UNITED STATES – ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS AND THE USE OF FACTS AVAILABLE REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 21 January 2021
Document codes: WT/DS539/R
Complainant: South Korea
Respondent: U.S.
Third parties: Brazil, Canada, China, Egypt, EU, India, Japan, Kazakhstan, Mexico, Norway, Russia
Dispute stage: Panel
Agreements cited: Art. 6.8, Annex II  Anti-dumpingArt. 12.7  Subsidies and Countervailing Measures (SCM)Art. 6.1  Anti-dumpingArt. 12.1  Subsidies and Countervailing Measures (SCM)Art. 6.2  Anti-dumpingArt. 12.2  Subsidies and Countervailing Measures (SCM)Art. 6.6  Anti-dumpingArt. 12.5  Subsidies and Countervailing Measures (SCM)Art. 6.7, Annex I  Anti-dumpingArt. 12.6, Annex VI  Subsidies and Countervailing Measures (SCM)Art. 6.9  Anti-dumpingArt. 12.8, 11.2, 11.3, 11.6  Subsidies and Countervailing Measures (SCM)Art. 11.4  Anti-dumpingArt. 21.4  Subsidies and Countervailing Measures (SCM)Art. 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, 18.1  Anti-dumpingArt. 1, 10, 11.9, 14, 15.1, 15.2, 15.4, 15.5, 19.1, 19.3, 19.4, 21.1, 21.3, 32.1  Subsidies and Countervailing Measures (SCM)Art. VI:1, VI:2, VI:3  GATT 1994Art. 3  Anti-dumpingArt. 15  Subsidies and Countervailing Measures (SCM)Art. 9.1  Anti-dumpingArt. 19.2  Subsidies and Countervailing Measures (SCM)Art. 18.4  Anti-dumpingArt. 32.5  Subsidies and Countervailing Measures (SCM)Art. XVI:4  Agreement Establishing the World Trade Organization

UNITED STATES – ANTI-DUMPING AND COUNTERVAILING DUTIES ON
CERTAIN PRODUCTS AND THE USE OF FACTS AVAILABLE
REPORT OF THE PANEL
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LIST OF ANNEXES

ANNEX A
PANEL DOCUMENTS
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Additional Working Procedures on Business Confidential Information 11
Annex A-3 Preliminary ruling of the Panel 13
Annex A-4 Interim Review 15
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of Korea 28
Annex B-2 Integrated executive summary of the arguments of the United States 41
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Brazil 56
Annex C-2 Integrated executive summary of the arguments of Canada 58
Annex C-3 Integrated executive summary of the arguments of the European Union 61
Annex C-4 Integrated executive summary of the arguments of Japan 64
Annex C-5 Integrated executive summary of the arguments of Mexico 69
Annex C-6 Integrated executive summary of the arguments of Norway 72

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CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
Argentina – Import
Measures
Appellate Body Reports, Argentina – Measures Affecting the
Importation of Goods, / /
, adopted 26 January 2015, DSR 2015:II, p. 579
Argentina – Poultry
Anti-Dumping Duties
Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry
from Brazil, , adopted 19 May 2003, DSR 2003:V,
p. 1727
Australia – Apples Appellate Body Report, Australia – Measures Affecting the
Importation of Apples from New Zealand, , adopted
17 December 2010, DSR 2010:V, p. 2175
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of
Salmon, WT/DS18/AB/R, adopted 6 November 1998,
DSR 1998:VIII, p. 3327
Canada – Welded Pipe Panel Report, Canada – Anti-Dumping Measures on Imports of
Certain Carbon Steel Welded Pipe from the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu, WT/DS482/R and
Add.1, adopted 25 January 2017, DSR 2017:I, p. 7
Canada – Wheat Exports
and Grain Imports
Appellate Body Report, Canada – Measures Relating to Exports of
Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted
27 September 2004, DSR 2004:VI, p. 2739
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on
Certain Automobiles from the United States, WT/DS440/R and
Add.1, adopted 18 June 2014, DSR 2014:VII, p. 2655
China – Broiler Products Panel Report, China − Anti-Dumping and Countervailing Duty
Measures on Broiler Products from the United States, WT/DS427/R
and Add.1, adopted 25 September 2013, DSR 2013:IV, p. 1041
China – Broiler Products
(Article 21.5 – US)
Panel Report, China − Anti-Dumping and Countervailing Duty
Measures on Broiler Products from the United States – Recourse to
Article 21.5 of the DSU by the United States, WT/DS427/RW and
Add.1, adopted 28 February 2018
China – GOES Panel Report, China – Countervailing and Anti-Dumping Duties on
Grain Oriented Flat-Rolled Electrical Steel from the United States,
WT/DS414/R and Add.1, adopted 16 November 2012, upheld by
Appellate Body Report WT/DS414/AB/R, DSR 2012:XII, p. 6369
China – HP-SSST
(Japan) / China –
HP-SSST (EU)
Appellate Body Reports, China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless Steel Seamless Tubes
("HP-SSST") from Japan / China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless Steel Seamless Tubes
("HP-SSST") from the European Union, WT/DS454/AB/R and Add.1 /
WT/DS460/AB/R and Add.1, adopted 28 October 2015,
DSR 2015:IX, p. 4573
China – Publications and
Audiovisual Products
Appellate Body Report, China – Measures Affecting Trading Rights
and Distribution Services for Certain Publications and Audiovisual
Entertainment Products, WT/DS363/AB/R, adopted
19 January 2010, DSR 2010:I, p. 3
China – Raw Materials Appellate Body Reports, China – Measures Related to the
Exportation of Various Raw Materials, WT/DS394/AB/R /
WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012,
DSR 2012:VII, p. 3295
EC – Bed Linen
(Article 21.5 – India)
Appellate Body Report, European Communities – Anti-Dumping
Duties on Imports of Cotton-Type Bed Linen from India – Recourse
to Article 21.5 of the DSU by India, WT/DS141/AB/RW, adopted
24 April 2003, DSR 2003:III, p. 965

BCI deleted, as indicated [[***]]

Short Title Full Case Title and Citation
EC – Chicken Cuts Appellate Body Report, European Communities – Customs
Classification of Frozen Boneless Chicken Cuts, WT/DS269/AB/R,
WT/DS286/AB/R, adopted 27 September 2005, and Corr.1,
DSR 2005:XIX, p. 9157
EC – Hormones Appellate Body Report, European Communities – Measures
Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R,
WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on
Farmed Salmon from Norway, WT/DS337/R, adopted
15 January 2008, and Corr.1, DSR 2008:I, p. 3
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs
Matters, WT/DS315/AB/R, adopted 11 December 2006,
DSR 2006:IX, p. 3791
EC – Tube or Pipe
Fittings
Appellate Body Report, European Communities – Anti-Dumping
Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil,
WT/DS219/AB/R, adopted 18 August 2003, DSR 2003:VI, p. 2613
EC and certain member
States – Large Civil
Aircraft
Appellate Body Report, European Communities and Certain Member
States – Measures Affecting Trade in Large Civil Aircraft,
WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel
Rebar from Turkey, WT/DS211/R, adopted 1 October 2002,
DSR 2002:VII, p. 2667
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain
Footwear from China, WT/DS405/R, adopted 22 February 2012,
DSR 2012:IX, p. 4585
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on
Grey Portland Cement from Mexico, WT/DS156/R, adopted
17 November 2000, DSR 2000:XI, p. 5295
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical
and Agricultural Chemical Products, WT/DS50/AB/R, adopted
16 January 1998, DSR 1998:I, p. 9
Indonesia – Iron or Steel
Products
Appellate Body Report, Indonesia – Safeguard on Certain Iron or
Steel Products, WT/DS490/AB/R, WT/DS496/AB/R, and Add.1,
adopted 27 August 2018
Japan – Alcoholic
Beverages II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted
1 November 1996, DSR 1996:I, p. 97
Korea – Certain Paper
(Article 21.5 –
Indonesia)
Panel Report, Korea – Anti-Dumping Duties on Imports of Certain
Paper from Indonesia – Recourse to Article 21.5 of the DSU by
Indonesia, WT/DS312/RW, adopted 22 October 2007,
DSR 2007:VIII, p. 3369
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on
Imports of Certain Dairy Products, WT/DS98/AB/R, adopted
12 January 2000, DSR 2000:I, p. 3
Korea – Pneumatic
Valves (Japan)
Appellate Body Report, Korea – Anti-Dumping Duties on Pneumatic
Valves from Japan, WT/DS504/AB/R and Add.1, adopted
30 September 2019
Mexico – Anti-Dumping
Measures on Rice
Appellate Body Report, Mexico – Definitive Anti-Dumping Measures
on Beef and Rice, Complaint with Respect to Rice, WT/DS295/AB/R,
adopted 20 December 2005, DSR 2005:XXII, p. 10853

BCI deleted, as indicated [[***]]

Short Title Full Case Title and Citation
Mexico – Anti-Dumping
Measures on Rice
Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef
and Rice, Complaint with Respect to Rice, WT/DS295/R, adopted
20 December 2005, as modified by Appellate Body Report
WT/DS295/AB/R, DSR 2005:XXIII, p. 11007
Mexico – Steel Pipes and
Tubes
Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and
Tubes from Guatemala, WT/DS331/R, adopted 24 July 2007,
DSR 2007:IV, p. 1207
Morocco – Hot-Rolled
Steel (Turkey)
Panel Report, Morocco – Anti-dumping Measures on Certain
Hot-Rolled Steel from Turkey, WT/DS513/R and Add.1, adopted
8 January 2020; appeal withdrawn by Morocco as reflected in
Appellate Body Report WT/DS513/AB/R
Russia – Commercial
Vehicles
Appellate Body Report, Russia – Anti-Dumping Duties on Light
Commercial Vehicles from Germany and Italy, WT/DS479/AB/R and
Add.1, adopted 9 April 2018
Russia – Railway
Equipment
Appellate Body Report, Russia – Measures Affecting the Importation
of Railway Equipment and Parts Thereof, WT/DS499/AB/R and
Add.1, adopted 5 March 2020
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles,
Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from
Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII,
p. 2701
US – Anti-Dumping
Methodologies (China)
Appellate Body Report, United States – Certain Methodologies and
Their Application to Anti-Dumping Proceedings Involving China,
WT/DS471/AB/R and Add.1, adopted 22 May 2017, DSR 2017:III,
p. 1423
US – Anti-Dumping
Methodologies (China)
Panel Report, United States – Certain Methodologies and Their
Application to Anti-Dumping Proceedings Involving China,
WT/DS471/R and Add.1, adopted 22 May 2017, as modified by
Appellate Body Report WT/DS471/AB/R, DSR 2017:IV, p. 1589
US – Carbon Steel
(India)
Appellate Body Report, United States – Countervailing Measures on
Certain Hot-Rolled Carbon Steel Flat Products from India,
WT/DS436/AB/R, adopted 19 December 2014, DSR 2014:V, p. 1727
US – Carbon Steel
(India)
Panel Report, United States – Countervailing Measures on Certain
Hot-Rolled Carbon Steel Flat Products from India, WT/DS436/R
and Add.1, adopted 19 December 2014, as modified by
Appellate Body Report WT/DS436/AB/R, DSR 2014:VI, p. 2189
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and
Application of Zeroing Methodology, WT/DS350/AB/R, adopted
19 February 2009, DSR 2009:III, p. 1291
US – Countervailing and
Anti-Dumping Measures
(China)
Appellate Body Report, United States – Countervailing and
Anti-Dumping Measures on Certain Products from China,
WT/DS449/AB/R and Corr.1, adopted 22 July 2014, DSR 2014:VIII,
p. 3027
US – Countervailing Duty
Investigation on DRAMS
Appellate Body Report, United States – Countervailing Duty
Investigation on Dynamic Random Access Memory Semiconductors
(DRAMS) from Korea, WT/DS296/AB/R, adopted 20 July 2005,
DSR 2005:XVI, p. 8131
US – Countervailing
Measures (China)
Appellate Body Report, United States – Countervailing Duty
Measures on Certain Products from China, WT/DS437/AB/R, adopted
16 January 2015, DSR 2015:I, p. 7

BCI deleted, as indicated [[***]]

Short Title Full Case Title and Citation
US – Differential Pricing
Methodology
Panel Report, United States – Anti-Dumping Measures Applying
Differential Pricing Methodology to Softwood Lumber from Canada,
WT/DS534/R and Add.1, circulated to WTO Members 9 April 2019
[appealed by Canada 4 June 2019 – the Division suspended its work
on 10 December 2019]
US – Gasoline Appellate Body Report, United States – Standards for Reformulated
and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996,
DSR 1996:I, p. 3
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on
Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R,
adopted 23 August 2001, DSR 2001:X, p. 4697
US – Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/R, adopted
23 August 2001 modified by Appellate Body Report
WT/DS184/AB/R, DSR 2001:X, p. 4769
US – Lamb Appellate Body Report, United States – Safeguard Measures on
Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand
and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted
16 May 2001, DSR 2001:IX, p. 4051
US – Lead and Bismuth II Appellate Body Report, United States – Imposition of Countervailing
Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel
Products Originating in the United Kingdom, WT/DS138/AB/R,
adopted 7 June 2000, DSR 2000:V, p. 2595
US – Oil Country Tubular
Goods Sunset Reviews
Appellate Body Report, United States – Sunset Reviews of
Anti-Dumping Measures on Oil Country Tubular Goods from
Argentina, WT/DS268/AB/R, adopted 17 December 2004,
DSR 2004:VII, p. 3257
US – Orange Juice
(Brazil)
Panel Report, United States – Anti-Dumping Administrative Reviews
and Other Measures Related to Imports of Certain Orange Juice from
Brazil, WT/DS382/R, adopted 17 June 2011, DSR 2011:VII, p. 3753
US – Shrimp (Viet Nam) Panel Report, United States – Anti-Dumping Measures on Certain
Shrimp from Viet Nam, WT/DS404/R, adopted 2 September 2011,
DSR 2011:X, p. 5301
US – Softwood Lumber
VI (Article 21.5 –
Canada)
Appellate Body Report, United States – Investigation of the
International Trade Commission in Softwood Lumber from Canada –
Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW,
adopted 9 May 2006, and Corr.1, DSR 2006:XI, p. 4865
US – Steel Plate Panel Report, United States – Anti-Dumping and Countervailing
Measures on Steel Plate from India, WT/DS206/R and Corr.1,
adopted 29 July 2002, DSR 2002:VI, p. 2073
US – Supercalendered
Paper
Appellate Body Report, United States – Countervailing Measures on
Supercalendered Paper from Canada, WT/DS505/AB/R and Add.1,
adopted 5 March 2020
US – Supercalendered
Paper
Panel Report, United States – Countervailing Measures on
Supercalendered Paper from Canada, WT/DS505/R and Add.1,
adopted 5 March 2020, as upheld by Appellate Body Report

US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the
Importation, Marketing and Sale of Tuna and Tuna Products,
WT/DS381/AB/R, adopted 13 June 2012, DSR 2012:IV, p. 1837
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard
Measures on Imports of Wheat Gluten from the European
Communities, WT/DS166/AB/R, adopted 19 January 2001,
DSR 2001:II, p. 717

BCI deleted, as indicated [[***]]

Short Title Full Case Title and Citation
US – Wool Shirts and
Blouses
Appellate Body Report, United States – Measure Affecting Imports of
Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted
23 May 1997, and Corr.1, DSR 1997:I, p. 323
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and
Methodology for Calculating Dumping Margins ("Zeroing"),
WT/DS294/AB/R, adopted 9 May 2006, and Corr.1, DSR 2006:II,
p. 417
US – Zeroing (EC)
(Article 21.5 – EC)
Appellate Body Report, United States – Laws, Regulations and
Methodology for Calculating Dumping Margins ("Zeroing") –
Recourse to Article 21.5 of the DSU by the European Communities,
WT/DS294/AB/RW and Corr.1, adopted 11 June 2009,
DSR 2009:VII, p. 2911

BCI deleted, as indicated [[***]]

EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Short Title (if any) Description
KOR-2 (BCI) CORE Section A questionnaire
response
CORE Section A questionnaire response
(4 September 2015)
KOR-3 19 U.S.C. § 1677a
KOR-4 CFR § 351.402(c)
KOR-5 CORE issues and decision
memorandum
CORE issues and decision memorandum (24 May 2016)
KOR-6 CORE anti-dumping
questionnaire to Hyundai
Steel
CORE anti-dumping questionnaire to Hyundai Steel
(27 July 2015)
KOR-7 (BCI) Hyundai Steel exclusion
request
Hyundai Steel exclusion request (17 August 2015)
KOR-9 USDOC teleconference with
Hyundai Steel
USDOC teleconference with Hyundai Steel
(14 September 2015)
KOR-10 (BCI) CORE response to request for
additional information
CORE response to request for additional information
(25 September 2015)
KOR-11 USDOC response to exclusion
request
USDOC response to exclusion request (15 October 2015)
KOR-13 Hyundai Steel request for
extension and additional
guidance
Hyundai Steel request for extension and additional
guidance (22 October 2015)
KOR-14 Meeting with counsel to
Hyundai Steel
(27 October 2015)
Meeting with counsel to Hyundai Steel (27 October 2015)
KOR-15 (BCI) CORE Section E questionnaire
response
CORE Section E questionnaire response
(2 November 2015)
KOR-16 Meeting with counsel to Hyundai Steel
(27 November 2015)
KOR-17 (BCI) Hyundai Steel response to
supplemental Section E
questionnaire
Hyundai Steel response to supplemental Section E
questionnaire (10 February 2016)
KOR-18 (BCI) CORE first supplemental
Section E questionnaire
response
CORE first supplemental Section E questionnaire response
(30 November 2015)
KOR-19 (BCI) CORE second supplemental
Section E questionnaire
response
CORE second supplemental Section E questionnaire
response (29 December 2015)
KOR-20 USDOC letter of cancellation
of verification
Letter dated 8 March 2018 from the USDOC to Hyundai
Steel of cancellation of verification
KOR-21 Hyundai Steel request to
reconsider the cancellation of
verification
Hyundai Steel request to reconsider the cancellation of
verification (11 March 2016)
KOR-23 (BCI) CORE case brief CORE case brief (22 April 2016)
KOR-27 CORE final determination CORE final determination (2 June 2014)
KOR-28 (BCI) CRS Section A questionnaire
response
CRS Section A questionnaire response (16 October 2016)
KOR-29 (BCI) CRS rebuttal brief CRS rebuttal brief (13 June 2016)
KOR-33 CRS initial questionnaire CRS initial questionnaire (18 September 2015)
KOR-34 (BCI) CRS supplemental
Sections B-C questionnaire
response
CRS supplemental Sections B-C response
(15 December 2015)
KOR-35 (BCI) CRS verification report Certain cold-rolled steel flat products from the Republic of
Korea: Hyundai Steel's sales verification report
(26 May 2016)
KOR-36 (BCI) CRS Section B questionnaire
response
CRS Section B questionnaire response (6 November 2015)
KOR-37 (BCI) CRS second supplemental
Sections B-C questionnaire
response
CRS second supplemental Sections B-C questionnaire
response (2 February 2016)
KOR-41 CRS issues and decision
memorandum
Memorandum dated 20 July 2016 concerning the final
affirmative determination in the antidumping duty
investigation of certain cold-rolled steel products from the
Republic of Korea
KOR-42 (BCI) CRS supplemental
Sections A-C questionnaire
response
CRS supplemental Sections A-C questionnaire response
(4 January 2016)

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description
KOR-43 CRS decision memorandum
for preliminary
determination,
Certain Cold-Rolled Steel Flat Products from the Republic
of Korea: Decision Memorandum for Preliminary
Determination (29 February 2016)
KOR-44 CRS preliminary
determination
Certain cold-rolled steel flat products from the Republic of
Korea: affirmative preliminary determination of sales at
less than fair value and postponement of final
determination, United States Federal Register, Vol. 81,
No. 44 (7 March 2016), pp. 11757-11760
KOR-46 (BCI) CRS HSA sales verification
report
CRS HSA sales verification report (26 May 2016)
KOR-47 (BCI) CRS CEP verification report CRS CEP verification report (26 May 2016)
KOR-48 (BCI) CRS case brief CRS case brief (6 June 2016)
KOR-49 (BCI) CRS final calculation memo CRS final calculation memo (20 July 2016)
KOR-51 (BCI) CRS Section C questionnaire
response
CRS Section C questionnaire response (9 November 2015)
KOR-53 HRS AD final determination Certain hot-rolled steel flat products from the Republic of
Korea: final determination of sales at less than fair value,
United States Federal Register, Vol. 81, No. 156
(12 August 2016), pp. 53419-53421
KOR-55 (BCI) HRS Section A questionnaire
response
HRS Section A questionnaire response (2 November 2015)
KOR-56 (BCI) HRS Sections B-C
questionnaire response
HRS Sections B-C questionnaire response
(23 November 2015)
KOR-57 (BCI) HRS verification report HRS Sales verification report (5 July 2016)
KOR-58 (BCI) HRS initial questionnaire HRS initial questionnaire (5 October 2015)
KOR-59 (BCI) HRS supplemental
Sections A-C questionnaire
response
HRS supplemental Sections A-C questionnaire response
(19 January 2016)
KOR-65 (BCI) HRS case brief HRS case brief (13 July 2016)
KOR-67 HRS issues and decision
memorandum
Memorandum dated 4 August 2016 on issues and decision
for the final affirmative determination in the antidumping
duty investigation of certain hot-rolled steel flat products
from the Republic of Korea
KOR-70 (BCI) CVD CRS initial questionnaire
response
CVD CRS initial questionnaire response (23 October 2015)
KOR-71 CVD CRS final determination Countervailing duty investigation of certain cold-rolled
steel flat products from the Republic of Korea: final
affirmative determination, United States Federal Register,
Vol. 81, No. 146 (29 July 2016), pp. 49943-49946
KOR-73 (BCI) CVD CRS affiliated companies
response
CVD CRS affiliated companies response
(30 September 2015)
KOR-74 (BCI) CVD CRS second
supplemental questionnaire
response
CVD CRS second supplemental questionnaire response
(12 November 2015)
KOR-75 (BCI) CVD CRS verification report CVD CRS verification report (29 April 2016)
KOR-76 (BCI) POSCO verification exhibit
PVE-3
POSCO verification exhibit PVE-3
KOR-77 CVD CRS issues and decision
memorandum
Memorandum dated 20 July 2016 concerning the final
determination in the countervailing duty investigation of
certain cold-rolled steel flat products from the Republic of
Korea
KOR-80 19 CFR 351.525 United States Code of Federal Regulations, Title 19,
Section 351.525
KOR-83 (BCI) CVD CRS POSCO and DWI
case brief
CVD CRS POSCO and DWI case brief (16 May 2016)
KOR-84 (BCI) GOK initial questionnaire GOK initial questionnaire (30 October 2015)
KOR-85 CVD CRS supplemental
questionnaire
CVD CRS supplemental questionnaire (5 November 2015)
KOR-86 (BCI) CVD CRS DWI verification
minor correction
CVD CRS DWI verification minor correction
(22 March 2016)
KOR-87 CVD CRS negative preliminary
determination
Memorandum dated 15 December 2015 concerning the
preliminary negative determination: countervailing duty
investigation of certain cold-rolled steel flat products from
the Republic of Korea

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description
KOR-88 CVD HRS final determination Countervailing duty investigation of certain hot-rolled
steel flat products from the Republic of Korea: final
affirmative determination, United States Federal Register,
Vol. 81, No. 156 (12 August 2016), pp. 53439-53441
KOR-90 (BCI) CVD HRS initial questionnaire
response
CVD HRS initial questionnaire response
(2 November 2015)
KOR-91 (BCI) CVD HRS affiliated companies
response
CVD HRS affiliated companies response (13 October 2015)
KOR-92 (BCI) CVD HRS supplemental
questionnaire response
CVD HRS supplemental questionnaire response
(13 April 2016)
KOR-93 USDOC letter on CVD HRS USDOC letter dated 14 April 2016 on CVD HRS
KOR-94 (BCI) CVD HRS supplemental new
subsidy allegation
questionnaire response
CVD HRS supplemental new subsidy allegation
questionnaire response (3 May 2016)
KOR-95 Rejection of POSCO's
resubmission
USDOC letter dated 3 May 2016 rejecting POSCO's
resubmission
KOR-96 (BCI) CVD HRS verification report CVD HRS verification report (30 June 2016)
KOR-98 CVD HRS issues and
decisions memorandum
Memorandum dated 4 August 2016 concerning the final
determination in the countervailing duty investigation of
certain hot-rolled steel flat products from the Republic of
Korea
KOR-99 CVD HRS POSCO minor
corrections
CVD HRS POSCO minor corrections (18 May 2016)
KOR-100 CVD HRS GOK questionnaire
response
CVD HRS GOK questionnaire response (2 November 2015)
KOR-101 CVD HRS supplemental
questionnaire
CVD HRS supplemental questionnaire
(30 November 2015)
KOR-102
(BCI)
CVD HRS supplemental
questionnaire response
CVD HRS supplemental questionnaire response
(4 December 2015)
KOR-110 LPT POR2 issues and
decisions memorandum
Memorandum dated 8 March 2016 concerning the final
results of the administrative review of the antidumping
duty order on large power transformers from the
Republic of Korea, 2013-2014
KOR-114
(BCI)
LPT POR2 HHI comments on
draft redetermination
LPT POR2 HHI comments on draft redetermination
(16 January 2018)
KOR-119
(BCI)
LPT POR3 HHI third
supplemental questions
13 and 17 response
LPT POR3 HHI third supplemental questions 13 and
17 response (10 November 2016)
KOR-121 LPT POR3 issues and decision
memorandum
Memorandum dated 6 March 2017 concerning the final
results of the administrative review of the antidumping
duty order on large power transformers from the
Republic of Korea, 2014-2015
KOR-122
(BCI)
LPT POR3 Sections B-C
questionnaire response
LPT POR3 Sections B-C questionnaire response
(27 January 2016)
KOR-124
(BCI)
LPT POR3 supplemental
Sections B C questionnaire
LPT POR3 supplemental Sections B-C questionnaire
(27 July 2016)
KOR-125
(BCI)
First part of LPT POR3
supplemental Sections A-D
questionnaire response
First part of LPT POR3 supplemental Sections A-D
questionnaire response (10 August 2016)
KOR-126
(BCI)
Second part of LPT POR3
supplemental Sections A-D
questionnaire response
Second part of LPT POR3 supplemental Sections A-D
questionnaire response (18 August 2016)
KOR-127
(BCI)
LPT POR3 decision
memorandum for preliminary
results
Decision memorandum dated 26 August 2016 concerning
the preliminary results of antidumping duty
administrative review: large power transformers from the
Republic of Korea, 2014-2015
KOR-128
(BCI)
LPT POR3 HHI third
supplemental questionnaire
LPT POR3 HHI third supplemental questionnaire
(7 October 2016)
KOR-129
(BCI)
LPT POR3 petitioner's case
brief
LPT POR3 petitioner's case brief (2 December 2016)
KOR-130
(BCI)
LPT POR3 HHI case brief LPT POR3 Hyundai case brief (5 January 2017)
KOR-131 LPT POR3 petitioner's
comments on questionnaires
to be issued
LPT POR3 petitioner's comments on questionnaires to be
issued (12 November 2015)
KOR-132 LPT POR3 HHI response to
petitioner's comments
LPT POR3 HHI response to petitioner's comments
(20 November 2015)
KOR-134
(BCI)
LPT POR3 Section D
questionnaire response
LPT POR3 Section D questionnaire response
(5 February 2016)

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description
KOR-135
(public
version)
LPT POR3 decision
memorandum for preliminary
results
Memorandum dated 26 August 2016 concerning the
preliminary results of antidumping duty
administrative review: large power transformers from the
Republic of Korea, 2014-2015
KOR-136
(BCI)
LPT POR3 HHI supplemental
questionnaire response
LPT POR3 HHI supplemental questionnaire response
(27 October 2016)
KOR-137 LPT POR3 petitioner call
memorandum
Memorandum dated 16 December 2016 on LPT POR3
petitioner call
KOR-140 LPT POR4 decision
memorandum (PDM)
Memorandum dated 31 August 2017 concerning the
preliminary results of antidumping duty
administrative review: large power transformers from the
Republic of Korea, 2015-2016
KOR-141
(BCI)
LPT POR4 HHI post
preliminary comments
LPT POR4 HHI post preliminary comments
(5 October 2017)
KOR-144
(BCI)
LPT POR4 Sections B-D
questionnaire response
LPT POR4 Sections B-D questionnaire response
(27 February 2017)
KOR-145 LPT issues and decision
memorandum
Memorandum dated 2 July 2012 concerning the final
determination of the antidumping duty investigation of
large power transformers from the Republic of Korea
KOR-146
(BCI)
LPT POR4 request for
clarification
LPT POR4 request for clarification (29 March 2017)
KOR-147
(BCI)
LPT POR4 second
supplemental questionnaire
LPT POR4 second supplemental questionnaire
(19 May 2017)
KOR-148
(BCI)
LPT POR4 second
supplemental questionnaire
response
LPT POR4 second supplemental questionnaire response
(16 June 2017)
KOR-149
(BCI)
LPT POR4 HHI case brief LPT POR4 HHI case brief (12 October 2017)
KOR-150
(BCI)
LPT POR4 Section A
questionnaire response
LPT POR4 Section A questionnaire response
(2 February 2017)
KOR-151 LPT POR4 USDOC Moses Y.
Song memorandum
Memorandum dated 4 October 2017 requesting to reject
and remove file
KOR-152
(BCI)
LPT POR4 Hyosung Section A
questionnaire response
LPT POR4 Hyosung Section A questionnaire response
(2 February 2017)
KOR-153
(BCI)
LPT POR4 Hyosung
Sections B-D questionnaire
response
LPT POR4 Hyosung Sections B-D questionnaire response
(27 February 2017)
KOR-154
(BCI)
LPT POR4 Hyosung
supplemental Section A
questionnaire response
LPT POR4 Hyosung supplemental Section A questionnaire
response (8 May 2017)
KOR-155 LPT POR4 Hyosung third
supplemental questionnaire
LPT POR4 Hyosung third supplemental questionnaire
(26 May 2017)
KOR-156
(BCI)
LPT POR4 Hyosung third
supplemental questionnaire
response
LPT POR4 Hyosung third supplemental questionnaire
response (21 June 2017)
KOR-157
(BCI)
LPT POR4 Hyosung case brief LPT POR4 Hyosung case brief (13 October 2017)
KOR-158
(BCI)
LPT POR4 petitioner
pre-preliminary comments
LPT POR4 petitioner pre-preliminary comments
(18 July 2017)
KOR-159
(BCI)
LPT POR4 Hyosung response
to comments by petitioner
LPT POR4 Hyosung response to comments by petitioner
(11 August 2017)
KOR-160 Alloy steel final determination Memorandum dated 29 March 2017 concerning the final
affirmative determination in the less-than-fair-value
investigation of certain carbon and alloy steel
cut-to-length plate from France
KOR-163 Heavy welded steel final
determination
Memorandum dated 14 July 2016 concerning the final
affirmative determination in the less-than-fair-value
investigation of heavy walled rectangular welded carbon
steel pipes and tubes from the Republic of Turkey
KOR-175 Essar Steel Ltd. v.
United States
United States Court of Appeals for the Federal Circuit,
Essar Steel Ltd. v. United States (12 June 2014)
KOR-176 De Cecco Di Filippo Fara. S.
Martino v. United States
United States Court of Appeals for the Federal Circuit, F.Lii
de Cecco di Filippo Fara. S. Martino v. United States,
(16 June 2000)
KOR-177 Özdemir Boru San. ve Tic.
Ltd. Sti. v. United States
United States Court of International Trade, Özdemir Boru
San. ve Tic. Ltd. Sti. v. United States, Court No. 16-00206
(16 October 2017)

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description
KOR-178 Lifestyle Enterprise, Inc. v
United States
United States Court of International Trade, Lifestyle
Enterprise v. United States, Consol. Court No. 09-00378
(11 February 2011)
KOR-206
(BCI)
LPT POR2 court remand United States Court of International Trade, ABB, INC. v.
United States, Consol. Court No. 16-00054,
Slip Op. 17-138 (10 October 2017)
KOR-207
(public
version)
LPT POR2 draft results of
redetermination
USDOC, Draft results of redetermination pursuant to court
remand, Consol. Court No. 16-00054, Slip Op. 17-138
(10 October 2017)
KOR-207
(revised,
public version)
LPT POR2 final results of
redetermination
USDOC, Final results of redetermination pursuant to court
remand, Consol. Court No. 16-00054, Slip Op. 17-138
(10 October 2017)
KOR-209 LPT POR3 initial questionnaire LPT POR3 initial questionnaire (3 December 2015)
KOR-211 LPT POR4 issues and decision
memorandum
Memorandum dated 9 March 2018 concerning the final
results of the administrative review of the
antidumping duty order on large power transformers from
the Republic of Korea, 2015-2016
KOR-212 LPT POR4 HHI request for
meeting
LPT POR4 HHI request for meeting (10 July 2017)
KOR-213
(BCI)
LPT POR4 second
supplemental questionnaire
response
LPT POR4 second supplemental questionnaire response
(19 June 2017)
KOR-215 LPT POR4 second
supplemental questionnaire
response
LPT POR4 second supplemental questionnaire response
(26 June 2017)
KOR-216
(revised)
List of AFA proceedings List of all proceedings in which AFA was used since the
amendments of Section 502 of the TPEA
KOR-217 Analysis of USDOC cases Substantive analysis of 12 representative USDOC cases
KOR-226 USDOC Anti-Dumping Manual Excerpt of USDOC Anti-Dumping Manual
KOR-227
(BCI)
CRS final redetermination CRS final redetermination (16 October 2018)
KOR-245 Section 776 of the Tariff Act Section 776 of the Tariff Act, as amended by Section 502
of the 2015 TPEA, codified in 19 U.S.C. 1677e
KOR-248
(BCI)
LPT POR2 supplemental
Sections B-C questionnaire
response
LPT POR2 supplemental Sections B-C questionnaire
response (3 June 2015)
KOR-252
(BCI)
LPT POR3 petitioner's
comments
LPT POR3 petitioner's comments (2 December 2016)
KOR-269
(BCI)
LPT POR3 petitioner case
brief
LPT POR3 petitioner case brief (5 January 2017)
KOR-270
(BCI)
LPT POR3 HHI rebuttal brief LPT POR3 HHI rebuttal brief (11 January 2017)
USA-3 CORE initial questionnaire
extension
CORE initial questionnaire extension (11 September 2015)
USA-4 USDOC additional guidance USDOC additional guidance (16 September 2015)
USA-5 (BCI) CORE first supplemental
Section E questionnaire
CORE first supplemental Section E questionnaire
(19 November 2015)
USA-8 CORE issues and decision
memorandum on PDM
Memorandum dated 21 December 2015 concerning the
preliminary determination in the antidumping duty
investigation of certain corrosion-resistant steel products
from the Republic of Korea
USA-14 (BCI) CRS part I of Section D
questionnaire response
Cold-rolled steel products from Korea: Hyundai Steel
Section D questionnaire response (Part I)
(4 November 2015)
USA-15 (BCI) CRS supplemental
Sections B-C questionnaire
CRS supplemental Sections B-C questionnaire
(19 January 2016)
USA-20 (BCI) HRS supplemental
Sections A-C questionnaire
HRS Supplemental Sections A-C questionnaire
(23 December 2015)
USA-23 LPT POR2 initial questionnaire LPT POR2 initial questionnaire (1 December 2014)
USA-24 (BCI) LPT POR2 Sections B-C
questionnaire response
LPT POR2 Sections B and C questionnaire response,
(26 January 2015)
USA-27 (BCI) LPT POR2 draft results of
redetermination
USDOC, ABB INC. v. United States, final results of
redetermination pursuant to court remand, Consol. Court
No. 16-00054, Slip Op. 17-138 (10 October 2017)
USA-29 (BCI) LPT POR2 final results of
redetermination
USDOC, ABB INC. v. United States, final results of
redetermination pursuant to court remand, Consol. Court
No. 16-00054, Slip Op. 17-138 (10 October 2017)
USA-35 LPT POR4 initial questionnaire LPT POR4 initial questionnaire (5 January 2017)

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description
USA-36 (BCI) LPT POR4 first supplemental
sales questionnaire
LPT POR4 first supplemental sales questionnaire
(12 April 2017)
USA-37 (BCI) LPT POR4 first supplemental
sales questionnaire response
LPT POR4 first supplemental sales questionnaire response
(3 May 2017)
USA-39 (BCI) LPT POR4 supplemental
questionnaire
LPT POR4 supplemental questionnaire (11 July 2017)
USA-40 LPT POR4 meeting
memorandum
Memorandum dated 21 July 2017 concerning 2015/2016
administrative review of the antidumping duty order on
large power transformers from the Republic of Korea:
meeting with Counsel for HHI
USA-41 (BCI) LPT POR4 supplemental
questionnaire response
LPT POR4 supplemental questionnaire response
(24 July 2017)
USA-43 (BCI) LPT POR4 preliminary
analysis memorandum
Memorandum dated 31 August 2017 concerning the
preliminary results of the 2015-2016 administrative
review of the antidumping duty order on large power
transformers from the Republic of Korea
USA-46 (BCI) Hyosung initial anti-dumping
questionnaire
Hyosung initial anti-dumping questionnaire
(5 January 2017)
USA-61 Viet I-Mei Frozen Foods Co.
v. United States
United States Court of International Trade, Viet I-Mei
Frozen Foods Co. v. United States, Court No. 14-00092
(30 July 2015)
USA-62 Stainless steel bar from Italy,
issues and decision
memorandum
Memorandum dated 23 January 2002 concerning the final
determination in the countervailing duty investigation of
stainless steel bar from Italy
USA-72 (BCI) CRS supplemental
Sections B-C questionnaire
CRS supplemental Sections B-C questionnaire
(24 November 2015)
USA-90 Welded line pipe from Korea,
issues and decision
memorandum
Memorandum dated 5 October 2015 concerning the final
negative determination: countervailing duty investigation
of welded line pipe from the Republic of Korea
USA-91 Non-oriented electrical steel
from Chinese Taipei, issues
and decision memorandum
Memorandum dated 6 October 2014 concerning the final
affirmative countervailing duty determination in the
countervailing duty investigation of non-oriented electrical
steel from Chinese Taipei
USA-96 List of duplicative cases in KOR-216

BCI deleted, as indicated [[***]]

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description

AD anti-dumping
AFA adverse facts available
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
AHSS advanced high-strength steel
AUL average useful life
BCI Business Confidential Information
CEP constructed export price
CONNUM control number
CORE corrosion-resistant steel
CRS cold-rolled steel
CVD countervailing duty
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
DWI Daewoo International Corporation
E&C enforcement and compliance
FEZ free economic zone
GATT 1994 General Agreement on Tariffs and Trade 1994
GOK Government of Korea
HHI Hyundai Heavy Industries
HRS hot-rolled steel
HSA Hyundai Steel America
Hyosung Hyosung Corporation
Hyundai Steel Hyundai Steel Corporation
Iljin Electric Iljin Electric Co., Ltd.
KEXIM Korea Export Import Bank
KNOC Korea National Oil Corporation
KORES Korean Resources Corporation
LPT large power transformer
LSIS LSIS Co., Ltd.
NME non-market economy
OAF order of acknowledgement form
PDM preliminary decision memorandum
POI period of investigation
POR2 period of review from 1 August 2013 to 31 July 2014 (second administrative
review)
POR3 period of review from 1 August 2014 to 31 July 2015 (third administrative
review)
POR4 period of review from 1 August 2015 to 31 July 2016 (fourth administrative
review)
R&D research and development
SCM Agreement Agreement on Subsidies and Countervailing Measures
SEQHs home market sales sequence numbers
SEQUs US sales sequence numbers
SSB skelp, sheet, and blank
2015 TPEA Amendment Section 502 of the Trade Preferences Extension Act of 2015
TWB tailor-welded blank
UHSS ultra-high-strength steel
USCIT US Court of International Trade
USDOC United States Department of Commerce
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969,
1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

BCI deleted, as indicated [[***]]

1 INTRODUCTION
1.1 Complaint by Korea
On 14 February 2018 , the Republic of Korea ( Korea) requested consultations with the
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 Tar iffs and
Trade 1994 (GATT 1994), Articles 17.2 and 17.3 of the Agreement on Implementation of Article VI
of the GATT 1994 (Anti-Dumping Agreement), and Article 30 of the Agreement on Subsidies and
Countervailing Measures (SCM Agreement) with respect to the measures and claims set out below.1
Consultations were held on 22 March 2018, but were unsuccessful in resolving the dispute
between the parties.
1.2 Panel establishment and composition
On 16 April 2018 , Korea requested the establishment of a panel pursuant to Article 6 of the
DSU with standard terms of reference. 2 Pursuant to Korea's request, the Dispute Settlement Body
(DSB) established the Panel at its meeting on 28 May 2018, in accordance with Article 6 of the DSU.3
Under its terms of reference, the Panel is required:
To examine, in the light of the relevant provisions of the covered Agreements cited by
the parties to the dispute, the matter re ferred to the DSB by the Republic of Korea in
document WT/DS539/6 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those Agreements.4
Based on an Agreement between the parties, the Panel was composed on 5 December 2018 as
follows:
Chairperson: Ms Marta Calmon Lemme

Members: Ms Leora Blumberg
 Mr Matthew Kennedy

Brazil, Canada, China, Egypt, the European Union, India, Japan, Kazakhstan, Mexico, Norway,
and the Russian Federation notified their interest in participating in the Panel proceedings as
third parties.
1.3 Panel proceedings
1.3.1 General
Having consulted with the parties, the Panel adopted its Working Procedures5 together with the
timetable for these proceedings on 13 February 2019. The timetable was further revised during the
course of the panel proceedings in light of subsequent developments and upon the parties' requests.6
The Panel held its first substantive meeting with the parties on 24 and 25 July 2019. A session
with the third parties was convened on 25 July 2019. The Panel's second substantive meeting with
the parties was held on 11 and 12 February 2020. The Panel issued its Interim Report to the parties
on 24 September 2020, followed by the Final Report to the parties on 17 December 2020.

1 Request for consultations by Korea, WT/DS539/1 (Korea's consultations request).
2 Request for the establishment of a panel by Korea, WT/DS539/6 (Korea's panel request).
3 DSB, Minutes of meeting held on 28 May 2018, WT/DSB/M/413.
4 Constitution note of the Panel, WT/DS539/7.
5 Working Procedures in Annex A-1.
6 The timetable was updated and revised on 29 July 2019, 4 September 2019, 26 February 2020,
28 February 2020, and 3 September 2020.

BCI deleted, as indicated [[***]]

1.3.2 Working Procedures on Business Confidential Information
Based on its consultations with the parties, on 13 February 2019 the Panel adopted additional
Working Procedures for the protection of Business Confidential Information (BCI).7
1.3.3 Preliminary ruling request
On 23 April 2019, before filing its first written submission, the United States requested a
preliminary ruling that one of the claims advanced by Korea – i.e. its "as such" claim against an
alleged unwritten measure – was outside the Panel's terms of reference.8 Korea responded to the
United States' request on 21 May 2019. 9 Both parties requested the Panel to issue its preliminary
ruling at the earliest moment practicable. 10 Following the Pane l's invitation to all third parties to
comment on the United States' request, two third parties addressed th is issue in their third -party
submissions.11
The Panel issued its preliminary ruling to the parties , with the third parties on copy , on
2 July 2019, before its first substantive meeting with the parties .12 Declining the
United States' request, the Panel found that, for purposes of Article 6.2 of the DSU, the alleged
unwritten measure that is the object of Korea's "as such" challenge is properly identified in its panel
request. The Panel's preliminary ruling and its underlying reasons are presented together in
section 7.4.1 of this Report.
2 FACTUAL ASPECTS
2.1 The measures at issue
Korea's panel request challenges the WTO -consistency of several measures concerning the
imposition by the United States of anti-dumping and countervailing duties on imports of products
from Korea.
First, Korea challenges on an "as applied" basis the definitive anti -dumping (AD) and
countervailing duty (CVD) measures imposed by the United States pursuant to the preliminary and
final determinations and orders issued by the United States Department of Commerce (USDOC) in
the following investigations and administrative reviews13:
a. Anti-Dumping Duties on Certain Corrosion -Resistant Steel Products (CORE) from the
Republic of Korea (USDOC investigation number A-580-878) ("CORE AD Investigation") as
set forth, among others, in:
i. Final Determination of Sales at Less Than Fair Value and Final Affirmative
Determination of Critical Circumstances, United States Federal Register, Vol. 81,
No. 35303 (2 June 2016);

7 Additional Working Procedures on Business Confidential Information in Annex A-2.
8 United States' request for a preliminary ruling.
9 Korea's response to United States' preliminary ruling request.
10 United States' request for a preliminary ruling, para. 24; Korea's response to
United States' preliminary ruling request, para. 54.
11 Canada's third-party submission, paras. 26-35; European Union's third-party submission,
paras. 70-71.
12 The Panel's preliminary ruling is reproduced in full in Annex A-4.
13 Korea's panel request, para. 6. The panel request explains that the "measures 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
countervailing duties imposed as a result of those investigations and administrative reviews, as well as any
notices, annexes, decision memoranda, orders, amendments, or other instruments issued by the United States
in connection with these anti-dumping and countervailing duty measures". (Ibid. para. 6). The panel 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". (Ibid. para. 7).

BCI deleted, as indicated [[***]]

ii. Issues and Decision Memorandum for the Final Affirmative Determination in the
Anti-Dumping Duty Investigation of Certain Corrosion -Resistant Steel Products from
the Republic of Korea (24 May 2016); and
iii. Anti-Dumping Duty Order, United States Federal Register, Vol. 81, No. 48390
(25 July 2016).
b. Anti-Dumping Duties on Certain Cold-Rolled Steel Flat Products from the Republic of Korea
(USDOC investigation number A -580-881) ("CRS AD Investigation") as set forth, among
others, in:
i. Final Determination of Sales at Less Than Fair Value , United States Federal Register,
Vol. 81, No. 49953 (29 July 2016);
ii. Issues and Decision Memorandum for the Final Affirmative Determination in the
Anti-Dumping Duty Investigation of Certain Cold -Rolled Steel Products from the
Republic of Korea (20 July 2016); and
iii. Anti-Dumping Duty Order, United States Federal Register, Vol. 81, No. 64432
(20 September 2016).
c. Countervailing Duties on Certain Cold-Rolled Steel Flat Products from the Republic of Korea
(USDOC investigation number C-580-882) ("CRS CVD Investigation") as set forth, among
others, in:
i. Final Affirmative Determination, United States Federal Register, Vol. 81, No. 49943
(29 July 2016);
ii. Issues and Decision Memorandum for the Final Determination in the Countervailing
Duty Investigation of Certa in Cold -Rolled Steel Flat Products from the Republic of
Korea (20 July 2016); and
iii. Countervailing Duty Order, United States Federal Register, Vol. 81, No. 64436
(20 September 2016).
d. Anti-Dumping Duties on Certain Hot-Rolled Steel Flat Products from the Republic of Korea
(USDOC investigation number A -580-883) ("HRS AD Investigation") as set forth, among
others, in:
i. Final Determination of Sales at Less Than Fair Value, United States Federal Register,
Vol. 81, No. 53419 (12 August 2016);
ii. Issues and Decision Memorandum for the Final Affirmative Determination in the
Anti-Dumping Duty Investigation of Certain Hot -Rolled Steel Flat Products from the
Republic of Korea (4 August 2016); and
iii. Anti-Dumping Duty Order, United States Federal Register, Vol. 81, No. 67962
(3 October 2016).
e. Countervailing Duties on Certain Hot-Rolled Steel Flat Products from the Republic of Korea
(USDOC investigation number C-580-884) ("HRS CVD Investigation") as set forth, among
others, in:
i. Final Affirm ative Determination, United States Federal Register, Vol. 81, No. 53439
(12 August 2016);
ii. 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); and

BCI deleted, as indicated [[***]]

iii. Countervailing Duty Order, United States Federal Register, Vol. 81, No. 67960
(3 October 2016).
f. Anti-Dumping Duties on Large Power Transformers from the Republic of Korea (USDOC
investigation number A-580-867) ("LPT AD Investigation") as set forth, among others, in:
i. Final Determination of Sales at Less Than Fair Value, United States Federal Register,
Vol. 77, No. 40857 (11 July 2012);
ii. Anti-Dumping Duty Order, United States Federal Register, Vol. 77, No. 53177
(31 August 2012); and
iii. 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 O p 17-138 (7 February 2018 ,
remand of second administrative review);
• Final Results of Anti -Dumping Duty Administrative Review; 2014 -2015
(United States Federal Register, Vol . 82, No. 13432 (13 March 2017 ), third
administrative review);
▪ Issues and Decision Memorandum for the Final Results of the Administrative
Review of the Anti-Dumping Duty Order on Large Power Transformers from
the Republic of Korea; 2014-2015 (6 March 2017);
• Final Results of Anti -Dumping Duty Administrative Review; 2015 -2016
(United States Federal Register, Vol. 83, No. 11679 (16 March 2018 ), fourth
administrative review);
▪ Issues and Decision Memorandum for the Final Results of the Administrative
Review of the Anti-Dumping Duty Order on Large Power Transformers from
the Republic of Korea; 2015-2016 (9 March 2018); and
• Final Results of the Expedited First Sunset Review of the Anti-Dumping Duty Order,
United States Federal Register, Vol. 82, No. 51604 (7 November 2017);
▪ Issues and Decision Memorandum for the Expedited First Sunset Review of
the Anti -Dumping Duty Order on Large Power Transformers from the
Republic of Korea (31 October 2017).
Second, Korea challenges "as such" the following provisions of the domestic law of the
United States relating to the USDOC's use of facts available and the drawing of adverse inferences14:
a. Section 502 of the Trade Preferences Extension Act of 2015, Pub. L. No. 114-27;
b. Section 776 of the Tariff Act of 1930, codified at the United States Code of Federal
Regulations, Title 19, Section 1677e;
c. the implementing regulations of the USDOC in the United States Code of Federal
Regulations, Title 19, Section 351, including in particular Section 308; and
d. 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.

14 Korea's panel request, para. 8. See also fn 19 below.

BCI deleted, as indicated [[***]]

Finally, Korea challenges "as such" an unwritten measure allegedly adopted by the
United States (the "alleged unwritten measure") as follows:
C. Use of Adverse Facts Available As Ongoing Conduct, or a Rule or Norm of
General and Prospective Application
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 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 finding
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 of 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]15
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 R equest. 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 ability is attached as Annex I to illustrate the practice.

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
Korea requests the Panel to make the following findings16:
a. In relation to each of the anti-dumping and countervailing duty measures identified under
the "as applied " claims, the United States acted inconsistently with 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 lack of basis to resort to
facts available, the improper application of facts available, and the drawing of adverse
inferences in the selection of facts otherwise available.
b. In addition, as a consequence of the undue use of adverse facts a vailable (AFA) when
determining dumping or subsidization, the "as applied" anti-dumping measures are also
inconsistent with Articles 1, 9.3, and 18.1 of the Anti -Dumping Agreement, and the "as
applied" countervailing duty measures are inconsistent with Articles 10, 19.4, and 32.1 of
the SCM Agreement.
c. Moreover, the "all others" rate applied by the USDOC in the fourth administrative review
of the anti -dumping duties on LPTs from Korea is inconsistent with Article 9.4 of the
Anti-Dumping Agreement, as the USDOC failed to disregard the margins established based
on facts available pursuant to Article 6.8 of the Anti-Dumping Agreement.
d. In relation to the "as such" claims, the United States acted inconsistently with 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 by reason of the AFA rule or norm or
AFA ongoing conduct since these measures involve selecting the facts available on the sole
basis of the adverse inference and without engaging in the required comparative process
of reasoning and evaluation in search of an accurate determination.

15 Korea's panel request, para. 9 and fn 1.
16 Korea's first written submission, para. 1040; second written submission, para. 434. See also
Korea's first written submission, paras. 455 and 657.

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Korea further requests that, pursuant to Article 19.1 of the DSU, the Panel recommend that
the United States bring its measures into conformity with its WTO obligations.
The United States requests that the Panel reject Korea's claims in this dispute in their entirety.
4 ARGUMENTS OF THE PARTIES
The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 23 of the Working Procedures adopted by the Panel (see Annexes B-1
and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
The arguments of Brazil, Canada, the European Union, Japan, Mexico, and Norway are reflected
in their executive summaries, provided in accordance with paragraph 26 of the Working Procedures
adopted by the Panel (see Annexes C -1, C -2, C-3, C -4, C -5, and C -6). China, Egypt, India,
Kazakhstan, and the Russian Federation did not make written or oral submissions before the Panel.
6 INTERIM REVIEW
The Panel issued its Interim Report to the parties on 24 September 2020. On 12 October 2020,
Korea and the United States each submitted written requests seeking a review of precise aspects of
the Interim Report. On 26 October 2020, both parties submitted comments on each other's requests
for review. Neither party requested an interim review meeting.
The requests made at the interim review stage as well as the Panel's discussion and disposition
thereof are set out in Annex A-4.
7 FINDINGS
This dispute concerns several "as applied" claims and one "as such" claim by Korea alleging a
violation of the United States' obligations under the Anti-Dumping and SCM Agreements. On an "as
applied" basis, Korea challenges individual instances of the USDOC 's use of facts available in
four anti-dumping17 and two countervailing duty 18 investigations with respect to the
United States' obligations under the covered agreements. In each of the six investigations at issue,
Korea claims both that the conditions for the USDOC's resort to facts available were not met and
that the USDOC's subsequent selection of the replacement facts for the missing information was in
violation of the applicable legal disciplines. In addition to its "as applied" challenges, Korea also
advances an "as such" claim against an alleged unwritten measure concerning the USDOC 's use of
"adverse facts available".19 Korea's "as such" challenge does not take issue with the USDOC's resort
to facts available, but, instead, focuses exclusively on the USDOC's "selection of the facts available
in a situation where a finding of non-cooperation has been made".20
Our findings and conclusions are organized as follows. We begin by addressing certain issues
of general relevance (section 7.1), including the applicable rules of treaty interpretation, the burden
of proof, and the standard(s) of review. Subsequently, we consider certain interpretative issues that
are common to our analysis of several of Korea's "as applied" challenges as well as its "as such"
claim (section 7.2). We then evaluate Kore a's claims, beginning with its "as applied" c hallenges
against individual instances of the USDOC's use of facts available in each of the six investigations at
issue (section 7.3) and then turning to its "as such" c laim against an alleged unwritten measure
(section 7.4). Our conclusions and recommendation are set out in section 8 of this Report.

17 CORE AD Investigation (USDOC investigation number A-580-878); CRS AD Investigation (USDOC
investigation number A-580-881); HRS AD Investigation (USDOC investigation number A-580-883); and
LPT AD Investigation (USDOC investigation number A-580-867).
18 CRS CVD Investigation (USDOC investigation number C-580-882); and HRS CVD Investigation
(USDOC investigation number C-580-884).
19 Korea did not pursue its "as such" claim against certain US domestic law provisions identified in
paragraph 2.3 of this Panel Report. (Korea's comments on draft descriptive part, para. 1).
20 Korea's response to Panel question No. 43. (emphasis added)

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7.1 General issues
7.1.1 Treaty interpretation
In Article 3.2 of the DSU, WTO Members "recognize" that the WTO dispute settlement system
serves, inter alia, to "clarify" the "existing provisions" of the covered agreements "in accordance
with customary rules of interpretation of public international law". Article 17.6(ii) of the
Anti-Dumping Agreement also stipulates that the panels "shall interpret the relevant provisions of
[that] Agreement in accordance with customary rules of interpretation of public international law".
The "customary rules of interpretation of public i nternational law" within the meaning of the
DSU and the Anti-Dumping Agreement are the rules of interpretation that have attained the status
of general customary international law, as codified , in particular, in Articles 31 and 32 of the
Vienna Convention on the Law of Treaties (Vienna Convention).21
Article 31(1) of the Vienna Convention , as rendered applicable by Article 3.2 of the DSU ,
requires that the covered agreements are to be interpreted "in good faith in accordance with the
ordinary meaning to be given to the terms of the treaty in their context and in light of its object and
purpose". The "ordinary meaning" of treaty terms can be ascertained only in their context and in
light of the object and purpose of the treaty. 22 Moreover, the pri nciple of effectiveness in treaty
interpretation, which is a corollary of the general rule in Article 31, requires that a treaty interpreter
must give meaning and effect to each term and not render redundant whole clauses or paragraphs.23
The rules of treaty interpretation "neither require nor condone the imputation into a treaty of words
that are not there or the importation into a treaty of concepts that were not intended". 24 Instead,
"[t]he fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret
the words actually used by the Agreement under examination, and not words which the interpreter
may feel should have been used". 25 As reflected i n the use of the singular "rule" in the title of
Article 31, "interpretation pursuant to the customary rule codified in Article 31 of the
Vienna Convention is ultimately a holistic exercise that should not be mechanically subdivided into
rigid components".26
Pursuant to Article 32 of the Vienna Convention , a treaty interpreter may resort to
supplementary means of interpretation either to "confirm" the meaning resulting from the
application of Article 31 of the Vienna Convention, or to determine the meaning when the
interpretation according to Article 31 le aves the meaning "ambiguous or obscure" or leads to a
"manifestly absurd" or "unreasonable" result. Supplementary means of interpretation include "the
preparatory work of the treaty and the circumstances of its conclusion".27
7.1.2 Burden of proof
The DSU does n ot contain any rules concerning burden of proo f. However, the
"generally accepted canon of evidence in … most jurisdictions, that the burden of proof rests upon
the party … who asserts the affirmative of a particular claim or defence" is also followed in the
WTO dispute settlement system.28 In WTO dispute settlement proceedings, it is understood that a
complainant must "establish a prima facie case of inconsistency with [the] provision [invoked] before
the burden of showing consistency with that provision is taken on by the defending party".29 A "prima
facie case is one which, in the absence of effective refutation by the defending party, requi res a
panel, as a matter of law, to rule in favour of the complaining party presenting the prima facie
case".30

21 Appellate Body Reports, US – Gasoline, DSR 1996:I, pp. 15-16; Japan – Alcoholic Beverages II,
DSR 1996:I, p. 104.
22 Appellate Body Report, China – Publications and Audiovisual Products, para. 348.
23 See, e.g. Appellate Body Report, US – Gasoline, DSR 1996:I, p. 21. See also Appellate Body Report,
Korea – Dairy, para. 81.
24 Appellate Body Report, India – Patents (US), para. 45.
25 Appellate Body Report, EC – Hormones, para. 181.
26 Appellate Body Report, China – Publications and Audiovisual Products, para. 348.
27 See also Appellate Body Report, EC – Chicken Cuts, para. 283.
28 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1997:I, p. 335.
29 Appellate Body Report, EC – Hormones, para. 104.
30 Appellate Body Report, EC – Hormones, para. 104.

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7.1.3 Standard(s) of review
The standard of review is the criteria by which a panel examines the consistency of a challenged
measure with a WTO Membe r's obligations under the WTO covered agreement s. In the present
dispute, Korea brings claims under the SCM Agreement and the Anti-Dumping Agreement.
The SCM Agreement does not contain any special or additional rules on the standard of review
to be adopted by the Panel.31 Panels examining claims under the SCM Agreement are guided by the
general function of panels as set out in Article 11 of the DSU, which provides, in relevant part, that:
[A] panel should make an objective assessment of the matter before it, including an
objective assessment of the facts of the case and the applicability of and conformity
with the relevant covered Agreements[.]
A panel's function under Article 11 to make an "objective assessment" embraces both factual
and legal aspects of a panel 's examination of the "matter" .32 We also note the clarification in
Article 3.2 of the DSU that "[r]ecommendations and rulings of the DSB cannot add to or diminish
the rights and obligations provided in the covered Agreements".
Article 17.6 of the Anti-Dumping Agreement sets out a "special" standard of review for claims
under that Agreement and reads as follows:
In examining the matter referred to in paragraph 5:
(i) in its assessment of the facts of the matter, the panel shall determine whether
the authorities ' establishment of the facts was proper and whether their
evaluation of those facts was unbiased and objective. If the establishment of the
facts was proper and the evaluation was unbiased and objective, even though the
panel might have reached a different conclusion, the evaluation shall not be
overturned;
(ii) the panel shall interpret the relevant provisions of the Agreement in accordance
with customary rules of interpretation of public international law. Where the panel
finds that a relevant provision of the Agreement admits of more than one
permissible interpretation, the panel shall find the authorities' measure to be in
conformity with the Agreement if it rests upon one of those permissible
interpretations.33
The first sub paragraph of Article 17.6 concerns the pane l's "assessment of the facts of the
matter", while the second guides its interpretative exercise.34 Under Article 17.6(i), a panel is tasked
with determining, first, whether the investigating authorities' "establishment of the facts was proper"
and, second, whether their "evaluation of those facts was unbiased and objective". Article 17.6(ii),
like Article 3.2 of the DSU, makes clear that the provisions of the Anti -Dumping Agreement are to
be interpreted in accordance with the "customary rules of interpretation of public international law".
If, however, such an interpretative exercise "admits of more than one permissible interpretation",
panels are precluded from reaching a finding of WTO-inconsistency if the challenged measure "rests
upon one of those permissible interpretations".35
Although the text of Article 17.6(i) is couched in terms of an obligation upon WTO panels, we
consider that "the provision, at the same time, in effect defines when investigating authorities can
be considered to have acted inconsistently with the Anti-Dumping Agreement in the course of their
'establishment' and 'evaluation ' of the relevant facts" .36 Only if an investigating
authority's "establishment of the facts" is "proper" and its "evaluation of those facts" is "unbiased

31 Appellate Body Report, US – Lead and Bismuth II, para. 45.
32 Appellate Body Report, US – Hot-Rolled Steel, para. 54.
33 Emphasis added. Article 17.6 of the Anti-Dumping Agreement is identified in Article 1.2 and
Appendix 2 of the DSU as one of the "special or additional rules and procedures" which prevail over the DSU
"[t]o the extent that there is a difference" between those provisions and the provisions of the DSU.
34 Appellate Body Report, US – Hot-Rolled Steel, para. 54. (emphasis original)
35 Appellate Body Report, US – Hot-Rolled Steel, paras. 59-60. (emphasis added)
36 Appellate Body Report, US – Hot-Rolled Steel, para. 56. (emphasis added)

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and objective" can it successfully withstand the scrutiny of a WTO panel under Article 17.6(i). These
requirements are applicable to all aspects of an investigating authorit y's conduct and to all stages
of an investigation.
While different provisions may apply to the examination of claims under the
Anti-Dumping Agreement and the SCM Agreement37, we note that both agreements envisage a
review of measures in the form of agency action, i.e . determinations made by the competent
authorities of WTO Members.38 In terms of the degree of deference to be accorded in reviewing
agency determinations, our tasks under the two covered agreements are, therefore, not entirely
dissimilar.
When reviewing the WTO-consistency of agency determinations , WTO panels are precluded
from engaging in a de novo review of the evidence as well as from substituting their own conclusions
for those of the competent authorities.39 Panels must therefore limit their review to the competent
authorities' determination, focusing, in particular, on the explanation provided by the competent
authorities in their published report.40
The obligation upon panels to make an "objective assessment" of the "matter" and to not
engage in a de novo review has an important corollary. F or purposes of review of their
WTO-consistency, competent authorities must support their determinations with explanations
establishing that they have discharged the specific obligations imposed by the provision s of the
covered agreements that are alleged to be infringed. The "objective assessment" to be made by a
panel reviewing an investigating authorit y's determination is thus enabled and informed by the
explanation provided by an authority.
Whether the explanation provided by a competent authority is sufficiently "reasoned and
adequate" for purposes of establishing compliance with the relevant WTO obligations will depend
inevitably upon the specific facts and circumstances of a given case. 41 Importantly, t he exact
standard of review to be applied by a panel in examining agency determinations is a "function of the
substantive provisions of the specific covered Agreements that are at issue in the dispute"42 as well
as the "specific claim(s) put forth by a complainant" in a given case.43
Although panels must not conduct a de novo review, they must not simply defer to the
conclusions of the competent authority either.44 Instead, a pane l's examination of a competent
authority's conclusions must be "critical and searching", and ought to be "based on the information
contained in the record and the explanations given by the authority in its published report".45 Though
ultimately dependent upon the precise claim that is advanced as well as the specific treaty provision
at issue, the Appellate Body has identified several "general lines of inquiry" that may be relevant to
a panel's task.46 Specifically, with respect to the "duties that apply to panels in their review of the
factual components of the findings made by investigating authorities" – as is the case with many of

37 We do not address the issue of "whether there may ever be circumstances in which separate
consideration of a single injury determination would be required in the light of the standards of review under
the Anti-Dumping Agreement and the SCM Agreement" as this is not the case before us. (Appellate Body
Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 92).
38 Appellate Body Reports, US – Countervailing Duty Investigation on DRAMs, para. 184;
39 Appellate Body Report, US – Lamb, para. 106. In the context of the Anti-Dumping Agreement, see
Appellate Body Report, Thailand – H-Beams, para. 117 ("[t]he aim of Article 17.6(i) is to prevent a panel from
'second-guessing' a determination of a national authority when the establishment of the facts is proper and the
evaluation of those facts is unbiased and objective" (emphasis added)). See also Appellate Body Report,
Russia – Commercial Vehicles, para. 5.102.
40 Appellate Body Report, US – Lamb, para. 105.
41 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.
42 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 95 (referring to
Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 184). See also Appellate Body
43 Appellate Body Report, US – Countervailing Measures (China), para. 4.182.
44 See also Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.
45 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.
46 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93 (referring to
Appellate Body Report, US – Lamb, para. 106).

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the claims in this dispute – we agree with the Appellate Body's general observations in US –
Softwood Lumber VI (Article 21.5 – Canada) that:
[I]t is in the nature of anti -dumping and countervailing duty investigations that an
investigating authority will gather a variety of information and data from different
sources, and that these may suggest different trends and outcomes. The investigating
authority will inevitably be called upon to reconcile this divergent information and data.
However, the evidentiary path that led to the inferences and overall conclusions of the
investigating authority must be clearly discernible in the reasoning and explanations
found in its report. When those inferences and conclusions are challenged, it is the task
of a panel to assess whether the explanations provided by the authority are "reasoned
and adequate" by testing the relationship between the evidence on which the authority
relied in drawing specific inferences, and the coherence of its reasoning . In particular,
the panel must also examine whether the investigating authorit y's reasoning takes
sufficient account of conflicting evidence and responds to competing plausible
explanations of that evidence. This task may also require a panel to consider whether,
in analyzing the record before it, the investigating authority evaluated all of the relevant
evidence in an objective and unbiased manner , so as to reach its findings " without
favouring the interests of any interested party, or group of interested parties , in the
investigation."47
7.2 Interpretative framework
Korea's claims in this dispute raise a number of interpretative issues under the covered
agreements relating to an investigating authorit y's use of facts available in anti -dumping and
countervailing duty investigations. The following section focuses on certain interpretative
considerations relating to an investigating authority's selection of the replacement facts – a recurrent
issue that bears upon our analysis of several of Korea's "as applied" challenges as well as its "as
such" claim. Subsequently, as part of our examination of Kore a's claims, we set out our
interpretation of the provisions conditioning the resort to facts available, and further develop our
analysis regarding the selection of the replacement facts, as regards each claim.
Korea argues that, in the context of the selection of the replacement facts , a "basic
principle[]"48 under both the Anti -Dumping Agreement and the SCM Agreement is that "an
investigating authority must undertake a comparative evaluation to ensure that it is using the 'best
information' available; i.e. the most fitting or 'most appropriate' information available in the case at
hand".49 According to Korea, the panel and Appellate Body in Mexico – Anti-Dumping Measures on
Rice agreed "that investigating authorities must, in accordance with Article 6.8 and Annex II of the
Anti-Dumping Agreement, carry out a comparative evaluation of the evidence available in order to
determine which constitutes the 'best information'" .50 As part of all of its claims under Article 6.8
and Annex II of the Anti -Dumping Agreement and Article 12.7 of the SCM Agreement , Korea thus
alleges that, in selecting the replacement facts, the USDOC does not engage in the "requisite
comparative analysis" to select the "best information available".51 Moreover, in the context of its "as
such" claim, Korea uses the term "best information available " as part of identifying the alleged
unwritten measure and also in presenting the legal basis of its complaint.52
The United States responds that "neither Article 6.8 nor Annex II of the
Anti-Dumping Agreement contains the term 'compa rative evaluation'" .53 Referring to the

47 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 97 (quoting
Appellate Body Report, US – Hot-Rolled Steel, para. 193). (emphasis added)
48 Korea's first written submission, para. 63.
49 Korea's first written submission, para. 71.
50 Korea's first written submission, para. 71 (quoting Appellate Body Report, Mexico – Anti-Dumping
Measures on Rice, para. 289, in turn referring to Panel Report, Mexico – Anti-Dumping Measures on Rice,
para. 7.166).
51 See, e.g. Korea's first written submission, paras. 88, 126, 201, and 859; response to Panel question
No. 49, para. 4 ("[s]uch an 'inevitable' exercise of selecting the 'best information available' must necessarily
entail a process of (comparative) assessment and evaluation among the facts that are available to the
authority"). See also Korea's first written submission, paras. 323, 337, 443, and 853; and second written
submission, paras. 264 and 367.
52 Korea's panel request, paras. 9 and 32-34.
53 United States' first written submission, para. 34.

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Appellate Body Report in US – Carbon Steel (India) , the United States submits that neither the
Anti-Dumping Agreement, nor the SCM Agreement, imposes an obligation upon investigating
authorities to engage in a "comparative evaluation" in all circumstances. 54 The United States also
considers "erroneous" Korea's "repeated[] invo[cation of] the title 'best information available ' as if
it is a separate legal obligation or legal standard by which USDO C's determinations should be
assessed".55
Given the parties ' disagreement on the obligations that apply to investigating
authorities' selection of the replacement facts , we begin by setting out our i nterpretation – in
accordance with the customary rules of interpretation of public international law – of the relevant
provisions under the Anti-Dumping Agreement and the SCM Agreement that bear upon investigating
authorities' selection of replacement facts. We then address whether and to what extent the covered
agreements require investigating authorities to select the "best information available" in order to
arrive at an "accurate" determination and to engage in a "comparative evaluation".
7.2.1 Anti-Dumping Agreement
In accordance with Article 31 of the Vienna Convention, our task is to ascertain the ordinary
meaning of the terms of Article 6.8 of the Anti-Dumping Agreement in their context and in light of
their object and purpose. Article 6 of the Anti -Dumping Agreement is entitled "Evidence" and sets
out the "evidentiary rul es that apply throughout the course of an anti -dumping investigation, and
provide[s] also for due process rights that are enjoyed by 'interested parties' throughout such an
investigation".56 Article 6.8 provides that:
In cases in which any interested party refuses access to, or otherwise does not provide,
necessary information within a reasonable period or significantly impedes the
investigation, preliminary and final determinations, affirmative or negative, may be
made on the basis of the facts available. The provisions of Annex II shall be observed
in the application of this paragraph.
The first sentence of Article 6.8 allows investigating authorit ies – through the use of the
permissive "may" – to overcome a lack of information in the responses of interested parties, by
using "facts" that are otherwise "available" to the authorities as the basis for completing their
determinations.57 The provision thus addresses the "dilemma" for investigating authorities when
faced with a gap in the r esponses of interested parties .58 By allowing the filling of such gaps,
Article 6.8 helps ensure that investigating authorities do not cede all control of the investigation to
the interested parties.59
At the same time, the first sentence of Article 6.8 also imposes important limitations upon
investigating authorities' use of the "facts" that are otherwise "available" in order to overcome a lack
of information and complete their determinations.60 The first sentence limits investigating
authorities' recourse to facts available only to situations where an "interested party" (a) "refuses
access to, or otherwise does not provide, necessary information within a reasonable period of time";
or (b) "significantly impedes the investigation". 61 In both situations, investigating authorities are
required to complete their determinations on the basis of "facts" that are "available" to them.62
The second sentence of Article 6.8 and Annex II to the Anti -Dumping Agreement impose
further limitations upon investigating authorities ' use of "facts" that are otherwise "available". The
second sentence mandates compliance with the provisions of Annex II – entitled "Best information
available in terms of paragraph 8 of Article 6" – in the application of Article 6.8.63 The reference to

54 United States' first written submission, paras. 34-35 (quoting Appellate Body Report, US – Carbon
Steel (India), paras. 4.434-4.435).
55 United States' opening statement at the first meeting of the Panel, para. 47; opening statement at
the second meeting of the Panel, para. 54; and response to Panel question No. 49, para. 10.
56 Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 136.
57 Appellate Body Report, US – Hot-Rolled Steel, para. 77.
58 Panel Report, Egypt – Steel Rebar, para. 7.146.
59 See, e.g. Appellate Body Report, US – Hot-Rolled Steel, paras. 73 and 86.
60 Panel Report, US – Shrimp (Viet Nam), para. 7.233.
61 Panel Report, Egypt – Steel Rebar, para. 7.146.

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"this paragraph" in the second sentence of Article 6.8 indicates that "Annex II applies to Article 6.8
in its entirety, and thus contains certain substantive parameters for the application of the individual
elements of that article".64 Moreover, the term "shall be observed" indicates that "these parameters,
which address both when facts available can be used, and what information can be used as facts
available, must be followed" by investigating authorities. 65 Thus, despite the repeated use of the
term "should" in Annex II, its provisions are mandatory because of the use of the term "shall" in the
second sentence of Article 6.8. For this reason, investigating authorities acting inconsistently with
the "additional preconditions"66 and "operational requirements"67 set out in the relevant provisions
of Annex II will also be found to be in breach of Article 6.8.
In this manner, Article 6.8 and Annex II to the Anti-Dumping Agreement together reflect a
carefully constructed and fine balance struck by the drafters between, on the one hand, the interests
of investigating authorities in controlling and completing their investigations and, on the other hand,
the due process and participatory rights of interested parties.68
A question that arises in several claims in t his dispute is what replacement facts may form
the basis for investigating authorities' determinations. We note that Article 6.8 contemplates the use
of facts available only to replace the missing information that is "necessary" for purposes of the
specific determination that is to be made .69 By its terms, Article 6.8 is "not directed at mitigating
the absence of 'any ' or 'unnecessa ry' information, but is rather concerned with overcoming the
absence of information required to complete a determination". 70 This suggests that "the process of
identifying the 'facts available ' should be limited to identifying replacements for the 'necessa ry
information' that is missing from the record".71 In this sense, "there has to be a connection between
the 'necessary information ' that is missing and the particular 'facts available ' on which a
determination … is based".72 In our view, the text of Article 6.8 requires investigating authorities to
base their determinations on those "facts" that are "available" and that "reasonably replace" the
missing "necessary" information. 73 The requirement that investigating authorities must select
reasonable replacements for the missing "necessary" information implies that such selection cannot
be aimed at punishing a non-cooperating party.
That said, given that an investigating authority may lack full and complete knowledge of the
missing "necessary" information when resorting to the use of facts available under Article 6.874, the
search for such "reasonable replacements" must be conducted in light of the specific facts and
circumstances of each instance in which an investigating authority use s facts available. 75
Importantly, a panel 's review of an investigating authority 's selection of the replacement facts
should be conducted in light of the information that was actually available to the in vestigating
authority during the course of the investigation. Whether an investigating authority selected
reasonable replacements for the missing information is, therefore, not to be determined in the

64 Panel Report, Egypt – Steel Rebar, para. 7.152.
65 Panel Report, Egypt – Steel Rebar, para. 7.152.
67 Panel Report, US – Steel Plate, para. 7.56.
68 See, e.g. Appellate Body Report, US – Hot-Rolled Steel, para. 102. See also Appellate Body Report,
US – Oil Country Tubular Goods Sunset Reviews, para. 241.
69 See also, in the context of the similarly worded Article 12.7 of the SCM Agreement, Appellate Body
Report, US – Countervailing Measures (China), para. 4.178 (quoting Appellate Body Report, US – Carbon Steel
(India), para. 4.416, in turn quoting Appellate Body Report, Mexico – Anti-Dumping Measures on Rice,
para. 293), noting that that Article 12.7 "permits the use of facts on record solely for the purpose of replacing
information that may be missing".
70 Appellate Body Report, US – Carbon Steel (India), para. 4.416. See also Panel Report, EC – Salmon
(Norway), para. 7.343.
71 Appellate Body Report, US – Carbon Steel (India), para. 4.416. (emphasis added)
72 Appellate Body Report, US – Carbon Steel (India), para. 4.416.
73 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 294.
74 See, e.g. Appellate Body Report, US – Carbon Steel (India), para. 4.426 (referring to "the selection of
a replacement for an unknown fact" (emphasis added)); Panel Report, US – Carbon Steel (India), fn 734
(noting that "[i]n the case of non-cooperation by an interested party … the investigating authority will not
know the actual missing relevant information".)
75 Appellate Body Report, US – Carbon Steel (India), para. 4.421.

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abstract, e.g. by reference to "necessary" information that may subsequently be revealed or
discovered outside the context of an investigation.76
Furthermore, we note that Annex II to the Anti -Dumping Agreement is entitled "Best
information available in terms of paragraph 8 of Article 6". By its own terms, the title does not create
an independent obligation. 77 As discussed in greater detail below, w e consider that the title of
Annex II usefully highlights that the object and purpose of the disciplines in Article 6.8 and Annex II,
as a whole, is to ensure that the conduct of investigating authorities aims to select "best information
available" in order to fill the evidentiary void resulting from the missing "necessary" information.78
This supports our interpretation above that Article 6.8 requires investigating authorities to select
those facts that reasonably replace in the specific facts and circumstances surrounding each instance
of missing "necessary" information.
Turning to the context provided by Annex II, we note that the first and second sentences of
paragraph 7 require that, in circumstances where investigating authorities "have to base their
findings" on information from a "secondary source" they must exercise "special circumspection" and,
where practicable, check such information from other independent sources at their disposal. 79 This
indicates that investigating authorities are required to exercise their judgment in selecting facts
available.80 In ou r view, the tasks of exercising "special circumspection" and checking the
information81 provide contextual support for the view that the process of selecting the "facts
available" under Article 6.8 is aimed at identifying reasonable replacements for the mi ssing
information, and not at punishing a non-cooperating party.82
Article 17.6(i) of the Anti -Dumping Agreement also provides relevant context for the
interpretation of Article 6.8. Article 17.6(i) requires that, "in its assessment of the facts of the
matter, the panel shall determine whether the authorities' establishment of the facts was proper and
whether their evaluation of those facts was unbiased and objective" . As we have explained 83,
although Article 17.6(i) speaks, in the first instance, to the task of WTO panels, "the provision, at
the same time, in effect defines when investigating authorities can be considered to have acted
inconsistently with the Anti -Dumping Agreement in the course of their 'establishment ' and
'evaluation' of the relevant f acts".84 Thus, Article 17.6(i) requires that an investigating
authority's "establishment of the facts" be "proper" and that its "evaluation of those facts" be
"unbiased and objective". We note, in this regard, that Article 6.8 is also directed at an investigating
authority's "establishment" and "evaluation" of "facts", albeit those that are otherwise "available" in
the absence of the "necessary" information. By requiring that an investigating
authority's establishment of the facts is "proper" and its evaluation of the facts that are available is
"unbiased and objective" 85, Article 17.6(i) thus supports the view that the authority must select
reasonable replacements for the missing information, and not be aimed at punishing the
non-cooperating party.
We also consider relevant as context paragraph 3 of Annex II, the first sentence of which
requires that:

76 We note the Appellate Body's observation that "[t]here is no doubt that a Member may not seek to
defend its agency's decision on the basis of evidence not contained in the record of the investigation".
(Appellate Body Report, US – Countervailing Duty Investigation on DRAMs, para. 161).
77 See paras. 7.43-7.44 below.
78 Korea's response to Panel question No. 49, para. 5.
79 Both Korea and the United States agree that it is not necessary for the Panel to comprehensively
define what constitutes "a secondary source" for purposes of this dispute. (Korea's comments on the
United States' response to Panel question No. 52, p. 13; United States' response to Panel question No. 52,
para. 13).
80 Panel Report, Korea – Certain Paper (Article 21.5 – Indonesia), para. 6.26.
81 Panel Reports, Korea – Certain Paper (Article 21.5 – Indonesia), para. 6.27; Egypt – Steel Rebar,
para. 7.154.
82 Appellate Body Reports, US – Anti-Dumping Methodologies (China), para. 5.173; US – Carbon Steel
(India), para. 4.416.
83 See para. 7.13 above.
84 Appellate Body Report, US – Hot-Rolled Steel, para. 56. (original emphasis omitted; emphasis added)
85 This requires an investigating authority to reach its findings "without favouring the interests of any
interested party, or group of interested parties" in the investigation. (Appellate Body Report, US – Softwood
Lumber VI (Article 21.5 – Canada), para. 97 (quoting Appellate Body Report, US – Hot-Rolled Steel,
para. 193)).

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All information which is verifiable, which is appropriately submitted so that it can be
used in the investigation without undue difficulties, which is supplied in a timely fashion,
and, where applicable, which is supplied in a medium or computer language requested
by the authorities, should be taken into account when determinations are made.86
The ordinary meaning of paragraph 3 requ ires investigating authorities to take into account all
information that fulfils certain criteria "when determinations are made". We agree with prior panels
and the Appellate Body that paragraph 3 serves as a touchstone for examining whether an
investigating authority properly rejected information submitted by an interested party as a
precondition for resorting to the use of facts available .87 However, we note that the scope of the
first sentence is textually not limited to that issue . Rather, it applies "when determinations are
made", which includes the time at which replacement facts are selected to form the basis of a
determination.88 Further, the first sentence speaks of "all information", without limiting that to
information submitt ed or supplied by a particular interested party, such as the allegedly
non-cooperating exporter.89 Thus, besides conditioning an investigating authority 's resort to facts
available, paragraph 3 of Annex II, in our view, also provides useful context for an investigating
authority's selection of the replacement facts under Article 6.8.90
In particular , paragraph 3 of Annex II provides useful context for the requirement under
Article 6.8 that determinations be made on the basis of "facts" that are "available" to an investigating
authority. The provision supports the interpretation that, in selecting the replacement "facts" for the
missing "necessary" information, an investigating authority is required to take into account all facts
that are properly available to it.91
Finally, we note that the last sentence of paragraph 7 of Annex II makes it "clear … that if an
interested party does not cooperate and thus relevant information is being withheld from the
authorities, this situation could lead to a result which is less favourable to the party than if the party
did cooperate". This indicates that a "less favourable" result is not necessarily WTO-inconsistent and
that an investigating autho rity is not always required to select th ose replacement facts that are
"most favourable" to a non-cooperating party. Rather, "non-cooperation creates a situation in which
a less favourable result becomes possible due to the selection of a replacement for an unknown
fact".92 We consider that paragraph 7 provides contextual support for the understanding that the
"procedural circumstances in which information is missing" – including the interested party 's own
conduct and its awareness of the c onsequences of not providing the "necessary" information 93 –
may be relevant to an investigating authority's selection of replacement facts under Article 6.8.94 At
the same time , nothing in the text of paragraph 7 suggests that procedural circumstances entitle
investigating authorities to dispense with the requirement to select reasonable replacements for the
missing "necessary" information.

86 Emphasis added.
87 See, e.g. Panel Reports, China – Broiler Products (Article 21.5 – US), para. 7.342; Mexico – Steel
Pipes and Tubes, para. 7.164; EC – Salmon (Norway), paras. 7.346 and 7.355; US – Steel Plate, para. 7.55;
and Egypt – Steel Rebar, para. 7.159; and Appellate Body Report, US – Hot-Rolled Steel, paras. 80-81. For a
fuller discussion of how paragraph 3 of Annex II disciplines an investigating authority's rejection of information
submitted by interested parties, see para. 7.138 below.
88 The second sentence of paragraph 3 addresses the issue of when "the failure to respond in the
preferred medium or computer language should not be considered to significantly impede the investigation",
but it does not limit the temporal scope of the requirement in the first sentence to take all information into
account "when determinations are made".
89 In this regard, we note that paragraph 7 of Annex II refers to "information from a secondary source".
90 The panel in Mexico – Anti-Dumping Measures on Rice also discussed paragraph 3 of Annex II in the
context of an investigating authority's selection of replacement facts. (Panel Report, Mexico – Anti-Dumping
Measures on Rice, para. 7.166).
91 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.172 (referring to
Appellate Body Reports, Mexico – Anti-Dumping Measures on Rice, para. 294; and US – Carbon Steel (India),
para. 4.419).
92 Appellate Body Report, US – Carbon Steel (India), para. 4.426.
93 As noted by the Appellate Body, paragraph 1 of Annex II to the Anti-Dumping Agreement, which
serves as relevant context for the interpretation of Article 6.8, "makes a connection between the 'awareness' of
an interested party, and the ability for an investigating authority to have recourse to the 'facts available'".
(Appellate Body Report, US – Carbon Steel (India), para. 4.426).
94 Appellate Body Report, US – Carbon Steel (India), para. 4.426.

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In sum, we consider that the terms of Article 6.8, interpreted in light of th eir context and
object and purpose , require investigating authorities to select – in an unbiased and objective
manner – those facts available that constitute reasonable replacements for the missing "necessary"
information in the specific facts and circumstances of a given case. In doing so, investigating
authorities must take into account all facts that are properly available to them. In selecting the
replacement facts, Article 6.8 does not require investigating authorities to select those facts that are
most "favourable" to the non-cooperating party. Investigating authorities may take into account the
procedural circumstances in which information is missing , but Article 6.8 does not condone the
selection of replacement facts for the purpose of punishing interested parties.
7.2.2 SCM Agreement
Having addressed Article 6.8 of the Anti-Dumping Agreement, we turn to Article 12.7 of the
SCM Agreement, which states that:
In cases in which any interested Memb er or interested party refuses access to, or
otherwise does not provide, necessary information within a reasonable period or
significantly impedes the investigation, preliminary and final determinations, affirmative
or negative, may be made on the basis of the facts available.
Article 12.7 of the SCM Agreement shares many textual similarities with the first sentence of
Article 6.8 of the Anti-Dumping Agreement, but we note that the term "interested Member or" does
not appear in the latter provision.95 These provisions share a common aim, namely, "permit[ting]
an investigating authority, under certain circumstances, to fill in gaps in the information necessary
to arrive at a conclusion as to subsidization (or dumping) and injury".96 Article 12.7 allows recourse
to facts available in similar situations to those contemplated in Article 6.8 of the
Anti-Dumping Agreement. Moreover, both provisions form part of the disciplines on the identification
and collection of evidence and use the term "facts available" to denote replacements for the missing
"necessary" information.97 Our interpretative analysis of the text of the first sentence of Article 6.8
of the Anti -Dumping Agreement, therefore, remains equally relevant to our interpretation of
Article 12.7 of the SCM Agreement. For reasons explained above, Article 12.7 requires investigating
authorities to select reasonable replacements for the missing "necessary" information.
We note that, unlike the Anti -Dumping Agreement, the SCM Agreement does not set out in
an annex the precise parameters that are applicable to an investigating authorit y's use of facts
available.98 We agree with the Appellate Body that "[t]his does not mean, however, that no such
conditions exist in the SCM Agreement".99 Several provisions of the SCM Agreement provide
additional context for interpreti ng Article 12.7. Article 12.1 supports the understanding that
investigating authorities are required to take into account all facts that are properly available to
them in selecting reasonable replacements for the missing information under Article 12.7.100 The
context provided by Articles 12.4 and 12.11 "suggest[s] that the manner or procedural
circumstances in which information is missing can be relevant to an investigating authority's use of
'facts available' under Article 12.7".101
While we remain mindful of the absence in the SCM Agreement of an equivalent of Annex II
to the Anti-Dumping Agreement, we agree with the Appellate Body that "it would be anomalous if
Article 12.7 of the SCM Agreement were to permit the use of 'facts available' in countervailing duty
investigations in a manner markedly different from that in anti -dumping investigations" .102

95 See also, paras. 7.269-7.270 below.
96 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 291.
97 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 291-292 (quoting
Appellate Body Report, EC – Tube or Pipe Fittings, para. 138, in turn quoting Appellate Body Report, EC – Bed
Linen (Article 21.5 – India), para. 136).
98 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 291.
99 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 291.
100 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 292 and 294. See also
Appellate Body Report, US – Carbon Steel (India), para. 4.417.
101 Appellate Body Report, US – Carbon Steel (India), para. 4.422.
102 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 295. See also Appellate Body
Report, US – Carbon Steel (India), para. 4.423.

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Depending upon the interpretativ e issue at hand 103, therefore, Annex II to the
Anti-Dumping Agreement may also provide relevant context for the interpretation of Article 12.7 of
the SCM Agreement.104 We consider our observations regarding the contextual relevance of the
provisions of Annex II to the Anti-Dumping Agreement for interpreting Article 6.8 thereof remain
also relevant for purposes of interpreting Article 12.7 of the SCM Agreement.
Thus, like Article 6.8 of the Anti -Dumping Agreement, Article 12.7 of the SCM Agreement
requires investigating authorities to select those facts available that constitute reasonable
replacements for the missing "necessary" information in the specific facts and circumstances of a
given case. In selecting reasonable replacements, investigating authorities must take into account
all facts that are properly available to them. While investigating authorities may take into account
the procedural circumstances in which information is missing in their selection of the replacement
facts, Article 12.7 does not allow such selection for the purpose of punishing the non -cooperating
party.
7.2.3 "Best information available" and "comparative evaluation"
Korea argues that an investigating authority is under an obligation "to ensure the information
used for facts available is the best information available that reasonably replaces the alleged missing
information to arrive at an accurate determination".105 According to Korea, "the investigating
authority's obligation to select the 'best information available' is firmly grounded in the express text
of Annex II, as well as the context and purpose of Article 6.8 of the Anti -Dumping Agreement, as
clearly confirmed by well -established WTO jurisprudence" .106 Korea clarifies "that the concept of
'best' information is not the same as 'the most favourable ' information", but relates to the
"reliability" and "relevance" of the replacement information with a view to "identifying the 'second
best' information when the 'first best' information is not available".107 The United States, for its part,
maintains that "the title of Annex II does not provide a separate legal obligation or legal standard"
by which investigating authorities' determinations should be assessed. Rather, for the United States,
"the substantive obligations in Annex II are set out in the provisions contained in paragraphs 1
through 7".108
We consider that the title of Annex II usefully highlights that the object and purpose of the
disciplines in Article 6.8 and Annex II, as a whole, is to ensure that investigating authorities' conduct
is aimed at selecting "best information available" in order to fill the evidentiary void resulting from
the missing "necessary" inform ation.109 That said, we note that, despite using these terms in the
title of the Annex II, the drafters did not use them in Article 6.8, nor in paragraphs 1 to 7 of Annex II
or anywhere else in the Anti -Dumping Agreement. They provided no definition of what constitutes
"best information available" in the abstract.
We consider these choices to be important because the drafters' ends must be distinguished
from their chosen means. 110 What constitutes the "best information av ailable" can only be
determined in the specific facts and circumstances of a given case. The "first -best" or most
"accurate" information is, under all circumstances, the information that is "necessary". 111 In the
absence of a reference point provided by actual knowledge of such information – as may be the case
when an interested party refuses access to, or otherwise does not provide, "necessary"
information – it may be very difficult to ascertain whether information is "second -best" or most

103 We note the absence in Article 6.8 and Annex II of the Anti-Dumping Agreement of a reference to an
"interested Member". We also note that Article 6.11(ii) of the Anti-Dumping Agreement indicates that the term
"interested parties" for purposes of that agreement includes "the government of the exporting Member".
104 Appellate Body Report, US – Carbon Steel (India), para. 4.423.
105 Korea's response to Panel question No. 49, para. 3. (emphasis original)
106 Korea's response to Panel question No. 49, para. 7.
107 Korea's response to Panel question No. 49, para. 8.
108 United States' comments on Korea's response to Panel question No. 49, para. 3.
109 Korea's response to Panel question No. 49, para. 5.
110 See, e.g. International Court of Justice, Case Concerning the Arbitral Award of 31 July 1989
(Guinea-Bissau v. Senegal), Judgment, I.C.J. Reports 1991, p. 53, para. 56. See also Panel Report,
Guatemala – Cement II, para. 8.162.
111 Panel Report, US – Hot-Rolled Steel, para. 7.55.

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"accurate" in the abstract.112 Rather, the important, albeit general, goals of selecting the "best
information available" and arriving at an "accurate" determination are operationalized and made
effective through the very specific obligations under Article 6.8 and the provisions of Annex II that
bear upon an investigating authorit y's conduct in a given case . The fact that, in selecting the
replacements, investigating authorities are entitled to take into upon the "procedural circumstances
in which the information is mis sing"113 further supports the view that , within the realm of facts
available, the "best information available", or an "accurate" determination, is simply one that results
from complying with the obligations in Article 6.8 and Annex II in the specific facts and
circumstances of a given case.114
Relatedly, the parties disagree on the need for a "comparative evaluation" of all the
information that is available to an investigating authority. Korea argues that an "investigating
authority must undertake a comparat ive evaluation to ensure that it is using the 'best
information' available; i.e. the most fitting or 'most appropriate' information available in the case at
hand".115 The United States rebuts that "neither Article 6.8 nor Annex II of the
Anti-Dumping Agreement contains the term 'comparative evaluation'".116
To the extent that Korea suggests that investigating authorities are always under an obligation
to undertake a "comparative evaluation" in all circumstances, we recall that the Appellate Body
rejected a similar argument under Article 12.7 of the SCM Agreement in US – Carbon Steel (India).
Rejecting "Indi a's argument that Article 12.7 of the SCM Agreement requires a comparative
evaluation of the 'facts available' in every case"117, the Appellate Body explained that "the extent to
which an 'evaluation ' of the 'facts available ' is required under Article 12.7, and the form it should
take, depend on the particular circumstances of a given case, including the quantity and quality of
the available facts on t he record, and the types of determinations to be made in a given
investigation".118 Disagreeing with India's "proposition that a 'comparative evaluation' is a necessary
pre-requisite to making a determination in every instance in which an investigating authority has
recourse to the 'facts available'", the Appellate Body explained that "[c]onceivably, there may be
circumstances where the kind of 'comparative evaluation' envisaged by India is not practicable".119
The treaty text does not require a comparative evaluation in all circumstances. As discussed,
however, it does require investigating authorities to select reasonable replacements for the missing
"necessary" information. An examination of the "reasonableness" of the replacement facts implies
an evaluation and the exercise of judgment by an investigating authority, taking into account – in
an objective and unbiased manner – all facts that are properly before it as well as t he procedural
circumstances in which the information is missing. In certain situations, it may well be that such an
evaluative exercise would need to be comparative in nature. There may be other circumstances,
however, in which there is no need to engage in a comparative evaluation or where another approach
may be better suited. 120 Although investigating authorities remain at all times under an obligation
to take into account all information that is properly before them with a view to selecting reasonable

112 The notion of "best information available" is therefore better understood in the sense that there is
"no better information" actually available to an investigating authority to serve as a reasonable replacement in
a given situation. (Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.166 ("for the conditions of
Article 6.8 of the AD Agreement and Annex II to be complied with, there can be no better information available
to be used in the particular circumstances")).
113 We note Korea's statement that the "degree of cooperation may be something to take into
consideration when weighing and balancing the pieces of information before the authority". (Korea's response
114 We note Korea's statement that "it is difficult to isolate the different paragraphs of Annex II as they
all reflect the same notion of using the 'best information available' when it becomes necessary to rely on facts
available under Article 6.8 of the Anti-Dumping Agreement." (Korea's response to Panel question No. 105,
para. 145).
115 Korea's first written submission, para. 71. See also Korea's response to Panel question No. 49,
para. 4 ("such an 'inevitable' exercise of selecting the 'best information available' must necessarily entail a
process of (comparative) assessment and evaluation among the facts that are available to the authority").
116 United States' first written submission, para. 34.
117 Appellate Body Report, US – Carbon Steel (India), para. 4.434.
118 Appellate Body Report, US – Carbon Steel (India), para. 4.434.
119 Appellate Body Report, US – Carbon Steel (India), para. 4.434.
120 For example, the Appellate Body has observed that "a comparative approach to the evaluation
required would not be feasible where there is only one set of reliable information on the record that is relevant
to a particular issue and may thus serve as a factual basis for a determination". (Appellate Body Report,

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replacements for the missing information, they enjoy a certain discretion in their choice of the means
for discharging this obligation in light of the specific facts and circumstances of the case before them.
For these reasons, we disagree with Korea insofar as i t argues that, under both the
Anti-Dumping and the SCM Agreement, "an investigating authority must undertake a comparative
evaluation to ensure that it is using the 'best information ' available"121 in all circumstances. A
comparative evaluation may not be a necessary prerequisite to making a determination in every
instance in which an investigating authority resorts to "facts available". Rather, we agree with the
Appellate Body that the "extent" of the evaluation of the "fa cts available" that is required, and the
"form" it should take, depend upon the "particular circumstances of a given case, including the
nature, quality, and amount of the evidence on the record, and the particular determinations to be
made" in a given investigation.122
7.3 Korea's "as applied" claims
7.3.1 Anti-dumping duties on certain corrosion -resistant steel products from Korea
(USDOC investigation number A-580-878)
Introduction
Korea claims that the United States acted inconsistently with Article 6.8 and Annex II to the
Anti-Dumping Agreement in the investigation concerning certain corrosion -resistant steel products
from Korea (the "CORE AD investigation").123 Korea alleges that there was no basis for the USDOC
to resort to facts available because "Hyundai Steel provided all information requested by the USDOC
after spending substantial time, effort, and resources to comply with the extremely complex
requests"124 and it "simply had a hard time making sense of the unguided request". 125 Korea also
claims that, in selecting the replacement facts, the USDOC used information from secondary sources
without exercising special circumspection, and failed to ensure that the information selected was a
reasonable replacement for the missing "necessary" information. 126 Korea's claims concern the
USDOC's use of facts available in relation to Hyundai Steel Corporation ( Hyundai Steel)'s sales to
unaffiliated parties of further manufactured products where CORE was used as an input (i.e. skelp,
sheet, and blanks (SSBs); tailor welded blanks (TWBs); and auto parts).127 The USDOC assigned to
these sales a dumping margin of 86.34% – the highest margin available in the petition.128
We begin by setting out the relevant factual background of the underlying investigation.
Subsequently, we summarize the parties ' main arguments before examining Korea 's claims of

121 Korea's first written submission, para. 71.
122 Appellate Body Report, US – Carbon Steel (India), para. 4.434. We note Japan's statement that a
"comparative evaluation" of all evidence available is not necessarily required in "each and every case", but an
"investigating authority should be able to explain, with sufficient basis, what evaluation it undertook".
(Japan's third-party submission, para. 22).
123 Korea's first written submission, para. 86.
124 Korea's first written submission, para. 144.
125 Korea's first written submission, para. 135.
126 Korea's first written submission, paras. 88 and 185.
127 Korea's first written submission, para. 96. The USDOC excused Hyundai Steel from reporting further
manufactured sales when the first unaffiliated sale was of the final product (a completed automobile).
(Korea's first written submission, para. 96; CORE issues and decision memorandum, (Exhibit KOR-5), p. 9).
According to Korea, [[***]]% of US sales of CORE by Hyundai Steel were made directly to unaffiliated
US customers; [[***]]% were sold through Hyundai Steel's affiliated Korean distributor, Hyundai Corporation,
who, in turn, sold the products to its US subsidiary Hyundai Corporation USA; and, finally, [[***]]% of the
US sales were made through Hyundai Steel's wholly-owned US affiliate, Hyundai Steel America (HSA). HSA, in
turn, dealt with these products in one of the three ways: it resold the CORE as coil; it performed minor
processing (slitting, shearing, or stamping) and sold the resulting products as SSBs; or it consumed the CORE
in manufacturing TWBs. Some of these products (coil, SSBs, and TWBs) were sold to affiliated and unaffiliated
vendors, who, after further processing, sold the resulting products (auto parts) to Hyundai Motor
Manufacturing Alabama or Kia Motor Manufacturing Georgia, who used them to produce automobiles and sold
the final products to unaffiliated US customers through their affiliated distributors (Hyundai Motor America and
Kia Motor America). (Korea's first written submission, paras. 93-95; CORE Section A questionnaire response,
(Exhibit KOR-2 (BCI)), pp. A-1-A-2).
128 Korea's first written submission, para. 121.

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WTO-inconsistency in respect of the USDO C's resort to facts available and its selection of the
replacement facts.
Factual background
In its initial questionnaire dated 27 July 2015 129, the USDOC requested Hyundai Steel to
respond to Sections A, B, C, and D, and noted that Hyundai Steel was not " currently" required to
respond to Section E, concerning the "Cost of Further Manufacturing or Assembly Performed in the
United States".130 However, the USDOC clarified that "we may request a response to this section if
we determine, based on your response to section A, that we require the information to account for
further-processing expenses incurred in the United States".131
On 17 August 2015, Hyundai Steel sought an exemption from providing a Section E
response132 and requested the USDOC to calculate the constructed export price (CEP) based on the
"special rule" provided in the US anti -dumping statute instead.133 In the meantime, Hyundai Steel
submitted its Section A response on 4 September 2015 134 and its Section C response on
29 September 2015. 135 On 15 October 2015, the USDOC denied Hyundai Steel 's request for a
"special exemption" in respect of Section E136, and requested Hyundai Steel to file such a response
for the products concerned and to make any necessary revisions to its Sections C-D databases in
accordance with its Section E reporting.137 On 22 October 2015, Hyundai Steel requested "a meeting
with and guidance from " the USDOC, noting difficulties in collecting and preparing the data to
conform to the USDOC's "standard questionnaire".138 Hyundai Steel also requested an extension of
two weeks to submit its further manufacturing cost data, from the date that the USDOC provided
such reporting guidance. On 27 October 2015, Hyundai Steel's counsel met with the USDOC officials
to discuss issues relating to Hyundai Steel's Section E response.139
On 2 November 2015 140, Hyundai Steel submitted a revised US sales database (originally
submitted on 29 September 2015 ) including the further manufactured sales and its first Section E

129 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6).
130 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2.
131 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2.
132 Hyundai Steel exclusion request, (Exhibit KOR-7 (BCI)), p. 2.
133 The "special rule" concerns the calculation of the CEP for subject merchandise imported by an
affiliated person when the "value added in the United States by the affiliated person is likely to exceed
substantially the value of the subject merchandise" (19 U.S.C. § 1677a, (Exhibit KOR-3), Section (e)
(emphasis added)). The value added in the United States will normally be determined to "exceed substantially"
the value of the subject merchandise if the value added is estimated to be "at least 65 percent of the
price charged to the first unaffiliated purchaser for the merchandise as sold in the United States".
(CFR § 351.402(c), (Exhibit KOR-4)). In such situations, the "special rule" envisages the calculation of the CEP
on the basis of a comparison with the price of identical subject merchandise or other subject merchandise sold
by the exporter or producer to an unaffiliated person, provided that there is a "sufficient quantity of sales to
provide a reasonable basis for comparison". (19 U.S.C. § 1677a, (Exhibit KOR-3), Section (e)).
134 CORE Section A questionnaire response, (Exhibit KOR-2 (BCI)).
135 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), p. 1.
136 USDOC response to exclusion request, (Exhibit KOR-11), p. 1. In its final determination, the USDOC
explained that:
Hyundai [Steel]'s TWBs consist of two subject merchandise CORE inputs. Yet, Hyundai
[Steel]'s value added calculations for TWBs treated one imported CORE component as part of the
value added in the United States to the other imported CORE component, and then doubled the
purchase price for the further manufactured product as part of the calculation of the value added.
Instead of allocating the value added in the United States to each subject CORE component of the
TWB (two subject CONNUMs), Hyundai [Steel] added the value of one subject CONNUM to the
other as value added, e.g., thereby inflating the value added through further manufacturing to
approach the 65 percent threshold. Thus, the [USDOC] instructed Hyundai to report its sales of
these two products to unaffiliated parties along with the revised U.S. sales and further
manufacturing cost databases.
(CORE issues and decision memorandum, (Exhibit KOR-5), p. 9 (emphasis original))
137 USDOC response to exclusion request, (Exhibit KOR-11), pp. 1-2.
138 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13).
139 Meeting with counsel to Hyundai Steel (27 October 2015), (Exhibit KOR-14).
140 The USDOC originally provided Hyundai Steel to file its responses by 29 October 2015, but
subsequently provided an extension of two business days following a request by Hyundai Steel. (See USDOC
response to exclusion request, (Exhibit KOR-11), p. 2; CORE Section E questionnaire response,
(Exhibit KOR-15 (BCI)), p. 6).

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response.141 On 19 November 2 015, the USDOC issued its second supplemental questionnaire to
Sections B-C and first supplemental questionnaire for Section E, noting that it had "identified certain
areas in the questionnaire response … that require[d] additional information". 142 In a mee ting on
24 November 2015, held in order to discuss issues relating to Hyundai Steel's reporting of further
manufactured sales in the United States, Hyundai Steel noted the difficulty in gathering the
information requested.143 On 30 November 2015, Hyundai Steel filed its first supplemental Section E
response with additional and revised sales data. 144 The USDOC issued a second supplemental
questionnaire on 15 December 2015, seeking, inter alia , an explanation for certain "downward"
changes in the first supplemental Section E response145, and asking Hyundai Steel to provide, if
necessary, "a new further manufacturing cost database which incorporates all changes resulting
from the questions above".146
On 21 December 2015, the USDOC issued its preliminary determination, finding that
"necessary information is not available on the record of the investigation and that Hyundai [Steel],
because of the issues affecting its further manufactured sales responses … significantly impeded the
proceeding".147 The USDOC observed that "the response and databases for sales of further
manufactured sales submitted by Hyundai [Steel] as part of its November 2, 2015 response [i.e. the
initial questionnaire response] were deficient and unusable", and due to the multip le deficiencies
noted, Hyundai Steel had been instructed to submit revised, usable databases. 148 Noting that
Hyundai Steel submitted revised responses and databases on 2 December 2015, the USDOC
explained that there was "inadequate time to analyze whether the revisions made by Hyundai to its
responses or databases are reliable or accurate" and its analysis of these responses was hindered
by shortcomings in the narrative portion of Hyundai Steel's responses. Given that Hyundai Steel did
not provide revised da ta "until very recently", it was "not practicable" for the USDOC to provide
Hyundai Steel with another opportunity to remedy its further manufactured sales responses prior to
the preliminary determination, and the USDOC intended to "provide such … an oppor tunity in the
weeks ahead".149
Following the preliminary determination, Hyundai Steel filed its second supplemental
Section E response on 29 December 2015150, which included changes to further manufacturing costs
and sales databases based on its response. 151 In its third supplemental Section E questionnaire
(5 February 2016) the USDOC identified and sought explanations for certain discrepancies between
Hyundai Steel's second supplemental Section E response and its initial response 152, but instructed
Hyundai Steel not to "submit any new or revised sales, cost, or further manufacturing databases in
response".153 Hyundai Steel responded on 10 February 201 6 (third supplemental Section E
response), providing explanations for the USDOC 's perceived discrepancies.154 On 8 March 2016,
the USDOC informed Hyundai Steel of its decision to cancel the CEP verification of further
manufactured sales.155 In so doing, the USDOC determined that the information for the further
manufactured sales is "unverifiable and deficient". 156 The U SDOC noted that the further
manufactured sales databases (sales and cost ) submitted on 30 November 2015 and
29 December 2015 "show inconsistencies, and contain multiple unexplained, or insufficiently
explained, changes".157 On 11 March 2016, Hyundai Steel c ommunicated to the USDOC a request

141 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), pp. 4-8.
142 CORE first supplemental Section E questionnaire, (Exhibit USA-5 (BCI)), p. 1.
143 Meeting with counsel to Hyundai Steel (27 November 2015), (Exhibit KOR-16).
144 CORE first supplemental Section E questionnaire response, (Exhibit KOR-18 (BCI)), pp. S-1-S-2.
145 CORE second supplemental Section E questionnaire response, (Exhibit KOR-19 (BCI)), p. 4.
146 CORE second supplemental Section E questionnaire response, (Exhibit KOR-19 (BCI)), p. 10.
147 CORE issues and decision memorandum on PDM, (Exhibit USA-8), p. 14.
148 CORE issues and decision memorandum on PDM, (Exhibit USA-8), p. 13. (fn omitted)
149 CORE issues and decision memorandum on PDM, (Exhibit USA-8), p. 13.
150 CORE second supplemental Section E questionnaire response, (Exhibit KOR-19 (BCI)), p. 5.
151 CORE second supplemental Section E questionnaire response, (Exhibit KOR-19 (BCI)), p. 5.
152 Hyundai Steel response to supplemental Section E questionnaire, (Exhibit KOR-17 (BCI)), p. 1.
153 Hyundai Steel response to supplemental Section E questionnaire, (Exhibit KOR-17 (BCI)), p. 1.
154 Hyundai Steel response to supplemental Section E questionnaire, (Exhibit KOR-17 (BCI)), pp. 2-3.
155 USDOC letter of cancellation of verification, (Exhibit KOR-20).
156 USDOC letter of cancellation of verification, (Exhibit KOR-20), p. 1.
157 USDOC letter of cancellation of verification, (Exhibit KOR-20), pp. 1-2.

BCI deleted, as indicated [[***]]

to reconsider its decision not to verify further manufactured sales. 158 In its case brief filed on
22 April 2016, Hyundai Steel addressed, inter alia, the USDOC's decision to cancel verification.159
In its final determination dated 2 June 2016160, the USDOC decided to resort to "partial facts
available" on the basis that "necessary information [was] not on the record, Hyundai [Steel] failed
to submit information by the established deadlines, and Hyundai [Steel] ha[d] significantly impeded
the proceeding". 161 Recalling its discussion of the shortcomings identified in its preliminary
determination, the USDOC found that Hyundai Steel 's first and second supplemental Section E
responses were "severely deficient" and its third response "was riddled with inconsistencies and
effectively made unsolicited changes to its reporting in its further manufactured cost and in its sales
databases".162 Observing that "Hyundai [Steel] has submitted a series of inaccurate value added
calculations and discredited claims of difficulty in gathering data and Section E responses that were
unusable, unreliable, and unverifiable", the USDOC found that Hyundai Steel , "with respect to its
further manufactured U.S. sales of TWBs, auto parts, skelp, blanks, and sheets, failed to cooperate
by not acting to the best of its ability to comply with requests for information in this investigation".163
As the replacement for the missing information, the USDOC selected the highest dumping margin in
the petition of 86.34%.164
Main arguments of the parties
Korea claims that the USDOC resorted to the use of facts available inconsistently with
Article 6.8 of the Anti -Dumping Agreement because there was no "necessary" information missing
concerning further manufactured sales, and because Hyundai Steel did not "significantly impede []"
the investigation.165 According to Korea, Hyundai Steel reported all the relevant input data (raw
material input and sales quantity data ) that would have allowed the USDOC to "apply whatever
methodology it deemed appropriate, including its standard methodology or an alternative
methodology".166
Korea further claims that the USDOC acted inconsistently with paragraph 1 of Annex II
because it (a ) failed to provide details of the information required "as soon as possible after
initiation"; (b) failed to "specify in detail " the information required and the manner in which that
information was to be structured; and (c) failed to give a reasonable period of time for Hyundai Steel
to provide the requested information. 167 Korea contends that , having "originally determined that
Hyundai Steel did not have to file a Section E response" 168, the USDOC requested a Section E
response "almost four months after [the] initiation of the investigation", and "did not specify how it
wanted the information to be presented and structured" in light of the reporting concerns expressed
early on by Hyundai Steel.169 According to Korea, despite Hyundai Steel's repeated attempts, the
USDOC "did not engage with Hyundai Steel on these requests and never provided guidance on which
information it specifically needed in addition to the comprehensive raw data that wa s already
provided".170 Finally, Korea alleges that considering the sheer volume of information required by the
USDOC, and the difficulty in tracing all transactions for further manufacturing, the USDOC should
have given a more reasonable deadline to submit the Section E response, instead of the short
14-day period it provided.171
Korea also claims that the USDOC acted inconsistently with paragraph 6 of Annex II by failing
to inform Hyundai Steel of the reasons for disregarding the submitted information, and by denying

158 Hyundai Steel request to reconsider the cancellation of verification, (Exhibit KOR-21).
159 CORE case brief, (Exhibit KOR-23 (BCI)).
160 CORE final determination, (Exhibit KOR-27).
161 CORE issues and decision memorandum, (Exhibit KOR-5), p. 38.
162 CORE issues and decision memorandum, (Exhibit KOR-5), p. 16.
163 CORE issues and decision memorandum, (Exhibit KOR-5), p. 16.
164 CORE issues and decision memorandum, (Exhibit KOR-5), p. 17.
165 Korea's first written submission, para. 129.
166 Korea's response to Panel question No. 1(a); first written submission, paras. 132 and 134 (referring
to Hyundai Steel response to supplemental Section E questionnaire, (Exhibit KOR-17 (BCI)), pp. 1-5).
167 Korea's first written submission, para. 150.
168 Korea's first written submission, para. 151 (emphasis added). See also CORE anti-dumping
questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2
169 Korea's first written submission, paras. 151-152.
170 Korea's first written submission, para. 152.
171 Korea's first written submission, para. 155.

BCI deleted, as indicated [[***]]

Hyundai Steel an opportunity to provide further explanations. 172 Korea argues that the second and
the third supplemental Section E questionnaires did not constitute "opportunities to provide any new
information or to conform to any request from t he USDOC other than responding to very limited
questions", and that these questionnaires only raised practical problems in respect of which
Hyundai Steel had already sought guidance from the USDOC.173
Korea also claims that the USDOC acted inconsistently wi th paragraph 3 of Annex II by
disregarding information which was "verifiable" as "it could have been verified had the USDOC not
canceled [ sic] the planned verification", and that was "'appropriately submitted ' given that
Hyundai Steel supplied the data by the deadlines in question and provided all of the raw data needed
to structure the information differently, if this is what the USDOC considered necessary". 174 This
information was also provided "in a timely fashion" as it complied with all deadlines. 175 Korea also
claims that the USDOC acted inconsistently with paragraph 5 of Annex II by disregarding the
information submitted by Hyundai Steel that, even if not ideal, was provided by it acting to the best
of its ability.176
As to the USDOC 's selection of t he replacement facts, Korea claims that the USDOC acted
inconsistently with Article 6.8 and paragraph 7 of Annex II by failing to corroborate properly the
selected replacement and by not exercising special circumspection in considering the reliability and
accuracy of the "secondary source information ".177 According to Korea, the USDOC improperly
confirmed the reliability of the petition rate on the basis of its pre-initiation analysis.178 Korea argues
that the only other basis for relying on the petition rate was that the USDOC found it to be equal to
or below certain product-specific margins for coils.179 Korea argues that the USDOC did not engage
in a process of reasoning or evaluation, but instead resorted to the highest petition margin because
that was its "practice".180 Finally, Korea argues that the USDOC's application of facts available was
not objective or fair, but punitive in nature.181
In response to Korea's argument that there was no "necessary" information missing because
Hyundai Steel had provided al l the relevant data that would have allowed the USDOC to apply the
alternative methodology that Hyundai Steel had proposed, the United States contends that "this
argument ignores that [the] USDOC specifically considered and rejected Hyundai's 'alternative
methodology'".182 The United States maintains that the USDOC decided not to apply the alternative
methodology proposed by Hyundai Steel given that it had failed to demonstrate that the value added
in the United States exceeded the threshold of 65% of the imported coil, which was a precondition
for the application of the "special rule".183 The United States stresses that Korea has not challenged
this determination. 184 The United States contends that, c ontrary to Korea 's arguments,
Hyundai Steel was offered three opportunities to correct deficiencies, and multiple opportunities to
meet with the USDOC in response to its requests for guidance. 185 According to the United States,
Hyundai Steel's reporting constituted a significant impediment because of the delays and because it
consistently provided unusable information.186
With respect to Korea's claim under paragraph 1 of Annex II, the United States responds that,
although the USDOC did not initially require Hyundai Steel to respond to the Section E questionnaire,
it did "alert" Hyundai Steel to the possibility of requiring such information in the future depending
on Hyundai Steel 's Section A response. 187 The United States maintains that the USDOC specified

172 Korea's first written submission, paras. 157-160.
173 Korea's second written submission, para. 36.
174 Korea's first written submission, paras. 164 and 167.
175 Korea's first written submission, para. 168.
176 Korea's first written submission, paras. 171 and 173.
177 Korea's first written submission, paras. 185 and 187-191.
178 Korea's first written submission, para. 186.
179 Korea's first written submission, para. 190.
180 Korea's first written submission, para. 192.
181 Korea's first written submission, para. 196.
182 United States' first written submission, para. 64.
183 United States' first written submission, para. 64.
184 United States' first written submission, para. 65.
185 United States' first written submission, paras. 68-69.
186 United States' first written submission, para. 70 (referring to CORE issues and decision
memorandum, (Exhibit KOR-5), p. 14).
187 United States' first written submission, para. 73 (referring to CORE anti-dumping questionnaire to
Hyundai Steel, (Exhibit KOR-6)).

BCI deleted, as indicated [[***]]

precisely and in great detail what was required from Hyundai Steel, and also provided written and
oral clarifications.188 The United States highlights that the USDOC offered multiple opportunities to
Hyundai Steel over the course of almost five months – from 11 September 2015 until
20 February 2016 – to respond adequately to the USDOC's requests for the further -manufactured
information, including issuing a total of five supplemental requests for the same information. 189
According to the United States, the USDOC "went to great lengths to understand and address
Hyundai [Steel]'s purported difficulties" 190 and provided specific guidance and asked follow -up
questions aimed at remedying the discrepancies in Hyundai Steel's responses.191
The United States also contends that the USDOC acted in accordance with paragraph 6 of
Annex II because it explained why the information submitted was not verifiable in its letter cancelling
the verification for the further manufactured sales. 192 The USDOC also provided mul tiple
opportunities to Hyundai Steel to furnish further explanations. 193 The United States maintains that
the USDOC acted consistently with paragraphs 3 and 5 of Annex II as Hyundai Steel 's responses
were not "verifiable" and could not be used "without undu e difficulties" because of the multiple
deficiencies therein.194 Finally, the United States argues that Hyundai Steel did not submit
information "to the best of its ability" because it repeatedly provided unusable data despite the
multiple opportunities.195
The United States asserts that the USDOC acted consistently with paragraph 7 of Annex II,
as it corroborated the petition margin to the extent practicable using sources that were reasonably
at its disposal, and used special circumspection in determining wh ether the rates alleged in the
petition were relevant and reliable for purposes of using them as replacement facts for Hyundai
Steel's further manufactured sales.196 The United States explains that the USDOC found the rate to
be relevant and reliable because the rate was derived from information from the CORE industry and
was within the range of Hyundai Steel's reported product -specific margins for coil. 197 The
United States contends that, despite arguing there was "better information on the record", Korea
offers no alternative.198 According to the United States, the USDOC's selection was not made on the
"sole basis" of the adverse inference.199
Evaluation by the Panel
7.3.1.4.1 The USDOC's resort to facts available
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 1, 3, 5,
and 6 of Annex II of the Anti-Dumping Agreement in resorting to the use of facts available in respect
of Hyundai Steel's reporting of information concerning further manufactured sales.
In its initial questionnaire dated 27 July 2015, the USDOC requested Hyundai Steel to respond
to Sections A-D, and clarified that it was not "currently" required to respond to Section E.200 Contrary
to Korea's arguments, we do not consider that the USDOC "originally determined that Hyundai Steel
did not have to file a Section E response". 201 Rather, in the letter accompanying its initial
questionnaire, the USDOC clearly explained that a Section E response " may" be requested if it is
"determine[d]" – based on Hyundai Steel 's Section A response – that "information to account for
further-processing expenses incurred in the United States" was required.202

188 United States' first written submission, paras. 73-74.
189 United States' first written submission, paras. 75-76.
190 United States' response to Panel question No. 2(b), para. 11.
191 United States' first written submission, para. 77.
192 United States' first written submission, para. 81.
193 United States' first written submission, paras. 83-84.
194 United States' first written submission, paras. 90-92.
195 United States' first written submission, para. 96.
196 United States' first written submission, paras. 101 and 103.
197 United States' first written submission, paras. 103-104.
198 United States' first written submission, para. 102.
199 United States' first written submission, para. 106.
200 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2.
201 Korea's first written submission, para. 151. (emphasis added)
202 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2. (emphasis added)

BCI deleted, as indicated [[***]]

Hyundai Steel's subsequent conduct confirms that it was aware of the possibility that it may
be required to submit a Section E response. On 17 August 2015, before responding to the initial
questionnaire, Hyundai Steel requested an exemption from the obligation to report sales that were
substantially further manufactured prior to sale to unaffiliated parties. 203 Hyundai Steel requested
the USDOC to calculate the CEP based on the "special rule" provided in the US anti -dumping
statute.204 Specifically, Hyundai Steel argued, first, that the value added in the United States vastly
exceeded 65% of the value of the imported merchandise. Second, Hyundai Steel stated that an
examination of the further manufactured sales would be "unnecessarily a nd enormously
burdensome" for the USDOC and there were other appropriate and reasonable bases to calculate
the CEP.205 Third, Hyundai Steel argued that the finished merchandise (i.e. automobiles ) was not
the "same class or kind" as the subject merchandise ( i.e. coils from CORE), and therefore the
difficulty for applying the standard methodology would be very high for the USDOC. 206 For these
reasons, Hyundai Steel suggested that the USDOC could apply an "alternative methodology", similar
to what had been adopt ed in prior cases, and determine dumping margins based on the
weighted-average dumping margins calculated on sales of subject merchandise sold to unaffiliated
persons, or, alternatively, to exclude from its calculations the sales of the further manufacture d
products.207
In its Section A response dated 4 September 2015, Hyundai Steel "respectfully suggest[ed]"
that a Section E response was not required in the present case, and requiring such data would be
"enormously burdensome" for both the USDOC and Hyunda i Steel. 208 In a letter dated
11 September 2015, the USDOC stated that it was still evaluating Hyundai Steel 's request for an
exemption from the Section E response and requested certain additional information with respect to
Hyundai Steel's exemption reques t.209 Subsequently, in a teleconference with officials from the
USDOC on 14 September 2015, Hyundai Steel stated that, based on the USDOC's request for
information dated 11 September 2015, "it is unclear to Hyundai [Steel], what additional information
it sh ould have, or could have, submitted to further substantiate its request for the alternate
calculation method". 210 In the teleconference, the USDOC "agreed to follow up with additional
guidance to Hyundai [Steel]'s request for clarification". 211 The USDOC provided such "additional
guidance" on "[i]nformation [r]equired to [s]ubstantiate Hyundai Steel Corporation 's [r]equest for
[a]lternative [c]alculation [m]ethod" through a letter dated 16 September 2015.212
Following the USDOC 's guidance, Hyundai Steel provided additional information regarding :
the quantity and the value of sales by Hyundai Steel America (HSA), Hyundai Steel's wholly owned
US affiliate, to each of its affiliated and unaffiliated customers; the value added by HSA prior to the
sale to an unaffiliated vendor; and the materials added to the merchandise under consideration by
HSA or the unaffiliated vendors. 213 The USDOC ultimately denied Hyundai Steel 's request for a
"special exemption" on 15 October 2015, stating that Hyundai Steel had failed to demonstrate that
the value added in the United States was equal to or greater than 65% of the imported coil with
respect to Hyundai Steel 's further manufactured sales of certain auto parts, TWBs, and further
processed TWB (after -service parts) .214 On this basis, the USDOC requested Hyundai Steel to

203 CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2.
204 19 U.S.C. § 1677a, (Exhibit KOR-3).
205 Hyundai Steel exclusion request, (Exhibit KOR-7 (BCI)), pp. 4-7.
206 Hyundai Steel exclusion request, (Exhibit KOR-7 (BCI)), p. 15. By "standard methodology", Korea
refers to the calculation of the constructed export price with the following adjustment:
 Additional adjustments to constructed export price
For purposes of this section, the price used to establish constructed export price shall also be
reduced by –
(1) …
(2) the cost of any further manufacture or assembly (including additional material and labor),
except in circumstances described in subsection (e) of this section …[.]
(19 U.S.C. § 1677a, (Exhibit KOR-3), Section (d))
207 Hyundai Steel exclusion request, (Exhibit KOR-7 (BCI)), pp. 15-16.
208 CORE Section A questionnaire response, (Exhibit KOR-2 (BCI)), p. A-3.
209 CORE initial questionnaire extension, (Exhibit USA-3), p. 2.
210 USDOC teleconference with Hyundai Steel, (Exhibit KOR-9).
211 USDOC teleconference with Hyundai Steel, (Exhibit KOR-9).
212 USDOC additional guidance, (Exhibit USA-4), p. 3.
213 CORE response to request for additional information, (Exhibit KOR-10 (BCI)).
214 USDOC response to exclusion request, (Exhibit KOR-11), p. 1. See also CORE issues and decision
memorandum, (Exhibit KOR-5), p. 9. Although arguing that "the application of the USDOC's standard

BCI deleted, as indicated [[***]]

provide, inter alia, a Section E response. 215 The USDOC also asked Hyundai Steel to make any
necessary revisions to its Sections C -D databases in accordance with its further manufactured
products reporting216, and to submit its responses by 29 October 2015.217
We disagree with Korea 's argument that the USDOC "originally determined" that
Hyundai Steel did not have to file a Section E response.218 Rather, we note that the USDOC originally
informed Hyundai Steel that such a determination would be made at a later stage, based upon
Hyundai Steel's initial Section A response.219 We also disagree with Korea that the USDOC acted
inconsistently with paragraph 1 because "[t]his instruction came almost four months after initiation
of the investigation".220 Not only does the above sequence of events show that Hyundai Steel was
aware from the outset that it could subsequently be asked to submit a Section E respo nse, but it
also indicates that the timing of the USDOC's decision to request a Section E response may have
been influenced by Hyundai Steel's exemption request and the USDOC's consideration thereof. Thus,
we reject Korea 's argument that the USDOC acted in consistently with paragraph 1 of Annex II
because it failed to specify in detail the information required "as soon as possible after initiation".
We now turn to Korea 's second argument that the USDOC acted inconsistently with
paragraph 1 of Annex II because it failed to "specify in detail" the information required and the
manner in which that information was to be structured. We recall that, a week after the
USDOC's rejection of Hyundai Steel 's exemption request, on 22 October 2015, Hyundai Steel
requested guidance from the USDOC on how sales and related further manufacturing costs data
should be reported 221, as well as a two -week extension from the time the USDOC provides such
guidance.222 Hyundai Steel explained that although it was "working diligently" to collect the
requested data, due to the "complexities" of the products at issue, the USDOC 's standard
questionnaire does not address how Hyundai Steel should report sales of TWBs or after -service
parts.223 Hyundai Steel noted that the USDOC's "basic instructions for reporting sales and costs for
further manufacturing" "presume that there is only one imported [control number ( CONNUM)] in
each U.S. further manufacture ( i.e., finished good) sale" and thus "envision that the [USDOC] will
start with the price of a finished good, subtract out the further manufacturing and other expenses,
and derive a net price for the imported CONNUM". Hyundai Steel argued that its "situation does not
fit this paradigm"224:
TWBs are manufactured by welding together flat -rolled sheets or blanks of different
thicknesses, grades, and coatings into various shaped forms. In Hyundai Steel 's case,
the TWBs manufactured from subject merchandise will consist of two CORE
components, generally with different CONNUMs. In order for the [USDOC] to employ its
standard margin calculation methodology, it must segregate each transaction into two
components in order to calculate a net price for each imported CONNUM.
In addition, the fu rther manufacturing costs (which are calculated by finished
good) must also be allocated between the two imported components. Moreover, the
value added for any given component necessarily includes the second imported
component required to manufacture the finished TWB. That is, in these circumstances,
each component of the TWB is both further processed subject merchandise and
simultaneously part of the value added. After-service auto parts are still more complex
containing more CONNUMs (although the number o f CONNUMs will vary from part to
part), as well as non -subject merchandise. For all practical purposes, these parts are

methodology in the CORE investigation to Hyundai Steel's further-manufactured sales was virtually
impossible", Korea does not directly challenge the USDOC's decision to reject Hyundai Steel's exemption
request and apply the "standard methodology". (Korea's response to Panel question No. 1(a)).
215 USDOC response to exclusion request, (Exhibit KOR-11), pp. 1-2.
216 USDOC response to exclusion request, (Exhibit KOR-11), p. 2.
217 USDOC response to exclusion request, (Exhibit KOR-11), p. 2.
218 Korea's first written submission, para. 151. (emphasis added)
219 The USDOC stated that Hyundai Steel was "not currently required to respond to section E", and
added that "[h]owever, we may request a response to this section if we determine, based on your response to
section A, that we require the information to account for further-processing expenses incurred in the
United States". (CORE anti-dumping questionnaire to Hyundai Steel, (Exhibit KOR-6), p. 2 (emphasis added)).
220 Korea's first written submission, para. 151.
221 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), p. 2.
222 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), p. 2.
223 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), p. 1.
224 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), p. 2.

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only slightly less complex than the automobiles produced by Hyundai Steel 's U.S.
affiliates.225
Because of these complexities, Hyundai St eel sought "guidance and additional clarifications" from
the USDOC in its preparation of the revised sales data and further manufacturing data.226
On 27 October 2015, representatives of Hyundai Steel met with USDOC officials "to discuss
issues related" to Hyundai Steel's request of 22 October 2015.227 The memorandum for the meeting
does not indicate whether the USDOC provided any "guidance" to Hyundai Steel. However, other
record evidence suggests that in response to Hyundai Steel 's requests, the USDOC grante d an
extension of two "business days" and indicated that Hyundai Steel "should do its best to adapt the
reporting requirements to the complex factual pattern presented here".228
On 2 November 2015, Hyundai Steel submitted its first response to the USDOC's request for
a Section E questionnaire and certain additional information, wherein it reiterated the complexity of
the information requested with respect to after-service auto parts, providing specific examples, and
continued to maintain that this situation qualified for the "special rule" for an alternative calculation
methodology.229 Hyundai Steel also explained that it "has been unable to eliminate those products
that did not contain Hyundai Steel -manufactured subject merchandise, but has conservatively
reported all transactions that theoretically could contain subject merchandise". 230 It further noted
that it had been unable to identify the specific steel components contained in the finished product,
and therefore conservatively assumed that each product contained four CONNUMs.231
Paragraph 1 of Annex II requires, inter alia, that an investigating authority must " specify in
detail the information required from any interested party, and the manner in which that information
should be structured by the interested party in its response".232 Although Article 6.8 and paragraph 1
of Annex II do not provide any guidance as to how an investigating authority is to "specify in detail"
the information it requires 233, we note that the general evidentiary ru le contained in Article 6.1 of
the Anti-Dumping Agreement requires that "[a]ll interested parties in an anti-dumping investigation
shall be given notice of the information which the authorities require". In contrast to Article 6.1,
paragraph 1 of Annex II is more "specific and detailed" and requires more than mere "notice" being
given to the interested parties.234 The context provided by paragraphs 5 and 7 of Annex II, as well
as Article 6.13, suggests that "'cooperation' is, indeed, a two-way process involving joint effort" and,
"[i]f the investigating authorities fail to 'take due account ' of genuine 'difficulties ' experienced by
interested parties, and made known to the investigating authorities, they cannot … fault the
interested parties concerned for a lack of cooperation".235
Further, an assessment of whether an investigating authority acted consistently with
paragraph 1 of Annex II must be made in light of the specific facts and circumstances of the
investigation at issue. In light of the applicable standard of review, an investigating authority would
act consistently with paragraph 1 of Annex II if the record of the investigation shows that the
investigating authority took all reasonable steps that might be expected from an objective and
unbiased authority to specify in detail the information requested, and the manner in which it is to
be structured, as soon as possible after initiation.236
In the case at hand, the United States acknowledges that, until the USDOC 's decision dated
15 October 2015, the USDOC was focused on the exemption request and did not provide guidance

225 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), pp. 2-3.
226 Hyundai Steel request for extension and additional guidance, (Exhibit KOR-13), p. 3.
227 Meeting with counsel to Hyundai Steel (27 October 2015), (Exhibit KOR-14).
228 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), p. 6.
229 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), pp. 4-5.
230 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), p. 6.
231 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), p. 7.
232 Emphasis added.
233 Panel Report, China – Autos (US), para. 7.129.
234 Panel Report, China – Autos (US), para. 7.122 and fn 213.
235 Appellate Body Report, US – Hot-Rolled Steel, para. 104.
236 Panel Report, China – Autos (US), para. 7.130.

BCI deleted, as indicated [[***]]

to Hyundai Steel on how to complete a Section E questionnaire. 237 Indeed, there is nothing in the
record to indicate that the USDOC addressed or engaged with the reporting difficulti es that were
identified by Hyundai Steel prior to its rejection of Hyundai Steel 's exemption request on
15 October 2015.238
Following the USDOC's 15 October 2015 decision to deny Hyundai Steel's exemption request
and seek a Section E response, Hyundai Stee l, on 22 October 2015, reiterated its previously
identified reporting difficulties and expressly sought additional guidance from the USDOC. A meeting
was held between USDOC officials and Hyundai Steel on 27 October 2015, but the record indicates
that the U SDOC merely suggested that Hyundai Steel "should do its best to adapt the reporting
requirements to the complex factual pattern presented here".239
Although the United States points out the limited purpose that meeting memoranda serve
under US domestic law240, it is unable to point to any other evidence demonstrating that the USDOC
did, in fact, provide additional guidance to Hyundai Steel during their meeting on 27 October 2015.241
Furthermore, we note the USDOC's explanation – as part of its final determina tion – that "it is not
within the purview of the [USDOC] to tell Hyundai [Steel] how its accounting system and overall
management system works, and it lies clearly with Hyundai [Steel] how best to report its further
manufactured sales within the [USDOC]'s required format".242 Based on the above, we find that the
USDOC did not provide any additional guidance to Hyundai Steel during their meeting on
27 October 2015.
According to the United States, additional "guidance" was provided by the USDOC as part of
its supplemental questionnaires. Specifically, the United States submits that the USDOC issued
three supplemental questionnaires that provided "specific guidance to Hyundai Steel by identifying
deficiencies with Hyundai Steel's responses and providing questions to help Hyundai Steel correct or
clarify its responses". 243 Identifying deficiencies in an interested part y' response may not be the
same as providing guidance at the time the information was originally requested . In the specific
circumstances of this case, identifying deficiencies in Hyundai Steel 's responses is distinct from
specifying in detail the information that was required and the manner in which it should be structured
"as soon as possible after the initiation of the investigation". For this reason, even if we find that the
three supplemental questionnaires issued by the USDOC identified deficiencies in
Hyundai Steel's responses, this does not, without more, establish compliance with paragraph 1 of
Annex II in a situation where Hyundai Steel had clearly identified certain reporting difficulties from
the outset and repeatedly requested additional guidance.
Finally, we note the United States' argument that the USDOC rejected Hyundai Steel's claims
of difficulty244, finding that Hyundai Steel "made claims of difficulty in gathering data which were
inaccurate".245 As the United States points out, the USDOC reached this finding in its final

237 United States' response to Panel question No. 59, para. 37 (noting that, in the period prior to
15 October 2015, "the focus of [the USDOC's] work was on helping Hyundai [Steel] provide a complete and
accurate request for exemption and not on providing guidance to Hyundai [Steel] on how to complete a
Section E response" (emphasis added)).
238 We disagree with the United States that Hyundai Steel's "claimed difficulties were not known" to the
USDOC prior to Hyundai Steel's letter dated 22 October 2015. (United States' response to Panel question
No. 59, para. 38). The reporting difficulties identified in Hyundai Steel's request for additional guidance on
22 October 2015 were also flagged and discussed in Hyundai Steel's earlier communication with the
USDOC concerning its exemption request on 17 August 2015. Hyundai Steel also raised these issues as part of
its initial Section A questionnaire response (4 September 2015), as well as its response to the USDOC's request
for additional information concerning the exemption request. (Hyundai Steel exclusion request,
(Exhibit KOR-7 (BCI)), p. 13; CORE Section A questionnaire response, (Exhibit KOR-2 (BCI)), pp. A-42-A-43;
and CORE response to request for additional information, (Exhibit KOR-10 (BCI)), pp. 3-6).
239 CORE Section E questionnaire response, (Exhibit KOR-15 (BCI)), p. 6.
240 United States' second written submission, paras. 27-28; response to Panel question No. 58,
paras. 27-28.
241 More detailed summary is provided in the memoranda for other meetings. See, e.g. Meeting with
counsel to Hyundai Steel (27 November 2015), (Exhibit KOR-16); see also USDOC teleconference with
Hyundai Steel, (Exhibit KOR-9).
242 CORE issues and decision memorandum, (Exhibit KOR-5), p. 16.
243 United States' second written submission, para. 29; response to Panel question No. 58, para. 32.
244 United States' second written submission, para. 39 (quoting CORE issues and decision memorandum,
(Exhibit KOR-5), pp. 16, 30, and 41).
245 CORE issues and decision memorandum, (Exhibit KOR-5), p. 41.

BCI deleted, as indicated [[***]]

determination on the basis that "Hyundai Steel initially reported that providing [the] USDOC with
requested information would be too complicated, too burdensome, or not possible, but
subsequently … was able to provide the requested information".246
The fact that an interested party is ultimately able to overcome some of the difficulties that it
initially identified does not necessarily detract from the genuineness of those difficulties from the
outset. We note that, as part of its first supplemental Section E response, Hyundai Steel submitted
that, although it had been able to collect additional in formation and refine its reporting, "these
additional data should not be interpreted as a sign that Hyundai Steel has been 'holding back ' or
that the reporting difficulties described to date have been over emphasized. Rather, Hyundai Steel
and its affiliates have worked tirelessly to collect and prepare the sales data provided herein".247 We
note that before Hyundai Steel was able to respond to the first supplemental Section E questionnaire,
the USDOC had already stated that Hyundai Steel had "numerous opportunities to present this
necessary information" concerning "further manufactured sale s in the United States", noting that
"this information was explicitly requested in the original questionnaire", but, even "at this late date
Hyundai [Steel] has not produced a usable database". 248 Given that Hyundai Steel was given one
opportunity to respond to the USDOC 's request for a Section E response dated 15 October 2015 –
and it had not yet submitted its response to the first supplemental questionnaire – we do not consider
that Hyundai Steel had already been provided "numerous opportunities" to present this information.
Furthermore, the USDOC 's comment that this information was explicitly requested in the original
questionnaire and even at this "late date" Hyundai Steel had not provided a useful information, must
be seen in light of the fact that the USDOC did not determine that Hyundai Steel was required to
submit a Section E response until 15 October 2015. In these circumstances, we do not consider that
the USDOC's finding in its final determination that Hyundai Steel was able to overcome some of its
initially reported difficulties would suggest to an impartial and objective investigating authority that
those difficulties were not genuine at the time Hyundai Steel was first asked to submit a Section E
response.
Based on the above, we find that the USDOC failed to engage with, and address, the reporting
difficulties that had repeatedly been raised by Hyundai Steel and thus did not provide any meaningful
guidance at the time it requested a Secti on E response. In these circumstances, we find that the
USDOC did not take all reasonable steps that would be expected from an objective and unbiased
authority to "specify in detail" the information requested and "the manner in which th at
information should be structured " within the meaning of paragraph 1 of Annex II to the
Anti-Dumping Agreement. We therefore find that the USDOC acted inconsistently with paragraph 1
of Annex II to the Anti -Dumping Agreement.249 Given that paragraph 1 of Annex II serves as a
precondition for an investigating authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement250, we find that the USDOC also acted inconsistently with that provision in
resorting to facts available with respect to Hyundai Steel's reporting of information concerning
further manufactured sales . In light of our findings of WTO -inconsistency, we do not consider it
necessary to rule upon Korea 's claims under paragraphs 3, 5 , and 6 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.251
7.3.1.4.2 The USDOC's selection of the replacement facts
We have already found that the USDOC erred in resorting to facts available with respect to
Hyundai Steel 's reporting of information concerning further manufactured sales. In these
circumstances, we do not consider that making further findings on Korea 's claims concerning the
USDOC's selection of the replacement facts on the basis of the record used for the

246 United States' second written submission, para. 39; response to Panel question No. 2(b),
paras. 17-21. See also CORE issues and decision memorandum, (Exhibit KOR-5), pp. 40-41.
247 CORE first supplemental Section E questionnaire response, (Exhibit KOR-18 (BCI)), p. S-1.
248 Meeting with counsel to Hyundai Steel (27 November 2015), (Exhibit KOR-16).
249 In light of our finding, we do not consider it necessary to address Korea's argument that the USDOC
acted inconsistently with paragraph 1 of Annex II by failing to provide a reasonable period of time for
Hyundai Steel to furnish the requested information.
250 Panel Report, China – GOES, paras. 7.384-7.385. See also paras. 7.26-7.27 above.
251 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.

BCI deleted, as indicated [[***]]

USDOC's WTO-inconsistent findings would assist in providing a positive solution to the dispute before
us.252
Korea's claims under Articles 1, 9.3, and 18.1 of the Anti-Dumping Agreement
Korea further claims that the USDOC 's use of facts available inconsistently with Article 6.8
and Annex II of the Anti -Dumping Agreement "led to an anti -dumping duty that was imposed and
collected in excess of the margin of dumping in violation of Articles 1, 9.3, and 18.1 of the
Anti-Dumping Agreement".253 According to Korea, because the margin of dumping was determined
based on facts available in a manner inconsistent with Article 6.8 and Annex II, "the imposition of
duties at the level of the margin of dumping automatically violated Article 9.3".254 Moreover, Korea
asserts that the violation o f Article 6.8 and Annex II also "automatically leads" to a violation of
Articles 1 and 18.1 of the Anti-Dumping Agreement, as "this USDOC investigation and the measure
taken were not in accordance with the Anti-Dumping Agreement".255
The United States responds that Korea's claims under Articles 1, 9.3, and 18.1 are "entirely
consequential" and "Korea offers no argument or evidence to support any independent breach of
those provisions".256 According to the United States, were the Panel to uphold Korea's claims under
Article 6.8 and Annex II, "there would be no basis to decide Korea's consequential claims".257 First,
the United States "does not concede that such breaches are 'automatic'". 258 Second, the
United States submits that deciding such claims would b e serve "no useful purpose" and would
provide no "additional guidance that would be useful regarding implementation of any
recommendations adopted by the DSB".259
Korea does not present any independent bases for the alleged breaches of Articles 1, 9.3,
and 18.1 of the Anti-Dumping Agreement; instead, its claims under these provisions are dependent
entirely upon a finding that the United States acted inconsistently with Article 6.8 and Annex II of
the Anti -Dumping Agreement.260 In these circumstances – and hav ing already found that the
United States acted inconsistently with Article 6.8 and paragraph 1 of Annex II – we do not consider
it necessary to rule upon Korea 's claims under Articles 1, 9.3, and 18.1 of the
Anti-Dumping Agreement in order to resolve the dispute before us.261
7.3.2 Anti-dumping duties on certain cold -rolled steel flat products from Korea
(USDOC investigation number A-580-881)
Introduction
Korea claims that the United States acted inconsistently with Article 6.8 and Annex II to the
Anti-Dumping Agreement in the investigation concerning certain cold-rolled steel (CRS) flat products
from Korea ("CRS AD investigation"). 262 Specifically, Korea challenges the USDOC 's use of facts
available in respect of two issues : the alleged fa ilure of Hyundai Steel to demonstrate the

252 We recall that Articles 3.4 and 3.7 of the DSU provide that that the aim of WTO dispute settlement is
to secure a positive solution to a dispute and achieve a satisfactory settlement of the matter. The
Appellate Body has explained that the principle of judicial economy "allows a panel to refrain from making
multiple findings that the same measure is inconsistent with various provisions when a single, or a certain
number of findings of inconsistency, would suffice to resolve the dispute". (Appellate Body Reports, Argentina –
Import Measures, para. 5.190 (referring to Appellate Body Report, Canada – Wheat Exports and Grain Imports,
para. 133)). Past panels have also found that, where an investigating authority errs in its resort to facts
available, it is not necessary to address claims concerning the selection of replacement facts in order to provide
a positive resolve the dispute. (See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico –
Anti-Dumping Measures on Rice, para. 7.200. See also Panel Report, China – Broiler Products, para. 7.555).
253 Korea's first written submission, para. 206.
254 Korea's first written submission, paras. 203-204.
255 Korea's first written submission, para. 205.
256 United States' first written submission, para. 356.
257 United States' first written submission, para. 358.
258 United States' first written submission, para. 358.
259 United States' first written submission, paras. 358-359.
260 Korea's first written submission, paras. 204-205.
261 See, e.g. Panel Reports, US – Differential Pricing Methodology, paras. 7.114-7.115; Argentina –
Poultry Anti-Dumping Duties, para. 7.369; US – Steel Plate, para. 7.103; and EU – Footwear (China),
para. 7.935.
262 Korea's first written submission, para. 207.

BCI deleted, as indicated [[***]]

arm's-length nature of certain services provided by its affiliate [[***]] ("affiliated party
transactions"); and the alleged misreporting of some products under the relevant control numbers
(CONNUMs) for certain home-market and US sales.263
We first examine the issue of Hyundai Steel's affiliated party transactions. We begin by setting
out the relevant factual background of the underlying investigation. Subsequently, we summarize
the parties ' arguments before examin ing Korea 's claims of WTO -inconsistency in respect of the
USDOC's resort to facts available and its selection of the replacement facts. We then follow the same
order of analysis for the second issue raised by Korea concerning the alleged misreporting of
certain CONNUMs.
Affiliated party transactions
7.3.2.2.1 Factual background
In response to Section A of the USDOC 's initial questionnaire 264, Hyundai Steel identified
[[***]] as its affiliate and reported that Hyundai Steel and [[***]] were members of the Hyundai
Motor Group, and that they were under "common control". 265 In its response to Section B of the
initial questionnaire (dedicated to sales in the home market or in a thi rd country), Hyundai Steel
stated that it used only its affiliate, [[***]], to transport merchandise to the customer 266, and
provided [[***]] financial statements in order to demonstrate that Hyundai Steel's transactions with
its affiliate for inland freight were made for profit and, therefore, were on an arm's-length basis.267
In its Section C response (dedicated to sales to the United States), Hyundai Steel stated that during
the period of investigation (POI), the inland freight to port of exportation was handled by [[***]],
and referred to its Section B response that the transactions were at arm 's length since [[***]]
earned a profit during the POI.268 For international freight, Hyundai Steel stated that during the POI,
[[***]] provided all shipping services to the United States269 and provided an international freight
contract it had with [[***]], as well as an international freight contract between [[***]] and one of
its unaffiliated subcontractors.270
The USDOC subsequently issued a supplemental Sections B-C questionnaire, noting that in
its initial questionnaire response, Hyundai Steel "never explained why the transactions between
Hyundai Steel and [[***]] for inland freight a nd warehousing are at arm's length".271 The USDOC
thus requested "all [] contracts with [[***]] and all unaffiliated freight providers that cover the full
POI [ sic]".272 Furthermore, the USDOC identified certain deficiencies with [[***]] financial
statements submitted by Hyundai Steel in its initial response. 273 Hyundai Steel responded that
[[***]] maintained subcontracts with over 30 subcontractors, and provided a sample contract of
[[***]] with its one of its unaffiliated subcontractors, namely, [[***]], which, in comparison to the
contract between Hyundai Steel and [[***]], allegedly demonstrated that [[***]] charged
Hyundai Steel a price higher than what [[***]] paid to its subcontractor.274
Regarding inland freight for US sales , the USDOC 's supplemental questionnaire requested
"copies of all freight contracts with [[***]] and all unaffiliated freight providers that cover the full
POI".275 The USDOC also requested Hyundai Steel to provide " [[***]] inland freight prices to its
other customers, unaffiliated to Hyundai Steel" along with "supporting evidence [of] how th[ese]
prices are comparable to the services provided to Hyundai Steel". 276 Hyundai Steel provided

263 Korea's first written submission, para. 219.
264 CRS initial questionnaire, (Exhibit KOR-33), p. 1.
265 CRS Section A questionnaire response, (Exhibit KOR-28 (BCI)), pp. A-10-A-12 and exhibit A-6.
266 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), pp. B-30-B-31.
267 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-31 and exhibit B-15.
268 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-27.
269 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-29 and exhibit C-10.
270 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), pp. C-29-C-30 and exhibit C-10.
271 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 3.
272 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4.
273 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 6-7.
274 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 6-11 and
exhibits S-6 and S-7.
275 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 8.
276 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 8.

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contracts of [[***]] with its one of its unaffiliated subcontractors, [[***]]277, and stated that [[***]]
did not provide comparable services to unaffiliated customers. 278 For international freight , the
USDOC requested "copies of all international freight contracts between [[***]] and its unaffiliated
customers".279 Additionally, the USDOC requested "[i]f [at] all possible, [] a price quote from [[***]]
sub-contractor to another customer showing the arm's -length transaction comparisons between
Hyundai Steel and [[***]], and [[***]] and its sub -contractor".280 Hyundai Steel responded that
[[***]] did not maintain any contracts with unaffiliated customers for shipments to the
United States, and that while " [[***]] does provide shipping services to unaffiliated customers for
shipments to third countries, [[***]] has declined Hyundai Steel 's request to provide its contracts
with unaffiliated third parties citing the proprietary and confidential nature of its transactions with
other parties".281 In respect of the USDOC 's second request, Hyun dai Steel responded that since
[[***]] subcontractor is not affiliated with Hyundai Steel or [[***]], Hyundai Steel was not in a
position to "compel" the subcontractor to provide its price quotes to another customer.282
The USDOC followed up with a second supplemental Sections B-C questionnaire to
Hyundai Steel, wherein it requested for inland freight services "copies of all contracts that [[***]]
has with all unaffiliated parties for similar services that covers the POI".283 Hyundai Steel responded
that for inland freight services to warehouse, [[***]] did not offer similar services to unaffiliated
parties, so it was unable to provide such contracts. 284 Furthermore, the USDOC asked for
[[***]] additional sample contracts between [[***]] and its subcontractors for both warehousing
and inland freight.285 Hyundai Steel provided the [[***]] contracts with different subcontractors,
clarifying that there were no separate contracts for warehousing. 286 Finally, during verification, in
relation to international and inland freight, the USDOC requested "all copies of contracts that [[***]]
has with all unaffiliated parties for similar services that cover the POI, regardless of the unaffiliated
parties' location".287 Hyundai Steel responded that it could not obtain the requested information due
to the absence of direct ownership of [[***]].288
In its verification report, the USDOC explained Hyundai Steel's relationship with [[***]] and
why Hyundai Steel should have been able to obtain the requested contracts between [[***]] and
unaffiliated parties. 289 Specifically, the USDOC indicated that , given Hyundai Steel's inability to
obtain the requested information, the USDOC sought a list of [[***]] shareholders.290 In examining
this list, the USDOC observed, – and Hyundai Steel confirmed – that [[***]], listed as the majority
holder of [[***]], was the same person as Hyundai Steel's Vice Chairman, spelled [[***]] in the
initial response. 291 Similarly, a major shareholder of [[***]], [[***]], was again confirmed by
Hyundai Steel as referring to the person spelled as [[***]] in the initial response, who was also
confirmed to be the father of [[***]].292 On this basis, the USDOC reiterated its request for the
aforementioned documents, and asked "how, given the fact that [[***]], along with his father
[[***]], possessed the largest ownership shares in [[***]] at the same time [[***]] was
Vice Chairman of Hyundai Steel, and while his father [[***]] was both a direct and indirect owner
of Hyundai Steel, could Hyundai Steel not obtain the requested information fro m [[***]]".293
Hyundai Steel again responded that it did not have direct control over [[***]].294
In its final determination, the USDOC noted that when it "specifically requested that
Hyundai Steel obtain certain freight information between its affiliate an d other unaffiliated parties,

277 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 20-21.
278 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 21.
279 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
280 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
281 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
282 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
283 CRS supplemental Sections B-C questionnaire, (Exhibit USA-15 (BCI)), question 3.
284 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 2.
285 CRS supplemental Sections B-C questionnaire, (Exhibit USA-15 (BCI)), question 5(B).
286 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 5 and
exhibits 8 and 9.
287 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 42.
288 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
289 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
290 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
291 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
292 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
293 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44.
294 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44.

BCI deleted, as indicated [[***]]

Hyundai Steel stated that its affiliated company refused to provide the data".295 The USDOC stated
that it was able to confirm that one of Hyundai Steel's affiliated freight providers [i.e. [[***]]
two largest shareholders is also a part owner of Hyundai Steel and that the other large shareholder
is the Vice Chairman of Hyundai Steel. 296 The USDOC also noted these two individuals to be father
and son, respectively.297 The USDOC thus confirmed that Hyundai Steel and [[***]] were held and
commonly controlled by the same family members during the POI. 298 Next, the USDOC found that
"Hyundai Steel failed to demonstrate the arm's -length nature of these services provided by the
affiliated company [i.e. [[***]] and its U.S. subsidiaries" and it was thus unable to determine the
arm's-length nature of the transactions between Hyundai Steel and [[***]].299 For these reasons,
the USDOC stated that it was "relying on facts otherwise available". 300 Furthermore, "because
Hyundai Steel failed to provide the requested information or fully cooperate with the request for this
information", the USDOC decided to apply an "adverse inference".301
The USDOC applied "adverse facts available" to Hyundai Steel's "home market inland freight,
home market warehousing expenses, international freight, and U.S. inland freight". 302 For home
market inland freight and warehousing, the USDOC selected "Hyundai Steel's lowest reported value
for its home inland freight and warehousing fields".303 For international freight and US inland freight,
the USDOC selected "the highest reported values by destination for Hyundai Steel's international
freight and U.S. inland freight".304 For home market inland freight for US sales, the USDOC "selected
second-highest transaction-specific value as AFA".305
7.3.2.2.2 Main arguments of the parties
Korea claims that the USDOC resorted to the use of facts available inconsistently with
Article 6.8 of the Anti-Dumping Agreement because no "necessary" information was missing306 and
because Hyundai Steel did not "significantly impede[]" the investigation.307 Korea asserts that the
USDOC improperly resorted to facts available because Hyundai Steel provided specific information
demonstrating that [[***]] made a reasonable profit in the services it provided to Hyundai Steel,
passing the full cost incurred by its subcontractors to Hyundai Steel, plus an amount covering its
expenses and profit. 308 The fact that the USDOC may have requested "additional information"
(i.e. [[***]] contracts with unaffiliated customers ) in order to confirm the arm's -length nature of
transactions does not render this information "necessary".309 Stressing that [[***]] did not maintain
unaffiliated third -party contracts for US -destined international freight – which were among the
information requested – Korea argues that information that is requested but does not exist cannot
logically constitute "necessary" information. 310 Korea also submits that Hyundai Steel did not
"refuse[] access" to this information within the meaning of Article 6.8 as it attempted to obtain
[[***]] prices to its unaffiliated customers, but [[***]] declined this request "citing the proprietary
and confidential nature of its transactions with other parties". 311 Korea argues that the

295 CRS issues and decision memorandum, (Exhibit KOR-41), p. 73. (fn omitted; emphasis added)
296 CRS issues and decision memorandum, (Exhibit KOR-41), pp. 73-74.
297 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
298 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
299 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
300 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
301 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
302 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
303 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
304 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
305 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
306 Korea's first written submission, para. 258.
307 Korea's first written submission, para. 269.
308 According to Korea, the information provided by Hyundai Steel demonstrated that (a) "[[***]] made
a reasonable profit on the services it provided to Hyundai Steel"; and (b) "when [[***]] subcontracted an
unaffiliated party for the services, it paid and passed the full cost incurred by the unaffiliated-service-provider
to Hyundai Steel, plus an amount to cover its expenses and profit".
(Korea's first written submission, paras. 223 and 258).
309 Korea's first written submission, paras. 262-263.
310 Korea's first written submission, para. 264.
311 Korea's second written submission, para. 72 (quoting CRS supplemental Sections B-C questionnaire
response, (Exhibit KOR-34 (BCI)), p. 24; and referring to CRS verification report, (Exhibit KOR-35 (BCI)),
pp. 43-44); first written submission, para. 223. Korea explains that Hyundai Steel was not in a position to
compel [[***]] to provide this information as a consequence of these entities being "legally separate", and
because the management of [[***]] has a number of fiduciary duties under Korean law not to disclose

BCI deleted, as indicated [[***]]

USDOC's focus on the affiliation between Hyundai Steel and [[***]] is "misplaced", since it was fully
identified and explained in the questionnaire responses.312
Korea further claims that the USDOC acted inconsistently with paragraph 1 of Annex II
because it failed to specify in detail the required information as soon as possible after the initiation
of the investigation.313 Korea contends that the USDOC expressly requested for the first time during
verification "all copies of contracts that [[***]] has with all unaffiliated parties for similar services
that cover the POI, regardless of the unaffiliated parties' location".314 Korea claims that the USDOC
also acted inconsistently with paragraph 6 of Annex II because it did not explain why the other
information submitted by Hyundai Steel was rejected and because it did not provide a reasonable
time to Hyundai Steel to submit further explanations after seeking the aforementioned contracts at
verification.315 Korea also claims that the United States acted inconsistently with paragraphs 3 and
5 of Annex II because the USDOC disregarded information that, even if not ideal in all aspects, was
not only verifia ble but also verified and was submitted appropriately, and in a timely fashion. 316
According to Korea, the USDOC rejected the submitted information "in favor of an unsubstantiated
assumption contradicted by other evidence".317
As to the selection of the replacement facts, Korea claims that the USDOC acted inconsistently
with Article 6.8 and paragraph 7 of Annex II of the Anti-Dumping Agreement because there was no
process of reasoning and evaluation by the USDOC as to how or why the facts employed by the
USDOC were reasonable replacements for the missing information.318 Korea contends that, instead
of selecting a reasonable replacement for the missing information 319, the USDOC rejected all
information submitted by Hyundai Steel and "asymmetrically applied AFA", with no supporting
explanation and irrespective of Hyundai Steel's actual circumstances, in order to increase the normal
value by using the lowest reported expense values to the entire home-market database and decrease
the export price by using the highest reported values to the US database.320 Korea argues that the
USDOC's selection of facts was punitive in nature 321, and "based on nothing but non -factual
assumptions and speculation". 322 Korea contends that the USDOC could have adjusted the
transaction value s found not to be at arm 's length based on Hyundai Steel's verified service
expenses (that were verified and found to be arm's -length transactions in the preliminary
determination).323 However, the USDOC used aberrational data that did not relate to the fac tual
circumstances of all of Hyundai Steel's sales.324 Korea also argues that the USDOC did not exercise
special circumspection.325
The United States responds that Korea has not demonstrated that the information at issue
was not "necessary" and highlights that the determination of whether certain information is
"necessary" lies solely with the investigating authority.326 According to the United States, the USDOC
reasonably determined that it "did not have enough information on the record to establish" the
arm's-length nature of the transactions at stake. 327 Given Hyundai Steel's response that it had not

confidential information. (Korea's second written submission, para. 82. See also Korea's response to Panel
question No. 15).
312 Korea's first written submission, para. 260.
313 Korea's first written submission, para. 265.
314 Korea's first written submission, para. 265 (referring to CRS verification report, (Exhibit KOR-35
(BCI)), p. 42). See also CRS supplemental Sections B-C questionnaire, (Exhibit USA-15 (BCI)), question 3.
Korea clarifies that although the USDOC had posed a general request for this information before verification, it
had previously not indicated that the copies of these contracts with third parties, even for sales to countries
other than the United States, constituted "necessary" information. (Korea's first written submission,
paras. 266 and 271; response to Panel question No. 10(b)).
315 Korea's first written submission, para. 271.
316 Korea's first written submission, paras. 285-287.
317 Korea's first written submission, para. 294.
318 Korea's first written submission, paras. 310 and 312. See also second written submission, para. 74.
319 Korea's second written submission, paras. 106-107.
320 Korea's first written submission, paras. 310 and 316.
321 Korea's first written submission, para. 313.
322 Korea's first written submission, para. 294.
323 Korea's first written submission, para. 313.
324 Korea's first written submission, para. 317. See also Korea's second written submission,
paras. 108-109.
325 Korea's first written submission, para. 318.
326 United States' second written submission, para. 54.
327 United States' first written submission, para. 150.

BCI deleted, as indicated [[***]]

engaged in transactions with unaffiliated providers during the POI, the contracts between [[***]]
and its unaffiliated customers were the only information capable of demonstrating the arm's-length
nature of the transactions. 328 The United States explains that copies of [[***]] contracts with
unaffiliated purchasers, irrespective of their location, were necessary for the USDOC's determination
because the prices presented in those contracts would likely represent market prices and, by
comparison, it could be determined whether the services provided to Hyundai S teel were at
arm's length.329
As to Korea's argument that Hyundai Steel did not have access to the requested information,
the United States responds that the "legal separation" between Hyundai Steel and [[***]] is not the
issue, but, instead, the issue is w hether "the two legally distinct companies are affiliated". 330 The
United States submits that [[***]], like Hyundai Steel, is a member of the "Hyundai Motor Group",
which has the ability to "directly or indirectly control " its group members, and thus Hyundai Steel
should have been able to respond fully to the USDOC 's requests for information and to provide the
affiliate's contracts and transaction details.331 The United States further argues that Korea makes a
post hoc argument when suggesting that Hyundai Steel could not gain access to the requested
documents due to confidentiality and fiduciary concerns and [[***]] obligations under Korean law,
an argument that was never made by Hyundai Steel before the USDOC.332
Further, the United States responds that the USDOC indicated early on in the investigation
that information relating to the transactions between Hyundai Steel and its affiliates would be
required.333 The number of times Hyundai Steel was asked to provide in formation relating to the
transactions with its affiliates "belies" its claims that it was not allowed a reasonable period of time
to provide the information, and that it was not asked for such information as soon as possible after
initiation.334 The United States rejects Korea 's characterization of the USDOC 's request as
"expansive" or "sudden", on the basis that the USDOC had clarified in its verification outline that it
may ask questions relating to any part of Hyundai Steel's responses, including those relating to the
affiliated service provider, in order to bolster the accuracy of its calculations. 335 The United States
submits that Korea has thus failed to demonstrate that the USDOC acted inconsistently with
paragraphs 1 and 6 of Annex II.
With respect t o Korea's claim under paragraph 3 of Annex II, the United States responds
that in the absence of the requested documents, the USDOC did not have the opportunity to examine
the accuracy and reliability of the information submitted, and to verify whether the affiliated
parties' transactions were at arm 's length.336 In addition, the United States argues that since the
information submitted by Hyundai Steel did not satisfy the conditions of paragraph 3, it falls outside
the ambit of paragraph 5, but even if the Panel were to conduct an assessment under paragraph 5,
Hyundai Steel did not act to the best of its ability by failing to submit the requested information ,
despite multiple opportunities.337
According to t he United States, the record shows the USDOC engaged in a careful
assessment of the missing necessary information and reasonably decided to rely on Hyundai
Steel's own reported data. 338 The United States highlights that Korea has not explained why the
USDOC's process for selecting the replacement facts is inconsistent with any specific provision of the
Anti-Dumping Agreement, apart from its dissatisfaction with the data selected.339 The United States
explains that the USDOC did not reject all of Hyundai Steel 's expense data – as argued by Korea –
but disregarded only certain information relating to Hyundai Steel 's affiliated service providers and
replaced those missing values with other expense values reported by Hyundai Steel. 340

328 United States' second written submission, para. 49.
329 United States' response to Panel question No. 14, para. 59.
330 United States first written submission, para. 156.
331 United States' first written submission, paras. 156-157 (quoting CRS issues and decision
memorandum, (Exhibit KOR-41), p. 74).
332 United States' second written submission, paras. 57-58.
333 United States' first written submission, para. 153.
334 United States' first written submission, para. 155.
335 United States' first written submission, paras. 158-160.
336 United States' first written submission, para. 172.
337 United States' first written submission, para. 176.
338 United States' first written submission, para. 183.
339 United States' first written submission, para. 184.
340 United States' first written submission, para. 187.

BCI deleted, as indicated [[***]]

Korea's characterization of the replacements as arbitrary and punitive is, according to the
United States, "meritless".341 Finally, the United States asserts that Korea 's claim that that the
USDOC did not use special circumspection fails, as Korea does not explain its arguments.342
7.3.2.2.3 Evaluation by the Panel
7.3.2.2.3.1 The USDOC's resort to facts available
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 1, 3, 5,
and 6 of Annex II of the Anti-Dumping Agreement in resorting to the use of facts available in respect
of Hyundai Steel's reporting of affiliated party transactions.
Noting the "important distinction between requested information and necessary
information", Korea submits that the information ultimately "requested" by the USDOC in the case
at hand (i.e. contracts of [[***]] with unaffiliated providers) was not "necessary" within the meaning
of Article 6.8.343 Specifically, Korea explains that "[t]he relevant U.S. law, as corroborated by
relevant practice, imposes an obligation on the USDOC to ensure that the cost of various expenses
used in the margin calculation, such as transportation expenses, reflect market value" .344 Korea
contends that the USDOC 's questionnaire reflects a clear "order of preference for the requested
information concerning the respondent's affiliated-company transactions".345 According to Korea:
[T]he USDOC's questionnaire directed Hyundai Steel to (i ) calculate market value by
using purchases of the inputs or services in question from unaffiliated parties during the
same period; and if there are no such purchases but the affiliated supplier sells the
identical input to unaffiliated customers in the relevant market, (ii) provide the average
price paid for the input or service by the unaffiliated purchasers. If Hyundai Steel is
unable to obtain a market value for the input, the questionnaire instructed to provide
(iii) the "product -specific" unit cost of production to demonstrate the arm's -length
nature of the transactions.346
For Korea, "[i]t is thus difficult to understand how Hyundai Steel 's reporting of its
affiliated-company transactions in accordance with the order provided by the questionnaire can
somehow circle back to constitute a total failure to provide the requested information" .347 In other
words, because the USDOC's questionnaire itself envisages reliance on different kinds of information
to demonstrate the arm's -length nature of affiliate -party transactions, Korea argues that a
respondent's inability to provide any one of the three kinds of information cannot ipso facto
constitute a failure to provide "necessary" information within the meaning of Article 6.8.
The United States acknowledges that the USDOC 's "Section D questionnaire provided
Hyundai Steel with three alternatives for providing necessary information relating to
Hyundai Steel's purchases of 'major inputs'". 348 However, acco rding to the United States, the
USDOC's "three-part methodology" in its Section D questionnaire for "major inputs" was "not
applicable to the inputs at issue such as freight and warehousing services" as they are "not major
inputs".349 Rather, for these transactions, the inquiry involved "a comparison between the transfer
price between the purchaser (respondent ) and its affiliates supplier with a market price for the
input".350 The United States submits that, "[i]n this case, the respond ent did not provide the data
needed to test whether the transactions were made at arm's length", and "[a]ccordingly … necessary
information for conducting the analysis" was "not on the record".351

341 United States' first written submission, para. 190.
342 United States' first written submission, para. 191.
343 Korea's first written submission, para. 263.
344 Korea's first written submission, para. 222.
345 Korea's first written submission, para. 261.
346 Korea's first written submission, para. 222 (emphasis added). See also Korea's comments on
United States' response to Panel question No. 66(a), pp. 40-41.
347 Korea's first written submission, para. 261.
348 United States' response to Panel question No. 66(a), para. 69.
349 United States' response to Panel question No. 66(b), para. 73.
350 United States' response to Panel question No. 66(b), para. 73.
351 United States' response to Panel question No. 66(b), para. 73.

BCI deleted, as indicated [[***]]

The USDOC in its initial questionnaire requested Hyundai Ste el to "[p]repare only a single
response for [itself and its] affiliates involved with the production or sale of the products under
investigation during the period of investigation (POI) in the foreign market or the United States".352
The initial questionnaire comprised of five sections, labelled A through E. Under Section D – entitled
"[c]ost of [p]roduction and [c]onstructed [v]alue" – the USDOC requested Hyundai Steel to
"identify", among other items, those inputs that it received f rom affiliated parties and indicate
"whether the transfer price of the good or service [i.e. the inputs] reflects the market price of the
item, in the market under consideration".353
With respect to "major inputs purchased from affiliated parties that are used to produce the
merchandise under consideration", the USDOC requested Hyundai Steel to provide "the average unit
market value per unaffiliated supplier(s)". 354 "If there are no such purchases" but an "affiliated
supplier sells the identical input to una ffiliated customers in the market under consideration", the
USDOC asked for the "average price paid for the input by the unaffiliated purchasers".355 Finally, in
cases that Hyundai Steel is "unable to obtain a market value for the input", the USDOC asked fo r
"the product specific per -unit cost of production incurred by each affiliated supplier producing the
major input".356
While we agree with Korea that this set of questions contemplates an "order of preference"
for different kinds of information requested by the USDOC depending upon the circumstances, we
note that these questions are posed expressly with respect to "major inputs". Nowhere in its
Section D response does Hyundai Steel identify the inputs supplied by its affiliate [[***]] that are
at issue in these panel proceedings as "major inputs". Instead, based upon "a summary of its
purchases of all inputs from affiliated suppliers" – including [[***]] – Hyundai Steel stated that "all
inputs sourced from affiliated parties constitute a tiny portion of the cost of manufacturing".357 We
therefore agree with the United States that the "order of preference" or the "three -part
methodology" reflected in the USDOC 's Section D questionnaire for "major inputs" is of limited
relevance for "the inputs at issue such as freight and warehousing services" as they are "not major
inputs".358 Accordingly, we reject Korea 's argument that the "requested" information was not
"necessary" within the meaning of Article 6.8 as the USDOC 's own questionnaire contemplated an
"order of preference".
Having determined that the Section D questionnaire contemplated an "order of preference"
only for "major inputs", we turn to examine the USDOC's questions posed specifically in respect of
the inputs that were, in fact, supplied by Hyundai Steel's affiliate [[***]] and form the basis for
Korea's claims under paragraphs 1, 3, 5, and 6 of Annex II.
In Section A of its initial questionnaire – entitled "[o]rganization, [a]ccounting [p]ractices,
[m]arkets and [m]erchandise" – the USDOC inquired about the corporate and legal structure of
Hyundai Steel and asked it to identify "all other persons affiliated with [the] company and provide a
description of all such persons".359 In response, Hyundai Steel identified [[***]] as its affiliate and
reported that [[***]].360 As to the "operational relationship" that Hyundai Steel had with other
members of the Hyundai Motor Group, Hyundai Steel explained "that there is common control of the

352 CRS initial questionnaire, (Exhibit KOR-33), p. G-10. (emphasis original)
353 CRS initial questionnaire, (Exhibit KOR-33), pp. D-3-D-4.
354 CRS initial questionnaire, (Exhibit KOR-33), p. D-4. (emphasis added)
355 CRS initial questionnaire, (Exhibit KOR-33), p. D-4.
356 CRS initial questionnaire, (Exhibit KOR-33), p. D-5. (emphasis original; fn omitted)
357 CRS part I of Section D questionnaire response, (Exhibit USA-14 (BCI)), p. D-7.
358 United States' response to Panel question No. 66(b), para. 73.
359 CRS initial questionnaire, (Exhibit KOR-33), p. A-4. The USDOC's questionnaire provides the
following definition of "affiliated persons":
The term affiliated persons (affiliates) includes: (1) members of a family; (2) an officer or director
of an organization and that organization; (3) partners; (4) employers and employees; (5) any
person directly or indirectly owning, controlling, or holding with power to vote, 5 percent or more
of the outstanding voting stock or shares of any organization and that organization; (6) two or
more persons directly or indirectly con trolling, controlled by, or under common control with, any
person; and (7) any person who controls any other person and that other person. Control exists
when a person is legally or operationally in a position to exercise restraint or direction over another
person. A control relationship should also have the potential to affect decisions concerning the
production, pricing, or cost of the merchandise under investigation or review.
(CRS initial questionnaire, (Exhibit KOR-33), p. I-1)
360 CRS Section A questionnaire response, (Exhibit KOR-28 (BCI)), p. A-12.

BCI deleted, as indicated [[***]]

Hyundai Motor Group through its chairman, [[***]]".361 With respect to its affiliate [[***]], Hyundai
Steel further explained that, "[d]uring the POI, [[***]]".362 Hyundai Steel stated that it would
"demonstrate in its forthcoming Sections B and C responses that transactions with affiliated service
providers are at arm's length".363
Section B of the USDOC's questionnaire concerned "[s]ales in the [h]ome [m]arket or to a
[t]hird [c]ountry" 364, while Section C required information concerning "[s]ales to the
United States".365 Under Section B – for home market sales – the USDOC asked Hyundai Steel to
report certain "movement expenses", including those incurred for "inland freight" from "[p]lant to
[d]istribution [w]arehouse"366, "warehousing"367, and "inland freight" from "[p]lant/[w]arehouse to
[c]ustomer".368 The USDOC's instructions required Hyundai Steel to also identify any "affiliations"
with the service providers and to "describe the nature of the affiliation". 369 Hyundai Steel stated
that, for inland freight from plant to warehou se, it "used an affiliated freight company, [[***]] to
transport" "some finished coils to offsite warehouses prior to shipment to the customer".370 Hyundai
Steel stated that it would demonstrate that "the rates paid to this company represent arm 's length
prices" as part of its response concerning "inland freight to the customer". 371 In respect of
warehousing expenses, Hyundai Steel responded that "in some instances" it "used offsite warehouse
facilities close to its factory to temporarily store finished subject products prior to shipment to the
final customer".372 Providing "a list of the off-site warehousing locations", Hyundai Steel explained
that:
These warehousing locations are owned by unaffiliated parties, but the warehousing
services at most of these facilities are provided by [[***]] and Hyundai Steel pays
[[***]] for these wa rehousing services. [[***]] contracts with the unaffiliated
warehouse providers and in turn pays them for warehousing. … With respect to one
warehousing location, [[***]], this facility is managed by an unaffiliated provider and
Hyundai Steel transacts directly with the unaffiliated company.
…
Hyundai Steel provides a copy of its warehousing contract with [[***]] in Exhibit B-12,
along with the contract for the [[***]] location, which is managed by an unaffiliated
company, [[***]].373
Hyundai Steel stated that it would demonstrate that the transactions with [[***]] reflect
arm's-length prices as part of its response for inland freight to customer.374
Finally, for inland freight from plant/warehouse to customer, Hyundai Steel explained that it
used its affiliate [[***]] to transport merchandise to the customer. As it did not use unaffiliated

361 CRS Section A questionnaire response, (Exhibit KOR-28 (BCI)), p. A-11. We note in this regard that
the USDOC's questionnaire defined "control" as existing "where a person is legally or operationally in a position
to exercise restraint or direction over another person". (CRS initial questionnaire, (Exhibit KOR-33), p. A-5).
362 CRS Section A questionnaire response, (Exhibit KOR-28 (BCI)), p. A-12.
363 CRS Section A questionnaire response, (Exhibit KOR-28 (BCI)), p. A-13. The USDOC's questionnaire
explains that arm's-length transactions are "those in which the selling price between the affiliated parties is
comparable to the selling prices in transactions involving persons who are not affiliated. The [USDOC] takes
into account terms of sale, conditions of delivery, and other circumstances related to the sales in deciding if the
selling prices are comparable". (CRS initial questionnaire, (Exhibit KOR-33), p. I-2).
364 CRS initial questionnaire, (Exhibit KOR-33), p. B-1.
365 CRS initial questionnaire, (Exhibit KOR-33), p. C-1. The USDOC explained that it would use this
information to "compare the prices at which this merchandise is sold in the United States with the prices at
which the foreign like product is sold in the foreign market in order to determine whether the subject
merchandise was sold at less than normal value in the United States during the [POI]". (CRS initial
questionnaire, (Exhibit KOR-33), p. C-1 (emphasis omitted)).
366 CRS initial questionnaire, (Exhibit KOR-33), p. B-22.
367 CRS initial questionnaire, (Exhibit KOR-33), p. B-23.
368 CRS initial questionnaire, (Exhibit KOR-33), p. B-23.
369 CRS initial questionnaire, (Exhibit KOR-33), pp. B-22-B-23.
370 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-28.
371 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-28.
372 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-29.
373 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-29.
374 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-29.

BCI deleted, as indicated [[***]]

freight companies for similar services, Hyundai Steel was "unable to provide comparable prices from
unaffiliated vendors for comparison". 375 Thus, in o rder to establish the arm's -length nature of the
transactions between Hyundai Steel and its affiliate [[***]], Hyundai Steel provided "calculations
from the company's financial statements demonstrating that the company earned a profit during the
POI".376 "[B]ecause this company earned a profit during the POI", Hyundai Steel considered that
"these transactions reflect arm 's length prices". 377 In addition to the financial statements,
Hyundai Steel also provided the contracts between "Hyundai Steel and the two p roviders" (i.e. its
affiliate [[***]] and the unaffiliated provider [[***]]) "show[ing] that these transactions are at
arm's length".378
For sales to the United States under Section C, Hyundai Steel reported that it "incurred
inland freight expenses for tr ansportation of the merchandise from the factory to the port" and
"[d]uring the POI, Hyundai Steel transported merchandise by truck using an affiliated general
logistics company, [[***]], which is the same company it used for domestic sales".379 Hyundai Steel
thus referred to its reporting under Section B for inland freight expenses as establishing that [[***]]
"provided such services at arm 's length".380 Additionally, Hyundai Steel also reported international
freight expenses "from the port of exit in the country of manufacture to the U.S. port of entry" and
stated that "[d]uring the POI, [[***]], an affiliate, provided all shipping services".381 In addition to
referring to its Section B response to demonstrate the arm's -length nature of the transactions,
Hyundai Steel also provided copies of Hyundai Steel's international freight contract with [[***]], on
the one hand, and [[***]] international freight contract with its subcontractors, on the other hand,
to demonstrate this point. 382 Specifically, Hyundai Steel provided copies of [[***]] international
freight contracts with two subcontractors, namely, [[***]] and [[***]].383
In summary, with respect to the re porting of movement expenses under Sections B and C
of the USDOC's questionnaire, Hyundai Steel noted that many of the services at issue were provided
by its affiliate [[***]] and offered several pieces of information to demonstrate the arm's -length
nature of the transactions with its affiliate [[***]]. First, Hyundai Steel provided "financial
statements" from [[***]] "demonstrating that the company earned a profit during the POI"384, and
that therefore "these transactions reflect arm 's length prices".385 Second, besides its contract with
[[***]], which provided warehousing services for home market sales at most of its facilities, Hyundai
Steel submitted a contract with an unaffiliated provider [[***]], which provided warehousing service
at one warehousing loc ation ( [[***]]). According to Hyundai Steel, its contracts with these
"two providers" "show that these transactions are at 'arm 's length'".386 Finally, with respect to
international freight for sales to the U nited States, Hyundai Steel provided copies of
Hyundai Steel's international freight contract with [[***]], on the one hand, and [[***]]
international freight contract with two subcontractor s ([[***]] and [[***]]387), on the other hand,
to demonstrate that transactions with [[***]] were on an arm's-length basis.388
The USDOC subsequently issued a supplemental Sections B-C questionnaire, observing that,
in its initial Section B response, Hyunda i Steel "never explained why the transactions between
Hyundai Steel and [[***]] for inland freight and warehousing are at arm's -length".389 The USDOC
thus requested "all freight contracts with [[***]] and all unaffiliated freight providers that cover the
full POI [ sic]".390 Furthermore, the USDOC noted that the "net profit information" provided for

375 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-30.
376 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), pp. B-30-B-31.
377 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-31.
378 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-31.
379 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-27. Hyundai Steel explained that
it "did not utilize outside warehouses for its sales to the United States" either in the home country or in the
United States and that it "did not incur any U.S. inland freight expenses during the POI for its [export price]
sales". (CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), pp. C-25-C-26 and C-30-C-32).
380 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-27.
381 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-29.
382 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-30.
383 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), exhibit C-10.
384 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), pp. B-30-B-31.
385 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-31.
386 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-31.
387 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), exhibit C-10.
388 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-30.
389 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 3.
390 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4.

BCI deleted, as indicated [[***]]

[[***]] does not show that it [[***]].391 The USDOC thus requested Hyundai Steel to demonstrate
why these transactions with its affiliate [[***]] should be considered to be at arm's length.392
Regarding inland freight from factory to the port for US sales , the USDOC noted
Hyundai Steel's reliance on [[***]] profit margins in its initial Section C response, but requested
"copies of all freight contracts with [[***]] and all unaffiliated freight providers that cover the full
POI [ sic]"393, as well as " [[***]] inland freight prices to its other custome rs, unaffiliated to
Hyundai Steel".394 Finally, with respect to Hyundai Steel 's reporting of its international freight
expenses for US sales, the USDOC requested "copies of all international freight contracts between
[[***]] and its unaffiliated customers". 395 Additionally, for international freight, the USDOC
requested "[i]f [at] all possible, [] a price quote from [[***]] sub-contractor to another customer
showing the arm's-length transaction comparisons between Hyundai Steel and [[***]], and [[***]]
and its sub-contractor".396
In response to the USDOC's supplemental queries, Hyundai Steel explained that, for inland
freight and warehousing for home market sales, [[***]] maintained subcontracts with over
30 subcontractors, and provided a sample contract of [[***]] with one such unaffiliated
subcontractor, namely, [[***]]397, which, in comparison with the contract between Hyundai Steel
and [[***]], allegedly demonstrated that [[***]] charged Hyundai Steel a "higher fees than it pays
to the sub -contractor".398 In relation to inland freight for products destined for the United States,
Hyundai Steel responded that [[***]] had contracts with over 40 subcontractors and provided as a
"representative sample" contracts between [[***]] and one unaffiliated subcontrac tor ([[***]]),
explaining that these "contracts cover multiple services, such as inland freight and warehousing".399
Hyundai Steel also stated that [[***]] did not provide comparable services to unaffiliated
customers.400
Finally, regarding international freight expenses for US sales, Hyundai Steel responded that
[[***]] did not maintain any contracts with unaffiliated customers for shipments to the
United States, and that while " [[***]] does provide shipping services to unaffiliated customers for
shipments to third countries, [[***]] ha[d] declined Hyundai Steel's request to provide its contracts
with unaffiliated third parties citing the proprietary and conf idential nature of its transactions with
other parties".401 In response to the USDOC's request for "a price quote from [[***]] sub-contractor
to another customer", "[i]f [at] all possible", Hyundai Steel responded that since [[***]]
subcontractor is not affiliated with Hyundai Steel or [[***]], Hyundai Steel was not in a position to
"compel" the subcontractor to provide its "price quotes to another customer".402
We note that, as part of its initial Section B response for inland freight for home market
sales, Hyundai Steel had already indicated that it did "not use unaffiliated freight companies for
similar services" and was therefore "unable to provide comparable prices from unaffiliated vendors
for comparison".403 Therefore, the USDOC's request in its supplemental questionnaire for "all freight
contracts with [[***]] and all unaffiliated freight providers that cover the full POI [ sic]"404 appears
to overlook Hyundai Steel 's initial explanation. In any event, for both home market and US sales,
Hyundai Steel provi ded sample inland freight and warehousing contracts of [[***]] with one
unaffiliated subcontractor, namely, [[***]]405, in addition to the information that was supplied as
part of its initial response.
We agree with the United States that, as part of its supplemental questionnaire, the USDOC
took into account the [[***]] financial statements provided by Hyundai Steel in its initial response,

391 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4.
392 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4.
393 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 8.
394 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 8.
395 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
396 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
397 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 7 and 9-11 and
exhibits S-6 and S-7.
398 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 8 and 10.
399 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 20-21.
400 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 21.
401 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
402 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
403 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-30.
404 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4. (emphasis added)
405 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 7 and 9.

BCI deleted, as indicated [[***]]

but found that they failed to establish that the transactions between [[***]] and Hyundai Steel were
at arm's length because they did not show that [[***]] "[[***]]".406 In other words, the USDOC
found the financial statements to be de ficient for purposes of its analysis and properly informed
Hyundai Steel of the reasons for such deficiency through its supplemental questionnaire.
Crucially, however, although the USDOC addressed the deficiencies in [[***]] financial
statements, it did not address the other information that was submitted by Hyundai Steel as part of
its initial response to establish the arm's -length nature of the transactions between Hyundai Steel
and [[***]]. Unlike its discussion of the financial statements, there is nothing in the supplementary
questionnaires to indicate that the USDOC took into account or otherwise addressed
Hyundai Steel's contract with an unaffiliated provider [[***]] that provided warehousing service at
one warehousing location ( [[***]]), which allegedly showed that these transactions are at
"arm's length".407 Nor do the supplementary questionnaires show that the USDOC took into account
"Hyundai Steel 's international freight contract with [[***]]", on the one hand, and [[***]]
international freight contracts with its subcontractors ( [[***]] and [[***]]408), on the other hand.
All of this information was submitted as part of Hyundai Steel 's initial response to show that these
transactions were at "arm's length".409
We disagree with the United States that the "record shows that Hyundai Steel never
presented the contract between Hyundai Steel and [[***]] to [USDOC] for the purpose of
demonstrating that [[***]] warehousing services were provided at arm 's length".410 In its initial
Section B response, Hyundai Steel provided a "copy of its warehousing contract with [[***]] … along
with the contract for the [[***]] location, which is managed by an unaffiliated company, [[***]]"
and clearly explained that the "contract materi als between Hyundai Steel and the two providers
([[***]] and the unaffiliated provider ) show that these transactions are at arm 's length".411 In
response to questioning by the Panel, the United States also submits that, in any event, "based on
what Hyundai [Steel] reports, the costs associated with the [[***]] contract appear not to be
comparable with the costs associated with the warehouses serviced by [[***]]".412 Even if the
contracts were not "comparable" – as now suggested by the United States – what is important is
that the USDOC did not provide any such reasoning or explanation as part of its analysis.
We therefore find it difficult to accept in its entirety t he United States' argument that the
USDOC, after "reviewing" Hyundai Steel 's Sections B and C initial responses, "found that the
information Hyundai Steel submitted failed to establish that the transactions between [[***]] and
Hyundai Steel were at arm 's length".413 Although the supplementary Sections B -C questionnaire
indicates that the USDOC reviewed one of the several pieces of information provided by
Hyundai Steel in its initial response (i.e. [[***]] financial statements) and found it to be deficient,
there is no indication that the USDOC took into account or otherwise addressed or reviewed
Hyundai Steel's contract with an unaffiliated supplier for warehousing services as well as [[***]]
international freight contracts with two of its subcontractors that were provided as part of its initial
Sections B and C responses.
The USDOC followed up with a second supplemental Sections B-C questionnaire to
Hyundai Steel, wherein, for inland freight to warehouse for home market sales, it requested "copies
of all cont racts that [[***]] has with all unaffiliated parties for similar services that covers the
POI".414 Additionally, the USDOC asked for a list of all subcontractors that provided warehousing and
inland freight services for [[***]] during the POI and also sought [[***]] additional sample contracts

406 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), pp. 3-4.
407 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), p. B-29.
408 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), exhibit C-10.
409 CRS Section C questionnaire response, (Exhibit KOR-51 (BCI)), p. C-30.
410 United States' response to Panel question No. 67, para. 77.
411 CRS Section B questionnaire response, (Exhibit KOR-36 (BCI)), pp. B-29 and B-31.
412 The United States explains that:
Specifically, Hyundai [Steel] reports that for the warehouse serviced by [[ ***]], Hyundai Steel
pays [[***]] [[***]] for warehousing, and [[ ***]] pays [[ ***]]. By co mparison, the contract
between Hyundai [Steel] and [[ ***]] for the [[ ***]] warehouse indicates that Hyundai [Steel]
pays [[ ***]] just [[ ***]]. Similarly based on Hyundai Steel's reported average costs for
warehousing, the average cost for warehousing at [[ ***]] during the [POI] was [[ ***]], while
Hyundai Steel's average cost for all warehouses was [[***]].
(United States' response to Panel question No. 67, para. 80 (fns omitted))
413 United States' response to Panel question No. 66(d), para. 75.
414 CRS supplemental Sections B-C questionnaire, (Exhibit USA-15 (BCI)), question 3.

BCI deleted, as indicated [[***]]

between [[***]] and its subcontractors for both warehousing and inland freight services "to show
that these transactions were at arms-length".415
Hyundai Steel responded that for inland freight services to warehouse for home market
sales, [[***]] did not offer similar services to other unaffiliated parties, and it was therefore unable
to provide such contracts as they did not exist.416 As to the USDOC's request for a list of all of [[***]]
subcontractors, Hyundai Steel clarified that "while [[***]] maintained over 30 subcontractors for
various logistics services bot h in Dangjin and Suncheon, [[***]] used only 4 subcontractors for
warehousing the subject merchandise during the POI". 417 Hyundai Steel provided a list of "these
subcontractors for both freight and warehousing". 418 In accordance with the USDOC 's request,
Hyundai Steel also provided [[***]] additional sample contracts with its subcontractors [[***]].
Hyundai Steel pointed out that these contracts covered both warehousing and inland freight
services.419
We find two aspects of the USDOC 's second supplemental questionnaire noteworthy. First,
there is nothing in the USDOC 's second supplemental questionnaire suggesting that the USDOC
found any deficiencies in the other information that was previously submitted by Hyundai Steel as
part of its first two res ponses. Second, the USDOC 's express request in its supplemental
questionnaire for [[***]] additional sample contracts between [[***]] and its unaffiliated
subcontractors for warehousing and inland freight services shows that it considered such contracts
to be relevant for the determination of the arm's -length nature of the transactions between
Hyundai Steel and its affiliate.
Subsequently, at verification the USDOC asked for "complete copies of freight contracts
between [[***]] and its unaffiliated freight providers that cover the full POI" and "all copies of
contracts that [[***]] has with all unaffiliated parties for similar services that cover the POI,
regardless of the unaffiliated parties' location". The USDOC also requested that "Hyundai Steel obtain
the total actual costs incurred by [[***]]".420
The USDOC 's verification report notes that Hyundai Steel officials provided "a chart
comparing Hyundai Steel 's freight costs with [[***]] total costs" and provided "examples of
contracts between [[***]] and its subcontractor to show that [[***]] made a profit".421 However,
the USDOC observed that "Hyundai Steel did not provide any of the information requested above
that was in the possession of [[***]], such as copies of all contracts that [[***]] has with all
unaffiliated parties for similar services that cover the POI".422 The reason provided by Hyundai Steel
officials was that there was no "direct ownership" of [[***]] by Hyundai Steel.423 The USDOC noted
"the fact that [[***]], along with his father [[***]], possessed the largest ownership shares in
[[***]] at the same time [[***]] was Vice Chairman of Hyundai Steel, and while his father [[***]]
was both a direct and indirect owner of Hyunda i Steel" and queried why, in light of these facts,
Hyundai Steel could not obtain the requested information from [[***]].424 In response, company
officials "again stated that Hyundai Steel does not directly control [[***]]".425 The USDOC "asked
why [[***]] was willing to provide some information, i.e., the contracts with its subcontractor, but
was unwilling to provide the additional documentation" requested. Company officials indicated that
they "did not know, but that the subcontractor information was all that [[***]] was willing to
provide".426
Thus, of the three pieces of information requested by the USDOC at verification, it appears
that Hyundai Steel furnished two, namely, examples of contracts between [[***]] and its

415 CRS supplemental Sections B-C questionnaire, (Exhibit USA-15 (BCI)), question 5(B).
416 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 2.
417 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 4
and exhibit 7.
418 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 4
and exhibit 7.
419 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 5.
420 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 42.
421 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 42.
422 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
423 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 43.
424 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44.
425 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44.
426 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44. (emphasis original)

BCI deleted, as indicated [[***]]

subcontractors allegedly showing that [[***]] made a profit, as well as information regarding [[***]]
total costs. Moreover, there is nothing in the verification report suggesting that the information
regarding the subcontractors and the costs incurred by [[***]] was somehow deficient; rathe r, it
appears that the USDOC, in fact, verified such information without any concerns.427
In response to the USDOC 's request for "all copies of contracts that [[***]] has with all
unaffiliated parties for similar services that cover the POI, regardless of t he unaffiliated
parties' location", Hyundai Steel stated that it was unable to comply and its officials explained at
verification that Hyundai Steel does not "directly control" [[***]].428 We recall that in its
first supplemental questionnaire, the USDOC ha d also made a similar request for "copies of all
international freight contracts between [[***]] and its unaffiliated customers". 429 In response,
Hyundai Steel stated that [[***]] did not maintain any contracts with unaffiliated customers for
shipments to the United States, and that while "[[***]] does provide shipping services to unaffiliated
customers for shipments to third countries, [[***]] ha[d] declined Hyundai Steel's request to
provide its contracts with unaffiliated third parties citing the proprietary and confidential nature of
its transactions with other parties".430 The USDOC at verification did not express any concerns with
respect to Hyundai Steel's previous response.
In its final determination, the USDOC acknowledged that Hyundai Steel "provided in its initial
questionnaire response contracts its affiliated company maintained with its sub -contractors
demonstrating that the affiliated company passed on its full costs plu s an amount to cover the
affiliated company's expenses and profit".431 The USDOC also noted that Hyundai Steel "was able to
obtain this supplier's cost of acquiring the service in question – on a transaction specific basis – and
so provided an analysis showing that its affiliated company 's charges well exceeded the cost of
acquiring the transportation services in amounts that covered all operating costs and provided a
profit to the company".432 However, besides noting that Hyundai Steel provided this information, the
USDOC's final determination contains no explanation as to how it took this information into account
before resorting to the use of facts available. Rather, the USDOC 's subsequent analysis focuses
exclusively on the issue of affiliatio n between Hyundai Steel and [[***]], and the information that
Hyundai Steel claimed it was unable to provide.
The USDOC noted that when it "specifically requested that Hyundai Steel obtain certain
freight information between its affiliate and other unaffil iated parties, Hyundai Steel stated that its
affiliated company refused to provide the data". 433 The USDOC stated that it was able to confirm
that one of the two largest shareholders of Hyundai Steel's affiliated freight provider (i.e. [[***]])
is also a part owner of Hyundai Steel, and that the other large shareholder is the Vice Chairman of
Hyundai Steel, and that the two are related. 434 The USDOC thus confirmed that Hyundai Steel and
[[***]] were "held and commonly controlled by the same family members d uring the POI". 435
Immediately thereafter, the USDOC found that "Hyundai Steel failed to demonstrate the
arm's-length nature of the services provided by the affiliated company [i.e. [[***]] and its
U.S. subsidiaries" and it was thus unable to determine the arm's-length nature of the transactions
between Hyundai Steel and [[***]].436 For these reasons, the USDOC stated that it was "relying on
facts otherwise available", with an "adverse inference".437
Thus, the USDOC 's resort to facts available in its final determination was based upon
Hyundai Steel's refusal at verification to provide "all copies of contracts that [[***]] has with all
unaffiliated parties for similar services that cover the POI, regardless of the unaffiliated
parties' location". The USDOC resorted to facts available because it "found" that Hyundai Steel and
[[***]] were "commonly controlled" and that therefore Hyundai Steel should have been able to

427 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 42.
428 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 44.
429 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
430 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
(emphasis added)
431 CRS issues and decision memorandum, (Exhibit KOR-41), p. 71.
432 CRS issues and decision memorandum, (Exhibit KOR-41), p. 71.
433 CRS issues and decision memorandum, (Exhibit KOR-41), p. 73. (fn omitted; emphasis added)
434 CRS issues and decision memorandum, (Exhibit KOR-41), pp. 73-74. The USDOC noted these
two individuals to be father and son, respectively.
435 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
436 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
437 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.

BCI deleted, as indicated [[***]]

provide the requested information. However, this issue of "common control" was addressed and
disclosed by Hyundai Steel from the very outset, as part of its initial Section A response.438 In fact,
this is confirmed by the USDOC in its final determination, when it notes that "Hyundai Steel defined
the companies that are members of the Hyundai Mo tor Group and/or held by the [[***]] family as
being affiliated parties via control by a 'group, ' which has the ability to directly or indirectly control
its group members, and are expected to cooperate with the [USDOC]'s antidumping
investigation".439
Furthermore, we recall that the USDOC in its supplemental questionnaire had already made
a request similar to the one made at verification by requesting "copies of all international freight
contracts between [[***]] and its unaffiliated customers".440 In response, Hyundai Steel stated that
[[***]] did not maintain any contracts with unaffiliated customers for shipments to the
United States, and that while " [[***]] does provide shipping services to unaffiliated customers for
shipments to third countries, [[***]] ha[d] declined Hyundai Steel's request to provide its contracts
with unaffiliated third parties citing the proprietary and confidential nature of its transa ctions with
other parties ".441 The final determination does not address the explanation provided by
Hyundai Steel and notes, instead, that "[w]hen the [USDOC] raised these overlapping
roles/ownership positions in Hyundai Steel and the affiliated company, Hy undai Steel officials
continued to indicate that they could not obtain the affiliated company 's information requested by
the [USDOC]".442
The above discussion reveals that Hyundai Steel submitted a variety of information to
demonstrate the arm's -length natu re of its transactions with its affiliate [[***]] throughout the
course of the investigation. As part of its initial questionnaire responses, Hyundai Steel submitted
(a) [[***]] financial statements demonstrating that the affiliate earned a profit; (b ) warehousing
contract with [[***]] and a contract with an unaffiliated provider [[***]] that provided warehousing
service at one warehousing location ( [[***]]); and (c) copies of international freight contract with
[[***]], on the one hand, and [[***]] international freight contract with two of its subcontractors
([[***]] and [[***]]), on the other hand. In its first supplemental response, Hyundai Steel further
provided s ample inland freight and warehousing contracts between [[***]] and one unaffiliated
subcontractor, namely, [[***]].443 In response to a specific request by the USDOC in its
second supplemental questionnaire, Hyundai Steel provided [[***]] additional inland freight and
warehousing contracts with its subcontractors [[***]].444 Finally, at verification, Hyundai Steel
submitted "a chart comparing Hyundai Steel 's freight costs with [[***]] total costs".445 Of all of
these pieces of information – some of which were supplied in direct response to a specific request
by the USDOC – the USDOC reviewed and found deficient only [[***]] financial statements. The
United States is unable to point to anything in the Panel record indicating that the USDOC took into
account or otherwise reviewed and found deficient any of the other information that was supplied
by Hyundai Steel to establish the arm's-length nature of its transactions with its affiliate [[***]].446
Turning now to the substantive provisions of Annex II to the Anti-Dumping Agreement,
paragraph 3 requires, in relevant part, that:
All information which is verifiable, which is appropriately submitted so that it can be
used in the investigation without undue difficulties, which is supplied in a timely fashion,

438 See para. 7.90 above.
439 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74. (emphasis added)
440 CRS supplemental Sections B-C questionnaire, (Exhibit USA-72 (BCI)), p. 9.
441 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), p. 24.
(emphasis added)
442 CRS issues and decision memorandum, (Exhibit KOR-41), p. 74.
443 CRS supplemental Sections B-C questionnaire response, (Exhibit KOR-34 (BCI)), pp. 7 and 9.
444 CRS second supplemental Sections B-C questionnaire response, (Exhibit KOR-37 (BCI)), p. 5.
445 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 42.
446 United States' responses to Panel question Nos. 12 and 67. The United States offers some
reasons in its submissions to the Panel as to why some of this information may not be relevant. (See,
e.g. United States' response to Panel question No. 67, para. 80; and response to Panel question No. 12,
para. 50). However, as explained in para. 7.123 above, what is important is that the USDOC did not provide
any such reasoning or explanation.

BCI deleted, as indicated [[***]]

and, where applicable, which is supplied in a medium or computer language requested
by the authorities, should be taken into account when determinations are made.447
Paragraph 3 provides key elements of the "substantive basis" for an investigating authority to
determine whether it can justify rejecting respondents ' information and resorting to facts available
in respect of some item, or items, of information, or whether instead it must rely on the information
submitted by respondents "when determinations are made".448 If, in direct response to a request by
an investigating authority, a respondent provides information that satisfies the criteria under
paragraph 3, the authority must take such information "into account" before resorting to facts
available.449 This is because a finding that information "necessary" for making a certain
determination is "missing", or that an interested party significantly impeded the investigation , can
only properly be made after "taking into account" all information that was, in fact, su pplied by the
interested party in response to an investigating authority 's requests. An investigating
authority's conclusion for purposes of Article 6.8 that "necessary" information is missing or that a
respondent significantly impeded the investigation wo uld be tainted if the information that meets
the criteria of paragraph 3 and that was supplied by an interested party directly in response to an
investigating authority's request is not taken into account by the authority before resorting to facts.
In our view, the information supplied by Hyundai Steel in response to the USDOC 's queries
satisfies the criteria under paragraph 3. All of the information identified above was provided either
as part of Hyundai Steel's Sections B and C questionnaire responses that were submitted within the
deadlines established by the USDOC, or upon the USDOC's request at verification. In the absence of
any findings of delay by the USDOC, we agree with Korea that this information was supplied in a
"timely fashion" for purposes of paragraph 3.450 Moreover, there is nothing to suggest that the
information was not verifiable. In fact, as Korea rightly points out, the USDOC appears to have
successfully verified many pieces of the submitted information, including the total actual costs
incurred by [[***]], as well as inland freight contracts between [[***]] and its unaffiliated
subcontractor. Finally, the fact that some of this information – such as the [[***]] additional inland
freight and warehousing contracts between [[***]] and its subcontractors – was provided in direct
response to a specific request by the USDOC suggests that this information was considered relevant
by the USDOC and – in the absence of any finding by the USDOC to the contrary – was appropriately
submitted such that it could be used in the investigation without "undue difficulties".
For these reasons, we find that the USDOC acted inconsistently with the first sentence of
paragraph 3 of Annex II to the Anti -Dumping Agreement by not "tak[ing] into account " the
information concerning affiliated party transactions that was submitted by Hyundai Steel in
accordance with that provision. Given that paragraph 3 of Annex II serves as a precondition for an
investigating authority 's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement451, we find that the USDOC also acted inconsistently with that provision in
resorting to facts available . In light of our findings of WTO -inconsistency, we do not consider it
necessary to rule upon Korea 's claims under paragraphs 1, 5, and 6 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.452
7.3.2.2.3.2 The USDOC's selection of the replacement facts
We have already found that the USDOC erred in resorting to facts available with respect to
the information concerning affiliated party transactions that was submitted by Hyundai Steel. In
these circumstances, we do not consider that making further findings on Korea's claims concerning
the USDOC 's selection of the replacement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution to the dispute before
us.453

447 Emphasis added.
448 Panel Report, Egypt – Steel Rebar, para. 7.159.
449 Panel Report, Egypt – Steel Rebar, para. 7.159.
450 Korea's first written submission, para. 293.
451 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56 and 7.79.
452 See, e.g. Panel Report, EC – Salmon (Norway), para. 7.387; and Panel Report, Morocco – Hot-Rolled
Steel (Turkey), paras. 7.105-7.106.
453 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on

BCI deleted, as indicated [[***]]

Alleged misreporting of control numbers (CONNUMs)
7.3.2.3.1 Factual background
The USDOC requested Hyundai Steel to provide information about further -manufacturing
expenses of CRS in the United States.454 In response, Hyundai Steel submitted a revised US sale s
database reporting the adjusted unit and total costs and, as a result, recalculated the indirect selling
expenses of HSA.455 In its preliminary determination, the USDOC found that "Hyundai Steel
cooperated with the [USDOC] in this proceeding and provided sufficient information to allow the
[USDOC] to calculate a margin" , thus rejecting the petitioners' suggestion to apply "tota l AFA".456
The USDOC calculated a preliminary dumping margin of 2.17% based on the data submitted by
Hyundai Steel.457
During verification of Hyundai Steel's export sales, the USDOC raised certain inconsistencies
in the reporting of the quality codes for Spec C products. Specifically, the USDOC noted that for one
sale (surprise US sale 3 ) Hyundai Steel had reported the product code (field PRODCOD2U ) as
[[***]], indicating that this was an ultra-high-strength steel (UHSS) or advanced high-strength steel
(AHSS) merchandise, which warranted a quality reporting code (field QUALITYH/U ) of "20". 458
However, Hyundai Steel reported a quality code of "25" ("high -strength low alloy" quality). 459
Hyundai Steel commented that this inconsistency resulted from a "linking problem" between
HSA's purchases from Hyundai Steel and its sales. 460 The USDOC chose not to review this issue
during Hyundai Steel's verification461, but further considered it during HSA's verification:
For certain sale observations, including one of the surprise sale trace observations first
examined during the verification of Hyundai Steel in Korea, the company official
explained why the reported "specification" (intended to reflect the specification/grade
of the source Hyundai Steel coil, which the company official had indicated was used for
reporting information in the product characteristic fields, SPECGRADEH/U and
QUALITYH/U) was inconsistent with the reported product code (PRODCO D2U) (which
the company official indicated was the specification/grade of the product sold by HSA,
according to HSA's records). However, the company official did not identify additional
sale observations in the U.S. sales database with such inconsistencies.462
Regarding this sale, Hyundai Steel provided additional details to explain why it had identified
the CONNUM as [[***]], even though the reported product code was [[***]]:
The company official stated this sale observation meets the description of the "type 2b"
transactions referenced in the Sales Reconciliation section above, such that it could link
the merchandise sold by HSA to the original Hyundai Steel coil but not to an HSA
production order, and in this instance, the original Hyundai Steel coil was c old-rolled
and classified as specification [[***]] (see page 62). The company official identified for
us additional sale observations, which it called "type 3" transactions, for which it could
identify the HSA production order, and which it could link to a n original Hyundai Steel
coil that was a cold-rolled coil, but where the original Hyundai Steel cold-rolled coil was
of a different specification than that identified for the HSA sale (see page 61). For
example, the first Hyundai Steel in the "type 3" section of page 61, [[***]], was
identified by the Hyundai Steel information as specification [[***]], but many of the
sale observations linked to that coil were reported with a different specification
([[***]]).463
Furthermore, the USDOC conducted a "completeness test" with respect to certain sales that
presented this inconsistency. In particular, the USDOC reviewed certain sales that presented

454 CRS supplemental Sections A-C questionnaire response, (Exhibit KOR-42 (BCI)), pp. 1-3.
455 CRS supplemental Sections A-C questionnaire response, (Exhibit KOR-42 (BCI)), pp. 1-3.
456 CRS decision memorandum for preliminary determination, (Exhibit KOR-43), p. 3.
457 CRS preliminary determination, (Exhibit KOR-44).
458 CRS CEP verification report, (Exhibit KOR-47 (BCI)), pp. 19 and 41.
459 CRS CEP verification report, (Exhibit KOR-47 (BCI)), pp. 19 and 41.
460 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 41.
461 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 41.
462 CRS HSA sales verification report, (Exhibit KOR-46 (BCI)), p. 2.
463 CRS HSA sales verification report, (Exhibit KOR-46 (BCI)), p. 13.

BCI deleted, as indicated [[***]]

discrepancies between the reported PRODCOD2U and QUALITYU fields, noting that rather than
reporting the field QUALITYU so as to reflect with the [[***]] categorization of Spec C products, the
reported QUALITYU was equal to [[***]] (representing [[***]]) or [[***]] (representing
[[***]]).464
In its case brief, Hyundai Steel addressed the issue regarding the "type 2b" sale and
explained that even though the reported informational product code (PRODCOD2U) for this sale was
[[***]], the "actual product produced and sold was a [[***]] product", for which the corresponding
quality code was "25". 465 Hyundai Steel noted that it correctly reported the product characteristic
information on the basis of the product as produced and sold, and therefore no revision was
necessary.466 Finally, Hyundai Steel stressed that this issue was minor since it concerned a single
sale in the database. 467 In its rebuttal brief, Hyundai Steel addressed the alleged misreporting of
Spec C sales ("type 3" ) as qual ity [[***]] or [[***]].468 Hyundai Steel explained that the
informational product code (PRODCOD2U) was identified based on HSA's records, however, in a few
instances this field did not match the CONNUM as sold (the actual product). 469 According to
Hyundai Steel, such an inconsistency may occur when HSA's inventory records do not perfectly trace
the product information back to the imported coil , or when HSA sold a higher or comparable grade
product as a substitute for another product. 470 For Hyundai Steel, the issue was precisely the
replacement of orders of a commercial quality steel (quality code [[***]]) with higher quality steel
(quality code [[***]] or [[***]]), which demonstrate d that there was no flaw in its reporting.471
Finally, H yundai Steel noted that , al though its reporting was not erroneous , the allegedly
misreported Spec C sales as quality [[***]] or [[***]] represented only [[***]]% of all Spec C sales
and [[***]]% of all US sales, and therefore had no meaningful impact on the USDOC's analysis.472
In addition to the issue in the export sales, during verification of home market sale s, the
USDOC questioned the product quality reporting for three product categories, Spec s D, E, and H.
With respect to Spec D, the USDOC noted that products with the designation [[***]] were identified
as commercial quality (QUALITYH/U="35").473 The USDOC noted that according to the
company's internal product guidelines, the mechanical and chemical r equirements of this
specification code were consistent with the description of drawing quality products.474 In its case
brief, Hyundai Steel responded that the "QUALITY classification of this product as a commercial steel
quality product as opposed to a drawing steel quality product was reasonable even if the mechanical
and physical requirements of the product are consistent with other products classified as drawing
steel products". 475 However, Hyundai Steel emphasized the fact that [[***]] products were not
commonly sold by Hyundai Steel, and noted that the sales of this product in the home market were
limited to [[***]] out of a total of [[***]] reported home market sales observations. 476 For this
reason, Hyundai Steel argued that "the QUALITY classification of this product has no meaningful
impact on the [USDOC]'s analysis in light of the insignificant quantity of merchandise at issue".477
Regarding Spec E sales, the USDOC asked why there were no yield strength measurements
for [[***]] spec code products, and Hyundai Steel responded that these products were not "prime"

464 CRS HSA sales verification report, (Exhibit KOR-46 (BCI)), pp. 10-11.
465 CRS case brief, (Exhibit KOR-48 (BCI)), p. 11.
466 CRS case brief, (Exhibit KOR-48 (BCI)), p. 11.
467 CRS case brief, (Exhibit KOR-48 (BCI)), pp. 11-12.
468 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), pp. 12-15. The alleged misreporting concerned the
"type 3" transactions identified by Hyundai Steel at verification, and certain additional transactions that were
not reported. Hyundai Steel explained that the table it prepared for verification (SVE 17, page 61) was only for
"type 3" sales, and not any instances of mismatching between PRODCOD2U and QUALITYU corresponded to
this type of sales.
469 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 13.
470 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 13.
471 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 14.
472 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 15.
473 CRS CEP verification report, (Exhibit KOR-47 (BCI)), pp. 2 and 21.
474 CRS CEP verification report, (Exhibit KOR-47 (BCI)), pp. 2 and 21. The USDOC came to this
conclusion by observing the internal production guideline of Hyundai Steel for this product, which identified
certain mechanical and chemical requirements (maximum manganese content, maximum phosphorus
content and minimum tensile strength) which were consistent with [[***]], rather than [[***]].
475 CRS case brief, (Exhibit KOR-48 (BCI)), p. 12.
476 CRS case brief, (Exhibit KOR-48 (BCI)), p. 12.
477 CRS case brief, (Exhibit KOR-48 (BCI)), p. 12. See also CRS rebuttal brief, (Exhibit KOR-29 (BCI)),
p. 16.

BCI deleted, as indicated [[***]]

and that it did not record yield strength information for non -prime merchandise.478 However, the
USDOC identified [[***]] sale observations of this product in the home market which had been
reported as "prime" products and noted that, in the sales documentation covering the sale of this
product, the "packing list" contained a yield strength box.479 Hyundai Steel did not comment on this
issue in its case brief. In its rebuttal brief, Hyundai Steel ar gued that the "sales documentation for
these products do not contain specification yield strength information confirming that no yield
strength was required and thus it is entirely reasonable for there not to be any yield strength
documentation".480 Hyundai Steel clarified that additional review of these sales had shown that these
sales were prime sales, but, nonetheless, this product did not require yield strength measurement.481
Hyundai Steel further noted that this product was not sold in the US market, and in the home market
it represented only [[***]] out of the [[***]] sales observations.482
Finally, with respect to Spec H sales, the USDOC noted that it could not find in the
information supplied any reference to the [[***]] spec code product. 483 The USDOC referred to
[[***]] home market sale observations identified as this product, each with the QUALITYH
code "20", which was applicable to UHSS or AHSS merchandise; accordingly, it noted that there was
no indication that this product met the company 's characterizations of UHSS or AHSS
merchandise.484 Hyundai Steel in its case brief explained that the classification of this product as an
UHSS quality product was justified by its classification in Hyundai Steel 's product coding system in
the normal course of business.485 Hyundai Steel also argued that the appropriate coding of this
product had no measurable impact on the USDOC 's analysis due to its insignificant home market
sales (only [[***]] transactions), and also because there were no such sales in the United States
during the POI.486 In its rebuttal brief, Hyundai Steel also asserted that , "for the few products the
[USDOC] flagged for further consideration, these products [were] either demonstrably coded
correctly, sold in insignificant volumes, or both", and that "Hyundai Steel's reporting [was] accurate
and no adjustment [was] required, let alone an AFA or total AFA adjustment".487
In its final determination, the USDOC applied facts available with an adverse inference to
the information associated with t he inconsistencies in reporting Specs C, D, E , and H sales.488 The
USDOC applied facts available because the missing information was "necessary" and Hyundai Steel
"withheld the requested information, [thus] significantly imped [ing] the proceeding … and the
[USDOC] was therefore unable to verify the missing informatio n".489 The USDOC also determined
that the application of an adverse inference was warranted due to Hyundai Steel 's failure to
cooperate by not acting to the best of its ability, given that "the information was never provided,
and was instead discovered by the [USDOC] at verification".490
Specifically, with respect to Spec C sales (those identified during verification and those later
referenced to by the USDOC), the USDOC found an inconsistency between the reported CONNUM
information and the reported product c ode in the field PRODCOD2U due to the different qualities
corresponding to each specification. 491 Regarding Spec D, the USDOC determined that the proper

478 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 21.
479 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 22.
480 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 17.
481 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), fn 26.
482 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 17.
483 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 21.
484 CRS CEP verification report, (Exhibit KOR-47 (BCI)), p. 21. In detail, the USDOC noted that this
product was not included in the list initially submitted as representing the products considered UHSS or AHSS
merchandise, nor in the AHSS grouping of products subsequently provided upon discussion of the topic of
UHSS and AHSS merchandise.
485 CRS case brief, (Exhibit KOR-48 (BCI)), pp. 12-13.
486 CRS case brief, (Exhibit KOR-48 (BCI)), p. 12; See also CRS rebuttal brief, (Exhibit KOR-29 (BCI)),
pp. 16-17.
487 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 47.
488 CRS issues and decision memorandum, (Exhibit KOR-41), pp. 59-60.
489 CRS issues and decision memorandum, (Exhibit KOR-41), p. 60.
490 CRS issues and decision memorandum, (Exhibit KOR-41), p. 60.
491 The USDOC stated that:
More fundamentally, during the Hyundai Steel sales verification the company had stated that "HSA
did not intentionally alter or revise the specification and grade designations from those of the
original coil it purchased from Hyundai Steel." Given that explanation, as well as the lack of
information on the record to s upport the respondent's belated assertions regarding products

BCI deleted, as indicated [[***]]

characterization of the products at issue was of "drawing quality" and not of "commercial quality".492
With respect to Spec E, the USDOC found that there was no basis for not reporting the yield strength
field.493 Finally, regarding Spec H, the USDOC was not convinced that Hyundai Steel properly
classified those products as AHSS/UHSS quality.494
Overall, the US DOC found that "Hyundai Steel had no plausible explanation either at
verification or in its case and rebuttal briefs for misidentifying these sales" and thus it did not
cooperate at the best of its ability, rendering the application of an adverse inference necessary.495
To sales associated with the Spec C issue, the USDOC assigned the highest calculated margin for
any other reported US sale of Hyundai Steel, [[***]]%.496 For home market sales under Specs D,
E, and H, the USDOC revised the "incorrect product c haracteristics" as described above, and as a

meeting multiple specifications, we find that the sales in question (i.e. those referenced in the
second grouping at the bottom of page 61 of the HSA sales verification exhibit 17, and those
identified within the last two paragraphs on page 10 of the HSA sales verification report) are
considered unverified. Those sale observations were not shown to be linked to the products as
imported into the United States, and no adequate explanation has been provided by the respondent
for those mismatches between the alleged Hyundai Steel input coils and the products sold by HSA
to its unaffiliated U.S. customers. These mismatches were not identified by the respondent prior
to verification.
(CRS issues and decision memorandum, (Exhibit KOR-41), p. 62)
492 The USDOC stated that:
As noted in the [USDOC]'s Hyundai Sales verification report, the products have properties
associated with the former [drawing] quality. Furthermore, the Spec D is even identified in a way
that is very obviously characteristic of drawing quality rather than commercial quality , given
Hyundai Steel's product coding designations, which were examined in detail during the verification
of Hyundai Steel. Therefore, the [USDOC] is revising the repor ting of that product characteristic
for the sales in question.
(CRS issues and decision memorandum, (Exhibit KOR-41), p. 60 (emphasis added; fns omitted))
493 The USDOC stated that:
Regarding Spec E products, Hyundai Steel identified a minimum specified yiel d strength for the
products in question. Hyundai Steel's reporting of the minimum yield strength code for products
classified under this specification (code "1") was consistent with the identified minimum specified
yield strength. However, at verification it was determined that there was no basis for the minimum
specified yield strength that Hyundai Steel identified. Documentation examined at verification
indicated there was no minimum specified yield strength required for the specification. Further
examination at verification also revealed the absence of evidence of any actual yield strength
measurements for the products in question, which Hyundai Steel initially opined was due to the
merchandise being classified as non -prime merchandise. However, the [USDOC] concluded that
the merchandise had been properly reported by Hyundai Steel as prime merchandise, not
non-prime merchandise . During the discussions of this specification, therefore, Hyundai Steel
provided no information indicating how it had devised the minimum yield strength value it had
identified as the basis for reporting the minimum specified yield strength field. The minimum
specified yield strength identified by Hyundai Steel for Spec E, therefore, is unsupported by the
record. The record indicates, however, that the minimum specified yield strength for the galvanized
steel products made from Spec E is a level that would fall in reporting code "4" for the minimum
specified yield strength characteristic. Accordingly, under section 776(a) of the Act, as facts
otherwise available, the [USDOC] is reclassifying the products under Spec E with the minimum
specified yield strength reporting code of "4".
(CRS issues and decision memorandum, (Exhibit KOR-41), p. 61 (emphasis added; fns omitted))
494 The USDOC stated that:
As the [USDOC] has noted, the product -specific documentation provided by the respondent at
verification that utilizes AHSS/UHSS terminology does not reference Spec H products. During
discussions of this product at verification, Hyundai Steel provided technical information supporting
its reporting of the products in question as AHSS/UHSS quality. In addition, although Spec H
products have some basic strength requirements, they do not possess any chemical requirements,
so they may cont ain little or no amount of alloying elements associated with AHSS/UHSS
(or high-strength low-alloy products). The properties of the merchandise are not consistent with
AHSS/UHSS merchandise, based both on Hyundai Steel's representations of such products an d
upon information about such products elsewhere on the record. Thus, there was no basis for
Hyundai Steel to report the products as AHSS/UHSS quality ; based on the information available,
the [USDOC] concludes it is best characterized for this investigation as structural quality (QUALITY
reporting code 30) and is revising the sales as such.
(CRS issues and decision memorandum, (Exhibit KOR-41), pp. 60-61 (emphasis added; fns omitted))
495 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63.
496 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63; CRS final calculation memo,
(Exhibit KOR-49 (BCI)), p. 6.

BCI deleted, as indicated [[***]]

result the CONNUMs for the associated sales were also revised to reflect the change in the product
characteristics.497 The USDOC assigned to the appropriate CONNUMs:
The highest total cost of manufacturing (AVGTC OM) from amongst the affected
CONNUMs (i.e., the reported CONNUMs for the sales in question plus the CONNUMs into
which such sales were reclassified as a result of the correction of the product
characteristic in question), along with the corresponding variable cost of manufacturing
(AVGVCOM) for the CONNUM with the highest reported AVGTCOM, was applied to all of
the affected CONNUMs, with one exception, as discussed below.
For one of the miscoded CONNUMs ([[***]]), the volume of reported sales equaled the
volume of sales for that CONNUM across both t he home market and U.S. sales
databases, and that volume also equaled the volume of production quantity for the
CONNUM in question. When the incorrectly reported product characteristic for that
CONNUM were corrected, the revised CONNUM ([[***]]) was one which already exists,
and for which no product coding issues were identified. We recalculated the AVGTCOM
and AVGVCOM for that revised CONNUM so that they are based on the weight-averaged
(by PRODQTY) values of the AVGTCOMs and AVGVCOMs of the original and the revised
CONNUMs.498
7.3.2.3.2 Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available because the information allegedly missing
was not "necessary" 499 and because Hyundai Steel did not "significantly impede []" the
investigation.500 Korea contends that this is not a situation where information was missing, but
instead a situation of alleged misreporting of information. 501 Korea asserts that the information at
issue was not "necessary" to complete the determination, and that the USDOC never explained how
the allegedly minuscule errors could possibly amount to withholding "necessary information".502 With
respect to Spec C sales, Korea argues that these sales represented on ly [[***]]% of total SPCC
sales, and [[***]]% of total US sales in the POI. As to home market sales (Specs D, E , and H),
Korea argues that these transactions represented only [[***]]% of total transactions or [[***]]%
of the total MT weight of all home market sales. 503 In addition, there were no such sales in the
US market during the POI.504
Korea asserts that the methodology used by Hyundai Steel in reporting these products was
reasonable and supported by sufficient explanation and further evidence provided at verification.505
Korea describes the inconsistencies at issue as a "technical issue" that arose during verification
because of the fact that the records kept in the ordinary course of business did not necessarily
correspond with the CONNUMs imposed by the USDOC for purposes of its investigation. 506 The
mismatches were the result of the complex nature of combining internal product codes and
CONNUMs in situations where the products are further processed. 507 Specifically for the Spec C
US sales, Korea asserts that regardless of the field PRODCOD2U, which was provided for
informational purposes and not used in the USDOC 's calculations, Hyundai Steel correctly reported
the CONNUM data on the basis of the product as produced and imported.508

497 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63.
498 CRS final calculation memo, (Exhibit KOR-49 (BCI)), p. 5.
499 Korea's first written submission, para. 274.
500 Korea's first written submission, para. 280.
501 Korea's response to Panel question No. 16(a).
502 Korea's response to Panel question No. 16(c). Korea's contends that the transactions at issue were
insignificant, and therefore not "necessary" to complete the determination. (Korea's first written submission,
para. 276).
503 Korea's first written submission, para. 275.
504 Korea's first written submission, para. 243.
505 Korea's first written submission, para. 277.
506 Korea's first written submission, para. 279.
507 Korea's first written submission, para. 279.
508 There were limited instances, according to Korea, where Hyundai Steel's reported CONNUM
information (the product produced and imported) did not match the field PRODCOD2U (including informational

BCI deleted, as indicated [[***]]

Korea further claims that the USDOC acted inconsistently with paragraph 6 of Annex II, as
it did not offer to the respondent an opportunity to provide further explanations after the alleged
misreporting had been identified, with the "dialogue" effectively ending after verification. 509
Moreover, the USDOC in its final determination did not address Hyundai Steel's arguments regarding
the "miniscule volume" of the sales in question, and did not explain its rejection of the explanations
provided by Hyundai Steel.510
Finally, Korea claims that the USDOC acted inconsistently with paragraphs 3 and 5 of
Annex II by disregarding information that had already been verified as accurate.511 Korea notes that
the USDOC applied facts available not only with respect to the problematic sales, but also with
respect to the whole CONNUMs into which sales were reclassified.512 According to Korea, the USDOC
unduly replaced verified sales information an d costs with assumptions based on adverse
inferences.513 Korea claims that "Hyundai Steel fully explained the reasonableness of its coding
scheme and provided supporting materials at verification", and that "[n]othing on the record
suggests that any of thes e alleged minor reporting inaccuracies constituted an attempt by
Hyundai Steel to report intentionally incorrect data or a failure to exert its best efforts to comply
with the USDOC's information requests".514
As to the USDOC 's selection of the replacement facts, Korea claims that the USDOC acted
inconsistently with paragraph 7 of Annex II and Article 6.8.515 Korea contends that the USDOC
assigned the highest reported total cost of manufacturing for the home market sales, and the highest
calculated dumping margin for US sales, without engaging in a process of reasoning and evaluation
as to how these facts were reasonable replacements for the alleged ly missing information. 516
According to Korea, the selection of the replacement facts was punitive in nature a nd the USDOC
deliberately selected adverse information to penalise Hyundai Steel.517 Korea contends that the facts
were chosen for the sole reason that they were the highest reported costs or dumping margin, and
were not related to the issue of the correct CON NUM determination.518 Finally, Korea argues that
the USDOC did not consider the aberrational nature of the replacement facts.519
The United States responds that Hyundai Steel failed to provide requested "necessary"
information and identifies the missing information as "the cost of manufacturing associated with
certain products where product specifications were unverified".520 The United States asserts that the
"proper reporting of the CONNUMs assigned to each product" is crucially important for the calculation
of the dumping margin since "[m]isreporting products sold has the effect of distorting the calculated
margin, because certain costs that should be associated with a given CONNUM are instead associated
with a different CONNUM, which can significantly affec t the price comparison between the home
market and U.S. sales and ultimately the dumping margin". 521 The United States asserts that,
because of this misreporting, the USDOC could not rely on the reported information for those classes
of products. 522 According to the United States, "the magnitude of the erroneously reported
information is not the standard against which information is judged for its necessity; instead, it is
whether the information is 'required to complete a determination'".523 The United States argues that,
contrary to Korea 's assertions, Hyundai Steel had provided no plausible explanation for its

product quality code) based on HSA's records for CEP sales. In other words, in certain instances HSA imported
steel of one specification to make a further manufactured product and sold the finished product under a
different specification. (Korea's first written submission, paras. 243 and 275; response to Panel
question No. 16(a)).
509 Korea's first written submission, para. 282.
510 Korea's first written submission, paras. 277 and 282.
511 Korea's first written submission, paras. 296 and 305.
512 Korea's first written submission, paras. 302 and 305.
513 Korea's first written submission, paras. 306-307.
514 Korea's first written submission, paras. 299-300.
515 Korea's first written submission, para. 321.
516 Korea's first written submission, para. 322. See also Korea's second written submission, para. 77.
517 Korea's first written submission, para. 325.
518 Korea's first written submission, para. 326.
519 Korea's first written submission, paras. 327-329. See also Korea's second written submission,
paras. 124-126 and 128-130.
520 United States' response to Panel question No. 16(a), para. 64.
521 United States' first written submission, para. 133.
522 United States' first written submission, para. 134.
523 United States' first written submission, para. 166. See also United States' response to Panel question
No. 16(b).

BCI deleted, as indicated [[***]]

misreporting.524 The United States further argues that Hyundai Steel failed to substantiate certain
instances of its misreporting, and when it did, the USDOC "took great pains to explain exactly why
each of [Hyundai Steel's] explanations was not sufficient", thus act ing consistently with its
obligations under paragraph 6 of Annex II.525
With respect to Korea 's claims under paragraphs 3 and 5 of Annex II, the United States
argues that the USDOC applied facts available only to issues for which the respondent was unable
to substantiate its product reporting.526 According to the United States, Korea fails to demonstrate
that the USDOC did not take into account all verifiable and substantiated facts.527 Regarding the use
of facts available for the affected CONNUMs in their entirety, the United States responds that the
CONNUMs into which the sales in question were reclassified "were no longer accurate and required
revision".528 Finally, the United States argues that Hyundai Steel had not acted to the best of its
ability and for this reason the USDOC was not bound by paragraphs 3 and 5 of Annex II.529
In relation to the USDOC 's selection of the replacement facts, the United States responds
that Korea has failed to established any breach of the Anti-Dumping Agreement.530 According to the
United States, Korea does not provide an explanation for why the USDOC's process for selecting the
values is inconsistent with any specific provision of the Anti-Dumping Agreement.531
7.3.2.3.3 Evaluation by the Panel
7.3.2.3.3.1 The USDOC's resort to facts available
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and
6 of Annex II of the Anti-Dumping Agreement in resorting to the use of facts available in respect of
Hyundai Steel's reporting of certain CONNUMs.
In its final determination, the USDOC explained that it resorted to "partial AFA where data
do not exist on the record to fully correct th e problems in question".532 The "problems in question"
related to separate reporting issues affecting certain home market sales and US sales. We will first
examine the issues pertaining the home market sales – concerning Specs D, E, and H – before
examining the US market sales concerning Spec C.
Specs D, E, and H sales
The USDOC found discrepancies between product characteristics for certain Spec s D, E ,
and H sales observed in the product database at verification, on the one hand, and the specifications
originally reported by Hyundai Steel, on the other hand. 533 For Spec D sales, the USDOC explained
that "the products in question are properly characterized as drawing quality products rather than
commercial quality products", as reported by Hyundai Steel, and that it was therefore "revising the
reporting of that product characteristic for the sales in question".534
Regarding Spec E, the USDOC explained that Hyundai Steel 's initial "reporting of the
minimum yield strength code for products classified under this specification (code '1') was consistent
with the identified minimum specified yield strength". However, at verification, the USDOC found
the "minimum specified yield strength identified by Hyundai Steel for Spec E" to be "unsupported by
the record". Instead, the USDOC found the record to indicate that "the minimum specified yield
strength for the galvanized steel products made from Spec E is a level that would fall in reporting
code '4' for the minimum specified yield strength characteristic" and, therefore, "under

524 United States' first written submission, para. 166.
525 United States' first written submission, para. 168.
526 United States' first written submission, para. 180.
527 United States' first written submission, para. 180.
528 United States' response to Panel question No. 16(d), para. 76.
529 United States' first written submission, para. 181.
530 United States' first written submission, para. 194.
531 United States' first written submission, para. 195.
532 CRS issues and decision memorandum, (Exhibit KOR-41), p. 59.
533 CRS HSA sales verification report, (Exhibit KOR-46 (BCI)), p. 2. See also United States' first written
submission, para. 130.
534 CRS issues and decision memorandum, (Exhibit KOR-41), p. 60.

BCI deleted, as indicated [[***]]

section 776(a) of the Act, as facts otherwise available", the USDOC "reclassif[ied] the products under
Spec E with the minimum specified yield strength reporting code of '4'".535
For Spec H, the USDOC observed that Hyundai Steel had classified these products as
"AHSS/UHSS". However, "based both on Hyundai Steel's representations of such products and upon
information about such products elsewhere on the record", the USDOC concluded that the product
"is best characterized for this inve stigation as structural quality (QUALITY reporting code 30)" and
thus "revis[ed] the sales as such". 536 Thus, for the affected Spec s D, E, and H sales, the USDOC
corrected and revised the misreported product characteristics by using "facts otherwise available".
In its final calculation memorandum, the USDOC explained that:
The incorrect product characteristics in question were corrected for those sales, and the
CONNUMs for those sales revised accordingly. The reported CONNUMs for these home
market sale observations were identified, and the incorrect product characteristics for
them were corrected. The CONNUMs for those sales were also revised to reflect the
change in the product characteristic in question. The highest total cost of manufacturing
(AVGTCOM) from amongst the affected CONNUMs (i.e., the reported CONNUMs for the
sales in question plus the CONNUMs into which such sales were reclassified as a result
of the correction of the product characteristic in question), along with the corresponding
variable cost of manufacturing (AVGVCOM) for the CONNUM with the highest reported
AVGTCOM, was applied to all of the affected CONNUMs[.]537
Referring to the above excerpt from the final calculation memorandum, the United States
explains that, "[p]ut another way, [the] USDOC considered that the CONNUMs into which the sales
in question were reclassified were no longer accurate and required revision". 538 In support of this
assertion, the United States refers the panel to a specific part of the final determination. However,
we do not find any explanation in this part of the Final Determination as to why the CONNUMs into
which the corrected sales were classified into were "no longer accurate and required revision".
Rather, in the part of the final determination that the United States refers to, the USDOC simply
stated that:
We find that the errors and inconsistencies associated with the aforementioned analyses
of Spec D, Spec H, and Spec E sales, and of certain Spec C sales, are such that the
[USDOC] should apply AFA to this information.539
Moreover, the United States explains that the "necessary" information that was missing due
to Hyundai Steel 's misreporting was "the cost of manufacturing associated with certain products
where product specifications were unverified".540 Consistent with the United States' position, we note
that, in its final calculation memorandum, the USDOC applied, as AFA, the "highest total cost of
manufacturing (AVGTCOM) from amongst the affected CONNUMs … along with the corresponding
variable cost of manufacturing … for the CONNUM with the highest reported AVGTCOM … to all of
the affected CONNUMs".541
After finding that Hyundai Steel had misreported product characteristics for certain Specs D,
E, and H sales, the USDOC revised the incorrect produc t characteristics using "facts otherwise
available".542 Once the misreporting for product characteristics for certain sales was corrected – and
the CONNUMs were revised accordingly – the USDOC provided no further explanation as to how this
misreporting resulted in the absence of information concerning the cost of manufacturing for the
sales in the affected CONNUMs.

535 CRS issues and decision memorandum, (Exhibit KOR-41), p. 61.
536 CRS issues and decision memorandum, (Exhibit KOR-41), pp. 60-61.
537 CRS final calculation memo, (Exhibit KOR-49 (BCI)), p. 5.
538 United States' response to Panel question No. 16(d), para. 76 (referring to CRS issues and decision
memorandum, (Exhibit KOR-41), p. 63 (emphasis added)).
539 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63. (emphasis added)
540 United States' response to Panel question No. 16(a), para. 64 (referring to CRS issues and decision
memorandum, (Exhibit KOR-41), pp. 58-63; and CRS final calculation memo, (Exhibit KOR-49 (BCI)), pp. 5-6).
541 CRS final calculation memo, (Exhibit KOR-49 (BCI)), p. 5.
542 CRS issues and decision memorandum, (Exhibit KOR-41), pp. 60-61.

BCI deleted, as indicated [[***]]

Article 6.8 is "not directed at mitigating the absence of 'any ' or 'unnecessary' information,
but is rather concerned with overcoming the absence of information required to complete a
determination".543 Under Article 6.8, "there has to be a connection between the 'necessary
information' that is missing and the particular 'facts available ' on which a determination … is
based".544 In the case at hand, the misreported information concerned product characteristics for
certain sales, but the USDOC resorted to the use of "facts available" not just for correcting this
information for these sales, but also for determining the total cost of manufacturing for all other
sales that were a part of the affected CONNUMs. 545 Prior to resorting to the use of facts available
with respect to the cost of manufacturing for all the affected CONNUMs, the USDOC did not explain
why it considered that the cost of manufacturing for the CONNUMs into which the sales at issue were
reclassified was no longer accurate.
With respect to the Spec s D, E, and H home market sales, we therefore find that the
USDOC acted inconsistently with Article 6.8 of the Anti -Dumping Agreement in resorting to facts
available in respect of the cost of manufacturing for all the affected CONNUMs. In light of our findings
of WTO -inconsistency, we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3, 5, and 6 of Ann ex II to the Anti-Dumping Agreement in order to provide a positive
solution to the dispute before us.546
Spec C sales
In relation to US sales, the USDOC found inconsistencies in the reporting of certain Spec C
sales during verification. Unlike the Specs D, E, and H home market sales, for US sales under Spec C
the USDOC did not "correct" any "misreporting" by Hyundai Steel. Rather, the USDOC found these
sales to be "unverified".547
Korea argues that the Spec C sales identified by the USDOC were "insignifi cant" in
comparison to the total number of transactions as they "represented only [[***]]% of total SPCC
sales, or [[***]]% of total U.S. sales in the POI". 548 On this basis, Korea asserts that this
"information was not such that it could not be 'dispensed with or done without'" and was therefore
not "necessary" for the USDOC's margin calculation.549 We note, however, that, unlike home market
sales where the USDOC assigned to all the affected CONNUMs the highest total cost of manufacturing
for the CONNUMs in question, the USDOC resort to facts available in this instance was limited to the
"the U.S. sales associated with the Spec C issue (which are limited to a small volume of U.S. sales
of products classified under that specification and under the two other specifications with comparable
linking problems)".550 Given the limited "gap" sought to be filled by the USDOC, we agree with the
United States that "Korea 's characterization of the magnitude of the erroneously reported
information does not bear upon the nece ssity of the information". 551 Besides the allegedly
"insignificant" number of the transactions at issue, Korea does not offer any other reason as to why
the information missing was not "necessary" for purposes of the USDOC 's determination within the
meaning of Article 6.8. We therefore find that Korea has failed to establish that the USDOC acted
inconsistently with Article 6.8 of the Anti -Dumping Agreement because the Spec C sales at issue
were "insignificant" in comparison to the total number of transactions.
We now turn to address Korea 's claims under paragraphs 3, 5, and 6 of Annex II. Korea
asserts that "Hyundai Steel explained from the outset of the investigation its reporting methodology
and explained that there could be certain instances where the req uested CONNUM data and the
internal company product codes for CEP sales might be different" .552 According to Korea,
Hyundai Steel was given "no opportunity to provide the information after the issue had been

543 Appellate Body Report, US – Carbon Steel (India), para. 4.416. See also para. 7.28 above.
544 Appellate Body Report, US – Carbon Steel (India), para. 4.416.
545 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63.
546 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
547 CRS issues and decision memorandum, (Exhibit KOR-41), p. 62.
548 Korea's first written submission, paras. 275-276.
549 Korea's first written submission, para. 276.
550 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63.
551 United States' response to Panel question No. 16(b), para. 72.
552 Korea's first written submission, para. 297.

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identified by the USDOC and all of the explanations that were provided in the case briefs were
effectively ignored".553
Following the USDOC's discovery of certain inconsistencies in the reporting of Spec C sales
at verification, Hyundai Steel consistently asserted that it had correctly reported the quality of the
products. Hyundai Steel explained that regarding the "type 2b" transaction, it had properly reported
the characteristic of the product as produced and imported.554 Regarding the "type 3" transactions,
Hyundai Steel explained that there wa s no flaw in its reporting; rather, the inconsistency in the
reported quality occurred because, in certain instances, HSA had actually sold a coil product of higher
quality rather than the one ordered and imported for this order.555 Hyundai Steel further stated that
while the "type 3" transactions concern instances where "a single coil was sold as multiple products",
there might be other instances as well where the PRODCOD2U did not match the QUALITYU, such
as the imported coil being processed and sold under a different specification. According to
Hyundai Steel, none of these instances would result in an error of the quality reporting, which was
always based on the imported coil.556
Contrary to Korea's assertion that the USDOC "effectively ignored" the explanations provided
by Hyundai Steel in its case and rebuttal briefs, the USDOC expressly considered
Hyundai Steel's explanation and found it to be lacking:
Hyundai Steel argues this variation is not due to some type of classification error, but,
rather, that it is due to certain products being sold to the final customer as specifications
requiring less stringent requirements than the specifications to which the products were
actually made. It is not evident from the record which, if any, of the Hyundai Steel
specifications in question are more or less stringent than the others, with respect to
requirements.557
Although the explanations provided by Hyundai Steel during and after verification may have
helped explain why the reporting inconsistencies identified by the USDOC could exist, e.g. in light of
the alleged "linking" problem, Korea does not identify any evidence or explanations provided by
Hyundai Steel in order to establish that, despite these inconsistencies, it, in fact, "correctly reported
the product c haracteristics based on the Hyundai Steel imported coil ( i.e., the actual physical
characteristics of the steel)" for all the sales at issue.558 Thus, even in light of the explanation offered
by Hyundai Steel for the identified inconsistencies, there was no way for the USDOC to confirm the
accuracy of the product characteristics that were actually reported by Hyundai Steel.
Furthermore, in addressing Hyundai Steel 's explanations, the USDOC in its final
determination also observed that during "the Hyundai Steel sales verification the company had
stated that 'HSA did not intentionally alter or revise the specification and grade designations from
those of the original coil it purchased from Hyundai Steel'" .559 Korea does not take issue with this
observation. In light of these facts, we find that the USDOC reasonably concluded that it could not
verify the accuracy of information for the sales at issue.560
As we have explained above561, paragraph 3 of Annex II constitutes the "substantive basis"
for an investigating authority 's rejection of information provided by a respondent and its resort to

553 Korea's first written submission, para. 282.
554 CRS case brief, (Exhibit KOR-48 (BCI)), p. 11.
555 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 13.
556 CRS rebuttal brief, (Exhibit KOR-29 (BCI)), p. 14.
557 CRS issues and decision memorandum, (Exhibit KOR-41), p. 62. (emphasis added)
558 CRS Rebuttal brief, (Exhibit KOR-29 (BCI)), p. 13. For one sale examined during verification
(surprise US sale 3) the USDOC verification report states that HSA provided "additional detail to explain why" it
identified the sale with a different product code. The verification report states that HSA was able to link the
merchandise it sold to the "original Hyundai Steel coil but not to an HSA production order, and in this instance,
the original Hyundai Steel coil was cold rolled" and classified with the relevant production code. (CRS HSA sales
verification report, (Exhibit KOR-46 (BCI)), p. 13 (emphasis added)). In our view, even if this explanation
provided by HSA supported Korea's assertion that the USDOC "effectively ignored" the explanations provided
by Hyundai Steel in its case and rebuttal briefs, it does not remedy the deficiency identified by the USDOC,
namely that it was not able to verify the accuracy of the product characteristics reported by Hyundai Steel.
559 CRS issues and decision memorandum, (Exhibit KOR-41), p. 62.
560 CRS issues and decision memorandum, (Exhibit KOR-41), p. 62.
561 See paras. 7.138-7.139 above.

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facts available.562 Under paragraph 3, an investigating authority shall take into account information
submitted by an in terested party when it is verifiable, appropriately submitted so it can be used
without undue difficulties, and furnished in a timely fashion. For the reasons set out above, we find
that the USDOC properly concluded that the information at issue was not verifiable and could not be
used for its determination. We therefore find that Korea has failed to establish that the USDOC acted
inconsistently with paragraph 3 of Annex II to the Anti-Dumping Agreement in resorting to facts
available with respect to the Spec C sales at issue.
Korea also claims that the USDOC acted inconsistently with paragraph 5 of Annex II, which
provides that:
Even though the information provided may not be ideal in all respects, this should not
justify the authorities from disregarding it, provided the interested party has acted to
the best of its ability.
Taken together, paragraphs 3 and 5 establish an obligation for an investigating authority to ensure
that information that is "not ideal in all respects" must not be considered unverifiable because of its
flaws, so long as the interested party submitting it has acted to the "best of its ability".563 However,
this does not mean that information that is not verifiable (or does not meet the other criteria in
paragraph 3) must nonetheless be used by an investigating authority if the interested party acted
to the best of its ability. 564 In this regard, we agree with the panel in US – Steel Plate that "it [is]
difficult to conclude that an investigating authority must use information which is, for example, not
verifiable, or not submitted in a timely fashion, or regardless of the difficulties incumbent upon its
use, merely because the party supplying it has acted to the best of its ability" .565 Having already
found that the USDOC properly concluded that the information at issue was not verifiable – and even
if Hyundai Steel is seen as having acted to the best of its abilit y – the USDOC was not required by
paragraph 5 to use that information. Accordingly, in the circumstances of this case, we find that
Korea has failed to establish that the USDOC acted inconsistently with paragraph 5 of Annex II in
resorting to the use of facts available with respect to the Spec C sales at issue.
As discussed above, Hyundai Steel provided explanations to the USDOC on this issue during
verification, as well as part of its case and rebuttal briefs. 566 The record indicates that the USDOC
properly engaged with these explanations, but found them to be insufficient for purposes of verifying
the accuracy of the reported information. We therefore find that Korea has not established that the
USDOC acted inconsistently with paragraph 6 of Annex II to the Anti -Dumping Agreement in
resorting to facts available with respect to the Spec C sales at issue.
7.3.2.3.3.2 The USDOC's selection of the replacement facts
We have already found that the USDOC erred in resorting to facts available with respect to
Specs D, E, and H home market sales. In these circumstances, we do not consider that making
further findings on Korea's claims concerning the USDOC's selection of the replacement facts on the
basis of the record used for the USDOC 's WTO-inconsistent findings would assist in providing a
positive solution to the dispute before us. 567 However, given our findings that Korea has failed to
establish that the USDOC erred in resorting to facts available with respect to the information
concerning Spec C sales, it is necessary for us to address Korea 's claims aimed at the
USDOC's selection of the replacement facts in relation to these sales.
Korea argues that there is no evidence that the USDOC engaged in any "process" in selecting
the replacement information. 568 According to Korea, there were many different kinds of data
available to the USDOC to use rather than the highest calculated dumping margin for US sales. 569

562 Panel Report, Egypt – Steel Rebar, para. 7.159.
563 See for example, Panel Report, Egypt – Steel Rebar, para. 7.161.
564 Panel Report, US – Steel Plate, para. 7.65.
565 See Panel Report, US – Steel Plate, para. 7.64.
566 See paras. 7.144-7.146 above.
567 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; Mexico – Anti-Dumping Measures on Rice,
568 Korea's first written submission, para. 322.
569 Korea's response to Panel question No. 16(f), p. 17.

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Korea also argues that the selected information was chosen for the sole reason that it was the
highest calculated margin for any US sale, irrespective of its aberrational nature.570
As discussed above, Article 6.8 requires investigating authorities to select reasonable
replacements for the missing "necessary" information.571 In selecting such reasonable replacements,
an investigating authority must take into account all the facts that are properly availabl e to it.
Whether the sales used to generate the highest margin were, as a matter of fact, aberrational, is a
subsidiary issue to whether the USDOC considered all information on the record. For US sales
associated with the Spec C issue, the USDOC assigned t he highest calculated margin for any other
reported US sale of Hyundai Steel, [[***]]%.572 This margin was one of many resulting from a
multitude of US sales. 573 When faced with such a range of margins, an objective and unbiased
investigating authority is required to explain why the highest margin was a reasonable replacement
for the missing necessary information. The USDOC 's issues and decision memorandum does not
contain any evidence of a process of reasoning and evaluation indicating that it took into acco unt
the various margins that were available to it. The USDOC found:
These are problems involving products analyzed during verification, and for which
Hyundai Steel had no plausible explanation either at verification or in its case and
rebuttal briefs for m isidentifying these sales, as discussed above. Accordingly, the
[USDOC] finds that under section 776(b) of the Act, Hyundai [Steel] did not cooperate
to the best of its ability with regard to this information, and finds it necessary to apply
an adverse inference.574
The only explanation offered by the USDOC was that an adverse inference was warranted in
light of Hyundai Steel's non-cooperation. The USDOC provided no other evidentiary basis in support
of its selection of the replacement facts with respect the Spec C sales. In the circumstances of this
case, we consider that Hyundai Steel 's non-cooperation cannot alone constitute the sole basis for
the selection of the replacement facts.575
We therefore find tha t the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in selecting the replacement facts for the Spec C sales at issue by failing
to take into account all the information that was properly before it. In light of our finding of
WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claim under paragraph 7
of Annex II to the Anti-Dumping Agreement in order to provide a positive solution to the dispute
before us.
Korea's claims under Articles 1, 9.3, and 18.1 of the Anti-Dumping Agreement
Korea further claims that the USDOC 's use of facts available inconsistently with Article 6.8
and Annex II of the Anti -Dumping Agreement "led to an anti -dumping duty that was imposed and
collected in excess of the margins of dumping in violation of Articles 1, 9.3, and 18.1 of the
Anti-Dumping Agreement".576 According to Korea, because the margin of dumping was determined
based on facts available in a manne r inconsistent with Article 6.8 and Annex II, "the imposition of
duties at the level of the margin of dumping automatically violated Article 9.3".577 Moreover, Korea
asserts that the violation of Article 6.8 and Annex II also "automatically leads" to a viol ation of
Articles 1 and 18.1 of the Anti-Dumping Agreement, as "this USDOC investigation and the measure
taken were not in accordance with the Anti-Dumping Agreement".578
The United States responds that Korea's claims under Articles 1, 9.3, and 18.1 are "entirely
consequential" and "Korea offers no argument or evidence to support any independent breach of

570 Korea's first written submission, para. 326.
571 See para. 7.36 above.
572 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63; CRS final calculation memo,
(Exhibit KOR-49 (BCI)), p. 6.
573 Korea's response to Panel question No. 16(f), p. 19 (referring to CRS final redetermination,
(Exhibit KOR-227 (BCI)), pp. 6-7).
574 CRS issues and decision memorandum, (Exhibit KOR-41), p. 63.
576 Korea's first written submission, para. 334.
577 Korea's first written submission, paras. 331-332.
578 Korea's first written submission, para. 333.

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those provisions".579 According to the United States, were the Panel to uphold Korea's claims under
Article 6.8 and Annex II, "there would be no basis to decide Korea's consequential claims".580 First,
the United States "does not concede that such breaches are 'automatic'". 581 Second, the
United States submits that deciding such claims would be serve "no useful purpose" and would
provide no "additional guidanc e that would be useful regarding implementation of any
recommendations adopted by the DSB".582
Korea does not present any independent bases for the alleged breaches of Articles 1, 9.3,
and 18.1 of the Anti-Dumping Agreement; instead, its claims under these provisions are dependent
entirely upon a finding that the United States acted inconsistently with Article 6.8 and Annex II of
the Anti -Dumping Agreement.583 In these circumstances – and having already found that the
United States acted inconsistently with Article 6.8 and paragraph 3 of Annex II – we do not consider
it necessary to rule upon Korea 's claims under Articles 1, 9.3, and 18.1 of the
Anti-Dumping Agreement in order to resolve the dispute before us.584
7.3.3 Anti-dumping duties on certain hot -rolled steel flat products from Korea
(USDOC investigation number A-580-883)
Introduction
Korea claims that the United States acted inconsistently with Article 6.8 and Annex II to the
Anti-Dumping Agreement in the investigation concerning certain hot-rolled steel (HRS) flat products
from Korea (the "HRS AD investigation"). 585 Similar to its claims concerning affiliated party
transactions in the CRS AD investigation, Korea challenges the USDOC 's use of facts available due
to the alleged failure of Hyundai Steel to demonstrate the arm's-length nature of certain services
provided by its affiliates [[***]] and [[***]].586 Korea asserts that the USDOC 's improper use of
"partial AFA" resulted in a dumping margin in the final determination, which was more than double
the dumping margin in the preliminary determination – an increase from 3.97% to 9.49% – and
demonstrates the "punitive" nature of the USDOC's selection of the replacement facts.587
We begin by setting out the relevant factual background of the underlying invest igation.
Subsequently, we summarize the parties ' arguments before examining Korea 's claims of
WTO-inconsistency in respect of the USDOC's resort to and selection of the replacement facts.
Factual background
The USDOC in its initial questionnaire requested Hyundai Steel to "[p]repare only a single
response for [itself and its] affiliates involved with the production or sale of the products under
investigation during the period of investigation (POI) in the foreign market or the United States".588
In response, Hyundai Steel responded that it was affiliated to [[***]], based on their common
membership of the Hyundai Motor Group. 589 Hyundai Steel also identified [[***]], as a company
"[[***]]".590
In response to Section B of the initial questionnaire, Hyundai Steel reported certain
movement expenses for its home market sales. With respect to inland freight to warehouse, Hyundai
Steel stated that during the POI it used [[***]] for these services, and provided a sample calculation
worksheet for the reported costs. 591 Regarding warehousing services, Hyundai Steel noted that it

579 United States' first written submission, para. 356.
580 United States' first written submission, para. 358.
581 United States' first written submission, para. 358.
582 United States' first written submission, paras. 358-359.
583 Korea's first written submission, paras. 332-333.
584 See, e.g. Panel Reports, US – Differential Pricing Methodology, paras. 7.114-7.115; Argentina –
Poultry Anti-Dumping Duties, para. 7.369; US – Steel Plate, para. 7.103; and EU – Footwear (China),
para. 7.935.
585 Korea's first written submission, para. 458.
586 Korea's first written submission, paras. 467-469.
587 Korea's first written submission, para. 517.
588 HRS initial questionnaire, (Exhibit KOR-58 (BCI)), p. G-10. (emphasis original)
589 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-11.
590 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-14.
591 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.

BCI deleted, as indicated [[***]]

received services mostly from its affiliate [[***]], except for certain HRS products ("PO products"),
for which it also transacted with an unaffiliated supplier ([[***]]).592 Hyundai Steel submitted copies
of contracts with this unaffiliated supplier and with its affiliated supplier, alleging that warehousing
transactions with [[***]] were at arm 's length.593 With respect to inland freight to customer ,
Hyundai Steel stated that it does not use unaffiliated freight companies for similar services, and was
therefore unable to provide comparable prices from unaffiliated vendors "for comparison". 594
Hyundai Steel provided a calculation of its expenses and a copy of its freight contract with [[***]]
supporting the per unit expense amount595, along with an excerpt from [[***]] financial statement,
allegedly demonstrating that [[***]] earned profit during the POI, and therefore that it engaged in
arm's-length transactions with Hyundai Steel.596
In response to Section C of the initial questionnaire concerning sales to the United States,
Hyundai Steel stated that [[***]] also provided domestic freight services from plant/warehouse to
port.597 Hyundai Steel explained that these transactions were at arm 's length due to [[***]]
operating profits for inland freight services that were discussed under its Section B response.598 With
respect to international freight, Hyundai Steel stated that "[d]uring the POI, [[***]] provided all
shipping services for subject merchandise". 599 Regarding marine insurance, it submitted a sample
calculation worksheet for the related costs, along with certain invoices.600
In its supplemental questionnaire dated 23 December 2015, the USDOC noted that the net
profit information provided for [[***]] in the initial response did not show that [[***]] earned a
profit from its freight and warehousing services, or from non -operating income, and asked
Hyundai Steel to demonstrate that the freight and warehousing rates charged by [[***]] were at
arm's length.601 Hyundai Steel provided a "representative sample" of [[***]] freight contracts with
one of its unaffiliated subcontractors, [[***]]602, which also included war ehousing services.603 For
Hyundai Steel, a comparison between the [[***]]-[[***]] contract and the Hyundai Steel -[[***]]
contract604 demonstrated that [[***]] charged Hyundai Steel higher prices than the amount [[***]]
paid to its subcontractor, thus indicating that these services were negotiated at an arm's -length
basis.605 Regarding international freight expenses for US sales, the USDOC requested Hyundai Steel
to provide "copies of : (a) the ocean freight contract between Hyundai Steel and [[***]], and
(b) international freight contracts between [[***]] and the provider of the ocean freight services".606
Hyundai Steel submitted its contract with [[***]] and a contract between [[***]] and its
subcontractor [[***]], allegedly demonstrating that [[***]] made a profit on the services it provided
to Hyundai Steel.607
At verification, as part of its "completeness test" 608, the USDOC requested comparative
inland and ocean freight charge information between [[***]] and other unaffiliated parties in order
to verify the arm's-length nature of transactions between the two affiliated companies. The USDOC
recalled that " [[***]]'s two largest shareholders are [[***]], and are also the part owner and

592 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-30.
593 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-30 and exhibit B-14.
594 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
595 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), exhibits B-14 and B-16.
596 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), pp. B-28-B-31 and exhibit B-17.
597 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-28.
598 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-28.
599 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30.
600 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30 and exhibit C-14.
601 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), pp. 16-17.
602 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), pp. 31, 33, and 45
and exhibit S-38.
603 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 32.
604 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), exhibit B-16.
605 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), pp. 31-33 and 46
and exhibit S-38.
606 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), p. 25.
607 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 48 and
exhibits S-59-S-60.
608 The USDOC describes "completeness" as "the process which confirms the accuracy and thoroughness
of reported sales and expenses", and among the sales items selected were the ocean freight for US sales and
the inland freight for home market sales performed by [[***]], and the marine insurance services provided
by [[***]]. (HRS verification report, (Exhibit KOR-57 (BCI)), pp. 14-15).

BCI deleted, as indicated [[***]]

Vice Chairman of Hyundai Steel, respectively". 609 Hyundai Steel maintained that it could not
"compel" [[***]] to provide this data "despite the ownership, managerial, and familial affiliations
between the two companies".610 Hyundai Steel provided a similar response to the USDOC's request
for comparative marine insurance rates between its affiliate, [[***]], and other unaffiliated
parties.611 Hyundai Steel provided instead an invoice from an unaffiliated marine insurance supplier,
[[***]], arguing that the rate charged by the unaffiliated supplier was lower than that of [[***]].612
The USDOC issued its final determination on 12 August 2016613, wherein it focused on the
issue of the affiliation between Hyundai Steel and the two companies and found that Hyundai Steel
and the two companies were "held and commonly controlled by the same family members during
the POI".614 It also found that "Hyundai Steel failed the completeness portion at verification with
regard to this issue, i.e., failed to demonstrate the arm's -length nature of these services provided
by the affiliated companies". The USDOC thus considered information concerning these transactions
as "necessary information" that was "not on the record due to Hyundai Steel's failure to provide it",
and on this basis decided to rely on facts available. 615 The USDOC also decided to apply facts
available with an "adverse inference" due to Hyundai Steel 's failure to cooperate by not acting to
the best of its ability.616 For its final determination, the USDOC selected replacement facts for home
market inland freight and warehousing by applying the lowest reported values, and for marine
insurance, international freight, and inland freight for US sales by applying the highe st reported
values.617
Main arguments of the parties
Korea claims that the USDOC resorted to the use of facts available inconsistently with
Article 6.8 of the Anti-Dumping Agreement because there was no "necessary" information that was
missing618, and becaus e Hyundai Steel did not "significantly impede[]" the investigation.619 Korea
argues that no "necessary" information was missing as Hyundai Steel provided all requested sales
and cost information about its affiliated service providers in an accurate and time ly manner, and
that the USDOC did not find any deficiencies with respect to this information during verification. 620
Korea contends that the USDOC, in Section D of its initial questionnaire, directed Hyundai Steel to
demonstrate the arm 's-length nature of i ts affiliated transactions based on three types of
information, requested in the alternative, and that Hyundai Steel responded in light of these
instructions.621 Korea argues that the information regarding sales of Hyundai Steel 's affiliates to
unaffiliated customers was not "necessary" and was never requested prior to verification. 622 Korea
also notes that, prior to verification, the USDOC focused properly on the nature of the actual
transactions between Hyundai Steel and its affiliates. 623 Korea argues that Hyundai Steel did not
"significantly impede" the investigation as the USDOC's request for information was "unreasonable"
and was tantamount to a surprise and extensive request for information at the last minute.624 Korea
states that Hyundai Steel could not have been held responsible for not providing information that

609 HRS verification report, (Exhibit KOR-57 (BCI)), p. 14.
610 HRS verification report, (Exhibit KOR-57 (BCI)), p. 14.
611 HRS verification report, (Exhibit KOR-57 (BCI)), p. 15.
612 HRS verification report, (Exhibit KOR-57 (BCI)), pp. 14-15 and exhibit HS-36. See also HRS case
brief, (Exhibit KOR-65 (BCI)), pp. 9-10.
613 HRS AD final determination, (Exhibit KOR-53). The underlying issues and decision memorandum was
issued on 4 August 2016. (HRS issues and decision memorandum, (Exhibit KOR-67)).
614 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.
615 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.
616 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.
617 HRS issues and decision memorandum, (Exhibit KOR-67), pp. 19-20.
618 Korea's first written submission, para. 487.
619 Korea's first written submission, para. 491.
620 Korea's first written submission, paras. 487-488. Specifically, Korea asserts that it provided the
following information to demonstrate the arm's-length nature of transactions: (a) for inland freight and
warehousing, it showed that [[***]] passed on the full costs, plus an amount to cover expenses and profit, to
Hyundai Steel; (b) for ocean freight, it demonstrated that the charges by [[***]] were comparable to those
charged by an unaffiliated carrier; and (c) for marine insurance, it offered evidence indicating that the
premium rate charged by [[***]] was higher than the rate charged by an unaffiliated provider.
(Ibid. para. 487).
621 Korea's first written submission, paras. 470-471 and 480 (referring to HRS initial questionnaire,
(Exhibit KOR-58 (BCI)), pp. D-4-D-5).
622 Korea's first written submission, para. 489.
623 Korea's first written submission, para. 489.
624 Korea's first written submission, paras. 491-493.

BCI deleted, as indicated [[***]]

was not within its control, and since the requested information was held by a legally separate –
albeit affiliated – company, Hyundai Steel could not be considered to have significantly impeded the
investigation.625 Korea points out that , had Hyundai Steel 's affiliates provided the requested
information, they could have been exposed to various legal liabilities, such as those for breach of a
duty of confidentiality.626
Korea further claims that the USDOC acted inconsistently with paragraph 1 of Annex II
because it failed to specify in detail the required information as soon as possible after the initiation
of the investigation.627 Korea contends that, at verification, the USDOC "suddenly" requested certain
information that was not within Hyundai Steel's control.628 In addition, Korea claims that the USDOC
acted inconsistently with paragraph 6 of Annex II because it rejected the information provided on
the arm 's-length nature of s ervices without previously informing and giving Hyundai Steel an
adequate opportunity to provide further explanations, and without subsequently setting out in its
published determination the reasons of rejection of such information.629
Korea also claims that the USDOC acted inconsistently with paragraph 3 of Annex II because
the USDOC rejected "all information previously submitted", even though such information was
verifiable and substantiated, and was, in fact, actually verified by the USDOC.630 Finally, Korea claims
that the USDOC acted inconsistently with paragraph 5 of Annex II, as the information provided by
Hyundai Steel, even if not ideal in all aspects, was provided by Hyundai Steel acting to the best of
its ability.631
As to the selection of the repl acement facts, Korea claims that the USDOC acted
inconsistently with Article 6.8 and paragraph 7 of Annex II.632 According to Korea, there was no
process of reasoning and evaluation by the USDOC as to how or why the facts employed by the
USDOC were reasonable replacements for the missing information.633 Korea argues that the USDOC
failed to exercise "the requisite caution" in selecting facts available.634 Korea contends that the sole
basis for the USDOC's selection of the replacement facts was to ensure "an adverse inference", and
that the USDOC simply took the highest and lowest values to increase normal value and reduce the
export price, thus ensuring that the dumping margin was the highest that it could be.635 The selection
of facts available was punitive in nature, and was even applied to transactions that the USDOC had
verified as being at arm's length.636 Korea contends that the USDOC failed to corroborate properly
the selected information and thus failed to ensure that this information was a reasonable
replacement.637 Korea argues that the USDOC could have sought to fill any supposed gap with
specific information, for example, by adjusting all allegedly problematic service values by applying
a variance factor to inflate or deflate the transaction values to arm's-length levels.638
The United States responds that the USDOC reasonably determined that it was appropriate
to resort to facts available due to Hyundai Steel 's failure to provide necessary information desp ite
the USDOC 's numerous requests. 639 Acknowledging that Hyundai Steel had provided "some
supporting documentation" to demonstrate that transactions with its affiliates were at
arm's length640, the United States argues that the USDOC nonetheless "did not hav e enough
information on the record to establish" the arm's-length nature of the transactions at stake and that
Korea has not demonstrated that the requested (missing ) information at issue was not
"necessary".641 In addition, the United States argues that Hyundai Steel did not explain its inability
to obtain the information the USDOC needed to establish the nature of the transactions between

625 Korea's second written submission, para. 205.
626 Korea's second written submission, para. 207.
627 Korea's first written submission, para. 494.
628 Korea's first written submission, para. 496.
629 Korea's first written submission, para. 497.
630 Korea's first written submission, para. 502.
631 Korea's first written submission, para. 503.
632 Korea's first written submission, para. 507.
633 Korea's first written submission, paras. 507 and 509.
634 Korea's first written submission, paras. 510-512.
635 Korea's first written submission, paras. 507 and 509.
636 Korea's first written submission, paras. 513 and 516.
637 Korea's first written submission, para. 515.
638 Korea's first written submission, para. 516.
639 United States' first written submission, para. 146.
640 United States' first written submission, para. 139.
641 United States' first written submission, para. 150.

BCI deleted, as indicated [[***]]

Hyundai Steel and [[***]]. According to the United States, the issue is not the legal separation
between the two companies, but rather the affiliation deriving from the close relationship between
Hyundai Steel 's management and [[***]] two largest shareholders, as well as the common
membership in a "group".642 According to the United States, Korea makes a post hoc argument when
suggesting that Hyundai Steel could not gain access to the requested documents due to
confidentiality and fiduciary concerns and [[***]] obligations under Korean law, an argument that
was never made by Hyundai Steel before the USDOC.643
The United States further responds that Korea has not demonstrated that the
USDOC's resort to facts available is inconsistent with paragraphs 1 and 6 of Annex II. According to
the United States, the USDOC notified Hyundai Steel early on in the investigation that information
relating to Hyundai Steel's transactions with its affiliates would be requested and made an additional
request w hen it determined that it needed further information to evaluate the nature of these
transactions.644 The United States alleges that the number of times that Hyundai Steel was asked to
provide information on its transactions with its affiliates is not compa tible with Korea's claim that
Hyundai Steel was not informed as soon as possible for the required information and was not allowed
a reasonable period of time to respond to these requests.645
With respect to Korea 's claim under paragraph 3 of Annex II, the United States responds
that because Hyundai Steel failed to provide the requested documents, the USDOC did not have the
opportunity to examine the accuracy and reliability of the information already submitted and verify
whether the affiliated parties ' transactions were at arm 's length.646 In addition, the United States
argues that since the information submitted by Hyundai Steel did not satisfy the conditions of
paragraph 3, it falls outside the ambit of paragraph 5, but, in any event, Hyundai Steel did not act
to the best of its ability by failing to submit the requested information despite being afforded multiple
opportunities.647
Regarding the selection of replacement facts, the United States responds that the USDOC
engaged in a careful assessment of the missing necessary information and reasonably decided to
rely on Hyundai Steel 's own reported data.648 According to the United States – besides expressing
its dissatisfaction with the selected r eplacements – Korea has not explained why the
USDOC's process for selecting the replacement facts is inconsistent with any specific provision of the
Anti-Dumping Agreement.649 The United States explains that the USDOC did not reject all of
Hyundai Steel's expense data, but disregarded only certain information relating to
Hyundai Steel's affiliated service providers and replaced those missing values with other expense
values reported by Hyundai Steel. 650 Korea's characterization of the replacements as arbitrar y and
punitive is, according to the United States, "meritless".651 Finally, the United States asserts that
Korea's claim that the USDOC did not use special circumspection fails as it does not explain its
argument.652
Evaluation by the Panel
7.3.3.4.1 The USDOC's resort to facts available
While many aspects of Korea's claims under Article 6.8 and paragraphs 1, 3, 5, and 6 of
Annex II of the Anti -Dumping Agreement relating to this investigation are similar to its claims
concerning the affiliated-party transactions issue in the CRS AD investigation, the two investigations
also differ in important ways. Unlike the CRS AD investigation, where its findings concerned one
affiliated company ([[***]]), the USDOC's findings in the HRS AD investigation concern that same
company and one other affiliated company, namely, [[***]]. Furthermore, the specific information

642 United States' first written submission, paras. 156-157.
643 United States' second written submission, paras. 57-58.
644 United States' first written submission, paras. 153-154 (referring to HRS supplemental Sections A-C
questionnaire, (Exhibit USA-20 (BCI)), pp. 16-17).
645 United States' first written submission, para. 155.
646 United States' first written submission, para. 172.
647 United States' first written submission, para. 176.
648 United States' first written submission, para. 183.
649 United States' first written submission, para. 184.
650 United States' first written submission, para. 187.
651 United States' first written submission, para. 190.
652 United States' first written submission, para. 191.

BCI deleted, as indicated [[***]]

requested by the USDOC, as well as the timing of the USDOC 's requests, differ between the two
investigations. In accordance with the proper standard o f review, these differences require us to
examine the WTO-consistency of the USDOC's conduct in light of the specific facts and circumstances
of the HRS AD investigation.
Insofar as Korea alleges that the USDOC's Section D questionnaire provided three alternative
ways of establishing the arm's -length nature of the transactions between Hyundai Steel and its
affiliates653, [[***]] and [[***]], the part of the Section D questionnaire that Korea relies upon is
expressly limited to the reporting of "major inputs purchased from affiliated parties that are used to
produce the merchandise under consideration". 654 Korea does not argue that the services supplied
by [[***]] and [[***]] constituted "major inputs" for Hyundai Steel 's production of HRS. In these
circumstances, we find the "guidance" 655 provided by the USDOC as part of its Section D
questionnaire to be of limited relevance for Hyundai Steel 's reporting of the non -major inputs
sourced from the affiliated parties at issue. Accordingly, we examine the questions that were, in
fact, posed by the USDOC concerning the arm's -length nature of the services provided by
Hyundai Steel's affiliates [[***]] and [[***]].
In Section A of its initial questionnaire, the USDOC inquired about the corporate and legal
structure of "any parent companies and subsidiaries of [the] company and all other persons affiliated
with [the] company and provide a description of all such persons". 656 Hyundai Steel in its response
identified [[***]] as its affiliate, noting that their [[***]].657 Hyundai Steel explained that [[***]]
"transported finished hot-rolled steel from Hyundai Steel's facilities to domestic customers (for home
market sales) and the port ( for export sales), and also provided international shipping (including
wharfage) for export sales". 658 Hyundai Steel further identified [[***]] as an affiliated provider of
marine " [[***]]" "[[***]]".659 Hyundai Steel described the operational relationship b etween the
members of the Hyundai Motor Group as sharing a single director [[***]], as well as being
"common[ly] control[led]" through the Hyundai Motor Group and its chairman, [[***]] (father of
[[***]]).660 [[***]] was also identified as the second largest stockholder of Hyundai Steel
(of 11.84%).661 Hyundai Steel stated that it would "demonstrate in its forthcoming Sections B -C
responses that transactions with affiliated service providers are at arm's length".662
Section B of the USDOC's questionnaire concerned "[s]ales in the [h]ome [m]arket or to a
[t]hird [c]ountry" 663, while Section C required information concerning "[s]ales to the
United States".664 Under Section B – for home market sales – the USDOC required Hyundai Steel to
report certain "movement expenses", including those incurred for "inland freight" from "plant to
distribution warehouse" 665, "warehousing" 666, and "inland freight" from "plant/warehouse to
customer".667 The USDOC's instructions required Hyundai Steel to also identify any "affiliations" with
the service providers and to "describe the nature of the affiliation".668
Hyundai Steel responded that, for inland freight from plant to warehouse, it used [[***]]
"to transport merchandise [i.e. finished coils] to offsite facilities" during the POI. 669 Hyundai Steel
stated that it would demonstrate that "the rates paid to this company represent arm's length prices"

653 Korea's first written submission, paras. 470-471.
654 HRS initial questionnaire, (Exhibit KOR-58 (BCI)), p. D-4 (emphasis original). The
USDOC's questionnaire defines a "major input" as "an essential component of the finished merchandise which
accounts for a significant percentage of the total cost of manufacturing incurred to produce one unit of the
merchandise under consideration". (Ibid.).
655 Korea's first written submission, para. 471.
656 HRS initial questionnaire, (Exhibit KOR-58 (BCI)), p. A-4.
657 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-11.
658 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-11. See also HRS Sections B-C
questionnaire response, (Exhibit KOR-56 (BCI)), pp. B-29-B-30.
659 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-14.
660 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-10.
661 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), exhibit A-8.
662 HRS Section A questionnaire response, (Exhibit KOR-55 (BCI)), p. A-11.
663 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), Section B.
664 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), Section C.
665 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-28.
666 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.
667 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-30.
668 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), pp. B-29-B-30.
669 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.

BCI deleted, as indicated [[***]]

as part of its response concerning "inland freight to the customer".670 Hyundai Steel also provided a
sample calculation worksheet for the reported costs. 671 Regarding warehousing services,
Hyundai Steel responded that "in some instances" it "used offsite warehouse facilities close to its
factory to temporarily store finished subject products prior to shipment to the final customer". 672
Hyundai Steel noted that the calculation worksheet submitted for inland freight to warehouse also
showed the warehousing expenses calculation, since the two services were grouped in the same
contract with [[***]].673 Providing "a list of the off -site warehousing locations", Hyundai Steel
explained:
Hyundai Steel uses different warehousing services for PO products versus all other
HR products. Hyundai Steel warehouses PO products at several warehous es, including
a warehouse located in [[***]], which is managed by an unaffiliated provider, [[***]].
Hyundai Steel provides a copy of its contract with this unaffiliated provider in
Exhibit B-14 Hyundai Steel directly transacts with the unaffiliated servic e provider for
these services. For all other HR products, Hyundai Steel uses warehousing locations are
owned by unaffiliated parties, but the warehousing services at most of these facilities
are provided by [[***]] and Hyundai Steel pays [[***]] for these warehousing services.
[[***]] contracts with the unaffiliated warehouse providers and in turn pays them for
warehousing. As described below, Hyundai Steel believes its transactions with this
company reflect arm's length prices.674
Hyundai Steel referred again to its response allegedly demonstrating that the "inland freight to the
customer" prices paid to [[***]] were at arm's length, and submitted a copy of
Hyundai Steel's warehousing contracts with affiliated and unaffiliated providers for HR products
(including PO products).675
Finally, for inland freight from plant/warehouse to customer, Hyundai Steel explained that it
used its affiliate [[***]] to transport merchandise to the customer. 676 Hyundai Steel provided "a
sample calculation worksheet", and "a copy of its freight contract with [[***]] to support the per-unit
expense amount associated with the shipment". 677 As it did not use unaffiliated freight companies
for similar services, Hyunda i Steel was "unable to provide comparable prices from unaffiliated
vendors for comparison".678 Thus, in order to establish the arm's -length nature of the transactions
between Hyundai Steel and its affiliate [[***]], Hyundai Steel provided "an excerpt from t he
provider's financial statements demonstrating that the company earned a profit during the POI". 679
"[B]ecause this company earned a profit during the POI", Hyundai Steel considered that "these
transactions reflect arm's length prices".680
Under Section C – for sales to the United States – the USDOC required Hyundai Steel to
report the expenses incurred for inland freight for sales to the United States681, international
freight682, and marine insurance .683 For inland and international freight, the USDOC also asked
Hyundai Steel to indicate and describe any affiliation. 684 In response, Hyundai Steel stated that for
domestic freight to port for sales to the United States during the POI it "transported merchandise by
truck using an affiliated general logistics company, [[***]], which is the same company it used for
domestic sales".685 Hyundai Steel submitted a sample calculation worksheet for these expenses and
referred to its reporting under Section B for inland freight expenses as establishing that [[***]]
"provided such services at arm 's length".686 Additionally, Hyundai Steel also r eported international

670 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.
671 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.
672 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.
673 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-29.
674 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-30.
675 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-30 and exhibit B-14.
676 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
677 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
678 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
679 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
680 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. B-31.
681 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-28.
682 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30.
683 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30.
684 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), pp. C-28 and C-30.
685 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-28.
686 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-28.

BCI deleted, as indicated [[***]]

freight expenses "from the port of exit in Korea to the U.S. port of entry" and stated that "[d]uring
the POI, [[***]] provided all shipping services for subject merchandise".687 Hyundai Steel explained
that freight fees were determine d through negotiation with the shipping provider, and provided a
sample cost calculation worksheet along with certain invoices.688 Finally, regarding marine insurance,
Hyundai Steel submitted a sample calculation worksheet for the related costs, along with certain
invoices, without specifying whether it maintained other providers apart from [[***]].689 Unlike the
other expenses, for marine insurance, the USDOC did not request an indication of any affiliation,
and Hyundai Steel did not address the nature of its affiliation.
In sum, the USDOC 's initial Sections B -C questionnaire required Hyundai Steel to identify
and describe its affiliations, but it did not seek any specific information concerning the arm's-length
nature of the transactions. In response, Hyunda i Steel provided several pieces of information
concerning its transactions with [[***]]. First, Hyundai Steel stated that it did not engage in
transactions with unaffiliated suppliers for these services, and thus was unable to provide
comparative information of prices paid to such providers. Instead, it submitted excerpts from [[***]]
financial statements, demonstrating that the company earned a profit during the POI. According to
Hyundai Steel, this indicated that its transactions with [[***]] were at arm' s length. Second, in
addition to its contract with [[***]] that provided warehousing services for home market sales at
most of its facilities, Hyundai Steel submitted a contract with an unaffiliated provider ([[***]]) that
provided warehousing service at one warehousing location ([[***]]).
In its supplemental Sections A -C questionnaire, the USDOC observed that "[t]he net profit
information provided for [[***]] does not show that [[***]] earned a profit from [these] services,
or from non-operating income" and asked Hyundai Steel to demonstrate that its inland freight and
its warehousing expenses were at arm 's length.690 For home market inland freight (to warehouse
and to customer), warehousing and inland freight for US sales, the USDOC requested "copies of all
[] contracts with [[***]] and all unaffiliated freight providers that cover the full POI". 691 For
international freight, the USDOC stated that Hyundai Steel had not demonstrated that t he related
expenses were at arm 's length, and thus requested "copies of : (1) the ocean freight contract
between Hyundai Steel and [[***]], and (2) international freight contracts between [[***]] and the
provider of the ocean freight services", and requested Hyundai Steel to "demonstrate that [[***]]
direct costs, overhead, general, administrative and selling expenses and interest expenses are fully
covered by the differential between the two contract values". 692 With respect to marine insurance,
the USDOC do es not appear to have questioned the arm 's-length nature of transactions at this
stage.693
Responding to the USDOC's supplemental queries, Hyundai Steel explained that, for inland
freight and warehousing for home market sales, [[***]] maintained almost 40 contracts with its
(unaffiliated) subcontractors, and provided – as a "representative sample" – [[***]] contracts with
[[***]] covering all of these services. 694 Hyundai Steel argued that a comparison between the
[[***]]-[[***]] contract and the Hyundai Steel-[[***]] contract submitted in its initial response695
would demonstrate that [[***]] had charged Hyundai Steel higher fees than it paid to its unaffiliated
subcontractor.696 According to Hyundai Steel, these materials demonstrated that [[***]] earned a
profit from the services provided to Hyundai Steel and thus these services were negotiated on an
arm's-length basis.697
With respect to inland freight for products destined to the United States, Hyundai Steel noted
that [[***]] maintained over 30 subcontractors, and referred to the home market inland freight

687 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30.
688 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30 and exhibit C-13.
689 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), p. C-30 and exhibit C-14.
690 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), pp. 16-17 and 24.
691 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), pp. 16-17 and 23.
692 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), p. 25.
693 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 48.
694 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 31.
695 HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), exhibit B-16.
696 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), pp. 31-32 and
exhibit S-38.
697 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), pp. 32-33.

BCI deleted, as indicated [[***]]

contracts with [[***]] as a representative sample.698 Hyundai Steel asserted that these contracts,
in conjunction with a "worksheet comparing the freight charged by [[***]] and the freight charged
by [[***]] subcontractor, [[***]]", demonstrated that the delivery rates charged by [[***]] were
arm's-length prices. 699 According to Hyundai Steel, " [[***]] profit rate in relation to the
transportation of the subject merchandise was approximately [[***]] percent".700 Finally, regarding
international freight expenses for US sales, Hyundai Steel submitted its contract with [[***]] and a
contract between [[***]] and its subcontractor [[***]], as well as invoices for the respective
transactions, allegedly demonstrating that [[***]] made a profit on the services it provided to
Hyundai Steel.701
Based on the USDOC 's supplemental Sections A -C questionnaire and
Hyundai Steel's response thereto, we observe, first, that the USDOC addressed the deficiencies
in the financial statements of [[***]] that Hyundai Steel supplied as part of its initial Section B
response for purposes of establishing the arm's-length nature of the transactions with its affiliate.702
Having identified these deficiencies, the USDOC sought several other pieces of information from
Hyundai Steel for ascertaining its relationship with [[***]]. Second, for international freight, the
USDOC expressly requested copies of contracts between Hyun dai Steel and [[***]], on the one
hand, and between [[***]] and the "provider of the ocean freight services",
i.e. [[***]]subcontractor703, on the other hand, and required Hyundai Steel to demonstrate that
[[***]] various costs were "fully covered by the differential between the two contract values".704 In
response, Hyundai Steel submitted its contract with [[***]] and a contract between [[***]] and its
subcontractor [[***]].705 The express request for [[***]] contracts with its subcontractors suggests
that th e USDOC considered such information to be germane to the issue of determining the
arm's-length nature of the relationship between Hyundai Steel and [[***]]. Third, for inland freight,
Hyundai Steel provided a worksheet comparing the inland freight charged by [[***]] and the freight
charged by [[***]] subcontractor, [[***]], that, together with the contracts, allegedly demonstrated
that that the rates charged by [[***]] represented arm's-length prices.706
The United States argues that the supplemental A-C questionnaire also marks the "first time"
that the "USDOC … asked Hyundai Steel to submit copies of [[***]] contracts with unaffiliated
customers … in … Question 83". 707 The relevant part of that question, however, requested
Hyundai Steel to provide "copies of all freight contracts with [[***]] and all unaffiliated freight
providers that cover the full POI".708 Thus, the question was posed with respect to contracts between
Hyundai Steel and "all" of its "unaffiliated freight providers". 709 Contrary to the argument of the
United States, we find nothing in the USDOC's supplemental questionnaire suggesting that it sought
[[***]] contracts with its "unaffiliated customers" at this stage.
The USDOC did not pose any further queries with respect to Hyundai Steel's responses until
verification710, when the USDOC undertook a "completeness test" for the arm's-length nature of the
transactions between Hyundai Steel and its affiliates. To verify that the ocean and inland freight
services were provided on arm's-length basis by [[***]], the USDOC requested "that Hyundai Steel

698 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 45 and
exhibit S-38.
699 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 46 and
exhibit S-56.
700 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 47 and
exhibit S-56.
701 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 48 and
exhibits S-59-S-60.
702 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), pp. 16-17 and 24.
703 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), p. 25.
704 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), p. 25.
705 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 48 and
exhibits S-59-S-60.
706 HRS supplemental Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 46 and
exhibit S-56.
707 United States' response to Panel question No. 17(b), para. 80.
708 HRS supplemental Sections A-C questionnaire, (Exhibit USA-20 (BCI)), p. 16. (emphasis added)
709 As noted above, Hyundai Steel had already clarified in its initial response that it did not maintain any
freight contracts with unaffiliated providers during the POI.
710 We recall that in the CRS AD investigation, the USDOC issued a second supplemental questionnaire
in respect of these issues before its verification exercise, wherein it requested copies of [[***]] contracts with
all unaffiliated parties for both international and inland freight.

BCI deleted, as indicated [[***]]

obtain comparative freight charge information between its affiliate, [[***]], and other unaffiliated
parties".711 Officials of Hyundai Steel responded that "such information had been requested during
the verification for the cold-rolled investigation, and that, as was the case then, Hyundai Steel could
not obtain it".712 Although it acknowledged the information that Hyundai Steel had already submitted
as part of its responses to the first supplemental questionnaire 713, the USDOC did not identify any
specific deficiencies in relation to that information, as it had done with the information submitte d
with the initial questionnaire responses . The USDOC focused instead on Hyundai Steel 's failure to
submit the specific information requested at verification:
For inland freight, we observed that Hyundai Steel had previously provided, in
Exhibit S-38 of i ts January 19, 2016, supplemental response, the contract between
[[***]] and its freight subcontractor [[***]], and further had provided in Exhibit S-56
of the same submission a chart to show that [[***]] had earned a profit on the inland
freight amount it charged Hyundai Steel. For ocean freight, we similarly noted that
Hyundai Steel had provided in Exhibit S -59 of its January 19, 2016, supplemental
response, the contract between [[***]] and its ocean freight subcontractor [[***]], and
further had provided in Exhibit S -60 of the same submission sample invoices from
[[***]] to [[***]], and from [[***]] to Hyundai Steel, to show that [[***]] had earned
a profit. However, Hyundai Steel was not able to provide the requested comparative
freight charge information between [[***]] and unaffiliated parties.714
Additionally, at verification, the USDOC requested Hyundai Steel to "obtain comparative
marine insurance rate information between its affiliate, [[***]], and other unaffiliated parties". 715
Hyundai Steel responded similarly that it was unable to compel [[***]] to provi de this
information.716 Instead, Hyundai Steel submitted its invoice from an unaffiliated marine insurance
supplier, [[***]].717 For Hyundai Steel, a comparison between the marine insurance expenses
charged by [[***]] and the unaffiliated provider demonstrat ed that the transactions with [[***]]
were at arm's length.718
Given our finding above that the USDOC did not seek copies of the contracts between [[***]]
and unaffiliated customers as part of its initial questionnaire or its supplemental questionnaire, we
find that verification marked the first instance whe n the USDOC specifically requested this
information. In particular , for marine insurance, the United States acknowledges that the "first
instance that [the] USDOC asked Hyundai Steel to submit copies of contracts that [[***]] had with
all unaffiliated customers was during verification".719
Much of the USDOC's analysis of this issue in its final determination concerned why, in light
of their affiliation and common control, Hyundai Steel should have been able to provide the contracts
between its affiliates and their unaffiliated customers that were requested at verification. 720 The
USDOC also found that "Hyundai Steel failed the completeness portion at verification with regard to
this issue, i.e., failed to demonstrate the arm's -length nature of these services provided by the
affiliated companies".721 The USDOC thus considered that "necessary information" was "not on the
record due to Hyundai Steel 's failure to provide it", and on this basis decided to rely on facts
available, "with an adverse inference" due to Hyundai Steel 's failure to cooperate by not acting to
the best of its ability. 722 For its final determination, the USDOC selected for home market inland

711 HRS verification report, (Exhibit KOR-57 (BCI)), p. 14.
712 HRS verification report, (Exhibit KOR-57 (BCI)), p. 14.
713 The USDOC is referring to the responses to the first supplemental questionnaire. (HRS supplemental
Sections A-C questionnaire response, (Exhibit KOR-59 (BCI)), p. 46 and exhibits S-38, S-56, and S-59-S-60).
714 HRS verification report, (Exhibit KOR-57 (BCI)), pp. 14-15. (emphasis added)
715 HRS verification report, (Exhibit KOR-57 (BCI)), p. 15.
716 HRS verification report, (Exhibit KOR-57 (BCI)), p. 15.
717 HRS verification report, (Exhibit KOR-57 (BCI)), pp. 14-15 and exhibit HS-36. See also HRS case
brief, (Exhibit KOR-65 (BCI)), pp. 9-10.
718 HRS verification report, (Exhibit KOR-57 (BCI)), p. 15.
719 United States' response to Panel question No. 17(c), para. 81.
720 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.
721 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.
722 HRS issues and decision memorandum, (Exhibit KOR-67), p. 19.

BCI deleted, as indicated [[***]]

freight and warehousing the lowest reported values, and for marine insurance, international freight,
and inland freight for US sales, the highest reported values.723
Although investigating authorities enjoy a certain discretion in identifying the information
they consider "necessary" for purposes of making their determinations, they must, at all times, act
consistently with the provisions of Article 6.8 and Annex II in their treatment of such information.
In particular, paragraph 1 of Annex II requires investigating authorities to "sp ecify in detail the
information required from any interested party", "[a]s soon as possible after the initiation of the
investigation". Investigating authorities must "also ensure that the party is aware that if information
is not supplied within a reasonable time, the authorities will be free to make determinations on the
basis of the facts available". Paragraph 1 of Annex II serves as an additional "precondition" for an
investigating authority's valid resort to "facts available".724 An investigating authority that does not
request information in accordance with paragraph 1 of Annex II cannot fault an interested party for
failing to provide "necessary" information for purposes of resorting to facts available.
Korea argues that "the USDOC suddenly requested t he contract information as if that
information was essential to the question of the arm's-length nature of the transactions when it had
never been before", thus failing to specify in detail the information "it apparently considered
necessary" as soon as po ssible after the initiation of the investigation, as required by paragraph 1
of Annex II.725 The United States argues that "following Hyundai [Steel]'s initial response, [the]
USDOC determined that it needed further information to evaluate nature of the transaction between
Hyundai [Steel] and its affiliated service providers", and notes "[t]he number of times that
Hyundai [Steel] was asked to provide information related to the t ransactions between
Hyundai [Steel] and its affiliates".726
The "necessary" information that was found to be missing by the USDOC were copies of
contracts between Hyundai Steel's affiliates ([[***]]) and their unaffiliated customers. As we have
found above, although the USDOC sought several other pieces of information as part of its
supplemental Sections A -C questionnaire, the information concerning the affiliates ' contracts with
their unaffiliated customers was not specifically requested by the USDOC at any point prior to its
verification exercise.
In these circumstances, we find that the USDOC acted inconsistently with paragraph 1 of
Annex II to the Anti-Dumping Agreement by not "specify[ing] in detail" the information concerning
the affiliates ' contracts with unaffiliated customers "[a]s soon as possible after the initiation".
Given that paragraph 1 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement727, we find that the
USDOC also acted inconsistently with that provision in resorting to facts available with respect to
Hyundai Steel's reporting of affiliated party transactions. In light of our findings of
WTO-inconsistency, we do not consider it necessary to rule upon Korea's claims under paragraphs 3,
5, and 6 of Annex II to the Anti-Dumping Agreement in order to provide a positive solution to the
dispute before us.728
7.3.3.4.2 The USDOC's selection of the replacement facts
We have already found that the USDOC erred in resorting to facts available with respect to
information concerning Hyundai Steel 's reporting of affiliated party transactions. In these
circumstances, we do not consider that making further findings on Korea 's claims concerning the
USDOC's selection of the replacement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution to the dispute before
us.729

723 HRS issues and decision memorandum, (Exhibit KOR-67), pp. 19-20.
725 Korea's first written submission, paras. 494-495. (emphasis added)
726 United States' first written submission, paras. 154-155.
727 Panel Reports, China – GOES, paras. 7.384-7.385 and 7.393-7.394; US – Steel Plate,
paras. 7.55-7.56. See paras. 7.26. -7.27 above.
728 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
729 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on

BCI deleted, as indicated [[***]]

Korea's claims under Articles 1, 9.3, and 18.1 of the Anti-Dumping Agreement
Korea further claims that the USDOC 's use of facts available inconsistently with Article 6.8
and Annex II of the Anti -Dumping Agreement "led to an anti -dumping duty that was imposed and
collected in excess of the margins of dumping in vio lation of Articles 1, 9.3, and 18.1 of the
Anti-Dumping Agreement".730 According to Korea, because the margin of dumping was determined
based on facts available in a manner inconsistent with Article 6.8 and Annex II, "the imposition of
duties at the level of the margin of dumping automatically violated Article 9.3".731 Moreover, Korea
asserts that the violation of Article 6.8 and Annex II also "automatically leads" to a violation of
Articles 1 and 18.1 of the Anti-Dumping Agreement, as "this USDOC investigation and the measure
taken were not in accordance with the Anti-Dumping Agreement".732
The United States responds that Korea's claims under Articles 1, 9.3, and 18.1 are "entirely
consequential" and "Korea offers no argument or evidence to support any indepe ndent breach of
those provisions".733 According to the United States, were the Panel to uphold Korea's claims under
Article 6.8 and Annex II, "there would be no basis to decide Korea's consequential claims".734 First,
the United States "does not concede that such breaches are 'automatic'". 735 Second, the
United States submits that deciding such claims would be serve "no useful purpose" and would
provide no "additional guidance that would be useful regarding implementation of any
recommendations adopted by the DSB".736
Korea does not present any independent bases for the alleged breaches of Articles 1, 9.3,
and 18.1 of the Anti-Dumping Agreement; instead, its claims under these provisions are dependent
entirely upon a finding that the United States acted inconsistently with Article 6.8 and Annex II of
the Anti -Dumping Agreement.737 In these circumstances – and having already found that the
United States acted inconsistently with Article 6.8 and paragraph 1 of Annex II – we do not consider
it necessary to rule upon Korea's claims under Articles 1, 9.3, and 18.1 in order to resolve the dispute
before us.738
7.3.4 Countervailing duties on certain cold -rolled steel flat products from Korea
(USDOC investigation number C-580-882)
Introduction
Korea claims that the United States acted inconsistently with Article 12.7 of the
SCM Agreement in the countervailing duties investigation concerning certain CRS flat products from
Korea (the "CRS CVD investigation"). 739 Specifically, Korea claims that the USDOC acted
inconsistently with Article 12.7 of the SCM Agreement by using facts avai lable in respect of
three issues:
a. POSCO's alleged failure to report certain cross -owned affiliate input suppliers
("cross-owned affiliate input suppliers")740;
b. POSCO's alleged failure to report a facility located in a Free Economic Zone (FEZ) ("POSCO
facility in an FEZ")741; and

730 Korea's first written submission, para. 521.
731 Korea's first written submission, paras. 518-519.
732 Korea's first written submission, para. 520.
733 United States' first written submission, para. 356.
734 United States' first written submission, para. 358.
735 United States' first written submission, para. 358.
736 United States' first written submission, paras. 358-359.
737 Korea's first written submission, paras. 519-520.
738 See, e.g. Panel Reports, US – Differential Pricing Methodology, paras. 7.114-7.115; Argentina –
Poultry Anti-Dumping Duties, para. 7.369; US – Steel Plate, para. 7.103; and EU – Footwear (China),
para. 7.935.
739 Korea's first written submission, para. 335.
740 Korea's first written submission, paras. 343, 391-401, and 426-429.
741 Korea's first written submission, paras. 343, 402-413, and 430.

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c. POSCO's affiliated trading company, Daewoo International Corporation (DWI)'s alleged
failure to provide requested information about the use of Korean Resources Corporation
(KORES) loans ("DWI loan data").742
Korea argues that POSCO app lied its best efforts to respond to the USDOC 's information
requests, and did not significantly impede the investigation, or otherwise fail to provide necessary
information pertaining to the three issues above. 743 Korea contends that the USDOC failed to use
any of the substantiated facts on the record and disregarded all of the verifiable information provided
by POSCO.744 Korea also claims that the USDOC did not corroborate the accuracy and relevance of
the "AFA rates" and failed to engage in the required com parative evaluation to determine whether
the selected replacements constituted the "best information available".745
We begin by setting out the relevant factual background of the underlying investigation,
followed by the parties ' arguments. In section 7.3.4.4.1, we address Korea 's claims of
WTO-inconsistency regarding the USDOC 's resort to facts available for each of the three issues
identified above. Finally, in section 7.3.4.4.2, we address Korea 's claims of WTO -inconsistency
regarding the USDOC's selection of the replacement facts for each of the three issues.
Factual background
7.3.4.2.1 The USDOC's resort to facts available
7.3.4.2.1.1 Cross-owned affiliate input suppliers
In its initial questionnaire, the USDOC requested certain information concerning
POSCO's cross-owned affiliate input suppliers.746 POSCO responded that it did "not believe it [had]
any affiliates that [met] any of the four cross -ownership criteria as defined [] by the [USDOC]", or
that "POSCO or any of its affiliates [were] cross -owned by a th ird party". 747 In the same
questionnaire, the USDOC sought the identity of all affiliated companies and a detailed description
of the relationship between POSCO and these companies – requests with which POSCO complied.748
The USDOC issued a supplemental questionnaire ask ing POSCO to confirm that no cross -owned
affiliates supplied inputs in the production of subject merchandise. 749 POSCO recalled that it had
already provided an answer to this question.750
Prior to verificatio n, the USDOC instructed POSCO to "[b]e prepared to demonstrate that
none of POSCO's other affiliated companies provided inputs for the production of cold-rolled steel or
otherwise would fall under our attribution regulations". 751 During verification, the US DOC asked

742 Korea's first written submission, paras. 343, 414-423, and 431.
743 Korea's first written submission, para. 336.
744 Korea's first written submission, para. 337.
745 Korea's first written submission, paras. 338 and 433-450.
746 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)). Section III of the
USDOC's questionnaire reads, in relevant part:
Cross-ownership exists between two companies where one company can use or direct the
individual assets of another company in essentially the same ways it can use its own assets.
Normally, such a relationship exists between two companies where one company holds, directly or
indirectly, a majority voting interest in the ot her. In addition, if two companies are both
cross-owned by a third party, the two companies themselves would be considered cross -owned
(for example, cross-ownership exists between two companies owned by the same parent).
You must provide a complete questionnaire response for those affiliates where "cross-ownership"
exists, and one of the following situations exists:
• the cross-owned company produces the subject merchandise; or
• the cross -owned company is a holding company or a parent company (with its own
operations) of your company; or
• the cross -owned company supplies an input product to you for production of the
downstream product produced by the respondent; or
• the cross-owned company has received a subsidy and transferred it to your company.
(CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), pp. 4-5)
747 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), p. 5.
748 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), pp. 3-4 and exhibit 1.
749 CVD CRS second supplemental questionnaire response, (Exhibit KOR-74 (BCI)), p. 1.
750 CVD CRS second supplemental questionnaire response, (Exhibit KOR-74 (BCI)), p. 1.
751 CVD CRS verification report, (Exhibit KOR-75 (BCI)), p. 5.

BCI deleted, as indicated [[***]]

POSCO to discuss and document (a) the corporate history, ownership, structure, and affiliations;
(b) the products produced and exported; and (c ) the location of all offices and facilities. 752
The USDOC found that four additional companies listed on POSCO 's affiliation chart provided raw
material inputs that were used in the production of CRS.753
In its final determination, the USDOC found that "POSCO failed to provide questionnaire
responses for certain input suppliers and its statement that no affiliated companies in Korea provided
inputs to POSCO's production of subject merchandise was verified to be incorrect".754 POSCO argued
that it was not required to provide questionnaire responses for the affiliated companies, as the input
products they supplied were not "primarily dedicated" to the production of CRS.755
The USDOC stated that "[b]ecause POSCO failed to provide responses for cross-owned input
suppliers … the [USDOC] was not provided the op portunity to carefully examine the full extent to
which POSCO and all of its cross-owned entities, including the aforementioned companies, benefitted
from subsidies that are attributed to POSCO".756 According to the USDOC, the information requested
was only provided near the conclusion of the final day of the verification, and therefore it "was unable
to verify this information, a document that listed inputs used in the production of cold -rolled and
providers of the inputs, due to the untimely nature and lar ge amounts of data required to fully
establish the credibility of the submission".757 The USDOC concluded that POSCO failed to act to the
best of its ability because it did not put in "maximum effort" to provide the USDOC with full and
complete answers to a ll inquiries relat ing to the inputs provided by cross -owned affiliated
companies.758 The USDOC found that "inputs produced by POSCO Chemtech, POSCO P&S, POSCO
MTech, and POS -HiMetal [were] primarily dedicated to the production of the downstream
product".759
7.3.4.2.1.2 POSCO facility in an FEZ
Companies in a Korean FEZ can be approved to receive tax reduction and exemptions,
exemptions and reduction of lease fees, and grants and financial support.760 The USDOC requested
POSCO and DWI provide information concerning subsidies provided to companies in an FEZ.761 Both
companies responded that they had "no facilities located in [an FEZ]" and thus were "not eligible
for, and did not receive any tax reductions, exemptions, grants, or financial support under any of
the three programs listed" in the USDOC's question.762 In its preliminary determination, the USDOC
found that POSCO and DWI "did not apply for or receive countervailable benefits during the POI"
under programmes for subsidies to companies in an FEZ.763
During verification, the USDOC found that the POSCO Global R&D Centre was listed on the
official Incheon FEZ government website as being located in the Incheon FEZ. 764 In the final
determination, the USDOC explained as follows:

752 CVD CRS verification report, (Exhibit KOR-75 (BCI)), p. 5.
753 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 65. The four companies at issue
were POSCO Chemtech, POSCO P&S, POSCO M-Tech, and POS-HiMetal. (CVD CRS verification report,
(Exhibit KOR-75 (BCI)), pp. 10-14; CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 65).
754 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 64.
755 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 58-59 and 64. US law provides
that "[i]f there is cross-ownership between an input supplier and a downstream producer, and production of
the input product is primarily dedicated to production of the downstream product, the Secretary will attribute
subsidies received by the input producer to the combined sales of the input and downstream products
produced by both corporations (excluding the sales between the two corporations)". (19 CFR 351.525,
(Exhibit KOR-80), Section (b)(6)).
756 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 64-65.
757 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 66-67. (fn omitted)
758 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 69.
759 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 69.
760 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 34; GOK initial questionnaire,
(Exhibit KOR-84 (BCI)), p. 107.
761 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 52. POSCO responded to the
USDOC's questionnaires on behalf of itself and DWI. (CVD CRS negative preliminary determination,
(Exhibit KOR-87), p. 9).
762 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), pp. 52-53.
763 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 41.
764 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 72-73.

BCI deleted, as indicated [[***]]

We … asked POSCO officials for any i nformation regarding the purpose and location of
the facility, to which they stated that they would attempt to provide further details as
they were currently unaware of the facility. Approximately two hours later, POSCO
officials presented a map printed from a Korean website that had a hand-drawn border
surrounding what they claimed to be the FEZ. The POSCO officials stated that the facility
was located outside of the hand-drawn FEZ. To compare, we examined the FEZ map on
the official Korean government website and found that the hand -drawn border did not
conform to the map on the official government website. As such, we declined to accept
the map presented by POSCO officials. We then offered repeatedly to visit the facility
as depicted on the Korean government website in order to clarify its location and confirm
non-use of the FEZ program, but POSCO officials declined.765
The USDOC found that it was unable to confirm POSCO 's statement that it had no facilities located
in an FEZ , and therefore did not receive a ny FEZ related benefits , because POSCO provided no
information in its questionnaire responses with respect to this facility.766
The USDOC rejected POSCO 's argument that the questions regarding the FEZ programme
were untimely because they were posed during the DWI verification.767 The USDOC explained that
it had indicated in the verification outline that it was going to verify the "non -use" of the
programme.768 The USDOC also rejected POSCO's claim – based on a statement by the Government
of Korea (GOK) that "during the investigation period, none of the respondents received tax
reductions or exemptions, lease-fee reductions or exemptions, or grants or financial support due to
their location in an FEZ" – that it did not receive any benefits due to its loc ation in an FEZ.769 The
USDOC stated that it was not clear from the GOK statement whether "investigation period" referred
to the period of investigation (POI) or the entire 15-year average useful life (AUL) of the "renewable
physical asset"770 and the USDOC, therefore, could not fill the gap in the record.771 Furthermore, the
USDOC disagreed with POSCO that it could not have benefitted from this programme on the basis
that it was designated to attract foreign investment. According to the USDOC, certain shareholders
of POSCO appeared to be foreign and thus POSCO could have been eligible to receive funding. 772
The USDOC also rejected POSCO's argument that none of the benefits received were related to the
sale or production of the subject merchandise and were therefore not attributable to POSCO, because
the USDOC was not able to verify the operations of the activities of the POSCO Global R&D Centre.773
The USDOC concluded as follows:
Because we are unable to confirm POSCO's statement that it has no facilities located in
an FEZ, and, therefore, did not receive benefits under this program, we are relying on
adverse facts available to find that this program was used by POSCO.774
7.3.4.2.1.3 DWI loan data
The USDOC requested POSCO and DWI to provide details regarding a ll assistance received
during the POI in the form of "long-term loans" under the KORES and Korea National Oil Corporation
(KNOC) programmes.775 "Long-terms loans" from KORES and KNOC were introduced with the
purpose of "enhancing and stabilizing the supply of energy resources in Korea" .776 KNOC is
responsible for the development of oil, whereas KORES is responsible for the development of other
natural resources.777 DWI submitted that it had outstanding long-term borrowings from KORES and
KNOC during the POI. 778 However, according to DWI, these loans were tied to non -subject

765 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
766 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
767 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
768 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
769 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 73-74.
770 See for example, CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 31.
771 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 74.
772 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 74.
773 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 74.
774 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
775 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 33.
776 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 23 (referring to GOK initial
questionnaire, (Exhibit KOR-84 (BCI)), p. 91).
777 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 24.
778 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 34.

BCI deleted, as indicated [[***]]

merchandise and were unrelated to DWI 's exports to the United States of subject merchandise
produced by POSCO.779 The USDOC issued a supplemental questionnaire requesting DWI to provide
a comp lete response regarding investments using KORES and KNOC loans. 780 In response,
DWI explained that there were two types of loans in the programme, [[***]] and [[***]].781
DWI reported that it had received KNOC and KORES loans that were [[***]].782
In its preliminary determination, the USDOC found that POSCO maintained loans from KNOC
and KORES, while DWI maintained long-term loans from KORES.783 However, the USDOC explained
that its analysis related solely to loans from KORES as information on the record demonstrated that
KNOC loans to POSCO were tied to non-subject merchandise.784 With respect to the KORES loans,
the USDOC preliminarily determined that POSCO and DWI received a benefit equal to "the difference
between the amount of interest POSCO and DWI paid on the KORES loans and the amount the
recipient would pay on a comparable commercial loan" (a calculated subsidy rate of 0.01%).785
During verification, DWI submitted [[***]] under the KORES programme in the form of
"[m]inor [c]orrections", that had initially been omitted due to an alleged "clerical mistake". 786 The
USDOC found that the [[***]] loans instead constituted an additional [[***]] loans that DWI had
initially failed to report.787 The USDOC rejected the submission of the new loans at verification and
explained in its final determination that this was because these loans amounted to "significant
additions" and were not "minor corrections":
As stated in the verification outline, we only accept information at verification as minor
corrections that "corroborates, supports, and clarifies" factual information already on
the record. Due to the magnitude of change in the reported lending under the specified
program, we determined that the submission did not constitute a minor correction, and
instead, consisted of new factual information. As such, we rejected the submission from
the record. Therefore, because the extensive nature of the corrections presented at
verification by DWI to its loan s received under this program, we were not able to fully
verify the use of this program.788
The USDOC thus concluded that "DWI withheld necessary information requested" by the
USDOC regarding the use of this programme and that, as a result, "necessary" information was
"missing on the record".789
7.3.4.2.2 The USDOC's selection of the replacement facts
The USDOC found that:
[T]he application of AFA is warranted with respect to POSCO 's responses for its failure
to provide information for certain cross -owned affiliated companies, failure to report
certain loans, and with respect to … POSCO 's … failure to report [its] respective
location[] in an FEZ.790

779 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 34. In detail, DWI reported that
the KNOC loans were related to investments in the exploration and production of natural gas in [[***]], while
the KORES loans were related to investments in [[***]].
780 CVD CRS supplemental questionnaire, (Exhibit KOR-85), p. 4.
781 CVD CRS second supplemental questionnaire response, (Exhibit KOR-74 (BCI)), exhibit F-11, p. 1.
DWI explained that with [[***]], the repayment obligation is subject to the results of the development project.
If the project fails, the company will be exempted from all or a portion of the repayment obligation. If the
project succeeds, however, a portion of the project income is payable to KORES/KNOC. (Ibid.).
782 CVD CRS second supplemental questionnaire response, (Exhibit KOR-74 (BCI)), p. 4 and
exhibit F-11, pp. 1-2 and exhibit F-12.
783 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 24.
784 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 24.
785 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 24.
786 CVD CRS DWI verification minor correction, (Exhibit KOR-86 (BCI)).
787 CVD CRS verification report, (Exhibit KOR-75 (BCI)), pp. 2-3.
788 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 76. (fns omitted)
788 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 76. See also CVD CRS verification
report, (Exhibit KOR-75 (BCI)), pp. 2-3.
789 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 76.
790 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 9. (emphasis added)

BCI deleted, as indicated [[***]]

In drawing an adverse inference, the USDOC determined that POSCO benefitted from all
programmes under investig ation, excluding programmes that were determined not to be
countervailable.791 The USDOC explained that in selecting an "AFA rate" it was "guided by the …
methodology" whereby it uses "the highest calculated program -specific rates determined for a
cooperating respondent in the same investigation, or, if not available, rates calculated in prior CVD
cases involving the same country".792
When relying on "secondary information", the USDOC explained that "it shall, to the extent
practicable, corroborate that infor mation from independent sources that are reasonably at its
disposal".793 However, this obligation does not apply when the information relied on for "adverse
inferences" is from "the petition, a final determination in the investigation, any previous review … or
determination … or any other information placed on the record" .794 Because the USDOC applied
subsidy rates calculated in the underlying investigation, or previous investigations involving Korea,
the USDOC found that the "corroboration exercise" was "ina pplicable".795 The USDOC calculated a
CVD rate of 58.36% for POSCO.796
Main arguments of the parties
7.3.4.3.1 The USDOC's resort to facts available
For each of the three issues , Korea claims that the USDOC acted inconsistently with
Article 12.7 of the SCM Agreement as the conditions for resort to the use of facts available were not
met.797
7.3.4.3.1.1 Cross-owned affiliate input suppliers
Korea argues that POSCO did not refuse access to any information regarding its affiliates as
all the information was made available on short notice and could have been verified if necessary.798
According to Korea, POSCO did not simply make a "belated assertion" , as claimed by the USDOC,
but it actually provided all the relevant supporting information.799 Korea argues that POSCO had not
previously submitted information on the inputs purchased from its cross-owned affiliates because it
had only sourced "minimal trace amounts ".800 Korea argues that this is confirmed by the
USDOC's practice, and relevant US law, because "where the input is not primarily dedicated to the
production of the downstream product, 'it is not reasonable to assume' that the subsidy to the input
supplier was meant to benefit the downstream producer". 801 Noting that the concept of "primari ly
dedicated" is not defined in US law, Korea refers to prior instances where the USDOC evaluated this
standard on the basis, inter alia, of "the proportion of the cross -owned affiliates' sales of inputs to
the mandatory respondent as a percentage of the cross-owned affiliate's total sales ".802 Korea
further asserts that the USDOC 's questionnaire asked whether an affiliate supplies inputs for the
production of cold-rolled products during the POI, and not whether there was any input that could
be used in the production of the product, which was the USDOC 's ultimate reason for resorting to
facts available.803 According to Korea, the USDOC did not point to evidence that the inputs at issue
were actually used by POSCO in the production of subject merchandise that was exported to the
United States, let alone that they were primarily dedicated to the production of the subject
merchandise or any intermediate "downstream product".804

791 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 12-13.
792 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 12.
793 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 15.
794 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 15.
795 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 15.
796 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 17.
797 Korea's first written submission, paras. 390, 391, 402, 414, and 424.
798 Korea's first written submission, para. 392.
799 Korea's first written submission, para. 392.
800 Korea's first written submission, para. 351.
801 Korea's first written submission, para. 351.
802 Korea's first written submission, para. 352.
803 Korea's response to Panel question No. 21. See also Korea's second written submission, para. 149.
804 Korea's comments on United States' response to Panel question No. 73, p. 67.

BCI deleted, as indicated [[***]]

Korea argues that nothing in the record demonstrates that the USDOC considered such
information to be "necessary".805 In any event, Korea argues that the value of POSCO's transactions
with these cross -owned affiliates was on the record from POSCO 's initial responses, as part of
POSCO's consolidated financial statements, and that the requested information was therefore
provided "within a reasonable period". 806 Korea contends that, based on the consolidated financial
statements, together with the data submitted by POSCO at verification concerning the total value of
inputs sources from each affiliate, the USDOC could derive the percentage of the inputs provided to
POSCO as a percentage of the affiliates ' total sales.807 According to Korea, the document provided
by POSCO during verification for med part of the administrative record, and the USDOC was not
permitted to ignore it on the basis that it constituted "new information".808 Based on the above,
Korea argues that the USDOC failed to use timely, appropriately submitted, and verifiable
information from POSCO regarding its transactions with the cross -owned affiliates.809 According to
Korea, the USDOC had no factual basis for its determination that the recipient of these inputs,
POSCO, benefitted from the subsidies received by its affiliated input suppliers.810
Korea submits that POSCO did not significantly impede the investigation since the inputs
provided were negligible, and that there was sufficient information on the record (from the
questionnaire responses and from the verification stage) to demonstrate this.811 According to Korea,
POSCO did not fail to act to the best of its ability, and, in fact, it went to extraordinary lengths to
obtain the cooperation of its affiliates to engage with the USDOC and obtain information that was
requested in the final stages of the investigation, despite being under the reasonable belief that it
did not have to report this information.812
The United States responds that POSCO tried to substitute itself for the investigating
authority in deciding that the affiliate d inputs were not primarily dedicated to downstream
products.813 The USDOC's request was for POSCO to identify the affiliated suppliers, and not to
engage in a "primarily dedicated" analysis.814 The United States argues that POSCO could not itself
decide whether the inputs were primarily dedicated, given that the USDOC has never established a
"bright line threshold " for such a determination, and points out that Korea does not identify an
instance where the USDOC permitted a respondent to make such a determina tion.815 Finally, the
United States contends that POSCO did not seek guidance to determine whether the information at
stake was, in fact, relevant or not.816
The United States disagrees with Korea that all the information was on the record from the
early stages of the investigation. Although POSCO listed the four cross -owned affiliates in its
affiliation chart, neither that chart nor other information that POSCO provided prior to verification
revealed that these companies produced inputs that could be used in the production of CRS. 817
Moreover, the United States submits that the USDOC did not initially focus on the issue of affiliated
suppliers because POSCO falsely claimed that no such affiliated suppliers existed. 818 According to
the United States, Korea's argument that the USDOC could have co nfirmed from the information
available on the record that only trace amounts were provided by these affiliates, is based on the
premise that the USDOC should have known that POSCO's response (that it received no inputs from
affiliates) was false.819 For the United States, these deductions from the available evidence were
"neither simple , nor logical ", nor based on any requirement in the SCM Agreement.820 The

805 Korea's first written submission, para. 396.
806 Korea's first written submission, para. 394 (referring to CVD CRS initial questionnaire response,
(Exhibit KOR-70 (BCI)), exhibit 20). See also Korea's second written submission, para. 154.
807 Korea's responses to Panel question No. 72(a), paras. 76-77, No. 72(b), paras. 78-79,
and No. 72(c), para. 80.
808 Korea's comments on United States' response to Panel question No. 74(b), p. 70.
809 Korea's first written submission, para. 429.
810 Korea's first written submission, para. 428.
811 Korea's first written submission, para. 397.
812 Korea's first written submission, para. 399.
813 United States' second written submission, para. 107.
814 United States' second written submission, para. 109.
815 United States' second written submission, para. 110.
816 United States' second written submission, para. 113.
817 United States' first written submission, para. 394.
818 United States' first written submission, para. 395. See also United States' second written submission,
para. 111.
819 United States' response to Panel question No. 22, para. 99.
820 United States' response to Panel question No. 22, para. 100.

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United States argues that , in order to determine whether inputs were primarily dedicated to
downstream products, the USDOC required an accurate response from POSCO. 821 If POSCO had
responded in the affirmative, this would have allowed the USDOC to solicit responses from those
affiliates and analyse whether the inputs were primarily dedicated to the producti on of the
downstream product.822
The United States explains that the USDOC does not determine whether an input is
"primarily dedicated" to the production of downstream products based on the input 's relation to a
percentage of an affiliates ' total sales or a respondents ' total cost of production. Rather, t he
USDOC's inquiry into whether an input is "primarily dedicated" to the production of downstream
products involves a "fact intensive assessment" of the extent to which the input is dedicated to the
production of intermediate inputs and subject merchandise (collectively, the "downstream
products").823 The United States argues that looking at the value of the transactions between POSCO
and its affiliated inputs suppliers would not have provided the necessary information for the USDOC
to determine whether the inputs were primarily dedicated to downstream products. 824 This is
because the analysis does not rely on numerical values.825
According to the United States, the document provided by POSCO at verification listing the
inputs used in the production of CRS, as well as the suppliers and value of those inputs 826, was
relevant to verification of POSCO's statement that "no affiliated companies located in Korea provided
inputs used in the production of the subject merchandise". 827 However, the quantity of inputs was
not relevant to that inquiry. 828 The United States explains that, as POSCO had not reported its
purchases of inputs from affiliated input suppliers, there was no underlying information for the
USDOC to verify along with the document provided by POSCO; as such, the data would be regarded
as new information. 829 The purpose of verification, as explained by the USDOC, "is to check the
accuracy of factual information already submitted on the record; it is not an opportunity to provide
new factual information, as the deadlines to submit factual information are explicitly set forth
under 19 CFR 351.301".830 The United States argues that, although the financial statements provide
the total value of sales for each of POSCO 's affiliates, they did not contain any information about
whether each affiliate provided POSCO with inputs, which was provided only at verification.831
7.3.4.3.1.2 POSCO facility in an FEZ
Korea argues that POSCO did not refuse access to "necessary" information, and acted to the
best of its ability, despite not being able to provide the exact information requested by the USDOC
at the last moment. 832 According to Korea, instead of allowing POSCO to respond to the new
information request with more time and in writing, the USDOC aske d on one occasion to visit the
facility immediately, but POSCO was unable to arrange such a visit .833 Korea further argues that,
even though the general verification outline refers to the FEZ programme in question, it specifically
refers to documentary evidence and not to visiting a POSCO facility.834
In any event, Korea argues that the necessary information concerning any benefits related
to the FEZ was already on the record, having been provided both by POSCO and the GOK.835 In this
respect, Korea maintains that the USDOC acted inconsistently by failing to use all substantiated facts

821 United States' response to Panel question No. 72, para. 97.
822 United States' response to Panel question No. 72, para. 98.
823 United States' responses to Panel question No. 72, paras. 102-105 and No. 73, para. 106.
824 United States' response to Panel question No. 72, para. 105.
825 United States' comments on Korea's response to Panel question No. 72(b), para. 59.
826 United States' response to Panel question No. 74(a), para. 107 (referring to CVD CRS verification
report, (Exhibit KOR-75 (BCI)), pp. 10-11).
827 United States' response to Panel question No. 74(b), para. 108 (referring to CVD CRS issues and
decision memorandum, (Exhibit KOR-77), p. 64).
828 United States' response to Panel question No. 74(b), para. 109.
829 United States' response to Panel question No. 74(b), para. 109.
830 United States' response to Panel question No. 74(b), para. 109 (referring to CVD CRS issues and
decision memorandum, (Exhibit KOR-77), p. 67).
831 United States' comments on Korea's response to Panel question No. 72(a), para. 56.
832 Korea's first written submission, para. 403.
833 Korea's first written submission, para. 406.
834 Korea's second written submission, para. 160.
835 Korea's first written submission, para. 407.

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provided by POSCO that were on the record. 836 Korea recalls that the GOK in its questionnaire
response stated that, "during the investigation period, none of the respondents recei ved tax
reductions or exemptions, lease-fee reductions or exemptions, or grants or financial support due to
their location in an FEZ". 837 Korea argues that there is nothing "ambiguous" about this response
from the GOK.838 Had POSCO or Hyundai Steel received AUL benefits that were allocated forward,
Korea contends that the allocated portion would have been "received" in the POI. 839 Thus, Korea
explains that "the GOK's response that neither company received any FEZ benefits in the POI would
capture any AUL benefits that may have been allocated forward to the POI".840 According to Korea,
although the USDOC determined that it was not able to verify this information, or to use the
GOK's response to fill the gap in the record because the response did not clarify whether the
"investigation period" referred to the POI or the "entire 15-year AUL", the USDOC never asked the
GOK to explain this reference.841 Korea notes that the United States fails to explain why it ignored
the evidence supplied by the GOK, and that the alleged ambiguity of the USDOC 's statement was
not a proper basis for disregarding the veracity of the information provided and assume the
opposite.842
Korea argues that the USDOC and the United States improperly shifted the focus of the
inquiry, as the USDOC had initially requested POSCO to report if it had appli ed for, used, or
benefitted from any FEZ assistance, and whether it had any facilities located in an FEZ. 843 Korea
recalls that POSCO responded consistently and accurately to this question in the negative, and
argues that the GOK's statement that POSCO did not receive any FEZ benefits should have sufficed
to verify the non-use of the programme.844 Finally, Korea asserts that the USDOC could have asked
for information or checked itself whether POSCO was registered under the relevant FEZ programme,
given that only registered companies could benefit therefrom.845 When asked by the Panel to identify
record evidence demonstrating that the operations of the POSCO facility in the FEZ were unrelated
to the subject merchandise, Korea states that the USDOC did not engage with an analysis of the
information regarding the FEZ facility.846
The United States responds that, in its initial questionnaire, POSCO denied having any
facilities in an FEZ; at verification, however, the USDOC discovered that the POSCO Global
R&D Centre was listed on the official Incheon FEZ government website as being located in an FEZ.
Upon inquiry, POSCO officials submitted a "hand-drawn map" and stated that the facility was outside
the FEZ. However, the USDOC found a discrepancy in the alignment of the borders on the
hand-drawn map and the map on the official government website, and thus de clined to accept the
hand-drawn map offered by POSCO. 847 The United States submits that POSCO provided no
information in its questionnaire about the FEZ facility and therefore the USDOC was unable to verify
any information with respect to subsidy use by the FEZ facility. The United States contends that
Korea cannot shift the blame to the wording of the USDOC's question, as POSCO's response was not
accurate. In response to the question of whether POSCO had received any FEZ benefits , POSCO
responded "that it did not benefit from any FEZ programs because it has 'no facilities located in a
free economic zone ('FEZ') and thus was not eligible'".848 The United States asserts that this response
was shown to be incorrect and den ied the USDOC the opportunity to examine whether
POSCO benefited from FEZ assistance.849

836 Korea's first written submission, para. 430.
837 Korea's first written submission, para. 370 (quoting GOK initial questionnaire,
(Exhibit KOR-84 (BCI)), p. 108).
838 Korea's comments on the United States' response to Panel question No. 75, p. 72.
839 Korea's comments on the United States' response to Panel question No. 75, p. 72.
840 Korea's comments on the United States' response to Panel question No. 75, p. 72.
841 Korea's first written submission, para. 370 (quoting CVD CRS issues and decision memorandum,
(Exhibit KOR-77), p. 74).
842 Korea's second written submission, para. 161.
843 Korea's response to Panel question No. 25 (referring to CVD CRS initial questionnaire response,
(Exhibit KOR-70 (BCI)), p. 13).
844 Korea's response to Panel question No. 25. See also Korea's second written submission, para. 159.
845 Korea's response to Panel question No. 25.
846 Korea's response to Panel question No. 27.
847 United States' first written submission, para. 382.
848 United States' second written submission, para. 117. (quoting CVD CRS initial questionnaire
response, (Exhibit KOR-70 (BCI)), p. 52 (emphasis added by the United States)).
849 United States' second written submission, para. 117.

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The United States submits that the USDOC explained in its questionnaire that it "allocates
the benefits received from certain types of subsidies over time" and, "in order to appropriately
measure any allocated subsidies", the USDOC relied on a 15 -year AUL.850 Although the POI was a
discrete and recent period, the USDOC explained it was "investigating alleged subsidies received
over a time period corresponding to the [AUL]" .851 Thus, the United States explains that a portion
of a subsidy received several years before the POI would be allocated to the 12 -month POI for
purposes of calculating a CVD rate.852
The United States also argues that, contrary to Korea 's assertions, the purpose and
operations of the FE Z facility were never verified, and Korea points to nothing on the record to
support its claim.853 Finally, the United States submits that there is no support for Korea's argument
that, as a Korean company, POSCO could not benefit from FEZ subsidies because, as the USDOC
noted, information on the record demonstrates that certain shareholders of POSCO appear to be
foreign and could have been eligible under the programme.854 The United States also noted that ,
when offered an opportunity to provide an explanation at verification, POSCO could have presented
materials to show that it did not benefit from the FEZ programme, instead of submitting a
hand-drawn map.855
7.3.4.3.1.3 DWI loan data
Korea argues that DWI did not refuse access to "necessary" information, but, instead,
actively participated and voluntarily reported the additional loans as soon as it discovered its
inadvertent failure to do so in its initial responses.856 Even assuming that the minor corrections could
be rejected, Korea submits that there was no basis for the USDOC to reject information about the
use of the KORES programme that was on the record from the start of the investigation. 857 Korea
also submits that DWI provided the necessary information within a reasonable period of time by
responding in a timely manner to the initial questionnaires and correcting record facts upon learning
of errors. In so doing, DWI did not introduce new factual information about an unknown subsidy
programme, but merely completed already provided information. 858 Korea maintains that the
corrections were "minor", as they concerned the extent of use of the KORES programme, and were
filed in time for the USDOC to verify the information. According to Korea, the nature and quantity of
the information submitted was such that it did not impact the USDOC 's ability to verify the
information concerning the use of the KORES programme because the use of the programme was
known and the corrected information only concerned [[***]] additional loans.859 Korea also submits
that DWI did not significantly impede the investigation and, in fact, acted in good faith by correcting
the information as soon as it discovered the errors.860 Finally, Korea contends that the USDOC failed
to use all verifiable substantiated facts provided by DWI about the use of the KORES programme,
while it was under the obligation to take into account all verifiable information even if they were
deemed incomplete.861
Korea argues that irrespective of the counting of the additional loans as [[***]] loan
programmes, or as [[***]] loan disbursements, what is of essence is that these programmes were
"entirely unrelated to the production of the subject merchandise in question".862 According to Korea,
this is evident from the mere title of these programmes [[***]]863, as well as by DWI 's responses

850 United States' response to Panel question No. 75, para. 111 (referring to GOK initial questionnaire,
(Exhibit KOR-84 (BCI)), pp. 2-3).
851 United States' response to Panel question No. 75, para. 111 (referring to GOK initial questionnaire,
(Exhibit KOR-84 (BCI)), p. 3).
852 United States' response to Panel question No. 75, para. 111.
853 United States' first written submission, para. 406.
854 United States' first written submission, para. 406 (referring to CVD CRS issues and decision
memorandum, (Exhibit KOR-77), p. 74).
855 United States' second written submission, para. 120.
856 Korea's first written submission, para. 416.
857 Korea's first written submission, paras. 417 and 431.
858 Korea's first written submission, para. 418.
859 Korea's first written submission, para. 420. See also Korea's second written submission, para. 172.
860 Korea's first written submission, para. 421.
861 Korea's first written submission, paras. 425 and 431.
862 Korea's response to Panel question No. 28(a). See also Korea's second written submission,
paras. 166 and 171.
863 For Korea, the titles of the loans make it clear that they were programmes for "exploration",
unrelated to CRS production. (Korea's response to Panel question No. 77, paras. 85-86).

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and the absence of any contrary information on the r ecord.864 Korea further argues that, from the
outset of the investigation, there was information on the record indicating that the KORES loans as
a whole were unrelated to the production of the subject merchandise. 865 Korea asserts that the
USDOC assumed the KORES loans were tied to subject merchandise, and did not make an affirmative
finding based on evidence.866
The United States responds that the additional loans unreported by DWI indicate that it was
not acting in good faith. 867 Additionally, the United States highlights the USDOC's observation that
the [[***]] additional loans represented a "significant change" in the magnitude of the funding
provided under the programme.868 The United States contends that the change was significant
irrespective of the metric used to calculate the number of loans because, in relative terms, the total
number of loans increased by [[***]]% and the total value of the loans also increased materially.869
The United States also points out that the information ultimately provided was untimely and
unsolicited.870 The United States asserts that, given the extensive nature of the corrections, which
could not be verified for lack of time, the USDOC properly resorted to the use of facts available.871
7.3.4.3.2 The USDOC's selection of the replacement facts
Following the USDOC 's application of AFA, Korea argues that POSCO 's margin increased
from 0.18% in the preliminary determination to 59.72% in the final determination.872 Korea asserts
that the USDOC did not engage in a process of reasoning or evaluation and its selection of
replacement facts was "not objective or fair", but, instead, was "punitive" in nature.873 Korea argues
that the USDOC failed to exercise special circumspection or check the information, as required by
Article 12.7 of the SCM Agreement.874 Korea contends that Article 12.7 of the SCM Agreement
imposes the same substantive obligations as paragraph 7 of Annex II to the
Anti-Dumping Agreement.875
Korea argues that a comparative evaluation of the facts on the record would have confirmed
that it was not reasonable to conclude that POSCO benefitted from all subsidy programmes in the
investigation.876 According to Korea, speculating and assuming that the cross -owned affiliates
benefitted from all subsidy programmes was not the "best information available". 877 In relation to
POSCO's facility in an FEZ, Korea argues that the USDOC 's assumption that POSCO us ed the
programmes at issue had no factual basis in the record, and the USDOC did not explain how and
why the inference drawn was the "best information available" to replace the alleged ly missing
information.878 In relation to DWI's loan data, Korea argues that the USDOC did not examine whether
the single loan programme rate was the best information, or appropriate and relevant for DWI
or POSCO.879
The United States responds that Korea fails to establish that the USDOC selected information
inconsistently with Article 12.7.880 The United States contends that Korea points to no evidence on
the record demonstrating that it was unreasonable for the USDOC to conclude that POSCO's affiliated

864 Korea's response to Panel question No. 28(a) (referring to CVD HRS supplemental new subsidy
allegation questionnaire response, (Exhibit KOR-94 (BCI)), exhibit 21).
865 Korea's response to Panel question No. 28(c). See also Korea's second written submission,
para. 168.
866 Korea's comments on the United States' response to Panel question No. 76, p. 73.
867 United States' first written submission, para. 410.
868 United States' first written submission, para. 411.
869 United States' second written submission, para. 126.
870 United States' first written submission, para. 412.
871 United States' first written submission, para. 411.
872 Korea's first written submission, para. 446.
873 Korea's first written submission, para. 436.
874 Korea's first written submission, para. 445.
875 Korea's response to Panel question No. 80, para. 94.
876 Korea's first written submission, para. 440.
877 Korea's first written submission, para. 440.
878 Korea's first written submission, paras. 441 and 443.
879 Korea's first written submission, para. 444.
880 United States' first written submission, para. 415.

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companies benefitted from the subsidy programmes and that the FEZ programmes were used
by POSCO.881
The United States asserts that the USDOC did not have an opportunity to carefully examine
the use and the extent of the benefit received from the subsidy programmes at issue due to
POSCO's failure to accuratel y report certain necessary information. 882 According to the
United States, Article 12.7 of the SCM Agreement acknowledges that non-cooperation may lead to
an outcome that is less favourable for the non -cooperating party, and Korea d oes not point to
anything on the record demonstrat ing that the USDOC's determination was not accurate. 883 As to
the appropriateness and relevance of the selected rates for POSCO and DWI , the United States
observes that these rates reflected the actual experiences of companies in Korea and the real subsidy
practices of the GOK. 884 According to the United States, it is a "logical inference" that the
non-cooperating company has benefitted from the subsidy programmes at issue, at least as much
as the cooperating company in the same industry who received the higher benefit amount. 885 The
United States contends that nothing in Article 12.7 precludes an investigating authority to select
replacement rates originally determined in other investigations, especially when there are no subsidy
rates available from identical or similar programmes.886
Evaluation by the Panel
7.3.4.4.1 The USDOC's resort to facts available
Article 12.7 of the SCM Agreement provides that:
In cases in which any interested Member or interested party refuses access to, or
otherwise does not provide, necessary information within a reasonable period or
significantly impedes the investigation, preliminary and final determinations, affirmative
or negative, may be made on the basis of the facts available.
Under Article 12.7, an investigating authority may resort to facts available, inter alia, when
"any interested Member or interested party" refuses access to, or otherwise does not provide, the
"necessary" information. Article 12.7 of the SCM Agreement refers to "necessary" information and
not to "required" or "requested" information.887 As discussed above, "'necessary information' refers
to the specific information held by an interested Member or an interested party that is requested by
an investigating authority for the purpose of making determinations".888 Ultimately, the question of
whether certain information is "necessary" is to be assessed in light of the specific facts and
circumstances of a given case, including the specific determination that is sought to be made and
for which information is sought.
The use of the terms "refuses access to, or otherwise does not provide" in Article 12.7 implies
a certain response – or a lack thereof – by an "interested Member or interested party" to a request
for information by an investigating authority. In determining whether an evidentiary gap sufficient
to warrant recourse to the facts available exists, an investigating authority may thus limit itself to
the information provided by an "interested Member or interested party" in direct response(s) to the
authority's specific request. There may be other inf ormation elsewhere on the record that would
allow the filling of such a gap, but this does not require an investigating authority to examine
exhaustively the entire record before resorting to the use of facts available. Rather, an investigating
authority must examine all information provided by an "interested Member or interested party" in
direct response to its specific request before resorting to facts available, and, subsequently, it must

881 United States' first written submission, para. 415.
882 United States' first written submission, paras. 416-417.
883 United States' first written submission, para. 418.
884 United States' first written submission, para. 420.
885 United States' first written submission, para. 420.
886 United States' first written submission, para. 422.
887 The panel in Egypt – Steel Rebar drew this distinction in the context of Article 6.8 of the
Anti-Dumping Agreement. (Panel Report, Egypt – Steel Rebar, para. 7.151. See also Panel Report, US –
Supercalendered Paper, para. 7.174).
888 Panel Report, EC – Salmon (Norway), para. 7.343. (emphasis added)

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fully take into account any other information on the record as part of its selection of the reasonable
replacement for the missing "necessary" information.889
With these observations in mind , we address Korea 's claims with respect to the
USDOC's resort to facts available in relation to each of the three issues, namely, cross-owned affiliate
input suppliers, POSCO's facility in an FEZ, and DWI's loan data.
7.3.4.4.1.1 Cross-owned affiliate input suppliers
Korea advances two main arguments in support of its claim that the USDOC acted
inconsistently with Article 12.7 with respect to POSC O's reporting of certain inputs supplied by its
cross-owned affiliates. First, Korea argues that, in its questionnaire responses, POSCO did not report
certain inputs provided by its cross -owned affiliates as these were not "primarily dedicated" to the
production of the subject -merchandise and therefore did not fall within the scope of its reporting
obligation.890 Second, Korea argues that there was other information on the record that would have
allowed the USDOC to determine that POSCO sourced o nly trace amounts of inputs from its
cross-owned affiliates.891 Korea thus asserts that the USDOC erred in resorting to facts available as
no "necessary" information was missing from the record. The United States responds that although
Korea attempts to "sh ift blame" onto the USDOC, POSCO did not actually provide the requested
information within a reasonable period of time. 892 According to the United States, nothing on the
record indicates that the amounts of the inputs were "negligible" 893, and, in any event, only the
USDOC can determine whether the inputs were primarily dedicated to the production of the subject
merchandise.894
For Korea, POSCO 's response – that no affiliated companies provided inputs to the
production of subject merchandise895 – was "accurate" in light of the USDOC 's "practice" requiring
the disclosure only of affiliates that provide materials that are primarily dedicated to the production
of subject merchandise.896 We recall that, in its initial questionnaire, the USDOC requested POSCO
to provide "complete questionnaire" responses for those affiliates that were "cross-owned", inter
alia, in instances where the cross-owned company "supplies" an input to POSCO for "production of
the downstream product produced by the respondent".897 We note that the USDOC's query does not
limit the reporting of such instances based on volume, value, or any other criteria. Instead, the
USDOC's question is broadly worded and encompasses information concerning all instances where
inputs are supplied by a cross-owned affiliate.
Upon questioning by the Panel, Korea agreed with the United States that "it is the USDOC
that determines whether an input is 'primarily dedicated ' to the production of the downstream
product".898 The information requested by the USDOC was n ot limited to those inputs that are
primarily dedicated, but concerned all instances where inputs are supplied by a cross-owned affiliate.
Without such information, the USDOC could not have determined which inputs were "primarily
dedicated" to the production of the downstream product. In this sense, the information requested
by the USDOC was "necessary" for the purpose of making its determination.

889 See also para. 7.138 above.
890 Korea's first written submission, para. 351.
891 Korea's first written submission, para. 394; responses to Panel question No. 72(a), paras. 76-77,
No. 72(b), paras. 78-79, and No. 72(c), para. 80.
892 United States' first written submission, paras. 394-395.
893 United States' first written submission, para. 399.
894 United States' first written submission, para. 399.
895 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), p. 4.
896 Korea's second written submission, para. 149.
897 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), pp. 4-5.
898 Korea's response to Panel question No. 21. The relevant provision of US law, namely
19 CFR 351.525(b)(6), relates to the conduct of the Secretary of the USDOC, including in relation to the
attribution of a subsidy to a product in the case of cross-owned input suppliers. Subsection (iv) of that
provision states that "[i]f there is cross-ownership between an input supplier and a downstream producer, and
production of the input product is primarily dedicated to production of the downstream product, the Secretary
will attribute subsidies received by the input producer to the combined sales of the input and downstream
products produced by both corporations (excluding the sales between the two corporations)".
(19 CFR 351.525, (Exhibit KOR-80), Section (b)(6) (emphasis added)). The provision does not concern an
interested party's reporting obligation; nor does it limit this obligation to only those inputs that an interested
party considers are primarily dedicated to the production of the downstream product.

BCI deleted, as indicated [[***]]

Korea adds that interested parties are nonetheless "entitled to rely on prior proceedings and
expression of re levant USDOC practice when responding to such questions". 899 In its response to
the USDOC 's initial questionnaire above, POSCO stated that " [t]here were no cross -owned
companies located in Korea that provided inputs to POSCO's production of subject merchandise".900
POSCO went on to explain that:
[I]t has affiliated companies located outside Korea that supplied a small volume of
inputs of [[***]] during the POI. These affiliated companies were : [[***]]. However,
as non-Korean companies, they are not subject to this investigation, which involves
only subsidies provided by the Government of Korea.901
POSCO thus stated that it did "not believe it [had] any affiliates that [met] any of the
four cross-ownership criteria as defined above by the [USDOC]", no r that "POSCO or any of its
affiliates [were] cross-owned by a third party".902
We note that, as part of its response, POSCO explained the basis for why it did not report
inputs supplied by its non -Korean cross-owned affiliates. However, POSCO did not offe r a similar
explanation that it was not reporting certain inputs supplied by its Korean cross -owned affiliates
because they were, in its view, not primarily dedicated to the production of the
subject-merchandise.903 This reason was provided by POSCO only at verification904, after the USDOC
found that certain inputs supplied by POSCO's cross-owned affiliates were used, or "could be" used,
in the production of CRS. By not explaining the basis for not reporting certain inputs supplied by its
Korean cross-owned affiliates as part of its initial questionnaire response, POSCO created a situation
whereby the USDOC could not explore this issue until "the very last juncture o f the investigation",
as it was precluded from seeking any further clarifications and verifying the information that was
belatedly provided. 905 For these reasons, we disagree with Korea that the "record evidence
substantiates POSCO's belief that it did not need to report such inputs, even from its cross -owned
affiliates, when the inputs were clearly not 'primarily dedicated ' to the production of CR[S]
products".906 Any such "belief" that POSCO may have had at the time of its response was expressed
only with r espect to "affiliated companies located outside Korea", for whom POSCO provided an
explanation.
Korea also argues that, in any event, "necessary" information was not "missing" because
"the value of the transactions with these cross-owned affiliates and the value of the transactions in
relation to the cross -owned affiliates ' total sales were part of POSCO 's consolidated financial
statements", that were on "the record from POSCO 's earliest responses" .907 However, as the
United States points out, POSCO's consolidated financial statements do "not contain any information
about whether each affiliate provided POSCO with inputs".908 Indeed, Korea acknowledges that any
information concerning the "total value of inputs sourced from each affiliate" was submitted only at
verification.909
In any event, we do not consider this to be an issue relating to the USDOC 's resort to facts
available. Korea does not argue, and we do not find, that the "other information" that Korea refers
to – namely, POSCO's consolidated financial statements – was provided in direct response to the
USDOC's query concerning POSCO's cross-owned affiliate input suppliers. In these circumstances, it
was reasonable for the USDOC to limit itself to the information provided by POSCO in direct response
to the USDOC 's specific request in determining whether an evidentiary gap sufficient to warrant

899 Korea's response to Panel question No. 21.
900 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), p. 5.
901 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), p. 5. (emphasis added)
902 CVD CRS affiliated companies response, (Exhibit KOR-73 (BCI)), p. 5.
903 United States' response to Panel question No. 72(d), para. 101.
904 The USDOC issued a supplemental questionnaire on 5 November 2015, wherein it asked POSCO to
confirm that they had provided responses for all cross-owned companies that fell within 19 CFR 351.525(b)(6).
POSCO responded that it believed that it had provided responses for all cross-owned companies that fell within
19 CFR 351.525(b). (CVD CRS second supplemental questionnaire response, (Exhibit KOR-74 (BCI)), p. 1).
905 United States' first written submission, paras. 395-397; second written submission, para. 104.
906 Korea's first written submission, para. 352.
907 See, e.g. Korea's second written submission, para. 154. See also Korea's response to Panel
question No. 72.
908 United States' comments on Korea's response to Panel question No. 72(a).
909 Korea's response to Panel question No. 72.

BCI deleted, as indicated [[***]]

recourse to the facts availa ble existed.910 The extent to which there was other information on the
record that would have allowed the USDOC to deduce that the inputs at issue were not primarily
dedicated to the production of the downstream product relates properly to the USDOC's selection of
the replacement facts, which we review below.911
Thus, based on the scope of the USDOC 's request, the nature of the determination to be
made, as well as the text of POSCO 's response, we find that the USDOC did not err in finding that
POSCO "refuse[d] access to", or "otherwise d[id] not provide", "necessary" information within the
meaning of Article 12.7 of the SCM Agreement. We therefore find that Korea has not established
that the USDOC 's resort to facts available with respect to information concer ning cross -owned
affiliate input-suppliers is inconsistent with Article 12.7 of the SCM Agreement.
7.3.4.4.1.2 POSCO facility in an FEZ
Korea argues that, throughout the investigation, POSCO stated that it did not use or benefit
from any FEZ programmes.912 Korea submits that this response remains accurate, and is
independent of whether or not POSCO had a facility located in the FEZ. Korea contends that the
non-receipt of any subsidies under the FEZ programme was confirmed by the GOK in its
questionnaire response and that, as a result, there was no "necessary" information missing so as to
justify the USDOC's resort to facts available.913 Korea argues that investigating authorities cannot
impose unreasonable demands on foreign producers. 914 According to Korea, t he
USDOC's information request from the USDOC was "unreasonable".915
We note that the parties agree that POSCO actually did, in fact, have a facility located in the
Incheon FEZ.916 The issue before us is whether an "interested Member or interested party refuse[d]
access to, or otherwise d[id] not provide, necessary information" for purposes of Article 12.7 of the
SCM Agreement. Our examination of this issue must be carried out in the specific facts and
circumstances of this case. In its initial questionnaire, the USDOC posed several "program specific
questions" to POSCO. For all these questions, the USDOC offered the following general instructions:
For each program, if your company (including cross -owned affiliates required to
respond, as well as all trading companies ) did not apply for, use, or benefit from that
program during the POI, you must clearly state so. Otherwise, please answer the
questions listed. To determine the information which must be reported under each
program, please see the instructions for each program in this section of the
questionnaire and in the referenced appendices.917
Following these general instructions, the USDOC posed several programme specific questions. With
respect to "subsidies to c ompanies located in certain economic zones" the USDOC 's initial
questionnaire identified certain programmes and offered the following instructions:
1. Tax Reductions and Exemptions in Free Economic Zones
2. Exemptions and Reductions of Lease Fees in Free Economic Zones
3. Grants and Financial Support in Free Economic Zones
4. Acquisition and Property Tax Benefits to Companies Located in Industrial Complexes
Please respond to the Standard Questions Appendix for each program listed above.918

910 See para. 7.270 above.
911 See paras. 7.303-7.313 below.
912 Korea's second written submission, para. 138.
913 Korea's second written submission, para. 138.
914 Korea's first written submission, para. 412 (referring to Appellate Body Report, US – Hot-Rolled
Steel, paras. 100-101).
915 Korea's first written submission, para. 413.
916 Korea's response to Panel question No. 25, pp. 25-26.
917 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 13.
918 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 52. (emphasis original)

BCI deleted, as indicated [[***]]

Similar to its questionnaire to POSCO, in its questionnaire to GOK, the USDOC posed several
"program-specific questions" and offered the following general instructions:
For each program, if no companies under investigation or "cross-owned" companies as
defined in Section III applied for, used, or benefited from that program during the POI,
the GOK must so state and provide a brief explanation of the program and a detailed
description of the records kept on that program. Otherwise, please answer all of the
questions listed, except as directed below.919
POSCO responded that it had "no facilities located in [an FEZ] and thus was not eligible for
and did not receive any tax reductions, exemptions, grants or financial support under any of the
three programs listed in the [USDOC]'s question".920 The GOK responded that:
During the investigation period, none of the respondents received tax reductions or
exemptions, lease-fee reductions or exemptions, or grants or financial support due to
their location in an FEZ.921
During verification, the USDOC subsequently discovered that a POSCO facility, namely, the
POSCO Global R&D Centr e, "was listed on the official Incheon FEZ government website as being
located in the Incheon FEZ".922 The USDOC asked for further information relating to the purpose and
location of this facility. POSCO officials presented a map printed from a Korean website that had a
"hand-drawn border" surrounding what they claimed to be the FEZ.923 The USDOC, however, found
that the hand -drawn border did not conform to t he map on the official government website, and
therefore declined to accept the map presented by POSCO officials. The USDOC officials then offered
to visit the site of the facility immediately in order to clarify its location and confirm POSCO's non-use
of the FEZ programme. According to the USDOC's verification report, "POSCO officials declined this
suggestion".924 In its case brief, POSCO noted that this request to visit the FEZ facility was made a
day after the conclusion of the POSCO verification and on the last day of the DWI verification, without
any prior notice, and that "[t]he POSCO representative present did not think this would be feasible
or accomplish any purpose".925
We note that the USDOC's questionnaire instructed POSCO to "clearly state" that it "did not
apply for, use, or benefit from that program [i.e. the relevant FEZ programmes] during the POI".926
Similarly, the determination made by the USDOC was that Hyundai Steel and POSCO received this
subsidy during the POI, and that [they] benefited f rom the subsidy". 927 Thus, the determination
made by the USDOC was not focused on whether POSCO had certain facilities located in an FEZ, but
instead concerned the issue of whether POSCO received subsidies under the relevant FEZ
programmes identified by the USDOC.
Information relating to the location of POSCO 's facilities in an FEZ, though not requested
specifically by the USDOC, was provided by POSCO in support of its assertion that that it did not
receive any subsidies under any of the t hree programmes identified by the USDOC. 928 The logic
underlying POSCO's response to the USDOC 's query and the USDOC 's subsequent discovery at
verification of a POSCO facility in the FEZ could have called into question the accuracy of
POSCO's reporting. However, we note that the GOK's response to the same query by the USDOC did

919 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 3. (emphasis added)
920 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 52.
921 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 108.
922 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 72-73. This information was
discovered by the USDOC when it had already completed the verification at POSCO and was undertaking the
verification exercise at DWI's headquarters. The USDOC discovered the information on the official website of
the Incheon FEZ during verification of DWI's response that it was not located in the Songdo International City
Zone.
923 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 73.
924 CVD CRS verification report, (Exhibit KOR-75 (BCI)), pp. 38-39. See also CVD CRS issues and
decision memorandum, (Exhibit KOR-77), pp. 72-73.
925 CVD CRS POSCO and DWI case brief, (Exhibit KOR-83 (BCI)), p. 6.
926 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 13.
927 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 35.
928 In its initial questionnaire response, POSCO stated that it "has no facilities located in a free economic
zone ('FEZ') and thus was not eligible for and did not receive any tax reductions, exemptions, grants or
financial support under any of the three programs listed in the [USDOC]'s question". (CVD CRS initial
questionnaire response, (Exhibit KOR-70 (BCI)), pp. 52-53 (emphasis added)).

BCI deleted, as indicated [[***]]

not concern whether POSCO maintained a facility in an FEZ, but instead clearly stated that "[d]uring
the investigation period, none of the respondents received tax reduc tions or exemptions, lease-fee
reductions or exemptions, or grants or financial support due to their location in an FEZ".929
The United States explains that the GOK 's response was not used by the USDOC because
the "statement is ambiguous [as] it is not clear what Korea means by the 'period of investigation'".930
The USDOC found that it was "unable to use the GOK 's response to fill this 'gap' in the record"
because "the GOK's response does not clarify if the 'investigation period' it refers to is the POI or
the entire 15 -year AUL" .931 In this regard, we note that the USDOC provided the following
instructions in its questionnaire to the GOK:
Respondents should be aware that the [USDOC] allocates the benefits received from
certain types of subsidies over time (see 19 CFR 351.524). As noted above, the AUL for
this investigation is 15 years. Thus, in order to appropriately measure any allocated
subsidies, the [USDOC] will use a 15-year AUL in this investigation. Although the POI is
a recent period, we are investiga ting alleged subsidies received over a time period
corresponding to the AUL.932
In its questionnaires to both POSCO and the GOK, the USDOC sought to confirm the non-use
of these programmes during the POI. In its questionnaire to POSCO, the USDOC requested P OSCO
to "clearly state" that it "did not apply for, use, or benefit from that program during the POI ".933
Similarly, in its questionnaire to the GOK, the USDOC required the GOK to state "[f]or each program,
if no companies under investigation or 'cross-owned' companies as defined in Section III applied for,
used, or benefited from that program during the POI ".934 The GOK's response was limited to the
"investigation period" and was therefore consistent with the scope of the USDOC 's query.935
In response to the USDOC's question about the application of a 15 -year AUL period, the GOK
separately responded that "[t]he GOK does not have any particular view on the
[USDOC]'s application of the 15-year AUL in this CVD investigation".936
Thus, the GOK responded to the USDO C's specific queries directed at the use of these
programmes "during the POI ". The GOK also did not express "any particular view" on the
USDOC's application of the 15 -year AUL in this investigation. In these circumstances, we do not
agree with the United States that the "Government of Korea did not clarify whether the investigation
period that it referred to is the year long [POI] or the entire 15-year average useful life".937 Given
the GOK's responses, to the extent that the USDOC continued to consider its response "ambiguous",
it should have sought further clarifications from the GOK. An unbiased and objective investigating
authority would not have remained passive in the face of such an alleged ambiguity in the reporting
basis.938 Based on the exchange between the USDOC and the GOK, the USDOC's conclusion that the
GOK's response was "ambiguous" is, in our view, not one that an unbiased and objective
investigating authority would have reached.
The United States argues that the USDOC determined that the GOK 's response was
"ambiguous regarding whether the respondents benefitted during the [POI] from subsidies received
prior to the [POI]". As discussed above, the USDOC's ultimate determination was made with respect
to the POI, and found that POSCO both "received this subsidy during the POI, and that it benefited
from the subsidy".939 Thus, the USDOC's ultimate determination was not limited to whether POSCO
benefitted from subsidies received prior to the POI; instead the USDOC clearly found that POSCO

929 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 108.
930 United States' responses to Panel question No. 26, para. 113; and No. 75, paras. 111-113.
931 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 74.
932 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 3.
933 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 13.
934 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 3.
935 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 108. (emphasis added)
936 GOK initial questionnaire, (Exhibit KOR-84 (BCI)), p. 2.
937 United States' response to Panel question No. 75, para. 112.
938 Past panels and the Appellate Body have previously found, albeit in different a context, that
"authorities charged with conducting an inquiry or a study – to use the treaty language, an 'investigation' –
'must actively seek out pertinent information' and may not remain 'passive in the face of possible
shortcomings in the evidence submitted'". (Panel Report, China – Broiler Products, para. 7.261 (referring to
Appellate Body Report, US – Wheat Gluten, paras. 53 and 55)). (fns omitted)
939 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 35. (emphasis added)

BCI deleted, as indicated [[***]]

"received this subsidy during the POI". The USDOC 's determination does not explain why the
GOK's response was ambiguous as to the receipt of subsidies during the POI . Even if the USDOC
had a reasonable basis to consider the GOK's response to be ambiguous, any such ambiguity could
only concern subsidies that were received in the past and whether they continued to benefit POSCO
during the POI, and not whether any subsidies were received during the POI – as ultimately found
by the USDOC. Thus, we find that the USDOC was not justified in disregarding the information
provided by the GOK – an interested Member – on the basis of a purported ambiguity relating to the
AUL when the response was clear as to the non-receipt of subsidies during the POI, which was also
the focus of the USDOC's ultimate determination.
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with Article 12.7 of the SCM Agreement in resorting to facts available with respect to information
concerning POSCO's facility in an FEZ because it erroneously disregarded the GOK's response on this
issue.
7.3.4.4.1.3 DWI loan data
Korea asserts that the USDOC acted inconsistently with Article 12.7 of the SCM Agreement
by refusing to accept certain allegedly "minor corrections" relating to the use of the KORES
programme that were submitted voluntarily by DWI at verification. In addition, Korea challenges the
USDOC's decision to not use information that was already on the record, despite DWI 's active
participation in the investigation.
We recall that in response to the USDOC 's initial questionnaire section concerning "energy
and resource subsidies", DWI identified certain "outstanding long-term borrowings" from the KORES
and the KNOC during the POI.940 DWI explained as follows:
DWI's KNOC loans are related to investments in the exploration and production of
natural gas in [[***]]. They are thus tied to non-subject merchandise and unrelated to
DWI's exports to the United States of subject merchandise produced by POSCO.
DWI's KORES loans are related to investments in [[***]]. As with the KORES loans,
these loans are tied to non-subject merchandise and are unrelated to DWI's exports to
the United Sates of subject merchandise produced by POSCO. Therefore, as it did in
NOES from Korea, the [USDOC] should determine that KORES and KNOC loans that are
not tied to subject merchandise are not countervailable.941
Subsequently, at the start of the verification, DWI presented "'two new loans ' under the
[KORES] program, which were not previously report ed".942 In presenting its minor correction, DWI
explained as follows:
While preparing for the verification [DWI] found a clerical mistake in reporting KORES
loans by missing two loans as follows.
a. Loan relating to [[***]]
b. Loan relating to [[***]][.]943
DWI also submitted a chart which listed [[***]] different "[l]oan [a]greement[s]" (by date). 944
[[***]] loan Agreements were listed as having the "purpose" of [[***]], and [[***]] had their stated
purpose as [[***]].945

940 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 34.
941 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), p. 34. (emphasis original)
The reference to KORES loans in the penultimate sentence appears to be a typographical error and should
instead refer to KNOC loans.
942 CVD CRS verification report, (Exhibit KOR-75 (BCI)), p. 3.
943 CVD CRS DWI verification minor correction, (Exhibit KOR-86 (BCI)), attachment 1.
944 CVD CRS verification report, (Exhibit KOR-75 (BCI)), p. 3; CVD CRS DWI verification minor
correction, (Exhibit KOR-86 (BCI)), attachment A.
945 CVD CRS DWI verification minor correction, (Exhibit KOR-86 (BCI)), attachment A.

BCI deleted, as indicated [[***]]

In its verification report, the USDOC explained that:
In the loan chart presented to [USDOC] officials, two loans were circled, indicating the
circled loans were being submitted as minor corrections. Company officia ls explained
that when DWI reported the KORES loans in its initial questionnaire response,
two [[***]] were omitted due to a misunderstanding that only [[***]] loans were
required to be reported. Upon reviewing the loan chart, we noted that there were
[[***]] loans submitted as minor corrections. We did not explicitly state that we would
accept the submission as a minor correction at the time of verification. As noted above
and in "Rejection of DWI Minor Corrections," we rejected this minor correction
submission.946
In its final determination, the USDOC resorted to the use of facts available on the basis that
"DWI withheld necessary information requested by the [USDOC] regarding it use of [the KORES]
program and that as a result, necessary information is miss ing on the record" .947 The USDOC
explained that:
At verification, DWI presented a list of loans that it characterized as a minor
correction, claiming that it received "two loans," under the KORES and KNOC lending
programs. … Due to the magnitude of change in the reported lending under the specified
program, we determined that the submission did not constitute a minor correction, and
instead, consisted of new factual information. As such, we rejected the submission from
the record. Therefore, because the exte nsive nature of the corrections presented at
verification by DWI to its loans received under this program, we were not able to fully
verify the use of this program.948
The United States argues that, with the additional loans, the total value of DWI 's loans
increased from [[***]] loans and [[***]] loans – an increase of more than [[***]]% and [[***]]%,
respectively.949
The determination made by the USDOC was whether POSCO received a benef it under the
programmes950, and information was requested from POSCO and DWI for purposes of making this
determination. In its initial questionnaire response, POSCO and DWI explained that, "[f]or projects
related to the development of strategic mineral reso urces, KORES lends the funds to the company
for foreign resources development. For projects related to petroleum and natural gas, KNOC lends
the funds to the company for foreign resources development" .951 In relation to the loans that were
reported before verification, POSCO and DWI both submitted that the loans were tied to non-subject
merchandise and unrelated to the exports of CRS to the United States.952 Thus, evidence existed on
the record suggesting that the purpose for which the subsidies were given wa s not related to the
production or export of the subject merchandise. 953 This evidence was provided in direct response
to the USDOC 's query, which in turn was made in light of the determination it sought to make,
i.e. whether a benefit was received.
Korea considers it evident from the title of the loans that they were related to "exploration"
and therefore unrelated to the "production" of CRS. 954 According to Korea, POSCO provided an
explanation of its manufacturing pro cess in its initial questionnaire response, and this information
was sufficient for the USDOC to determine that exploration of [[***]] and [[***]] were unrelated
to the production of CRS, because the loans were for exploration, not production, and for good s

946 CVD CRS verification report, (Exhibit KOR-75 (BCI)), p. 3 (fn omitted). See also Rejection of
POSCO's resubmission, (Exhibit KOR-95).
947 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 76.
948 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 76. (fns omitted; emphasis added)
949 United States' second written submission, para. 126.
950 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 19-20.
951 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), exhibit F-1, p. 1.
952 CVD CRS initial questionnaire response, (Exhibit KOR-70 (BCI)), pp. 27-28 and 33-34.
953 The USDOC found sufficient information on the record to determine that KNOC loans were tied to
non-subject merchandise, but did not find that KORES loans were tied to non-subject merchandise. (CVD CRS
issues and decision memorandum, (Exhibit KOR-77), pp. 23-24; United States' response to Panel question
No. 76, para. 114. See also HRS Sections B-C questionnaire response, (Exhibit KOR-56 (BCI)), pp. 23-24).
954 Korea's response to Panel question No. 28(a). See also Korea's second written submission,

BCI deleted, as indicated [[***]]

unrelated to the production of CRS.955 POSCO's initial questionnaire response also stated that DWI
was primarily a "trading company" with no production operations related to the subject merchandise.
The information provided by POSCO pertaining to the use of these programmes – in addition
to POSCO 's express statements that the KORES and KNOC loans were tied to non -subject
merchandise and were therefore not countervailable – was relevant to the determination made by
the USDOC that POSCO received a measurabl e benefit from the KORES and KNOC loan
programmes.956 Were it to be established that the loans programmes were, in fact, unrelated to the
production of CRS, any changes in the magnitude of the loan amounts would be irrelevant to the
inquiry of whether POSCO benefitted from these loans. The USDOC, however, did not make any
attempt to determine whether, in ligh t of POSCO 's statements and the supporting evidence, the
KORES loan programme was, in fact, tied to non -subject merchandise.957 The USDOC did not take
into account this evidence relating to the use of these loan programmes. Nor did the USDOC provide
a reasoned and adequate explanation as to why the alleged changes in the magnitude of the loan
amounts would preclude reliance upon evidence concerning the use and purpose of the loan
programmes. In light of the record evidence suggesting that the programmes could be unrelated to
the production of CRS, we consider that an unbiased and objective investigating authority would
have at least sought to ascertain certain basic aspects of the information properly before it – such
as the use of the programmes – notwithstanding the timing of subsequent submissions or the
magnitude of change in reported lending. The USDOC was not justified in finding that the loan data
pertaining to the additional loans reported at verification by DWI amounted to missing "necessary"
information because it did not consider or explain why the other information on the record did not
establish that these loans were unrelated to the subject merchandise.
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with Article 12.7 of the SCM Agreement in resorting to facts available with respect to information
concerning DWI loan data as it did not take into account information that was submitted as part of
POSCO's and DWI's direct responses before concluding that DWI had failed to provide "necessary"
information.
7.3.4.4.2 The USDOC's selection of the replacement facts
We turn now to consider Korea's claims that the USDOC acted inconsistently with Article 12.7
in its selection of the replacement facts. Like Article 6.8 of the Anti-Dumping Agreement, Article 12.7
of the SCM Agreement imposes an obligation on investigating authorities to select those facts that
reasonably replace the missing "necessary" information. 958 In selecting reasonable replacements,
an investigating authority must take into account all facts that are properly before it. While an
investigating authority may take into account the procedural circumstances surrounding
non-cooperation in its selection of the replacement facts, an authority is not permitted to select facts
in order to punish non-cooperation.959
7.3.4.4.2.1 Cross-owned affiliate input suppliers
Korea argues that there was sufficient information on the record – from
POSCO's questionnaire responses and from verification – to demonstrate that the inputs at issue
were not "primarily dedicated" to the production of the subject-merchandise.960 According to Korea,
following its finding that POSCO failed to provide "necessary" information, the USDOC erroneously
inferred that the inputs produced by the four cross -owned affiliates at issue were "primarily
dedicated" to the production of the downstream product.
Korea challenges the USDOC's conclusion and identifies two pieces of informa tion provided
by POSCO that would have allowed the USDOC to determine that the inputs at issue were not

955 Korea's response to Panel question No. 77, paras. 85-86.
956 CVD CRS issues and decision memorandum, (Exhibit KOR-77), pp. 19-20.
957 In its preliminary determination, the USDOC made such a finding for only the KNOC programme, that
the "information on the record sufficiently demonstrates that the loans from KNOC to POSCO are tied to
non-subject merchandise". (CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 24).
958 See para. 7.41 above.
959 See para. 7.41 above.
960 Korea's first written submission, para. 397. Korea presents this argument as part of its claim that the
conditions to resort to facts available were not met. However, in our view, this argument pertains to the
USDOC's selection of replacement facts and as such, we address it here.

BCI deleted, as indicated [[***]]

primarily dedicated to the production of CRS. First, Korea points out that the four affiliates at issue
were all identified in POSCO 's affiliation chart filed at the outset of the investigation. 961 Korea also
submits that "the value of POSCO 's transactions … in relation to the cross -owned affiliates' sales
were part of POSCO 's consolidated financial statements", that were on the record from
POSCO's earliest responses.962 Second, Korea submits that the information submitted by POSCO
during verification also contained a list of all the raw materials that it used for the production of CRS,
including the suppliers for each of these inputs, and established that only "insignificant" amounts of
inputs were provided by the four affiliates at issue. 963 According to Korea, this information, when
read together, indicated that the "percentage of the inputs provided to POSCO as a percentage of
the affiliates' total sales r anged from [[***]] to [[***]]% or between [[***]] to [[***]]% when
measured against POSCO's total cost of production for CR[S] products".964
Concerning the financial statements, the United States explains that "POSCO's consolidated
financial statements, which [the] USDOC examined in full, contain general information pertaining to
cross-owned affiliates".965 According to the United States, these "financial statements do not provide
any information on whether or to what ext ent such cross -owned affiliates provided inputs that
POSCO used in the production of subject merchandise". 966 As to the information provided at
verification, the United States submits that the USDOC took into account that information for
verifying the accur acy of POSCO 's questionnaire response insofar as it was "relevant to that
inquiry".967
We recall that, upon discovering at verification that, contrary to its initial responses, POSCO
received from its cross -owned affiliate input suppliers "inputs that 'coul d' be used to produce
downstream products" 968, the USDOC determined that "POSCO withheld requested necessary
information during the course of the investigation, impeded the proceeding, and through its actions
prevented the [USDOC] from being able to verify that information". On these bases, the USDOC
found that the use of "facts available" was "warranted in determining the existence of cross-owned
affiliates that provided inputs used in the production of subject merchandise".969
Noting that POSCO "failed to identify or provide necessary information as to its respective
cross-owned companies" despite "repeated requests", the USDOC found that POSCO did not act to
the "best of its ability" and that an " adverse inference that POSCO and its cross -owned input
suppliers received certain subsidies, benefitted from those subsidies, and that those subsidies were
specific, is warranted in this case".970 In drawing this adverse inference, the USDOC explained that:
Because POSCO failed to report the necessary informat ion and only after discovery at
verification did it report on the last day that some of the inputs provided by the
aforementioned affiliated companies were, in fact, used in the production of the subject
merchandise, the [USDOC] concludes that inputs produ ced by POSCO Chemtech,
POSCO P&S, POSCO MTech, and POS-HiMetal are primarily dedicated to the production
of the downstream product, within the meaning of 19 CFR 351.525(b)(6)(iv).971
Following its finding that POSCO failed to provide the "necessary" inform ation, the USDOC
thus immediately inferred that the inputs produced by the four cross-owned affiliates at issue were

961 Korea's first written submission, para. 394 (referring to CVD CRS affiliated companies response,
(Exhibit KOR-73 (BCI)), exhibit 1).
962 Korea's first written submission, para. 394 (referring to CVD CRS initial questionnaire response,
(Exhibit KOR-70 (BCI)), exhibit 20).
963 Korea's first written submission, paras. 348 and 356 (referring to CVD CRS verification report,
(Exhibit KOR-75 (BCI)), p. 11; and POSCO verification exhibit PVE-3, (Exhibit KOR-76 (BCI))).
964 Korea's first written submission, para. 352; responses to Panel question No. 72(a), paras. 76-77,
No. 72(b), paras. 78-79, and No. 72(c), para. 80. Korea explains that these figures can be derived from
"[t]he 2014 audited consolidated financial statement lists POSCO's total cost-of-sales on the income statement,
and at verification POSCO submitted the total value of inputs sourced from each affiliate". (Ibid.).
965 United States' response to Panel question No. 22, para. 100 (referring to CVD CRS issues and
decision memorandum, (Exhibit KOR-77), p. 15). (emphasis added)
966 United States' responses to Panel question No. 22, para. 100, and No. 72(d), paras. 97-105.
967 United States' response to Panel question No. 74(b), para. 109. (emphasis added)
968 United States' response to Panel question No. 74(a), para. 107 (referring to CVD CRS issues and
decision memorandum, (Exhibit KOR-77), pp. 65-67).
969 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 10.
970 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 10. (emphasis added)
971 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 69. (fn omitted)

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primarily dedicated to the production of the downstream product. The USDOC provided no further
explanation as to how its finding that the i nputs supplied by these cross -owned affiliates were
primarily dedicated to the production of the downstream product was based on positive evidence on
the record.
The United States' assertion that the USDOC "examined in full" the consolidated financial
statements submitted by POSCO is not supported by record evidence. The part of the final
determination that the United States cites simply indicates that the USDOC applied an "AFA rate" to
POSCO for "[v]arious grants contained in Financial Statements". 972 The USDOC's analysis does not
explain the examination it undertook of POSCO's financial statements, or how this examination was
with a view to ascertaining whether the value of POSCO's transactions in relation to the cross-owned
affiliates' sales were part of POSCO's financial statements, as alleged by Korea.973 Moreover, Korea
does not rely upon the financial statements in isolation, but uses them together with the information
supplied by POSCO during verification.974
With respect to the information provided at verification, we note the United States' argument
that "a document listing input suppliers (including affiliated input suppliers ) would be relevant in
verifying POSCO's statement", but the "quantity of inputs purchased, would not be relevant to that
inquiry".975 Be that as it may, we recall that the determination made by the USDOC was that these
inputs were "primarily dedicated" to the production of the downstream product. Article 12.7 allows
an investigating authority to "fill in the gaps" by using the "facts" that are "available" to it, but this
does not serve as a license to base determinations solely upon "non -factual assumptions or
speculation".976 Rather, an investigating authority continues to be under an obligation to take into
account al l facts that are properly before it in order to make determinations on the basis of
reasonable replacements for the missing information. In the circumstances of this case, the USDOC
ought to have taken into account the input purchase data provided at verification, particularly when
the data was contained in the same document listing the input suppliers – information which the
USDOC took into account for verification purposes – in order to select reasonable replacements for
the missing "necessary" information.
The USDOC explained that it was not able to "verify the validity of the input amounts" due
to the "untimely nature and large amounts of data required to fully establish the credibility of the
submission".977 However, the fact that the data provided at v erification may have been "untimely"
and in "large amounts" 978, and therefore it may have been "inconvenient or impractical" for the
USDOC to take further steps to confirm the basic nature of the data, cannot outweigh the due
process rights that are enjoyed by interested parties throughout the course of an investigation. 979
The United States argues that the information concerning the value of inputs provided by POSCO is
"not relevant to [the USDOC's] fact intensive primarily dedicated analysis because the ana lysis
considers whether an input is primarily dedicated not the value that is dedicated".980 This, however,
is exactly what the USDOC failed to do, i.e. to examine whether the information provided by POSCO
was relevant for purposes of its "primarily dedicated analysis".
In sum, the determination as to whether inputs were primarily dedicated ought to have been
made by the USDOC in light of all the facts that were properly available to it. It is clear that these
facts included the information relating to cross -owned affiliates and their sales in
POSCO's consolidated financial statements submitted as a questionnaire response, as well as the
information provided at verification. The USDOC did not consider whether the information that was

972 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 15.
973 The consolidated financial statements contain information on "related party transactions" with
cross-owned affiliates for 2013-2014 as well as the total sales figures for them. (CVD CRS initial questionnaire
response, (Exhibit KOR-70 (BCI)), exhibit 20, pp. 110-111).
974 Korea's responses to Panel question No. 72(a), paras. 76-77, No. 72(b), paras. 78-79, and
No. 72(c), para. 80.
975 United States' response to Panel question No. 74(b), paras. 108-109. (emphasis added)
976 Appellate Body Reports, US – Carbon Steel (India), paras. 4.417 and 4.419; Mexico – Anti-Dumping
Measures on Rice, para. 294; US – Countervailing Measures (China), para. 4.178; and US – Anti-Dumping
Methodologies (China), para. 5.172.
977 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 67.
978 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 67.
979 Panel Report, US – Supercalendered Paper, para. 7.177. See also Appellate Body Reports Mexico –
Anti-Dumping Measures on Rice, para. 292; and EC – Tube or Pipe Fittings, para. 138 (quoting
Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 136).
980 United States' comments on Korea's response to Panel question No. 72(a).

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before it indicated that the inputs at issue were primarily dedicated for the production of the
downstream product. Upon discovering at verification that, contrary to POSCO 's questionnaire
response, cross-owned affiliates supplied inputs that could have been used for the production of the
downstream product, the USDOC simply assumed – impermissibly, in our view – that the inputs
were primarily dedicated for the production of the downstream product without taking into account
the information that was properly before it.981
Accordingly, in the circumstances of this case , we find that, in selecting the replacement
facts, the USDOC did not take into account all the information that was properly before it and made
an assumption unsupported by positive evidence that the inputs supplied by the cross -owned
affiliates discovered at verification were "primarily dedicated" to the production of the downstream
product. Because the USDOC erred in finding that the inputs supplied by the cross -owned affiliates
were "primarily dedicated" to the produc tion of the CRS products at issue, it also erred in finding
that the relevant subsidies received by these affiliates were countervailable and attributable to
POSCO. We therefore find that the USDOC acted inconsistently with Article 12.7 of the
SCM Agreement in its selection of the replacement facts with respect to cross-owned affiliate input
suppliers.
7.3.4.4.2.2 POSCO facility in an FEZ
We have already found that the USDOC erred in resorting to facts available with respect to
POSCO's facility in an FEZ. In these circumstances, we do not consider that making further findings
on Korea's claims concerning the USDOC 's selection of the replacement facts on the basis of the
record used for the USDOC's WTO-inconsistent findings would assist in providing a positive solution
to the dispute before us.982
7.3.4.4.2.3 DWI loan data
We have already found that the USDOC erred in resorting to facts available with respect to
the DWI loan data. In these circumstances, we do not consider that making further findings on
Korea's claims concerning the USDOC's selection of the replacement facts on the basis of the record
used for the USDOC's WTO-inconsistent findings would assist in providing a positive solution to the
dispute before us.983
Korea's claims under Articles 10, 19.4, and 32.1 of the SCM Agreement
Korea further claims that, as a result of the USDOC 's use of facts available inconsistently
with Article 12.7 of the SCM Agreement, the United States imposed countervailing duties "in excess
of the amount of the subsidy found to exi st, in violation of Article 19.4", as well as in violation of
Articles 10 and 32.1 of the SCM Agreement.984 According to Korea, because the margin of
countervailing duty was determined based on facts available in a manner inconsistent with
Article 12.7, "th e countervailing duty levied automatically violated Article 19.4 of the
SCM Agreement".985 Moreover, Korea asserts that the violation of Article 12.7 also "automatically
leads" to a violation of Articles 10 and 32.1 of the SCM Agreement, as "this USDOC investigation
and the measure taken were not in accordance with the SCM Agreement".986
The United States responds that Korea 's claims under Articles 10, 19.4, and 32.1 are
"entirely consequential" and "Korea offers no argument or evidence to support any in dependent
breach of those provisions". 987 According to the United States, were the Panel to uphold
Korea's claims under Article 12.7, "there would be no basis to decide Korea 's consequential
claims".988 First, the United States "does not concede that such breaches are 'automatic'".989 Second,

981 CVD CRS issues and decision memorandum, (Exhibit KOR-77), p. 67. (emphasis added)
982 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on
983 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on
984 Korea's first written submission, paras. 455-456.
985 Korea's first written submission, paras. 451-452.
986 Korea's first written submission, para. 453.
987 United States' first written submission, para. 425.
988 United States' first written submission, para. 427.
989 United States' first written submission, para. 427.

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the United States submits that deciding such claims would be serve "no useful purpose" and would
provide no "additional guidance that would be useful regarding implementation of any
recommendations adopted by the DSB".990
Korea does not present any independent bases for the alleged breaches of Articles 10, 19.4,
and 32.1 of the SCM Agreement; instead, its claims under these provisions are dependent entirely
upon a finding that the United States acted inconsistently with Article 12.7 of the SCM Agreement.991
In these circumstances – and having already found that the United States acted inconsistently with
Article 12.7 of the SCM Agreement – we do not consider it necessary to rule upon Korea 's claims
under Articles 10, 19.4, and 32.1 of the SCM Agreement in order to resolve the dispute before us.992
7.3.5 Countervailing duties on certain hot -rolled steel flat products from Korea
(USDOC investigation number C-580-884)
Introduction
Korea claims that the United States acted inconsistently with Article 12.7 of the
SCM Agreement in the countervailing duties investigation concerning certain HRS flat products from
Korea (the "HRS CVD investigation"). 993 Specifically, Korea claims that the USDOC acted
inconsistently with Article 12.7 of the SCM Agreement by using facts available in respect of
three issues:
a. POSCO's alleged failure to provide certain information relating to its cross-owned affiliate
input suppliers ("cross-owned affiliate input suppliers")994;
b. POSCO's alleged failure to provide requested information about the POSCO Global R&D
Centre in the FEZ ("POSCO facility in an FEZ")995; and
c. DWI's alleged failure to provide requested information about the use of KORES loans
("DWI loan data").996
Korea claims that POSCO did not "refuse access" to, or otherwise fail to provide "necessary"
information or significantly impede the investigation, with respect to the three issues presented
above.997 Furthermore, Korea claims that the USDOC disregarded verifiable informatio n that was
submitted by POSCO acting to the best of its ability and did not engage in a comparative evaluation
and assessment in order to arrive at an accurate determination, thus failing to select the "best
information available".998
We begin by setting ou t the relevant factual background of the underlying investigation,
followed by the parties' arguments. In section 7.3.5.4.1 we address Korea's claims of
WTO-inconsistency regarding the USDOC's resort to facts available for each of the three issues
identified above. Finally, in section 7.3.5.4.2 we address Korea's claims of WTO -inconsistency
regarding the USDOC's selection of the replacement facts.
Factual background
The USDOC initiated the HRS CVD investigation on 9 September 2015. 999 This followed the
initiation of the CRS CVD investigation on 17 August 2015.1000 POSCO was selected as a mandatory

990 United States' first written submission, para. 428.
991 Korea's first written submission, paras. 451-453.
992 Panel Report, US – Carbon Steel (India), para. 7.537.
993 Korea's first written submission, para. 523.
994 Korea's first written submission, paras. 533, 589-609, and 634-635.
995 Korea's first written submission, paras. 533, 610-622, and 636.
996 Korea's first written submission, paras. 533, 623-630, and 637.
997 Korea's first written submission, para. 524.
998 Korea's first written submission, paras. 527-528 and 644-646.
999 CVD HRS negative preliminary determination, (Exhibit KOR-105), p. 1.
1000 CVD CRS negative preliminary determination, (Exhibit KOR-87), p. 1.

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respondent in both investigations.1001 The USDOC conducted the two investigations simultaneously,
with the CRS CVD investigation being further advanced given its earlier initiation date. For example,
in the CRS CVD investigation, the USDOC issu ed its preliminary determination on
15 December 20151002, conducted verification of POSCO in March 2016 1003, and issued its final
determination on 29 July 2016.1004 These events were followed closely by the HRS CVD investigation,
with the USDOC issuing its preliminary determination on 8 January 2016, conducting verification of
POSCO in May 20161005, and issuing its final determination on 12 August 2016.1006 Thus, as discussed
below, despite the broad factual similarity between the issues in the two investigations, POSCO
modified its responses in the HRS CVD investigation in light of the issues that it had already
encountered in the CRS CVD investigation.
7.3.5.2.1 The USDOC's resort to facts available
7.3.5.2.1.1 Cross-owned affiliate input suppliers
In section III of its initial questionnaire dated 24 September 2015, the USDOC requested
complete responses for certain "'cross-owned' affiliated companies".1007 The USDOC specified which
companies it considered "cross-owned", and in which situations responses were required, i.e. if the
"cross-owned company supplies an input product … for production of the downstream product
produced by the respondent".1008
In its joint response with its affiliated trading company, DWI, POSCO stated that it did "not
believe it [had] any affiliates that [met] any of the four cross -ownership criteria as defined above
by the [USDOC]", nor that "POSCO or any of its affiliates [were] cross -owned by a third party".1009
DWI also responded that it did not have any cross -owned affiliat es as defined by the USDOC,
however, it submitted a complete response to the USDOC's questionnaire "because it is a trading
company that was involved in POSCO's exports of subject merchandise to the United States during
the POI".1010
On 6 April 2016, the USDOC issued a supplemental questionnaire to POSCO. 1011 Together
with its response – filed a week later on 13 April 2016 – POSCO included a submission explaining
that, "[i]n the course of prep aring for the upcoming verification, POSCO … discovered some issues
with its initial questionnaire responses that it would like to clarify".1012 One of these issues pertained
to cross-owned affiliate input suppliers and POSCO clarified "that it did have seve ral cross-owned
affiliates that provided negligible amounts of inputs that could be used in the production of the
downstream product (although POSCO [could not] determine if these inputs were actually used to
produce the subject merchandise during the POI) ".1013 It noted, however, that under the
USDOC's regulations, any subsidies to these affiliated companies were not attributable to POSCO
because the production of the inputs was not "primarily dedicated" to the production of the subject
merchandise.1014 POSCO also provided a list of inputs purchased from cross -owned affiliates that
could be used in the production of the downstream product, along with the values of those sales as
a percentage of the cross -owned affiliates' total sales.1015 This information allegedly demonstrated
that any inputs supplied by the cross-owned affiliates represented an insignificant part of their total

1001 CVD HRS negative preliminary determination, (Exhibit KOR-105), p. 2; CVD CRS negative
preliminary determination, (Exhibit KOR-87), p. 2.
1002 CVD CRS negative preliminary determination, (Exhibit KOR-87).
1003 CVD CRS verification report, (Exhibit KOR-75 (BCI)).
1004 CVD CRS final determination, (Exhibit KOR-71).
1005 CVD HRS verification report, (Exhibit KOR-96 (BCI)).
1006 CVD HRS final determination, (Exhibit KOR-88).
1007 CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), p. 4.
1008 CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), pp. 4-5.
1009 CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), p. 5.
1010 CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), pp. 5-6. In the same
questionnaire, the USDOC requested the identity of all affiliated companies, and a detailed description of the
relationship between POSCO and DWI, and these companies – requests with which the two companies
complied. (CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), pp. 3-4 and exhibits 1 and 2).
1011 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)).
1012 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 5.
1013 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 6.
1014 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 6 (referring to
19 CFR 351.525, (Exhibit KOR-80), Section (b)(6)(iv)).
1015 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 7 and exhibit 20.

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sales.1016 The following day, on 14 April 2016, the USDOC responded by letter explaining that the
submission included with the supplemental questionnaire response was not "information submitted
in response to questionnaires", and therefore constituted "new factual information" that was
"untimely and unsolicited".1017
In response to the USDOC's supplemental new subsidy allegation questionnaire dated
26 April 2016, POSCO again attempted to submit the same information, arguing that "timeliness"
was not an issue as the USDOC continued to collect new information, as evidenced by the new
subsidy allegation questionnaire.1018 POSCO also argued that this information did not substantially
prejudice any party, and thus it was within the USDOC's discretion to accept it.1019 On the same day
as POSCO's response, the USDOC again declined to take into account the "new, untimely and
unsolicited information".1020
During verification conducted in May 2016 , the USDOC asked POSCO and DWI to discuss
and document (a) corporate history, ownership, structure, and affiliations; (b) products produced
and exported; and (c) location of all offices and facilities.1021 The USDOC also asked POSCO and DWI
to "[b]e prepared to demonstrate that none of POSCO's other affiliated companies provided inputs
for the production of hot -rolled steel or otherwise would fall under our attribution regulations". 1022
The USDOC's verification report explains that:
[C]ounsel for POSCO stated that another ongoing proceeding had queried
POSCO's reporting of possible cross-owned companies. The officials then provided us a
list of raw material purchases by POSCO as well as a list of inputs that may go into the
production of hot-rolled steel. … Officials clarified that this list includes all possible inputs
to a typical hot -rolled product, rather than all inputs purchased by POSCO. Company
officials explained that it would not be possible to produce an exhaustive list of all inputs
because each product is made to a specific purchase order and the company would be
unable to review every purchase order made during the POI. However, the list is a
reasonable reflection of the inputs to the subject merchandise. Additionally, company
officials stated that, as an initial matter, because POSCO produces many products and
is a fully integrated producer, they cannot trace every element and input to the subject
merchandise.
The official then continued on how it determined if any POSCO affiliate needed to provide
a response. … Then they determined whether any of the companies provided any inputs
that could be used to produce subject merchandise or the downstream product, and
whether the inputs were primarily dedicated . In order to determine which inputs were
primarily dedicated, they looked at the value of the input supplied by the affiliated
company. If the value of the input was small, either relative to POSCO's cost of sales or
relative to the total value of the affiliated companies' sales, they determined that it was
not primarily dedicated.1023
The USDOC requested further explanations for the following companies from the list presented by
POSCO at verification: POSCO Chemtech, POS-HiMetal, POSCO M-Tech, and POSCO P&S.1024

1016 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 7.
1017 USDOC letter on CVD HRS, (Exhibit KOR-93), p. 1. Because the new factual information was
submitted after the latest period available for the submission of such information – 30 days before the
preliminary determination – the USDOC explained it "cannot accept this new, untimely and unsolicited
information for this proceeding". (Ibid.).
1018 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
pp. 5-6 and 8-9.
1019 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
pp. 5-7.
1020 Rejection of POSCO's resubmission, (Exhibit KOR-95).
1021 CVD HRS verification report, (Exhibit KOR-96 (BCI)), p. 4.
1022 CVD HRS verification report, (Exhibit KOR-96 (BCI)), p. 4.
1023 CVD HRS verification report, (Exhibit KOR-96 (BCI)), pp. 4-5.
1024 CVD HRS verification report, (Exhibit KOR-96 (BCI)), p. 5. These were the same four companies at
issue in the CRS CVD investigation. See para. 7.237 above.

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In its final determination , the USDOC found that POSCO failed to provide questionnaire
responses for certain input suppliers , and that it had incorrectly stated that no affiliates provided
inputs to its production of subject merchandise:
POSCO failed to satisfy its statutory duty to reply accurately and completely to requests
for necessary information regarding its affiliates, p ursuant to section 776(a)(1) of the
Act. … Without the complete, accurate and reliable data upon which to attribute the
unreported companies' subsidies to POSCO, the [USDOC] cannot accurately calculate
POSCO's CVD subsidy rate for this final determination. Consequently, we determine that
because POSCO withheld necessary information, failed to provide such information by
the deadlines for submission, and significantly impeded the investigation, we find that
the use of facts available is warranted in accordance with sections 776(a)(1) and (2) of
the Act.1025
7.3.5.2.1.2 POSCO facility in an FEZ
In its initial questionnaire, the USDOC asked POSCO certain questions regarding subsidies
to companies located in an FEZ.1026 Both POSCO and DWI replied that they had no facilities located
in an FEZ and were therefore not eligible for and did not receive any tax reductions, exemptions,
grants, or financial support under any of the three programmes listed in the USDOC's question.1027
Additionally, the GOK in its initial response stated that, during the investigation period, none of the
respondents received any benefit under the FEZ programmes, referring specifically to the
Incheon FEZ, among others.1028
In its supplemental questionnaire response , POSCO clarified that it had certain facilities
located in FEZs, however it confirmed that it did not receive any FEZ -related benefits since it was
not an eligible foreign-invested enterprise.1029 The USDOC rejected POSCO's attempted clarification
with respect to POSCO facilities in an FEZ as constituting unsolicited and new factual information.1030
POSCO made a second attempt to clarify its initial response in its new subsidy allegation
questionnaire response. POSCO argued that "timeliness" was not an impediment for the USDOC to
accept the information sinc e the USDOC continued to collect new information, and , as this
information did not substantially prejudice any party, it was within the USDOC's discretion to accept
it.1031 On the same day, the USDOC again declined to take into account this "new, untimely an d
unsolicited information".1032
During verification, POSCO presented what it considered to be "minor corrections", including
the "clarification" that POSCO maintained a Global R&D Centre located in Songdo International City,
which is part of the Incheon FEZ.1033 The USDOC accepted this clarification as a "minor correction",
but explained that it would not verify the use or non-use of the alleged FEZ programmes as POSCO
had "only stated that the company had no facilities located in an FEZ".1034
In the final determination, the USDOC rejected POSCO's claim that it did not receive any
benefits because it, in fact, had a facility located in an FEZ. 1035 The USDOC also rejected
POSCO's argument that it could not have benefitted from this programme on the basis that it was
designated to attract foreign investment. 1036 According to the USDOC, certain shareholders of
POSCO appeared to be foreign and thus POSCO could have been eligible to receive funding. 1037

1025 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 61.
1026 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 45.
1027 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 45.
1028 CVD HRS GOK questionnaire response, (Exhibit KOR-100), pp. 67-68 and exhibit FEZ-1.
1029 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), pp. 5-6.
1030 USDOC letter on CVD HRS, (Exhibit KOR-93).
1031 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
pp. 5-7.
1032 Rejection of POSCO's resubmission, (Exhibit KOR-95).
1033 CVD HRS POSCO minor corrections, (Exhibit KOR-99), p. 1 and attachment 3.
1034 CVD HRS verification report, (Exhibit KOR-96 (BCI)), p. 3.
1035 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 69.
1036 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), pp. 69-70.
1037 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), pp. 69-70.

BCI deleted, as indicated [[***]]

The USDOC concluded that POSCO did not act to the best of its ability and that the application of
facts available with an adverse inference was therefore warranted.1038
7.3.5.2.1.3 DWI loan data
In its initial questionnaire, the USDOC requested details regarding all assistance received
during the POI under the KORES and KNOC loan programmes.1039 DWI responded that it had
outstanding long-term borrowings from KORES and KNOC during the POI. It explained, however,
that these loans were tied to non -subject merchandise and were unrelated to DWI's exports to the
United States of subject merchandise produced by POSCO.1040
The USDOC issued a supplemental questionnaire requesting DWI to provide a complete
questionnaire response regarding investments using KORES and KNOC loans. 1041 DWI responded
that it had reported only [[***]] that it received under these programmes during the POI, as
opposed to [[***]].1042 DWI provided a chart listing the loans it had received under these
programmes.1043
The USDOC subsequently issued a new subsidy allegation q uestionnaire. In response,
POSCO sought to clarify, inter alia , issues regarding certain KORES loans received by DWI. 1044
POSCO reported that DWI received additional funding for two projects ( [[***]] and [[***]]), for
which it had also received loans pursuan t to Korea Export Import Bank's (KEXIM) Overseas
Investment Credit programme.1045 POSCO also argued that these loans were not tied to subject
merchandise, and therefore any benefit could not be attributed to the subject merchandise.1046 The
USDOC declined to t ake into account this information on the basis that it was "new, untimely and
unsolicited".1047
POSCO and DWI again attempted to report this additional funding during verification as a
"minor correction", however, the USDOC did not accept it and declined to verify the loans.1048 In its
final determination , the USDOC explained that it did not accept this information as a "minor
correction" because it constituted a "significant change in the magnitude of the funding provided
under the program".1049 The USDOC rejected POSCO's argument that the KORES programme was
verified in its entirety, recalling that it had declined to verify the additional loans provided. 1050
The USDOC found that DWI withheld necessary information regarding the use of the KORES
programme and thus the use of facts available was warranted.1051
7.3.5.2.2 The USDOC's selection of the replacement facts
The USDOC found that:
[G]iven the information reported in its questionnaire response, and the conflicting
information discovered at verification, we determine that PO SCO withheld requested
necessary information during the course of the investigation, impeded the proceeding,
and through its actions prevented the [USDOC] from being able to verify that

1038 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 69.
1039 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 31.
1040 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), pp. 31-32. Specifically, DWI
reported that the KNOC loans were related to investments in the exploration and production of [[***]], while
the KORES loans were related to investments in [[***]]. (Ibid.).
1041 CVD HRS supplemental questionnaire, (Exhibit KOR-101), p. 4.
1042 CVD HRS supplemental questionnaire response, (Exhibit KOR-102 (BCI)), exhibit E-11, pp. 1-2.
See para. 7.241 above.
1043 CVD HRS supplemental questionnaire response, (Exhibit KOR-102 (BCI)), exhibit E-12.
1044 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
p. 9.
1045 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
p. 9.
1046 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
pp. 9-10.
1047 Rejection of POSCO's resubmission, (Exhibit KOR-95).
1048 CVD HRS verification report, (Exhibit KOR-96 (BCI)), p. 3.
1049 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 72.
1050 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 72.
1051 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 72.

BCI deleted, as indicated [[***]]

information. Therefore, the [USDOC] determines that the use of facts a vailable … is
warranted in determining the existence of cross -owned affiliates that provided inputs
used in the production of subject merchandise.
We further find that an adverse inference is warranted, pursuant to section 776(b) of
the Act. POSCO failed to identify or provide necessary information as to its respective
cross-owned companies. Additionally, we find that POSCO failed to report that one of
its facilities is located in a FEZ and that DWI failed to report certain loans. As a result,
we find that POSCO did not act to the best of its ability in this investigation. Accordingly,
we find that an adverse inference that POSCO and its cross -owned input suppliers
benefited from those subsidies is warranted in this case.1052
The USDOC explained that in applying AFA to POSCO, it was guided by the "methodology"
whereby it selected "the highest calculated program -specific rates determined for a cooperating
respondent in the same investigation, or, if not available, rates calculat ed in prior CVD cases
involving the same country". 1053 The USDOC found that POSCO benefitted from all programmes
under investigation, but excluded programmes determined not to be countervailable.1054 The USDOC
calculated a CVD rate of 57.04% for POSCO.1055
Main arguments of the parties
7.3.5.3.1 The USDOC's resort to facts available
Korea claims that, for each of the three issues, the USDOC acted inconsistently with
Article 12.7 of the SCM Agreement as the conditions for resorting to the facts available were not
met.1056 With respect to each issue, Korea argues that no information was "discovered" by the
USDOC, but, instead, POSCO "reported the relevant information from the outset, and then offered
additional clarification well before the verification when similar issues arose in the further progressed
[CRS] CVD Investigation".1057 Referring to the findings in US – Hot-Rolled Steel, Korea contends that
additional information with respect to each issue was provided in a timely manner despite the fact
that it was submitted after the relevant deadlines.1058
The United States submits that the USDOC did not take the additional information into
account as it was provided several months after the expiry of the applicable deadlines.1059
The United States also takes issue with Korea's reliance on US – Hot-Rolled Steel, arguing that the
factors identified by the Appellate Body in that case do not find any basis in the text of the covered
agreements.1060 According to the United States, Korea ignores the number of days by which the
interested party missed the deadline.1061 The United States asserts that accepting information nearly
four months after the relevant deadline would have likely compromised the USDOC's ability to
conduct the investigation expeditiously, and would have undermined the "effectiveness and
efficiency" of the proceedings.1062
7.3.5.3.1.1 Cross-owned affiliate input suppliers
Korea argues that POSCO did not refuse to provide necessary information concerning certain
cross-owned affiliated input suppliers.1063 Korea explains that – unlike the situation in the CRS CVD
investigation – POSCO attempted to provide the information more than a month before verification
in the investigation at issue. 1064 Korea argues that the information regarding inputs provided by

1052 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), pp. 9-10.
1053 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 11.
1054 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 12.
1055 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 17.
1056 Korea's first written submission, paras. 588 and 631.
1057 Korea's second written submission, paras. 232-233.
1058 Korea's second written submission, paras. 237-238 (referring to Appellate Body Report,
US – Hot-Rolled Steel, paras. 87-89; and Panel Report, US – Hot-Rolled Steel, paras. 7.54-7.55 and 7.57).
1059 United States' second written submission, paras. 129-139.
1060 United States' second written submission, paras. 134-135.
1061 United States' second written submission, para. 138.
1062 United States' second written submission, para. 138.
1063 Korea's first written submission, para. 597.
1064 Korea's first written submission, para. 597.

BCI deleted, as indicated [[***]]

POSCO's cross-owned affiliates was not "necessary" as those inputs were not "primarily dedicated"
to the production of the subject merchandise, and because it could not be determined whether the
inputs were actually used in the production of HRS. 1065 As to the issue of timeliness, Korea argues
that the requested information was provided within a reasonable period of time , as part of its
supplemental responses dated 13 April 2016 and 3 May 2016, as well as at verification. 1066 In any
event, Korea contends that the values of these transactions were alr eady on the record as part of
POSCO's initial submission of its consolidated financial statements. 1067 Finally, given that POSCO
itself alerted the USDOC to this issue, Korea argues that POSCO acted to the best of its ability and
did not impede the investigation.1068
The United States responds that it was only after the "discovery" at verification in the
CRS CVD investigation that POSCO submitted the information in this investigation, nearly
four months after the deadline for submitting new factual information had passed. 1069 The
United States also submits that, besides being untimely and unsolicited, this information was
included as part of the supplemental questionnaire response pertaining to a request for different
information, and was therefore rejected by the USDOC for be ing unrelated to its request. 1070 The
United States notes that the USDOC had requested POSCO to identify the inputs provided by
affiliated parties, and not to conduct a "primarily dedicated" analysis. 1071 The United States argues
that, had POSCO responded that it had cross-owned affiliate input suppliers, the USDOC would have
requested further information from those suppliers.1072
7.3.5.3.1.2 POSCO facility in an FEZ
Korea argues that POSCO provided information with respect to its facility in an FEZ over a
month before the planned verification.1073 Korea explains that POSCO provided this information as
a "clarification", and it was consistent with the response already provided by the GOK.1074 Therefore,
according to Korea, the information requested was provided within a reas onable period.1075 Korea
contends that timeliness was not an issue since the USDOC was still issuing supplemental
questionnaires when POSCO submitted the information, meaning that it was still collecting new
information.1076 Korea further argues that there was no "necessary" information missing, as there
was a significant amount of record evidence that would have allowed the USDOC to fill in any possible
gap and find that POSCO did not benefit from any FEZ programme. 1077 Korea contends that the
USDOC could have requested to visit POSCO's R&D facility to verify that it did not receive a benefit;
however, it did not do so and the United States should not conflate the factual situation of this
investigation with the CRS CVD investigation.1078
The United States responds that the information was rejected because it was untimely and
unsolicited and the USDOC clearly indicated that verification could not be used for the submission of
new information. 1079 According to the United States, nothing in the SCM Agreement obliges an
investigating authority to take into account information submitted well after the "factual
deadline".1080 Furthermore, the United States explains that the purpose of verification is to verify
the response provided by a company against that company's records.1081 Therefore, the USDOC
allowed the "minor correction" that POSCO had a facility in an FEZ because it was relevant to
POSCO's previous reporting regarding whether they had a facility in an FEZ.1082 However, the USDOC

1065 Korea's first written submission, paras. 590-593.
1066 Korea's first written submission, paras. 595-596.
1067 Korea's first written submission, paras. 595-596.
1068 Korea's first written submission, para. 607.
1069 United States' first written submission, para. 378.
1070 United States' first written submission, para. 378.
1071 United States' second written submission, paras. 109-112.
1072 United States' response to Panel question No. 81(a), paras. 118 and 121.
1073 Korea's first written submission, para. 558.
1074 Korea's second written submission, para. 232.
1075 Korea's first written submission, paras. 617-619.
1076 Korea's second written submission, para. 242.
1077 Korea's first written submission, paras. 611-616.
1078 Korea's second written submission, para. 245.
1079 United States' first written submission, para. 384.
1080 United States' second written submission, para. 122.
1081 United States' response to Panel question No. 82, para. 125.
1082 United States' response to Panel question No. 82, paras. 125-126.

BCI deleted, as indicated [[***]]

was not able to verify the use of the pro grammes because POSCO had reported that it did not
maintain any facilities within an FEZ.1083
7.3.5.3.1.3 DWI loan data
Korea argues that upon discovering an "inadvertent error", POSCO submitted information
concerning certain additional loans under the KORES programme o n 3 May 2016 – a few weeks
before verification – together with its response to the USDOC's new subsidy allegation
questionnaire.1084 Korea argues that the use of the programme was already known to the USDOC,
and POSCO's corrections concerned only the extent of the use of the programme.1085 Korea contends
that the USDOC had already found that DWI's use of the programme was de minimis; therefore, the
minor additional information could not have had any meaningful impact on the benefit calculation.1086
Korea points out that DWI specifically stated that the additional loans were tied to inputs not used
in the production of the subject merchandise.1087 Even though these loans were not relevant for this
investigation – as there was no benefit attributed to the production o f HRS – DWI submitted these
additional loans in order to complete the information provided earlier.1088
The United States maintains that, as with the other information discovered during
verification in the CRS CVD investigation, POSCO tried to put untimely a nd unsolicited information
on the record of this investigation twice, but it was rejected by the USDOC.1089
7.3.5.3.2 The USDOC's selection of the replacement facts
Korea claims that the USDOC acted inconsistently with Article 12.7 of the SCM Agreement
by drawing adv erse inferences that the cross -owned affiliates benefitted from all the subsidy
programmes at issue; that POSCO obtained benefits under the FEZ programme; and that DWI
obtained a benefit under the KORES programme.1090 Korea argues that the USDOC failed to evaluate
comparatively all substantiated facts on the record in order to determine the "best available
information" for arriving at an "accurate" determination.1091
Korea also argues that the USDOC acted inconsistently with Article 12.7 of the
SCM Agreement by not exercising special circumspection in its selection of the subsidy rates.
According to Korea, the USDOC failed to corroborate the selected rates and simply chose the highest
calculated rates.1092 Moreover, the replacement facts were selected in a punitive manner, on the
basis of whether they were "sufficiently adverse" to POSCO and DWI. 1093 For Korea, the punitive
character of the selected rates is evident from their "excessive and unrealistic" nature.1094
The United States responds that Korea fails to establish that the USDOC selected information
inconsistently with Article 12.7.1095 The United States contends that Korea points to no evidence on
the record demonstrating that it was unreasonable for the USDOC to conclude that POSCO's affiliated
companies benefitted from the subsidy programmes and that the FEZ programmes were used by
POSCO.1096 Similarly, the United States asserts that Korea points to nothing on the record to
demonstrate that the USDOC's determination is not accurate.1097 In response to Korea's argument
that the USDOC failed to use the "relevant 'verifiable' information" on the record, the United States

1083 United States' response to Panel question No. 82, para. 127. (emphasis added)
1084 Korea's first written submission, para. 578.
1085 Korea's first written submission, para. 626. (emphasis added)
1086 Korea's first written submission, paras. 627-628.
1087 Korea's second written submission, para. 232.
1088 Korea's second written submission, para. 243.
1089 United States' first written submission, para. 390.
1090 Korea's first written submission, paras. 639, 644-646, and 651.
1091 Korea's first written submission, para. 640.
1092 Korea's first written submission, para. 651.
1093 Korea's first written submission, paras. 642-643 and 651.
1094 Korea's first written submission, paras. 648-650.
1095 United States' first written submission, para. 415.
1096 United States' first written submission, para. 415.
1097 United States' first written submission, para. 418.

BCI deleted, as indicated [[***]]

argues that the information submitted before verification was prop erly found to be unsolicited and
untimely and, accordingly, it did not constitute "verifiable information on the record".1098
Evaluation by the Panel
7.3.5.4.1 The USDOC's resort to facts available
Pursuant to Article 12.7 of the SCM Agreement, an investigating authority may only resort
to facts available when an interested party "refuses access to, or otherwise does not provide,
necessary information within a reasonable period". 1099 In the HRS CVD investigation,
POSCO attempted to submit information in relation to each of the three issues after the relevant
deadline imposed by the USDOC, but before verification. Therefore, the main issue before us is
whether the information provided by POSCO was submitted within a "reasonable period". The
SCM Agreement does not define what constitutes a "reasonable period" for purposes of Article 12.7.
Referring to the Appellate Body's discussion of Article 6.8 and Annex II of the
Anti-Dumping Agreement in US – Hot-Rolled Steel, Korea identifies the factors that an investigating
authority must consider in determining whether information was submitted within a "reasonable
period".1100 We do not consider it necessary to opine upon the relevance of the factors propounded
by the Appellate Body in that dispute in the abstract. That said, for present purposes, we note that
the use of the term "reasonable" in Article 12.7 of the SCM Agreement implies "a degree of flexibility
that involves consideration of all of the circumstances of a particular case. What is 'reasonable' in
one set of circumstances may prove to be less than 'reasonable' in different circumstances".1101
Although the SCM Agreement envisages that investigating authorities can impose time-limits
for responses, the mere fact that information is provided after the expiry of such time -limits does
not, without more, establish that the information was not provided within a "reasonable period"
under Article 12.7.1102 Article 12 – entitled "Evidence" – uses both the terms "time -limit" and
"reasonable period".1103 In our view, the drafters' careful choice of words also implies that they carry
different meanings. This supports our understanding that a time -limit imposed by an investigating
authority does not ipso facto constitute a "reasonable period" in all circumstances. While it is proper
for an investigating authority to attach importance to time-limits fixed for questionnaire responses,
in determining whether information is submitted within a reasonable period of time, an investigating
authority is required to do more than merely establish that a deadline was exceeded. In this sense,
Article 12.7 strikes a balance between "the rights of the investigating authorities to control and
expedite the investigating process, and the legitimate interests of the parties to submit information
and to have that information taken into account".1104 Exactly what factors may be considered by an
investigating authority – in addition to the expiry of the relevant deadline – remains a function of
the specific facts and circumstances of a given case.1105 With this understanding, we turn to examine
Korea's claims with respect to the USDOC's resort to facts available in relation to each of the
three issues.
7.3.5.4.1.1 Cross-owned affiliate input suppliers
Korea argues that no "necessary" information was missing as the inputs provided by the
cross-owned companies were not "primarily dedicated" to the production of the subject merchandise,
and, in any event, the requested information was provided within a reasonable period of time. 1106

1098 United States' first written submission, para. 424.
1099 Article 12.7 of the SCM Agreement. See also paras. 7.269-7.270 above.
1100 Korea's second written submission, paras. 237-238 (referring to Appellate Body Report, US –
Hot-Rolled Steel, paras. 87-89; and Panel Report, US – Hot-Rolled Steel, paras. 7.54-7.55 and 7.57).
1101 Appellate Body Report, US – Hot-Rolled Steel, para. 84. (emphasis added)
1102 Panel Report, US – Steel Plate, para. 7.76.
1103 Footnote 40 to Article 12.1.1 provides, in relevant part, that "[a]s a general rule, the time-limit for
exporters shall be counted from the date of receipt of the questionnaire". In addition, paragraph 6 of Annex II
to the Anti-Dumping Agreement also distinguishes between "time-limits" and "reasonable period". Paragraph 6
provides, in relevant part, that "[i]f evidence or information is not accepted, the supplying party should be
informed forthwith of the reasons therefor, and should have an opportunity to provide further explanations
within a reasonable period, due account being taken of the time-limits of the investigation".
1104 Appellate Body Report, US – Hot-Rolled Steel, para. 86.
1105 Appellate Body Report, US – Hot-Rolled Steel, para. 84.
1106 Korea's first written submission, paras. 591 and 595.

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The United States argues that the USDOC properly rejected the information submitted by POSCO as
being "untimely and unsolicited".1107
The USDOC, in its initial questionnaire, requested POSCO to provide "complete
questionnaire" responses for those affiliates that were cross -owned, inter alia, in instances where
the cross-owned company "supplies" an input to POSCO for "production of the downstream product
produced by the respondent".1108 The USDOC did not limit its query by referring to the criterion of
"primarily dedicated" products. Instead, the USDOC's question is broadly worded and could
encompass information concerning all instances where inputs are supplied by a cross-owned affiliate
for the production of the downstream product. In its response to the USDOC's supplemental
questionnaire submitted on 13 April 2016, POSCO explained that "it did have several cross -owned
affiliates that provided negligible amounts of inputs that could be used in the production of the
downstream product (although POSCO [could not] determine if these inputs were actually used to
produce the subject merchandise during the POI)". 1109 POSCO provided a list of the inputs that it
purchased from cross -owned affiliates during the POI that could be used in the production of the
downstream product, along with the values of those sales as a percentage of the cross -owned
affiliates' total sales. 1110 According to POSCO, this demonstrated that any inputs supplied
represented an insignificant part of the affiliates' total sales, and they were not "primarily dedicated"
to the production of the downstream product.1111
Through its letter dated 14 April 2016, the USDOC rejected the information concerning
cross-owned affiliate input suppliers. The USDOC reasoned, first, that the information concerning
cross-owned affiliate input suppliers constituted "unsolicited new factual information" as it "was not
related to the information requested by the [USDOC] in its supplemental questionnaire".1112 Second,
the USDOC noted that the deadline for the submission of such new factual information under US law
is 30 days prior to preliminary determination (in this case, the preliminary determination was issued
on 15 January 2016).1113 Noting that the "new factual information" was submitted "after the latest
period available for the submission of unsolicited new factual information", the USDOC rejected the
information provided as being "new, untimely and unsolicited".1114 As such, the only reason provided
by the USDOC for rejecting the "new" information was that it was submitted after "the latest period
available". POSCO made a second attempt to submit the same information together with its new
subsidy allegation questionnaire response. 1115 The USDOC again rejected this "new, untimely and
unsolicited information" provided by POSCO as it was provided after the deadline for the submission
of new factual information.1116
Thus, on both occasions that POSCO tried to submit information concerning cross -owned
affiliate input supplie rs, the USDOC rejected POSCO's submission for the sole reason that it was
provided after the applicable deadline for the submission of new factual information under US law,
i.e. 30 days before the preliminary determination. While it is undisputed that POSCO provided the
information concerning cross-owned affiliates after the expiry of this statutory deadline, this, in and
of itself, does not mean that it was not provided within a "reasonable period" for purposes of
Article 12.7 of the SCM Agreement. As discussed, whether an interested party refuses access to, or
otherwise fails to provide, necessary information within a "reasonable period", must be assessed in
the specific facts and circumstances of a given case. 1117 The mere fact that the information was
provided after the relevant deadline does not, without more, establish that it was not provided within
a "reasonable period".
In its final determination, the USDOC found "that POSCO only provided information at
verification which would have allowed the [USDOC] to investigate further regarding the inputs
provided by the companies" and that "only after discovery at verification did it report on the last day
that some of the inputs provided by the aforementioned affiliated companies were, in fact, used in

1107 United States' first written submission, para. 398.
1108 CVD HRS affiliated companies response, (Exhibit KOR-91 (BCI)), pp. 4-5.
1109 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 6.
1110 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 7 and exhibit 20.
1111 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 7.
1112 USDOC letter on CVD HRS, (Exhibit KOR-93).
1113 USDOC letter on CVD HRS, (Exhibit KOR-93).
1114 USDOC letter on CVD HRS, (Exhibit KOR-93).
1115 See para. 7.330 above.
1116 Rejection of POSCO's resubmission, (Exhibit KOR-95).
1117 See paras. 7.350-7.351 above.

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the production of the subject merchandise".1118 We find that these observations by the USDOC are
not supported by the record evidence in so far as POSCO did, in fact, submit this information prior
to verification, only for it to be rejected by the USDOC. The USDOC made no mention in the final
determination of POSCO's prior attempts to submit this information, nor did it provide any reasons
for rejecting this information in its final determination. To this extent, these statements by the
USDOC do not reflect conduct that would be expected from an unbiased and objective investigating
authority.
For the above reason s, we find that Korea has established that the USDOC acted
inconsistently with Article 12.7 of the SCM Agreement because it rejected the information concerning
the cross-owned affiliate input suppliers solely on the basis that it was provided after the time-limit
imposed by the USDOC, without considering whether, in light of the specific facts and circumstances,
the information submitted by POSCO was nonetheless submitted within a "reasonable period".1119
7.3.5.4.1.2 POSCO facility in an FEZ
Korea argues that the USDOC improperly resorted to the use of facts available as the
requested information was provided by Korea within a "reasonable period". 1120 The United States
responds that the information was rejected because it was untimely and unsolicited.1121
In response to the USDOC's initial questionnaire, POSCO stated that it "has no facilities
located in a free economic zone ('FEZ') and thus was not eligible for and did not receive any tax
reductions, exemptions, grants or financial support under any of the three programs listed in the
[USDOC]'s question".1122 Pursuant to the general instructions offered by the USDOC, the initial
questionnaire did not inquire whether POSCO had any facilities located in an FEZ. Instead, the
questionnaire required POSCO to "clearly state" that it "did not apply for, use, or benefit from that
program during the POI". Thus, information relating to the location of POSCO's facility in an FEZ was
not specifically requested by the USDOC. Such information, however, was offered by POSCO in its
response as the basis for its assertion that it did not receive any subsidies under the FEZ
programmes. At the same time, the GOK in its own questionnaire response stated in relation to FEZ
benefits that, "[d]uring the investigation period, none of the respondents received a benefit under
this program".1123
Following its initial response, POSCO subsequently attempted to submit a "clarification"
regarding the FEZ issue together with its supplemental questionnaire response. POSCO clarified that
it had certain faciliti es located in FEZs, however, as it initially stated and as confirmed by the
GOK's response, "it did not receive any benefits for being located in an FEZ".1124 In support, POSCO
also noted that "it is not a foreign -invested enterprise, and as the GOK reported the FEZ benefits
are limited to foreign -invested enterprises". 1125 The USDOC declined to accept this clarification,
finding, instead, that it constituted "new factual information submitted to the [USDOC] after the
latest period available for the submission of unsolicited new factual information on the record". 1126
POSCO again attempted to submit this information in a subsequent questionnaire response, while
arguing that timeliness was not an issue, since "[t]his information did not substantially prejudice
any party, as it was submitted in the context of a response to the [USDOC]'s own request for
additional and new information based on a new subsidy allegation that had been filed by the
petitioner some 4 months ago".1127 The USDOC again rejected this information for the same reasons
as before, i.e. it constituted unsolicited, new factual information submitted after the relevant
deadline.1128

1118 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), pp. 63 and 65. (emphasis added)
1119 See, e.g. Appellate Body Report, US – Hot-Rolled Steel, para. 89.
1120 Korea's first written submission, para. 617.
1121 United States' first written submission, para. 408.
1122 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 45.
1123 CVD HRS GOK questionnaire response, (Exhibit KOR-100), pp. 67-68.
1124 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 5.
1125 CVD HRS supplemental questionnaire response, (Exhibit KOR-92 (BCI)), p. 6.
1126 USDOC letter on CVD HRS, (Exhibit KOR-93).
1127 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
pp. 5-7.
1128 Rejection of POSCO's resubmission, (Exhibit KOR-95).

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The record evidence suggests that POSCO submitted its clarifications concerning the FEZ
issue together with its clarifications concerning the issue of cross-owned affiliate input suppliers as
part of both its supplemental responses. The USDOC did not offer any specific or different reasons
for rejecting the information relating to FEZs. Instead, the USDOC rejected POSCO's "clarifications"
on the FEZ issue together with its "clarifications" on the issue of the cross -owned affiliates for the
same reason: that the information relating to both issues was unsolicited, new factual information
that was submitted after the applicable deadline.
Finally, in its final determination, the USDOC found that "POSCO did not reveal the fact that
it had a facility located in an FEZ until verification" and , therefore, the USDOC "did not have an
opportunity to follow up on [POSCO's] claim, or the GOK's claim prior to verification".1129 This is not
supported by the record evidence. POSCO did, in fact, submit information prior to verification
explaining that it had facilities in an FEZ, only for it to be rejected by the USDOC. The USDOC made
no mention in the final determination of POSCO's prior attempts to submit this information, nor did
it provide any reasons for rejecting this information. To this extent, these statements do not reflect
conduct that would be expected from an unbiased and ob jective investigating authority. The sole
reason for the USDOC's rejection of the information supplied by POSCO concerning the FEZ issue
was that it was submitted after the expiry of the applicable deadline.
For the above reasons, we find that Korea has es tablished that the USDOC acted
inconsistently with Article 12.7 of the SCM Agreement because it rejected the information concerning
POSCO's facility in an FEZ solely on the basis that it was provided after the time -limit imposed by
the USDOC, without consi dering whether, in light of the specific facts and circumstances, the
information submitted by POSCO was nonetheless submitted within a "reasonable period".1130
7.3.5.4.1.3 DWI loan data
Korea argues that the USDOC erred in resorting to facts available as the revised l oan data
was provided by DWI within a "reasonable period".1131 The United States maintains that, as with the
other information discovered during verification, POSCO tried twice to put untimely and unsolicited
information on the record of the investigation, which was rejected properly by the USDOC.1132
In response to the USDOC's initial questionnaire section concerning "[e]nergy and
[r]esource [s]ubsidies", DWI identified certain "outstanding long-term borrowings" from KORES and
KNOC during the POI.1133 DWI explained as follows:
DWI's KNOC loans are related to investments in the exploration and production of
[[***]]. They are thus tied to non-subject merchandise and unrelated to DWI's exports
to the United States of subject merchandise produced by POSCO. DWI's KORES loans
are related to investments in [[***]]. As with the KORES loans, these loans are tied to
non-subject merchandise and are unrelated to DWI's exports to the United Sates of
subject merchandise produced by POSCO. Therefore, as it did in [ Non-Oriented
Electrical Steel from the Republic of Korea], the [USDOC] should determine that KORES
and KNOC loans that are not tied to subject merchandise are not countervailable.1134
Through its supplemental questionnaire, the USDOC requested complete responses
"regarding investments using [KORES] and [KNOC] loans".1135 In response to the question regarding
the eligibility criteria for the KORES programme, DWI submitted that it had "long -term foreign
currency loans from KORES for [[***]] that are [[***]]".1136

1129 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 69. (emphasis added)
1130 See, e.g. Appellate Body Report, US – Hot-Rolled Steel, para. 89.
1131 Korea's first written submission, para. 626.
1132 United States' first written submission, para. 390.
1133 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 32.
1134 CVD HRS initial questionnaire response, (Exhibit KOR-90 (BCI)), p. 32 (emphasis original). The
reference to KORES loans in the penultimate sentence appears to be a typographical error and should instead
refer to KNOC loans.
1135 CVD HRS supplemental questionnaire, (Exhibit KOR-101), p. 4.
1136 CVD HRS supplemental questionnaire response, (Exhibit KOR-102 (BCI)), exhibit E-11, pp. 1-2.

BCI deleted, as indicated [[***]]

Subsequently, as part of its new subsidy allegation supplemental response, POSCO
submitted – as a clarification – "additional funding from KORES" for two projects that had already
been reported in previous questionnaire responses, as they received funding under the KEXIM
loans.1137 The "two projects" were " [[***]] and [[***]]".1138 DWI submitted a chart which listed
[[***]] individual "[l]oan [a]greement[s]".1139 The "purpose of loan" for [[***]] agreements was
listed as [[***]], and [[***]] Agreements had their stated purpose as [[***]].1140 This information
was provided by DWI together with its second attempt at submitting "clarifications" in respect of the
cross-owned affiliate input suppliers and POSCO's facility in an FEZ. The USDOC rejected this
additional informat ion on the basis that it constituted unsolicited factual information that was
provided after the expiry of the applicable deadline. 1141 The USDOC did not provide any reasons
specific to the information concerning the DWI loan data. For example, the USDOC did not consider
the ease with which the data could be used to establish that the loans were related to the production
of non-subject merchandise and not the export of HRS to the United States.1142
In its final determination, the USDOC stated that, "[a]t verification, DWI presented a list of
KORES loans that it had not previously reported as a minor correction".1143 While we do not disagree
that DWI attempted to submit the information at verification, the USDOC does not address in its
verification report, or final determination, the previous attempts made by POSCO and DWI to submit
the information. All of these previ ous attempts were rejected by the USDOC. As such, the
USDOC's statement that the loans were not "previously reported" by DWI is not supported by record
evidence and is not consistent with the conduct of an objective and unbiased investigating authority.
We find that the sole reason for the USDOC's rejection of the information concerning the additional
KORES loans that was submitted by POSCO and DWI in their new subsidy allegation supplemental
response was that it was submitted after the expiry of the applicable deadline.
For the above reasons, we find that Korea has established that the USDOC acted
inconsistently with Article 12.7 of the SCM Agreement because it rejected the information concerning
DWI loan data solely on the basis that it was provided after the time-limit imposed by the USDOC,
without considering whether, in light of the specific facts and circumstances, the information
submitted by POSCO was nonetheless submitted within a "reasonable period".1144
7.3.5.4.2 The USDOC's selection of the replacement facts
We have already found that the USDOC acted inconsistently with Article 12.7 of the
SCM Agreement in resorting to facts available with respect to each of the three issues discussed
above. In these circumstances, we do not consider that mak ing further findings concerning the
USDOC's selection of the replacement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution the dispute before
us.1145
Korea's claims under Articles 10, 19.4, and 32.1 of the SCM Agreement
Korea further claims that, as a result of the USDOC's use of facts available inconsistently
with Article 12.7 of the SCM Agreement, "the United States imposed countervailing duties in
violation of Articles 10, 19.4, and 32.1 of the SCM Agreement".1146 According to Korea, because the
margin of countervailing duty was determined based on facts available in a manner inconsistent with
Article 12.7, "the countervailing duty levied automatically violated Article 19.4 of the

1137 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
p. 9.
1138 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
p. 9.
1139 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
exhibit 21.
1140 CVD HRS supplemental new subsidy allegation questionnaire response, (Exhibit KOR-94 (BCI)),
exhibit 21.
1141 Rejection of POSCO's resubmission, (Exhibit KOR-95).
1142 See, e.g. paras. 7.292-7.301 above.
1143 CVD HRS issues and decisions memorandum, (Exhibit KOR-98), p. 72. (emphasis added)
1144 See, e.g. Appellate Body Report, US – Hot-Rolled Steel, para. 89.
1145 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; Mexico – Anti-Dumping Measures on
1146 Korea's first written submission, para. 657.

BCI deleted, as indicated [[***]]

SCM Agreement".1147 Moreover, Korea asserts that the violation of Article 12.7 also "automatically
leads" to a violation of Articles 10 and 32.1 of the SCM Agreement, as "the USDOC Hot Rolled CVD
investigation and the CVD measure taken were not in accordance with the SCM Agreement".1148
The United States responds that Korea's claims under Articles 10, 19.4, and 32.1 are
"entirely consequential" and "Korea offers no argument or evidence to support any independent
breach of those provisions". 1149 According to the Uni ted States, were the Panel to uphold
Korea's claims under Article 12.7, "there would be no basis to decide Korea's consequential
claims".1150 First, the United States "does not concede that such breaches are 'automatic'". 1151
Second, the United States submits that deciding such claims would be serve "no useful purpose"
and would provide no "additional guidance that would be useful regarding implementation of any
recommendations adopted by the DSB".1152
Korea does not present any independent bases for the alleged breaches of Articles 10, 19.4,
and 32.1 of the SCM Agreement; instead, its claims under these provisions are dependent entirely
upon a finding that the United States acted inconsistently with Article 12.7 of the
SCM Agreement.1153 In these circumstances – and having already found that the United States acted
inconsistently with Article 12.7 of the SCM Agreement – we do not consider it necessary to rule upon
Korea's claims under Articles 10, 19.4, and 32.1 of the SCM Agreement in order to resolve the
dispute before us.1154
7.3.6 Anti-dumping duties on large power transformers from Korea (USDOC investigation
number A-580-867)
Introduction
Korea claims that the USDOC used facts available inconsistently with Article 6.8 and Annex II
of the Anti-Dumping Agreement in three administrative reviews concerning the anti-dumping duties
imposed on LPTs.1155
In the remand proceedings for the second administrative review (POR2) 1156, the USDOC
found that Hyundai Heavy Industries (HHI ) "refused to provide the necessary information for [the
USDOC] to apply its capping methodology".1157 The information at issue concerned "the sale price,
discounts, rebates and all other revenues and expenses" ("service -related revenues"). 1158
In section 7.3.6.2.4 below, we address Korea 's claims that the USDOC erred in its resort to facts
available and its subsequent selection of the replacement facts in respect of HHI 's reporting of
service-related revenues.
In the third administrative review (POR3) 1159, the USDOC found that HHI "significantly
impeded this review by failing to act to the best of its ability by not providing complete and accurate
information".1160 On the basis of four "specific examples" the USDOC found that HHI "demonstrated
a pattern of behavior" which caused the USDOC "to question certain fundamental aspects of
[HHI's] reporting".1161 Korea challenges the USDOC's use of facts available in respect of each of the
four "specific examples" or issues concerning HHI 's reporting of (a) service-related revenues ,

1147 Korea's first written submission, paras. 653-654.
1148 Korea's first written submission, para. 655.
1149 United States' first written submission, para. 425.
1150 United States' first written submission, para. 427.
1151 United States' first written submission, para. 427.
1152 United States' first written submission, para. 428.
1153 Korea's first written submission, paras. 653-655.
1154 Panel Report, US – Carbon Steel (India), para. 7.537.
1155 Korea did not pursue its "as applied" claim against the Expedited First Sunset Review of the
Anti-Dumping Duty Order on Large Power Transformers from the Republic of Korea identified in
paragraph 2.2(f)(iii) of this Panel Report.
1156 POR2 covers the period 1 August 2013 to 31 July 2014.
1157 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
1158 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
1159 POR3 covers the period 1 August 2014 to 31 July 2015.
1160 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 4.
1161 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 4.

BCI deleted, as indicated [[***]]

(b) home-market prices, (c) accessories, and (d) certain sales documentation. 1162 For each issue,
Korea contends that the USDOC erred in resorting to the use of facts available 1163, as well as in its
subsequent selection of the replacement facts. 1164 In section 7.3.6.3.2 below, we address
Korea's claims concerning the USDOC 's resort to facts available with respect to each of the four
issues, followed by its claims concerning the USDOC 's selection of the replacement facts in
section 7.3.6.3.3.
In the fourth administrative review (POR4) 1165, the USDOC applied facts available to HHI
and Hyosung Corporation (Hyosung).1166 With respect to HHI, the USDOC identified defici encies in
HHI's reporting of three issues and found that, "[c]ollectively", these issues demonstrated that HHI
impeded the review1167 and "failed to put forth its maximum effort to cooperate in this review" .1168
Korea challenges the USDOC 's resort to facts ava ilable in respect of the three issues concerning
HHI's (a) reporting of accessories, (b) reporting of gross unit price for certain home market sales ,
and (c) non-disclosure of an allegedly affiliated US sales agent. 1169 In section 7.3.6.4.2 below, we
address Korea's claims against the USDOC 's resort to facts available for HHI in respect of each of
these three issues.
With respect to Hyosung, t he USDOC found in POR4 that Hyosung 's failure to report or
explain certain issues caused the USDOC "to question the reliability of the information provided".1170
Korea challenges the USDOC 's resort to facts available with respect to Hyosung 's reporting
of (a) service-related revenue s, (b) an invoice that overlapped between two review periods , and
(c) certain discounts and price adjustments. 1171 In section 7.3.6.4.3 below, we address
Korea's claims concerning the USDOC's resort to facts available for Hyosung with respect to each of
the three issues.
As to the selection of the replacement facts, the USDOC applied "total AFA" with respect to
both HHI and Hyosung in POR4.1172 We address Korea's claims that the USDOC erred in its selection
of the replacement facts with respect to both HHI and Hyosung in section 7.3.6.4.4 below. Finally,
in relation to POR4, Korea also claims that the USDOC acted inconsistently with Article 9.4 of the
Anti-Dumping Agreement by calculating the "all others rate" for three non-selected exporters of LPTs
on the basis of the "AFA rates" for HHI and Hyosung.1173 We address this claim in section 7.3.6.4.5
below.
The second administrative review (POR2)
7.3.6.2.1 Introduction
Korea's claims in POR2 concern HHI 's reporting of service -related revenues. We begin by
setting out the relevant factual background of the POR2 proceedings. We then summarize the
parties' main arguments, before examining Korea's claims pertaining to the USDOC's resort to facts
available as well as its selection of the replacement facts.
7.3.6.2.2 Factual background
In its POR2 final determination, the USDOC calculated a dumping margin for HHI without
using facts available. 1174 However, in the reman d proceedings following a court appeal by the
petitioner, the USDOC calculated a dumping margin of 25.51% for HHI using facts available – an

1162 Korea's first written submission, paras. 775-797 and 838-840.
1163 Korea's first written submission, para. 775.
1164 Korea's first written submission, paras. 659 and 767.
1165 POR4 covers the period from 1 August 2015 to 31 July 2016.
1166 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 3.
1167 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 4.
1168 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 4.
1169 Korea's first written submission, paras. 798-818 and 842-845.
1170 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 4.
1171 Korea's first written submission, paras. 819-832 and 846-850.
1172 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 3.
1173 Korea's first written submission, para. 872.
1174 Korea's first written submission, para. 664.

BCI deleted, as indicated [[***]]

increase from a margin of 4.07% in the final determination.1175 Korea challenges the USDOC's final
determination in the remand proceedings (the "final redetermination").
In its initial questionnaire, the USDOC requested HHI to report the gross unit price for US
sales "as it appear[ed] on the invoice for sales shipped and invoiced in whole or in part". 1176
For certain fields of its questionnaire, including the field for gross unit prices, the USDOC instructed
HHI to report, inter alia, "[a]ll price adjustments granted, including discounts and rebates", and to
"create a separate field for reporting each additional charge" in cases that the invoice to the customer
included "separate charges for other services directly related to the sale, such as a charge for
shipping".1177 HHI responded by adding the price-related fields "ADDPOPRU" and "ADDPOEXPU" and
explained as follows:
ADDPOPRU is sales amount under a separate purchase order for services that were not
included in the purchase order for the transformer ( e.g., supervision), but that are
related to the transformer. ADDPOEXPU is the expense associated with the additional
services.1178
The USDOC issued a supplemental questionnaire requesting HHI to clarify if it considered
"a sales amount entered under ADDPOPRU to be part of the purchase price of an LPT, even though
the amount appeared on a separate purchase order". 1179 HHI respon ded that , in light of the
USDOC's instructions in prior segments of the proceedings, the gross unit price included the value
of services "[w]here the terms of sale require[d] [HHI] to perform such services".1180 HHI explained
that, "[i]n accordance with the [USDOC]'s decision in the Original Investigation, where the customer
has issued a separate, additional purchase order for services related to, but not included in the
purchase order for the sale, [HHI] has reported the value of the a dditional purchase order and
related expenses separately (i.e., in fields ADDPOPRU and ADDPOEXPU)".1181 HHI also clarified that
the sales amount reported as ADDPOPRU was not included in the reported gross unit price
(GRSUPRRU), and the corresponding expense (ADDPOEXPU) was not included as part of a sales
expense.
In its final determination, the USDOC rejected the petitioner's assertion that HHI had failed
to report reimbursed expenses from services , and, as a result , HHI had misstated the gross unit
prices.1182 The USDOC did not understand the US sales at issue to satisfy the conditions under which
reimbursed expenses arose and therefore did not require them to be separately reported. 1183
As such, the USDOC did not apply its capping methodology, i.e. its practice of capping the reported
service-related revenues by the actual expenses in order to avoid the overstatement of gross unit
prices.1184 Finding the reported gross unit price for each sale to be the appropriate basis for the
calculation of the export price for the final dumping margin 1185, the USDOC declined the
petitioner's request to "at least apply partial facts available" as follows:
Specifically, we cannot conclude that necessary information is not available on the
record, nor can we find that [HHI] withheld information requested by the [USDOC], that
it failed to provide such information in the form or manner requested, that it acted to
significantly impede the proceeding, or that it provided requested information that could
not be verified. As discussed in re sponse to the other comments filed for these final
results, [HHI] has complied with all of our requests for information, and the necessary
information requested by the [USDOC] and provided by [HHI] is sufficient to determine
[HHI]'s final dumping margin for this review period.1186

1175 Korea's first written submission, paras. 676 and 684.
1176 LPT POR2 initial questionnaire, (Exhibit USA-23), p. C-20.
1177 LPT POR2 initial questionnaire, (Exhibit USA-23), p. C-18. (emphasis omitted)
1178 LPT POR2 Sections B-C questionnaire response, (Exhibit USA-24 (BCI)), p. C-28.
1179 LPT POR2 supplemental Sections B-C questionnaire response, (Exhibit KOR-248 (BCI)), p. 14.
1180 LPT POR2 supplemental Sections B-C questionnaire response, (Exhibit KOR-248 (BCI)), pp. 14-15.
1181 LPT POR2 supplemental Sections B-C questionnaire response, (Exhibit KOR-248 (BCI)), p. 15.
1182 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), pp. 38-40. (emphasis added)
1183 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 40.
1184 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), pp. 6-7.
1185 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 40.
1186 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 50.

BCI deleted, as indicated [[***]]

The petitioner appealed certain aspects of the USDOC's final determination to the US Court
of International Trade ( USCIT)1187, arguing, inter alia, that the USDOC failed to cap the revenues
that HHI had included "in its gross unit prices for subject merchandise for sales-related services that
were separately purchased by the customer by the amount of the related expenses incurred by [HHI]
on those services".1188 The USDOC requested – and was granted – a voluntary remand to evaluate
its treatment of service-related revenues.1189 In its draft redetermination in the remand proceedings
(the "draft redetermination"), the USDOC determined that it would cap the service -related
revenues.1190 According to the USDOC, the documentation it re-examined indicated that, for certain
US sales sequence numbers (SEQUs), the price charged to the final customer included revenues that
were dedicated to various services, and that these revenues exceeded the related service
expense.1191 The USDOC found that HHI had overstated the gross-unit prices and had not separately
reported service-related revenue.1192 The USDOC thus found that the conditions for resorting to facts
available were met:
After re-examining the record evidence, we find that applying [the USDOC]'s standard
practice to cap [HHI]'s service-related revenues by the corresponding expense is
warranted. However, because necessary information is missing from the record due to
[HHI]'s failure to report service -related revenues, as [the USDOC] requested, we find
that [HHI] impeded this review by failing to provide information necessary for [the
USDOC] to apply its standard capping methodology . Therefore, we find that the
application of facts available is warranted in order to cap [HHI]'s service related
revenues by the associated expenses.1193
HHI alleged multiple deficiencies in the USDOC 's draft redetermination with respect to
service-related revenues.1194 HHI argued that in the draft redetermination, the USDOC abandoned
the "Original Test" applied in the original investigation, the POR1 review, as well as the POR2 final
determination, and used instead a "New Test" in order to determine whether service-related revenue
existed.1195 According to HHI, under the "Original Test", "service -related revenue existed only if
[HHI] was not required to provide a service under the terms of sale and [HHI] nevertheless provided
the service for a separate amount", while under the "New Test", "service -related revenue exists if
certain sales documents identified revenue for the service, regardless of whether [HHI] was required
to provide the service under the terms of sale".1196
For HHI, there was no basis for the USDOC's resort to facts available as it did not notify HHI
of any deficiencies in its reporting, and it did not give an opportunity to provide information that was
relevant for the "New Test". 1197 Even assuming that the USDOC had valid grounds for using facts
available, HHI argued there was no basis for drawing adverse inferences, as the USDOC did not
clearly articulate how HHI "failed to act to the best of its ability". 1198 Finally, HHI argued that the
draft redetermination failed to acknowledge the USDOC 's prior treatment of HHI 's service-related
revenues and the USDOC 's confirmation that HHI had properly reported this information. 1199
HHI noted that the documents allegedly s howing service-related revenues were available to the
USDOC well in advance of verification, as was HHI 's methodology for reporting service -related
revenues.1200 According to HHI, the USDOC could not fault HHI for a "failure" to report information

1187 LPT POR2 court remand, (Exhibit KOR-206 (BCI)); United States' first written submission,
para. 204.
1188 LPT POR2 court remand, (Exhibit KOR-206 (BCI)), p. 3.
1189 United States' first written submission, para. 204. The USDOC's final determination in the remand
proceedings was partially affirmed by the USCIT. The matter was again remanded to the USDOC, these
proceedings were ongoing at the time of this dispute. Korea's challenge in the current dispute pertains to the
final determination in the first remand proceedings. (Korea's response to Panel question No. 32, p. 30).
1190 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 13.
1191 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 12.
1192 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 13.
1193 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 11.
(emphasis added)
1194 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), p. 2.
1195 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 2-3.
1196 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 2-3.
1197 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 8-10.
1198 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 10-12.
1199 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 17-18.
1200 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), p. 17. The sequence
numbers in question that the USDOC examined during verification were SEQUs [[***]].

BCI deleted, as indicated [[***]]

under the revised interpretation of service -related revenues of 2018, when it had submitted its
responses in 2015.1201 HHI also argued that the USDOC should have notified HHI of the change in
its interpretation.1202 In any event, HHI argued that if the USDOC would continue to apply this new
test in the final redetermination, it had to reopen the factual record.1203
In its final redetermination in the remand proceedings, the USDOC addressed
HHI's argument that the USDOC had changed its methodology in its redetermination by stating that
it voluntarily sought remand specifically to examine the capping methodology as its "understanding
of the information continues to evolve". 1204 The USDOC explained that , "[b]ased on the plain
language of the law and [the USDOC]'s regulations, it has been [the USDOC]'s stated practice to
decline to treat service -related revenue as an addition to U.S. price under section 1677a(c)(1) of
the Act or as a price adjustment under 19 CFR 351.102(b)(38)".1205 According to the USDOC:
If a respondent collects, as a portion of the final price to the customer, a portion of
revenue which is dedicated to covering a service -related expense, and that
service-related expense is less than the revenue set aside to cover the expense, then
this is service-related revenue which is part of the material terms of sale and must be
capped. [HHI] cannot prevent the application of [the USDOC]'s capping methodology
based on a technicality concerning whether a respondent chooses to separately itemize
service-related charges in sales contracts or invoices. [The USDOC]'s determination in
this remand redetermination is not a change in methodology, but is instead an
appropriate application of our capping methodology pursuant to the statute and past
practice.1206
In response to HHI's comment that it was not informed of any change in the applicable methodology,
the USDOC stated that it had instructed HHI to report actual and estimated costs and expenses –
information that was "necessary" for the USDOC to apply its capping methodology.1207
The USDOC found that HHI "refused to provide the necessary information for [the USDOC]
to apply its capping methodology"1208 and that HHI "failed to cooperate to the best of its ability by
not providing the information requested. Therefore, partial adver se facts available [was]
warranted".1209 The USDOC re-examined [[***]] sales in the remand proceedings. For [[***]] sales,
the USDOC applied facts available by reducing the gross unit price by the difference between the
service-related expenses and service r evenues reported by HHI, expressed as a percentage. 1210
For all other sales1211, the USDOC applied facts available with an adverse inference by reducing the
gross unit prices by the highest percentage rate difference identified in one of the [[***]] examined
sales.1212 This resulted in a dumping margin of 25.51% for HHI.1213
7.3.6.2.3 Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available, as HHI did not refuse access to, or otherwise
fail to provide, "necessary" information. 1214 Korea contends that the services performed under the
terms of sale were not separate, and that the revenues for such services were correctly reported by
HHI as part of the sales price for the LPTs. 1215 According to Korea, "problems arose" in the POR2
remand proceedings because the USDOC applied a different definition of "service-related revenue",

1201 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), p. 19.
1202 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), p. 20.
1203 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 21-22.
1204 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 20.
1205 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 21.
1206 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 22.
1207 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
1208 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
1209 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
1210 LPT POR2 draft results of redetermination, (Exhibit USA-27 (BCI)), pp. 13-14.
1211 Other than [[***]]; LPT POR2 draft results of redetermination, (Exhibit USA-27 (BCI)), p. 14.
1212 LPT POR2 draft results of redetermination, (Exhibit USA-27 (BCI)), p. 14.
1213 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), pp. 24
and 32.
1214 Korea's first written submission, paras. 769 and 771.
1215 Korea's first written submission, para. 769.

BCI deleted, as indicated [[***]]

without explaining this new definition and without providing HHI with a re asonable opportunity to
respond.1216 To the extent that any "necessary" information was missing, Korea argues that this was
due to the USDOC's failure to inform HHI.1217
Korea challenges the USDOC's "refusal" to permit HHI to submit "necessary" information in
the remand proceedings, "after [the] USDOC changed its practice and despite … HHI's express
request for permission to submit the data".1218 Korea emphasizes that the USDOC did not "discover"
upon remand any information was "hidden" by HHI, and that the sales documentation on the record
was exactly the same for the final determination and for the remand determination. Rather, it was
the USDOC that changed its methodology.1219 Korea argues that the United States mischaracterizes
the facts by stating that the USDOC "initially did not look beyond what HHI reported" as the USDOC
accurately described what HHI had done initially and concluded that HHI's reporting was proper.1220
Korea does not challenge the US DOC's capping methodology1221 or the USDOC 's right to
change its practice.1222 According to Korea, however, an investigating authority 's ability to change
practice is restrained by the "minimum" requirement of providing notice to the interested parties
and providing an opportunity for interested parties to submit information under the new practice.1223
According to Korea, the USDOC was required under paragraph 6 of Annex II to the
Anti-Dumping Agreement to do so before resorting to facts available. 1224 Korea argues that the
USDOC should have issued an additional supplemental questionnaire and accepted HHI's request to
reopen the record. 1225 Furthermore, Korea argues that the information on the record allowed the
USDOC to apply its standard capping methodology.1226 On this basis, Korea submits that the USDOC
acted inconsistently with paragraphs 3 and 5 of Annex II by failing to take into account verifiable
and appropriately submitted information – even though it may not have been ideal – and by finding
that HHI had failed to act to the best of its ability.1227
The United States responds that service-related revenues should have been capped in the
final determination, but despite the USDOC 's requests to report "the sale pric e, discounts, rebates
and all other revenues and expenses", HHI refused to provide the "necessary" information. 1228
Because of HHI 's failure, the USDOC was unable to apply its standard capping methodology. 1229
According to the United States, the USDOC did not change its treatment of service-related revenues,
but its understanding of HHI's transactions and accounting "continue[d] to evolve".1230 The USDOC
initially did not look beyond what HHI reported, but, upon re -examination of the evidence in the
remand procee dings, found that "the fact that certain expenses 'are not on the invoice to the
unaffiliated customer, or part of the purchase order, does not negate the fact that these are revenue,
collected by [HHI] from the unaffiliated customer and dedicated to cover service expenses, and

1216 Korea's first written submission, para. 770.
1218 Korea's response to Panel question No. 35, p. 33.
1219 Korea's second written submission, paras. 287 and 292.
1220 Korea's second written submission, para. 288 (quoting United States' first written submission,
para. 210).
1221 Korea's second written submission, para. 289.
1222 Korea's response to Panel question No. 35, p. 33.
1223 Korea's response to Panel question No. 35, p. 33. See also Korea's second written submission,
para. 290.
1224 Korea's second written submission, paras. 286 and 290. Relatedly, Korea also asserts in its
first written submission that if "necessary" information was missing, "it was missing because the USDOC failed
to request [it] specifically", as required under paragraph 1 of Annex II. (Korea's first written submission,
para. 774).
1225 Korea's first written submission, para. 836.
1226 Korea's first written submission, para. 773 (referring to LPT POR2 draft results of redetermination,
(Exhibit KOR-207 (public version)), p. 13); second written submission, para. 295.
1227 Korea's first written submission, para. 837.
1228 United States' first written submission, paras. 221-222.
1229 United States' first written submission, paras. 222 and 224. The United States submits that, in any
event, HHI did not act to the best of its ability as it "possessed the information necessary to report specific
service-related revenues for specific service-related expenses, but failed to do so". (United States' first written
submission, para. 225).
1230 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 20; see
also United States' response to Panel question No. 35, paras. 131-139; and second written submission,
para. 78.

BCI deleted, as indicated [[***]]

which exceed those service expenses'". 1231 The United States argues that nothing in the
Anti-Dumping Agreement requires an investigating authority to ignore certain facts simply because
its understanding of equivalent facts was less developed in an earlier segment of the proceedings.1232
Thus, the United States' submits that the USDOC properly resorted to facts available.1233
Responding to Korea's argument that the USDOC never informed HHI of the deficiencies in
its reporting, the United States alleges that HHI failed to report service -related revenues and
expenses as originally instructed by the USDOC and misled the USDOC "by mischaracterizing its
need to report revenues and expenses separately", and thus HHI "never provided [the USDOC] with
an opportunity to inform [HHI] of any deficiencies". 1234 The United States contends that "HHI
reported to [the] USDOC on multiple occasions that it had no service -related revenues to report"
and for this reason "USDOC 's obligation to inform HHI of the nature of any deficiency never
arose".1235 The United States points out that HHI had the opportunity to submit comments on the
USDOC's draft redetermination, which were addressed by the USDOC in its final redetermination.1236
The United States also asserts that there was no verifiable or appropriately submitted information
on the record for the USDOC to take into account pursuant to paragraph 3 and paragraph 5 of
Annex II.1237
As to the selection of the replacement facts, Korea argues that the USDOC acted
inconsistently with Article 6.8 and Annex II as it did not engage in the process of reasoning and
evaluation that was required in the circumstances.1238 Referring to the panel's findings in Canada –
Welded Pipe, Korea argues that the USDOC failed to provide a reasoned and adequate explanation,
or to engage in the requisite comparative evaluation for determining how or why the highest
calculated difference between HHI 's reported service -related expenses and revenues was a
reasonable replacement for the allegedly missing information. 1239 According to Korea, the
USDOC's selection of the replacement facts was not objective and fair, but, instead, was arbitrary
and punitive in nature.1240
The United States responds that the USDOC selected reasonable replacements for the
missing information after ascertaining their relevance and reliability based on HHI 's own reported
information and the actual revenues. 1241 According to the United States, the USDOC engaged in a
process of reasoning and evaluation, whereby it determined that purchase orders for [[***]] of the
[[***]] sales examined contained the information required by the USDOC – "meaning that HHI could
have reported the revenues separately, but elected not to" do so.1242 According to the United States,
the mere fact that the result was less favourable for HHI does not indicate that the USDOC acted in
a punitive manner or inconsistently with Article 6.8.1243
7.3.6.2.4 Evaluation by the Panel
7.3.6.2.4.1 The USDOC's resort to facts available
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of service-related revenues.
We recall that, in its final determination for POR2, the USDOC did not object to
HHI's understanding of its reporting obligations and accepted the information submitted by HHI in

1231 United States' first written submission, para. 210 (quoting LPT POR2 final results of redetermination,
(Exhibit USA-29 (BCI)), p. 23-24).
1232 United States' second written submission, para. 78.
1233 United States' first written submission, para. 211.
1234 United States' response to Panel question No. 84, paras. 135 and 142.
1235 United States' first written submission, para. 218.
1236 United States' response to Panel question No. 34, para. 129.
1237 United States' first written submission, para. 222.
1238 Korea's first written submission, para. 854.
1239 Korea's first written submission, para. 853 (referring to Panel Report, Canada – Welded Pipe,
para. 7.133).
1240 Korea's first written submission, paras. 853-854.
1241 United States' first written submission, para. 227.
1242 United States' first written submission, para. 228.
1243 United States' first written submission, paras. 227 and 229.

BCI deleted, as indicated [[***]]

the face of express objections by the petitioner. The USDOC stated that, "[a]lthough some expense
amounts (and spare part amounts) may have been broken out in the purchase orders, the totals on
the purchase orders are lump -sum amounts and these amounts all tie to the invoice totals". 1244
Specifically, for the expenses that the petitioner took issue with, the USDOC found that there was
no basis to indicate that HHI sought or obtained reimbursements for the se expenses from the
customers and that, despite being broken out in the purchase orders, the totals in these purchase
orders were "lump sum" amounts.1245 Importantly, the USDOC accepted HHI's understanding of the
reporting requirements, and the application of these requirements to the service -related revenues
and expenses for the US sales at issue after a "review of the sales traces".1246 Ultimately, the USDOC
concluded that the record did not suggest that HHI improperly reported its sales data , and that all
the "necessary" information had been provided. 1247 Thus, as part of its POR2 final determina tion,
the USDOC accepted the information, as well as HHI's underlying reporting basis.
Following remand from the USCIT, the USDOC, in its draft redetermination, decided to apply
its "standard practice to cap [HHI]'s service-related revenues by the corresponding expense" and
found that necessary information was missing from the record due to HHI's failure to report
service-related revenues, "as [the USDOC] requested".1248 In its final redetermination results upon
remand, the USDOC explained that:
[The USDOC]'s capping methodology is not dependent upon whether a respondent must
provide the servic e under the terms of sale as [HHI] contends, but whether such
services were provided and whether the revenue amounts collected for the provision of
such services exceed the cost of those services. Neither is [the USDOC] 's capping
methodology dependent upon whether the service-related expenses and revenues are
separate line-items on an invoice to the unrelated customer. … [The USDOC]'s capping
methodology, generally, may nevertheless be applied notwithstanding whether the
amounts are specified in sales contr acts with, or invoices to, the customer. If a
respondent collects, as a portion of the final price to the customer, a portion of revenue
which is dedicated to covering a service -related expense, and that service -related
expense is less than the revenue set aside to cover the expense, then this is
service-related revenue which is part of the material terms of sale and must be capped.
[HHI] cannot prevent the application of [the USDOC]'s capping methodology based on
a technicality concerning whether a respond ent chooses to separately itemize
service-related charges in sales contracts or invoices. [The USDOC]'s determination in
this remand redetermination is not a change in methodology, but is instead an
appropriate application of our capping methodology pursua nt to the statute and past
practice.1249
Addressing HHI's assertion that the USDOC did not inform it of any change in methodology or any
deficiencies in the information supplied, the USDOC noted that:
[The USDOC] requested that [HHI] report the sale price, discounts, rebates and all other
revenues and expenses in the currencies in which they were earned or incurred. [The
USDOC] also notified [HHI] that it expected to obtain information "with regard to actual
and estimated costs and expenses" through December 31, 2014.
[The USDOC]'s instructions indicate that [HHI] should report actual and estimated
expenses. Yet, [HHI] refused to provide the necessary information for [the USDOC] to
apply its capping methodology.1250
We note that Korea does not take issue with the USDOC 's right to change its "practice"
relating to the reporting of service-related revenues1251 or to apply the "capping methodology" during

1244 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), pp. 39-40.
1245 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), pp. 39-40.
1246 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 39.
1247 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 50.
1248 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 11.
1249 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), pp. 21-22.
1250 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), p. 24.
(fns omitted)
1251 Korea's response to Panel question No. 35, p. 33. Korea notes however that, "as pointed out in
Korea's opening statement for the first substantive meeting, the USDOC's changed practice relating to
service-related revenues does not seem as reasonable as its previous practice". (Ibid.).

BCI deleted, as indicated [[***]]

the remand proceedings.1252 Thus, the USDOC's ability to steer the course of its investigation, by,
inter alia, determining the standard for reporting service-related revenues and deciding whether to
apply the "capping methodology" is not in dispute before us. That said, irrespective of the reasons
underlying the USDOC 's rejection of the information that was orig inally submitted by HHI and
accepted by the USDOC in its final determination, the USDOC 's continues to be subject to the
obligations under Article 6.8 and Annex II of the Anti-Dumping Agreement at all times.
The first sentence of paragraph 6 of Annex II to the Anti-Dumping Agreement requires that:
If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefor, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time -limits of
the investigation.
Under the second sentence of paragraph 6, "[i]f the explanations are considered by the
authorities as not being satisfactory, the reasons for the rejection of such evidence or information
should be given in any published determinations". Nothing in the text of paragraph 6 limits these
obligations to certain stages of an investigation. Rather, by its terms, paragraph 6 sets out the
obligations that investigating authorities must discharge whenever "evidence or information is not
accepted". In interpreting paragraph 6 of Annex II, we also consider important the context provided
by Article 6.2 of the Anti-Dumping Agreement, which provides, in relevant part, that:
Throughout the anti -dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that op posing views may be presented and rebuttal arguments
offered.1253
As discussed above, in its final determination for POR2, the USDOC accepted
HHI's understanding of the reporting requirements, as well as the reporting of the specific services
at issue, after a "review of the sales traces" 1254, and concluded that HHI had provided all the
"necessary" information.1255 Subsequently, in its draft redetermination in the remand proceedings,
the USDOC rejected the information relating to service-related revenues that was initially accepted
by the USDOC in its final determination.
Having "not accepted" the information supplied by HHI, the USDOC was required, under the
first sentence of paragraph 6 of Annex II, to inform HHI "forthwith" of the reasons for such rejection,
and to provide an opportunity to HHI to furnish further explanations. We note the
United States' argument that HHI "chose to report its data a certain way and misled [the USDOC]
regarding its reasons for doing so", and, "[b]y adopting this course of action, [HHI] never gave [the
USDOC] an opportunity to inform [HHI] of any deficiencies" .1256 The United States' argument
acknowledges that the USDOC did not inform HHI of any deficiencies in the submitted information.
From the USDOC's refusal to reopen the record, it is also clear that no additional information was
requested by the USDOC or provided by HHI during the remand proceedings.1257
We disagree with the United States' argument that HHI "misled" the USDOC regarding its
reasons for reporting the service-related revenues in "a certain way" and thus HHI "never provided
[the USDOC] with an opportunity to inform [HHI] of any deficiencies". 1258 As discussed above, in
response to a clarification sought by the USDOC in the supplemental questionnaire for POR2, HHI
stated its understanding that reporting of services separately from the gross-unit prices was required
when the services were not perfor med in "the terms of sale". 1259 HHI thus clearly set out its

1252 LPT POR2 draft results of redetermination, (Exhibit KOR-207 (public version)), p. 11. See also
Korea's first written submission, para. 773.
1253 Emphasis added.
1254 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 39.
1255 LPT POR2 issues and decisions memorandum, (Exhibit KOR-110), p. 50.
1256 United States' response to Panel question No. 84, para. 135.
1257 Korea's first written submission, para. 836; United States' response to Panel question No. 34,
para. 130.
1258 United States' response to Panel question No. 84, para. 135.
1259 LPT POR2 supplemental Sections B-C questionnaire response, (Exhibit KOR-248 (BCI)), pp. 14-15.
See para. 7.383 above.

BCI deleted, as indicated [[***]]

understanding of its reporting obligations from the outset of the proceedings. In its final
determination, the USDOC did not find any fault with HHI 's understanding of its reporting
obligations. Th us, instead of "misleading" the USDOC, HHI disclosed its basis for reporting
service-related revenues from the outset and the USDOC never took issue with HHI 's position until
the draft redetermination. Moreover, the United States' argument that "[the] USDOC's obligation to
inform HHI of the nature of any deficiency never arose" because "HHI reported to [the] USDOC on
multiple occasions that it had no service-related revenues to report"1260 is also circular inasmuch as
it seeks to justify the USDOC 's failure to inform to inform HHI of any deficiencies in its reporting
precisely because of those very deficiencies.
Paragraph 6 of Annex II requires that the interested party be informed of the reasons why
submitted information is not accepted by an investigating a uthority irrespective of the reasons for
the non-acceptance or the accuracy of the interested party 's reporting. The USDOC rejected the
information relating to service -related revenues that it had originally accepted in its final
determination for POR2. The discussion above reveals that the USDOC did not inform HHI "forthwith"
of the reasons for such rejection.
We note the United States' argument that HHI had the opportunity to comment on the
USDOC's draft redetermination, and that the USDOC addressed these comments before rejecting
HHI's suggestions in its final redetermination. 1261 However, we do not consider that, in the
circumstances of this case, HHI 's comments on the USDOC 's draft redetermination amount to an
opportunity to provide further explanations i n the sense of paragraph 6, because, as part of its
comments, HHI expressly requested the USDOC to reopen the record and request information with
respect to service -related revenues during the remand proceedings 1262, but the USDOC declined
HHI's request.1263 Therefore, we conclude that the USDOC did not provide an opportunity to HHI for
furnishing further explanations within a reasonable period, due account being taken of the
time-limits of the investigation. In the circumstances of this case, this ought to have included an
opportunity to submit further information in accordance with the USDOC's requirements.
We therefore find that the USDOC acted inconsistently with paragraph 6 of Annex II to the
Anti-Dumping Agreement because – having "not accepted" the information provided by HHI – the
USDOC failed to inform HHI "fort hwith" of the reasons for its non -acceptance and failed to provide
an opportunity to HHI for furnishing "further explanations within a reasonable period , due account
being taken of the time-limits of the investigation". Given that paragraph 6 of Annex II serves as a
precondition for an investigating authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the USDOC also acted inconsistently with that provision in
resorting to facts available with respect to HHI's reporting of service-related revenues in POR2.1264
In light of our findings of WTO -inconsistency, we do not consider it necessary to rule upon
Korea's claims under paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in order to
provide a positive solution to the dispute before us.1265
7.3.6.2.4.2 The USDOC's selection of the replacement facts
We have already found that the USDOC erred in resorting to facts available with respect to
HHI's reporting of information concerning service -related revenues. In these circumstances, we do
not consider that making further findings on Korea's claims concerning the USDOC's selection of the
replacement facts on the basis of the record used for the USDOC's WTO-inconsistent findings would
assist in providing a positive solution to the dispute before us.1266

1260 United States' first written submission, para. 218.
1261 United States' response to Panel question No. 34, para. 129.
1262 LPT POR2 HHI comments on draft redetermination, (Exhibit KOR-114 (BCI)), pp. 21-22.
1263 LPT POR2 final results of redetermination, (Exhibit KOR-207 (revised, public version)), pp. 19
and 24.
1264 Panel Reports, China – GOES, paras. 7.384-7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico –
1265 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1266 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on

BCI deleted, as indicated [[***]]

The third administrative review (POR3)
7.3.6.3.1 Introduction
For the POR3 proceedings, Korea challenges the USDOC 's use of facts available in respect
of four issues concerning HHI's reporting of (a) service-related revenues; (b) home-market prices;
(c) accessories; and (d ) certain sales documentation. 1267 Korea claims that the USDOC erred in
resorting to the use of facts available for each of the four issues 1268, as well as in its subsequent
selection of the replacement facts.1269 The United States requests us to reject Korea 's claims, and
maintains that this is not an instance of "collective failure" where the "USDOC found that Hyundai
failed with respect to specific issues that, 'on their own' may not warr ant facts available with an
adverse inference, but 'taken as a whole,' do"; rather, for the United States, the USDOC properly
resorted to facts available for each specific issue.1270
We first address Korea 's claims of inconsistency under Article 6.8 and Annex II of the
Anti-Dumping Agreement concerning the USDOC's resort to facts available with respect to each of
the four issues. For each issue, we describe the factual background and summarize the main
arguments of the parties, before examining whether the USDOC erred in resorting to facts available.
In light of the USDOC's application of "total facts available with an adverse inference" 1271, we then
examine Korea's claims pertaining to the USDOC's selection of the replacement facts.
7.3.6.3.2 The USDOC's resort to facts available
7.3.6.3.2.1 Service-related revenues
Factual background
In its initial questionnaire , the USDOC requested HHI to "report revenue in separate fields
(e.g., ocean freight revenue, inland freight revenue, oil r evenue, installation, etc.) and identify the
related expense(s) for each revenue".1272 HHI responded that , in view of its understanding of the
USDOC's reporting requirements for services in the original investigation, it did not have separate
revenues for se rvices.1273 The USDOC issued a supplemental questionnaire seeking clarity as to
whether HHI "received revenue related to international freight, inland freight, oil, installation, or any
other expenses" for home market and US sales.1274 HHI responded that it did not receive any such
revenues, "[i]n accordance with the [USDOC]'s review and treatment of [HHI]'s sales documentation
in prior segments of this proceeding". 1275 HHI argued that , as its information in this review was
essentially the same as in the prior segments of this proceeding – and the USDOC had previously
found that there was no indication of improper reporting – the reporting of its home-market and US
gross unit prices was appropriate.1276

1267 Korea's first written submission, paras. 775-797 and 838-840.
1268 Korea's first written submission, para. 775.
1269 Korea's first written submission, paras. 767 and 855.
1270 United States' first written submission, para. 254; response to Panel question No. 37.
1271 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 4.
1272 LPT POR3 initial questionnaire, (Exhibit KOR-209), p. B-1.
1273 LPT POR3 Sections B-C questionnaire response, (Exhibit KOR-122 (BCI)), pp. B-3-B-4.
HHI explained in detail its reporting methodology:
Following the [USDOC]'s analysis in the I&D Memo [accompanying the original final
determination], [HHI] has reported, since the first administrative review, separate revenue and
expenses where the customer issues a separate purchase order for services that are not part of
the original term of sale. Specifically, in the U.S. sales list, [HHI] has reported the sales amount
from additional purchase orders in the ADDPOPRU field and the associated additional expenses
under the separate purchase order in the ADDP OEXPU field. [HHI] did not receive additional
purchase orders for home market sales during the POR.
(Ibid.).
1274 LPT POR3 supplemental Sections B-C questionnaire, (Exhibit KOR-124 (BCI)), pp. 6.
1275 First part of LPT POR3 supplemental Sections A-D questionnaire response, (Exhibit KOR-125 (BCI)),
p. 11.
1276 First part of LPT POR3 supplemental Sections A-D questionnaire response, (Exhibit KOR-125 (BCI)),
pp. 11-12.

BCI deleted, as indicated [[***]]

In its preliminary decision memorandum, the USDOC did not take issue with HHI's reporting
of service -related revenues. 1277 Subsequently, the USDOC issued a supplemental questionnaire,
requesting HHI to "provide complete sales and expenses docu mentation (including all sales and
expenses related documentation generated in the sales process ) for all U.S. SEQUs".1278 It further
asked HHI to revise its US sales database to report in separate fields all expenses and revenues for
separately-negotiated s ervices and non -subject merchandise for the sales identified as
SEQUs [[***]].1279 In the event that HHI considered that there were no such additional expenses or
revenues, the USDOC requested HHI to comment on the corresponding assertions of the
petitioner.1280 HHI responded to the USDOC's request and provided "worksheet listing on a category
basis the values listed anywhere in the sales documentation for the breakdowns of the price of the
LPTs and the corresponding expenses", while insisting that there were n o "separate" revenues for
services.1281
In its final determination issues and decision memorandum, the USDOC noted that:
Although we requested that [HHI] report separately service -related revenues
(e.g., freight, installation, and supervision ) from the associated expenses in prior
segments of this proceeding, we did not require [HHI] to do so in the previous segments
because [HHI] stated that such services were required under the terms of sale and that
these revenues were not separately invoiced to the customers. However, record
evidence in the prior review shows that [HHI]'s U.S. price could be inflated by the
inclusion of service -related revenues, thereby affecting the [USDOC]'s ability to
calculate an accurate antidumping margin. Given these c oncerns, at the onset of this
instant review, we requested that [HHI] separately report such revenues and related
expenses so that, per our practice, we could cap such revenues by the related
expenses.1282
The USDOC further observed that in the second part of HHI 's response to the supplemental
questionnaire, certain documents identified separate service line items with the corresponding
prices/revenues listed were higher than the expenses reported for this sale. 1283 According to the
USDOC, "[t]his finding affirmed [its] concerns regarding the methodology [HHI] used to report gross
unit price".1284 In addition, the USDOC noted that the revised US sales database submitted by HHI
in its supplemental response had purchase orders or invoices for many US sales containing separate
line items for services, thus confirming that "while revenues from such services may not have been
separately invoiced to the customers, [HHI] and its customers separately assigned prices for the
related services and identified these amounts as separate line items on invoices, separate from the
price of the subject merchandise".1285

1277 LPT POR3 decision memorandum for preliminary results, (Exhibits KOR-127 (BCI), KOR-135
(public version)).
1278 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 5. (emphasis original)
1279 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 6.
1280 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 6.
1281 LPT POR3 HHI third supplemental questions 13 and 17 response, (Exhibit KOR-119 (BCI)), p. 23
and exhibit 3S-46.
1282 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 18. The USDOC stated that it
had requested three times the separate reporting of these revenues, that is in its 3 December 2015 initial
questionnaire, in its 27 July 2016 supplemental questionnaire, and in its 7 October 2016 supplemental
questionnaire. (Ibid. pp. 18-20 and 24).
1283 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 20 (referring to Second part of
LPT POR3 supplemental Sections A-D questionnaire response, (Exhibit KOR-126 (BCI))).
1284 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 20.
1285 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21 (emphasis original). In detail,
the USDOC explained:
Although these services are required under the terms of sale and are invoiced on a lump -sum
basis, as [HHI] argued, we find that [HHI]'s sales documentation specifically indicates that these
sales-related services could be negotiable, apart from subject merchandise, since each service is
shown/listed with the corresponding amount in purchase orders and/or invoices. In other words,
if customers do not like [HHI]'s price for a certain service, they can procure/arrange such service
on their own without using [HHI]'s service. That is, we cannot conclude that such service is
non-negotiable and that customers cannot opt out of the service prior to accepting the offer just
because a specific service is included in the selling price under the terms of sale. Similarly, we
cannot conclude, as [HHI] suggests, that such service -related revenue should always be part of

BCI deleted, as indicated [[***]]

Finally, the USDOC stated that the worksheet submitted by HHI was incomplete and cast
serious doubts on the reliability of such information.1286 According to the USDOC, it would have had
the time to verify the issues raised, had HHI submitted this information earlier on in the review, but
"[w]hat key information [HHI] finally provided came in very late in the process, thereby negating
[its] ability to [check] … that the data provided are accurate and reliable, and to develop deficiency
questionnaires".1287
Main arguments of the parties
Korea claims that the USDOC resorted to facts available in violation of Article 6.8 of the
Anti-Dumping Agreement as HHI did not "refu se[] access to", or otherwise fail to provide,
"necessary" information, nor did it "significantly impede []" the proceedings.1288 Korea takes issue
with the USDOC's determination in the final results of POR3, which, in its view, "directly contradicts"
the USDOC's position in the final results of POR2 and the preliminary results of POR3 ; that HHI did
not need to separately report revenues for services that were performed under the terms of sale of
LPTs.1289 According to Korea, the POR3 administrative review marks the first instance when the
USDOC requested HHI to report such expenses and revenues relating to "separately -negotiated
services and non-subject merchandise", that is, "based on whether such revenues were separately
listed on a sales document". 1290 Korea describes this shift in "accepted definition" as a "significant
extra burden" on HHI, and states that even so, HHI submitted data in accordance with the
"redefined" service-related revenues in a timely manner.1291
Korea also claims that the USDOC acted inconsistently with paragraphs 3 and 5 of Annex II
to the Anti -Dumping Agreement by rejecting verifiable and substantiated information that HHI
submitted in a timely fashion.1292 Korea contends that the USDOC did not explain how many sales
were affected by the alleged error in the submitted worksheet for determining whether the entirety
of the information was tainted or unusable.1293 Nor was the USDOC justified in rejecting this data on
the basis of untimeliness, given that it had imposed unreasonable and untimely demands, and given
that it refused to take any further action even though the information was submitted over
four months before the issuance of the final results. 1294 According to Korea, the
United States' statement that HHI provided the information requested "nearly a year after" the
USDOC had requested it is "entirely disingenuous", given that the USDOC had accepted HHI's initial
reporting in the preliminary determination wi thout expressing any concerns.1295 Korea asserts that
HHI cooperated "to the best of its ability" by submitting the requested data and that the USDOC was
not justified to reject it based on the allegation that it was imperfect.1296
According to the United States, "necessary" information was missing from the record,
despite multiple requests by the USDOC which served to notify HHI of the USDOC 's reporting
requirements.1297 The United States submits that HHI had multiple opportunities to submit the
requested data, but it chose to "ignore or defy" the USDOC's definitions and instructions, resulting
in inaccurate and flawed reporting. 1298 The United States also asserts that, because
HHI's information did not meet the criteria under paragraph 3 of Annex II, it is not af forded the

the gross unit price just because a service is not arranged separately. Therefore, given the record
evidence, we find that service-related revenues for the sale of subject merchandise should not be
considered as a component of the gross unit price.
(Ibid.).
1286 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.
1287 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1288 Korea's first written submission, paras. 775-776.
1289 Korea's first written submission, paras. 697-698.
1290 Korea's first written submission, para. 702. (quoting LPT POR3 HHI third supplemental
questionnaire, (Exhibit KOR-128 (BCI)), p. 6).
1291 Korea's first written submission, paras. 776-777 (referring to LPT POR3 HHI third supplemental
questions 13 and 17 response, (Exhibit KOR-119 (BCI)), p. 23 and exhibit 3S-46).
1292 Korea's first written submission, para. 838.
1293 Korea's second written submission, para. 305.
1294 Korea's first written submission, para. 779.
1295 Korea's second written submission, para. 303.
1296 Korea's first written submission, para. 778.
1297 United States' first written submission, para. 253.
1298 United States' first written submission, para. 255.

BCI deleted, as indicated [[***]]

protections of paragraph 5, and in any event, HHI did not act "to the best of its ability" in responding
to the USDOC's requests for information.1299
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3 and 5
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of service-related revenues in POR3.
We have discussed a similar issue concerning the reporting of service -related revenues as
part of our analysis for POR2 above. The essential facts relating to the alleged "change" in the
USDOC's methodology or definition remain the same for both the POR3 final determination and the
POR2 redetermination. One crucial difference, however, is that in POR3, the USDOC appears to have
provided HHI with an opportunity to report service -related revenues when deciding that it was
necessary to apply its "capping methodology". Accordingly, Korea confines its claims of inconsistency
to paragraphs 3 and 5 of Annex II, and to Article 6.8. As with the POR2 remand proceedings, we do
not understand Korea to be taking issue with the USDOC 's ability to apply its "capping
methodology".1300 Rather, the question before us is whether the USDOC acted in a WTO-consistent
manner in rejecting the information submitted by HHI.
We recall that, in its preliminary decision memorandum dated 26 August 2016, the USDOC
did not take issue with HHI 's reporting of service-related revenues.1301 Thus, as of the preliminary
determination, there was no reason for HHI to suspect that its reporting and the basis thereof were
somehow deficient for purposes of the USDOC 's determination. Following its preliminary
determination, the USDOC issued a third supplemental questionnaire on 7 October 2016, requesting
HHI to "provide complete sales and expenses documentation (including all sales and expenses
related documentation generated in the sales process ) for all U.S. SEQUs".1302 The USDOC noted
the petitioner 's assertion that "HHI incurred expenses and obtained revenues for
separately-negotiated services and non -subject merchandise for the sales identified as
SEQUs [[***]]", and on this basis asked HHI to "revise [its] U.S. sales database to report all such
expenses and revenues for these sales in separate fields".1303 In the event that HHI considered that
there were no such additional expenses or revenues, the USDOC requested HHI to comment on the
corresponding assertions of the petitioner.1304
Given that the USDOC did not take issue with HHI's reporting of service-related revenues in
its preliminary determination, the third supplemental questionnaire is the first instance when HHI
was notified that the USDOC was not satisfied w ith its reporting of service -related revenues. HHI
responded to the USDOC 's third supplemental questionnaire on 10 November 2016 – within the
deadline established by the USDOC – and provided a "worksheet listing on a category basis the
values listed anywhere in the sales documentation for the breakdowns of the price of the LPTs and
the corresponding expenses", stressing however that there were no "separate" revenues for
services.1305
In its final determination, the USDOC rejected this information and found that the "worksheet
provided is incomplete and casts serious doubt on the reliability of such information".1306 By way of
reasoning, the USDOC referred to an example offered by the petitioner:
For example, as Petitioner noted, the worksheet appears to be missi ng information for
multiple U.S. sales (i.e., it is missing the related expenses for its claimed revenues).1307

1299 United States' first written submission, para. 262.
1300 Korea's response to Panel question No. 35, pp. 31-32.
1301 LPT POR3 decision memorandum for preliminary results, (Exhibits KOR-127 (BCI), KOR-135
(public version)).
1302 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 5. (emphasis original)
1303 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 6.
1304 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 6.
1305 LPT POR3 HHI third supplemental questions 13 and 17 response, (Exhibit KOR-119 (BCI)), p. 23
and exhibit 3S-46.
1306 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.
1307 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.

BCI deleted, as indicated [[***]]

The USDOC did not provide any further explanation concerning the alleged deficiencies in
HHI's worksheet. The USDOC acknowledged that HHI in its rebuttal brief "attempted to explain the
reason for the missing information" by stating that: "(1) such items relate to the manufacture of the
transformer and the costs are, therefore, included in the reported cost of production; and (2) there
are no separate sales expenses for these production costs" .1308 The USDOC did not examine these
explanations, but instead provided the following explanation:
[W]e cannot examine the validity of [HHI]'s reporting at this late stage of the review.
What key information [HHI] finally provided came in very late in the process, thereby
negating our ability to satisfy ourselves that the data provided are accurate and reliable,
and to develop deficiency questionnaires, as needed.1309
Paragraph 3 of Annex II to the Anti-Dumping Agreement requires an investigating authority
to "take into account" all information that is "verifiable", "appropriately submitted so that it can be
used in the investigation without undue difficulties", and "supplied in a timely fashion". Information
that satisfies these criteria cannot, therefore, be rejected by investigating authorities.1310
We note that the reason provided by the USDOC for its finding that the "worksheet provided
is incomplete" was that, as the "[p]etitioner noted, the worksheet appears to be missing information
for multiple U.S. sales".1311 The petitioner's case brief reveals that the "multiple U.S. sales" pertain
to [[***]] SEQUs.1312 The USDOC acknowledges that HHI "attempted to explain the reason for the
missing information" in its rebuttal brief. However, the USDOC stated that it could not "examine the
validity of [HHI]'s reporting at this late stage of the review" as the "key information [HHI] finally
provided came in very late in the process".1313 Thus, as we see it, the main reason provided by the
USDOC for disregarding the worksheet provided by HHI and its explanations relating thereto
concerned the timeliness of HHI's responses. We must therefore determine whether the information
provided by HHI was supplied within a "timely fashion" , within the meaning of paragraph 3 of
Annex II.
We note that HHI provided the worksheet at issue in response to the USDOC 's third
supplemental questionnaire on 10 November 2016, thus within the deadlines established by the
USDOC for that purpose.1314 The issue of timeliness of HHI's submission therefore does not relate to
whether HHI responded within the prescribed time-limit. Rather, the USDOC's concern relates to the
"late stage of the review process" when the information was submitted.1315 According to the USDOC,
because the worksheet "came in very late in the process" it was unable to check the accuracy and
reliability of the information, and develop deficiency questionnaires, as needed. 1316 Our
understanding is confirmed by the USDOC's observation that HHI should have separately reported
service-related revenues and related expenses "early on ( i.e., in [HHI's] January 27, 2016,
Sections B and C Questionnaire Response or even in [HHI's] August 10, 2016, Supplemental
Questionnaire Response)".1317
Although the USDOC requested information relating to service -related revenues and
expenses as part of its initial and supplemental questionnaires, it did not take issue with
HHI's responses in its preliminary determination dated 26 August 2016.1318 It was only as part of its
third supplemental questionnaire, issued on 7 October 2016, that the USDOC noted the
petitioner's concerns and sought revised information from HHI. Thus, irrespective of the scope of its
initial queries, the USDOC accepted the information originally reported by HHI, until 7 October 2016
– when the USDOC issued its third supplemental questionnaire seeking a revised database. As HHI
could not have been aware of any deficiencies in its responses before the third supplemental

1308 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 21-22 (referring to LPT POR3
HHI rebuttal brief, (Exhibit KOR-270 (BCI)), p. 17).
1309 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1310 See para. 7.138 above.
1311 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.
1312 LPT POR3 petitioner's case brief, (Exhibit KOR-129 (BCI)), pp. 21-22.
1313 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1314 LPT POR3 HHI supplemental questionnaire response, (Exhibit KOR-136 (BCI)), p. 15.
1315 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1316 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1317 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1318 LPT POR3 decision memorandum for preliminary results, (Exhibits KOR-127 (BCI), KOR-135
(public version)).

BCI deleted, as indicated [[***]]

questionnaire, we are not persuaded by the United States' argument that HHI provided the
information "nearly a year after [the] USDOC first requested that HHI report separately
service-related revenues and associated expenses".1319
As the USDOC did not raise any concerns with respect to HHI's initial responses, we do not
consider that these responses constituted opportunities for HHI to appropriately report
service-related revenues earlier in the review process. We therefore disagree with the United States
that the USDOC, by requesting such information "multiple times" from HHI, "ensured that HHI was
aware of its reporting requirements". 1320 Furthermore, HHI submitted the revised worksheet on
10 November 2016, which, as Korea points out, was over four months before the final determination
dated 13 March 2017. 1321 In these circumstances, we are not convinced that the worksheet was
submitted so late in the process that the USDOC was unable to assess its accuracy and reliability.1322
Indeed, if the USDOC did not intend to assess the accuracy and reliability of the data submitted in
response to its third supplemental questionnaire, it is unclear for what purpose the USDOC issued
that questionnaire. For purposes of paragraph 3, therefore, we find that the worksheet submit ted
by HHI on 10 November 2016 was "supplied in a timely fashion".
We also note the USDOC 's finding that the " worksheet provided is incomplete and casts
serious doubt on the reliability of such information" .1323 One reason offered by the USDOC for this
finding is that, "as Petitioner noted, the worksheet appears to be missing information for multiple
U.S. sales (i.e., it is missing the related expenses for its claimed revenues)" .1324 We note however
that HHI in its rebuttal brief "attempted to explain the reason for the missing information". 1325
The USDOC did not examine these explanations, because " [w]hat key information [HHI] finally
provided came in very late in the process, thereby negating [its] ability [to check] that the data
provided are accurate and reliable, and to develop deficiency questionnaires, as needed".1326
Thus, any finding by the USDOC concerning the unreliability or incompleteness of the
information – based on the petitioner's observations – is premised on its finding that the worksheet
was submitted at a late stage of the proceedings, and on its decision to not examine the explanations
provided by HHI for that reason. We have, however, found that the worksheet submitt ed by HHI
was provided in a "timely fashion" for purposes of paragraph 3. The USDOC does not provide any
other reasons as to why the information was not "verifiable" or could not be taken into account
"without undue difficulties". Korea asserts that the in formation submitted was unquestionably
verifiable.1327 For the reasons set out above, we are not convinced by the United States' argument
that the information submitted was not verifiable in light of the difficulties faced by the USDOC in
obtaining the information despite multiple requests.1328 Insofar as the USDOC considered any "undue
difficulties" to be related to the incomplete nature of the information, we find that this issue is also
grounded, ultimately, on the USDOC's erroneous finding of untimeliness of HHI's responses.
For these reasons, we find that the USDOC acted inconsistently with the first sentence of
paragraph 3 of Annex II to the Anti -Dumping Agreement by not "tak[ing] into account" the
information concerning service-related revenues that was submitted by HHI in accordance with that
provision. Given that paragraph 3 of Annex II serves as a precondition for an investigating
authority's proper resort to facts available under Article 6.8 of the Anti-Dumping Agreement1329, we
find that the USDOC also acted inconsistently with that provision in resorting to facts available.
In light of our findings of WTO -inconsistency, we do not consider it necessary to rule upon

1319 United States' first written submission, paras. 237-238.
1320 United States' first written submission, para. 253.
1321 Korea's first written submission, para. 779.
1322 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1323 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.
1324 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21.
1325 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 21 (referring to LPT POR3 HHI
rebuttal brief, (Exhibit KOR-270 (BCI)), p. 17).
1326 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 22.
1327 Korea's second written submission, para. 301.
1328 United States' first written submission, para. 252.
1329 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56 and 7.79.

BCI deleted, as indicated [[***]]

Korea's claims under paragraph 5 of Annex II to the Anti-Dumping Agreement in order to provide a
positive solution to the dispute before us.1330
7.3.6.3.2.2 Alleged understatement of home-market prices
Factual background
In its initial questionnaire, the USDOC requested HHI to "separately report the price and
cost for 'spare parts ' and 'accessories ' to ensure that product matches are based on accurate
physical characteristics of the LPTs". 1331 In response, HHI submitted documentation identifying
[[***]] as "non-subject merchandise".1332 Citing the USDOC's definition of subject merchandise and
the issues and decisions memorandum from the original investigation, HHI reported separately the
price and cost for spare parts, but not for "[t]ransformer parts that [are] physically attached to an
LPT [and therefore] are within the definition of the scope of subject merchandise".1333
In its supplemental questionnaire, the USDOC requested complete sales documentation for
home market sequence numbers ( SEQHs) [[***]] and [[***]] relating to home market sale s.1334
In its additional supplemental questionnaire, the USDOC further asked HHI to provide for the same
SEQHs "any supporting documentation of [the] sales negotiation process ( i.e., internal documents,
e-mails, etc.) and all reported expenses (i.e., freight request from HHI to the freight provider, freight
invoice from the freight provider)". 1335 HHI submitted information in response to both these
requests.1336
Commenting on HHI 's questionnaire responses 1337, the petitioner stated that "an
examination of the limited documents submitted by [HHI] confirms that [HHI] has employed a
methodology that understated the reported gross unit price (GRSUPRH ) for home market sales"
(namely SEQHs [[***]]).1338 The petitioner explained that HHI "wrongly identified integral parts of
subject transformers" and, as a result, "[t]hose parts were not included in the reported gross unit
price, which was therefore understated".1339 Specifically, the petitioner argued that the identification
and reporting of these parts was erroneous , as documents submitted in HHI 's 27 October 201 6
additional supplemental questionnaire response treated these parts as integral parts of LPTs, and
thus as "subject merchandise". 1340 Furthermore, according to the petitioner, " [HHI] appear[ed] to
have employed the same methodology across all home market sales reported, resulting in a portion
of the gross unit price being incorrectly excluded from the price reported to the [USDOC]".1341 Thus,
in the petitioner 's view, by failing to report the full value of the subject merchandise, HHI had
understated the home market gross unit price, and, in turn, the dumping margin.1342
HHI responded that the petitioner raised its objection three months after the submission of
the concerned document, and argued that:
At this stage of this review, [HHI] is not permitted to submit r ebuttal information to
respond to [the petitioner's] argument and is limited to documents on record. With this
limitation, the record is ambiguous and does not allow a definitive conclusion regarding
whether the items in question are properly included in t he gross unit price. In light of

1330 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1331 LPT POR3 initial questionnaire, (Exhibit KOR-209), p. D-1.
1332 Second part of LPT POR3 supplemental Sections A-D questionnaire response, (Exhibit KOR-126
(BCI)), attachment 2S-17.
1333 LPT POR3 Section D questionnaire response, (Exhibit KOR-134 (BCI)), pp. D-2-D-3.
1334 Second part of LPT POR3 supplemental Sections A-D questionnaire response, (Exhibit KOR-126
(BCI)), attachment 2S-17.
1335 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 5.
1336 LPT POR3 HHI supplemental questionnaire response, (Exhibit KOR-136 (BCI)), p. 8 and
attachment 3S-7.
1337 In particular, the petitioner's comments addressed the data submitted by HHI in response to the
USDOC's questionnaires of 27 July 2016 and 7 October 2016.
1338 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), p. 10.
1339 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), p. 10.
1340 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), pp. 10-12.
1341 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), p. 12.
1342 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), pp. 12-13.

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this ambiguity, [HHI] provides in Exhibit 2 a revised price calculation worksheet, which
treats the items in [sic] as transformer components.1343
In the final determination, the USDOC found that HHI had incorrectly reported i ts home
market price despite its knowledge that "(1) parts that are physically attached to, imported with, or
invoiced with active parts of a LPT; or (2 ) parts that are required to assemble an incomplete LPT,
are also subject merchandise/foreign like produ ct, and that they should be included in its reported
gross unit price".1344 According to the USDOC, HHI failed to "include properly a particular part in its
reported home market gross unit prices" until this issue was identified by the USDOC, despite having
three opportunities to do so.1345 The USDOC further noted that while HHI had failed to include this
specific part in its home market sale s, it had included it in the gross unit prices for its US sales,
which rendered the US price and the home -market price incomparable.1346 The USDOC found that
"the vast majority of the reported gross unit prices provided by [HHI], pursuant to the
[USDOC's] request for full documentation for a limited number of sample sales … display the
understatement of such reported prices".1347 Thus, the USDOC found that HHI had impeded the
review proceedings and its reported home market prices were, in their entirety, unreliable.1348
Main arguments of the parties
Korea claims that the USDOC resorted to facts available in violation of Article 6.8 of the
Anti-Dumping Agreement as HHI did not "refuse [] access to", or otherwise fail to provide,
"necessary" information, nor did it "significantly impede[]" the proceedings.1349 Korea explains that,
in response to the USDOC's request for complete sales documentation for certain home market sales
(SEQHs [[***]] and [[***]]), HHI inadvertently identified certain [[***]] as non -subject
merchandise in one of the contracts submitted.1350 This error concerned a single contract ([[***]]),
which was submitte d in the sales documentation for SEQH [[***]] and covered multiple
transformers, under SEQHs [[***]].1351 Korea argues that the misreported information could not in
good faith be considered as "necessary", as it concerned a small amount of data about an isolated
home market sale consisting of four LPTs.1352 According to Korea, "[t]his isolated information could
not objectively be viewed as casting doubt on all of the sales and related data reported in the
home-market sales database".1353
Furthermore, Korea argues that there was no need to apply facts available in order to
overcome the absence of information, as HHI's inadvertent error was immediately corrected and full
information was provided that allowed the USDOC to make its determination.1354 Specifically, Korea
refers to the worksheet submitted by HHI supporting the gross unit price as originally calculated
(i.e. without the part that was identified as non -subject merchandise), as well as a revised price
calculation worksheet (i.e. including the revenue for that part in the gross unit price).1355 In addition,
there was sufficient time for the USDOC to take into account HHI's revisions as they were provided
more than two months before the final results, and thus within a reasonable time.1356 Korea notes
that the USDOC, instead of treating this deficiency as an isolated issue, "added this to the other
issues to construct a rationale for disregarding all of HHI's data and applying total AFA".1357
Korea also claims that the USDOC acted inconsistently with paragraphs 3 and 5 of Annex II
to the Anti -Dumping Agreement by rejecting verifiable and substantiated information that was
submitted by HHI in a timely fashion. 1358 Korea contends that HHI had provided verifiable

1343 LPT POR3 HHI case brief, (Exhibit KOR-130 (BCI)), p. 21. (emphasis omitted)
1344 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 23-24.
1345 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 24.
1346 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25.
1347 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 25-26.
1348 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 26.
1349 Korea's first written submission, paras. 780 and 783.
1350 Korea's first written submission, paras. 705-707.
1351 Korea's response to Panel question No. 86, para. 104.
1352 Korea's first written submission, para. 780.
1353 Korea's response to Panel question No. 88, para. 107. (emphasis original)
1354 Korea's first written submission, para. 781.
1355 Korea's first written submission, para. 707.
1356 Korea's second written submission, para. 309.
1357 Korea's second written submission, para. 308.
1358 Korea's first written submission, para. 838.

BCI deleted, as indicated [[***]]

information regarding the reporting of a single part, which enabled the USDOC to establish the
normal value of the four LPTs in the one transaction at issue, but the USDOC chose to disregard
such information.1359 According to Korea, even if the USDOC considered this information as not being
ideal, this was not a sufficient reason to disregard it, and the appropriate response would have been
to issue an additional supplemental questionnaire to HHI.1360
The United States responds that HHI failed to provide all the required information and to act
to the best of its ability. 1361 According to the United States, HHI's home-market database failed its
"reliability check" as [[***]] out of the [[***]] sales for which the USDOC requested support ing
documentation in order to check the accuracy of the whole database demonstrated that HHI had
engaged in improper reporting of data.1362 The United States contends that the USDOC did not have
sufficient time to verify the accuracy of HHI 's subsequent correction.1363 Finally, the United States
notes that HHI corrected the home-market gross unit prices for the few sales for which the USDOC
had requested support ing documentation, however, it did not "restore the integ rity of the
unexamined home market sales".1364
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3 and 5
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of an LPT part as non-subject merchandise.
At the outset, we note that Korea does not dispute that the part at issue was initially
misreported by HHI. Nor did HHI dispute the petitioner's claim of misreporting before the USDOC.1365
There is also no disagreement between the parties on the appropriate reporting requirements in
light of the USDOC 's definition of "subject merchandise". 1366 Rather, Korea characterizes the
misreporting of [[***]] as non-subject merchandise as an "inadvertent error" by HHI.1367
We recall that the USDOC took issue with the improper reporting of a particular LPT part in
the gross unit prices of certain home market sale s. The USDOC referred to the petitioner 's claim
concerning certain documentation submitted for SEQH [[***]] in HHI 's 27 October 2016
questionnaire response. According to the petitioner, this documentation demonstrated the
understatement of the reported gross unit prices (field GRSUPRH ) for specific home market sales
(SEQHs [[***]]), due to the mischaracterization of certain [[***]] as non-subject merchandise.1368
In response, HHI submitted with its case brief a revised worksheet which treated the LPT part at
issue as subject merchandise, thus including it in the gross unit price.1369 In the final determination,
the USDOC found that HHI had incorrectly reported the gross unit prices for these home market
sales, even though it was fully aware of what constituted "subject merchandise". 1370 The USDOC
found:

1359 Korea's first written submission, para. 838.
1360 Korea's first written submission, paras. 838-839.
1361 United States' first written submission, para. 260.
1362 United States' response to Panel question No. 88, para. 148.
1363 United States' response to Panel question No. 88, para. 150.
1364 United States' response to Panel question No. 88, para. 149.
1365 See also LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25.
1366 The agreed definition of the "subject merchandise" is found in Appendix III of the USDOC's initial
questionnaire:
The scope of this order 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.
(LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III)
1367 Korea's first written submission, paras. 705-707.
1368 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), p. 10.
1369 LPT POR3 HHI case brief, (Exhibit KOR-130 (BCI)), p. 21.
1370 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 23-24.

BCI deleted, as indicated [[***]]

In addition, even though [HHI] provided the "revised" gross u nit prices for such sales
in its case brief, which show increased gross unit prices for those sales identified by the
[USDOC] in its review of [HHI]'s October 27, 2016, Supplemental Questionnaire
Response, we have no time to confirm or verify the validity of these revisions. For
example, we cannot confirm whether other parts, which [HHI] listed as "non -subject
merchandise" (i.e. non-foreign like product) in the same document referred to above,
are, in fact, non-foreign like product. To confirm the accuracy of [HHI]'s reporting as a
whole, we requested full sales and expenses documentation for a very limited number
of sample home market sales. The fact that a certain document exhibits a consistent
pattern of understating the reported home market prices for the requested sale and
other covered sales, for which we did not request full documentation, calls into question
the reliability of [HHI]'s reported home market prices.
…
To verify the accuracy of [HHI]'s reporting, we requested full documentation for certain
home market sales, only to determine, at such a late stage in the review, that there is
a significant issue which could be related to [HHI]'s entire reporting of home market
gross unit prices.1371
We note that although HHI 's misreporting affected multiple ( [[***]]) SEQHs, this was due
to a single error, namely, the consistent characterization of a single part (i.e . [[***]], within the
same contract as non -subject merchandise. The USDOC acknowledged that only "a certain
document" exhibited this error. 1372 Thus, the record evidence indicates tha t the misreporting
concerned a single part in a single document – out of multiple documents that were submitted in
response to the USDOC's complete documentation request – for one of the two sampled sales.
Moreover, while the USDOC acknowledged that HHI p rovided the revised gross unit prices
for the misreported sales as part of its case brief – which showed "increased gross unit prices for
those sales identified by the [USDOC] in its review of [HHI]'s October 27, 2016 Supplemental
Questionnaire Response" – the USDOC stated that it had "no time to confirm or verify the validity
of these revisions".1373 As an "example", the USDOC stated that it could not "confirm whether other
parts, which [HHI] listed as 'non -subject merchandise' (i.e., non-foreign like product) in the same
document referred to above, are, in fact, non -foreign like product".1374 Observing that HHI's "U.S.
sales database indicates that [it] included such parts in the reported gross unit prices for the U.S.
sales", the USDOC stated that "[i]ncluding such parts in U.S. price, but not in home market price, is
a serious issue because it renders U.S. price and normal value incomparable".1375
We have no reason to doubt the "seriousness" of the issue flagged by the USDOC.
Nonetheless, we note that the USDOC's statements appear to suggest that the discrepancies at issue
related to multiple "parts" and represented a "systematic" understatement of home market sales.
However, the USDOC found that HHI misreported only a single "part" as a non -foreign like
product.1376 Thus, the USDOC 's finding of discrepancies between the US sales and home market
sales concerned a single part that was misreported in one document. Insofar as this discrepancy
was concerned, the USDOC also appears to have considered the revised gross unit prices for the
misreported home market sales that HHI provided as part of its case brief.1377 In any event, although
the inclusion of the single part in the US price, but not in the home market price, may well render
the US price and the normal value "incomparable", the "seriousness" of this issue does not, without
more, establish a "pattern" of systematic misreporting by HHI for all of its home market sales. While
we acknowledge the USDOC's explanation that the documents requested for the sample sales were
aimed at checking the accuracy of the home market sale s as a whole, we note that the USDOC
provided no explanation as to how the misreporting of one LPT part in relation to one of the

1371 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25. (fn omitted;
emphasis added)
1372 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25.
1373 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25.
1374 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25. (emphasis added)
1375 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25. (emphasis added)
1376 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25 (finding that the "record
evidence demonstrates that the excluded part is required to assemble a complete LPT. As a result, this part
should have been treated as foreign like product" (fn omitted)). (Ibid.).
1377 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25.

BCI deleted, as indicated [[***]]

two sampled SEQHs undermined the reliability of the whole data base.1378 Even though this
misreporting may have affected multiple ( [[***]]) SEQHs, this was due to the mischaracterization
of this one part – the [[***]] – within the same contract as non-subject merchandise. In our view,
such misreporting of a single part in one document cannot amount to a "pattern" of misreporting.
In such a situation, an objective and unbiased investigating authority would not have found
an existence of a "pattern" of misreporting suggesting that HHI 's "reported home market prices in
their entirety are unreliable".1379 We agree with Korea's argument that, in the circumstances of this
case, "[t]his isolated information could not objectively be viewed as casting doubt on all of the sales
and related data reported in the home -market sales database". 1380 We note that the petitioner
asserted – without, however, providing any further explanation – that HHI had "employed the same
methodology across all home market sales reported".1381 Likewise, the USDOC – despite referring
to discrepancies relating to multiple "parts" – made no attempts to ascertain whether HHI had
misreported other parts as non -foreign like products. Indeed, the USDOC found only that
HHI's misreporting "could be related to [its] entire reporting of home market gross unit prices".1382
A finding that HHI "systematically" understated the prices for its home market sales cannot be based
solely on the wrong classification of a single part in one document , and the mere possibility that
other such errors could also exist.
For the above reasons, we find that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available with respect to HHI's reporting of an LPT part
as non-subject merchandise.1383 In light of our finding of WTO-inconsistency, we do not consider it
necessary to address Korea 's claims under paragraphs 3 and 5 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.1384
7.3.6.3.2.3 Accessories
Factual background
In its initial questionnaire, the USDOC instructed HHI to "separately report the price and
cost for 'spare parts ' and 'accessories ' to ensure that product matches are based on accurate
physical characteristics of the LPTs".1385 HHI stated that, while it had separately reported the price
and cost for "spare parts", there was no definition for "accessories". 1386 In its preliminary
determination, the USDOC did not refer to the cost of "accessories". 1387 In an additional

1378 The United States submits that HHI's home-market database failed the USDOC's "reliability check"
as "the [[***]] out of the [[***]] sales for which [the USDOC] requested specific documentary support
demonstrated that HHI had improperly reported the particular part". (United States' response to Panel
question No. 88, para. 148). The USDOC requested sales documentation for two home market sales
(SEQHs [[***]] and [[***]]) and the misreporting that was later identified concerned the first of the
two samples sales. The fact that three additional SEQHs indicated the same misreporting does not mean that
these sales were included in the spectrum of sampled sales for which the USDOC requested specific
documentary support.
1379 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 25-26.
1380 Korea's response to Panel question No. 88, para. 107. (emphasis original)
1381 LPT POR3 petitioner's comments, (Exhibit KOR-252 (BCI)), p. 12.
1382 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 25. (emphasis added)
1383 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 26.
1384 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1385 LPT POR3 initial questionnaire, (Exhibit KOR-209), p. D-1.
1386 LPT POR3 Section D questionnaire response, (Exhibit KOR-134 (BCI)), pp. D-2-D-3 (referring to
LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III). We recall the USDOC's definition of the
subject merchandise:
The scope of this order 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.
(LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III)
1387 LPT POR3 decision memorandum for preliminary results, (Exhibits KOR-127 (BCI), KOR-135
(public version)), pp. 3-14.

BCI deleted, as indicated [[***]]

supplemental questionnaire, the USDOC asked HHI to confirm that its product-specific costs did not
include the costs of spare parts and accessories, clarifying that it was referring to "non-subject
merchandise".1388
In its final determination, the USDOC observed that it had requested HHI to report separately
the price and costs of "accessories" of LPTs, "[f]or the purpose of determining whether the
differences in costs between similar product matching control numbers (i.e., CONNUMs) reported by
[HHI] were due to the differences in the physical characteristics of the products within the CONNUMs
or were the result of factors other than the physical characteristics".1389 The USDOC found that HHI
knew what constituted an "accessory", since this term w as found in sales documentation that it
provided, however it "refused to provide such information". 1390 The USDOC stated that if HHI had
questions regarding the definition of "accessories", it could have requested a clarification from the
USDOC, but it failed to do so.1391 The USDOC thus concluded that HHI "failed to provide information
specifically requested", namely the separate prices and costs of accessories, and "impeded this
review by failing to act the best of its ability".1392
Main arguments of the parties
Korea claims that the USDOC resorted to facts available in violation of Article 6.8 of the
Anti-Dumping Agreement, as HHI did not "refuse [] access to", or otherwise fail to provide,
"necessary" information.1393 Korea argues that such information was not important, and that, in any
event, the USDOC neither provided a definition of the term "accessories", nor any guidance on how
the information regarding prices and costs of accessories should have been structured. 1394 Korea
also claims that the USDOC acte d inconsistently with paragraph 1 of Annex II to the
Anti-Dumping Agreement by ignoring its obligation to be "precise in identifying the information that
it needs" from a respondent. 1395 According to Korea, it was the responsibility of the USDOC to
provide, as soon as possible, a definition of "accessories" to the extent that it had a bearing on the
use of "necessary" information in the review.1396 According to Korea, the only meaningful guidance
provided by the USDOC was to equate "accessories" with "non-subject merchandise".1397
Korea further claims that the USDOC acted inconsistently with paragraphs 3 and 5 of
Annex II by disregarding verifiable and substantiated information "simply because it was not
considered ideal while it was simply unclear what would be 'ideal ' information on the undefined
concept of 'accessories'". 1398 Korea asserts that, in any event, HHI exerted its best efforts by
submitting all the information requested, based on its consideration of the proper meaning of the
term "accessories" and according to the approach taken by the USDOC. 1399 Korea also adds that
"HHI did not in fact use the term 'accessories ' as a term during the ordinary course of business",
and it was used inconsistently only by a few customers.1400
The United States responds that the separate reporting of the prices and costs of
"accessories" was "necessary" for the USDOC 's determination of whether certain cost differences
between similar product matching CONNUMs were the result of differences in physical characteristics
or of other factors.1401 The United States explains that, because the same parts had been treated by
HHI as "optional or non -optional (i.e., as accessories or not as accessories)", there was a serious
danger of manipulation of the gross unit price, and ultimately, of the margin.1402 The United States

1388 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 8.
1389 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 26.
1390 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1391 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1392 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1393 Korea's first written submission, paras. 771 and 784.
1394 Korea's first written submission, paras. 709 and 784-788 (referring to LPT POR3 initial
questionnaire, (Exhibit KOR-209), appendix III).
1395 Korea's first written submission, para. 785 (quoting Panel Report, Egypt – Steel Rebar,
para. 7.155).
1396 Korea's response to Panel question No. 36, p. 33.
1397 Korea's response to Panel question No. 36, p. 34.
1398 Korea's first written submission, para. 838.
1399 Korea's first written submission, para. 786; response to Panel question No. 36, p. 34.
1400 Korea's first written submission, para. 788.
1401 United States' first written submission, para. 251 (referring to LPT POR3 issues and decision
memorandum, (Exhibit KOR-121), p. 26); response to Panel question No. 90, paras. 151-152.
1402 United States' response to Panel question No. 90, para. 152.

BCI deleted, as indicated [[***]]

contends that the USDOC was justified in finding that that "HHI was responsible for determining
what constituted an accessory", because "[i]t would be highly unusual for a company to sell a product
that included accessories and use such term in its documents, but not be able to determine what it
sold and what the term used in its own documents means". 1403 The United States also states that
"the same request was made to the other respondent in POR3, Hyosung, also without the term being
defined by [the] USDOC, and the company provided the requested information". 1404 Finally, the
United States argues that because HHI 's information did not meet the criteria of paragraph 3 of
Annex II, HHI is not afforded the protections of paragraph 5 of Annex II, and in any event, HHI did
not act "to the best of its ability" in responding to the USDOC's requests for information.1405
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 1, 3, and 5
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of "accessories".
Prior to the issuance of the USDOC 's initial questionnaire, the petitioner urged the USDOC
to request HHI to report separately the costs of "spare parts" and "accessories" in order to "provide
the [USDOC] with necessary information that prevent inaccurate product concordances, making
product matches based on accurate physical character istics of the LPTs". 1406 HHI objected to this
request, stating that, while there was a definition of "spare parts" and HHI had correctly reported
such parts separately in previous stages of the investigation, there was no definition offered by the
petitioner for the term "accessories".1407 HHI argued that, "[t]o the extent that Petitioner's claim on
'accessories' relates to parts that are physically attached to an LPT, its claim is contrary to the
definition of the scope of subject merchandise".1408 Noting that "accessories" are "basic components
of common transformers" and are viewed as "essential to the operations of LPTs", HHI asserted that
"[t]here is simply no logic in trying to exclude from the sale price parts that are normally included
within or attached to the LPT and are subject merchandise".1409
In its initial questionnaire, the USDOC instructed HHI to "separately report the price and
cost for 'spare parts ' and 'accessories ' to ensure that product matches are based on accurate
physical characteristics of the LPTs".1410 Although HHI could find guidance on the meaning of "spare
parts" in the definition given by the USDOC in its issues and decisions memorandum of the original
determination1411, at no stage did the USDOC provide a definition of the term "accessories".
In response, HHI reiterated that, while it had separately reported the price and cost for "spare parts",
there was no definition for "accessories", and recalled that, pursuant to the USDOC 's questionnaire
and the definition of subject merchandise, parts that are physically attached to an LPT fall within the
scope of the subject merchandise. 1412 In the additional supplemental questionnaire, the USDOC

1403 United States' response to Panel question No. 36, paras. 140-141.
1404 United States' response to Panel question No. 36, para. 141.
1405 United States' first written submission, para. 262.
1406 LPT POR3 petitioner's comments on questionnaires to be issued, (Exhibit KOR-131), p. 2. The
petitioner made this request in order to prevent distortions that might occur "when the product concordance
matches otherwise physically dissimilar LPTs, or when the concordance disqualifies physically very similar LPTs
from comparison, simply because the matching LPTs passed or failed the 20 percent difference-in-merchandise
('DIFMER') test as a result of inconsistent reporting of spare parts and accessories". (Ibid.).
1407 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), p. 3. HHI understood the
definition of "spare parts" as parts that are not needed to assemble an incomplete LPT, in accordance with the
USDOC's statement in the issues and decision memorandum for its determination in the original investigation.
(LPT issues and decision memorandum, (Exhibit KOR-145), p. 29; see also ibid. fn 4).
1408 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), p. 3.
1409 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), p. 4.
1410 LPT POR3 initial questionnaire, (Exhibit KOR-209), p. D-1.
1411 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), fn 4 (referring to LPT issues
and decision memorandum, (Exhibit KOR-145), p. 29).
1412 LPT POR3 Section D questionnaire response, (Exhibit KOR-134 (BCI)), pp. D-2-D-3 (referring to
LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III). We recall the USDOC's definition of the
subject merchandise:
The scope of this order 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

BCI deleted, as indicated [[***]]

asked HHI to confirm that its product -specific costs did not include the costs of spare parts an d
accessories, "i.e., non-subject merchandise".1413 HHI confirmed that the product -specific costs did
not include "non-subject merchandise".1414
In its final determination, the USDOC found that HHI knew what constituted an "accessory",
as this term was found in sales documentation that it provided, however it "refused to provide such
information".1415 The USDOC explained its view that "if [HHI] had questions related to the definition
of 'accessories,' it could have contacted the [USDOC] to request clarification; it failed to do so, and
instead refused to provide such information". 1416 The USDOC thus concluded that HHI "failed to
provide information specifically requested" and "impeded this review by failing to act the best of its
ability".1417
The above discussion reveals that even before the USDOC issued its initial questionnaire,
HHI placed on record its concerns about the absence of a definition of "accessories".1418 The USDOC
did not provide any definition or further clarification on what constituted "accessories", but it simply
reiterated the scope of subject merchandise as including any part "attached to, imported with or
invoiced with the active parts of LPTs". 1419 As part of its initial request, the USDOC thus did not
address or take into account the difficulties identified by HHI, including its assertions that there was
no definition of "accessories" and that, in its view, "accessories" were "essential components" of
LPTs, and thus fell within the definition of the "subject merchandise" in this investigation. 1420
HHI reiterated these concerns in its initial questionnaire response, however, the USDOC did not offer
any further instructions or guidance as part of its su pplemental questionnaire and noted only that
the "accessories" for which separate reporting was required concerned "non -subject
merchandise".1421
Paragraph 1 of Annex II to the Anti -Dumping Agreement stipulates that , "[a]s soon as
possible after the initiation of the investigation", the investigating authorities shall "specify in detail
the information required from any interested party, and the manner in which that information should
be structured by the interested party in its response". As relevant context , we also note that
Article 6.13 of the Anti-Dumping Agreement requires investigating authorities to "take due account
of any difficulties experienced by interested parties … in supplying information requested" and to
"provide any assistance practicable". We agree with the panel in Morocco – Hot-Rolled Steel that
"[f]ailure by an interested party to cooperate only gives rise to the consequences envisaged by
Article 6.8 if the investigating authority itself acted in a reasonable, objective, and impartial
manner".1422 An examination of whether an investigating authority has complied with paragraph 1
of Annex II must be carried out in the particular circumstances of each case.
Given the fact that HHI had, from the outset, expressed its concerns with respect to th e
definition of "accessories", we agree with Korea that, by not providing further guidance as to the
meaning of "accessories", the USDOC failed to "specify in detail" the information required from HHI
pursuant to paragraph 1 of Annex II. While we have no reason to doubt the United States' assertion
that the separate reporting of "accessories" constituting "non-subject merchandise" was "necessary"
for its accurate cost determination 1423, this does not, without more, absolve the USDOC from
complying with paragraph 1 of Annex II. We are also not convinced that HHI should have been able
to derive a definition of "accessories" based on its internal documents. 1424 We note that HHI had

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.
(LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III)
1413 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 8.
1414 LPT POR3 HHI supplemental questionnaire response, (Exhibit KOR-136 (BCI)), p. 22.
1415 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1416 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1417 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1418 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), p. 3.
1419 LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III.
1420 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), pp. 3-4.
1421 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 8.
1422 Panel Report, Morocco – Hot-Rolled Steel, para. 7.92 (referring to Panel Report, Guatemala –
Cement II, para. 8.251).
1423 United States' first written submission, para. 251 (referring to LPT POR3 issues and decision
memorandum, (Exhibit KOR-121), p. 26); response to Panel question No. 90, para. 152.
1424 United States' first written submission, para. 260; response to Panel question No. 36, para. 140.

BCI deleted, as indicated [[***]]

explained why, in its view, "accessories" fell within the scope of subject merchandise, stating also
that accessories were "viewed as essential to the operations of LPTs" by the USCIT and citing the
petitioner's own "Transformer Handbook", which treated accessories as indispensable to LPTs. 1425
In these circumstances, we find that paragraph 1 of Annex II required the USDOC to clarify the
definition of "accessories" for purposes of HHI's reporting obligations.
In any event, we note that the USDOC in its final determina tion did not establish that the
requested information (regardless of the scope and clarity of its request) was, in fact, missing, as it
did not identify any items which constituted "non-subject merchandise" and that should have been
separately reported for this reason. The USDOC simply assumed that its cost determination would
be inaccurate due to the failure to separately report certain "accessories". Nor did the petitioner
identify any specific part as being misreported; rather, it simply urged the USDOC to require the
separate reporting of "accessories".1426 The United States argues that the USDOC 's resort to facts
available was reasonable since "the same parts could have been treated as optional or non-optional
(i.e., as accessories or not as accessories), there was a serious concern that certain parts could be
selectively included/excluded from [HHI]'s home market and U.S. sales and reported gross unit
prices at [HHI]'s discretion, which could have led to manipulation of the gross unit price".1427 In our
view, the United States' argument remains hypothetical, as it is unable to identify any particular
instance where the USDOC, in fact, found such a "dual" classification of the same part.
Accordingly, in the circumstances of this case, we find that, by not providing further guidance
as to the meaning of the term "accessories" , the USDOC acted inconsistently with paragraph 1 of
Annex II to the Anti-Dumping Agreement, as it failed to "specify in detail" the information required.
Given that paragraph 1 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement1428, we find that the
USDOC also acted inconsistently with that provision in resorting to facts available. In light of our
findings of WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3 and 5 of Annex II to the A nti-Dumping Agreement in order to provide a positive
solution to the dispute before us.1429
7.3.6.3.2.4 Certain sales documentation
Factual background
Following its preliminary determination, the USDOC, by way of a supplemental
questionnaire, requested HHI to "provide complete sales and expenses documentation (including all
sales and expenses related documentation generated in the sales process ) for all U.S. SEQUs".1430
In response, HHI submitted documentation totalling over 3,300 pages.1431 In a communication with
the petitioner, the USDOC noted that it was still considering the petitioner's request for an extension
to submit case briefs, but clarified that it would not accept new information at such a late stage of
the proceeding. 1432 In its case brief, the petitioner identified certain inconsistencies in the
documentation submitted by Hyundai Steel 1433, with Hyundai Steel addressing these as part of its
rebuttal brief.
In its final determination, the USDOC found that, in addition to the three o ther identified
inconsistencies, " [HHI] has been systematically selective in providing various documents to the
[USDOC], thereby impeding the course of the review". 1434 The USDOC mentioned as an "example"
of selective reporting HHI's deficient response to its additional supplemental questionnaire in relation
to the complete sales and expenses documentation for all US sales:

1425 LPT POR3 HHI response to petitioner's comments, (Exhibit KOR-132), p. 4.
1426 LPT POR3 petitioner's comments on questionnaires to be issued, (Exhibit KOR-131), p. 2.
1427 United States' response to Panel question No. 90, para. 152. (emphasis added)
1428 Panel Reports, China – GOES, paras. 7.384-7.385 and 7.393-7.394; US – Steel Plate,
paras. 7.55-7.56.
1429 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1430 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 5. (emphasis original)
1431 LPT POR3 HHI third supplemental questions 13 and 17 response, (Exhibit KOR-119 (BCI)).
1432 LPT POR3 petitioner call memorandum, (Exhibit KOR-137).
1433 LPT POR3 petitioner case brief, (Exhibit KOR-269 (BCI)).
1434 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.

BCI deleted, as indicated [[***]]

Rather than providing the requested documentation, [HHI] selectively reported what it
considered "necessary" and "sufficient," thereby stripping the [USDOC] of its ability to
determine what is, in fact, necessary and sufficient to calculate an accurate margin.
Although we asked [HHI] to submit all related documents, [HHI] did not provide invoices
for many expenses and instead justified its failure to provide those invoices by claiming
that: (1) the [USDOC] did not ask for such documents specifically; and (2) the [USDOC]
accepted [HHI]'s questionnaire response regarding the same question prior to the
Preliminary Results . While [HHI] refuted the fact that it failed to provide certain
requested documents (i.e., invoices), this particular question asked for complete sales
and expenses documentation, including all sales and expe nses related documentation
generated in the sales process . [HHI] cannot excuse itself from submitting all related
documents, such as invoices, which are vital for the [USDOC] to verify a
respondent's reporting. In other words, [HHI] was obligated to submit the requested
information whether it agreed with the request or not; despite its obligation, it failed to
provide the requested information.
Furthermore, there are other discrepancies on the record ( e.g., the values of the
international freight and marine insurance expenses, reported to CBP and to the
[USDOC], respectively). There are also issues regarding certain expenses
(e.g., brokerage expenses ) which [HHI] did not address in its rebuttal brief. As
Petitioner noted, [HHI] did not correctly allocate the installation costs over the value of
the transformer and spare parts in the home market. Collectively, these discrepancies
and issues further undermine the reliability of [HHI]'s data.1435
Main arguments of the parties
Korea claims that the USDOC acted inco nsistently with Article 6.8 in resorting to facts
available as HHI did not "refuse [] access to", or otherwise fail to provide, "necessary"
information.1436 Korea points out that HHI submitted extensive documentation despite the
USDOC's request being "highly unusual and burdensome due to [its] extremely broad scope and late
timing".1437 In addition, Korea argues that the USDOC simply rejected the documentation based on
inconsistencies as claimed by the petitioner, without identifying any actual errors, and assumed the
existence of systematic misreporting , without offering HHI an opportunity to respond, as required
by paragraph 6 of Annex II.1438 Korea maintains that if the USDOC considered this information to be
"necessary", it should have requested clarifications as there was "ample time" to do so.1439 Even if
the USDOC considered the submitted information incomplete or imperfect, Korea argues that this
was not suff icient to reject "summarily" the entire sales documentation.1440 According to Korea,
there was no information on the record demonstrating that HHI "materially" or "notably" impeded
the investigation; to the contrary, HHI fully cooperated and responded to the extremely burdensome
and late information request. 1441 Korea further claims that the USDOC acted inconsistently with
paragraphs 3 and 5 of Annex II by failing to take into account verifiable information that was
submitted in an appropriate and timely manner, and which, even if not ideal, was submitted by HHI
acting to the best of its ability.1442
The United States responds that HHI selectively reported what it considered "necessary" and
"sufficient" and it is not the right of the respondents to decide what inf ormation is "necessary" for
the USDOC to make its determination.1443

1435 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 28. (emphasis original)
1436 Korea's first written submission, paras. 793 and 797.
1437 Korea's first written submission, para. 793.
1438 Korea's first written submission, para. 794.
1439 Korea's first written submission, para. 795.
1440 Korea's first written submission, paras. 796 and 838.
1441 Korea's first written submission, para. 797.
1442 Korea's first written submission, paras. 796 and 838-839; second written submission, para. 313.
1443 United States' response to Panel question No. 91, para. 153.

BCI deleted, as indicated [[***]]

Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of fa cts available in respect of
HHI's reporting of certain sales documentation.
We recall that, in its supplemental questionnaire, the USDOC asked HHI to "provide complete
sales and expenses documentation (including all sales and expenses related documentation
generated in the sales process ) for all U.S. SEQUs". 1444 In response, HHI submitt ed over
3,300 pages of documentation.1445 The pet itioner raised certain inconsistencies regarding this
documentation in its case brief, and while Hyundai Steel responded to these in its rebuttal brief, it
was unable to submit new information in light of the USDOC's guidance.1446
In its final determination, the USDOC rejected the information submitted by HHI in its
entirety on the basis that HHI was "systematically selective in providing various documents".
The USDOC explained HHI's "pattern" of selective reporting by offering certain examples of missing
documents, "such as invoices" "for many expenses".1447 We note that the record demonstrates that
the final determination marked the first instance when the USDOC addressed this issue and rejected
HHI's response as "incomplete and unreliable".1448 Before the final determination, only the petitioner
in its case brief had alleged certain deficiencies in the information submitted by HHI. 1449
HHI responded to these arguments in its rebuttal brief.1450
The first sentence of paragraph 6 of Annex II requires that "[i]f evidence or information is
not accepted, the supplying party should be informed forthwith of the reasons therefor, and should
have an opportunity to provide further explanations within a reasonable period, due account being
taken of the time-limits of the investigation". The text of the provision thus envisages "due account
being taken of the time-limits" for determining what constitutes a "reasonable period" for purposes
of providing further explanations. 1451 That said, the time -limits of an inve stigation cannot be used
to deprive an interested party of the opportunity to provide further explanations within the meaning
of paragraph 6 of Annex II, provided that all other conditions under that provision are satisfied.
In the case at hand, it is clear that information that was requested by the USDOC in its
supplemental questionnaire and provided by HHI was ultimately not accepted by the USDOC in its
final determination. In such circumstances, paragraph 6 of Annex II required the USDOC to give an
opportunity to HHI to provide further explanations within a reasonable period, due account being
taken of the time -limits of the investigation. However, t he USDOC never provided such an
opportunity to HHI. We also note that although the petitioner, in its case brief submitted before the
final determination, alleged certain deficiencies in the information submitted by HHI – that were
addressed by HHI in its rebuttal brief – the petitioner's submission cannot substitute the conduct
required on the part of the USDOC under paragraph 6 of Annex II.
Accordingly, i n these circumstances, we find that the USDOC acted inconsistently with
paragraph 6 of Annex II in re sorting to facts available because – having "not accepted" the
information provided by HHI – the USDOC subsequently failed to give an opportunity to HHI to
"provide further explanations within a reasonable period". Given that paragraph 6 of Annex II serves
as a precondition for an investigating authority's proper resort to facts available under Article 6.8 of
the Anti -Dumping Agreement1452, we find that the USDOC also acted inconsistently with that
provision in resorting to facts available. In light of our fi ndings of WTO -inconsistency, we do not

1444 LPT POR3 HHI third supplemental questionnaire, (Exhibit KOR-128 (BCI)), p. 5. (emphasis original)
1445 LPT POR3 HHI third supplemental questions 13 and 17 response, (Exhibit KOR-119 (BCI)).
1446 LPT POR3 petitioner call memorandum, (Exhibit KOR-137).
1447 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 27-28.
1448 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1449 LPT POR3 petitioner case brief, (Exhibit KOR-269 (BCI)).
1450 LPT POR3 HHI rebuttal brief, (Exhibit KOR-270 (BCI)).
1451 See, e.g. Panel Report, Egypt – Steel Rebar, para. 7.282.
1452 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.

BCI deleted, as indicated [[***]]

consider it necessary to rule upon Korea 's claims under paragraphs 3 and 5 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.1453
7.3.6.3.3 The USDOC's selection of the replacement facts
7.3.6.3.3.1 Factual background
The USDOC found that HHI failed "to act to the best of its ability by not providing complete
and accurate information, thereby raising issues as to whether [HHI]: (1) systematically overstated
U.S. prices; and (2) systematically understated home market prices".1454 The USDOC further found
that HHI "failed to provide the [USDOC] with requested cost information, which prevented the
[USDOC] from determining whether such costs are distorted by incomplete reporting" , and that it
engaged in "selective reporting".1455 The USDOC applied the highest dumping margin alleged in the
petition, 60.81%, as "total facts available with an adverse inference".1456
The USDOC noted that, in line with the US Tariff Act, "[b]ecause the AFA rate determined
for [HHI] is derived from a rate in the Petition and, consequently, based upon secondary information,
the [USDOC] must corroborate the rate to the extent practicable".1457 The USDOC examined the
evidence supporting the calculations in the petition to determine the probative value of the dumping
margins.1458 During its pre-initiation analysis, the USDOC also examined the "key elements" of the
export price and n ormal value calculations, and "various independent sources" that "corroborate"
the key elements of the export price and normal value calculations. 1459 The USDOC explained that,
as part of its pre -initiation analysis, it "obtained no other information that ca lls into question the
validity of the sources of information or the validity of the information supporting the export price
and normal value calculations provided in the Petition".1460 On this basis, the USDOC concluded the
highest dumping margin alleged in the petition was "reliable" for the purposes of the review.1461 The
USDOC determined the highest dumping margin in the petition was "relevant" by examining the
deductions and adjustments made by the petitioner in its application.1462
7.3.6.3.3.2 Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraph 7 of
Annex II of the Anti-Dumping Agreement in its selection of the replacement facts because it failed
to engage in an "adequate process of reasoning an evaluation " as to how or why the adverse
inferences it made were a reasonable replacement for all of the alleged pieces of missing
information.1463 Korea argues that the USDOC failed to corroborate the information, as required by
paragraph 7 of Annex II.1464 For Korea, an i nvestigating authority 's pre-initiation analysis of the
information contained in a petition is not sufficient for the purposes of using that information in
making a final determination. 1465 Korea asserts that the USDOC acted arbitrarily to punish HHI by
applying AFA.1466
The United States responds that the USDOC considered the information contained in the
petition, carefully selected a replacement, and corroborated it to the extent practicable using sources
at its disposal.1467 According to the United States, Korea has not suggested an alternative, and has

1453 See, e.g. Panel Report, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1454 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 4.
1455 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 4.
1456 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), pp. 4 and 6.
1457 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 6. (fn omitted)
1458 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 7.
1459 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 7.
1460 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 7.
1461 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 7.
1462 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 7.
1463 Korea's first written submission, paras. 855 and 858-859.
1464 Korea's first written submission, paras. 856-858.
1465 Korea's first written submission, para. 859. See also Korea's response to Panel question No. 92,
para. 111.
1466 Korea's first written submission, para. 860.
1467 United States' first written submission, paras. 265-268. See also United States' response to Panel
question No. 92, paras. 156-157.

BCI deleted, as indicated [[***]]

not demonstrated why the replacement was improper. 1468 The United States argues that, contrary
to Korea's submission, the USDOC did not apply facts available with a view to ensure a punitive rate
and the fact that the outcome is less favourable than Korea would have liked does not mean that
the USDOC acted inconsistently with Article 6.8.1469
7.3.6.3.3.3 Evaluation by the Panel
We have already found that the USDOC erred in resorting to facts available for each of the
four issues identified above. In these circumstances, we do not consider that making further findings
on Korea's claims concerning the USDOC 's selection of the replacement facts on the basis of the
record used for the USDOC's WTO-inconsistent findings would assist in providing a positive solution
to the dispute before us.1470
The fourth administrative review (POR4)
7.3.6.4.1 Introduction
For the POR4 proceedings, Korea claims that the USDOC acted inconsistently with Article 6.8
and Annex II of the Anti -Dumping Agreement in using "total AFA" for the two Korean
producers/exporters of the subject merchandise that were selected as "mandatory respondents",
namely, HHI and Hyosung.1471 Korea also challenges the USDOC 's determination of an "all others"
rate for three Korean producers/exporters that were not selected for "individual examination" as
being inconsistent with Article 9.4 of the Anti-Dumping Agreement.1472
We first examine Korea 's claims challenging the USDOC 's resort to facts available for HHI
and Hyosung, respectively. In light of the USDOC 's application of "total AFA" for both HHI and
Hyosung1473, we next address Korea's claim that the USDOC erred in its selection of the replacement
facts for both the mandatory respondents. Finally, we address Korea's claim challenging the
USDOC's calculation of the "all others" rate for the three non-selected Korean producers.
7.3.6.4.2 HHI
With respect to HHI, Korea challenges the USDOC's resort to facts available for three issues
concerning (a) the reporting of accesso ries, (b) the reporting of gross unit price for certain home
market sales, and (c) the non-disclosure of an allegedly affiliated US sales agent.1474 We separately
address Korea's claims pertaining to the USDOC 's resort to facts available with respect to each of
these three issues. For each issue, we begin by setting out the factual background, before
summarizing the parties ' main arguments, and examining Korea 's claims under Article 6.8 and
Annex II of the Anti-Dumping Agreement.
7.3.6.4.2.1 Accessories
Factual background
The USDOC in its initial questionnaire instructed HHI to "separately report the price and cost
for 'spare parts ' and 'accessories' to ensure that product matches are based on accurate physical
characteristics of the LPTs".1475 Noting that there was no definition of the term "accessories" in the
USDOC's questionnaire, HHI submitted that its response was in line with the scope of the subject

1468 United States' first written submission, para. 267.
1469 United States' first written submission, para. 272.
1470 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on
1471 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 2; Korea's first written
submission, paras. 798-818 842-845, 819-832, and 846-850.
1472 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 2; Korea's first written
submission, para. 872.
1473 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 3.
1474 Korea's first written submission, paras. 798-818 and 842-845.
1475 LPT POR4 Sections B-D questionnaire response, (Exhibit KOR-144 (BCI)), p. D-2.

BCI deleted, as indicated [[***]]

merchandise, thus including costs of all parts that are "attached to, imported with or invoiced with
the active parts of large power transformers".1476
HHI subsequently filed a request for clarification of the term "accessories", stating that
"[f]rom the records of the previous segments of this proceeding, [HHI] has not been able to identify
a fixed definition for the term 'accessories' as used by the [USDOC] in this question".1477 HHI asked
the USDOC to clarify whether HHI was required to report prices for the "accessories" when sales
documents did not indicate separate prices for such items, and, if so, to identify the me thodology
for determining the "price".1478 HHI also asked the USDOC to provide a methodology for calculating
"costs", when these were not readily identifiable. 1479 Immediately following its request, HHI
requested a meeting with the USDOC to discuss this issue. The USDOC asked to delay this meeting
until after the issuance of the supplemental questionnaires, and HHI's responses thereto.1480
In its first supplemental sales questionnaire, the USDOC asked HHI to "explain in detail
whether the sales documentation generated for U.S. and home market sales (in cluding the RFQ
[(request for quotation )], sales contract, initial and/or amended purchase order contract for the
same transaction, invoices, or other sales documents ) separately list or otherwise itemize the
price/revenues for the main transformer body, spare parts, accessories and sales -related service
revenues ( e.g., freight, brokerage, installation and supervision)" and requested that "[a]ll such
separate reporting of revenues in sales documentation should result in separate reporting of
revenues and associated expenses in [HHI's] responses to sections B and C, per the
[USDOC]'s instructions in the January 5, 2015, antidumping duty questionnaire".1481 In its response
of 3 May 2017, HHI submitted worksheets with the separate values as requested.1482
In its second supplemental sales questionnaire, the USDOC requested HHI – in light of its
request for clarification – to "provide a definition of how [HHI] use[d] and/or underst[ood] the scope
of the term 'accessories' when negotiating with [its] customers" and to "explain [its] basis for such
usage and/or understanding in detail". 1483 It also requested HHI to "describe in detail what
constitutes 'main bodies, ' 'spare parts, ' and 'accessories ' that [HHI] sold in the U.S. and home
markets in conjunct ion with sales of subject LPTs". 1484 The USDOC posed a number of additional
questions which concerned "accessories" as part of LPTs. HHI responded by recalling that HHI had
requested such a definition from the USDOC, as it did not have a particular understan ding of the
term in its use thereof internally or in its dealings with its customers,1485 and reiterated its request
for a meeting with the USDOC.1486
The USDOC issued an additional supplemental questionnaire, asking HHI to ensure that it
had separately reported "accessories" in its revised Sections B-C sales files.1487 HHI responded that,
because the USDOC was still considering its definition of an "accessory", it was unclear whether
some items would ultimately be considered as parts ; in order to cover this possibility, it submitted

1476 LPT POR4 Sections B-D questionnaire response, (Exhibit KOR-144 (BCI)), pp. D-2-D-3
(emphasis omitted). We recall the definition of the subject merchandise given by the USDOC:
The scope of this order covers large liquid dielectric power transformers … 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 large power transformers are subassemblies consisting of the active part and any
other parts attached to, imported with or invoiced with the active parts of large power
transformers. 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 a large power transformer.
(LPT POR3 initial questionnaire, (Exhibit KOR-209), appendix III)
1477 LPT POR4 request for clarification, (Exhibit KOR-146 (BCI)), p. 5. HHI was referring to POR3, the
final results of which were published on 13 March 2017.
1478 LPT POR4 request for clarification, (Exhibit KOR-146 (BCI)), pp. 12-15.
1479 LPT POR4 request for clarification, (Exhibit KOR-146 (BCI)), pp. 12-15.
1480 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 14.
1481 LPT POR4 first supplemental sales questionnaire, (Exhibit USA-36 (BCI)), pp. 14-15.
1482 LPT POR4 first supplemental sales questionnaire response, (Exhibit USA-37 (BCI)), p. 41.
1483 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), p. 9.
1484 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), pp. 9-10.
1485 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-148 (BCI)), pp. 10-11 and
attachments 2nd SS-1-2nd SS-2.
1486 LPT POR4 HHI request for meeting, (Exhibit KOR-212).
1487 LPT POR4 supplemental questionnaire, (Exhibit USA-39 (BCI)), p. 4.

BCI deleted, as indicated [[***]]

a complementary chart, including for each of these sales the revenue and the corresponding cost.1488
In the meantime, a meeting was held between HHI and the USDOC, where the issue of defining
"accessories" was raised again.1489
In its final determination, the USDOC found that HHI failed to report the price and cost of
accessories, and this determination was part of the basis for the application of total AFA. 1490
The USDOC explained:
Additionally, regarding [the USDOC]'s statutory obligation under section 782 of the Act
to notify a party of a deficiency and to provide an opportunity to explain or remedy the
deficiency, as detailed in our [preliminary decision memorandum] PDM, we made
multiple attempts to obtain information regarding "accessories" from [HHI]. Despite our
requests, [HHI] failed to provide the requested information and, instead, defaulted to
the scope language and [the USDOC] 's historical treatment of "accessories." [HHI]
claims it does not know what accessories are, yet claims it already reported accessories
as subject merchandise. In light of this reporting strategy, we followed up with
numerous supplemental questionnaires seeking further explanation, as detailed in the
PDM. As evinced by these supplemental questionnaires, [the USDOC] satisfied its
obligation to inform [HHI] of the nature of its deficiencies regarding its reporting of
accessories and provided [HHI] with several opportunities to remedy or explain its
deficient and conflicting responses. [HHI] failed to address w hich components in its
reporting constitute the accessories [HHI] considers in its normal course of business,
regardless of the scope language and [the USDOC]'s prior treatment of accessories, and
despite repeated opportunities to do so. Accordingly, we fi nd that [HHI]'s argument
regarding [the USDOC]'s statutory obligation under section 782(d) is not supported.1491
Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement because HHI did not "refuse[] access to", or otherwise fail to provide,
"necessary" information, nor did it "significantly impede[]" the proceedings.1492 Korea also claims
that the USDOC acted inconsistently with paragraph 1 of Annex II by failing to provide a definition
of "accessories" as soon as possible. 1493 According to Korea, in the absence of a definition of
"accessories" by the USDOC, HHI did its "utmost" to provide in a timely manner the requested
information and furnished all the data on "accessories" based on HHI's understanding of the term.1494
Korea also claims that the USDOC acted inconsistently with paragraphs 3 and 5 of Annex II by failing
to take into account the verifiable and substantiated information concerning "accessories", which,
even if not perfect, was submitted by HHI acting to the best of its ability. 1495 Korea states that the
data on accessories was provided based on the way that HHI interpreted and applied the term 1496,
and the USDOC never took any issue with HHI 's reporting, nor did it provid e any guidance to the
contrary despite HHI's repeated efforts to seek further clarifications.1497
The United States maintains that, despite the USDOC 's repeated requests, HHI withheld
"necessary" information and otherwise impeded the review.1498 According to the United States, HHI
bore the burden of defining the terms in respect to which information was required, in light of its
obligation to respond to the best of its ability, and given that the company that uses the term is "by
far in the best position" to understand how that term is used.1499 Referring to the Hyosung's reporting

1488 LPT POR4 supplemental questionnaire response, (Exhibit USA-41 (BCI)), p. 10.
1489 LPT POR4 meeting memorandum, (Exhibit USA-40).
1490 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 11.
1491 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 11. (fns omitted)
1492 Korea's first written submission, paras. 799-800.
1493 Korea's first written submission, para. 808.
1494 Korea's first written submission, paras. 800-801.
1495 Korea's first written submission, paras. 803, 843, and 845.
1496 Korea notes that the USDOC justified its decision to reject the information submitted relating to
accessories based on the fact that some HHI sales documentation included the term "accessories", and thus it
could not be considered undefined. However, Korea emphasizes that the term was used inconsistently across
HHI's customers base. (Korea's first written submission, para. 806).
1497 Korea's first written submission, paras. 801 and 805-806.
1498 United States' first written submission, para. 286.
1499 United States' second written submission, paras. 87-88.

BCI deleted, as indicated [[***]]

and to the proposed definitions provided by the petitioner, the United States notes that HHI did not
offer a definition of the term "accessories" even though it "ha d previously taken positions in its
February response on sales of accessories" and " [w]hile acknowledging how other parties have
attempted to define and report accessories".1500 The United States argues that HHI's documentation
reflected its awareness and und erstanding of the types of components that constituted
accessories.1501 The United States also points out that HHI requested a clarification of the term
"accessories" months after the USDOC's initial request.1502
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraph 1, 3, 5,
and 6 of Annex II of the Anti-Dumping Agreement in resorting to the use of facts available in respect
of HHI's reporting of "accessories" in POR4.
We recall that the issue concerning the reporting of "accessories" also arose in POR3. While
the facts relating to this issue in POR4 are similar in many respects to the situation in POR3, we note
that in POR3 HHI expressed its reporting concerns mainly through its questionnaire responses, and
the USDOC finally determined that HHI had misreported "accessories" and that, in case of any doubts
as to the meaning of the term, HHI should have sought a clarification from the USDOC.1503 In POR4,
HHI did, in fact, seek such a clarification and actively sought to meet with the USDOC to discuss this
issue.1504 We recall that paragraph 1 of Annex II to the Anti -Dumping Agreement requires an
investigating authority to "specify in detail", "as soon as possible" after the initiation of the
investigation, the information that is required and the manner in which such information should be
structured.
HHI underscored the absence of a general definition of the term "accessories" on multiple
occasions during the POR4 proceedings. 1505 The USDOC expressly disagreed with HHI t hat
the USDOC was obliged to define the term "accessories". 1506 Indeed, the record does not
demonstrate – nor does the United States contend – that a definition of "accessories" was, in fact,
provided by the USDOC to HHI. Rather, the United States refutes Korea's claim under paragraph 1
of Annex II on the ground that HHI was in the best position to define "accessories" as it had used
the term in its internal sales documents.1507
Although the term "accessories" appears in HHI 's sales documentation, we note that HHI
explained to the USDOC that it did not have a common internal definition of "accessories" and that
term was not used in the same sense in documents pertaining to different sales or, in some cases,
in different documents pertain ing to a single sale. 1508 Neither the United States nor the USDOC
explain why HHI could be considered to have had a particular or specific understanding of the term
"accessories" notwithstanding the evidence presented by HHI showing that the term was not use d
consistently across its internal sales documentation. We therefore disagree with the United States
that the USDOC was not required to define "accessories" merely because that term was used in
HHI's internal documents.

1500 United States' first written submission, para. 278 (referring to LPT POR4 request for clarification,
(Exhibit KOR-146 (BCI)), pp. 5-12).
1501 United States' first written submission, para. 286.
1502 United States' first written submission, para. 278.
1503 LPT POR3 issues and decision memorandum, (Exhibit KOR-121), p. 27.
1504 LPT POR4 request for clarification, (Exhibit KOR-146 (BCI)), pp. 5-15.
1505 LPT POR4 Sections B-D questionnaire response, (Exhibit KOR-144 (BCI)), p. D-2 (submitting that
"there is no definition of what constitutes 'accessories'"); LPT POR4 request for clarification, (Exhibit KOR-146
(BCI)), p. 5 (submitting that "[HHI] has not been able to identify a fixed definition for the term 'accessories' as
used by the [USDOC] in this question"); LPT POR4 second supplemental questionnaire response,
(Exhibit KOR-148 (BCI)), p. 10 (submitting that "[i]nternally, [HHI] does not have a definition of
'accessories.' Moreover, there is no particular use of the term 'accessories' by [HHI]'s customers."); and
LPT POR4 HHI request for meeting, (Exhibit KOR-212) (requesting a meeting with the USDOC to discuss the
"'accessories' issue raised in HHI's responses and previous submissions").
1506 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 13.
1507 United States' second written submission, para. 88; first written submission, paras. 278, 236,
and 315.
1508 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-148 (BCI)), pp. 10-16.

BCI deleted, as indicated [[***]]

In support of its position, the United States also points to the USDOC's observation that the
other mandatory respondent, Hyosung, was "able to identify what an accessory is".1509 In our view,
the fact that Hyosung reported its understanding of the term "accessories" does not have a bearing
on the validity or genuineness of HHI 's explanation that it did not have a consistent or common
understanding of that term in its own internal operations. We therefore consider that the
United States' argument concerning Hyosung 's reporting of its understan ding of the term
"accessories" is not relevant to the issue of whether the USDOC was required to provide a definition
of "accessories" to HHI – a respondent that repeatedly informed the USDOC that it did not have a
common understanding of that term across its operations.
The United States also argues that , had HHI reported its own understanding of the term
"accessories", the USDOC could have further analysed whether that understanding was appropriate
for the purpose of calculating a margin, and that HHI withheld necessary information and otherwise
impeded the review by not providing such definition. 1510 We note in this regard that in its
questionnaire dated 19 May 2017, the USDOC requested HHI to provide "a definition of how [HHI]
use[s] and/or understand[s] t he scope of the term 'accessories ' when negotiating with [its]
customers".1511 In response, HHI clearly conveyed to the USDOC that it did not have any particular
understanding of the term "accessories" in negotiating with its customers, as was allegedly reflected
in the varying usage of the term within and across sales. 1512 We also note that HHI informed the
USDOC in this response that it was reporting information regarding "accessories" based on the
following definition:
[HHI] will report any component that is not "attached to, imported with or invoiced with
the active parts of LPTs" as an "accessory," and [HHI] will report any component that
is "attached to, imported with or invoiced with the active parts of LPTs" as part of t he
transformer. Thus, under this definition, [HHI] would report any component that is
procured for the customer and sent directly to the customer without being "attached to,
imported with or invoiced with the active parts of LPTs" as an "accessory."1513
Thus, HHI also clearly indicated its reporting basis to the USDOC. However, the USDOC did not
explain why HHI 's proposed definition of the term "accessories" under the fourth administrative
review was inappropriate for the purpose of calculating a dumping margin. Further, while the USDOC
noted that the "record evidence suggests that [HHI] could have provided the ranges/types of
components which it believes constitute accessories based on its technical knowledge and experience
in the industry", this observation appears as an unsubstantiated assertion in the USDOC 's final
determination.1514 The United States has neither identified record evidence that formed the basis of
this observation by the USDOC, nor has it pointed us to any flaw in the evidence or the explanation
provided by HHI that it had no consistent understanding of the term "accessories" as part o f its
internal operations.
The United States also points to an alleged inconsistency in HHI 's submissions before the
USDOC, asserting that, on the one hand, HHI claimed not to have a particular understanding of the
term "accessories", while , on the other hand, HHI argued that it had properly reported
accessories.1515 We understand the United States to suggest that this alleged inconsistency reveals
HHI's failure to properly define and submit information pertaining to "accessories" before the
USDOC. While HHI denied having a consistent understanding of "accessories" in its internal
operations and in its negotiations with customers, the understanding of this term that it offered in
its submissions before the USDOC was tailored for the purpose of the POR4 procee dings. In other
words, while HHI denied having a general understanding of the term "accessories" in the normal
course of business, it did propose an understanding of the term for the purpose of the
USDOC's investigation and reported the relevant informatio n based on that understanding. 1516

1509 United States' first written submission, para. 315.
1510 United States' first written submission, para. 286; second written submission, para. 88; and opening
statement at the first meeting of the Panel, para. 112.
1511 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), p. 9.
1512 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-148 (BCI)), p. 10.
1513 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-148 (BCI)), p. 16.
1514 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 14.
1515 United States' first written submission, para. 286 (referring to LPT POR4 issues and decision
memorandum, (Exhibit KOR-211), p. 10).
1516 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 6-11.

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Thus, contrary to the United States' argument, we see no inconsistency in HHI's submissions before
the USDOC.1517
Accordingly, in the circumstances of this case, we find that, by not providing further guidance
as to the meani ng of the term "accessories" , the USDOC acted inconsistently with paragraph 1 of
Annex II to the Anti-Dumping Agreement, as it failed to "specify in detail" the information required.
Given that paragraph 1 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement1518, we find that the
USDOC also acted inconsistently with that provision in resorting to facts available. In light of our
findings of WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3 and 5 of Annex II to the Anti -Dumping Agreement in order to provide a positive
solution to the dispute before us.1519
7.3.6.4.2.2 Gross unit price for certain home market sales
Factual background
In its second supplemental questionnaire for the POR4 proceedings, the USDOC asked HHI
to provide "complete sales and expenses documentation" for certain home-market and US sales (in
particular SEQHs [[***]] and SEQUs [[***]]).1520 Having reviewed the information provided by HHI
for "one of the home-market sales requested" (SEQH [[***]]), in its preliminary determination the
USDOC found that HHI had "improperly reported its home market gross unit prices for certain home
market sales".1521 The USDOC explained:
Specifically, the record indicates that even though later -revised contracts identify
different contract values, [HHI] continued to use the values from its initial contract to
report its gross unit prices for certain sales, thereby understating its home market sales
for certain home market sales. As a result, we preliminarily find that [HHI]'s reporting
of i ts gross unit prices for its home market sales is not reliable. Therefore, we
preliminarily determine that [HHI] failed to cooperate to [the] best of its ability to
provide complete and accurate information, thereby preventing the [USDOC] from
calculating an accurate margin and calling into question the accuracy of
[HHI]'s reporting.1522
The USDOC provided a further explanation for its conclusion in its preliminary analysis
memorandum, stating that " [HHI] improperly determined its home market gross unit price for
[[***]] home market sales".1523 The USDOC found that for one of the [[***]] home market sales
for which it had requested complete documentation (SEQH [[***]]), HHI had reported the gross
unit prices based on the original contract, while subsequent revis ions of this contract reported
increased prices. This contract and its revisions included gross unit prices also for SEQH [[***]], for
which the USDOC had not requested complete documentation. The USDOC therefore preliminary
determined that HHI had misreported SEQHs [[***]].
In its case brief submitted after the preliminary determination, HHI argued that it had not
understated its home -market gross unit prices , as the changes that the USDOC observed in the

1517 The United States also points to HHI's reference to "accessories as a type of change that can occur
after the initial purchase order" in HHI's questionnaire response dated 2 February 2017. (United States' first
written submission, para. 277 (referring to (LPT POR4 Section A questionnaire response, (Exhibit KOR-150
(BCI)), p. A-29)). We note that while the term "accessories" does appear in the questionnaire response that
the United States points to, this does not, in our view, contradict the evidence provided by HHI showing that
this term was not used uniformly by HHI in its internal operations and across/within different sales.
1518 Panel Reports, China – GOES, paras. 7.384-7.385 and 7.393-7.394; US – Steel Plate,
paras. 7.55-7.56.
1519 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1520 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), p. 13.
1521 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), pp. 17-18.
1522 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 18.
1523 LPT POR4 preliminary analysis memorandum, (Exhibit USA-43 (BCI)), pp. 2-3.

BCI deleted, as indicated [[***]]

contract prices were related solely to non-subject merchandise, and thus there was no basis to find
that HHI had not reported gross unit prices in an accurate manner.1524
In its final determination, the USDOC continued to find that the application of "adverse facts
available" was warranted1525 and addressed the petitioner's concerns as follows:
The petitioner alleges that the initial contract for the home market sales at issue
indicates that this certain part, which is supposed to be treated as a non -foreign like
product, may be indeed a foreign like product. In particular, the petitioner argues that
the initial contract for the home market sales at issue shows that this particular part
(i.e., the supposed non-foreign like product) is included within the contract under the
"Main Transformer" des cription, which indicates that this supposed non -foreign like
product may be indeed a foreign like product. This evidence contradicts [HHI]'s claims
that the total contract value change between its initial contract and later -revised
contracts is only relat ed to a non -foreign like product. Other than [HHI]'s annotation
claiming that this part is a non -foreign like product, the record does not demonstrate
whether it is indeed non-foreign like product.
Additionally, due to [HHI]'s failure to provide the reques ted information regarding
accessories, as detailed in Comment 1 above, we are unable to determine whether this
item would be an accessory. As explained above, other than [HHI]'s annotation which
categorized this item as non -foreign like product in its cont ract, [HHI] did not provide
any additional details concerning the nature of this item and how it interacts with
merchandise under review. Therefore, we find that the record is ambiguous and there
continues to be concern that the gross unit prices may be understated.1526
The USDOC concluded that: "(1) [HHI]'s reporting of nonforeign like products is inaccurate;
(2) there is inconsistent treatment of a certain item in its home market sales; and (3) by excluding
this item, this could lead to the understatement o f the home market gross unit price for certain
sales".1527 The USDOC applied facts available with an "adverse inference" "because such inaccurate
and incomplete reporting gives rise to concerns of the manipulation of gross unit prices, and
[HHI]'s continued careless reporting".1528
Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available because information about one home market
sale cannot, in good faith, be considered "requisite, essential, needful" – and therefore is not
"necessary" – for purposes of the USDOC 's determination.1529 Korea also asserts that H HI had
submitted record evidence that, in any case, would have allowed the USDOC to decide whether to
include or exclude the cost of this part in the gross unit price for the calculation of the normal value
of these transactions. 1530 On this basis, Korea cla ims that the USDOC acted inconsistently with
paragraphs 3 and 5 of Annex II by discarding verifiable and appropriately submitted information.1531

1524 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 39-40.
1525 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 3.
1526 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 15-16 (emphasis original). The
USDOC was also concerned due to the different treatment of the same item in different home market
sales: "[w]hile the item names between the two sales are not identical, they indicate that the item name
appears in the second sale as merchandise within the scope (i.e., treated as a foreign like product in the
second sale while its treated as non-subject merchandise in the first sale)".
1527 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 16.
1528 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 16.
1529 Korea's first written submission, para. 811. Korea explains that the USDOC stated for the first time,
in its preliminary determination, that the gross unit prices for certain home market sales were inappropriately
reported as HHI used values from original contracts, although later-revised contracts showed different values.
According to Korea, HHI explained in its subsequent case brief that the revisions concerned non-subject
merchandise, and thus the gross-unit price was not affected. Korea notes that the USDOC finally determined
that necessary information was missing, even though it only concluded that the "part" at issue may be subject
merchandise, and not that it certainly was. (Korea's first written submission, paras. 736-737; second written
submission, para. 328).
1530 Korea's first written submission, para. 812. See also Korea's second written submission, para. 330.
1531 Korea's first written submission, paras. 815 and 844.

BCI deleted, as indicated [[***]]

Finally, Korea asserts that an investigating authority 's internal deadlines do not justify the
authority's failure to request additional information, as required by paragraph 6 of Annex II.1532
The United States maintains that HHI classified a particular component as "non -subject
merchandise" even though this component was "always attached or assembled" to the LPT.
The United Stated recalls that HHI reported gross unit prices for certain sales on the basis of values
from the "initial purchase contract", while this contract had been modified twice. 1533 On this basis,
the United States argues that HHI failed to accurately report gross-unit prices and thus the "USDOC
was unable to accurately compare home market sales with export sales to the United States". 1534
The United States further refers to the USDOC's statement that it would have been impracticable to
send another supplemental questionnaire as it would have had to cover and examine significantly
more home market sales in order to determine if HHI had understated its gross unit prices.1535
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of the gross unit prices for certain home market sales.
We recall that the USDOC preliminarily determined that HHI had understated the gross unit
prices for SEQHs [[***]] and [[***]], because "even though later -revised contracts identif[ied]
different contract values, [HHI] continued to use the values from its initial contract to report its
gross unit prices" for these two home market sale s.1536 HHI responded in its case brief that the
USDOC "correctly identified a change between the original and revised contracts of the sale in
question … but that change concerned non-subject merchandise only".1537 HHI based this assertion
on the original purchase order and the revised order, which referred to the disputed "part" as "not
attached" to the LPT, thus allegedly indicating that it was not subject merchandise.1538 On this basis,
HHI maintained that "the gross unit prices connected to the sale did not change" and that its
reporting based on the original contract was accurate.1539
The USDOC in its final determination stated that HHI's assertion that the LPT part at issue
was "non-subject merchandise" was contradicted by the fact that this part was included under the
"Main Transformer" description of the contract.1540 For the USDOC, "[o]ther than [HHI]'s annotation
claiming that this part is a non -foreign like product, the record [did] not demonstrate whether it is
indeed non-foreign like product", and " [HHI] did not provide any additional details concerning the
nature of this item and how it interacts with merchandise under review".1541 The USDOC also stated
that the "con cern that [HHI] might be understating its home market gross unit price" was
exacerbated by the fact that HHI had not treated consistently the same item between different home
market sales. 1542 As the record was "unclear" as to whether HHI 's reporting was acc urate, the
USDOC concluded that HHI's reporting could lead to an understatement of the home market gross
unit price for certain sales. 1543 The USDOC ultimately applied facts available with "adverse
inferences" because of HHI's "inaccurate", "incomplete", and "careless" reporting.1544
As Korea points out, "the USDOC did not definitively conclude that the part was subject
merchandise – only that it may be".1545 Thus, in its final determination, the USDOC rejected the
information provided by HHI as part of its case brief aimed at demonstrating that the discrepancy
between the original and revised contracts concerned non -subject merchandise only. The USDOC

1532 Korea's second written submission, para. 329.
1533 United States' first written submission, para. 289.
1534 United State' first written submission, para. 318.
1535 United States' first written submission, paras. 288-290.
1536 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 18. See also LPT POR4
second supplemental questionnaire response, (Exhibit KOR-215 (BCI)), pp. 1-4.
1537 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 39-40. (emphasis omitted)
1538 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 40.
1539 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 39-40.
1540 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 15.
1541 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 15-16. (emphasis original)
1542 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 16.
1543 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 16-17.
1544 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 16.
1545 Korea's second written submission, para. 328. (emphasis original)

BCI deleted, as indicated [[***]]

however could not definitely conclude on the basis of the information before it as to whether the
part at issue was, in fact, subject merchandise.
Paragraph 6 of Annex II requires, in the first sentence, that "[i]f evidence or information is
not accepted, the supplying party should be informed forthwith of the reasons therefor, and should
have an opportunity to provide further explanations within a reasonable period, due account being
taken of the time -limits of the investigation" . As relevant context, we note that Article 6.2 of the
Anti-Dumping Agreement provides that:
Throughout the anti -dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that opposing views may be presented and rebuttal arguments
offered.
In the case at hand, HHI in its case brief provided information allegedly demonstrating that
the change between the original and revised contracts at issue concerned only non -subject
merchandise.1546 HHI also stated that "if any questions remain[ed] as to the sales responses and
supplemental responses supplied by [HHI] – which are voluminous and complex – the [USDOC]
should resolve them by reviewing the documentation on -site with the relevant company personnel
at verification". 1547 HHI further asserted that the discrepancy identified by the USDOC was
"amenable to an explanation" from HHI.1548
In its final determination, the USDOC considered the record to be "unclear" as to whether
HHI's reporting was accurate, and for this reason it concluded that HHI's reporting could lead to an
understatement of the home market gross unit price for certain sales. 1549 Moreover, the USDOC
stated that it "discovered these discrepancies regarding conflict ing treatment of certain LPT
components late in the review stage", and "[a]t this point in time, in light of [the] statutory deadlines
to complete the review, it became impracticable to send yet another supplemental
questionnaire".1550 Thus, the USDOC never provided an opportunity to HHI to furnish further
explanations regarding the alleged deficiency in the information supplied by HHI to demonstrate that
any change between the original and revised contracts of the sale at issue concerned non -subject
merchandise.1551
From the above, it is clear that the USDOC did not accept the information and explanations
provided by HHI in its case brief and did not provide an opportunity to HHI for furnishing further
explanations solely on the basis that it would be " impracticable" in light of the "statutory
deadlines".1552 As discussed above, while paragraph 6 of Annex II allows "due account being taken
of the time-limits of the investigation" for purposes of determining what constitutes a "reasonable
period" for seeking further explanations, this does not without more mean that the time-limits of an
investigation can be used to deprive an interested party of the opportunity to provide further
explanations within the meaning of paragraph 6 of Annex II, provided that all other conditions under
that provision are satisfied. We therefore disagree with the United States that the USDOC was
justified in not seeking further explanations and information from HHI in light of the applicable
statutory deadlines.1553
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with paragraph 6 of Annex II to the Anti -Dumping Agreement in resorting to facts available
because – having "not accepted" the information provided by HHI as it was "unclear" – the USDOC
did not subsequently give an opportunity to HHI to provide "further explanations within a reasonable
period, due account being taken of the time -limits of the investigation". Given that paragraph 6 of

1546 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 39-40.
1547 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 40.
1548 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 41. See also LPT POR4 HHI post preliminary
comments, (Exhibit KOR-141 (BCI)), p. 2.
1549 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 16-17.
1550 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 17.
1551 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 39-40.
1552 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 17.
1553 United States' first written submission, para. 290. Furthermore, we note that HHI's case brief was
filed on 12 October 2017, while the USDOC's Final Determination was issued almost five months later on the
9 March 2018.

BCI deleted, as indicated [[***]]

Annex II serves as a precondition for an investigating authority's proper resort to facts available
under Article 6.8 of the Anti -Dumping Agreement1554, we find that the USDOC also acted
inconsistently with that provision in resorting to facts available with respect to HHI 's reporting of
gross unit prices for certain home market sales in POR4. In light of our findings of
WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claims under paragraphs
3 and 5 of Annex II to the Anti-Dumping Agreement in order to provide a positive solu tion to the
dispute before us.1555
7.3.6.4.2.3 US sales agent
The last issue raised with respect to HHI's reporting in POR4 pertains to its identification of
an allegedly affiliated sales agent.
Factual background
In its initial Section A questionnaire, the USDOC made the following requests:
b. Provide a list of all … sales office locations … involved in the development, production,
sale and/or distribution of the merchandise under review operated by your company
and its affiliates. Please briefly describe the purpose of each. Provide a complete address
and telephone number for each of these plants, offices, and other facilities.1556
Following HHI's response1557, the USDOC issued a supplemental questionnaire, instructing
HHI to "provide a chart which includes a complete list of all of (1) HHI's subsidiaries and/or affiliates
and (2) HHI's subsidiaries and/or offices that are related to sale and/or distribution of merchandise
under review (please include addresses)", as well as "a detailed explanation of their specific sale
and/or distribution activities for merchandise under review during the POR". 1558 Furthermore, the
USDOC asked HHI to "describe in detail [its] relationship with each of its sales agents". 1559
Specifically, noting the petitioner 's allegation "that publicly available information shows, for
example, that commission agent [[***]] shares the same address and phone number with [[***]]",
the USDOC asked HHI to explain its "relationship with this company and state whether there is any
affiliation between [[***]] and any [HHI] entity".1560 HHI noted that it had submitted all charts of
its subsidiaries and affiliates in its initial section A response1561 and submitted again the list of all its
subsidiaries and affiliates 1562 while clarifying that it "is not affiliated with any of its sales agents",
because it compensated them when they were able to arrange a sale. 1563 HHI also submitted
evidence to demonstrate that, contrary to the petitioner's allegation "[[***]] is located in [[***]],
not [[***]]".1564
In its preliminary determination and the accompanying analysis, the USDOC acknowledged
HHI's response concerning the different locations of the sales agent and [[***]]1565, but nonetheless
found that HHI was affiliated with the sales agent on the basis that this agent used an email address
and a title and division that, in its view, "belong[ed]" to HHI.1566 The USDOC found that by not
identifying this sales agent as an affiliate, HHI prevented the USDOC from conducting an

1554 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.
1555 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1556 LPT POR4 initial questionnaire, (Exhibit USA-35), p. A-4.
1557 LPT POR4 Section A questionnaire response, (Exhibit KOR-150 (BCI)), pp. A-7-A-10.
1558 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), p. 4.
1559 LPT POR4 second supplemental questionnaire, (Exhibit KOR-147 (BCI)), p. 30.
1560 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-213 (BCI)), p. 81.
1561 LPT POR4 Section A questionnaire response, (Exhibit KOR-150 (BCI)), attachments A-6, A-8,
and A-9.
1562 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-213 (BCI)), p. 4.
1563 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-213 (BCI)), p. 81.
1564 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-213 (BCI)), p. 81.
1565 LPT POR4 preliminary analysis memorandum, (Exhibit USA-43 (BCI)), p. 5.
1566 LPT POR4 preliminary analysis memorandum, (Exhibit USA-43 (BCI)), p. 5.

BCI deleted, as indicated [[***]]

arm's-length analysis and calculating an accurate margin, as the indirect selling expenses related to
this agent could have been understated.1567
HHI subsequently submitted its post -preliminary comments, addressing, inter alia , the
USDOC's "factual assertion" about the alleged US sales agent. The USDOC, however, rejected this
submission in its entirety as it contained "new factual information " and noted that HHI would have
a "full and fair opportunity" to present its arguments regarding the preliminary results, absent the
new factual information, in its case and rebuttal briefs. 1568 HHI resubmitted its post -preliminary
comments, having redacted all the "new factual information" identified by the USDOC.1569 HHI urged
the USDOC to conduct the previously-planned verification, in order to examine the independence of
this agent.1570 As part of its case brief, HHI asserted that the USDOC had not establishe d that the
relationship between the two entities satisfied the statutory definition of "affiliated persons" and that
nothing indicated that HHI had failed to disclose some aspect of its relationship with the sales
agent.1571
In its final determination, the USDOC continued to find that HHI was affiliated with this sales
agent and that HHI had failed to report such affiliation, thereby preventing the USDOC from
examining whether the selling expenses were reported accurately:
Specifically, we find that the avail able record evidence, which is otherwise incomplete
and unreliable for the reasons discussed above, demonstrates that [HHI] was affiliated
with a certain sales agent in the United States based on the fact that this sales agent
uses an email address and a title and a division that belongs to [HHI]. After examining
parties' comments and the record evidence, we continue to find that [HHI] failed to
provide complete and accurate information regarding its precise relationship with this
sales agent as to whether this agent is affiliated. Therefore, [HHI] should
have: (1) reported that its New Jersey sales agent office was involved in the sale of
merchandise under review; and (2) included the associated selling expenses as part of
its indirect selling expenses. By not disclosing the precise relationship between [HHI]
and this sale agent, [HHI] failed to cooperate to the best of its ability to provide
complete and accurate information regarding its affiliated parties.1572
Main arguments of the parties
Korea claims that the USDOC resorted to facts available inconsistently with Article 6.8 of the
Anti-Dumping Agreement, as the information regarding the one sales agent at issue was not
"necessary", and, in any event, HHI had submitted record evidence demonstrating that it "is not
affiliated with any of its sales agents", thus no information was, in fact, "refuse[d] access to" or
otherwise "not provide[d]", nor was the review process "significantly impede[d]". 1573 Korea claims
that the USDOC also acted inconsistently with paragraphs 3 and 5 of Annex II by failing to take into
account verifiable information that was submitted in an appropriate and timely manner, and which,
even if not ideal, was submitted by HHI acting to the best of its ability. 1574 Furthermore, according
to Korea, the USDOC failed to notify HHI of any specific deficiencies relat ing to the information
concerning the sales agent and did not issue any follow-up requests, as required by the first sentence
of paragraph 6 of Annex II.1575
The United States responds that the USDOC reasonably determined that HHI failed to
provide complete information regarding its affiliated sales agent and properly rejected the new and
unsolicited information that HHI attempted to submit in this regard. 1576 The United States

1567 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 18.
1568 LPT POR4 USDOC Moses Y. Song memorandum, (Exhibit KOR-151).
1569 LPT POR4 HHI post preliminary comments, (Exhibit KOR-141 (BCI)), p. 2.
1570 LPT POR4 HHI post preliminary comments, (Exhibit KOR-141 (BCI)), p. 6.
1571 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), pp. 43-46.
1572 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 18-19. (fn omitted)
1573 Korea's first written submission, paras. 814-816.
1574 Korea's first written submission, paras. 815, 837, 842, and 845.
1575 Korea's first written submission, para. 815.
1576 United States' first written submission, paras. 321-322.

BCI deleted, as indicated [[***]]

emphasizes that despite the multiple opportunities that the USDOC provided to HHI in order to report
its affiliates, HHI still failed to report its relationship with the sales agent at issue.1577
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
HHI's reporting of one US sales agent.
We note that, as part of its second supplemental response, HHI, based on supporting
evidence, asserted that it "is not affiliated with any of its sales agents". 1578 In its preliminary
determination, the USDOC found that HHI was affiliated with one of its sales agents on the basis
that this agent used an email address and a title and division that, in its view, belonged to HHI.1579
In its final determination, the USDOC continued to find that HHI was affiliated with the sales agent
for the same reasons.1580 The USDOC concluded that HHI "failed to provide complete and accurate
information regarding its precise relationship with this sales agent as to whether this agent is
affiliated".1581
As discussed above, HHI attempted to respond to the USDOC 's preliminary finding by way
of post-preliminary comments; however, the USDOC rejected its submission on the ground that it
contained "new factual information". 1582 HHI resub mitted its post -preliminary comments, having
redacted all the "new factual information".1583 HHI also urged the USDOC to conduct verification so
as to "readily examine registration documentation for the e-mail address, employment records, and
other records r elating to the sales agent – demonstrating that he is independent of [HHI]".1584
Similarly, as part of its case brief, HHI reiterated its request "to submit new factual information to
rebut, correct, or clarify the [USDOC]'s erroneous factual statement regarding the sales agent's use
of [HHI]'s email address"1585, and also urged the USDOC to "invite it to refile its post -preliminary
comments, including the new factual information" for this purpose. 1586 The record thus indicates
that, following the preliminary determination, HHI made several attempts to explain that the email
address identified by the USDOC did not belong to HHI, and that the title used by the sales agent
did not indicate that it was affiliated with HHI. HHI repeatedly requested permission to submit
evidence in support of its assertions, which was never granted by the USDOC.
The first sentence of paragraph 6 of Annex II requires that, "[i]f evidence or information is
not accepted, the supplying party should be informed forthwith of the reasons therefor, and should
have an opportunity to provide further explanations within a reasonable period, due account being
taken of the time-limits of the investigation" . As relevant context, we note that Article 6.2 of the
Anti-Dumping Agreement provides that:
Throughout the anti -dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that opposing views may be presented and rebuttal arguments
offered.
While the USDOC found in its preliminary determination that HHI was affiliated with the sales
agent on the basis that this agent used an email address and a title and division that belonged to
HHI, HHI presented arguments questioning the factual basis of the USDOC's preliminary findings in

1577 United States' first written submission, para. 296.
1578 LPT POR4 second supplemental questionnaire response, (Exhibit KOR-213 (BCI)), p. 81.
1579 LPT POR4 preliminary analysis memorandum, (Exhibit USA-43 (BCI)), p. 5.
1580 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 18-19.
1581 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 19. (emphasis added)
1582 LPT POR4 USDOC Moses Y. Song memorandum, (Exhibit KOR-151).
1583 LPT POR4 HHI post preliminary comments, (Exhibit KOR-141 (BCI)), p. 2. The context surrounding
the redacted comments indicates to us that the "new factual information" rejected by the USDOC pertained to
demonstrating that the email address used by the sales agent did not belong to HHI. (LPT POR4 HHI post
preliminary comments, (Exhibit KOR-141 (BCI)), p. 6).
1584 LPT POR4 HHI post preliminary comments, (Exhibit KOR-141 (BCI)), p. 6.
1585 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 44.
1586 LPT POR4 HHI case brief, (Exhibit KOR-149 (BCI)), p. 48.

BCI deleted, as indicated [[***]]

its case and rebuttal briefs. 1587 It is clear that – despite repeated requests by HHI – the USDOC
never allowed HHI to place on the record information allegedly demonstrating that the email address
and title used by the sales agent at issue did not, in fact, belo ng to HHI. In light of the explanation
provided by the USDOC, the fact that the sales agent used a particular email address and title, and
the USDOC 's inference that these belonged to HHI, constituted an important basis for the
USDOC's findings. In these c ircumstances, we consider that "an opportunity to provide further
explanations" for purposes of paragraph 6 of Annex II required more than a mere cursory rejection
of the information supplied by HHI and ought to have allowed HHI to present information that, in its
view, demonstrated that the email address and the title used by the sales agent at issue did not
belong to HHI.
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with paragraph 6 of Annex II to the Anti -Dumping Agreement in resorting to facts available
because – having not accepted HHI 's submission that it was not affil iated with any of its sales
agents – the USDOC did not subsequently give an opportunity to HHI to provide "further
explanations within a reasonable period". Given that paragraph 6 of Annex II serves as a
precondition for an investigating authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement1588, we find that the USDOC also acted inconsistently with that provision
in resorting to facts available with respect to HHI's reporting of a US sales agent in POR4. In light of
our findings of WTO-inconsistency, we do not consider it necessary to address Korea's claims under
paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in order to provide a positive
solution to the dispute before us.1589
7.3.6.4.3 Hyosung
With respect to Hyosung, Korea challenges the USDOC 's resort to facts available for three
issues concerning the reporting of (a) service-related revenues, (b) an overlapping invoice between
two PORs, and (c) certain discounts and price adjustments.1590 For each issue, we begin by setting
out the factual background, before summarizing the parties ' main arguments, and examining
Korea's claims under Article 6.8 and Annex II of the Anti-Dumping Agreement.
7.3.6.4.3.1 Service-related revenues
Factual background
In its initial Section C quest ionnaire, the USDOC asked Hyosung to "report revenue in
separate fields ( e.g., ocean freight revenue, inland freight revenue, oil revenue, installation,
etc.) and identify the related expense(s ) for each revenue".1591 Hyosung in its response explained
the in stances for which it reported separately service -related revenues, based on whether
Hyosung/HICO America was responsible for the provision and was assuming the risk of the
calculation of the cost for this service, or such costs were itemized and separately negotiated.1592
In its supplemental Section A questionnaire, the USDOC requested Hyosung to provide the
order of acknowledgement forms (OAFs ) issued by HICO America for all the [[***]] sales that
occurred during the POR.1593 Hyosung had initially reported that such OAFs were supplied to Hyosung
by HICO America upon the receipt of a purchase order or contract of a customer. 1594 Hyosung
complied with the USDOC's supplemental query.1595 The USDOC subsequently issued a Sections B-C
supplemental questionnaire that included a number of questions related to service -related

1587 LPT POR4 USDOC Moses Y. Song memorandum, (Exhibit KOR-151).
1588 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.
1589 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1590 Korea's first written submission, paras. 819-832 and 846-850.
1591 LPT POR4 initial questionnaire, (Exhibit USA-35), p. C-1.
1592 LPT POR4 Hyosung Sections B-D questionnaire response, (Exhibit KOR-153 (BCI)), pp. C-23-C-24.
1593 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
p. S-21 and exhibit S-18.
1594 LPT POR4 Hyosung Section A questionnaire response, (Exhibit KOR-152 (BCI)), p. A-18.
1595 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
p. S-21 and exhibit S-18.

BCI deleted, as indicated [[***]]

revenues.1596 Specifically, the USDOC asked Hyosung to "explain in detail whether the sales
documentation generated for both sales in Korea and in the United States separately list, or
otherwise itemize, the prices and/or revenues for the main transformer body, spare parts,
accessories, and/or sales -related service revenues ( e.g., freight, brokerage, installation, and
supervision)".1597 Hyosung responded that for US sales it had reported separate revenues in
instances where the HICO invoice , upon request of the customer, identified such revenues in
separate line items.1598 For home market sales, Hyosung noted that the tax invoices did not itemize
revenues or prices separately.1599
In addition, for each of the reported net price variables for both home-market and US sales,
Hyosung was instructed to describe how it calculated the service-related revenues.1600 In particular,
for US sales, the USDOC asked Hyosung to ensure that, if the ocean freight revenue was separately
identified on any sales documents, Hyosung should identify such documents and provide copies of
those documents; and if the reported value was based upon an allocation, to explain that
methodology.1601 Hyosung responded that it had reported all ocean freight revenue based on the
information contained in the commercial invoice issued to the customer, and that it had not reported
separately such revenues when they were not specified in a separate line in the invoice.1602 Hyosung
also submitted complete sales and expenses documentation for certain US and home market
sales1603 as requested by the USDOC.1604
The petitioner in its pre -preliminary comments identified certain deficiencies in
Hyosung's supplemental responses 1605, and Hyosung responded to these comments. 1606 In its
preliminary determination, the USDOC noted that the majority of the OAFs submitted were illegible,
and further found that service-related revenues exceeded the relevant expenses, thus distorting the
net US price and the calculation of the antidumping margin:
However, an examination of the few legible, partial OAFs submitted by Hyosung
indicates that HICO America dedicates a portion of the sales price charg ed to its U.S.
customers to cover service-related expenses. An analysis of the reported service-related
expenses as compared to the allocations by Hyosung of revenues to cover these
expenses demonstrates that the service -related revenues exceed the expense s, and
that Hyosung did not reduce the price charged to the customer for the revenues in
excess of the services provided. The allocation of revenues, as shown in the OAFs, are
not reflected in the section C sales database/chart in Exhibit SBC -32(1). Theref ore,
service-related revenues exceed the underlying service-related expenses and Hyosung
neither reduced the revenues collected from its U.S. customers for these expenses nor
reported them separately so that the [USDOC] could cap the revenues, thus distorting
the [USDOC]'s calculation of the antidumping duty margin by artificially increasing the
net U.S. price, and thereby artificially decreasing the margin of dumping.1607
The USDOC noted that because most of the information in OAFs was illegible, it could no t
conclude that all the "necessary" requested information was on the record.1608 The USDOC concluded
that Hyosung failed to provide the service-related revenues information requested even though such
information was available, as demonstrated by the few legible OAFs, and thus prevented the USDOC
from applying its "capping methodology" and impeded the review proceeding.1609

1596 LPT POR4 Hyosung third supplemental questionnaire, (Exhibit KOR-155).
1597 LPT POR4 Hyosung third supplemental questionnaire, (Exhibit KOR-155), p. 5.
1598 LPT POR4 Hyosung third supplemental questionnaire response, (Exhibit KOR-156 (BCI)), p. 9.
1599 LPT POR4 Hyosung third supplemental questionnaire response, (Exhibit KOR-156 (BCI)), p. 9.
1600 LPT POR4 Hyosung third supplemental questionnaire, (Exhibit KOR-155), pp. 6-8.
1601 LPT POR4 Hyosung third supplemental questionnaire, (Exhibit KOR-155), p. 9.
1602 LPT POR4 Hyosung third supplemental questionnaire response, (Exhibit KOR-156 (BCI)), p. 27.
1603 LPT POR4 Hyosung third supplemental questionnaire, (Exhibit KOR-155), p. 13.
1604 LPT POR4 Hyosung third supplemental questionnaire response, (Exhibit KOR-156 (BCI)), p. 41 and
exhibit SBC-66.
1605 LPT POR4 petitioner pre-preliminary comments, (Exhibit KOR-158 (BCI)).
1606 LPT POR4 Hyosung response to comments by petitioner, (Exhibit KOR-159 (BCI)).
1607 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), pp. 8-9. (fns omitted)
1608 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 9.
1609 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 9.

BCI deleted, as indicated [[***]]

In its case brief, Hyosung argued that in its responses it had relied on the sales invoice for
the revenue reporting, and that the USDOC at no point prior to the preliminary determination took
issue with this manner of reporting. 1610 Nor did the USDOC indicate that the OAF may be an
appropriate basis for Hyosung to report its service-related revenues.1611 Hyosung stated that, in any
event, any deficiencies could be resolved with a supplemental questionnaire or upon verification.1612
In its final determination, the USDOC maintained that Hyosung had failed to respond
accurately and completely with respect to the service -related revenues.1613 The USDOC disagreed
with Hyosung that its questions were based on the premise that reporting revenues on the basis of
invoices was the correct methodology:
However, if that were true, [the USDOC] would have no need to ask the further
questions that it asked of Hyosung with respect to this issue. [The
USDOC]'s questionnaire does not direct a respondent to create separate fields for
additional charges only if they appear on the invoice. Indeed, included in the question
is a statement that "all price adjustments granted, including discounts and rebates,
should be reported in these fields. The gross unit price less price adjustments should
equal the net amount of revenue received from the sale." It is clear that [the USDOC]
requests that a respondent report all price adjustments, whether or not they appear on
an invoice to a customer.1614
The USDOC also explained why it considered that an OAF, despite being an internal document,
contained sales information that would have allowed Hyosung to calculate service -related
revenues.1615
Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available as Hyosung did not "refuse [] access to", or
otherwise fail to provide, "necessary" information; nor did it "significantly impede []" the
proceedings.1616 Korea argues that there was no missing information that was "necessary" in the
sense of being "requisite, essential, needful" for the USDOC 's determination, as "[t]he USDOC did
not issue any follow -up questionnaires or notify Hyosung of any deficiencies in its reporting of
service-related revenue thereafter, nor [did it] make any explicit requests or express any concerns
regarding the OAFs submitted by Hyosung". 1617 Korea claims that the USDOC also acted
inconsistently with paragraphs 3 and 5 of Annex II by failing to take into account verifiable
information that was submitted in an appropriate and timely manner, and which, even if not ideal,
was submitted by Hyosung acting to the best of its ability.1618 Korea asserts that there was no basis
to conclude that Hyosung had failed to cooperate, given that it had reported the service -related
revenues on the basis of the invoices, as indicated in the USDOC's questioning.1619 Furthermore,
Korea asserts that the USDOC was not justified in resorting to facts available as it failed to inform
Hyosung of any deficiencies in its reporting and to request any further explanations regarding the
information submitt ed by Hyosung, as required under the first sentence of paragraph 6 of
Annex II.1620
The United States focuses on the USDOC's explanation as to why the OAFs for all US sales
were necessary for the investigation. 1621 The United States recalls that the OAFs subm itted were
incomplete and only partially legible, and thus the record was lacking information "necessary" to

1610 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 15 and 18.
1611 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 15 and 19.
1612 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 21.
1613 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 26.
1614 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 27 (referring to LPT POR4 initial
questionnaire, (Exhibit USA-35), p. C-18). (fn omitted)
1615 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 27-28.
1616 Korea's first written submission, para. 820.
1617 Korea's first written submission, para. 822.
1618 Korea's first written submission, paras. 846-847.
1619 Korea's first written submission, para. 823.
1620 Korea's first written submission, para. 822.
1621 United States' first written submission, paras. 301-302.

BCI deleted, as indicated [[***]]

complete the service-related revenue calculations.1622 The United States also argues that the USDOC
had provided to Hyosung "three separate opportuni ties to specifically report the relevant
revenue-related information and Hyosung failed to do so", and for this reason the USDOC found that
Hyosung had significantly impeded the investigation. 1623 In response to Korea's argument that the
USDOC did not specif ically request the reporting of service -related revenues based on OAFs, the
United States asserts that "[t]he issue is not whether a specific type of documentation was identified,
but rather whether [the USDOC] requested Hyosung to report specific informat ion", and since the
requested information was contained in the OAFs, HHI should have reported the service -related
revenues in light of these documents.1624
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
Hyosung's reporting of service-related revenues.
In its final determination, having found that OAFs were relevant to the examination of
services-related revenues and expenses, and having noted that Hyosung did not report
service-related revenues which did not appear on the invoice, the USDOC resorted to facts available
on the ground that the USDOC was "unsure as to whether t he submitted OAFs are complete, and
because the [OAFs] submitted [were] partially illegible". 1625 Korea argues that the USDOC did not
make specific requests of Hyosung to report information concerning service-related revenues based
on OAFs or to submit more legible copies of the OAFs.1626 In response, the United States contends
that the USDOC issued "multiple supplemental questionnaires" to Hyosung, providing multiple
opportunities to Hyosung to cure the deficiencies.1627
Paragraph 6 of Annex II requires, in relevant part, that "[i]f evidence or information is not
accepted, the supplying party should be informed forthwith of the reasons therefor, and should have
an opportunity to provide further explanations within a reasonable period, due account being taken
of t he time -limits of the investigation" . As relevant context, we note that Article 6.2 of the
Anti-Dumping Agreement provides that:
Throughout the anti -dumping investigation all interested parties shall have a full
opportunity for the defence of their interes ts. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that opposing views may be presented and rebuttal arguments
offered.
We note that none of the "multiple supplemental questionnaires" that the United States
points to specifically described the basis on which the USDOC rejected information concerning
services-related revenues supplied by Hyosung, namely that Hyosung did not report pertinent
information contained in the OAFs and that the OAFs supplied by Hyosung were illegible.1628 Neither
did these questionnaires ask Hyosung to address these particular deficiencies. Thus, we do not
consider that the USDOC fulfilled its obligations under paragraph 6 of Annex II to the
Anti-Dumping Agreement to inform Hyosung of the reasons for not accepting the information that
had been submitted and to provide Hyosung an opportunity to furnish further explanations.
Furthermore, the record before us demonstrates that the USDOC first identified deficiencies
regarding the reporting of service -related revenues in its preliminary determination. Although the
USDOC noted in its final determination that it had issued "multiple supplemental questionnaires" to
Hyosung, we note that these questionnaires were issued prior to the USDOC 's preliminary
determination wherein it first found Hyosung to have not properly reported service-related revenues.
As we see it, an "opportunity to provide further explanations" within the meaning of paragraph 6

1622 United States' first written submission, para. 329.
1623 United States' first written submission, para. 331.
1624 United States' responses to Panel question Nos. 100 and 101.
1625 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 29. (fn omitted)
1626 Korea's first written submission, paras. 749, 822, and 847; opening statement at the first meeting
of the Panel, paras. 123-124 and 127; and second written submission, paras. 273 and 341.
1627 United States' first written submission, para. 330.
1628 United States' first written submission, paras. 297-301.

BCI deleted, as indicated [[***]]

can only be provided once "evidence or information is not accepted". In this case, the USDOC did
not provide any such opportunity to Hyosung following its rejection of the information submitted by
Hyosung in its preliminary determination.1629
Accordingly, in the circumstances of this case – and irrespective of whether the
USDOC's analysis regarding the relevance of the OAFs for its determination of
Hyosung's service-related revenues was appropriate – we find that the USDOC acted inconsistently
with paragraph 6 of Annex II to the Anti-Dumping Agreement, because it did not inform Hyosung
"forthwith" of the reasons for not accepting the information that had been submitted and did not
give Hyosung an opportunity to provide "further explanations with in a reasonable period of time" .
Given that paragraph 6 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement1630, we find that the
USDOC also acted inconsistently with that provision. In light of our findings of WTO -inconsistency,
we do not consider it necessary to address Korea's claims under paragraphs 3 and 5 of Annex II to
the Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.1631
7.3.6.4.3.2 Invoice covering multiple US sales
Factual background
In its initial Sections B-D response, Hyosung reported the invoice number for each US sale
as instructed by the USDOC. 1632 In its supplemental questionnaire, the USDOC requested a
clarification concerning the quantity and value of LPTs for US sales.1633 Hyosung reported that, when
preparing its response to one of the USDOC's questions concerning the reconciliation of the products
sold and entered into the United States during the POR, it discovered that the total US sales value
erroneously included values of certain LPTs that had entered into the United States outside the POR
and reflected non -final invoice amounts in some instances. 1634 Hyosung therefore submitted a
revised quantity and value chart reflecting these revisions.1635
In its preliminary determination, the USDOC identified a deficiency in Hyosung 's reporting
of the invoices for US sales. The USDOC observed that Hyosung had reported the same invoice
number for multiple sales, and also that one of the multiple sales covered by this invoice concerned
the previous review period. 1636 The USDOC concluded that "Hyosung 's failure to explain how one
invoice could involve multiple sales over multiple periods of review raises concerns as to the accuracy
and reliability of the quantity and value of sales reported to the [USDOC]".1637
Hyosung commented on this finding in its case brief, asserting that "[t]he record fully
explains the basis of Hyosung 's reporting with respect to these sales, and sho uld the [USDOC]
require any further factual support, the [USDOC] should request that information prior to using this

1629 We also note that in its post-preliminary determination case brief, Hyosung stated that it was able
and willing to provide information that would address the concerns expressed by the USDOC in the preliminary
determination regarding the information on services-related revenues that Hyosung had submitted in response
to the USDOC's questionnaires. Hyosung noted that such concerns could be cured if the USDOC would offer
Hyosung an opportunity to provide further explanations through a supplemental questionnaire. Hyosung
argued to the extent that there were issues with the OAFs, that was "the result of a technical production error,
which the [USDOC] was required by law to allow Hyosung the opportunity to remedy", adding that such an
opportunity "would not delay the [USDOC]'s analysis or be a departure from standard investigative
procedures". As noted above, however, the USDOC did not provide such an opportunity to Hyosung. (LPT POR4
Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 18-19 and 21-22).
1630 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.
1631 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1632 LPT POR4 Hyosung Sections B-D questionnaire response, (Exhibit KOR-153 (BCI)), p. C-16.
1633 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
p. S-1.
1634 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
pp. S-1-S-2.
1635 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
pp. S-1-S-2, and exhibit S-2.
1636 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 10.
1637 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 10.

BCI deleted, as indicated [[***]]

invoice as a basis for total AFA" .1638 According to Hyosung, the USDOC 's standard questionnaire
instructed Hyosung to report "each U.S. sale of merchandise entered for consumption during the
POR", and, in that instance, the unit on the invoice had entered the United States in a different
POR.1639 According to Hyosung, it is not uncommon for shipment dates to differ for units covered by
the same i nvoice, and "[t]he mere fact that the shipment of the units listed on the invoice for
SEQUs [[***]] also contained a unit shipped during the prior POR is of no significance, and certainly
not grounds for the [USDOC] to default to total AFA".1640
In its final determination, the USDOC found that, given Hyosung 's description of its sales
process, it remained unclear how multiple sales could be covered by the same invoice:
Our examination of the invoice and record evidence leaves us unclear as to the number
of sales covered, as well as why this invoice would be used to cover multiple sales. In
its section A response to [the USDOC] 's antidumping duty questionnaire, Hyosung
states that "HICO America issues the invoice to the unaffiliated customer when the
merchandise is delivered and/or site test is completed."1641
The USDOC concluded that "the record [was] incomplete and the lack of explanation regarding this
invoice render[ed] Hyosung's reporting unreliable".1642
Main arguments of the parties
Korea claims that the USDO C acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available as Hyosung did not "refuse[] access to", or
otherwise fail to provide, "necessary" information; nor did it "significantly impede[]" the
proceedings.1643 Korea argues that Hyosung submitted the correct information in a timely manner
and its reporting was fully in line with the USDOC's instructions.1644 Korea also claims that, by failing
to use the verifiable information that was appropriately and timely submitted by Hyosung, the
USDOC acted inconsistently with paragraphs 3 and 5 of Annex II.1645 Further, Korea claims that the
USDOC acted inconsistently with paragraph 6 of Annex II to the Anti-Dumping Agreement by failing
to issue any follow -up questions or notif ying Hyosung of any deficiencies regarding the invoice at
issue.1646
According to the United States, "Hyosung did not explain why one invoice could cover
multiple sales in the current review period, as wel l as a sale in the previous review period". 1647
This explanation was necessary to support the accuracy of the data reported, which was necessary
to the USDOC's calculation of the dumping margin.1648
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
Hyosung's reporting of an invoice covering multiple sales.
In its preliminary determination, the USD OC noted for the first time that Hyosung had
reported the same invoice submitted in this POR also for a sale to the United States made during
the previous POR, and concluded that "Hyosung 's failure to explain how one invoice could involve
multiple sales over multiple periods of review raises concerns as to the accuracy and reliability of

1638 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 23.
1639 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 23.
1640 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 24.
1641 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 30 (referring to LPT POR4
Hyosung Section A questionnaire response, (Exhibit KOR-152 (BCI)), p. A-38).
1642 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 31.
1643 Korea's first written submission, para. 825.
1644 Korea's first written submission, para. 826.
1645 Korea's first written submission, para. 848.
1646 Korea's first written submission, para. 827; opening statement at the first meeting of the Panel,
para. 131.
1647 United States' first written submission, para. 304.
1648 United States' first written submission, para. 333.

BCI deleted, as indicated [[***]]

the quantity and value of sales reported to the [USDOC]".1649 On this basis, the USDOC preliminarily
determined that Hyosung impeded the investigation. The USDOC did not issue any supplemental
questionnaire seeking further explanations on this issue. In its case brief, Hyosung explained that ,
following the USDOC's instructions to report "each U.S. sale of merchandise entered for consumption
during the POR", "while a single invoice may relate to multiple entries, the relevant question for
identifying the reportable transactions for each administrative review is the timing of the entry into
the United States".1650 In its final determination , the USDOC stated that it remained unclear as to
"why this invoice would be used to cover multiple sales" given Hyosung 's statement in its
questionnaire response that "HICO America issues the invoice to the unaffiliated customer when the
merchandise is delivered and/or site test is completed". 1651 The USDOC determined that the
application of facts available was therefore warranted , as the record was incomplete , and because
the lack of explanation regarding the invoices rendered Hyosung's reporting unreliable.1652
Paragraph 6 of Annex II requires, in relevant part, that "[i]f evidence or information is not
accepted, the supplying party should be informed forthwith of the reasons therefor, and should have
an opportunity to provide further explanations within a reasonable period, due account being taken
of the time -limits of the investigation" . As relevant context, we note that Article 6.2 of the
Anti-Dumping Agreement provides that:
Throughout the anti -dumping investig ation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that opposing v iews may be presented and rebuttal arguments
offered.
In the case at hand, the USDOC resorted to facts available based on an alleged "discrepancy"
in an invoice that covered multiple US sales. 1653 The specific discrepancy that the USDOC referred
to in the final determination was that the record evidence was "unclear" as to the number of sales
covered in the invoice, as well as to how one invoice could cover multiple sales given that Hyosung
explained that it "issues the invoice to the unaffiliated customer when the merchandise is delivered
and/or site test is completed". 1654 Korea argues that the USDOC did not notify Hyosung of this
alleged deficiency in the invoice at issue.1655 The United States is unable to point to anything on the
record indicating that the USDOC informed Hyosung about this deficiency for the invoice at issue, or
offered Hyosung an opportunity to provide further explanations in this regard. We also note that the
alleged tension between Hyosung's statement that an invoice could cover multiple sales and
its explanation that an invoice for US sales is issued upon completion of the delivery or site test was
not set out as the basis for the USDOC 's rejection of the invoice in questio n in the preliminary
determination. This implies that Hyosung could not have provided further explanations in this regard
in its post-preliminary submissions.
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with paragraph 6 of Annex II to the Anti-Dumping Agreement, because it did not inform Hyosung
"forthwith" about the alleged deficiency in the invoice at issue that was "not accepted" and because
it did not give Hyosung an opportunity to provide "further explanations within a reasonable period".
Given that paragraph 6 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement1656, we find that the
USDOC also acted inconsistently with that provision. In light of our findings of WTO -inconsistency,

1649 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 10.
1650 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 23.
1651 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 30 (referring to LPT POR4
Hyosung Section A questionnaire response, (Exhibit KOR-152 (BCI)), p. A-38).
1652 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 31.
1653 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 30-31.
1654 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 30. We note that in response to
the USDOC's finding in the preliminary determination that Hyosung did not explain why one invoice could cover
sales in two review periods, Hyosung explained in its post-preliminary determination case brief that "while a
single invoice may relate to multiple entries, the relevant question for identifying the reportable transactions
for each administrative review is the timing of the entry into the United States". (LPT POR4 Hyosung case brief,
(Exhibit KOR-157 (BCI)), p. 23).
1655 Korea's first written submission, para. 754.
1656 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.

BCI deleted, as indicated [[***]]

we do not consider it necessary to address Korea's claims under paragraphs 3 and 5 of Annex II to
the Anti-Dumping Agreement in order to provide a positive solution to the dispute before us.1657
7.3.6.4.3.3 Discounts and price adjustments
Factual background
In its initial questionnaire, the USDOC asked Hyosung to report all price adjustments,
including discounts and rebates, when reporting the information concerning the quantity and price
for each transaction (i.e. in fields 16 through 21). 1658 Hyosung responded to these requests.1659 In
its supplemental questionnaire, the USDOC referred to a US sale for which it had previously
requested sample documentation, and asked Hyosung to submit "any do cuments referenced in, or
attached to, the sales documents provided in the sample sale which were not otherwise included".1660
Hyosung submitted the requested sales documentation for these sales.1661
In its pre-preliminary comments, the petitioner asserted that certain information from the
supplemental response contradicted Hyosung 's assertion in its "Section C Response that it did not
provide 'any early payment discounts,' 'any quantity discounts' or 'any other discounts on U.S. sales
of LPTs durin g the POR'" .1662 Specifically, the petitioner referred to certain SEQUs, for which the
commercial invoices reflected a type of discount that was not reported or explained by Hyosung. In
response, Hyosung explained that for SEQU [[***]] "[t]he term [[***]]" and it did "not have
[[***]]".1663 Similarly, for SEQUs [[***]], Hyosung explained that the line item of the commercial
invoice related to "[[***]]" and "this [[***]]".1664
In its preliminary determination, the USDOC stated that it was unconvinced by
Hyosung's assertion that the discounts did not fit the USDOC's definition, as they were the result of
negotiations with the customer at the time of the purchase order. 1665 The USDOC noted that the
price negotiations at the time of the purchase order are not controlling if the material terms of sale
change after that date and necessitate the use of the shipment date as the date of sale. 1666 In its
case brief, Hyosung reiterated its arguments from its response to the petitioner 's comments and
added that, for the SEQUs co ncerned, the record confirmed that Hyosung reported the full invoice
amount in the gross unit price field taking into account the "discount" and Hyosung 's reporting
therefore had "absolutely no impact" and was "immaterial" to the USDOC 's analysis.1667 Hyosung
argued that "[w]hether there was a separate line item on one of the invoices, the fact remains that
Hyosung's reporting captured the full amount charged to, and due from, the customer".1668
In its final determination, the USDOC stated that it "does not request that respondents report
net prices as the initial basis for our dumping calculations", and that "the instructions in the
antidumping duty questionnaire specifically state that a respondent should report discounts and
rebates".1669 The USDOC also explained that "[r]eporting all such adjustments to the gross unit price
allows [the USDOC] to examine the veracity of each claimed adjustment, and the validity of the
reported price, as well as examine the level of trade between the respondent and its customers".1670

1657 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.
1658 LPT POR4 Hyosung Sections B-D questionnaire response, (Exhibit KOR-153 (BCI)), p. C-19.
1659 LPT POR4 Hyosung Sections B-D questionnaire response, (Exhibit KOR-153 (BCI)), pp. C-19-C-26.
1660 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
p. S-34.
1661 LPT POR4 Hyosung supplemental Section A questionnaire response, (Exhibit KOR-154 (BCI)),
p. S-34 and exhibit S-32.
1662 LPT POR4 petitioner pre-preliminary comments, (Exhibit KOR-158 (BCI)), pp. 28-29.
1663 LPT POR4 Hyosung response to comments by petitioner, (Exhibit KOR-159 (BCI)), p. 24.
1664 LPT POR4 Hyosung response to comments by petitioner, (Exhibit KOR-159 (BCI)), p. 24.
1665 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 11.
1666 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 11.
1667 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 25-26.
1668 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 25.
1669 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 31-32.
1670 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 32.

BCI deleted, as indicated [[***]]

The USDOC found that the failure to report such adjustments calls into question the accuracy of the
reported prices and of the sales process.1671
Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 of the
Anti-Dumping Agreement in resorting to facts available as Hyosung did not "refuse[] access to", or
otherwise fail to provide, "necessary" information; nor did it "significantly impede[]" the
proceedings.1672 Korea contends that Hyosung properly reported all ap plicable discounts and price
adjustments in the initial and supplemental questionnaire responses. 1673 Korea focuses on the fact
that the total amount shown on the invoice, net of all discounts, was consistent with
Hyosung's reported gross unit prices. 1674 Korea also claims that by failing to take into account
verifiable information, the USDOC acted inconsistently with Article 6.8 and paragraphs 3 and 5 of
Annex II of the Anti -Dumping Agreement.1675 Finally, Korea claims that by failing to issue any
follow-up inquiries or supplemental questionnaires regarding alleged deficiencies in the information
supplied by Hyosung, the USDOC acted inconsistently with paragraph 6 of Annex II to the
Anti-Dumping Agreement.1676
The United States responds that Hyosung did not report adjustments in accordance with the
USDOC's instructions for certain sales during the POR.1677 According to the United States, the USDOC
provided opportunities to Hyosung to report the price adjustments in its initial and supplemental
questionnaires.1678 The United States also submits that "Hyosung failed to put forth its maximum
efforts to comply with requests for information, thereby failing to cooperate … to the best of its
ability".1679
Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraphs 3, 5, and 6
of Annex II of the Anti -Dumping Agreement in resorting to the use of facts available in respect of
Hyosung's reporting of certain discounts and price adjustments.
We recall t hat, in its preliminary determination, the USDOC found that Hyosung failed to
properly submit information regarding price adjustments and discounts for US sales on the ground
that Hyosung did not report certain price adjustments that were made in price neg otiations with
customers at the time of the purchase order.1680 While Hyosung argued that such adjustments did
not fit the description of "price adjustments" as defined by the USDOC, the USDOC was "not
persuaded that Hyosung was excused from reporting and explaining these adjustments".1681 In the
final determination, the USDOC also found that Hyosung had failed to report adjustments for interest
revenue that it received from certain customers.1682
Paragraph 6 of Annex II requires, in relevant part, that "[i]f evidence or information is not
accepted, the supplying party should be informed forthwith of the reasons therefor, and should have
an opportunity to provide further explanations within a reasonable period, due account being taken
of the time -limits of the investigation" . As relevant context, we note that Article 6.2 of the
Anti-Dumping Agreement provides that:
Throughout the anti -dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with

1671 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 32.
1672 Korea's first written submission, para. 829.
1673 Korea's first written submission, para. 830.
1674 Korea's first written submission, para. 830.
1675 Korea's first written submission, para. 850.
1676 Korea's first written submission, para. 849.
1677 United States' first written submission, paras. 306-307.
1678 United States' first written submission, para. 336.
1679 United States' first written submission, para. 345.
1680 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 11.
1681 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 11.
1682 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 32.

BCI deleted, as indicated [[***]]

adverse interests, so that opposing views may be presented and rebuttal arguments
offered.
Korea asserts that, in Hyosung's case brief responding to the USDOC 's preliminary finding
that Hyosung failed to properly submit information regarding price adjustments made pursuant to
negotiations with customers, Hyosung informed the USDOC that it had reported the full amount
invoiced to the cu stomer, accounting for all discounts. 1683 Korea also states that , in respect of the
USDOC's concerns regarding reporting of the interest amounts, Hyosung explained to the USDOC
that Hyosung had reported the actual amount that the customer was required to pay .1684 Korea
claims that the USDOC improperly resorted to facts available in the final determination without
sending Hyosung any follow -up enquiries after receiving the abovementioned clarifications by
Hyosung.1685 The United States responds by arguing that the USDOC had provided Hyosung the
opportunity to report all price adjustments through its initial and supplementary questionnaires.1686
We note that in its preliminary determination, where it first addressed this issue, the USDOC stated
that it was not convinced by Hyosung's argument that the discounts at issue did not fit the definition
of discounts in the USDOC 's questionnaires. However, the USDOC did not request further
explanations from Hyosung, nor did it request revised information after its rejection of
Hyosung's understanding of "discounts".
As to the United States' argument that the USDOC provided Hyosung the opportunity to
report all price adjustments through its initial and supplementary questionnaires 1687, we note that
these questionnaires invited Hyosung to submit certain information relating to price adjustment and
sales documentation, but they d id not address the specific clarifications offered by Hyosung as to
why its reporting of price adjustments and interest amounts was adequate. Thus, we do not consider
that the USDOC informed Hyosung forthwith of any alleged deficiencies in the clarifications that it
provided in its case brief; nor did it give Hyosung an opportunity to provide any further explanation
regarding such alleged deficiencies. We consider it relevant that in its post-preliminary determination
case brief, Hyosung expressly indicated its openness to further questions from the USDOC regarding
the basis on which Hyosung had reported prices adjustments negotiated with customers at the time
of the purchase orders, as well as Hyosung's reporting of interest revenues.1688 Insofar as the USDOC
had doubts about the accuracy of the "sales process" due to Hyosung's reporting, the USDOC never
raised this issue through a supplemental questionnaire or other such means, and did not seek any
further explanations from Hyosung on this matter.
Accordingly, in the circumstances of this case, we find that the USDOC acted inconsistently
with paragraph 6 of Annex II to the Anti-Dumping Agreement in resorting to facts available, because
the USDOC failed to inform Hyosung of any alleged deficiencies in the clarifications that were
provided in Hyosung 's case brief, and because it did not give Hyosung an opportunity to provide
"further explanations within a reaso nable period". Given that paragraph 6 of Annex II serves as a
precondition for an investigating authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement1689, we find that the USDOC also acted inconsistently with that provision
in resorting to facts available with respect to Hyosung's reporting of discounts and price adjustments.
In light of our findings of WTO -inconsistency, we do not consider it necessary to address
Korea's claims under paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in order to
provide a positive solution to the dispute before us.1690

1683 Korea's first written submission, para. 850; opening statement at the first meeting of the Panel,
para. 135 (referring to LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 25-26).
1684 Korea's first written submission, para. 850; opening statement at the first meeting of the Panel,
para. 135 (referring to LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), p. 26).
1685 Korea's opening statement at the first meeting of the Panel, para. 136; second written submission,
paras. 273-274.
1686 United States' first written submission, paras. 335-336 (referring to Hyosung initial anti-dumping
questionnaire, (Exhibit USA-46 (BCI)), p. C-18; and LPT POR4 Hyosung third supplemental questionnaire,
(Exhibit KOR-155), pp. 13-14, question 66).
1687 United States' first written submission, paras. 335-336 (referring to LPT POR4 Hyosung
third supplemental questionnaire, (Exhibit KOR-155), pp. 13-14 question 66; and Hyosung initial anti-dumping
questionnaire, (Exhibit USA-46 (BCI)), p. C-18).
1688 LPT POR4 Hyosung case brief, (Exhibit KOR-157 (BCI)), pp. 25-26.
1689 Panel Reports, China – GOES, para. 7.385; US – Steel Plate, paras. 7.55-7.56; and Mexico – Steel
Pipes and Tubes, para. 7.190.
1690 See, e.g. Panel Reports, EC – Salmon (Norway), para. 7.387; and Morocco – Hot-Rolled Steel
(Turkey), paras. 7.105-7.106.

BCI deleted, as indicated [[***]]

7.3.6.4.4 The USDOC's selection of the replacement facts for HHI and Hyosung
7.3.6.4.4.1 Factual background
In the POR4 final results, the USDOC applied to both HHI and Hyosung the rate of 60.81%,
which was the rate used for HHI in the POR3 final results. 1691 The USDOC explained that because
the rate was corroborated in the previous review, it did not require corroboration in the current
review.1692 Consistent with its findings in the p revious review, the USDOC found that the rate was
sufficiently adverse, without being punitive or aberrational, to ensure that the uncooperative parties
do not obtain a more favourable result by failing to cooperate than if they had fully cooperated.1693
7.3.6.4.4.2 Main arguments of the parties
Korea claims that the USDOC acted inconsistently with Article 6.8 and paragraph 7 of
Annex II of the Anti -Dumping Agreement.1694 Korea argues that the USDOC, in selecting facts
available in POR4, "simply built further on the error of POR3". According to Korea, the USDOC "did
nothing" to corroborate the use of the highest dumping margin in the petition.1695 In addition, Korea
contends that there was no individual corroboration with respect to Hyosung, as it was not subject
to the application of AFA in POR3.1696 Finally, Korea argues that the USDOC did not select the best
information available to render an accurate determination, but rather selected "particularly adverse
information available effectively to punish HHI and Hyosung."1697
The United States responds that Korea has not demonstrated that the USDOC did not use
the "best available information" to replace the missing information. 1698 According to the
United States, the USDOC's selection of the replacement facts was not punitive because the USDOC
used a relevant and reliable rate to replace HHI 's and Hyosung 's unreliable information. 1699
The United States contends that because the dumping margin had been properly corroborated in the
third administrative review, there is no obligation under Annex II to corroborate an already -used
rate for a second time.1700 According to the United States, the USDOC explained that it considered
the record evidence of the review when determining the "probative value" of the selected rate.1701
7.3.6.4.4.3 Evaluation by the Panel
We have already found that the USDOC erred in resorting to facts available with respect to
both HHI and Hyosung for all of the issues discussed above . In these circumstances, we do not
consider that making further findings on Korea 's claims concerning the USDOC 's selection of the
replacement facts on the basis of the record used for the USDOC's WTO-inconsistent findings would
assist in providing a positive solution to the dispute before us.1702
7.3.6.4.5 The USDOC's selection of an "all others" rate
7.3.6.4.5.1 Factual background
POR4 covered five "producers/exporters of the subject merchandise", namely, Hyosung,
HHI, Iljin, Iljin Electric Co ., Ltd. (Iljin Electric), and LSIS Co., Ltd. ( LSIS).1703 The USDOC selected
Hyosung and HHI as "mandatory respondents" whereas "Iljin, Iljin Electric, and LSIS" were not

1691 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 6; LPT POR4 issues and decision
memorandum, (Exhibit KOR-211), pp. 3 and 21.
1692 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 21.
1693 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 22.
1694 Korea's first written submission, para. 864.
1695 Korea's first written submission, para. 862.
1696 Korea's first written submission, para. 862.
1697 Korea's first written submission, para. 863.
1698 United States' first written submission, para. 348.
1699 United States' first written submission, para. 348.
1700 United States' first written submission, para. 350.
1701 United States' first written submission, para. 351 (referring to LPT POR4 decision memorandum
(PDM), (Exhibit KOR-140), p. 6).
1702 See, e.g. Panel Reports, Egypt – Steel Rebar, para. 7.310; and Mexico – Anti-Dumping Measures on
1703 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 2.

BCI deleted, as indicated [[***]]

selected for "individual examination".1704 In its preliminary determination, the USDOC "determined
that a reasonable method for determining the rate for the non-selected companies is to use the rate
applied to the mandatory respondents ( i.e., Hyosung and [HHI]) in this administrative review".1705
The USDOC thus assigned to Iljin, Iljin Electric, and LSIS the dumping margin of 60.81 %, i.e. "the
only rate determined in this review for individual respondents". 1706 In its final determination, the
USDOC rejected comments by Iljin, objecting to the assigned margin, and agreed with the petitioner
that the USDOC "may use the average of two AFA margins in assigning the rate to non -selected
respondents" and that the USDOC is allowed "to use AFA rates in calculating a margin for a
non-selected company".1707
7.3.6.4.5.2 Main arguments of the parties
Korea argues that, by determining the "all others" rate for three non -selected respondents
(Iljin, Iljin Electric, and LSIS) based on the "AFA rates" selected for HHI and Hyosung , the USDOC
acted inconsistently with Article 9.4 of the Anti-Dumping Agreement.1708 For Korea, the fact that the
Anti-Dumping Agreement is silent when all margins are either de minimis or based on facts
available1709 does not mean that the "prohibition" under Article 9.4 no longer applies.1710 According
to Korea, any methodology that is used for determining the all others rate must still respect the rule
under Article 9.4 and not be based on margins established using facts available.1711 Korea points out
that the USDOC failed to ensure that the non-selected producers were not prejudiced by the alleged
failure of the mandatory respondents to provide certain "necessary" information, thus violating
Article 9.4.1712 Korea contends that the fact that the margin was lower than the aberrational margin
that the USDOC had identified for one of the selected exporters does not affect its conclusion, and
that alternative methodologies were available to the USDOC, such as, for example, relying on the
margins assigned to these producers in prior reviews. 1713 Korea argues that the application of the
rate established for HHI and Hyosung using facts available to the non -investigated producers
prejudiced the due process rights of the non-investigated producers.1714
The United States argues that Korea fails to establish a prima facie case, as it "has not even
alleged what the cap was in that review, which is a pre -requisite to establishing that the all others
rate exceeded the cap" for purposes of Article 9.4.1715 According to the United States, "there would
be no rates left once rates based on facts available are disregarded". 1716 The United States also
urges the Panel to not rule upon this issue because, to the extent that this gap exists in Article 9.4,
only WTO Members are permitted to address it pursuant to Article 3.2 of the DSU and they have not
done so.1717
7.3.6.4.5.3 Evaluation by the Panel
Korea claims that the USDOC acted inconsistently with Article 9.4 of the Anti -Dumping
Agreement by assigning the margin established for HHI and Hyosung pursuant to Article 6.8 as the
"all others" rate for the non -selected Korean exporters. 1718 The United States argues that in the
circumstances of this case, Article 9.4 of the Anti-Dumping Agreement is "inoperative", and therefore
Korea's claim fails.1719

1704 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 2.
1705 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 19.
1706 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 19.
1707 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 35.
1708 Korea's first written submission, para. 872.
1709 Korea's first written submission, para. 869.
1710 Korea's first written submission, para. 869 (referring to Appellate Body Report, US – Zeroing
(Article 21.5 – EC), para. 453).
1711 Korea's second written submission, para. 357.
1712 Korea's first written submission, para. 870.
1713 Korea's second written submission, paras. 357-358.
1715 United States' second written submission, para. 98.
1716 United States' second written submission, para. 99.
1717 United States' second written submission, para. 100.
1718 Korea's first written submission, para. 872.
1719 United States' second written submission, para. 100.

BCI deleted, as indicated [[***]]

Before evaluating the merits of Korea 's claim, we discuss the legal standard set out in
Article 9.4 of the Anti-Dumping Agreement, which reads, in relevant part, as follows:
When the au thorities have limited their examination in accordance with the second
sentence of paragraph 10 of Article 6, any anti-dumping duty applied to imports from
exporters or producers not included in the examination shall not exceed:
(i) the weighted average margin of dumping established with respect to
the selected exporters or producers or,
…
provided that the authorities shall disregard for the purpose of this paragraph any zero
and de minimis margins and margins established under the circumstances referred t o
in paragraph 8 of Article 6.
We note that Article 9.4 applies only in cases where investigating authorities have used
"sampling", that is, where investigating authorities have, in accordance with Article 6.10 of the
Anti-Dumping Agreement, limited their investigation to a select group of exporters or producers.1720
In such cases, the anti-dumping duty rate applied by an investigating authority to those exporters
and producers who were not included in the investigated sample is referred to as the "all other s"
rate.1721 We also note that Article 9.4 does not prescribe a particular method that WTO Members
must use to determine the "all others" rate; rather, it simply identifies a maximum limit, or ceiling,
which investigating authorities "shall not exceed" in establishing an "all others" rate.1722
Subparagraph (i) of Article 9.4 sets out the general rule that the relevant ceiling is to be
established by calculating a "weighted average margin of dumping established" with respect to those
exporters or producers who were "selected" or investigated. 1723 However, this general rule is
qualified by the proviso that, "for the purpose of this paragraph", investigating authorities "shall
disregard", first, zero and de minimis margins and, second, "margins established under the
circumstances referred to in paragraph 8 of Article 6".1724 Thus, the provision constrains the
discretion of investigating authorities in two ways: first, by imposing a ceiling that the "all others"
rate "shall not exceed"; and, second, by requiring investi gating authorities to disregard, for the
purposes of that paragraph, any zero, de minimis, and "facts available" margins. 1725 By requiring
investigating authorities to disregard "facts available" margins, Article 9.4 "seeks to prevent the
exporters, who were not asked to cooperate in the investigation, from being prejudiced by gaps or
shortcomings in the information supplied by the investigated exporters".1726
We recall that the USDOC assigned to Iljin, Iljin Electric, and LSIS the dumping margin
of 60.81%1727, which was based on "the average of two AFA margins" for Hyosung and HHI. 1728
The United States does not deny that the all oth ers rate was based on the rate calculated by the
USDOC in respect of HHI and Hyosung. Rather, the United States argues that in a situation where
all margins are excluded, as was the case in LPT POR4 proceedings, no ceiling for the "all others"
rate can be calculated pursuant to Article 9.4 and hence the provision becomes "inoperative".1729
We note that although Article 9.4 prohibits the use of certain margins in the calculation of
the ceiling for the "all others" rate, "it does not expressly address the issue of how that ceiling should
be calculated in the event that all margins are to be excluded from the calculation, under the
prohibitions".1730 However, nothing in the text of Article 9.4 indicates that the provision ceases to
be applicable in a situation where all rates established by the investigating authority are either zero,
de minimis, or based on facts available. In the absence of such a limitation in the text of Article 9.4,

1720 Appellate Body Report, US – Hot-Rolled Steel, para. 115.
1721 Appellate Body Report, US – Hot-Rolled Steel, para. 115.
1722 Appellate Body Report, US – Hot-Rolled Steel, para. 115.
1723 Appellate Body Report, US – Hot-Rolled Steel, para. 116.
1724 Appellate Body Report, US – Hot-Rolled Steel, para. 116.
1725 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 451.
1726 Appellate Body Report, US – Hot-Rolled Steel, para. 123.
1727 LPT POR4 decision memorandum (PDM), (Exhibit KOR-140), p. 19.
1728 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 35 and 3.
1729 United States' opening statement at the first meeting of the Panel, paras. 56-57.
1730 Appellate Body Report, US – Hot-Rolled Steel, para. 126. (emphasis original)

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Article 3.2 of the DSU prevents us from "add[ing] to or diminish[ing] the righ ts and obligations
provided in the covered agreements". We therefore disagree with the United States that Article 9.4
of the Anti-Dumping Agreement is "inoperative" in light of the facts and circumstances of the present
case.1731
We also note the United States' argument that Korea 's claim fails because "Korea has not
even alleged what the cap was" in the determination at issue. 1732 Nothing in the record suggests
that the USDOC calculated a ceiling for the "all others" rate separately from the "all ot hers" rate
of 60.81 percent assigned to Iljin, Iljin Electric, and LSIS. Rather, we consider that the determination
of the ceiling for the "all others" rate was implicit in the USDOC 's determination of the "all others"
rate to be applied.1733 The issue before us is not whether the USDOC improperly exceeded the ceiling
for the "all others" rate inconsistently with subparagraph (i) of Article 9.4, but, instead, whether the
USDOC's determination of the ceiling for the "all others" rate is consistent with the pro viso to
Article 9.4 of the Anti-Dumping Agreement.
We also reject the United States argument that Korea has failed to make a prima facie case
because it has not "proposed any alternative methodology for calculating the cap in Article 9.4".1734
We note Korea 's express suggestion that "alternative reasonable m ethodologies were available to
the USDOC such as relying on the margins assigned to these producers in prior reviews". 1735
The United States does not respond to Korea's proposed alternative methodology.
Article 9.4 requires investigating authorities to "disr egard for the purpose of this
paragraph … margins established under the circumstances referred to in paragraph 8 of Article 6".
Having rejected the United States' arguments above, we find the USDOC acted inconsistently with
Article 9.4 of the Anti -Dumping Agreement because the USDOC determined the ceiling for the
"all others" rate in respect of Iljin, Iljin Electric, and LSIS based on "the average of two AFA margins"
for HHI and Hyosung" 1736, i.e. "margins established under the circumstances referred to in
paragraph 8 of Article 6" of the Anti-Dumping Agreement.
Korea's claims under Articles 1, 9.3, and 18.1 of the Anti-Dumping Agreement
Korea further claims that, in the LPT AD investigation, the USDOC 's use of facts
available inconsistently with Article 6.8 a nd Annex II of the Anti -Dumping Agreement "led to an
anti-dumping duty that was imposed and collected in excess of the margins of dumping in violation
of Articles 1, 9.3, and 18.1 of the Anti -Dumping Agreement".1737 According to Korea, because the
margin of dumping was determined based on facts available in a manner inconsistent with Article 6.8
and Annex II, "the imposition of duties at the level of the margin of dumping automatically violated
Article 9.3".1738 Moreover, Korea asserts that the violation of Article 6.8 and Annex II also
"automatically leads" to a violation of Articles 1 and 18.1 of the Anti -Dumping Agreement, as "this
USDOC investigation and the measure taken were not in accordance with the
Anti-Dumping Agreement".1739
The United States responds that Korea's claims under Articles 1, 9.3, and 18.1 are "entirely
consequential" and "Korea offers no argument or evidence to support any independent breach of
those provisions".1740 According to the United States, were the Panel to uphold Korea's claims under
Article 6.8 and Annex II, "there would be no basis to decide Korea 's consequential claims". 1741

1731 See also Panel Report, US – Supercalendered Paper, para. 7.267.
1732 United States' opening statement at the first meeting of the Panel, para. 55.
1733 By finding the "all others" rate to be 60.81%, the USDOC impliedly found that the ceiling for the "all
others" rate is equal to or greater than 60.81%. (Panel Report, US – Shrimp (Viet Nam), fn 279. See also
Panel Report, Canada – Welded Pipe, para. 7.32).
1734 United States' opening statement at the first meeting of the Panel, para. 58.
1735 Korea's first written submission, para. 871. We also note that, before the USDOC, Iljin stated that
the USDOC "has information on the record of this review, and past reviews, concerning dumping rates
calculated in prior reviews; however, [the USDOC] continues to use the six-year-old petition rate from the
investigation as the AFA rate". (LPT POR4 issues and decision memorandum, (Exhibit KOR-211), p. 35).
1736 LPT POR4 issues and decision memorandum, (Exhibit KOR-211), pp. 3 and 35.
1737 Korea's first written submission, para. 875.
1738 Korea's first written submission, para. 873.
1739 Korea's first written submission, para. 874.
1740 United States' first written submission, para. 356.
1741 United States' first written submission, para. 358.

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First, the United States "does not concede that such breaches are 'automatic'". 1742 Second, the
United States submits that deciding such claims would be serve "no useful purpose" , and would
provide no "additional guidance that would be useful regarding implementation of any
recommendations adopted by the DSB".1743
Korea does not present any independent bases for the alleged breaches of Articles 1, 9.3,
and 18.1 of the Anti-Dumping Agreement; instead, its claims under these provisions are dependent
entirely upon a finding that the United States acted inconsistently with Article 6.8 and Annex II of
the Anti -Dumping Agreement.1744 In these circumstances – and having already found that the
United States acted inconsistently with Article 6.8 and certain provisions of Annex II – we do not
consider it necessary to rule upon Korea's claims under Articles 1, 9.3, and 18.1 in order to resolve
the dispute before us.1745
7.4 Korea's "as such" claim
7.4.1 Preliminary ruling
Korea challenges "as such" an unwritten measure allegedly adopted by the United States
(the "alleged unwritten measure"). On 23 April 2019, the United States requested a preliminary
ruling that this claim was outside the Panel's terms of reference because Korea had failed to "identify
the specific measure[] at issue", as required by Article 6.2 of the DSU. 1746 The Panel issued its
preliminary ruling on 2 July 2019 – before t he first substantive meeting with the parties – and
decided to provide the reasoning underlying its ruling as part of its Interim Report in accordance
with paragraph 4.1(c) of the Working Procedures. 1747 The preliminary ruling and the underlying
reasons are presented together below.
The Panel's preliminary ruling was as follows:
Having carefully considered the arguments of the Parties and the Third Parties, the Panel
declines to rule that Korea's "as such" claim concerning the alleged unwritten measure
is outside its terms of reference. Rather, the Panel finds that, for purposes of Article 6.2
of the DSU, the alleged unwritten measure that is the object of Korea 's "as such"
challenge is properly identified in Section I.C of the Panel Request as follows:
C. Use of Adverse Facts Available As Ongoing Conduct, or a Rule
or Norm of General and Prospective Application
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 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 finding 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 of 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]1748
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

1742 United States' first written submission, para. 358.
1743 United States' first written submission, paras. 358-359.
1744 Korea's first written submission, paras. 873-874.
1745 See, e.g. Panel Reports, US – Differential Pricing Methodology, paras. 7.114-7.115; Argentina –
Poultry Anti-Dumping Duties, para. 7.369; US – Steel Plate, para. 7.103; and EU – Footwear (China),
para. 7.935.
1746 See section 1.3.3 above.
1748 Korea's panel request, para. 9 and fn 1.

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of 2015, Pub. L. No. 114 -27; (ii) Section 776 of the Tariff Act of 1930, codified
at 19 U.S.C. § 1 677e; 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 Request. 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 i s made that a
producer or exporter has failed to act to the best of its ability is attached as Annex I
to illustrate the practice.
The above preliminary ruling by the Panel is limited to the issue of its jurisdiction and
is without prejudice to any substan tive arguments concerning the existence or the
precise content of the measure at issue that may be raised by the parties or third parties
during the course of these proceedings.
We now provide the reasons underlying this preliminary ruling.
In its preliminary ruling request of 23 April 2019, the United States asserts that Korea's "as
such" claim against an alleged unwritten measure is outside the Panel 's jurisdiction because, while
being directed at a "single unwritten measure", Korea's panel request contains "multiple inconsistent
descriptions" of such an alleged unwritten measure. 1749 Moreover, according to the United States,
the deficiency found in the Korea 's panel request is "confirm[ed]" and "compound[ed]" in its
first written submission, wherein Korea "switches between multiple different descriptions of the
'precise content' of the alleged unwritten measure".1750 Having identified at least three such allegedly
inconsistent descriptions in the panel request 1751, the United States contends that Korea fails to
identify a "specific unwritten measure at issue", in accordance with Article 6.2 of the DSU.1752
Korea responds that the United States' preliminary ruling request is "entirely unfounded"
and should be rejected by the Panel. 1753 According to Korea, in accordance with Article 6.2 of
the DSU, the panel request properly identifies in section I the measures at issue, and provides a
brief summary of the legal basis of the complaint in section II. Korea therefore considers unavailing
the United States' identification of multiple allegedly conflicting descriptions from section II of its
panel request, which "simply elaborate on the problematic aspects of the measure in order to provide
the required brief summary of the legal basis, witho ut however affecting the identification of the
measure".1754 In Korea's view, therefore, the United States improperly conflates the identification of
the measure at issue in section I with the brief explanation of the legal basis in section II of its panel
request.1755
We first summarize the relevant aspects of the legal standard under Article 6.2 of the DSU
(section 7.4.1.1) and then examine whether Kore a's panel request is consistent with that legal
standard (section 7.4.1.2).

1749 United States' request for a preliminary ruling, para. 2.
1750 United States' s request for a preliminary ruling, para. 3.
1751 United States' request for a preliminary ruling, paras. 10-12 (quoting Korea's panel request,
paras. 9 and 33-34).
1752 United States' request for a preliminary ruling, para. 4.
1753 Korea's response to United States' request for a preliminary ruling, paras. 4 and 28.
1754 Korea's response to United States' request for a preliminary ruling, para. 33.
1755 Korea's response to United States' request for a preliminary ruling, para. 33. Korea also takes issue
with the United States' assertion that the so-called "different descriptions" of the measure are "conflicting" or
"inconsistent", arguing instead that, the "different descriptions", which are to be found only in section II of the
panel request, merely refer to different aspects of the same unwritten measure that are deemed problematic in
light of the relevant requirements under the Anti-Dumping Agreement and the SCM Agreement.
(Korea's response to United States' request for a preliminary ruling, para. 42 (referring to
United States' request for a preliminary ruling, para. 2)). Furthermore, Korea considers the
United States' focus on the first written submission when examining the panel request to be "entirely
misplaced" as the sufficiency of a panel request under Article 6.2 is to be determined on its face and not by
reference to subsequent submissions. (Korea's response to United States' request for a preliminary ruling,
para. 35).

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Article 6.2 of the DSU
Article 6.2 of the DSU, entitled "Establishment of Panels", sets out the relevant requirements
for panel requests in WTO dispute settlement proceedings and reads, in relevant part, as follows:
The request for the establishment of a panel shall be made in writing. It shall indicate
whether consultations were held, identify the specific measures at issue and provide a
brief summary of the legal basis of the complaint sufficient to present the problem
clearly.
Besides requiring that panel requests shall be made in writing and must indicate whether
consultations were held, Article 6.2 of the DSU sets out two additional and distinct requirements for
a complainant: first, to "identify the specific measures at issue "; and second, to "provide a brief
summary of the legal basis of the complaint sufficient to present the problem clearly".1756
The "specific measure" to be identified in a panel request is the "object of the challenge",
i.e. the measure that is alleged to b e causing the violation of an obligation contained in a
covered agreement.1757 The specific measure at issue defines what is being challenged by a
complainant. By contrast, the legal basis of the complaint, i.e. the "claim", pertains to the specific
provision of the covered agreement that contains the obligation alleged to be infringed. 1758
Article 6.2 requires that the panel request set out "a brief summary" of the legal basis of the
complaint that is "sufficient to present the problem clearly". In order to comply with this requirement,
a panel request must "plainly connect" the challenged measure(s ) with the provision(s ) of the
covered agreements that are alleged to have been violated.1759
Taken together, these two aspects – the "specific measures at issue" and "a brief summary
of the legal basis of the complaint" – constitute the "matter referred to the DSB", which normally
forms the basis of a panel 's terms of reference under Article 7.1 of the DSU.1760 In this manner, a
panel request serves to define a panel 's terms of reference and to delimit the scope of its
jurisdiction.1761 The requirements under Article 6.2 of the DSU are, therefore, "central" to the proper
establishment of a panel's jurisdiction.1762
Given the fundamentally important role that a panel request plays in delimiting the
jurisdiction of a panel from the outset of the proceedings, panels must, for purposes of Article 6.2,
carefully scrutinize the specific panel request at issue, read as a wh ole, and on the basis of the
precise text contained in that request.1763 Moreover, compliance with the requirements of Article 6.2
must be assessed on the "face" of the panel request, as it existed at the time of filing. 1764
The examination under Article 6.2 envisages a limited of role for the parties ' submissions that are
made after the filing of the panel request. Such subsequent submissions cannot "cure" any existing
defects in a panel request, and may only be consulted to the extent that they "confirm" or " clarify"
the meaning of the text used in the panel request.1765

1756 Appellate Body Reports, Argentina – Import Measures, para. 5.39.
1757 Appellate Body Report, EC – Selected Customs Matters, para. 130.
1758 Appellate Body Report, EC – Selected Customs Matters, para. 130.
1759 Appellate Body Report, Korea – Pneumatic Valves (Japan), paras. 5.6-5.7. See also Appellate Body
Reports, China – Raw Materials, para. 220; and China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.12.
1760 Appellate Body Reports, US – Countervailing and Anti-Dumping Measures (China), para. 4.6;
Argentina – Import Measures, para. 5.39.
1761 Appellate Body Reports, Korea – Pneumatic Valves (Japan), para. 5.4; China – HP-SSST (Japan) /
China – HP-SSST (EU), para. 5.12. By defining the jurisdiction of the panel, the panel request also fulfils the
due process objective of providing the respondent and third parties with notice regarding the essential nature
of the complainant's case. This "due process objective is not constitutive of, but rather follows from, the proper
establishment of a panel's jurisdiction". (Appellate Body Report, EC and certain member States – Large Civil
Aircraft, para. 640. See also Appellate Body Reports, Korea – Pneumatic Valves (Japan), para. 5.4; and US –
Countervailing and Anti-Dumping Measures (China), para. 4.7).
1762 Appellate Body Report, Korea – Pneumatic Valves (Japan), para. 5.8.
1763 See, e.g. Appellate Body Report, Russia – Railway Equipment, para. 5.29.
1764 See, e.g. Appellate Body Reports, Russia – Railway Equipment, para. 5.29; and Indonesia – Iron or
Steel Products, para. 5.79.
1765 See, e.g. Appellate Body Reports, Russia – Railway Equipment, para. 5.29; and Indonesia – Iron or
Steel Products, para. 5.79.

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Whether Korea's panel request is consistent with Article 6.2 of the DSU
The United States asserts that Korea 's "as such" claim is outside the Panel 's jurisdiction
because the panel request conta ins "multiple inconsistent descriptions" of the alleged unwritten
measure that is challenged by Korea.1766 Having identified at least three such allegedly inconsistent
descriptions in the panel request1767, the United States submits that Article 6.2 of the DSU "does not
allow for this level of uncertainty". 1768 The United States also alleges that Korea 's first written
submission confirms that its panel request does not adequately identify the alleged unwritten
measure and, instead, compounds the deficiency.1769
We note that the introduction of the panel request explains that, "[p]ursuant to Article 6.2
of the DSU, Korea proceeds below to identify the specific measures at issue and to provide a brief
summary of the legal basis of the complaint".1770 Consistent with this introduction, the panel request
then sets out two parts entitled "Identification of the Measures" and "Legal Basis", respectively.
Part I of the panel request, entitled "Identification of the Measures", is divided into
three sections that identify three categories of measures, namely:
A. "Certain Definitive Anti-Dumping and Countervailing Duty Measures"1771;
B. "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"1772; and
C. "Use of Adverse Facts Available As Ongoing Conduct, or a Rule or Norm of General and
Prospective Application".1773
The description of the alleged unwritten measure in Section I.C – set out in paragraph 7.586
above – is the only description of that measure set out in Part I of Korea's panel request.
Part II of the panel request, entitled "Legal Basis", is divided into three sections that set out
the "legal basis" for the claims corresponding to each of the categories of measures identified in
Part I, namely:
A. "As Applied Challenge to Certain Definitive Anti -Dumping and Countervailing Duty
Measures"1774;
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 implemen ting
regulations"1775; and
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".1776
Section II.C sets out multiple allegations as to why the alleged unwritten measu re is
inconsistent with the United States' obligations under the covered agreements.
We disagree with the United States that Korea 's panel request contains "multiple
inconsistent descriptions" of the alleged unwritten measure at issue. Part I is aimed expr essly at
identifying the specific measures at issue and contains one description of the alleged unwritten

1766 United States' request for a preliminary ruling, para. 2.
1767 United States' request for a preliminary ruling, paras. 10-12 (quoting Korea's panel request,
paras. 9 and 33-34).
1768 United States' request for a preliminary ruling, para. 13.
1769 United States' request for a preliminary ruling, para. 14.
1771 Korea's panel request, section I.A.
1772 Korea's panel request, section I.B.
1773 Korea's panel request, section I.C.
1774 Korea's panel request, section II.A.
1775 Korea's panel request, section II.B.
1776 Korea's panel request, section II.C.

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measure being challenged. Part II of the panel request sets out a brief summary of the legal basis
for each challenge. In doing so, Section II.C also refers to the alleged unwritten measure identified
in Section I.C by using slightly different explanations, including the two allegedly "conflicting"
descriptions identified by the United States as the primary basis for its jurisdictional challenge.1777
Article 6.2 treats measures and claims as distinct and sets out separate requirements that
must each be satisfied in a panel request in order for a "matter" to be within a panel 's terms of
reference.1778 In our view, the structure of Korea 's panel request clearly reflects this distinction
between the specific measures at issue, which are identified in Part I, and the corresponding claims
of WTO-inconsistency, which are set out in Part II.1779
It is the des cription of the alleged unwritten measure in Part I, and not the formulations
used by Korea as part of describing its claims in Part II, that ought to be tested against the
requirement under Article 6.2 of the DSU to identify the "specific" measure at issue. In this regard,
we note that the United States does not argue that the description of the alleged unwritten measure
contained in Section I.C of the panel request is, in and of itself , deficient, or otherwise lacks the
requisite degree of specificity und er Article 6.2 of the DSU. For jurisdictional purposes under
Article 6.2 of the DSU, we find that Section I.C of Korea 's panel request properly identifies the
alleged unwritten measure. 1780 In light of this finding, we see no reason to consult Korea 's first
written submission – as urged by the United States – for purposes of our preliminary ruling.
Conclusion
Our assessment – based upon an objective examination of the precise text and the overall
structure of Korea's panel request at the time it was filed – leads us to conclude that, for purposes
of Article 6.2 of the DSU, the alleged unwritten measure that is the object of Korea 's "as such"
challenge is identified properly in Section I.C of its panel request.
Our preliminary ruling remains limited to the issue of our jurisdiction and is without prejudice
to any substantive arguments concerning the existence or the precise content of the alleged
unwritten measure that may be raised by the parties during the course of these proceedings. 1781
We address these issues below.
7.4.2 "As such" claim against the alleged unwritten measure
Korea challenges, on an "as such" basis, the USDOC's use of "adverse facts available" as an
unwritten measure (the "AFA measure" or the "alleged unwritten measure"). Arguing that the
measure is a "rule or norm of general and prospective application" 1782 or, in the alternative,
constitutes "ongoing conduct"1783, Korea offers several pieces of evidence – including provisions of
US domestic law, the USDOC Anti -Dumping Manual, US domestic court rulings, and USDOC
determinations – to establish its existence.1784 According to Korea, the AFA rule or norm, or, in the

1777 United States' request for a preliminary ruling, paras. 10-12.
1778 Appellate Body Report, Australia – Apples, para. 421. See also Appellate Body Report, EC – Selected
Customs Matters, para. 131.
1779 Korea's panel request, para. 4. ("Pursuant to Article 6.2 of the DSU, Korea proceeds below to
identify the specific measures at issue and to provide a brief summary of the legal basis of the complaint"
(emphasis added)). We note Canada's statement that it is "reasonable to assume that a description of how the
measure allegedly violates the covered agreements would involve different wording and more detail than the
mere identification of the measure". (Canada's third-party submission, para. 33).
1780 We are mindful, in this regard, that a complaining Member enjoys a "certain discretion" in the
identification of the specific measure at issue and, "[a]s long as the specificity requirements of Article 6.2 are
met, [there is] no reason why a Member should be precluded from setting out in a panel request 'any act or
omission' attributable to another Member as the measure at issue". (Appellate Body Report, Australia – Apples,
para. 423 (quoting Appellate Body Report, EC – Selected Customs Matters, paras. 133 and 149)).
1781 Panel's preliminary ruling, para. 2.2. See also Appellate Body Report, US – Continued Zeroing,
para. 169 (noting that "the identification of the specific measures at issue, pursuant to Article 6.2, is different
from a demonstration of the existence of such measures" (emphasis added)).
1782 See section 7.4.5 below.
1783 See section 7.4.6 below.
1784 Korea's response to Panel question No. 104, para. 143.

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alternative, the AFA "ongoing conduct", is 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.1785
From the outset of the proceedings1786, the United States maintains that Korea has failed to
establish the existence of the alleged unwritten measure. According to the United States, such failure
results from the lack of "clarity" in Korea 's identification of the measure 1787, as well as its flawed
attempts at esta blishing the various elements of the alleged measure, including its precise
content.1788 For the United States, the possibility of "ongoing conduct" constituting a measure "is
ultimately moot in the context of this dispute", because Korea, in attempting to prove the existence
of "ongoing conduct", has not identified any elements different from those necessary to prove the
existence of a "rule or norm". Therefore, if Korea fails to prove the latter, its alternative also fails.1789
We first examine how Korea iden tifies the alleged unwritten measure and describes its
precise content. Next, we address Korea 's reliance upon prior WTO disputes involving allegedly
similar measures. We then review the arguments and evidence to determine whether Korea has
established that the unwritten measure with the precise content alleged by it, in fact, exists and, if
it does, whether that measure is "as such" inconsistent with the covered agreements.
7.4.3 The measure at issue
Introduction
An "as such" challenge can, in principle, be brought against a measure that is not expressed
in the form of a written document under both the Anti -Dumping Agreement and the
SCM Agreement.1790 That said, when a challenge is brought against a measure that is not expressed
in written form, the very existence of the challenged measure may be uncertain 1791 – as is the
United States' position in the present proceedings. "As such" challenges are "serious challenges" and
their implications "are obviously more far-reaching than 'as applied' claims", as they seek to prevent
Members ex ante from engaging in certain conduct.1792
Panels are well advised to "not lightly assume the existence of a 'rule or norm' constituting
a measure of general and prospective application, especially when it is not expressed in the form of
a written document" .1793 Instead, in order to make an "objective assessment" under Article 11 of
the DSU, " [p]articular rigour is required on the part of a panel to support a conclusion as to the
existence of a 'rule or norm ' that is not expressed in the for m of a written document" .1794
In particular, a panel "must carefully examine the concrete instrumentalities that evidence the
existence of the purported 'rule or norm ' in order to conclude that such 'rule or norm ' can be
challenged, as such".1795 This does not, however, mean "that a mere abstract principle would qualify
as a 'rule or norm' that can be challenged, as such".1796
We note that the "specific measure at issue, whether it is written or unwritten, and how it is
described, characterized, and challenged by a complainant", are important aspects that "inform the

1785 Korea's first written submission, para. 1035; panel request, para. 34. See also Korea's response to
Panel question No. 105, paras. 144 and 146.
1786 United States' request for a preliminary ruling, paras. 18-23.
1787 United States' first written submission, para. 432 ("Korea's failure to identify a specific measure with
even any level of clarity … also makes it impossible to identify precisely which additional elements Korea would
need to prove.")
1788 United States' first written submission, paras. 439-467.
1789 United States' first written submission, para. 436.
1790 Appellate Body Report, US – Zeroing (EC), para. 193.
1791 Appellate Body Report, US – Zeroing (EC), para. 197.
1792 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 172.
1793 Appellate Body Report, US – Zeroing (EC), para. 196. (emphasis added)
1794 Appellate Body Report, US – Zeroing (EC), para. 198. (original emphasis omitted; emphasis added)
1795 Appellate Body Report, US – Zeroing (EC), para. 198.
1796 Appellate Body Report, US – Zeroing (EC), fn 342. (emphasis added)

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kind of evidence a complainant is required to submit and the elements that it must prove in order
to establish the existence of the measure challenged".1797
Mindful of the seriousness of "as such" cla ims and the uncertainty inherent in challenges
against unwritten measures, we begin by examining how Korea – as the complainant – identifies
and describes the alleged unwritten measure challenged in these proceedings.
The precise content of the alleged unwritten measure
Korea's panel request identifies the alleged unwritten measure as set out in paragraph 7.586
above. It contains two sentences and a footnote. Given the terms of the panel request, as confirmed
by our preliminary ruling, this is the only alleged unwritten measure that is within the Panel's terms
of reference.
Korea explains that the description in the panel request "involves several interlinked aspects
of the measure, which together form the single measure challenged" .1798 According to
Korea's description, the first aspect of the measure is that it applies "whenever the USDOC makes
a finding that a producer or exporter has failed to cooperate by not acting to the best of its
ability".1799 Korea explains that its "challenge focuses on the selection of the facts available in a
situation where a finding of non -cooperation has been made". 1800 According to Korea, its "'as
such' claim is agnostic about the justified nature or not of the finding of non-cooperation by the
USDOC in these cases".1801 We agree with Korea that one of the "interlinked aspects" of the measure
is the USDOC's finding of non-cooperation that serves as the "trigger"1802 and delimits the universe
within which the alleged unwritten measure applies.
The next aspect of Korea 's description relates to the "consequence" that follows the
"trigger".1803 According to Korea's description, the USDOC "adopts adverse inferences" whenever it
makes a finding of non-cooperation.1804 Korea explains that "the term 'adverse inferences' does not
actually cover the use of AFA as it suggests that the USDOC draws certain inferences from the
relevant factual circumstances of each proceeding when assessing the totality of the fact[s] and
evidence before it".1805 Rather, Korea explains that an "adverse inference" means that "the duty will
be determined based on facts that are adverse to the interests of the party concerned".1806
The third aspect of the measure relates to the selection of the particular facts available due
to the adoption of adverse inferences. According to Korea 's description, "in determining the duty
rate for this producer or exporter, [the USDOC] selects facts from the record that are adverse to the
interests of this producer or exporte r".1807 In its first written submission, Korea explains that the
USDOC "selects from among the facts available those facts that would lead to a result that would
certainly be not more favorable than that where the foreign producer or exporter in question had
cooperated fully".1808
Korea explains that the "precise content" of what it means to apply "adverse facts available"
or adopt "adverse inferences" is "foreshadowed" in the remainder of the description in its panel
request, which "gives meaning and color to the label AFA".1809 According to this description in the
second sentence of paragraph 9 of Korea's panel request, as part of the measure, the USDOC does
not establish "(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

1797 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.123 (referring to
Appellate Body Reports, Argentina – Import Measures, paras. 5.108 and 5.110 (emphasis added)); see also
Appellate Body Report, US – Supercalendered Paper, fn 65.
1798 Korea's response to preliminary ruling request, para. 31.
1800 Korea's response to Panel question No. 43.
1801 Korea's response to Panel question No. 40(b). (emphasis added)
1802 Korea's response to United States' preliminary ruling request, para. 31.
1803 Korea's response to United States' preliminary ruling request, para. 31.
1805 Korea's response to Panel question No. 43.
1806 Korea's response to Panel question No. 104, para. 139.
1808 Korea's first written submission, para. 923.
1809 Korea's response to Panel question No. 104, paras. 133 and 139.

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circumstances".1810 We understand "such inferences" to be the "adverse inferences" that comprise
the second aspect of the measure. Similarly, "such facts" are the adverse facts available that are
selected as part of the third aspect of the measure. Consequently, we agree with Korea that the
description in the panel request defines the measure by reference to both what the USDOC does do
(i.e. the first, second, and third as pects), as well as what the USDOC does not do (i.e. the precise
meaning of the second and the third aspects ).1811 These positive and negative aspects of the
USDOC's conduct are important elements of the precise content of Korea 's alleged unwritten
measure.
Neither the term "adverse inferences" nor the term "adverse facts available" is defined in
Article 6.8 and Annex II of the Anti-Dumping Agreement and Article 12.7 of the SCM Agreement.1812
We therefore consider important Korea's explanation that the second sentence of paragraph 9 of its
panel request describes "the precise content of the AFA Norm and salient aspects of what the label
'AFA' means".1813 Insofar as it explains and clarifies Korea 's use of the terms "adverse facts
available" and "adverse inferences", the additional "meaning" or "colour" imparted by the remainder
of Korea 's description is a crucial and important feature of the precise content of the unwritten
measure alleged to exist. 1814 In this sense, we agree with the United States that "Korea's panel
request cannot be read as challenging the use of adverse inferences broadly".1815
As to the linkage between the different aspects of the alleged unwritten measure, Korea
explains that, "whenever the USDOC makes a determination that an interested party has failed to
cooperate to the best of its abilities, it automatically resorts to the use of AFA" .1816 In response to
questioning by the Panel at the first substantive meeting, Korea similarly refers to the " automatic
relationship between a finding of non -cooperation and the use of AFA". 1817 As part of its

1811 Korea's response to Panel question No. 104, para. 140.
1812 Annex V of the SCM Agreement contains a reference to the drawing of "adverse inferences" by a
panel in cases concerning "serious prejudice".
1813 Korea's response to Panel question No. 104, para. 139.
1814 We note Korea's argument that, "[i]n light of recent case law clarifying the limited obligation of a
complainant, Korea could actually have stopped with the description in the first sentence [of paragraph 9 of its
panel request] that plainly connects the measure with the provision of the covered Agreements claimed to
have been infringed, and foregone the additional coloring in the second sentence as complainants".
(Korea's response to Panel question No. 104, para. 141). We disagree with Korea that the first sentence of
paragraph 9 serves to "plainly connect the measure with the provision of the covered Agreement claimed to
have been infringed". As Korea acknowledges, and as found by the Panel in its preliminary ruling, paragraph 9
of Korea's panel request, in its entirety, identifies the specific unwritten measure at issue, while section II.C of
Korea's panel request sets out the legal basis of the complaint by "plainly connecting" the unwritten measure
to the treaty provisions alleged to be infringed. Furthermore, as Korea notes, the second sentence of
paragraph 9 of its panel request describes "the precise content of the AFA Norm and salient aspects of what
the label 'AFA' means". The "precise content" and "meaning" of "AFA" provided by Korea – the complainant –
are important because the measure challenged is unwritten and because the term "AFA" is not defined under
the covered agreements. (See Panel's preliminary ruling, para. 2.1; Korea's response to
United States' preliminary ruling request, para. 33 (stating that, "[i]n arguing that Korea's panel request
provides multiple descriptions of the identified 'as such' measure, the United States improperly compares the
correct identification of the measure in Section I with the brief explanation of the legal basis in Section II");
and Korea's response to Panel question No. 104, para. 139).
1815 United States' second written submission, para. 144. See also Appellate Body Report, US – Zeroing
(EC), fn 342 (expressing doubt "that a mere abstract principle would qualify as a 'rule or norm' that can be
challenged, as such" (emphasis added)). Given the manner in which Korea identifies its measure, the Panel is
not called upon to address the extent to which inferences that happen to be "adverse" to the non-cooperating
party are permissible under the covered Agreements. We note, in this regard, arguments made by two of the
third parties in this dispute. The European Union "agrees … that the use of adverse inferences is not
necessarily inconsistent, in all circumstances, with Article 6.8 of the Anti-Dumping Agreement and Article 12.7
of the SCM Agreement" and "that the use of adverse inferences … would be justified in cases of fraud or total
lack of cooperation by the producer or exporter in question". (European Union's third-party submission,
para. 81). Pointing out that "Annex II of the Anti-Dumping Agreement contemplates the possibility that the use
of facts available may result in a less favourable outcome for an interested party", Canada submits that this
"d[oes] not preclude the use of adverse inferences in all situations". (Canada's third-party submission,
para. 18).
1816 Korea's response to Panel question No. 104, para. 128 (emphasis added). See also Korea's first
written submission, para. 1034.
1817 Korea's response to Panel question No. 45 (emphasis added). See also response to question No. 43
("whenever it makes a finding of non-cooperation, that door closes and another door opens that is based on

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second written submission, Korea explains that the USDOC applies "AFA … solely based on the
finding that the party failed to cooperate to the best of its ability" and that the USDOC 's "selection
of the facts available is based solely on their adverse nature".1818 In a similar fashion, in response
to questioning by the Panel at the second substantive meeting, Korea explains that "[t]he sole
procedural circumstance of non-cooperation cannot be the basis for the selection of the information
to replace the allegedly m issing information"1819 and that "the unwritten measure that Korea is
challenging is the automatic link between a finding of non -cooperation and the application of
AFA".1820 Korea therefore emphasizes the "automatic link" between the first aspect of the measur e
(i.e. the finding of non-cooperation) and the second and third aspects (i.e. the adoption of "adverse
inferences" and the selection of "adverse facts available").1821
As discussed, the positive and negative aspects of Korea's definition of "adverse inferences"
and "adverse facts available", working together, constitute important features of the precise content
of the alleged unwritten measure. Korea must demonstrate both these aspects in order to establish
the "automatic link" between a find ing of non -cooperation and the USDOC 's use of "adverse
inferences" or "adverse facts available" that it takes issue with. Showing merely that whenever the
USDOC makes a finding of non -cooperation, it uses the labels of "adverse inference" or "adverse
facts available" or selects those replacement facts that happen to be "adverse to the interests" of
the non-cooperating party is not sufficient to establish the "automaticity" that Korea emphasizes.
Rather, Korea must also demonstrate the negative aspect of the USDOC's conduct that forms an
important feature of the alleged unwritten measure. This understanding of the positive and negative
aspects of "adverse inferences" identified in Korea 's panel request is also confirmed by its
subsequent statements and submissions to the Panel.1822
Based on the above, we understand the crux of Korea 's concern to be an alleged lack of
evaluation by the USDOC between the finding of non -cooperation and the adoption of adverse
inferences and the selection of adverse facts available. The nature and the extent of the evaluation
that is allegedly lacking in the unwritten measure is, however, not entirely clear to us from Korea's
submissions. On the one hand, Korea's repeated statements in its submissions to the Panel that the
selection of adverse facts available is "automatic" and based solely on a finding of non-cooperation
implies that the USDOC does not engage in any other evaluation. On the other hand, the negative
aspects of the alleged unwritten measure identified in Korea's panel request imply that the USDOC
conducts an inadequate evaluation, because it uses "adverse inferences" or "adverse facts available"
without taking into account the "degree of cooperation" received and witho ut establishing that the
replacement facts selected by it "are the 'best information available ' in the particular
circumstances".1823 In its subsequent submissions, Korea also explains this as a failure to engage in
a "comparative evaluation to arrive at an accurate determination"1824 and asserts that "[t]he AFA
Rule or Norm, or the AFA Ongoing Conduct, does not" allow a proper drawing of inferences because
it does not take "differences in the factual circumstances of the situation into account".1825 In other
words, instead of claiming that the USDOC necessarily fails to engage in any other evaluation after
a finding of non-cooperation, Korea asserts that the USDOC does not engage in the kind of search

finding facts that are sufficiently adverse to the interests of the interested party in question without any
process of reasoning or evaluation to determine whether these facts reasonably replace the missing
information or lead to an accurate determination, and without consideration of the specific reasons that led to
the finding of non-cooperation" (emphasis added)).
1818 Korea's second written submission, paras. 409-410 (emphasis added). See also ibid.
para. 412: "each time the USDOC found such non-cooperation, it automatically applied AFA without engaging
in the required comparative process of reasoning and evaluation to make an accurate determination"; and
Korea's request for interim review, para. 69 ("[t]he use of AFA means that the sole procedural circumstance of
non-cooperation is the basis for the selection of the facts available that are adverse to the interest of the
producer rather than the most accurate").
1819 Korea's response to Panel question No. 50, para. 16. (emphasis added)
1820 Korea's response to Panel question No. 107, para. 155. (emphasis added)
1821 We note that the term "whenever" – signifying the "automatic" link between a finding of
non-cooperation and the consequences that follow – is found only in the second sentence of Korea's description
of the alleged unwritten measure in paragraph 9 of its panel request, thereby underscoring the importance of
this sentence. (Korea's request for interim review, paras. 69 and 72 (quoting Korea's response to Panel
question No. 104)).
1822 See, e.g. Korea's second written submission, para. 422; responses to Panel question Nos. 43 and
104; and request for interim review, para. 69.
1824 Korea's first written submission, para. 924.
1825 Korea's second written submission, para. 419.

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for reasonable replacements for the missing information that i s required under the covered
agreements. Given the lack of clarity in Korea 's submissions on this issue, we address both these
different understandings as part of our analysis below.1826
The legal characterization of the alleged unwritten measure
Korea makes clear that it challenges the alleged unwritten measure on an "as such" basis.1827
We agree that "the distinction between 'as such ' and 'as applied ' challenges neither governs the
definition of a measure for purposes of WTO dispute settlement, nor defines exhaustively the types
of measures susceptible to challenge". 1828 Nonetheless, we note that "this distinction serves as an
analytical tool to facilitate the understanding of the nature of a measure at issue".1829 In the case at
hand, the fact that Korea cha racterizes its challenge as an "as such" claim helps us, at the very
least, understand that it seeks to prevent the United States from "engaging in certain conduct in
general and in the future, as opposed to addressing particular instances of application t hat are
occurring or have occurred".1830
Korea characterizes the unwritten measure in two alternative ways. First, it argues that the
measure is a "rule or norm of general and prospective application" (the "AFA rule or norm"). 1831
In the event the Panel considers that "the use of AFA does not meet the criteria for being a rule or
norm of general and prospective application", Korea claims that "it in any case constitutes a form of
'ongoing conduct'" (the "AFA ongoing conduct"). 1832 Thus, Korea's characterization of the alleged
unwritten measure as ongoing conduct is presented only in the alternative to its arguments
demonstrating the existence of a "rule or a norm". We follow this order for purposes of our analysis,
bearing in mind that, "[i]n every WTO dispute, a complainant must establish … the precise content
of that challenged measure".1833 Thus, in whatever legal form it chooses to characterize the alleged
unwritten measure, Korea bears the burden of establishing that the unwritten measure with the
precise content identified by it, in fact, exists.
7.4.4 Korea's reliance on prior WTO disputes
A peculiar feature of this dispute is the way in which Korea seeks to rely on
dispute settlement reports in three prior WTO disputes, namely US – Carbon Steel (India) ,
US – Anti-Dumping Methodologies (China) , and US – Supercalendered Paper. Korea asserts that
"prior WTO panel and Appellate Body findings have confirmed the existence of the United States' AFA
Norm or similar AFA Ongoing Conduct". 1834 Korea further submits that " [a] nu mber of relevant
factual findings were made by the panels and the Appellate Body in these disputes relating to the
use of AFA by the United States, which confirm the claims made by Korea about the use of AFA as
a Norm or as a form of Ongoing Conduct".1835 The United States, for its part, asserts that any findings
concerning "the existence of a measure with th[e] precise content" in these prior disputes "offer []
no support for the existence of the markedly different alleged measure in Korea's panel request".1836
Korea submits that in US – Carbon Steel (India), the Appellate Body "implicitly acknowledged
that there exists a practice of always using AFA in cases of non-cooperation".1837 Korea asserts that
the Appellate Body in that dispute made certain factual findin gs that "acknowledged that using
AFA was a consistent 'practice ' of the USDOC". 1838 Specifically, Korea refers to the

1826 See paras. 7.682-7.683, 7.686, and 7.697-7.698 below.
1827 Korea's panel request, sections I.C and II.C.
1828 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.124. See also
Appellate Body Reports, US – Continued Zeroing, para. 179; and Argentina – Import Measures, para. 5.102.
1829 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.124.
1830 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.127.
1831 Korea's first written submission, paras. 878 and 895-940.
1832 Korea's first written submission, paras. 941-960.
1833 Appellate Body Report, Argentina – Import Measures, para. 5.104. (emphasis added)
1834 Korea's first written submission, para. 879.
1835 Korea's first written submission, para. 962.
1836 United States' second written submission, para. 143. See also United States' first written
submission, paras. 456 and 465.
1837 Korea's first written submission, para. 971 (quoting Appellate Body Report, US – Carbon Steel
(India), fn 1181).
1838 Korea's first written submission, para. 969.

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Appellate Body's discussion of certain US domestic court decisions and the USDOC determinations
that India invoked.1839
In US – Carbon Steel (India) , India presented an "as such" challenge against certain
statutory provisions of US domestic law, including Section 776(b ) of the Tariff Act prior to the
changes introduced by the Section 502 of the Trade Preferences Extension Act of 2015 (the
2015 TPEA Amendment).1840 The Appellate Body found that the written measure at issue, "on its
face", does not require the investigating authority to act inconsistently with Article 12.7.1841 Noting
that the "practice" of the USDOC was "distinct and separate" from the written measure at issue, the
Appellate Body observed that "India expressly clarified that it did not challenge the 'practice' of the
USDOC in the application of the measure 'as such'".1842 As to the USDOC's determinations that India
presented in support of its case, the Appellate Body did not understand "why a number of instances
of the application of the measure should, in this case, conclusively establish the meaning of the
measure at issue in general, which … is confined to" the written measure at issue. 1843 Following a
very brief analysis of the USDOC 's determinations, the Appellate Body also noted that "the
United States placed a number of cases on the Panel record where the 'worst possible inference' was
not applied in instances of non -cooperation".1844 The Appellate Body's analysis, including its
discussion of US court rulings, was thus not aimed at ascertaining the USDOC's alleged "practice" –
a measure that was not challenged by India – but instead sought to determine whether the written
"measure at issue is mandatory in requiring the use of the worst possible information in all cases of
non-cooperation".1845
Korea acknowledges that its "as such" claim in the present dispute is "different from that of
India" and "is not that under AFA, the USDOC will always use the worst info rmation possible".1846
Moreover, Korea's claim is not directed at the written legislation. 1847 The Appellate Body's findings
in US – Carbon Steel (India ) were made in the context of the claim and evidence presented by
India – both of which are not exactly the same as what Korea presents before us. Neither the
Appellate Body nor the panel in that dispute sought to ascertain the existence and precise content
of the USDOC's alleged "practice", as it was not the measure challenged by India. For these reasons,
we disagree with Korea that the Appellate Body in US – Carbon Steel (India ) somehow "implicitly
acknowledged that there exists a practice of always using AFA in cases of non-cooperation".1848
Korea submits that the panel and the Appellate Body's findings in US – Anti-Dumping
Methodologies (China) "confirm the position of Korea that the United States' use of adverse facts
available is a rule or norm of general and prospective application". 1849 Korea notes the "overlap in
terms of the U.S. statutory basis for the AFA Norm in this dispute (Section 776 of the Tariff Act
of 1930)" and the content of the AFA Norm in that prior dispute, which it variously describes as
"identical", "almost identical", "very similar", and "similar".1850 Observing that the measure at issue
in US – Anti-Dumping Methodologies (China) "related to [non-market economy] NME-wide entities,
which are not even arguably relevant to this proceeding", the United States responds that
Korea's discussion of this report offers no support for establishing the precise content or general and
prospective nature of the specific unwritten measure at issue in the present proceedings.1851

1839 Korea's first written submission, paras. 969-970.
1840 Appellate Body Report, US – Carbon Steel (India), paras. 4.464-4.466. See also Korea's first written
submission, para. 967.
1841 Appellate Body Report, US – Carbon Steel (India), para. 4.470.
1842 Appellate Body Report, US – Carbon Steel (India), fn 1180.
1843 Appellate Body Report, US – Carbon Steel (India), para. 4.480.
1844 Appellate Body Report, US – Carbon Steel (India), para. 4.480.
1845 Appellate Body Report, US – Carbon Steel (India), para. 4.477. Furthermore, we note that, in
respect of one of the judicial decisions relied upon by India, the Appellate Body observed that it "points to
accuracy as the goal for applying the inference in the measure". (Ibid. para. 4.475).
1846 Korea's first written submission, para. 974.
1847 Korea's second written submission, para. 374; response to Panel question No. 40(c); comments on
draft descriptive part, para. 1.
1848 Korea's first written submission, para. 971. (emphasis added)
1849 Korea's first written submission, para. 979.
1850 Korea's first written submission, paras. 995 and 977-978.
1851 United States' second written submission, paras. 441 and 457.

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We disagree with Korea that the manner in which Korea 's panel request identifies the
measure is also how the measure was identified in US – Anti-Dumping Methodologies (China).1852
In that case, China's panel request identified the unwritten measure as follows:
When the USDOC considers that a producer or exporter has failed to cooperate by not
acting to the best of its ability, it uses infe rences that are "adverse to the interests of
that party in selecting from among the facts otherwise available". China refers to the
USDOC's approach as the "Use of Adverse Facts Available".1853
China further provided the following description of the precise content of the unwritten measure at
issue:
[W]henever [the] USDOC considers that an NME-wide entity has failed to cooperate to
the best of its ability, it systematically makes an adverse inference and selects, to
determine the rate for the NME -wide entity, facts that are adverse to the interests of
that fictional entity and each of the producers/exporters included within it.1854
Thus, the scope of the measure in US – Anti-Dumping Methodologies (China) was expressly
limited not only to those instances in anti-dumping investigations where the USDOC found that "an
NME wide entity has failed to cooperate", but also to the determination of "the rate for the NME-wide
entity". In such cases, China alleged that the USDOC selected "facts that are adverse to the interests
of that fictional entity and each of the producers/exporters included within it" . However, as the
United States' correctly points out, the precise content of the alleged unwritten measure identified
by Korea is not limited in this manner. 1855 Korea submits that the findings in US – Anti-Dumping
Methodologies (China) nonetheless remain "relevant for the present dispute as the same mechanism
applies to non -NME situations".1856 However, Korea offers no further explanation as to why "the
same mechanism applies to non-NME situations" at issue in the present dispute.
Finally, we note that the panel 's findings in that dispute were based on "73 determinations
[placed] on the record [by China] where the NME-wide entity was found to be non-cooperating" prior
to the 2015 TPEA Amendment .1857 By contrast, as discussed below, Korea submits a tabular
summary and a "representative sample" of determinations in which the USDOC used "adverse facts
available" since the 2015 TPEA A mendment.1858 In these circumstances, we consider the
panel's finding in US – Anti-Dumping Methodologies (China) concerning the precise content of the
measure challenged in that dispute to be of limited relevance for purposes of establishing the
existence of the allege d unwritten measure with the precise content alleged by Korea in these
proceedings.
Korea submits that the panel and Appellate Body findings in US – Supercalendered Paper
also confirm the use of "adverse facts available" as "ongoing conduct". 1859 In that dispute, Canada
successfully challenged, as "ongoing conduct", the "Other Forms of Assistance-AFA measure", which
consisted of "the USDOC asking the 'other forms of assistance ' question and, where the USDOC
'discovers' information that it deems should have been provided in response to the above question,
applying AFA with respect to the respondent to determine that the 'discovered' information amounts
to countervailable subsidies".1860
We note that the measure at issue in US – Supercalendered Paper was notably different
from – and narrower than – the alleged unwritten measure challenged by Korea in these
proceedings. The "ongoing conduct" measure in that dispute was limited to a fact pattern that could
be triggered by a response to a specific question posed to a respondent during the course of
countervailing duty investigations. 1861 By contrast, the alleged unwritten measure at issue in the

1852 Korea's response to Panel question No. 104, para. 129.
1853 US – Anti-Dumping Methodologies (China), request for the establishment of a panel by China, p. 4.
1854 Panel Report, US – Anti-Dumping Methodologies (China), para. 7.422. (emphasis original)
1857 Panel Report, US – Anti-Dumping Methodologies (China), para. 7.452.
1858 Korea's first written submission, para. 919.
1859 Korea's first written submission, section V.5.3; opening statement at the second meeting of the
Panel, para. 111.
1860 Panel Report, US – Supercalendered Paper, para. 7.308.
1861 Panel Report, US – Supercalendered Paper, para. 7.295.

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present dispute is limited neither to the USDOC posing a specific question, nor to the conduct of
countervailing duty investigations. Contrary to Korea's arguments, we find nothing in the panel and
Appellate Body reports in US – Supercalendered Paper to suggest that the "same reasoning applies
to this dispute and Korea 's challenge of the USDOC's use of AFA in cases of non -cooperation more
generally".1862
We recall that panels must " not lightly assume the existence"1863 of an unwritten measure
and must exercise " [p]articular rigour … to support a conclusion as to the existence of a 'rule or
norm' that is not expressed in the form of a written document".1864 In keeping with these duties, our
findings on the existence of an unwritten measure cannot be based on certain general observations
made by panels and the Appellate Body in prior WTO disputes. The precise content and scope of the
alleged unwritten measure identified by Korea in this dispute are different from that of the measures
challenged in prior WTO disputes. The evidence that Korea adduces is also not exactly the same as
the evidence that was examined in these past cases. In US – Carbon Steel (India) , the
Appellate Body examined a claim against written US legislation and emphasized that India did not
challenge an unwritten practice. Given the Appellate Body's limited engagement with the factua l
question of the existence of such a practice, its observations in that dispute cannot, in our view,
demonstrate the existence of the alleged unwritten measure identified by Korea in this dispute. The
measures at issue in US – Anti-Dumping Methodologies (China) and US – Supercalendered Paper
were also limited to a significantly narrower set of circumstances and situations in contrast to the
broad scope of the alleged unwritten measure challenged by Korea in these proceedings , which is
triggered upon a finding of non-cooperation by the USDOC in any circumstance and on any question
or issue.
Even if the measures at issue were the same – which they are not – we note that "factual
findings made in prior disputes do not determine facts in another dispute".1865 Although "[e]vidence
adduced in one proceeding, and admissions made in respect of the same factual question about the
operation of an aspect of municipal law, may be submitted as evidence in another proceeding",
panels, as the "finders of fact[,] are of course obliged to make their own determination afresh and
on the basis of all the evidence before them". 1866 Only if the "critical evidence is the same and the
factual question about the operation of domestic law is the same", is it "likely that the finder of facts
would reach similar findings in the two proceedings". 1867 In these circumstances, we cannot agree
with Korea that these prior WTO disputes "confirmed the existence of the United States' AFA Norm
or similar AFA Ongoing Conduct" nor that they "confirm the claims made by Korea about the use of
AFA as a Norm or as a form of Ongoing Conduct".1868 We now turn to examine the specific arguments
and evidence presented by Korea in these proceedings to establish the existence of the alleged
unwritten measure at issue.
7.4.5 Whether Korea has established the existence of the AFA rule or a norm with the
precise content alleged by it
When an unwritten rule or a norm is challenged "as such", a complainant is required to
adduce arguments and supporting evidence to de monstrate the precise content, attribution, and
general and prospective nature of the rule or norm. 1869 We therefore begin by examining whether
Korea has established the existence of the unwritten measure with the precise content alleged by it.
To this end, Korea presents arguments and evidence concerning (i) statutory provisions of US law,
namely Section 776 of the Tariff Act of 1930 (9 U.S.C 1677 (e)), as amended by the 2015 TPEA
Amendment1870; (ii) the USDOC Anti-Dumping Manual1871; (iii) certain rulings by US courts1872; and
(iv) certain anti-dumping and countervailing duty determinations by the USDOC. 1873 We address

1862 Korea's first written submission, para. 1000.
1863 Appellate Body Report, US – Zeroing (EC), para. 196. (emphasis added)
1864 Appellate Body Report, US – Zeroing (EC), para. 198 (first italics added; second italics original). See
also para. 7.609 above.
1865 Appellate Body Report, US – Continued Zeroing, para. 190.
1866 Appellate Body Report, US – Continued Zeroing, para. 190.
1867 Appellate Body Report, US – Continued Zeroing, para. 190.
1868 Korea's first written submission, para. 962.
1869 Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.127.
1870 Korea's first written submission, paras. 897-909.
1871 Korea's first written submission, para. 912.
1872 Korea's first written submission, paras. 920-921.
1873 Korea's first written submission, paras. 913-919.

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these different bases in turn, beginning with the written instruments and rulings that Korea invokes
before examining the USDOC's alleged practice.
Written instruments and rulings
7.4.5.1.1 Statutory provisions of US law
Korea relies upon Section 776 of the Tariff Act (19 U.S.C 1677 (e)) as modified by the
2015 TPEA Amendment, which reads as follows:
(a) In general
If –
(1) necessary information is not available on the record, or
(2) an interested party or any other person –
(A) withholds information that has been requested by the administering authority or the
Commission under this subtitle,
(B) fails to provide such information by the deadlines for submission of the information
or in the form and manner requested, subject to subsections (c)(1) and (e) of
section 1677m of this title,
(C) significantly impedes a proceeding under this subtitle, or
(D) provides such information but the information cannot b e verified as provided in
section 1677m(i) of this title,
the administering authority and the Commission shall, subject to section 1677m(d) of
this title, use the facts otherwise available in reaching the applicable determination
under this subtitle.
(b) Adverse inferences
(1) In general
If the administering authority or the Commission (as the case may be) finds that an
interested party has failed to cooperate by not acting to the best of its ability to comply
with a request for information from the administering authority or the Commission, the
administering authority or the Commission (as the case may be), in reaching the
applicable determination under this subtitle –
(A) may use an inference that is adverse to the interests of that party in selecting from
among the facts otherwise available; and
(B) is 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.
(2) Potential sources of information for adverse inferences
An adverse inference under paragraph (1)(A) may include reliance on information
derived from –
(A) the petition,
(B) a final determination in the investigation under this subtitle,

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(C) any previous review under section 1675 of this title or determination under
section 1675b of this title, or
(D) any other information placed on the record.
(c) Corroboration of secondary information
(1) In general
Except as provided in paragraph (2), when the administering authority or the
Commission relies on secondary information rather than on information obtained in the
course of an investigation or review, the administering authority or the Commission, as
the case may be, shall, to the extent practicable, corroborate that information from
independent sources that are reasonably at their disposal.
(2) Exception
The administrative authority and the Commission shall not be required to corrobor ate
any dumping margin or countervailing duty applied in a separate segment of the same
proceeding.
(d) Subsidy rates and dumping margins in adverse inference determinations
(1) In general
If the administering authority uses an inference that is adverse to the interests of a
party under subsection (b)(1)(A) in selecting among the facts otherwise available, the
administering authority may –
(A) in the case of a countervailing duty proceeding –
(i) use a countervailable subsidy rate applied for the same or similar program in a
countervailing duty proceeding involving the same country; or
(ii) if there is no same or similar program, use a countervailable subsidy rate for a
subsidy program from a proceeding that the administering authority considers
reasonable to use; and
(B) in the case of an antidumping duty proceeding, use any dumping margin from any
segment of the proceeding under the applicable antidumping order.
(2) Discretion to apply highest rate
In carrying out paragraph (1), the administering authority may apply any of the
countervailable subsidy rates or dumping margins specified under that paragraph,
including the highest such rate or margin, based on the evaluation by the administering
authority of the situation that resulted in the administ ering authority using an adverse
inference in selecting among the facts otherwise available.
(3) No obligation to make certain estimates or address certain claims
If the administering authority uses an adverse inference under sub section (b)(1)(A) in
selecting among the facts otherwise available, the administering authority is not
required, for purposes of subsection (c) or for any other purpose –
(A) to estimate what the countervailable subsidy rate or dumping margin would have
been if the interested part y found to have failed to cooperate under
subsection (b)(1) had cooperated; or

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(B) to demonstrate that the countervailable subsidy rate or dumping margin used by
the administering authority reflects an alleged commercial reality of the interested
party.1874
Korea makes clear that it does not challenge the written law "as such", but instead relies
upon the text of the statute to make the limited point that it:
[P]rovides the express permission for the USDOC to act the way it does. Although the
statute may not require the WTO-inconsistent behavior, it does describe the practice of
the USDOC and gives discretion to the USDOC to act in this incompliant manner by, for
example, expressly relieving the USDOC of certain tasks of corroboration and special
circumspection. It is not because Korea ultimately decided to focus its claim on the
unwritten measure that the written permission for the measure becomes irrelevant for
purposes of describing the specific contents of the measure.1875
The United States considers it "nonsensical" that Korea seeks to prove the existence of an
unwritten measure, by reference to a written law.1876 According to the United States, "Korea has not
pursued a claim against any provision of the U.S. statute, which of course is a written measure.
Therefore, the contents of this statute do not support the alleged existence of an unwritten measure
with the precise content reflecting Korea's description in its panel request".1877
We agree with previous findings to the effect that the specific measure challenged and how
it is described and characterized by a complainant will determine the kind of evidence th e
complainant is required to submit and the elements that it must prove in order to establish the
existence of the measure.1878 We note that, as part of identifying the unwritten measure in its panel
request, Korea provides the following explanation:
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 308.1879
Korea clearly indicates that, although it is not challenging the written legislation individually
and "as such", the alleged unwritten measu re is undertaken pursuant to the "discretion" or
"permission" granted under the written legislation. Contrary to the United States, we see nothing
"nonsensical" insofar as Korea seeks to rely upon the text of a written measure for the limited
purpose clear ly stated by it. We see no compelling reason as to why, in challenging unwritten
measures, complainants should a priori be precluded from relying on the text of a written measure
as evidence. Rather, what is important is the manner in which a complainant r elies on the written
measure as evidence in support of its arguments concerning the existence of the unwritten measure.
Turning to the legislation, Korea explains that "[p]rior to the enactment of the TPEA, the
USDOC and the USITC … possessed the authority under 19 U.S.C. 1677e(i) to make determinations
on the basis of facts available, in line with Article 6.8 of the Anti -Dumping Agreement and
Article 12.7 of the SCM Agreement". According to Korea, the "TPEA Amendment [] made a number
of key changes to U.S. law that significantly altered the manner in which the authorities make such
determinations".1880 Specifically, Korea avers that the "checks and balances that may have existed
in the past, have been removed by the TPEA amendment [], leading to the use of AFA as a rule or
norm with general and prospective application, or as ongoing conduct", that violates the relevant
provisions of the covered agreement s.1881 On this basis, Korea asse rts that the

1874 Section 776 of the Tariff Act, (Exhibit KOR-245), pp. 1-2.
1875 Korea's second written submission, para. 374. (italics original; underlining added)
1876 United States' first written submission, para. 440.
1877 United States' second written submission, para. 141. (emphasis original)
1878 Appellate Body Reports, Argentina – Import Measures, para. 5.110.
1879 Korea's panel request, fn 1.
1880 Korea's first written submission, paras. 898-899.
1881 Korea's response to Panel question No. 40(a).

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2015 TPEA Amendment "essentially codified and supported the existing practice of the USDOC and
are a good reflection of the precise content of the AFA Norm or Ongoing Conduct".1882
The United States, for its part, "strongly maintains" that "no provision in the TPEA, whether
in isolation or in combination with another provision, breaches the covered Agreements".1883
According to the United States, because the various statutory provisions raised by Korea are
"inherently limited to particular context s that do not exist in all or even most cases, they most
certainly cannot be relied upon to demonstrate the as such WTO -inconsistency of an unwritten
measure".1884
Although the written legislation identified by Korea contains many provisions, for purposes
of establishing the precise content of the alleged unwritten measure, Korea relies on certain changes
made by the 2015 TPEA Amendment with a view to identifying the "most important points" for its
case.1885
First, according to Korea, sub section (d) allows competent authorities to "use as the 'facts
otherwise available' a countervailable subsidy rate or dumping margin meeting, including the highest
rate or margin, when making an inference adverse to a party 's interests". Relatedly, according to
Korea, competent authorities are now "permitted to use a subsidy rate for a subsidy program from
any proceeding that the authority considers reasonable, irrespective of the fact that such rates are
obviously company specific and m ay thus not be pertinent to the producer or exporter under
examination".1886
Second, Korea points out that, under subsection (c)(2), competent authorities are no longer
"required to corroborate any dumping margin or subsidy rate as soon as it has already been applied
in a separate segment of the same proceeding, and this irrespective of whether the facts and other
available information is different from what prevailed at the time of that prior determination". 1887
Third, and finally, Korea considers that, under the amended law, competent authorities are no longer
"required to determine, or make any adjustments to, a countervailable subsidy rate or dumping
margin based on any assumptions about information the interested party would have provided or
that otherwise represents the 'commercial reality ' of the interested party if it had complied with a
request for information".1888
It is clear that our task is not to examine whether these provisions or aspects thereof are
"as such" inconsistent with the applica ble provisions of the covered agreements. We recall in this
regard that although Korea included an "as such" claim of WTO -inconsistency against the
2015 TPEA Amendment, it subsequently decided not to pursue this "as such" claim against the
written legislat ion, focusing instead on its claim against the alleged unwritten measure. 1889
Therefore, we limit our analysis to examining the factual conclusions that Korea seeks to draw based
on the written legislation for purposes of establishing the precise content of the alleged unwritten
measure.
As to Korea's first point, we note that subsection (d) – entitled "Subsidy rates and dumping
margins in adverse inference determinations" – permits competent authorities, when using adverse
inferences in "selecting from the facts otherwise available", to engage in certain conduct. Specifically,
for countervailing duty proceedings, competent authorities using adverse inferences "may" "(i ) use
a countervailable subsidy rate applied for the same or similar program in a countervai ling duty
proceeding involving the same country; or (ii ) if there is no same or similar program, use a
countervailable subsidy rate for a subsidy program from a proceeding that the administering
authority considers reasonable to use". In the case of anti -dumping proceedings, competent

1882 Korea's first written submission, para. 909. (emphasis added)
1883 United States' second written submission, para. 149.
1884 United States' second written submission, para. 149.
1885 Korea's first written submission, para. 907.
1886 Korea's first written submission, paras. 904 and 907.
1887 Korea's first written submission, paras. 902 and 907.
1888 Korea's first written submission, paras. 906-907.
1889 Korea's second written submission, para. 374; response to Panel question No. 40(c); comments on
draft descriptive part, para. 1.

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authorities "may" "use any dumping margin from any segment of the proceeding under the
applicable antidumping order".
Korea alleges that "[t]his change permits the USDOC to apply an adverse dumping margin
or subsidy rate without having to exercise reason and judgment or to demonstrate otherwise the
reasonableness of the adverse rate selected for purposes of arriving at an accurate
determination".1890 We note, however, that, in the case of countervailing duty proceedings,
subsection (d)(1)(A)(ii) permits competent authorities to "use a countervailable subsidy rate for a
subsidy program from a proceeding that the administering authority considers reasonable to use" in
cases where there "is no same or similar program".1891 In our view, contrary to Korea's position, this
provision does not wholly preclude the exercise of reason and judgment by a competent authority
in such cases.
In a similar fashion, subsection (d)(2) – entitled "Discretion to apply highest rate" – provides
that competent authorities "may" apply any of the countervailable subsidy rates or dumping margins
specified above, "including the highest such rate or margin, based on the evaluation by the
administering authority of the situation that resulted in the administering authority using an adverse
inference in selecting among the facts otherwise available ".1892 Thus, in permitting investigating
authorities to select various rates or margins, including the highest, the provision requires that this
be "base d on the evaluation" by the investigating authority of the procedural circumstances
surrounding non-cooperation in selecting "among the facts otherwise available". This is important
not only because it implies reasoning and evaluation on the part of the co mpetent authority, but
also because one of the key features of the unwritten measure identified by Korea is that the USDOC
draws "adverse inferences" without taking into account the procedural circumstances of
non-cooperation.
Korea's second point concern s sub section (c)(2), which sets out the "exception" to the
"corroboration of secondary information". The provision states that competent authorities "shall not
be required to corroborate any dumping margin or countervailing duty applied in a separate segment
of the same proceeding". According to Korea, competent authorities can thus rely upon a margin or
a duty from a separate segment of the same proceeding without "corroboration", "even if it is based
on secondary source information". 1893 We agree with Korea that the provision makes clear that
competent authorities "shall not be required to corroborate any dumping margin or countervailing
duty applied in a separate segment of the same proceeding".1894
Korea's third and final point concerns sub section (d)(3) – entitled "No obligation to make
certain estimates or address certain claims". When using an "adverse inference … in selecting among
the facts otherwise available", this provision makes clear that competent authorities are not required
"to estimate what the countervailable subsidy rate or dumping margin would have been" if the
interested party had cooperated; or, "to demonstrate that the countervailable subsidy rate or
dumping margin used by the administering authority reflects an alleged commercial reality of the
interested party".1895
While we note these aspects of the provision, we find it difficult to draw any meaningful
conclusions from them in the abstract. Although the term "alleged commercial reality" may be used
under US law, we note that it is not fou nd in the covered agreements and Korea does not engage
with its meaning and implications in greater detail as part of its discussion of the written legislation.
This, together with the fact that Korea does not challenge this specific provision on an "as su ch"
basis, prevents us from drawing any comparisons between the concept of "commercial reality" under
the written legislation and the "reasonableness" of the replacement facts under the covered
agreements.
Having addressed the specific points raised by Korea for purposes of establishing the precise
content of the unwritten measure, we now turn to the general conclusions that Korea draws based
upon the text of the provision. First, Korea concludes that the provision "gives full discretion to the

1890 Korea's first written submission, para. 907. (emphasis added)
1891 Emphasis added.
1892 Emphasis added.
1893 Korea's first written submission, para. 902.
1894 Emphasis added.
1895 Emphasis added.

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authorities to apply the highest rate or margin available from among the available dumping margins
or countervailable subsidy rates, without the need to corroborate such margins". 1896 As discussed
above, however, this is not entirely accurate inasmuch as the provision allows the selection of the
highest rate or margin "based on the evaluation by the administering authority of the situation that
resulted in the administering authority using an adverse inference in selecting among the facts
otherwise available" . Contrary to Korea 's conclusion, the discretion available to the competent
authorities in such cases is not "full" or entirely unbounded, as the provision clearly requires an
evaluation of the particular situation of non -cooperation leading to the use of the facts a vailable in
a given investigation.
Second, Korea asserts that the provision "essentially codified and supported the existing
practice of the USDOC" and is therefore "a good reflection of the precise content of the AFA Norm
or Ongoing Conduct".1897 We find nothing in the statutory text to suggest that the provision somehow
"codifies" the "existing practice" of the USDOC. Korea does not offer any further explanation or
evidence in support of its assertion. The written legislation does not show how frequently t he
discretion available thereunder to the USDOC is actually exercised in a WTO -inconsistent manner.
This is an essential aspect of Korea 's alleged unwritten measure. That said, we note the various
permissive aspects of the written legislation that Korea highlights insofar as they bear upon the
USDOC's selection of replacement facts and are relevant to understanding what Korea describes as
the "written permission" for the alleged unwritten norm.
7.4.5.1.2 USDOC Anti-Dumping Manual
The next piece of evidence that Korea relies upon to establish the existence of the unwritten
measure with the precise content alleged by it is the USDOC Anti-Dumping Manual, which is "used
for the 'internal training and gui dance of Enforcement and Compliance (E&C ) personnel'".1898
Specifically, Korea quotes the following excerpt from the USDOC Anti-Dumping Manual:
[I]f the respondent has not cooperated to the best of its ability in supplying information,
E&C can make an adverse inference in choosing which facts to use. The potential use
of adverse facts available gives respondents incentive to cooperate fully in providing
the information requested by E&C.1899
The United States points out that the USDOC Anti -Dumping Manual e xpressly disclaims that it
"cannot be cited to establish DOC practice".1900
Besides the issue of the normative value of the Anti-Dumping Manual – which is also relevant
for analysing the general and prospective nature of the alleged unwritten norm – for pre sent
purposes, we note that the excerpt quoted by Korea envisages that the USDOC " can make an
adverse inference in choosing which facts to use".1901 Thus, not only is it cast in permissive terms
when envisaging the use of "adverse inferences", but it also suggests that such inferences are aimed
at "choosing which facts to use". In keeping with the permissive nature of the text, the second
sentence refers to the " potential use" of "adverse facts available" as providing an "incentive" to
respondents "to coopera te fully in providing the information requested". We find nothing in the
excerpt requiring the selection of facts by the USDOC that are adverse to the interests of the
non-cooperating party based solely on a finding of non -cooperation, which, as discussed above, is
an important feature of the alleged unwritten measure identified by Korea. As discussed below, we
also note that the alleged unwritten measure identified by Korea is not described in terms of the
USDOC's "policy" of using "adverse facts available" as an "incentive to cooperate". 1902 In these
circumstances, we consider the single excerpt from the USDOC Anti -Dumping Manual that Korea
cites to be of limited utility for demonstrating the "precise content" of the alleged unwritten measure.

1896 Korea's first written submission, para. 909. (emphasis added)
1897 Korea's first written submission, para. 909.
1898 Korea's first written submission, para. 912 (quoting USDOC Anti-Dumping Manual,
(Exhibit KOR-226), pp. 1 and 4).
1899 Korea's first written submission, para. 912 (quoting USDOC Anti-Dumping Manual,
(Exhibit KOR-226), pp. 1 and 4).
1900 United States' second written submission, fn 233 (quoting USDOC Anti-Dumping Manual,
(Exhibit KOR-226), p. 1).
1901 Emphasis added.
1902 See paras. 7.658-7.659 below.

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7.4.5.1.3 Rulings by US courts
Korea asserts that "[s]everal rulings of the [USCIT] and the U.S. Court of Appeals for the
Federal Circuit ('USCAFC' ) are consistent with the description of the contents of" the alleged
unwritten measure.1903 Referring to court rulings betwee n 2000 and 2017, Korea asserts that US
courts have confirmed that when resorting to the use of facts available, the USDOC relies on various
"secondary" sources of information (the petition, the final determination from the investigation, prior
administrative reviews, or any other information placed on the record) to select a proxy that should
be a "reasonably accurate estimate of the respondent's actual rate, albeit with some built-in increase
intended as a deterrent to noncompliance ".1904 Based solely on thi s excerpt, Korea argues that
"[e]ven according to the U.S. courts, therefore, the drawing of adverse inferences seeks to induce
cooperation by respondents". 1905 The United States, for its part, responds that US courts "have
stated unambiguously that, under U .S. law, application of adverse inferences in resorting to facts
available cannot be punitive".1906
We note, first, that, somewhat contrary to Korea's arguments that the USDOC "consistently
does not seek to replace the missing information with the facts otherwise available in order to arrive
at an accurate determination" 1907, the excerpt from the US court rulings that Korea relies upon
expressly recognizes that selected replacement facts should be a " reasonably accurate estimate of
the respondent's actual rate".1908 Korea does not explain how this language supports the existence
of its alleged unwritten measure. Korea also does not address the United States' assertion that its
courts have stated that the application of "adverse inferences" cannot be "punitive". Second, insofar
as Korea argues that "the drawing of adverse inferences seeks to induce cooperation by
respondents"1909, we note that the question before us is not whether and to what extent the
mechanism of "facts available" can generally be used to "induce cooperation". As discussed above,
the alleged unwritten measure identified by Korea has several interlinked aspects that must each be
demonstrated for the alleged unwritten measure to exist. The measure is not described in terms of
a "policy" or "tool" of using "adverse facts available" or a "built -in increase" to incentivize
cooperation. Korea can, of course, seek to rely upon the "policy" underlying the measure to establish
certain aspects, such as its allegedly general and prospective nature, but this i s not enough to
discharge its burden of establishing the existence of the unwritten measure with the precise content
alleged by it.
We also note that Korea acknowledges that the "degree of cooperation is something that
can be taken into consideration in the weighing and balancing of different pieces of information and
evidence on the record".1910 Amongst the third parties, the European Union "agrees … that the use
of adverse inferences is not necessarily inconsistent, in all circumstances, with Article 6.8 of the
Anti-Dumping Agreement and Article 12.7 of the SCM Agreement" and "that the use of adverse
inferences … would be justified in cases of fraud or total lack of cooperation by the producer or
exporter in question".1911 Pointing out that "Annex II of the Anti-Dumping Agreement contemplates
the possibility that the use of facts available may result in a less favourable outcome for an interested
party", Canada – another third party – submits that this "d[oes] not preclude the use of adverse
inferences in all situations".1912 In these circumstances, and given the alleged unwritten measure

1903 Korea's first written submission, para. 920.
1904 Korea's first written submission, para. 921 (quoting Essar Steel Ltd. v. United States,
(Exhibit KOR-175), p. 1373, in turn quoting De Cecco Di Filippo Fara. S. Martino v. United States,
(Exhibit KOR-176), p. 1032; Özdemir Boru San. ve Tic. Ltd. Sti. v. United States, (Exhibit KOR-177), p. 1245,
in turn quoting De Cecco Di Filippo Fara. S. Martino v. United States, (Exhibit KOR-176), p. 1032; and Lifestyle
Enterprise, Inc. v United States, (Exhibit KOR-178), p. 1298, in turn quoting De Cecco Di Filippo Fara. S.
Martino v. United States, (Exhibit KOR-176), p. 1032 (emphasis original)).
1905 Korea's first written submission, para. 921.
1906 United States' second written submission, para. 195; first written submission, para. 485 (referring
to Viet I-Mei Frozen Foods Co. v. United States, (Exhibit USA-61), pp. 11-12).
1907 Korea's first written submission, para. 880.
1908 Emphasis added.
1909 Korea's first written submission, para. 921.
1910 Korea's response to Panel question No. 50, para. 10. See also Korea's response to Panel question
No. 44 (noting that "a reasonable degree of inference is warranted in order to prevent the party from
benefiting from its non-cooperation" and that "drawing an adverse inference in the ordinary sense is still aimed
at achieving a reasonably accurate result and is part of a process of reasoning and evaluation of all of the
evidence and facts on the record").
1911 European Union's third-party submission, para. 81.
1912 Canada's third-party submission, para. 18.

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specifically identified by Korea, we do not consider that a single quote from court rulings recognizing
that the replacement facts must be a "reasonably accurate estimate", albeit with a "built-in increase"
to promote compliance, suffices to demonstrate the precise content of the alleged unwritten measure
or the "policy" underlying such a measure.
The USDOC's alleged "practice"
Korea submits that the existence of the unwritten measure with the precise content alleged
by it is "established" and "confirmed" by the way the USDOC has "repeatedly and consistently
exercised its discretion" in the use of "adverse facts available" since the enactment of the
2015 TPEA Amendment.1913 In support of its assertion, Korea submits a "list of all [319] proceedings
in which AFA was used since the amendment[] of Section 502 of the TPEA". 1914 Furthermore, as a
"representative sample", Korea presents an "overview table of 12 cases involving different products
related to determinations made at different times, which all confirm the precise content" of the
alleged unwritten measure and "reflect the automatic link between a finding of a failure to
cooperate … and the drawing of adverse inferences".1915
The United States points out that "Korea 's approach, as a logical matter, is fundamentally
incapable of demonstrating the conclusion it draws".1916 According to the United States, Korea's list
starts with all 319 cases in which adverse inferences allegedly were applied, and its assertion that
all but 13 cases included some language regarding failure to cooperate "simply shows the frequency
of non-cooperation findings in those 319 cases".1917 However, it is "incapable of establishing the
frequency wit h which [the] USDOC applies adverse inferences when it finds non -cooperation",
because, "[a]t minimum, one would need to start with the universe of instances in which [the]
USDOC found non-cooperation, and then measure how often within the context of those instances
[the] USDOC applied adverse inferences". 1918 The United States identifies several other
methodological issues with Korea 's approach and takes issue with its "conclusory" and
"unsupported" statements and assertions.1919
As to the "representative sample" of 12 cases offered by Korea, the United States highlights
that "Korea does not indicate how it chose these 12 determinations or on what basis the Panel could
conclude that they are representative of other determinations". According to the United States,
"[i]dentifying 12 determinations, out of hundreds that Korea itself cites, simply cannot support the
existence of some sort of unwritten measure of general and prospective application".1920 Moreover,
the United States presents examples of the USDOC 's practice which, in its view, establish that
whenever it finds non-cooperation the USDOC does not (a) always make adverse inferences1921; and
(b) cease to engage in any reasoning and evaluation and uses the finding of non-cooperation as the
sole basis of selecting the replacement facts.1922
We recall that the only alleged unwritten measure at issue in this dispute is the one identified
in Korea's panel request.1923 Our task is therefore to examine whether the USDOC 's practice that
Korea relies upon establishes the existence of the unwritten measure with the precise content alleged
by Korea.
Turning to the database of 319 cases, Korea submits that this is a list of "all proceedings in
which AFA was used" by the USDOC since the 2015 TPEA Amendment.1924 The United States points

1913 Korea's first written submission, paras. 910 and 913.
1914 Korea's first written submission, para. 916.
1915 Korea's first written submission, para. 919.
1916 United States' first written submission, para. 473.
1917 United States' first written submission, para. 472.
1918 United States' first written submission, para. 472. See also United States' second written
submission, para. 187 (noting that "[a]n analogy would be if Korea maintained that whenever an animal has
legs (trigger), it is a spider (consequence). Obviously, the correct way to test that would be start to with a set
of animals that have legs (i.e., the trigger). If every animal is indeed a spider, then one may conclude that
whenever an animal has legs, it is a spider.")
1919 United States' first written submission, paras. 474-476.
1920 United States' first written submission, para. 483.
1921 United States' second written submission, paras. 152-165.
1922 United States' second written submission, paras. 166-179.
1923 See para. 7.597 above.
1924 Korea's first written submission, para. 916. (emphasis added)

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out that, "[o]f the 319 cases listed … Korea double counts 59 cases. Specifically, Korea repeatedly
counts the same case once as a preliminary determination, and a second time as a final
determination".1925 Our assessment of the list provided by Korea reveals that, as pointed out by the
United States, Korea treats the preliminary and final determinations in the same investigation as
two different "cases" or items fo r purposes of its database. 1926 It is therefore more accurate to
describe Korea's database as comprising of 319 determinations – both preliminary and final – and
not 319 investigations or proceedings.
As to the United States' argument that Korea 's "statistical analysis" is logically flawed 1927,
we note that Korea 's begins with a "list of all [319] proceedings in which AFA was used since the
amendment[] of Section 502 of the TPEA" 1928, and asserts that "all of these cases clearly show a
failure to cooperate in su bstance".1929 We see merit in the United States' argument that beginning
with a list of all instances when "adverse facts available" were used by the USDOC is insufficient to
fully and definitively establish the automatic causal link between a finding of non -cooperation and
the use of "adverse facts available" that Korea needs to establish.1930 As discussed above, the finding
of non-cooperation is an important aspect of the alleged unwritten measure because it serves as the
"trigger" and defines the universe of situations in which the alleged unwritten measure applies.
Therefore, in order to successfully establish the "automatic link" between a finding of
non-cooperation and the use of "adverse facts available", a more sound approach would have been
to begin with a list of all cases in which a finding of non -cooperation was made and then ascertain
whether "adverse facts available" were used in all such cases.
As to the contents of the database, Korea explains that the initial list of 319 determinations
submitted to the Panel as Exhibit KOR -216 is "broken down by : Product; Country; Whether it
concerns and anti -dumping or countervailing duty proceeding (AD/CVD); Whether it concerns an
Investigation or a Review; Date; Federal Register citation; and Whether it involves a Non Market
Economy ('NME') situation or a market situation".1931 In response to questioning by the Panel, Korea
submits a revised "list of cases involving AFA, this time with two new columns indicating where a
reference to AFA as a 'practice' is being made and a brief summary of the 'practice' related language
for each of these".1932
In its first written submission, Korea explains that, "[i]n all but 13 cases, the USDOC included
standard language regarding a party's 'failure to cooperate' by failing to act to the best of its abilities
in terms of responding to certain request for information from the USDOC".1933 Moreover, in "virtually
all of the 306 cases in which the language was included, the use of this language was boilerplate,
and the USDOC was citing to the statutory provisions and requirements for an application of AFA in
line with Section 776 of the Tariff Act of 1930, as amended". 1934 According to Korea, the
"consequence in all of these cases was the drawing of adverse inferences in the sense tha t the
allegedly missing information was replaced with facts otherwise available that would ensure a result
that was adverse to the interests of the foreign producer or exporter in question".1935
In response to questioning by Panel with respect to the 13 instances in the initial list where
the USDOC did not include standard language regarding "failure to cooperate", Korea explains that
it subsequently "discovered that in four of them, the USDOC did actually use the standard boilerplate
language about the failure to cooperate".1936 According to Korea, "[t]his discovery is due to the fact
that [it] had originally conducted [its] research based on LexisNexis which [it] understood to have
included both the Federal Register and the Issues & Decision Memorandum for each case" .1937

1925 United States' second written submission, para. 193 (referring to List of duplicative cases in
KOR-216, (Exhibit USA-96 (revised)) (fn omitted)).
1926 List of AFA proceedings, (Exhibit KOR-216 (revised)); List of duplicative cases in KOR-216,
(Exhibit USA-96).
1927 See, e.g. United States' second written submission, paras. 185-189.
1928 Korea's first written submission, para. 916. (emphasis added)
1929 Korea's response to Panel question No. 45.
1930 United States' second written submission, paras. 185-186.
1931 Korea's first written submission, para. 917.
1932 Korea's response to Panel question No. 45, fn 128; List of AFA proceedings, (Exhibit KOR-216
(revised)).
1933 Korea's first written submission, para. 918.
1934 Korea's first written submission, para. 918.
1935 Korea's first written submission, para. 918.
1936 Korea's response to Panel question No. 45. (fn omitted)
1937 Korea's response to Panel question No. 45. (fn omitted)

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However, it "found out that this was not always the case" and "upon examination of the final Issues
& Decision Memorandum for these cases, [it] found that in four of them, the USDOC did actually
make an express finding of a failure to cooperate".1938 Korea asserts that, in any event, "all of these
cases clearly show a failure to cooperate in substance" and the "few cases in which the boilerplate
language is not used in extenso are thus equally based on the automatic link between
non-cooperation and the use of AFA" .1939 For Korea, statistics thus support the "conclusion that
non-cooperation equals the use of AFA, which in turn means the use of information that is sufficiently
adverse to the interests of the producer or exporter in question".1940
The database of 319 determinations provided by Korea contains a variety of information.
For each of the 319 listed items, it indicates the "product" concerned (column A); the "country" at
issue (column B); whether it is in the context of an anti-dumping or countervailing duty investigation
(column C); whether it concerns an original investigation or a review proceeding (column D);
whether it represents a preliminary or a final determination (column E); the date of the
determination (column F); the US "Federal R egister" citation for the determination (column G);
whether it involves a non -market economy (NME ) or "market" situation (column H); whether the
interested party "didn't respond" (column I – coded as "yes", "no", "yes (in part)", or "both"); and
whether the determination includes language concerning the "failure to cooperate" (column J – coded
as a "yes" or "no").1941 The revised list subsequently submitted by Korea adds two columns indicating
whether the determinations contain a reference to the "p ractice" of using "adverse facts available"
by the USDOC (column K – coded as a "yes" or "no); and, finally, a "brief summary of the
'practice' related language" used in each determination.1942
As to the information that is contained in Korea 's database, we note that for 119 out of
the 319 determinations listed, the data in column K indicates that the USDOC made "no" reference
to the "practice" of using "adverse facts available".1943 For the remaining 200 determinations, Korea
provides limited excerpts of the " practice-related language" used by the USDOC. Useful as these
pieces of information are, we note that Korea 's database provides very limited information about
the USDOC 's actual use of "adverse inferences" or "adverse facts available" in each of the
319 determinations. The limited information contained in the database does not provide full details
of crucial aspects of the investigations at issue, including, the "necessary" information that was
"missing" from the record; the "facts" that were otherwise avai lable to the USDOC; the procedural
circumstances surrounding non-cooperation; how the "facts" selected by the USDOC were "adverse"
to the interests of the non -cooperating party; and the USDOC 's analysis, if any, in selecting the
replacement information. As the United States points out, Korea does not "place the vast majority
of these cases on the record of this dispute". 1944 In fact, Korea places on the panel record the full
text of the USDOC 's analysis in only 2 8 out of the 319 determinations that are includ ed in its
database.1945
The absence of such information in Korea's database and its choice to not place on the record
and engage with each of the 319 determinations is particularly problematic because, as we have
found1946, the meaning that Korea ascribes to the terms "adverse inferences" and "adverse facts
available" constitute important features of the precise content of the alleged unwritten measure.
As discussed, Korea alleges that the USDOC selects facts adverse to the interests of the
non-cooperating party based solely on a finding of non-cooperation. Although, based on its database

1938 Korea's response to Panel question No. 45. (fn omitted)
1939 Korea's response to Panel question No. 45.
1940 Korea's first written submission, para. 1011. (emphasis original)
1941 List of AFA proceedings, (Exhibit KOR-216 (revised)).
1942 List of AFA proceedings, (Exhibit KOR-216 (revised)). Korea's response to Panel question No. 45,
fn 128.
1943 List of AFA proceedings, (Exhibit KOR-216 (revised)). Korea explains in this regard that "it is of
course not at all necessary for the USDOC to use this term in order for Korea to demonstrate the existence of a
repeated, frequent, consistent, and extended use of an AFA rule or norm, or ongoing conduct. In the
first written submission, Korea already included a number of references to the USDOC itself referring to the
AFA 'rule', and to its adverse selection of facts available as its practice in a number of the specific proceedings
Korea challenged 'as applied'". (Korea's response to Panel question No. 45 (fn omitted)).
1944 United States' second written submission, para. 193.
1945 As discussed in paragraph 7.630 above, we note that, in contrast to Korea's approach in the present
dispute, in US – Anti-Dumping Methodologies (China), China placed on the record the full text of the
73 determinations where the "NME-wide entity was found to be non-cooperating". (Panel Report, US –
1946 See paras. 7.617-7.619 above.

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of 319 determinations, Korea draws the conclusion "that non-cooperation equals the use of AFA"1947,
given the limited information contained in Korea 's database, and without access to all of the
determinations cited by Korea, we are unable to examine whether the USDOC 's use of AFA or
"adverse inferences" in these proceedings, in fact, corresponds with the meaning that Korea ascribes
to these terms as part of its identification of the precise content of the alleged unwritten measure
at issue.
While the examples of "practice -related" language used by the USDOC in 200 of the
319 determinations cited by Korea may, to some extent, indicate that the USDOC considered t he
non-cooperation of an interested party as being relevant for its selection of the "facts available", we
are unable to find, based on these excerpts alone, that this was the sole basis for the
USDOC's ultimate selection of the facts available in these de terminations. Korea's decision not to
place on the Panel record each of the 319 determinations identified by it – let alone engage with
them in greater detail – further limits our ability to examine whether the USDOC selected "adverse"
facts based solely on its finding of non -cooperation, without undertaking further analysis as to the
reasonableness of the replacement facts – features that are crucial to the alleged unwritten measure
identified by Korea.
In the absence of the additional information identif ied above for each of the
319 determinations relied upon by Korea – whether in a tabular form or by providing and discussing
the full determinations – the Panel simply cannot examine the manner in and the extent to which
the USDOC relied upon its finding of non-cooperation, whether it considered any other facts besides
the finding of non -cooperation, whether and how the replacement facts selected were "adverse",
and, whether, as alleged by Korea, it did not engage in further reasoning required to select
"reasonable replacements" for the missing "necessary" information in the particular circumstances
of each case. 1948 In our view, Korea 's identification of the specific unwritten measure at issue
necessitates these lines of inquiry. For these reasons, we find that the database of
319 determinations provided by Korea is, in and of itself, insufficient to establish the existence of
the unwritten measure with the precise content alleged by it.
In light of these limitations in Korea's discussion of the 319 determinations, we also remain
cautious in relying upon Korea's analysis of a limited subset of these cases. We note, for example,
that Korea narrows its list of 319 determinations to focus on a subset of 90 determinations in which
it alleges there was "at least a partial response by the interested parties to the information requests
(i.e. not a complete failure to cooperate)".1949 In doing so, Korea explains that "it seeks to focus on
the most egregious situation where the use of AFA as a Norm or as part of Ongoing Conduct is in
any case not consistent with the relevant WTO obligations of the United States".1950 Then, without
any further discussion or analysis of these 90 determinations, Korea concludes that, "[i]n all of these
90 cases, the USDOC applied AFA in a mechanistic manner solely based on the finding that party
failed to cooperate to the best of its ability and without engaging in the required comparative process
of reasoning and evaluation and an assessment of the available facts on the record to identify the
facts that lead to an accurate determination".1951
First, without a fuller analysis of the 319 determinations – which is rendered impossible in
light of the cursory way in which Korea discusses them – it is difficult for the Panel to assess whether
and how the 90 determinations that are short-listed by Korea reflect the "most egregious situation"
as well as the utility of such a distinct ion when challenging "as such" an unwritten measure that is
described as having a general and prospective nature. 1952 Moreover, focusing on a subset of
determinations in this manner still does not speak to the precise circumstances of each of the
90 determinations beyond what is contained in Korea 's original database. In particular, the Panel
remains unable to determine whether, in each of the 90 determinations, the USDOC used "adverse
inferences" or "adverse facts available" in the sense that Korea describes the precise content of
these terms.

1947 Emphasis added.
1948 See also Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.178.
1949 Korea's opening statement at the first meeting of the Panel, para. 144.
1950 Korea's first written submission, para. 1016. (emphasis added)
1951 Korea's first written submission, para. 1017.
1952 See also United States' second written submission, para. 191.

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As part of demonstrating the precise content of the alleged unwritten measure, Korea also
presents a table "reflect[ing]" the "specific statements contained in the 12 proceedings" that it
focuses on.1953 Korea's discussion of these 12 cases in the context of the first step of establishing
the existence of the measure is therefore somewhat limited in this manner. By contrast, Korea
addresses these 12 proceedings in considerably greater detail as part of the second step of t he
analysis which seeks to demonstrate that the unwritten measure breaches Article 6.8 and Annex II
of the Anti-Dumping Agreement and Article 12.7 of the SCM Agreement.1954
Even if we were to agree with Korea and find that the 12 cases discussed in greater detail
reflect the precise content of the alleged unwritten measure that is identified by Korea , it remains
unclear as to how this conclusion in respect of a limited number of investigations can be used to
arrive at a similar finding for the many o ther determinations in which the USDOC allegedly used
"adverse facts available" but for which Korea provides very limited information. Given the overall
approach adopted by Korea, we therefore see merit in the United States' argument that
"[i]dentifying 12 determinations, out of hundreds that Korea itself cites, simply cannot support the
existence of some sort of unwritten measure of general and prospective application".1955
In any event, we do not consider that all of the 12 cases discussed by Korea unequivo cally
demonstrate the precise content of alleged unwritten measure. For example, in Heavy walled
rectangular welded carbon steel pipes and tubes from Turkey , the USDOC found numerous
discrepancies in the respondent MMZ 's reporting of certain information, i ncluding, production
quantities, general and administrative expenses, financial expenses, indirect selling expenses,
CONNUMs, and per -unit product weight for home market sale s.1956 In applying "partial AFA", the
USDOC selected the highest transaction-specific margin of the cooperating respondent
(Özdemir) and applied it to the non -cooperating respondent (MMZ). 1957 In doing so, the USDOC
explained that:
While petition rates are permissible as adverse rates in some instances, it is not
appropriate to use any of t he petition rates here because the [USDOC] is unable to
corroborate them. Therefore, based on record evidence, the [USDOC] has assigned to
MMZ as AFA the highest transaction-specific margin, 35.66 percent, of the cooperating
company, Ozdemir. It is unnecessary to corroborate this rate because it was obtained
in the course of this investigation and, therefore, is not secondary information. The
transaction underlying this dumpin g margin is neither unusual in terms of transaction
quantities nor otherwise atypical.1958
In our view, the above analysis by the USDOC suggests that, in selecting the replacement
facts, it engaged in some reasoning and evaluation. Specifically, the USDOC di d not consider it
"appropriate" to select the dumping margins in the petition, which were "facts" that were otherwise
available to it, precisely because it was "unable to corroborate them". Moreover, in selecting the
highest transaction-specific margin from the cooperating respondent, the USDOC explained that the
"transaction underlying this dumping margin is neither unusual in terms of transaction quantities
nor otherwise atypical".
In response to questioning by the Panel on this issue, Korea explained tha t the "mere fact
that the USDOC did not opt for the 'worst' information such as in this case the highest margin from
the petition is not determinative. The mechanistic application of a particular practice of selecting
margins that ensure an adverse result and the failure to engage in a process of reasoning and
evaluation are key ".1959 Noting that the USDOC "expressly rejected the need to corroborate the
information it selected because it was obtained in the course of the investigation and thus allegedly
did not constitute 'secondary' information", Korea also points out that "the information from another
producer [i.e. Özdemir] is clearly 'secondary ' source information for the exporter to which AFA is
applied".1960 Finally, Korea submits that "the lack of 'corroboration' to support the use of the highest

1953 Korea's first written submission, paras. 922 and 919.
1954 Korea's first written submission, paras. 1022-1032; Analysis of USDOC cases, (Exhibit KOR-217).
1955 United States' first written submission, para. 483.
1956 Heavy welded steel final determination, (Exhibit KOR-163), pp. 9-11.
1957 Heavy welded steel final determination, (Exhibit KOR-163), p. 6.
1958 Heavy welded steel final determination, (Exhibit KOR-163), pp. 6-7. (fns omitted; emphasis added)
1959 Korea's response to Panel question No. 107, para. 163. (emphasis added)
1960 Korea's response to Panel question No. 107, para. 164.

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petition margin … was in fact only a reference to the kind of meaningless 'corroboration' of checking
for anomalies".1961
Far from establishing that the USDOC 's conduct in this investigation reflects the precise
content of the alleged unwritten measure, we consider that Korea 's responses to the
Panel's questions highlight the problem with losing sight of the alleged unwritten measure identified
by Korea and the "as such" basis of its challenge. According to the measure identified by Korea, the
USDOC selects facts adverse to the interests of the non-cooperating party based solely on a finding
of non -cooperation. Yet, the USDOC 's analysis in this case shows that its selection of the
replacement information was not based solely on its finding of non -cooperation, but was also
influenced by its inability to corroborate the margin in the petition. The USDOC also observed that
the "transaction underlying this dumping margin is neither unusual in terms of transaction quantities
nor otherwise atypical".
Insofar as Korea considers the USDOC 's "mechanistic application of a particular practice of
selecting margins" to be the "key", we note that this is not the specific unwritten measure identified
by Korea, which hinges, in K orea's own words, upon the "automatic link" between the finding of
non-cooperation and the selection of "adverse facts available". Furthermore, Korea also appears to
take issue with the USDOC's finding that the information from another producer is not "sec ondary"
and therefore does not need to be "corroborated"; for Korea, this "clearly" constitutes secondary
source information. This raises the important question of what constitutes "information from a
secondary source" within the meaning of paragraph 7 of Annex II to the Anti-Dumping Agreement.
However, elsewhere in its responses, Korea also expressly "agrees with the United States that the
Panel does not need to come up with a general definition of the term 'secondary source' information"
in interpreting paragraph 7 of Annex II.1962
To be clear, this is not to say that the points raised by Korea in its responses are unimportant
or that the USDOC 's conduct in this particular instance was WTO -consistent. To the contrary, it is
precisely because these issues – relating to the nature of the USDOC's reasoning, the definition of a
"secondary source", and the proper scope of "corroboration" – are extremely important, that they
should be the subject of an "as applied" claim, or, an "as such" claim against a different unwritten
measure, if such a measure were to exist. For purposes of Korea's present "as such" claim, we simply
cannot find, as a matter of fact, that the USDOC in Heavy walled rectangular welded carbon steel
pipes and tubes from Turkey selected the replac ement facts based solely on its finding of
non-cooperation. To the extent that Korea takes issue with the "kind of evaluation" provided by the
USDOC as falling short of what is required under Article 6.8 and Annex II, we address this in
section 7.4.5.3 below.
Another case that Korea discusses as part of its "representative sample" of 12 cases is
Certain carbon and alloy steel cut-to-length plate from France. In that case, the USDOC found that
the respondent Industeel had:
(1) [M]isreported the product characteristics for chromium and nickel content for a
significant percentage of its home market and U.S. sales, as well as in the costs for
these products; (2) made numerous errors in the data reported in numerous expense
fields for the home market and U.S. sales examined at verification; and (3 ) failed to
include certain production orders, including certain orders for abrasion products, when
weight averaging its costs by CONNUM.1963
Having found that the respondent did not act to th e best of its ability, the USDOC applied
"total AFA" and "assigned Industeel the highest margin contained in the petition of
148.02 percent".1964 In doing so, the USDOC "corroborated the petition rate using transaction
specific margins from the mandatory res pondent Dillinger France, which were not calculated using
total AFA".1965 Furthermore, the USDOC found that that the "petition margin falls within the range

1961 Korea's response to Panel question No. 107, para. 165. (emphasis added)
1962 Korea's comments on United States' response to Panel question No. 52, p. 13.
1963 Alloy steel final determination, (Exhibit KOR-160), p. 33.
1964 Alloy steel final determination, (Exhibit KOR-160), p. 6.
1965 Alloy steel final determination, (Exhibit KOR-160), p. 6.

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of the highest transaction-specific margins calculated for Dillinger France, which appear to be sales
whose terms were normal, when compared with other sales in Dillinger France's database".1966
In response to questioning by the Panel, Korea asserts that the USDOC 's reasoning is "not
the kind of evaluation of the available facts on the record with a vi ew to making an accurate
determination that is required by Article 6.8 and Annex II of the Anti -Dumping Agreement".1967
Furthermore, Korea contends that the kind of "corroboration" undertaken by the USDOC falls short
of what is required under the covered agreements.1968 Again, while we consider the issues raised by
Korea to be important, our task is limited to determining whether the USDOC selected facts
"adverse" to the interests of the non -cooperating respondent based solely on its finding of
non-cooperation. For this purpose, as a factual matter, it is clear that, in selecting the petition
margin, the USDOC engaged in an exercise of corroboration and also noted that the margins from
another mandatory respondent were from "sales whose terms were normal, when c ompared with
other sales in Dillinger France 's database". Therefore, we simply cannot find, as a matter of fact,
that the USDOC in this instance selected the replacement facts based solely on its finding of
non-cooperation and nothing else. In our view, this case does not reflect the precise content of the
unwritten measure identified by Korea. To the extent that Korea takes issue with the "kind of
evaluation" provided by the USDOC as falling short of what is required under Article 6.8 and
Annex II, we address this in section 7.4.5.3 below.
The United States also offers several counterexamples to demonstrate that, contrary to
Korea's arguments, whenever it makes a finding of non -cooperation, the USDOC does not always
adopt "adverse inferences" and fail to engage in any further evaluation. 1969 The United States
submits that, in Stainless steel b ar from Italy , the USDOC found that the respondent failed to
cooperate to the best of its ability, however, it did not draw adverse inferences and instead "relied
on other information on the record that allowed it to accurately calculate the subsidy rate".1970
Korea stresses, first, that "[ t]his case concerns a CVD proceeding from 2002, thus well
before the adoption of the TPEA amendment [] to Section 776 in 2015" .1971 We note in this regard
Korea's argument that the "unwritten measure … has existed for much longer" than the
2015 TPEA Amendment.1972 We also note that Korea cites several US court rulings that pre-date the
2015 TPEA Amendment for purposes of demonstrating the existence of the alleged unwritten
measure.1973 In these circumstances, it is not entirely clear to us as to why Korea considers any less
relevant the evidence from the same period that United States' relies upon.
Second, Korea submits that the USDOC in that case actually applied "adverse facts available"
and "[t]he only issue was … was which information to use as AFA". 1974 As discussed, however, the
exact meaning that Korea ascribes to the term "adverse facts available" relates precisely to "which
information to use as AFA" and is therefore an important feature of the precise content of the alleged
unwritten measure. In Stainless steel bar from Italy, the USDOC found that the respondent, CAS,
"did not act to the best of its ability".1975 The petitioners argued that "the rate calculated in a previous
proceeding represents a proper starting point for the [USDOC]'s construction of a facts available
rate".1976 Disagreeing with the petitioners, the USDOC instead used information provided by the
Government of Italy and the European Commission because it a llowed the USDOC "to calculate a

1966 Alloy steel final determination, (Exhibit KOR-160), p. 6.
1967 Korea's response to Panel question No. 109, para. 175.
1968 Korea's response to Panel question No. 109, para. 176.
1969 United States' second written submission, paras. 155-164 and 169-70; opening statement at the
first meeting of the Panel, paras. 70-73; and opening statement at the second meeting of the Panel,
paras. 98-101.
1970 United States' second written submission, para. 157 (referring to Stainless steel bar from Italy,
issues and decision memorandum, (Exhibit USA-62)).
1971 Korea's second written submission, para. 389.
1972 Korea's response to Panel question No. 40(a).
1973 Korea's first written submission, para. 921 (referring to, inter alia, Essar Steel Ltd. v. United States,
(Exhibit KOR-175), p. 1373; De Cecco Di Filippo Fara. S. Martino v. United States, (Exhibit KOR-176), p. 1032;
and Lifestyle Enterprise, Inc. v United States, (Exhibit KOR-178), p. 1298).
1974 Korea's second written submission, para. 389.
1975 Stainless steel bar from Italy, issues and decision memorandum, (Exhibit USA-62), p. 16.
1976 Stainless steel bar from Italy, issues and decision memorandum, (Exhibit USA-62), p. 15.

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more precise subsidy rate for the POI".1977 Thus, this example offered by the United States does not
support the existence of the unwritten measure with the precise content alleged by Korea.
Korea offers a similar response to the United States' reliance upon Non-oriented electrical
steel from Chinese Taipei. Korea submits that it "pre-dates the TPEA amendment[]" and "the USDOC
applied AFA to an exporter in relation to several programs for its failure to cooperate and the only
issue related to the selection of AFA".1978 For reasons discussed above, we remain unconvinced that
cases pre-dating the 2015 TPEA Amendment cannot be offered as evidence challenging the existence
of the alleged unwritten measure, particularly when Korea itself cites court rulings from that period.
Moreover, we note that the USDOC's determination contains standard "boilerplate" language relating
to the use of "adverse inferences" that Korea places great significance upon as part of its own
database of the USDOC's alleged practice.1979 The USDOC clearly made a finding of non-cooperation
and found that the non -cooperating party "did not respond to the … countervailing duty
questionnaires, even after asking, and receiving an extension for time to respond". 1980 For the
"alleged income tax programs pertaining to either the reduction or exemption of the income tax
rates or payment of no income tax", the USDOC thus applied an "adverse inference that the
non-cooperating mandatory respondent paid no income tax during the POI". The USDOC explained
that, "under this approach, the highest possible benefit for income tax programs is equal to the
standard income tax rate in the country at issue. In the instant case, the standard income tax rate
for corporations in [Chinese Taipei] is 17 percent" . However, the USDOC did not select this rate
"because the [foreign authority] placed [the non -cooperating party's] tax returns on the record of
this investigation" and it therefore used these returns for purposes of its AFA analys is. Thus, using
the other information properly available to it, the USDOC determined that the respondent "did not
use any tax exemptions or reductions at issue in this CVD investigation" and thus the USDOC did
not assign a subsidy rate for these programmes .1981 In our view, therefore, the USDOC clearly did
not select the more "adverse" replacement fact based solely upon its finding of non-cooperation.
The United States also refers to Welded line pipe from Korea, asserting that the USDOC in
that case "discovered at verification several unreported subsidies, including exemptions from the
local education tax", but it used facts available without an adverse inference. 1982 Korea responds
that "the USDOC did not make a finding of non -cooperation and the case is thus not applicable to
the claim of Korea that each time a finding of non-cooperation is made, AFA is applied".1983 We note,
however, that the USDOC stated that because the respondent "failed to provide information on this
exemption [of local education ta x] by the deadline" it "relied on the facts available". 1984
The petitioner in that case urged the USDOC to use the rate calculated in another proceeding, "which
is the highest rate calculated in any Korean case for such a program".1985 The USDOC disagreed and
instead used information provided by the Government of Korea in its initial questionnaire response
as the replacement for the missing information.1986 Therefore, we agree with the United States that
this case undermines the "automatic link" between a finding of non-cooperation and the selection of
facts that are adverse to the interests of the non -cooperating party that is an important feature of
the precise content of the alleged unwritten measure.
The nature of an "as such" claim
We recall that "as such" claims are "serious challenges" and their implications "are obviously
more far-reaching than 'as applied' claims" as they seek to prevent Members ex ante from engaging
in certain conduct.1987 We agree in this regard that, "[b]y definition, an 'as such ' claim challenges

1977 Stainless steel bar from Italy, issues and decision memorandum, (Exhibit USA-62), p. 17.
1978 Korea's opening statement at second meeting of the Panel, para. 104.
1979 Non-oriented electrical steel from Chinese Taipei, issues and decision memorandum,
(Exhibit USA-91), pp. 10-11.
1980 Non-oriented electrical steel from Chinese Taipei, issues and decision memorandum,
(Exhibit USA-91), p. 9.
1981 Non-oriented electrical steel from Chinese Taipei, issues and decision memorandum,
(Exhibit USA-91), p. 11.
1982 United States' second written submission, para. 161.
1983 Korea's opening statement at second meeting of the Panel, para. 104.
1984 Welded line pipe from Korea, issues and decision memorandum, (Exhibit USA-90), p. 35.
1985 Welded line pipe from Korea, issues and decision memorandum, (Exhibit USA-90), p. 33.
1986 Welded line pipe from Korea, issues and decision memorandum, (Exhibit USA-90), pp. 34-35.
1987 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 172. See also
para. 7.608 above.

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[measures] that have general and prospective application, asserting that a Member's conduct – not
only in a particular instance that has occurred, but in future situations as well – will necessarily be
inconsistent with that Member's WTO obligations".1988
With respect to the alleged unwritten measure at issue, we note that Korea does not
challenge the written legislation setting out the discretion available to the USDOC in its selection of
the replacement facts. Rather, the alleged unwritten measure concern s the exercise of that
discretion in a WTO-inconsistent manner by the USDOC. Korea thus needs to demonstrate that the
alleged unwritten measure cannot lead to a WTO-consistent selection of replacement facts and that
it necessarily entails a WTO -inconsistent selection of the replacement facts in future situations,
irrespective of the particular circumstances of individual investigations. As Korea asserts, "[t]he AFA
Rule or Norm, or the AFA Ongoing Conduct, does not take 'differences in the factual circumstances
of the situation into account '".1989 Any other approach risks rendering the alleged unwritten
measure's WTO-consistency dependent upon the circumstances, which requires a case -by-case
assessment of the kind that is required for "as applied" claims of WTO-inconsistency.
To establish that the alleged unwritten measure necessarily results in the WTO-inconsistent
conduct, Korea stresses the "automatic link" between the USDOC 's finding of non-cooperation and
its use of "adverse inferences". As discussed abov e, under the alleged unwritten measure, the
USDOC selects replacement facts that are adverse to the interests of the non -cooperating party
based solely upon its finding of non -cooperation. Specifically, Korea submits that the USDOC, in
using "adverse facts available" in this manner, does not take into account the procedural
circumstances of non-cooperation and does not engage in a "comparative evaluation" with a view to
selecting the "best information available" in the particular circumstances.
We recall that Article 6.8 requires investigating authorities to select reasonable replacements
for the missing "necessary" information in a given case. 1990 Together with Annex II, the provision
prescribes in considerable detail an investigating authority's conduct in selecting reasonable
replacements in the particular circumstances of a given investigation. While the search for
reasonable replacements requires an investigating authority to exercise its judgment and consider
all the facts that are properly available to it as well as the procedural circumstances of
non-cooperation, the nature and extent of the evaluation and analysis that are required on the part
of the investigating authority depend inevitably upon the particular facts and circumst ances,
including the "necessary" information that was found to be missing, the circumstances surrounding
non-cooperation, as well as the facts that are otherwise available to it. As discussed in our
interpretative analysis, we disagree with Korea insofar a s it suggests that the
Anti-Dumping Agreement and the SCM Agreement always require a certain kind of "comparative
evaluation" in all circumstances.
Korea alleges that the 319 determinations show that the USDOC does not engage in a
"comparative analysis". However, in light of Korea's limited discussion of each of these
319 determinations and the fact that it does not place on the panel record a vast majority of these
determinations, we are unable to ascertain whether a "comparative evaluation" of the kind t hat
Korea envisages was, in fact, required in the specific circumstances of each of the 319 investigations.
Put differently, asserting that the USDOC did not engage in a certain kind of evaluation in the
abstract is not enough; Korea must also demonstrate that the kind of evaluation it envisages was,
in fact, required in light of the specific facts of each of the 319 determinations.
Furthermore, our analysis of the representative sample of the USDOC's determinations that
Korea places on the record indicates that the USDOC use of "adverse inferences" and "adverse facts
available" is not always as "automatic" as Korea claims. We disagree with Korea that the USDOC
selects "adverse facts available" based solely upon its finding of non -cooperation. As discussed
above, contrary to Korea 's position, in many of the determinations placed on the record by the
parties the USDOC does, in fact, engage in some analysis and reasoning for purposes of selecting
the replacement facts and, therefore, the link between a finding of non-cooperation and the adoption
of adverse inferences and the selection of "adverse facts available" is not as "automatic" as Korea
suggests. Insofar as Korea argues that the USDOC's analysis in these determinations is nonetheless
WTO-inconsistent, we consider that such a conclusion cannot be arrived at without a case -by-case

1988 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 172.
1989 Korea's second written submission, para. 419.
1990 See para. 7.36 above.

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assessment of each instance of the USDOC 's use of "adverse facts available", thereby questioning
the utility of Korea 's "as such" challenge and the existence of a rule or a norm of general and
prospective application.
To the extent that Korea takes the position that the alleged unwritten measure comprises of
the USDOC selecting "adverse facts available" without engaging in the kind of analysi s and
evaluation that is required under the covered agreements, it appears to describe the impugned
measure by reference to a treaty obligation. As discussed, at times – including in its responses to
the Panel's questions concerning the individual determinations that it discusses – Korea asserts that
the AFA rule or norm entails the USDOC's failure to select the "best information available" in the
"particular circumstances" or its failure to undertake the " required comparative assessment" to
arrive at an "a ccurate determination". These terms are not used by the USDOC, but are instead
found in the covered agreements and in WTO jurisprudence. The fact that Korea describes the
alleged unwritten measure as comprising of the USDOC's failure to act WTO -consistently by not
undertaking the "required" evaluation has the important effect of blurring the line between the
factual question of the existence of the measure and the issue of its WTO -consistency. This is
because Korea's unwritten measure is defined by referenc e to the USDOC engaging in
WTO-inconsistent conduct, i.e. its failure to select the "best information available" or to undertake
a "comparative evaluation".1991 At the same time, Korea alleges that it is for this very "reason" that
the unwritten measure is WTO-inconsistent.1992 We agree with the Appellate Body in this regard that
such an approach is "flawed" and "introduce[s] uncertainty because the identification of the measure
would vary depending on the substance of the legal provision invoked by a complaina nt and the
interpretation that a panel might give to that provision".1993
Conclusion regarding the "AFA rule or norm"
Based on our examination of the arguments and evidence, we find that Korea has not
established the existence of the unwritten "AFA rule or norm" with the precise content alleged by it.
Given Korea's failure to demonstrate to the precise content of the alleged unwritten measure, it is
not necessary for us to consider whether the alleged rule or norm is attributable to the United States
and is of general and prospective application.
7.4.6 Whether Korea has established the existence of the AFA ongoing conduct with the
precise content alleged by it
Having found that Korea has failed to establish the existence of the unwritten "AFA rule or
norm", we now address Korea's alternative characterization of the alleged unwritten measure as a
form of "ongoing conduct" that can be challenged in WTO dispute settlement proceedings.
The description of the unwritten measure in its panel request , as well as its submissions to
the Panel, suggest that Korea characterizes the same substantive measure as a "rule or norm of
general and prospective application", or, in the alternative, as "ongoing conduct". In its first written
submission, for establishing the existence of the alleged "ongoing conduct" measure, Korea explains
that it "already demonstrated … the precise content" of the measure as part of its arguments on the
existence of the "rule or norm of general and prospective application".1994
In response to furthe r questioning by the Panel, Korea acknowledges that, "[i]n terms of
determining the precise content and the repeated application of AFA, the evidence is the same".1995
Thus, not only does Korea offer the same description for the precise contents of the alleged "rule or
norm" and "ongoing conduct", but it also relies on the very same evidence to demonstrate the
existence of both kinds of measures. The only reason offered by Korea to present such distinct

1991 See Korea's request for interim review, para. 73 (identifying the alleged unwritten measure as
follows: "whenever there is a finding of non-cooperation, the USDOC will use adverse facts to fill the alleged
gap, which, in turn, means that it will not engage in the required search for reasonable replacements for the
missing information" (emphasis added)).
1992 Korea's request for interim review, para. 74 (explaining that "[t]he reason why the use of AFA
(i.e. the challenged measure) violates the Anti-Dumping and the SCM Agreement[s] is because it involves a
wholly inadequate evaluation" (emphasis added)).
1993 Appellate Body Report, EC – Selected Customs Matters, para. 132.
1994 Korea's first written submission, para. 944.
1995 Korea's response to Panel question No. 47.

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characterizations is that "both types of measures have t heir own conditions that must be
demonstrated to exist".1996
While many different kinds of measures have been challenged by complainants in previous
disputes – including, inter alia, a "rule or norm"1997 and "ongoing conduct"1998 – nothing in the treaty
text di stinguishes different measures in this manner. Generally speaking, we agree with the
Appellate Body that "[t]hese distinctions are not always useful or appropriate to define the elements
that must be substantiated for purposes of proving the existence and nature of a measure at
issue".1999 Instead, as discussed, the additional elements that must be demonstrated to establish
the existence of an unwritten measure are to be ascertained in light of the specific measure
challenged and how it is described by a complainant in a given case. Rather than focusing on the
elements necessary to establish the existence of different kinds of measures in the abstract, our
task is better served by examining the precise description of the specific measure offered by Korea
with a view to ascertaining the elements that it must demonstrate.
According to the description in Korea 's panel request, the unwritten measure exists
"whenever the USDOC makes a finding that a producer or exporter has failed to cooperate by not
acting to the best of its ability". 2000 This suggests that Korea, in fact, seeks to prevent the
United States from engaging in the alleged conduct in general and in the future . This is also
consistent with the fact that Korea 's challenge is made on an "as such" basis, because, "[b]y
definition, an 'as such ' claim challenges [measures] that have general and prospective
application".2001 Nothing in Korea's description suggests that the measure does not cover all imports
into the United States from all countries.2002 Nor does the description offered by Korea limit the
scope of the measure to certain finite number of investigations or a determinate group of cases or
proceedings. Rather, Korea recognizes that "the AFA Rule or Norm, or AFA Ongoing Conduct, applies
to an unidentified number of economic operators and in a broad range of situations or cases".2003
The measure described by Korea is also markedly different from the measures
previously challenged as "ongoing conduct" in US – Continued Zeroing and US – Orange
Juice (Brazil). In US – Continued Zeroing , the European Communities challenged two sets of
measures (a) the continued application of duties resulting from 18 anti-dumping duty orders, as
calculated or maintained in the most recent proceeding, at the time of the challenge; and (b ) the
use of the zeroing methodology in anti-dumping proceedings pertaining to the duties resulting from
these 18 anti-dumping duty orders (including original investigations, periodic reviews, and sunset
reviews).2004 The Appellate Body noted that the European Communities' claims against the measures
at issue could neither be characterized as a challenge to the measures "as such", nor as a challenge
to these measures "as applied", and explained as follows:
The European Communities' claim regarding these measures is not an "as such" claim,
in that its scope is narrower than a challenge to the zeroing methodology as a rule or
norm of general and prospective application with regard to all imports into the
United States from all countries. At the same time, the measures at issue are broader
than specific instances in which the zeroing methodology was applied, such as a periodic
review or sunset review determination. In other words, the measures at issue consist
of the use of the zeroing methodology in a string of connected and sequential
determinations, in each of the 18 cases, by which the duties are maintained. As the
European Communities explains, its complaint is directed at "the zer oing methodology
as used in the final order and programmed to continue to be used until such time as the

1996 Korea's response to Panel question No. 47.
1997 Appellate Body Report, US – Zeroing (EC), paras. 192-194.
1998 Appellate Body Report, US – Continued Zeroing, para. 181.
1999 Appellate Body Report, Argentina – Import Measures, para. 5.109. See also Appellate Body Report,
US – Continued Zeroing, para. 179.
2000 Emphasis added.
2001 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 172.
2002 This is further confirmed by annex I of Korea's panel request, which sets out a "preliminary and
non-exhaustive list" of USDOC investigations that, in Korea's view, establish the existence of the unwritten
measure and illustrates the USDOC's practice. (Korea's panel request, fn 1 and annex I). The proceedings
listed in annex I concern a wide-range of products that are imported from many different countries.
2003 Korea's second written submission, para. 379. (emphasis added)
2004 Appellate Body Report, US – Continued Zeroing, para. 164.

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United States eliminates zeroing from the particular anti -dumping duty under
consideration.2005
The Appellate Body explained that the "successive determi nations by which duties are
maintained are connected stages in each of the 18 cases involving imposition, assessment, and
collection of duties under the same anti -dumping duty order".2006 For the Appellate Body, the "use
of the zeroing methodology in a string of these stages [was] the allegedly unchanged component of
each of the 18 measures at issue" 2007 and it was "with respect to this ongoing conduct that the
European Communities brought its challenge, seeking its cessation".2008 Notably, the Appellate Body
considered that the European Communities ' claim against "ongoing conduct" "is not an 'as
such' claim".2009
In US – Orange Juice (Brazil), Brazil challenged the "continued use by the United States of
zeroing procedures in successive anti-dumping proceedings under the Orange Juice Order, including
the original investigation and any subsequent administrative reviews by which duties are applied
and maintained over a period of time" .2010 The United States claimed that the "ongoing conduct"
challenged by Brazil was not susceptible to a WTO challenge because it was based on "an indefinite
number of future individual measures that do not and may never exist". 2011 In response to the
United States' argument, the panel observed that "ongoing conduc t may be simply described as
conduct that is currently taking place and is likely to continue in the future".2012 The panel explained
that:
[I]mplicit in the United States' argument is the view that there is a prospective element
to the alleged "ongoing cond uct" "measure" Brazil challenges which cannot be
established with any degree of certainty because it is inherently speculative. We note,
however, that although describing the "ongoing conduct" measure in US – Continued
Zeroing in terms that contemplate its prospective operation, the Appellate Body did not
require absolute certainty as to the future conduct it envisaged.
…
Thus, ongoing conduct may be simply described as conduct that is currently taking place
and is likely to continue in the future.2013
In this regard, we also note the Appellate Body's explanation that, "in addition to attribution
to a WTO Member and precise content … [a] complainant that is challenging a measure characterized
as 'ongoing conduct' would need to provide evidence of its repeated application, and of the likelihood
that such conduct will continue".2014 In both US – Continued Zeroing and US – Orange Juice (Brazil),
the measures challenged as "ongoing conduct" thus exuded a certain prospective character, but
were not of general application and were, instead, limited to certain finite or determinate number of
(connected) proceedings or instances.
In contrast to the measures challenged in these prior disputes, Korea 's description of the
measure at hand is broadly -worded and is not limited to certain finite number of proceedings or
narrow set of circumstances. Korea does not characterize the alleged unwritten measure as "ongoing
conduct" to challenge the use of "adverse facts available" by the USDOC in connected segments of
a determinate number of investigations, such as, for example, the investigations challenged in this
dispute on an "as applied" basis. Rather, the unwritten measure allegedly prevents the USDOC from
engaging in WTO -consistent conduct in general and in the future . Consistent with the "as such"

2005 Appellate Body Report, US – Continued Zeroing, para. 180. (fns omitted)
2006 Appellate Body Report, US – Continued Zeroing, para. 181.
2007 Appellate Body Report, US – Continued Zeroing, para. 181.
2008 Appellate Body Report, US – Continued Zeroing, para. 181.
2009 Appellate Body Report, US – Continued Zeroing, para. 180. (fns omitted)
2010 Panel Report, US – Orange Juice (Brazil), para. 7.163 (quoting Brazil's first written submission,
para. 48).
2011 Panel Report, US – Orange Juice (Brazil), para. 7.174 (quoting United States' first written
submission, paras. 51 and 131).
2012 Panel Report, US – Orange Juice (Brazil), para. 7.176. (emphasis original)
2013 Panel report, US – Orange Juice (Brazil), paras. 7.175-7.176. (emphasis original)
2014 Appellate Body Reports, Argentina – Import Measures, para. 5.108 (referring to Appellate Body
Report, US – Continued Zeroing, para. 191 (fns omitted)).

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nature of Korea's challenge, as well the manner in which it describes and demonstrates the precise
content of the alleged unwritten measure, we consider that the alleged unwritten measure described
by Korea is properly characterized as a "rule or a norm" and not as "ongoing conduct".2015
In any event, Korea acknowledges that the arguments and evidence for establishing the
"precise content" of the "ongoing conduct" measure are the same as those presented in the context
of the "rule or a norm".2016 We have found above that Korea has failed to establish the existence of
the "rule or a norm" with the precise content alleged by it. Therefore, Korea's attempt at establishing
the existence of the "ongoing conduct" measure also fails for the same reasons.
The panel and the Appellate Body in US – Supercalendered Paper appear to have shared an
understanding of "ongoing conduct" that is substantially closer to the notion of a "rule or norm of
general and prospective application".2017 However, as one Appellate Body Member observed in their
separate opinion on this issue, "[i]n this case, the Panel and the majority [went] beyond US –
Continued Zeroing to enhance and broaden the concept of 'ongoing conduct' into something akin to
a 'rule or norm of general and prospective application', only vaguer and less disciplined in its
requirements".2018 We agree with this observation and consider that Korea 's description and
characterization of the alleged unwritten measure in this case serves to caution against a mechanistic
and rigid application of these notions.
We note Korea's argument that, "[i]n the context of its AFA Ongoing Conduct, the USDOC
applies several specific methodologies for selecting AFA from among facts available in its
anti-dumping and countervailing duty proceedings in case a particular factual situation arises". 2019
Specifically, Korea identifies three "methodologies". First, under the "Total AFA – Highest Dumping
Margin" methodology, Korea alleges that the "USDOC has a practice of selecting, as an AFA rate,
the higher of (1) the highest dumping margin alleged in the petition, or (2 ) the highest calculated
dumping margin of any respondent in the investigation".2020 In support, Korea references six USDOC
determinations. Second, under the "Expenses AFA – Highest / Lowest Expenses" methodology, Korea
alleges that "in a situation where the allegedly missing information concerns expenses, the USDOC
maintains a specific ongoing conduct of applying an adverse inference, as it has a standard
'practice' of selecting as AFA the lowest expenses for home-market sales and the highest expenses
for export sales, so that the normal value is increased as high as possible and the export price is
reduced as low as possible" .2021 Korea refers to five investigations as reflecting this specific
"methodology". Finally, under the "Subsidy Program – Highest Rates AFA" methodology, Korea
contends that, "if the allegedly missing information requires resort to AFA for a particular subsidy
program, the USDOC has a practice of computing the AFA by using the highest calculated
program-specific rates determined for a cooperating respondent in the same investigation, or, if not
available, rates calculated in prior CVD cases involving the same c ountry".2022 Korea identifies nine
investigations as embodying this methodology.
Korea acknowledges that the three "methodologies" that it identifies "are triggered in
particular circumstances" and are "clear examples of the United States' AFA Ongoing Conduct".2023
However, the alleged unwritten measure identified by Korea is not limited to "particular
circumstances" or to a limited number of investigations. Instead, the alleged unwritten measure is
very broad in scope and exists "whenever the USD OC makes a finding non -cooperation".2024
Moreover, the alleged unwritten measure identified by Korea is not described in terms of these
specific "methodologies". In these circumstances, it is not clear to us – and, importantly, Korea does

2015 We note, in this regard, Korea's argument that the manner in which Korea's panel request identifies
the unwritten measure at issue "is also how the measure was identified in" US – Anti-Dumping Methodologies
(China). (Korea's response to Panel question No. 104, para. 129 (quoting US – Anti-Dumping Methodologies
(China), China's panel request, p. 4)). While we see some important differences between the unwritten
measures at issue in these two disputes, we nonetheless note that the Appellate Body in US – Anti-Dumping
Methodologies (China) ultimately found that the measure identified was a "rule or norm of general and
prospective application". (Appellate Body Report, US – Anti-Dumping Methodologies (China), para. 5.183).
2016 Korea's first written submission, para. 944.
2017 See, e.g. Appellate Body Report, US – Supercalendered Paper, para. 5.29.
2018 Appellate Body Report, US – Supercalendered Paper, para. 5.86.
2019 Korea's first written submission, para. 947.
2020 Korea's first written submission, para. 950.
2021 Korea's first written submission, para. 952.
2022 Korea's first written submission, para. 954.
2023 Korea's first written submission, para. 948. (emphasis added)

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not explain – how t hese "examples" of the USDOC 's conduct in "particular circumstances"
demonstrate the existence of the unwritten measure with the precise content alleged by Korea.
Given this important limitation, we do not consider it necessary to examine whether Korea has
demonstrated the existence of the three alleged "methodologies".
For the above reasons, we find that the alleged unwritten measure challenged on an "as
such" basis by Korea is properly characterized as a "rule or a norm of general and prospective
application" and not as "ongoing conduct". In any event, given that Korea's arguments and evidence
for establishing the "precise content" of the "ongoing conduct" measure are the same as those
presented in the context of the "rule or a norm", Korea 's attempt at establishing the existence of
the "ongoing conduct" measure also fails in light of our finding that Korea has failed to establish the
existence of the "rule or a norm" with the precise content alleged by it.
7.4.7 Overall conclusion
As the complainant challenging an unwritten measure on an "as such" basis, Korea bears
the burden of establishing the existence as well as the WTO -inconsistency of the measure with the
precise content alleged by it. As indicated in our preliminary ruling, the only alleged unwritten
measure that is within the Panel 's terms of reference is the one identified in Section I.C of
Korea's panel request. Korea characterizes the alleged unwritten measure as a "rule or a norm" of
general and prospective application or, in the alternative, as a form of "ongoing conduct". Mindful of
avoiding an overly rigid application of labels that do not find a basis in the treaty text, we consider
that, ultimately, the specific elements that must be substantiated with arguments and evidence in
order to prove the existence of the impugned measure are informed by how a complainant describes
and characterizes the unwritten measure alleged to exist in a given case. In the case at hand, the
measure described by Korea is of general and prospective application and is therefore more akin to
a "rule or a norm" than to a form of "ongoing conduct". In any event, we note that Korea offers the
same description and substantially similar arguments and evidence for establishing the existence of
the "ongoing conduct" measure as it does for demonstrating the existence of a "rule or a norm".
As to its precise content, Korea identifies several interlinked aspects that, working together,
constitute the alleged unwritten measure. The first aspect serves as the trigger for the
WTO-inconsistent action and consists of a finding of non -cooperation being made by the USDOC.
The subsequent aspect s concern the consequences that follow the trigger and comprise of the
USDOC adopting "adverse inferences" and selecting "adverse facts available". As to the precise
meaning of these terms, Korea explains that the USDOC adopts "adverse inferences" and selec ts
replacement facts that are "adverse" to the interests of the non -cooperating party, 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.
Korea therefore defines the precise content of the alleged unwritten measure by reference to both
what the USDOC does (a finding of non -cooperation and the adoption of "adverse inferences" and
selection of "adv erse facts available"), as well as what the USDOC does not do ( i.e., the precise
meaning that Korea ascribes to "adverse inferences" and "adverse facts available"). We consider
these positive and negative aspects of the USDOC's conduct to be an important feature of the precise
content of the alleged unwritten measure because, according to Korea, the existence of the measure
is predicated upon the "automatic" link between a finding of non -cooperation and the adoption of
"adverse inferences" and the selection of "adverse facts available".
We disagree with Korea that several prior WTO disputes confirm the existence of the alleged
unwritten measure at issue in this case because the precise content of the alleged unwritten measure
identified by Korea in these proceedings is different from that of the measures challenged in prior
WTO disputes. Moreover, the evidence that Korea adduces is also not exactly the same as what was
examined in the past disputes that Korea cites. Turning to the different kinds of evidence that
Korea presents to establish the existence of the alleged unwritten measure, we note the
various permissive aspects of the written legislation that Korea highlights (Section 776 of the
Tariff Act (19 U.S.C 1677 (e)) as modified by the 2015 TPEA Amendment) as embodying the "written
permission" for the alleged unwritten norm. However, we find nothing in the statutory text to suggest
that the provision somehow "codifies" the "existing practice" of the USDOC or shows how frequently
the discretion available thereunder to the USDOC is actually exercised in a WTO -inconsistent
manner.

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Turning to the USDOC's Anti-Dumping Manual and the US court rulings that Korea refers to,
we do not consider that the excerpts from these documents that Korea relies upon demonstrate the
precise content of the alleged unwritten measure. For example, the USDOC's Anti-Dumping Manual
is cast in permissive language and the excerpt from the US court rulings cited by Korea suggests
that the USDOC is required to select "reasonably accurate" replacements for the missing information.
As to Korea 's reliance upon the USDOC 's alleged "practice", we find that the database of
319 determinations provided by Korea is insufficient to establish the existence of the unwritten
measure with the precise content alleged by it and note that Korea does not discuss or place on the
record the full text of the 319 determinations. Given the "as such" nature of Korea 's challenge and
the general and prospective nature of the alleged unwritten norm, and in light of the limitations in
Korea's discussion of the 319 determinations that it identifies, we also remain cautious in relying
upon Korea's analysis of a limited subset of these cases. Even if we were to agree with Korea and
find that the few cases that it discus ses in greater detail reflect the precise content of the alleged
unwritten measure that is identified by Korea, it remains unclear as to how this conclusion in respect
of a limited number of determinations can be used to arrive at a similar finding for the many other
determinations wherein the USDOC used "adverse facts available" , but for which Korea provides
very limited information.
In any event, we do not consider that the USDOC 's conduct in the few cases that Korea
discusses in greater detail always re flects the precise content of the alleged unwritten measure.
Contrary to Korea's position, in many of the determinations placed on the record by the parties, the
USDOC does, in fact, engage in some analysis and reasoning for purposes of selecting the
replacement facts and, therefore, the link between a finding of non-cooperation and the adoption of
adverse inferences and the selection of "adverse facts available" is not as "automatic" as Korea
suggests. Insofar as Korea argues that the USDOC's analysis in these determinations is nonetheless
WTO-inconsistent, given our interpretation of Article 6.8 and Annex II of the Anti -Dumping
Agreement and Article 12.7 of the SCM Agreement, we consider that such a conclusion cannot be
arrived at without a case-by-case assessment of each instance of the USDOC's use of "adverse facts
available", thereby questioning the utility of Korea's "as such" challenge and the existence of a "rule
or a norm" of general and prospective application.
For these reasons, we find that Kore a has failed to establish the existence of the alleged
unwritten measure with the precise content identified by it. In these circumstances, it is not
necessary for us to examine whether the alleged unwritten measure is 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.
8 CONCLUSIONS AND RECOMMENDATION
On Korea's claims concerning the USDOC's CORE AD investigation, for the reasons contained
in this Report, the Panel concludes as follows:
a. the United States acted inconsistently with paragraph 1 of Annex II to the
Anti-Dumping Agreement because the USDOC did not "specify in detail" the information
requested and "the manner in which that information should be structure d" with respect
to Hyundai Steel's reporting of information concerning further manufactured sales. Given
that paragraph 1 of Annex II serves as a precondition for an investigating
authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the U nited States also acted inconsistently with
that provision;
b. in light of our findings of WTO-inconsistency, we do not consider it necessary to rule upon
Korea's claims under paragraphs 3, 5, and 6 of Annex II to the Anti-Dumping Agreement
in order to provide a positive solution to the dispute before us;
c. having found that the USDOC erred in resorting to facts available with respect to
Hyundai Steel's reporting of information concerning further manufactured sales, we do not
consider that making further findings on Korea's claims concerning the USDOC's selection
of the replacement facts on the basis of the record used for the USDOC's WTO-inconsistent
findings would assist in providing a positive solution to the dispute before us; and

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d. having found that the United States acted inconsistently with Article 6.8 and paragraph 1
of Annex II, we do not consider it necessary to rule upon Korea's claims under Articles 1,
9.3, and 18.1 of the Anti-Dumping Agreement in order to resolve the dispute before us.
On Korea's claims concerning the USDOC's CRS AD investigation, for the reasons contained in
this Report, the Panel concludes as follows:
a. in respect of the affiliated party transactions issue:
i. the U nited States acted inconsistently w ith the first sentence of paragraph 3 of
Annex II to the Anti -Dumping Agreement because the USDOC did not "tak e[] into
account" the information concerning affiliated party transactions that was submitted
by Hyundai Steel in accordance with that provision. Given that paragraph 3 of Annex II
serves as a precondition for an investigating authority's proper resort to facts available
under Article 6.8 of the Anti-Dumping Agreement, we find that the United States also
acted inconsistently with that provision;
ii. in light of our findings of WTO -inconsistency, we do not consider it necessary to rule
upon Korea 's claims under paragraphs 1, 5, and 6 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before
us; and
iii. having fo und that the USDOC erred in resorting to facts available with respect to
information concerning affiliated party transactions that was submitted by
Hyundai Steel, we do not consider that making further findings on Korea 's claims
concerning the USDOC's selection of the replacement facts on the basis of the record
used for the USDOC 's WTO-inconsistent findings would assist in providing a positive
solution to the dispute before us.
b. in respect of the CONNUMs issue:
i. the United States acted inconsistently with Article 6.8 of the Anti-Dumping Agreement
because the USDOC resorted to facts available in respect of the cost of manufacturing
for all the affected CONNUMs for Specs D, E, and H home market sales;
ii. in light of our findings of WT O-inconsistency with respect to Specs D, E, and H home
market sales , we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3, 5, and 6 of Annex II to the Anti-Dumping Agreement concerning these
sales in order to provide a positive solution to the dispute before us;
iii. having found that the USDOC erred in resorting to facts available with respect to
Specs D, E, and H home market sales, we do not consider that making further findings
on Korea's claims concerning the USDOC's selection of the replacement facts for these
sales on the basis of the record used for the USDOC's WTO-inconsistent findings would
assist in providing a positive solution to the dispute before us;
iv. with respect of the USDOC's resort to facts available for Spec C sales, Korea has not
established that the U nited States acted inconsistently with Article 6.8 and
paragraphs 3, 5, and 6 of Annex II of the Anti-Dumping Agreement; and
v. the United States acted inconsistently with Article 6.8 of the Anti-Dumping Agreement
because, in selecting the replacement facts for the Spec C sales at issue , the USDOC
failed to take into account all the information that was properly before it. In light of
our finding of WTO -inconsistency, we do not consider it necessary to rule upon
Korea's claim under paragraph 7 of Annex II to the Anti-Dumping Agreement in order
to provide a positive solution to the dispute before us.
c. having found that the United States acted inconsistently with Article 6.8 and paragraph 3
of Annex II, we do not consider it necessary to rule upon Korea's claims under Articles 1,
9.3, and 18.1 of the Anti-Dumping Agreement in order to resolve the dispute before us.

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On Korea's claims concerning the USDOC's HRS AD investigation, for the reasons contained in
this Report, the Panel concludes as follows:
a. the U nited States acted inconsistently with paragraph 1 of Annex II to the
Anti-Dumping Agreement because the USDOC did not "specify in detail" the information
concerning the affiliates' contracts with unaffiliated customers "[a]s soon as possible after
the initiation". Given that paragraph 1 of Annex II serves as a precondition for an
investigating authority 's proper reso rt to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the United States also acted inconsistently with
that provision;
b. in light of our findings of WTO-inconsistency, we do not consider it necessary to rule upon
Korea's claims under paragraphs 3, 5, and 6 of Annex II to the Anti-Dumping Agreement
in order to provide a positive solution to the dispute before us;
c. having found that the USDOC erred in resorting to facts available, we do not consider that
making further findings on Korea's claims concerning the USDOC 's selection of the
replacement facts on the basis of the record used for the USDOC 's WTO-inconsistent
findings would assist in providing a positive solution to the dispute before us; and
d. having found that the United States acted inconsistently with Article 6.8 and paragraph 1
of Annex II, we do not consider it necessary to rule upon Korea's claims under Articles 1,
9.3, and 18.1 of the Anti-Dumping Agreement in order to resolve the dispute before us.
On Korea's claims concerning the USDOC's CRS CVD investigation, for the reasons set forth in
this Report, the Panel concludes as follows:
a. in respect of the issue of cross-owned affiliate input suppliers:
i. Korea has not established that the United States acted inconsistently with Article 12.7
of the SCM Agreement with respect to the USDOC's resort to facts available; and
ii. the United States acted inconsistently with Article 12.7 of the SCM Agreement because
the USDOC , in selecting the replacement facts, did not take into account all the
information that was properly before it and made an assumption unsupported by
positive evidence that the inputs supplied by the cross -owned affiliates discovered at
verification were "primarily dedicated" to the production of the downstream product ,
thereby also erring in finding that the relevant subsidies received by these affiliates
were countervailable and attributable to POSCO.
b. in respect of the issue of a POSCO facility in an FEZ:
i. the United States acted inconsistently with Article 12.7 of the SCM Agreement because
the USDOC, in resorting to facts available , erroneously disregarded the
GOK's response; and
ii. having found that the USDOC erred in resorting to facts available, we do not consider
that making further findings on Korea 's claims concerning the USDOC 's selection of
the replacement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution to the
dispute before us.
c. in respect of the issue of the DWI loan data:
i. the United States acted inconsistently with Article 12.7 of the SCM Agreement because
the USDOC, in resorting to facts available, did not take into account information that
was submitted as part of POSCO's and DWI's direct responses before concluding that
DWI had failed to provide "necessary" information; and
ii. having found that the USDOC erred in resorting to facts available, we do not consider
that making further findings on Korea 's claims concerning the USDOC 's selection of

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the replacement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution to the
dispute before us.
d. having found that the United States acted inconsistently with Article 12.7 of the
SCM Agreement, we do not consider it necessary to rule upon Korea 's claims under
Articles 10, 19.4, and 32.1 of the SCM Agreement in order to res olve the dispute before
us.
On Korea's claims concerning the USDOC's HRS CVD investigation, for the reasons contained
in this Report, the Panel concludes as follows:
a. in respect of the issue of cross -owned affiliate input suppliers, the U nited States acted
inconsistently with Article 12.7 of the SCM Agreement because the USDOC rejected the
information concerning the cross-owned affiliate input suppliers solely on the basis that it
was provided after the time-limit imposed by the USDOC, without considering whether, in
light of the specific facts and circumstances, the information submitted by POSCO was
nonetheless submitted within a "reasonable period";
b. in respect of the issue of a POSCO facility in an FEZ, the United States acted inconsistently
with Article 12.7 of the SCM Agreement because the USDOC rejected the information
concerning POSCO's facility in an FEZ solely on the basis that it was provided after the
time-limit imposed by the USDOC, without considering whether, in light of the specific
facts and circumstances, the information submitted by POSCO was nonetheless submitted
within a "reasonable period";
c. in respect of the issue of the DWI loan data, the U nited States acted inconsistently with
Article 12.7 of the SCM Agreement because the USDOC rejected the information
concerning DWI loan data solely on the basis that it was provided after the time -limit
imposed by the USDOC, without considering whether, in light of the specific facts and
circumstances, the information submitted by POSCO was nonetheless submitted within a
"reasonable period";
d. having found that the USDOC erred in resorting to facts available for each of the three
issues set out above, we do not consider that making further findings concerning the
USDOC's selection of the repl acement facts on the basis of the record used for the
USDOC's WTO-inconsistent findings would assist in providing a positive solution the
dispute before us; and
e. having found that the United States acted inconsistently with Article 12.7 of the
SCM Agreement, we do not consider it necessary to rule upon Korea 's claims under
Articles 10, 19.4, and 32.1 of the SCM Agreement in order to resolve the dispute before
us.
On Korea's claims concerning the USDOC 's LPT POR2 proceedings, for the reasons contained
in this Report, the Panel concludes as follows:
a. the U nited States acted inconsistently with paragraph 6 of Annex II to the
Anti-Dumping Agreement because – having "not accepted" the information provided by
HHI – the USDOC failed to inform HHI "forthwith" of the reasons for its non -acceptance
and failed to provide an opportunity to HHI for furnishing "further explanations within a
reasonable period, due account being taken of the time limits of the investigation". Given
that paragraph 6 of Annex II serves as a precondition for an investigating
authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that t he United States also acted inconsistently with
that provision;
b. in light of our findings of WTO-inconsistency, we do not consider it necessary to rule upon
Korea's claims under paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in
order to provide a positive solution to the dispute before us; and

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c. having found that the USDOC erred in resorting to facts available with respect to
HHI's reporting of information concerning service -related revenues, we do not consider
that making further findings on Ko rea's claims concerning the USDOC 's selection of the
replacement facts on the basis of the record used for the USDOC 's WTO-inconsistent
findings would assist in providing a positive solution to the dispute before us.
On Korea's claims concerning the USDOC 's LPT POR3 proceedings, for the reasons contained
in this Report, the Panel concludes as follows:
a. in respect of the issue of service-related revenues, the United States acted inconsistently
with the first sentence of paragraph 3 of Annex II to the Anti-Dumping Agreement because
the USDOC, in resorting to facts available, did not "take[] into account" the information
concerning service-related revenues that was submitted by HHI in accordance with that
provision. Given that paragraph 3 of Annex II serves as a precondition for an investigating
authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the United States also acted inconsistently with
that provision. In light of our findings of WTO -inconsistency, we do not consider it
necessary to rule upon Korea 's claims under paragraph 5 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us;
b. in respect of the issue of understatement of home-market prices, the United States acted
inconsistently with Article 6.8 of the Anti -Dumping Agreement because the USDOC
resorted to facts available for HHI's reporting of an LPT part as non-subject merchandise.
In light of our finding of WTO -inconsistency, we do not consider it necessary to address
Korea's claims under paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in
order to provide a positive solution to the dispute before us;
c. in respect of the issue of accessories, the U nited States acted inconsistently with
paragraph 1 of Annex II to the Anti -Dumping Agreement because the USDOC , by not
providing further guidance as to the meaning of the term "accessories", failed to "specify
in detail" the information required before resorti ng to facts available . Given that
paragraph 1 of Annex II serves as a precondition for an investigating authority 's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement, we find that
the United States also acted inconsistently with that provision. In light of our findings of
WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in order to provide a
positive solution to the dispute before us;
d. in respect of the issue of certain sales documentation, the U nited States acted
inconsistently with paragraph 6 of Annex II because the USDOC – having "not accepted"
the information provided by HHI – subsequently failed to g ive an opportunity to HHI to
"provide further explanations within a reasonable period". Given that paragraph 6 of
Annex II serves as a precondition for an investigating authority 's proper resort to facts
available under Article 6.8 of the Anti-Dumping Agreement, we find that the United States
also acted inconsistently with that provision. In light of our findings of WTO-inconsistency,
we do not consider it necessary to rule upon Korea 's claims under paragraphs 3 and 5 of
Annex II to the Anti-Dumping Agreement in order to provide a positive solution to the
dispute before us; and
e. having found that the USDOC erred in resorting to facts available for each of the
four issues identified above, we do not consider that making further findings on
Korea's claims concerning the USDOC's selection of the replacement facts on the basis of
the record used for the USDOC 's WTO-inconsistent findings would assist in providing a
positive solution to the dispute before us.
On Korea's claims concerning the USDOC's LPT POR4 proceeding, for the reasons contained in
this Report, the Panel concludes as follows:
a. in respect of the issue of accessories for HHI, the U nited States acted inconsistently with
paragraph 1 of Annex II to the Anti -Dumping Agreement because the USDOC, by not
providing further guidance as to the meaning of the term "accessories", failed to "specify

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in detail" the information required before resorting to facts available . Given that
paragraph 1 of Annex II serves as a precondition for an investigating authority's proper
resort to facts available under Article 6.8 of the Anti -Dumping Agreement, we find that
the United States also acted inconsistently with that provision. In light of our findings of
WTO-inconsistency, we do not consider it necessary to rule upon Korea 's claims under
paragraphs 3 and 5 of Annex II to the Anti-Dumping Agreement in order to provide a
positive solution to the dispute before us;
b. in respect of the issue of home market gross-unit prices for HHI, the United States acted
inconsistently with paragraph 6 of Annex II to the Anti-Dumping Agreement because the
USDOC – having "not accepted" the information provided by HHI as it was "unclear" – did
not subsequently give an opportunity to HHI to provide "further explanations within a
reasonable period". Given that paragraph 6 of Annex II serves as a precondition for an
investigating authority 's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the United States also acted inconsiste ntly with
that provision. In light of our findings of WTO -inconsistency, we do not consider it
necessary to rule upon Korea 's claims under paragraphs 3 and 5 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us;
c. in respect of the issue of the US sales agent for HHI, the U nited States acted
inconsistently with paragraph 6 of Annex II to the Anti-Dumping Agreement because the
USDOC – having not accepted HHI's submission that it was not affiliated with any of its
sales agents – did not subsequently give an opportunity to HHI to provide "further
explanations within a reasonable period". Given that paragraph 6 of Annex II serves as a
precondition for an investigating authority 's proper resort to facts available under
Article 6.8 of the Anti -Dumping Agreement, we find that the U nited States also acted
inconsistently with that provision. In light of our findings of WTO-inconsistency, we do not
consider it necessary to address Korea 's claims under paragraphs 3 and 5 of Annex II to
the Anti-Dumping Agreement in order to provide a positive solution to the dispute before
us;
d. in respect of the issue of service -related revenues for Hyosung, the U nited States acted
inconsistently with paragraph 6 of Annex II to the Anti-Dumping Agreement because the
USDOC did not inform Hyosung "forthwith" of the reasons for not accepting the information
that had been submitted and did not give H yosung an opportunity to provide "further
explanations within a reasonable period". Given that paragraph 6 of Annex II serves as a
precondition for an investigating authority 's proper resort to facts available under
Article 6.8 of the Anti -Dumping Agreement, we find that the United States also acted
inconsistently with that provision. In light of our findings of WTO-inconsistency, we do not
consider it necessary to address Korea 's claims under paragraphs 3 and 5 of Annex II to
the Anti-Dumping Agreement in order to provide a positive solution to the dispute before
us;
e. in respect of the issue of the invoice covering multiple US sales for Hyosung, the
United States acted inconsistently with paragraph 6 of Annex II to the
Anti-Dumping Agreement because the USDOC did not inform Hyosung "forthwith" about
the alleged deficiency in the invoice at issue that was "not accepted" and because it did
not give Hyosung an opportunity to provide "further explanations within a reasonable
period". Given that paragraph 6 of Annex II serves as a precondition for an investigating
authority's proper resort to facts available under Article 6.8 of the
Anti-Dumping Agreement, we find that the U nited States also acted inconsistently with
that provision . In light of our fi ndings of WTO -inconsistency, we do not consider it
necessary to address Korea 's claims under paragraphs 3 and 5 of Annex II to the
Anti-Dumping Agreement in order to provide a positive solution to the dispute before us;
f. in respect of the issue of discounts and price adjustments for Hyosung, the United States
acted inconsistently with paragraph 6 of Annex II to the Anti-Dumping Agreement because
the USDOC did not inform Hyosung of any alleged deficiencies in the explanations that
were provided in Hyosung's case brief and because it did not give Hyosung an opportunity
to provide "further explanations within a reasonable period". Given that paragraph 6 of
Annex II serves as a precondition for an investigating authority 's proper resort to facts
available under Article 6.8 of the Anti-Dumping Agreement, we find that the United States

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also acted inconsistently with that provision. In light of our findings of WTO-inconsistency,
we do not consider it necessary to address Korea 's claims under paragraphs 3 and 5 of
Annex II to the Anti-Dumping Agreement in order to provide a positive solution to the
dispute before us;
g. having found that the USDOC erred in resorting to facts available with respect to both HHI
and Hyosung for all of t he issues set out above, we do not consider that making further
findings on Korea's claims concerning the USDOC's selection of the replacement facts on
the basis of the record used for the USDOC 's WTO-inconsistent findings would assist in
providing a positive solution to the dispute before us; and
h. in respect of the USDOC 's selection of an "all others" rate, the United States acted
inconsistently with Article 9.4 of the Anti -Dumping Agreement because the USDOC
determined the ceiling for the "all others" rate in respect of Iljin, Iljin Electric, and LSIS
based on "margins established under the circumstances referred to in paragraph 8 of
Article 6" of the Anti-Dumping Agreement.
On the claims under Articles 1, 9.3, and 18.1 of the Anti -Dumping Agreement concerning the
USDOC's LPT POR2, POR3, and POR4 proceedings, for the reasons contained in this Report, having
already found that the United States acted inconsistently with Article 6.8 and certain provisions of
Annex II, we do not consider it necessary to rule upon Korea's claims under Articles 1, 9.3, and 18.1
in order to resolve the dispute before us.
On Korea's "as such" claim against the alleged unwritten measure, for the reasons contained
in this Report, the Panel concludes as follows:
a. Having considered the United States' request for a preliminary ruling regarding the
Panel's terms of reference and the responses thereto, for purposes of Article 6.2 of the
DSU, the alleged unwritten measure that is the object of Korea 's "as such" challenge is
properly identified in Section I.C of its panel request; and
b. Korea has failed to establish the existence of the alleged unwritten measure with the
precise content identified by it.
Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to constitute a case of nullification
or impairment of benefits under that Agreement. Accordingly, to the extent the United States has
acted inconsistently with certain provisions of the SCM and Anti-Dumping Agreements, we conclude
that it has nullified or impaired benefits accruing to Korea under those Agreements.
Pursuant to Article 19.1 of the DSU, having found that the United States has acted
inconsistently with the Anti-Dumping and the SCM Agreements, we recommend that the
United States bring the measures at issue into conformity with these Agreements.