[Federal Register Volume 76, Number 212 (Wednesday, November 2, 2011)]
[Notices]
[Pages 67675-67688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28415]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-865]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value, Postponement of Final Determination, and Negative Critical 
Circumstances Determination: Bottom Mount Combination Refrigerator-
Freezers From the Republic of Korea

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

ACTION: Notice.

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SUMMARY: We preliminarily determine that bottom mount combination 
refrigerator-freezers (bottom mount refrigerators) from the Republic of 
Korea (Korea) are being sold, or are likely to be sold, in the United 
States at less than fair value (LTFV), as provided in section 733(b) of 
the Tariff Act of 1930, as amended (the Act). In addition, we 
preliminarily determine that there is no reasonable basis to believe or 
suspect that critical circumstances exist with respect to the subject 
merchandise exported from Korea.
    Interested parties are invited to comment on this preliminary 
determination. Because we are postponing the final determination, we 
will make our final determination not later than 135 days after the 
date of publication of this preliminary determination in the Federal 
Register.

FOR FURTHER INFORMATION CONTACT: Henry Almond or Elizabeth Eastwood, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230; telephone: (202) 482-0049 or (202) 482-3874, 
respectively.

Preliminary Determination

    We preliminarily determine that bottom mount refrigerators from 
Korea are being sold, or are likely to be sold, in the United States at 
LTFV, as provided in section 733(b) of the Act. The estimated margins 
of sales at LTFV are shown in the ``Suspension of Liquidation'' section 
of this notice. In addition, we preliminarily determine that there is 
no reasonable basis to believe or suspect that critical circumstances 
exist with respect to the subject merchandise exported from Korea. The 
critical circumstances analysis for the preliminary determination is 
discussed below under the section ``Critical Circumstances.''

Background

    Since the initiation of this investigation on April 19, 2011 (see 
Initiation of Antidumping Duty Investigations: Bottom Mount Combination 
Refrigerator-Freezers From the Republic of Korea and Mexico, 76 FR 
23281 (April 26, 2011) (Initiation Notice)), the following events have 
occurred.
    On May 2, 2011, Daewoo Electronics Corporation (Daewoo) identified 
itself as an exporter and producer of the subject merchandise in Korea 
and requested that it be designated as a mandatory respondent. On May 
10, 2011, we included Daewoo as a mandatory respondent in this 
investigation. See Memorandum to James Maeder, Director, Office 2, from 
David Goldberger, Senior International Trade Analyst, entitled, 
``Inclusion of Daewoo as a Mandatory Respondent,'' dated May 10, 2011.
    On May 13, 2011, the United States International Trade Commission 
(ITC) preliminarily determined that there is a reasonable indication 
that imports of bottom mount refrigerators from Mexico are materially 
injuring the United States industry. See ITC Investigation Nos. 701-TA-
477 and 731-TA-1180-1181 (Publication No. 4232).
    On May 20, 2011, we issued section A of the questionnaire (i.e., 
the section covering general information) to Daewoo, LG Electronics, 
Inc. (LG), and Samsung Electronics Co., Ltd. (Samsung). We issued 
sections B through E of the questionnaire (i.e., the sections covering 
comparison market sales, U.S. sales, cost of production (COP) 
information, and further manufacturing information, respectively) to 
these respondents on May 25, 2011.
    Also, in May 2011, various interested parties, including Whirlpool 
Corporation (hereafter, the petitioner), submitted comments on the 
scope of this and the concurrent antidumping and countervailing duty 
investigations of bottom mount refrigerators from Mexico and Korea. See 
``Scope Comments'' section of this notice.
    We received responses to section A of the questionnaire from 
Daewoo, LG, and Samsung in June 2011, and to sections B, C, and D of 
the questionnaire in July 2011. No responses to section E of the 
questionnaire were necessary.
    We issued supplemental questionnaires from July through September 
2011, and we received responses to these supplemental questionnaires 
from July through October 2011.
    On July 29, 2011, the petitioner alleged that critical 
circumstances existed with respect to bottom mount refrigerators 
produced and exported from Korea. On August 10, 2011, we requested 
monthly shipment data from the respondents for the period January 2008 
through July 2011 for purposes of this analysis.
    On August 11, 2011, the petitioner submitted allegations related to 
affiliated party transactions and the major input rule with respect to 
subject merchandise produced and exported from Korea by LG and Samsung.
    Also on August 11, 2011, the petitioner requested that the date for 
the issuance of the preliminary determination in this investigation be

[[Page 67676]]

fully extended pursuant to section 733(c)(1) of the Act and 19 CFR 
351.205(e). On August 16, 2011, pursuant to sections 733(c)(1)(A) and 
(c)(2) of the Act and 19 CFR 351.205(f), the Department postponed the 
preliminary determination until no later than October 26, 2011. See 
Bottom Mount Combination Refrigerator-Freezers From the Republic of 
Korea and Mexico: Postponement of Preliminary Determinations of 
Antidumping Duty Investigations, 76 FR 52313 (August 22, 2011).
    Also on August 16, 2011, LG objected to the Department's request 
for monthly shipment data, arguing that the petitioner's critical 
circumstances allegation did not meet the necessary statutory criteria. 
We responded to LG's objection on August 18, 2011. Daewoo, LG, and 
Samsung submitted the requisite shipment data on August 24, 2011. In 
their submissions, LG and Samsung provided comments on how the 
Department should analyze whether critical circumstances exist with 
respect to their imports of bottom mount refrigerators from Korea.
    On September 9, 2011, the petitioner alleged that targeted dumping 
was occurring with respect to bottom mount refrigerators produced and 
exported from Korea by LG and Samsung.
    On October 5, 2011, we issued an additional supplemental 
questionnaire regarding Samsung's section D response. Although the 
October 14, 2011, response to this questionnaire was timely, it was 
received too late for consideration in the preliminary determination. 
Moreover, subsequent to this date, we also received various submissions 
from interested parties to this investigation. As with Samsung's 
supplemental questionnaire response, these submissions were also 
received too late for consideration in the preliminary determination. 
We will consider each of these submissions in our final determination.
    On October 6, 2011, we requested updated shipment data from Daewoo, 
LG, and Samsung for consideration in our critical circumstances 
analysis for the final determination.
    On October 18, 19, and 21, 2011, respectively, Daewoo, Samsung, and 
LG requested a postponement of the final determination.
    Also on October 21, 2011, we received an amendment to the 
petitioner's targeted dumping allegation for LG. Because the 
petitioner's original allegation was based on data which were 
superseded by LG's supplemental response, we have accepted this 
amendment for purposes of the preliminary determination.

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    Pursuant to section 735(a)(2) of the Act, on October 18, 19, and 
21, 2011, respectively, Daewoo, Samsung, and LG requested that, in the 
event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination until 
not later than 135 days after the date of the publication of the 
preliminary determination in the Federal Register, and extend the 
provisional measures to not more than six months. In accordance with 19 
CFR 351.210(b), because (1) our preliminary determination is 
affirmative for LG and Samsung, (2) LG and Samsung account for a 
significant proportion of exports of the subject merchandise, and (3) 
no compelling reasons for denial exist, we are granting LG's and 
Samsung's requests and are postponing the final determination until no 
later than 135 days after the publication of this notice in the Federal 
Register. Suspension of liquidation will be extended accordingly.

Period of Investigation

    The period of investigation (POI) is January 1, 2010, through 
December 31, 2010. This period corresponds to the four most recent 
fiscal quarters prior to the month of the filing of the petition (i.e., 
March 2011).

Scope of Investigation

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

[[Page 67677]]

Scope Comments

    In accordance with the preamble to the Department's regulations 
(see Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 
27296, 27323 (May 19, 1997)), in our Initiation Notice we set aside a 
period of time for parties to raise issues regarding product coverage, 
and encouraged all parties to submit comments within 20 calendar days 
of publication of the Initiation Notice.
    On May 9, 2011, we received timely comments on the scope of the 
investigation from Samsung. Specifically, Samsung requested that the 
Department clarify the current description of a freezer compartment and 
exclude a certain type of refrigerator-freezer from the scope. These 
scope requests are as follows:
    1. Samsung requested that the Department use the Association of 
Home Appliance Manufacturers (AHAM) definition to revise the current 
description of a freezer compartment; and
    2. Samsung requested that the Department determine that a certain 
type of refrigerator with four compartments known as ``Quatro Cooling 
Refrigerators'' be excluded from the scope due to its upper-left non-
convertible freezer compartment.
    On May 18, 2011, Daewoo and LG submitted comments in response to 
Samsung's May 9 submission. In their comments, Daewoo and LG agreed 
with Samsung that the Department should amend the scope language to use 
the AHAM definition. Alternatively, LG requested that at a minimum the 
Department exclude from the scope any refrigerator, regardless of 
freezing capability, that is specifically designed to store kimchi.
    Also on May 18, 2011, as well as on June 30, 2011, the petitioner 
submitted comments objecting to the requests filed by Samsung and LG, 
respectively. As part of these comments, the petitioner proposed a 
modification to the scope language with respect to the positioning of 
the freezer in relation to the upper-most compartment. Samsung 
submitted rebuttal comments on July 25, 2011.
    Based on our analysis of these issues, we have preliminarily 
determined that the scope of this and the concurrent antidumping and 
countervailing duty investigations on bottom mount refrigerators from 
Mexico and Korea remains fundamentally unchanged. We have not modified 
the description of a freezer compartment in the scope of this 
investigation to be consistent with the AHAM definition, nor have we 
excluded kimchi refrigerators or Quatro Cooling Refrigerators from the 
scope of the investigation. However, as suggested by the petitioner, we 
have clarified the scope to eliminate any ambiguity with respect to the 
inclusion of Quatro Cooling Refrigerators in the scope of 
investigation.\2\ See Memorandum to Gary Taverman, Acting Deputy 
Assistant Secretary for AD/CVD Operations, from James Maeder, Director, 
Office 2, entitled, ``Scope Modification Requests,'' dated October 26, 
2011, for further discussion.
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    \2\ The scope language has been revised as follows: The two 
references to ``the upper-most interior storage compartment(s)'' 
have been replaced with ``an upper-most interior storage 
compartment;'' and the two references in the footnote to ``the 
upper-most storage compartment'' have been replaced with ``an upper-
most storage compartment.''
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Facts Available Related to Samsung's Sales of Kimchi Refrigerators

    The scope of the investigation includes all bottom mount 
refrigerators, including ``kimchi refrigerators,'' that meet the scope 
definition. As noted in the ``Scope Comments'' section of this notice, 
above, LG argued that the Department should modify the scope to exclude 
kimchi refrigerators. Therefore, in order to eliminate any confusion 
with respect to our reporting requirements, in June 2011 we clarified 
the reporting requirements of the questionnaire to include a product 
characteristic to specifically identify sales of kimchi refrigerators. 
While Daewoo and LG complied with our instructions and reported their 
home market sales of kimchi refrigerators, Samsung did not, arguing 
that its kimchi refrigerators did not fall within the scope. In July 
2011, we instructed Samsung to report its sales of kimchi refrigerators 
and, again, Samsung refused to do so, repeating its claim that they 
were out-of-scope merchandise.
    On September 1, 2011, we instructed Samsung to provide the 
technical specifications of its kimchi refrigerator models 
demonstrating that they fall outside the scope definition. At this 
time, we once again provided Samsung the alternative of reporting its 
sales of these models. In its September 29, 2011, response, Samsung 
continued to maintain that these models were not in scope. Nonetheless, 
instead of providing the technical specifications to support its claim, 
Samsung reported sales of kimchi refrigerators totaling many thousands 
of units, a figure which represents the vast majority of Samsung's home 
market sales.
    On October 5, 2011, the petitioner provided further data which it 
states demonstrate that Samsung's kimchi refrigerators are in-scope 
merchandise.
    Samsung eventually elected to report its sales of kimchi 
refrigerators, but because this new information was not received until 
the end of September, the Department did not have time to issue an 
associated supplemental questionnaire. Our initial analysis, however, 
indicates that there are serious problems with the sales data. 
Specifically, we have identified numerous areas of concern, including 
the following:
     There are significant inconsistencies in the methodology 
Samsung used to report its rebates, packing expenses, and indirect 
selling expenses between the kimchi sales databases and its other home 
market sales databases;
     Samsung reported many complicated schedules which include 
discrepancies for which Samsung has provided no explanation;
     There are inconsistencies between Samsung's narrative 
response and its reported data;
     Samsung reported kimchi refrigerator-specific rebate 
programs, and given Samsung's reporting issues with respect to its home 
market rebates (see the ``Calculation of Normal Value Based on 
Comparison Market Prices'' section, below), we cannot presume that 
these programs are not similarly deficient;
     Samsung departed from our specific instructions regarding 
the reporting of its control numbers; and
     Samsung did not separately identify packing expenses for 
its kimchi refrigerator models.

In light of these serious concerns, it became necessary to determine if 
the application of facts available was warranted.
    Section 776(a) of the Act provides that the Department will apply 
``facts otherwise available'' if necessary information is not available 
on the record or an interested party: (1) Withholds information that 
has been requested by the Department; (2) fails to provide such 
information within the deadlines established, or in the form or manner 
requested by the Department, subject to subsections (c)(1) and (e) of 
section 782 of the Act; (3) significantly impedes a proceeding; or (4) 
provides such information, but the information cannot be verified.
    Pursuant to section 776(a)(2)(B) of the Act, we find that Samsung 
failed to provide information in the form and manner requested by the 
Department and that it is appropriate to resort to facts otherwise 
available to account for the unreported information. In selecting from 
among the facts otherwise

[[Page 67678]]

available, section 776(b) of the Act authorizes the Department to use 
an adverse inference if the Department finds that an interested party 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information. The legislative history of the Act also 
provides guidance by explaining that adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See Statement 
of Administrative Action, accompanying the Uruguay Round Agreements 
Act, H.R. Doc. No. 103-465 at 870 (1995). Information used to make an 
adverse inference may include such sources as the petition, other 
information placed on the record, or determinations in a prior 
proceeding regarding the subject merchandise. Id. and 19 CFR 
351.308(c). Furthermore, ``affirmative evidence of bad faith on the 
part of a respondent is not required before the Department may make an 
adverse inference.'' See Antidumping Duties; Countervailing Duties, 62 
FR 27296, 27340 (May 19, 1997); see also Nippon Steel Corp. v. United 
States, 337 F.3d 1373, 1383 (Fed. Cir. 2003) (Nippon).
    Based on the information contained in Samsung's questionnaire 
responses, we find that Samsung's kimchi refrigerator sales data are 
not useable in their current form. Although, after numerous requests, 
this information was eventually submitted, it was received too close in 
time to the preliminary determination to permit the Department to issue 
a supplemental questionnaire to Samsung to remedy the deficiencies 
noted above. Moreover, because Samsung could have either reported the 
information at issue in the form and manner requested by the Department 
at an earlier date in response to the Department's prior questionnaires 
or provided the technical specifications to prove its claim that the 
models in question were not in-scope merchandise, and instead failed to 
do either, we find that Samsung has failed to cooperate to the best of 
its ability with our requests for information. Specifically, we find 
that an adverse inference is appropriate because Samsung: (1) Had the 
necessary information within its control and did not report this 
information; and (2) failed to put forth the maximum effort to provide 
the requested information. See, e.g., Nippon, 337 F.3d at 1883; and 
Notice of Final Determination of Sales at Less Than Fair Value: Citric 
Acid and Certain Citric Salts from Canada, 74 FR 16843, 16844-45 (April 
13, 2009). Thus, for this preliminary determination, pursuant to 
section 776(b) of the Act, we find that it is appropriate to apply 
adverse facts available (AFA) with respect to Samsung's U.S. sales 
either: (1) Which had as their closest product comparison a kimchi 
refrigerator model; or (2) for which normal value (NV) was based on 
constructed value (CV).\3\
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    \3\ We find that it is appropriate to base the margin for those 
U.S. sales for which NV is based on CV on AFA because home market 
sales of kimchi refrigerators would be used to determine CV profit 
and selling expenses.
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    As AFA for the percentage of U.S. sales meeting the above criteria, 
we have preliminarily used the highest margin calculated for any U.S. 
transaction for Samsung, in accordance with our practice. See, e.g., 
Notice of Final Determination of Sales at Less than Fair Value: Certain 
Cold-Rolled Carbon Steel Flat Products From Brazil, 67 FR 62132 
(October 3, 2002), and accompanying issues and Decision Memorandum at 
Comment 1; Static Random Access Memory Semiconductors From Taiwan; 
Final Results of Antidumping Duty New Shipper Review, 65 FR 12214 
(March 8, 2000), and accompanying Issues and Decision Memorandum at 
Comment 1; Notice of Final Determination of Sales at Less Than Fair 
Value: Static Random Access Memory Semiconductors From Taiwan, 63 FR 
8909, 8912 (February 23, 1998); Final Determination of Sales at Less 
Than Fair Value; Stainless Steel Sheet and Strip in Coils From Germany, 
64 FR 30710, 30732 (June 8, 1999); and Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
From South Africa, 62 FR 61731, 61747 (November 19, 1997). In selecting 
a facts available margin, we sought a margin that is sufficiently 
adverse so as to effectuate the statutory purposes of the AFA rule, 
which is to induce respondents to provide the Department with complete 
and accurate information in a timely manner. We also sought a margin 
that is rationally related to the transactions to which the AFA is 
being applied and indicative of Samsung's customary selling practices. 
To that end, we selected the highest margin on an individual sale in a 
commercial quantity that fell within the mainstream of Samsung's 
transactions (i.e., transactions that reflect sales of products that 
are representative of the broader range of models used to determine 
normal value).
    We intend to issue an additional supplemental questionnaire to 
Samsung to allow it to remedy the deficiencies in the sales data for 
kimchi model refrigerators noted above, and we will consider this 
information for purposes of our final determination. However, if 
Samsung fails to respond adequately to this subsequent request for 
information, for purposes of the final determination, we may consider 
whether total versus partial AFA is appropriate for Samsung given the 
high percentage of comparisons affected by these deficiencies. See the 
Memorandum to the File from Elizabeth Eastwood, Senior Analyst, 
entitled, ``Calculations Performed for Samsung Electronics Corporation 
(Samsung) for the Preliminary Determination in the Antidumping Duty 
Investigation of Bottom Mount Refrigerators from Korea'' (Samsung 
Calculation Memo), dated October 26, 2011.

Targeted Dumping Allegations

    The statute allows the Department to employ the average-to-
transaction margin-calculation methodology under the following 
circumstances: (1) There is a pattern of export prices that differ 
significantly among purchasers, regions, or periods of time; and (2) 
the Department explains why such differences cannot be taken into 
account using the average-to-average or transaction-to-transaction 
methodology. See section 777A(d)(1)(B) of the Act.
    On September 9, 2011, the petitioner submitted allegations of 
targeted dumping with respect to LG and Samsung and asserted that the 
Department should apply the average-to-transaction methodology in 
calculating the margins for these respondents. In its allegations, the 
petitioner asserted that there are patterns of U.S. sales prices for 
comparable merchandise that differ significantly among time periods. 
The petitioner relied on the Department's targeted dumping test in 
Certain Steel Nails From the United Arab Emirates: Notice of Final 
Determination of Sales at Not Less Than Fair Value, 73 FR 33985 (June 
16, 2008), and Certain Steel Nails From the People's Republic of China: 
Final Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances, 73 FR 33977 (June 
16, 2008) (collectively Nails), as applied in more recent 
investigations such as Multilayered Wood Flooring from the People's 
Republic of China: Preliminary Determination of Sales at Less Than Fair 
Value, 76 FR 30656, 30659-60 (May 26, 2011). See the Petitioner's 
Submission of Targeted Dumping Allegations dated September 9, 2011, at 
pages 8-12.
    On October 21, 2011, we received an amendment to the petitioner's 
targeted dumping allegation for LG. In this amended allegation, the 
petitioner

[[Page 67679]]

defined the time period over which targeted dumping occurred as the 
fourth calendar quarter of 2010. The petitioner's original allegation 
covered essentially the same period, but it defined the fourth quarter 
by reference to weeks. As noted above in the ``Background'' section, 
because the petitioner's original allegation was based on data which 
was superseded by LG's supplemental response, we have accepted this 
amendment for purposes of the preliminary determination.

A. Targeted Dumping Test

    We conducted time-period targeted dumping analyses for LG and 
Samsung using the methodology we adopted in Nails and most recently 
articulated in Certain Coated Paper Suitable for High-Quality Print 
Graphics Using Sheet-Fed Presses From Indonesia: Final Determination of 
Sales at Less Than Fair Value, 75 FR 59223 (September 27, 2010), and 
accompanying Issues and Decision Memorandum at Comment 1 (Coated 
Paper); and Multilayered Wood Flooring From the Peoples' Republic of 
China: Final Determination of Sales at Less Than Fair Value, 76 FR 
64318 (October 18, 2011) (Wood Flooring), and accompanying Issues and 
Decision Memorandum at Comment 4.
    The methodology we employed involves a two-stage test; the first 
stage addresses the pattern requirement and the second stage addresses 
the significant-difference requirement. See section 777A(d)(1)(B)(i) of 
the Act, Nails, Coated Paper, and Wood Flooring. In this test we made 
all price comparisons on the basis of identical merchandise (i.e., by 
control number or CONNUM). We based all of our targeted dumping 
calculations on the U.S. net price which we determined for U.S. sales 
by LG and Samsung in our standard margin calculations. For further 
discussion of the test and results, see Memorandum to the File from 
Henry Almond, Senior Analyst, entitled, ``Calculations Performed for 
LGE for the Preliminary Determination in the Antidumping Duty 
Investigation of Bottom Mount Combination Refrigerator-Freezers from 
the Republic of Korea'' (LG Calculation Memo); and the Samsung 
Calculation Memo. As a result of our analysis, we preliminarily 
determine that there is a pattern of U.S. prices for comparable 
merchandise that differs significantly among certain time periods for 
LG and Samsung in accordance with section 777A(d)(1)(B)(i) of the Act 
and our current practice as discussed in Nails, Wood Flooring, and 
Coated Paper.

B. Price Comparison Method

    Section 777A(d)(1)(B)(ii) of the Act states that the Department may 
compare the weighted average of the NV to export prices (EPs) (or 
constructed export prices (CEPs)) of individual transactions for 
comparable merchandise if the Department explains why differences in 
the patterns of EPs (or CEPs) cannot be taken into account using the 
average-to-average methodology. As described above, we preliminarily 
determine that, with respect to sales by Samsung and LG, for certain 
time periods there was a pattern of prices that differed significantly.
    For both LG and Samsung, we find that these differences cannot be 
taken into account using the average-to-average methodology because the 
average-to-average methodology conceals differences in the patterns of 
prices between the targeted and non-targeted groups by averaging low-
priced sales to the targeted group with high-priced sales to the non-
targeted group. Therefore, for the preliminary determination, we find 
that the standard average-to-average methodology does not take into 
account LG's and Samsung's price differences because the alternative 
average-to-transaction methodology yields a material difference in the 
margin. Accordingly, for this preliminary determination we applied the 
average-to-transaction methodology to all U.S. sales made by LG and 
Samsung. See the LG Calculation Memo and the Samsung Calculation Memo 
for further discussion.

Fair Value Comparisons

    To determine whether sales of bottom mount refrigerators from Korea 
to the United States were made at LTFV, we compared the EP or CEP to 
the NV, as described in the ``Export Price/Constructed Export Price'' 
and ``Normal Value'' sections of this notice, below. In accordance with 
section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average 
EPs and CEPs to weighted-average NVs for Daewoo, and in accordance with 
section 777A(d)(1)(B) of the Act, we compared transaction-specific EPs 
and CEPs to weighted-average NVs for LG and Samsung.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondents in Korea during the POI 
that fit the description in the ``Scope of Investigation'' section of 
this notice to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales made in the home market, where appropriate. Where there were 
no sales of identical merchandise in the home market made in the 
ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to sales of the most similar foreign like product made in the 
ordinary course of trade. Where there were no sales of identical or 
similar merchandise, we made product comparisons using CV.
    In making product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order of importance: Completed unit or subassembly, unit 
type, calculated volume, number of compartments, refrigerator door/
drawer configuration, other external door/drawer configurations, 
icemaker and water dispenser feature, door finish, type of compressor, 
number of evaporators, type of user interface, existence of a through-
the-door feature, existence of an interior temperature-controlled sub-
compartment, and existence of thin-wall insulation panels.

Export Price/Constructed Export Price

    For certain U.S. sales made by Daewoo, LG, and Samsung, we used the 
EP methodology, in accordance with section 772(a) of the Act, because 
the subject merchandise was sold directly to the first unaffiliated 
purchaser in the United States before the date of importation by the 
producer or exporter of the subject merchandise outside the United 
States, and the use of the CEP methodology was not otherwise warranted 
based on the facts of record.
    For the remaining U.S. sales made by Daewoo, LG, and Samsung, we 
calculated CEP in accordance with section 772(b) of the Act because the 
subject merchandise was first sold (or agreed to be sold) in the United 
States after the date of importation by or for the account of the 
producer or exporter, or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or exporter.

A. Daewoo

    With respect to EP sales, we based the starting price on the packed 
prices to unaffiliated purchasers in the United States. We increased 
the starting price by the amount of duty drawback reported by Daewoo. 
We made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these expenses included, where appropriate, 
foreign inland freight, foreign brokerage and handling, freight 
subcontractor service fees, international

[[Page 67680]]

freight, and marine insurance. Regarding foreign inland freight, Daewoo 
used an affiliated company to arrange delivery of its merchandise to 
the United States. Because Daewoo's affiliate did not provide the same 
service to unaffiliated parties, nor did Daewoo use unaffiliated 
companies to arrange its deliveries, we were unable to test the arm's-
length nature of the fees paid by Daewoo. Therefore, we based these 
expenses on the affiliate's costs. For further discussion, see the 
Memorandum to the File from David Crespo, Analyst, entitled, 
``Calculations Performed for Daewoo Electronics Corporation for the 
Preliminary Determination in the Antidumping Duty Investigation of 
Bottom Mount Combination Refrigerator-Freezers from the Republic of 
Korea'' (Daewoo Calculation Memo) dated October 26, 2011.
    We based CEP on the packed delivered prices to unaffiliated 
purchasers in the United States. We increased the starting price by the 
amount of duty drawback reported by Daewoo. We made deductions for 
movement expenses for Daewoo's CEP transactions, as well, in accordance 
with section 772(c)(2)(A) of the Act; these included, where 
appropriate, foreign inland freight, foreign brokerage and handling, 
freight subcontractor service fees (adjusted as noted above), 
international freight, marine insurance, U.S. duties, and U.S. 
brokerage and handling.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., imputed credit expenses and warranties), and indirect 
selling expenses. We recalculated Daewoo's U.S. credit expenses to base 
them on its U.S. affiliate's revised U.S. dollar borrowing rate 
obtained from page 14 of Daewoo's October 4, 2011, response. For 
further discussion, see the Daewoo Calculation Memo.
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by Daewoo on its sales of the subject merchandise 
in the United States and the profit associated with those sales.

B. LG

    LG reported certain U.S. sales of refurbished merchandise. Because 
these sales were unusual and represented an insignificant quantity of 
total U.S. sales, we disregarded them for purposes of our analysis.
    With respect to EP sales, we based the starting price on the packed 
prices to unaffiliated purchasers in the United States. We increased 
the starting price by the amount of billing adjustments and duty 
drawback reported by LG. We made deductions for discounts and rebates, 
as appropriate. We also made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these expenses 
included, where appropriate, foreign inland freight, foreign brokerage 
and handling, international freight, and marine insurance. Regarding 
foreign inland freight, LG used an affiliated company to arrange 
delivery of its merchandise to the port of exportation. Because LG's 
affiliate did not provide the same service to unaffiliated parties, nor 
did LG use unaffiliated companies for its deliveries, we were unable to 
test the arm's-length nature of the expenses paid by LG. Therefore, we 
based these expenses on the affiliate's costs. For further discussion, 
see the LG Calculation Memo dated October 26, 2011.
    We based CEP on the packed prices to unaffiliated purchasers in the 
United States. We increased the starting price by the amount of billing 
adjustments and duty drawback reported by LG. We made deductions for 
discounts and rebates, as appropriate.
    We made deductions for movement expenses for LG's CEP transactions, 
in accordance with section 772(c)(2)(A) of the Act; these included, 
where appropriate, foreign inland freight (adjusted as noted above), 
foreign brokerage and handling, international freight, marine 
insurance, U.S. brokerage and handling, U.S. warehousing, and U.S. 
inland freight expenses.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., imputed credit expenses, bank charges, advertising 
expenses, and warranty expenses), and indirect selling expenses 
(including inventory carrying costs and other indirect selling 
expenses). We recalculated LG's U.S. inventory carrying costs using the 
company's reported cost of manufacturing (COM), revised as stated 
below. For further discussion, see the ``Cost of Production Analysis'' 
section of the notice.
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by LG on its sales of the subject merchandise in 
the United States and the profit associated with those sales. See the 
LG Calculation Memo for further discussion.

D. Samsung

    In accordance with the Department's policy, Samsung reported the 
earlier of the date of invoice or shipment as its date of sale for both 
EP and CEP sales made during the POI. However, Samsung did not report 
its actual date of shipment from the factory, but rather it reported 
the bill of lading date. Samsung's methodology is not consistent with 
the Department's practice of using the date of shipment from the 
factory as the date of shipment. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Narrow Woven Ribbons 
With Woven Selvedge From Taiwan, 75 FR 41804 (July 19, 2010), and 
accompanying Issues and Decision Memorandum at Comment 5. Because 
Samsung did not provide the number of days between shipment from the 
factory and shipment from the port, we have accepted the dates reported 
as facts available for purposes of the preliminary determination, 
pursuant to section 776(A)(2)(B) of the Act. However, following the 
issuance of the preliminary results, we intend to request that Samsung 
report its shipment dates from the factory, as well as any additional 
sales of merchandise shipped from the factory during the POI but 
invoiced afterwards. Should Samsung provide the Department with that 
information in a timely fashion, we intend to use it for purposes of 
the final determination.
    In addition, Samsung reported certain U.S. sales of defective 
merchandise. Because these sales were unusual and represented an 
insignificant quantity of total U.S. sales, we disregarded them for 
purposes of our analysis.
    With respect to EP, we based the starting price on the packed 
prices to unaffiliated purchasers in the United States. We increased 
the starting price by the amount of duty drawback reported by Samsung. 
We made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, foreign 
inland freight, foreign loading expenses, and foreign brokerage and 
handling expenses. Regarding foreign inland freight and loading 
expenses, Samsung used an affiliated company to load the merchandise 
into containers and arrange its delivery to the port of

[[Page 67681]]

exportation. Because Samsung's affiliate did not provide the same 
services to unaffiliated parties, nor did Samsung use unaffiliated 
companies for these services, we were unable to test the arm's-length 
nature of the fees paid by Samsung. Therefore, we based these expenses 
on the affiliate's costs. For further discussion, see the Samsung 
Calculation Memo.
    We based CEP on the packed prices to unaffiliated purchasers in the 
United States. We increased the starting price by the amount of billing 
adjustments and duty drawback reported by Samsung. We made deductions 
for discounts and rebates, as appropriate. We reclassified certain 
early payment ``rebates'' as discounts because these amounts were 
established in accordance with Samsung's normal payment terms set forth 
on the invoice.
    Regarding Samsung's remaining rebates, in a supplemental 
questionnaire dated September 1, 2011, we instructed Samsung to report 
its rebates on as customer-specific, product-specific and time period-
specific basis as possible. However, Samsung declined to report its 
U.S. rebates as instructed. While Samsung reported its U.S. rebates on 
a customer-specific basis, based on information reported in Samsung's 
supplemental questionnaire responses, we believe that it is possible 
for Samsung to report certain rebates (i.e., REBATE3U and REBATE4U) on 
a product-specific and possibly a time period-specific basis, as 
well.\4\ Therefore, pursuant to section 776(a)(2)(B) of the Act, we 
find that Samsung failed to provide information in the form and manner 
requested by the Department and that it is appropriate to resort to 
facts otherwise available to account for the unreported information. 
Moreover, we find that, pursuant to section 776(b) of the Act, an 
adverse inference is appropriate because: (1) Samsung had the necessary 
information within its control and did not report this information; and 
(2) it failed to put forth the maximum effort to provide the requested 
information. Therefore, for this preliminary determination, pursuant to 
section 776(b) of the Act, we find that it is appropriate to apply AFA 
with respect to these rebates. Specifically, as AFA, we recalculated 
both of these rebates by assigning the highest customer-specific rebate 
percentage reported for each rebate program to all POI sales that were 
eligible for a rebate under that particular rebate program. We intend 
to request additional information concerning Samsung's rebate programs, 
as well as its rebate reporting methodologies, prior to verification 
for consideration in the final determination.
---------------------------------------------------------------------------

    \4\ See, e.g., Exhibit 12 of Samsung's September 29, 2011, 
supplemental questionnaire response.
---------------------------------------------------------------------------

    We made deductions for movement expenses for Samsung's CEP 
transactions, in accordance with section 772(c)(2)(A) of the Act; these 
included, where appropriate, foreign inland freight, foreign loading 
expenses, foreign brokerage and handling expenses, ocean freight, 
marine insurance, U.S. customs duties (including merchandise processing 
fees and customs broker fees), U.S. warehousing expenses, U.S. inland 
insurance expenses, and U.S. inland freight expenses. Regarding foreign 
inland freight, foreign loading expenses, and ocean freight, Samsung 
used the affiliated company referenced above to provide the associated 
freight services. Therefore, we adjusted the freight expenses reported 
for CEP sales in the same manner as was done for EP sales.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., imputed credit expenses, advertising expenses, bank 
charges, and warranty expenses), and indirect selling expenses 
(including inventory carrying costs and other indirect selling 
expenses). Regarding credit expenses, Samsung reported the dates that 
its customers paid for the merchandise based on the payment terms of 
each sale; however, documentation on the record shows that payment may 
occur after this date. Because Samsung did not report actual payment 
dates for its U.S. sales and its reported methodology was inaccurate 
based on record evidence, pursuant to section 776(a)(2)(B) of the Act, 
as facts available, we increased Samsung's credit period by the 
additional time between the end of the payment terms and the actual 
payment for the sale for which Samsung provided this information, and 
we recalculated credit expenses using this revised information. For 
further discussion, see the Samsung Calculation Memo.
    Regarding indirect selling expenses, we revised the calculation 
ratio for Samsung's U.S. affiliate to remove certain offsets which were 
not adequately substantiated in Samsung's response. We also 
recalculated Samsung's U.S. inventory carrying costs using the 
company's reported COM, revised as stated below. For further 
discussion, see the ``Cost of Production Analysis'' section of the 
notice and the Samsung Calculation Memo.
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by Samsung and its affiliate on their sales of 
the subject merchandise in the United States and the profit associated 
with those sales. See the Samsung Calculation Memo for further 
discussion.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared each respondent's volume of home market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with sections 773(a)(1)(A) and (B) of the 
Act.
    In this investigation, we determined that Daewoo's, LG's, and 
Samsung's aggregate volume of home market sales of the foreign like 
product was greater than five percent of the aggregate volume of U.S. 
sales of the subject merchandise. Therefore, we used home market sales 
as the basis for NV in accordance with section 773(a)(1)(B) of the Act.

B. Affiliated Party Transactions and Arm's-Length Test

    During the POI, Daewoo, LG, and Samsung sold foreign like product 
to affiliated customers. To test whether the sales made by Daewoo and 
certain sales by Samsung were made at arm's-length prices, we compared, 
on a product-specific basis, the starting prices of sales to affiliated 
and unaffiliated customers, net of all applicable billing adjustments, 
discounts and rebates, movements charges, direct selling expenses and 
packing expenses. Where the price to the affiliated party was, on 
average, within a range of 98 to 102 percent of the price of the same 
or comparable merchandise sold to unaffiliated parties, we determined 
that sales made to the affiliated party were at arm's-length. See 19 
CFR 351.403(c); see also Stainless Steel Sheet and Strip in Coils From 
Japan: Preliminary Results of Antidumping Duty Administrative Review, 
74 FR 39615 (August 7, 2009), unchanged in Stainless Steel Sheet and 
Strip in Coils From Japan: Final Results of Antidumping Duty 
Administrative Review, 75 FR 6631 (February 10, 2010).

[[Page 67682]]

Sales to affiliated customers in the home market that were not made at 
arm's-length prices were excluded from our analysis because we 
considered them to be outside the ordinary course of trade. See section 
771(15) of the Act and 19 CFR 351.102(b)(35).
    Because sales of foreign like product to certain of Samsung's 
affiliated resellers failed the arm's length test, Samsung reported its 
home market sales by these resellers. Therefore, we used Samsung's 
reported downstream home market sales data for all affiliates failing 
the arm's length test in our calculations for the preliminary 
determination. Where sales to one or more affiliates passed the arm's 
length test, we included these sales in our analysis, rather than the 
affiliate's downstream sales.
    With respect to LG, this respondent reported downstream sales by 
its affiliated reseller, rather than both sales to the affiliate and 
the affiliate's downstream sales. Therefore, we used the downstream 
sales in our analysis for purposes of the preliminary determination.

C. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (LOT) as the EP or CEP. Sales are made at different 
LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id; 
see also Certain Orange Juice From Brazil: Final Results of Antidumping 
Duty Administrative Review and Notice of Intent Not To Revoke 
Antidumping Duty Order in Part, 75 FR 50999, 51001 (August 18, 2010), 
and accompanying Issues and Decision Memorandum at Comment 7 (OJ from 
Brazil). In order to determine whether the comparison market sales were 
at different stages in the marketing process than the U.S. sales, we 
reviewed the distribution system in each market (i.e., the chain of 
distribution), including selling functions, class of customer (customer 
category), and the level of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices),\5\ we consider the starting prices 
before any adjustments. For CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act. See Micron Tech., Inc. v. 
United States, 243 F.3d 1301, 1314-16 (Fed. Cir. 2001).
---------------------------------------------------------------------------

    \5\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, general 
and administrative (G&A) expenses, and profit for CV, where 
possible.
---------------------------------------------------------------------------

    When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or CEP sales at a different LOT 
in the comparison market, where available data make it possible, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is at a more advanced stage of 
distribution than the LOT of the CEP and there is no basis for 
determining whether the difference in LOTs between NV and CEP affects 
price comparability (i.e., no LOT adjustment was possible), the 
Department shall grant a CEP offset, as provided in section 
773(a)(7)(B) of the Act. See, e.g., OJ from Brazil, 75 FR at 51001.
    In this investigation, we obtained information from Daewoo, LG, and 
Samsung regarding the marketing stages involved in making the reported 
home market and U.S. sales, including a description of the selling 
activities performed by each respondent for each channel of 
distribution. Company-specific LOT findings are summarized below.

Daewoo

    Daewoo reported that it made EP and CEP sales through a single 
channel of distribution (i.e., sales to distributors), and performed 
the following selling functions for sales to U.S. customers: Sales 
forecasting, order input/processing, freight and delivery services, 
warranty services, and packing. These selling activities can be 
generally grouped into four selling function categories for analysis: 
(1) Sales and marketing; (2) freight and delivery services; (3) 
inventory maintenance and warehousing; and (4) warranty and technical 
support. Accordingly, based on the selling function categories, we find 
that Daewoo performed sales and marketing, freight and delivery 
services, and warranty and technical support for U.S. sales. Because 
all sales in the United States are made through a single distribution 
channel (i.e., sales to distributors) and the selling activities to 
Daewoo's customers did not vary within this channel, we preliminarily 
determine that there is one LOT in the U.S. market.
    With respect to the home market, Daewoo reported that it made sales 
to retailers and end users. Daewoo reported that its home market sales 
were made through a single channel of distribution and that it 
performed the following selling functions for sales to all home market 
customers: Sales forecasting, strategic/economic planning, personnel 
training/exchange, engineering services, market research, sales 
promotion, advertising, order input/processing, technical assistance, 
direct sales personnel, sales/marketing, freight and delivery services, 
inventory maintenance, warranty services, and packing. Additionally, 
for sales to retailers, Daewoo also provided cash discounts and 
distributor/dealer training. These selling activities can be generally 
grouped into four selling function categories for analysis: (1) Sales 
and marketing; (2) freight and delivery services; (3) inventory 
maintenance and warehousing; and (4) warranty and technical support. 
Accordingly, we find that Daewoo performed sales and marketing, freight 
and delivery services, inventory maintenance and warehousing, and 
warranty and technical support at the same relative level of intensity 
for all customers in the home market. Because all sales in the home 
market sales are made through a single distribution channel and the 
selling activities to Daewoo's customers did not vary significantly 
within this channel, we preliminarily determine that there is one LOT 
in the home market for Daewoo.
    Finally, we compared the U.S. LOT to the home market LOT and found 
that the selling functions Daewoo performed for home market customers 
are more advanced than those performed for its U.S. customers. This 
difference is sufficient to determine that the U.S. LOT is different 
from the home market LOT. Therefore, based on the totality of the facts 
and circumstances, we preliminarily determine that sales to the home 
market during the POI were made at a different LOT than sales to the 
United States. Additionally, because the home market LOT is at a more 
advanced stage of distribution than Daewoo's U.S. LOT and no LOT 
adjustment is possible, a CEP offset is warranted.

LG

    LG reported that it made U.S. sales through three channels of 
distribution (i.e., direct EP sales to original equipment manufacturer 
(OEM) customers, CEP sales to OEM customers,

[[Page 67683]]

and CEP sales out of inventory of LG branded products). For all three 
channels of distribution, LG reported that it performed the following 
selling functions in Korea for sales to U.S. customers: Sales and 
marketing support, market research, advertising, order processing, 
direct sales personnel, freight and delivery services, warranty and 
after sales services, and packing. These selling activities can be 
generally grouped into four selling function categories for analysis: 
(1) Sales and marketing; (2) freight and delivery services; (3) 
inventory maintenance and warehousing; and (4) warranty and technical 
support. Accordingly, based on the selling function categories, we find 
that LG performed sales and marketing, freight and delivery services, 
and warranty and technical support for U.S. sales. Although LG reported 
sales through three different channels of distribution, because the 
selling functions performed by LG in Korea do not differ between 
channels we preliminarily determine that there is one LOT in the U.S. 
market.
    With respect to the home market, LG reported that it also made 
sales through three channels of distribution (i.e., sales to 
construction companies, sales to unaffiliated retailers, and sales to 
unaffiliated retailers for which LG was responsible for delivery and 
installation at the end user's residence). Additionally, LG reported a 
fourth channel of distribution for sales made to unaffiliated end user 
customers by its affiliated retailer, HiPlaza.
    LG reported that it performed the following selling functions for 
sales to all home market customers: Sales forecasting, product 
development/market research, advertising, sales promotion, packing, 
inventory maintenance, order input, direct sales personnel/sales 
support, warranty services, payment of commissions, and arrangement of 
freight and delivery. In addition to these activities, LG reported that 
its affiliated retailer maintained an extensive retail presence in 
Korea during the POI and performed the following additional selling 
functions for its sales: Sales forecasting, advertising, sales 
promotion, order input, direct sales personnel/sales support, and the 
payment of commissions.
    These selling activities can be generally grouped into four selling 
function categories for analysis: (1) Sales and marketing; (2) freight 
and delivery services; (3) inventory maintenance and warehousing; and 
(4) warranty and technical support. Accordingly, we find that LG 
performed sales and marketing, freight and delivery services, and 
inventory maintenance and warehousing at the same relative level of 
intensity for three of its reported sales channels in the home market. 
Regarding sales made by HiPlaza, we find that it also performed 
substantial sales and marketing activities for sales to its 
unaffiliated customers. These activities are sufficient to determine 
that the sales made by HiPlaza were at a more advanced level of trade 
than those made by LG. Accordingly, based on the totality of the facts 
and circumstances, we preliminarily determine that LG made sales at two 
levels of trade in the home market.
    Finally, we compared the U.S. LOT to the home market LOTs and found 
that the selling functions LG performed for home market customers (at 
both home market LOTs) are more advanced than those performed for its 
U.S. customers. This difference is sufficient to determine that LG's 
U.S. LOT is different from the home market LOTs. Therefore, based on 
the totality of the facts and circumstances, we preliminarily determine 
that sales to the home market during the POI were made at different 
LOTs than sales to the United States. Additionally, because the home 
market LOTs are at a more advanced stage of distribution than LG's U.S. 
LOT and no LOT adjustment is possible, a CEP offset is warranted.

Samsung

    Samsung reported that it made EP and CEP sales through two channels 
of distribution (i.e., direct sales to unaffiliated customers and CEP 
sales out of inventory). Samsung reported that it packed subject 
merchandise in Korea for sales to both its EP and CEP customers. In 
addition, Samsung reported that it performed sales/marketing support 
and market research for its CEP sales, while it performed order input/
processing for its EP sales. Moreover, Samsung sold subject merchandise 
to its U.S. affiliate during the POI (and thus it processed orders for 
CEP sales), and the sales listing shows that Samsung delivered subject 
merchandise to U.S. customers. These selling activities can be 
generally grouped into four selling function categories for analysis: 
(1) Sales and marketing; (2) freight and delivery services; (3) 
inventory maintenance and warehousing; and (4) warranty and technical 
support. Accordingly, based on the selling function categories, we find 
that Samsung performed freight and delivery and sales and marketing 
activities for U.S. sales. Further, while Samsung reported sales 
through two different channels of distribution, because the selling 
functions performed by Samsung in Korea do not differ significantly 
between channels we preliminarily determine that there is one LOT in 
the U.S. market.
    With respect to the home market, Samsung reported that it made 
sales through two channels of distribution (i.e., sales to unaffiliated 
customers and sales to affiliated resellers). Additionally, Samsung 
reported a third channel of distribution for sales made to unaffiliated 
end users by its affiliated resellers. For its sales, Samsung reported 
that it performed the following selling functions for sales to all home 
market customers: Sales forecasting, strategic/economic planning, 
personnel training/exchange, provision of engineering services, 
advertising, distributor/dealer training, packing, inventory 
maintenance, order input/processing, employment of direct sales 
personnel, sales/marketing support, market research, technical 
assistance, provision of rebates and cash discounts, payment of 
commissions, provision of warranty services, provision of guarantees, 
provision of after-sales services, and provision of freight and 
delivery services. In addition to these activities, Samsung reported 
that its affiliated resellers maintained an extensive retail presence 
in Korea during the POI and performed the following additional selling 
functions for sales to the unaffiliated end users: Sales forecasting, 
strategic/economic planning, personnel training/exchange, advertising, 
sales promotion, inventory maintenance, order input/processing, 
employment of direct sales personnel, sales/marketing support, market 
research, provision of after-sales services, and provision of freight 
and delivery services.
    These selling activities can be generally grouped into four selling 
function categories for analysis: (1) Sales and marketing; (2) freight 
and delivery services; (3) inventory maintenance and warehousing; and 
(4) warranty and technical support. Accordingly, we find that Samsung 
performed sales and marketing, freight and delivery services, inventory 
maintenance and warehousing, and warranty and technical support at the 
same relative level of intensity for both of its reported sales 
channels in the home market. Regarding sales made by Samsung's 
affiliated resellers, we find that the affiliated resellers performed 
sales and marketing, freight and delivery services, and inventory 
maintenance and warehousing for sales to its unaffiliated customers. 
The additional selling functions performed by the affiliated resellers 
are sufficient

[[Page 67684]]

to determine that the affiliated resellers' home market sales were at a 
more advanced level of trade than those home market sales made by 
Samsung. Accordingly, based on the totality of the facts and 
circumstances, we preliminarily determine that Samsung made sales at 
two LOTs in the home market.
    Finally, we compared the U.S. LOT to the home market LOTs and found 
that the selling functions Samsung performed for home market customers 
(in both home market LOTs) are more advanced than those performed for 
its U.S. customers. This difference is sufficient to determine that the 
U.S. LOT is different from either of the home market LOTs. Therefore, 
based on the totality of the facts and circumstances, we preliminarily 
determine that sales to the home market during the POI were made at 
different LOTs than sales to the United States. Additionally, because 
Samsung's home market LOTs are at a more advanced stage of distribution 
than its U.S. LOT and no LOT adjustment is possible, a CEP offset is 
warranted.

D. Cost of Production Analysis

    Based on our analysis of an allegation contained in the petition, 
we found that there were reasonable grounds to believe or suspect that 
Daewoo's, LG's, and Samsung's sales of bottom mount refrigerators in 
the home market were made at prices below their COP. Accordingly, 
pursuant to section 773(b) of the Act, we initiated a country-wide 
sales-below-cost investigation to determine whether Daewoo's, LG's, and 
Samsung's sales were made at prices below their respective COPs.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for G&A, interest expenses, and 
home market packing costs. See ``Test of Home Market Sales Prices'' 
section below for treatment of home market selling expenses. Based on 
the review of record evidence, none of the respondents appeared to 
experience significant changes in the cost of manufacturing during the 
POI. Therefore, we followed our normal methodology of calculating an 
annual weighted-average cost.
    We relied on the COP data submitted by Daewoo, LG, and Samsung. For 
LG and Samsung, we made the following adjustments to the companies' COP 
data: \6\
---------------------------------------------------------------------------

    \6\ We have preliminarily determined that a portion of LG's and 
Samsung's home appliance research and development (R&D) costs 
benefit the operations in Mexico. As a result, these respondents' 
submitted R&D costs allocated to Korea should be adjusted downward. 
The information needed to make this adjustment is not currently on 
the record; however, we intend to request the necessary information 
for consideration in the final determination.
---------------------------------------------------------------------------

A. LG

     We analyzed LG's transactions with certain affiliated 
parties in accordance with section 773(f)(2) of the Act (the 
transactions disregarded rule) to determine whether the prices paid for 
the inputs used in the production of the merchandise under 
consideration reflect arm's-length prices. Based on our analysis, we 
found that the sum of the extended weighted-average prices paid by LG 
for inputs purchased from its affiliate LG Chemical was less than the 
sum of the extended weighted-average market prices. As such, we 
increased LG's reported COM to reflect market prices for the input 
supplied by LG Chemical.
     We revised LG's reported R&D expense ratio for the home 
appliance division to exclude internal transfers from the denominator 
of the ratio.
     We also revised the denominator of LG's common R&D expense 
ratio to reflect LG's unconsolidated cost of sales (COS) rather than 
consolidated COS.
     We revised the denominator of LG's G&A expense ratio to 
exclude unconsolidated scrap offsets and packing expenses.

    See Memorandum to Neal Halper from Heidi Shriefer entitled, ``Cost 
of Production and Constructed Value Calculation Adjustments for the 
Preliminary Determination--LG Electronics Inc. and LG Electronics USA, 
Inc.,'' dated October 26, 2011.

B. Samsung

     We analyzed Samsung's transactions with certain affiliated 
parties in accordance with the transactions disregarded rule to 
determine whether the prices paid for the inputs used in the production 
of the merchandise under consideration reflect arm's-length prices. 
Based on our analysis, we found that the sum of the extended weighted-
average prices paid by Samsung Gwangju Electronics Co., Ltd. (Samsung 
Gwangju), the producer of the merchandise under consideration, for 
inputs purchased from an affiliated party was less than the sum of the 
extended weighted-average market prices. As such, we increased Samsung 
Gwangju's reported COM to reflect market prices for inputs supplied by 
these affiliated parties.
     We reclassified the offset reported for Samsung Gwangju's 
sales of scrap from Samsung Gwangju's G&A expenses to the COM. We 
recalculated Samsung's G&A expenses, originally calculated by Samsung 
based on the income statements of its Digital Appliance Division, based 
on Samsung's fiscal year 2010 audited unconsolidated financial 
statements.
     We revised the costs reported in Samsung's October 3, 
2011, COP data file to exclude packing expenses. We also revised the 
calculations of Samsung Gwangju's R&D and G&A expense ratios, used to 
calculate the per-unit expenses, to exclude packing costs from the 
denominators of those ratios. Likewise, we revised the denominators of 
Samsung's R&D and G&A expense ratios to exclude packing expenses.

See Memorandum to Neal Halper from LaVonne Clark entitled, ``Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Determination--Samsung Electronic Co., Ltd. and Samsung 
Electronics America, Inc.,'' dated October 26, 2011.
2. Test of Home Market Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
the sale prices were below the COP. The prices were exclusive of any 
applicable billing adjustments, discounts and rebates, movement 
charges, and actual direct and indirect selling expenses. In 
determining whether to disregard home market sales made at prices less 
than their COP, we examined, in accordance with sections 773(b)(1)(A) 
and (B) of the Act, whether such sales were made: (1) Within an 
extended period of time in substantial quantities, and (2) at prices 
which permitted the recovery of all costs within a reasonable period of 
time.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a given product during the POI are 
at prices less than the COP, we do not disregard any below-cost sales 
of that product, because we determine that in such instances the below-
cost sales were not made in substantial quantities. Where 20 percent or 
more of the respondent's sales of a given product during the POI are at 
prices less than the COP, we disregard those sales of that product, 
because we determine that in such instances the

[[Page 67685]]

below-cost sales represent substantial quantities within an extended 
period of time, in accordance with section 773(b)(1)(A) of the Act. In 
such cases, we also determine whether such sales were made at prices 
which would not permit recovery of all costs within a reasonable period 
of time, in accordance with section 773(b)(1)(B) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Daewoo's, LG's, and Samsung's home market sales during the POI were 
at prices less than the COP and, in addition, the below-cost sales did 
not provide for the recovery of costs within a reasonable period of 
time. We therefore excluded these sales and used the remaining sales, 
if any, as the basis for determining NV, in accordance with section 
773(b)(1) of the Act.

D. Calculation of Normal Value Based on Comparison Market Prices

LG
    We calculated NV based on delivered prices to unaffiliated 
customers. We made deductions, where appropriate, from the starting 
price for discounts and rebates. We also made deductions for movement 
expenses, including inland freight, handling, and warehousing, under 
section 773(a)(6)(B)(ii) of the Act. Regarding inland freight, 
handling, and warehousing, LG paid an affiliated company to arrange 
unaffiliated subcontractors to perform these services. Because LG's 
affiliate did not provide the same service to unaffiliated parties, nor 
did LG use unaffiliated companies for these services, we were unable to 
test the arm's-length nature of the expenses paid by LG. Therefore, we 
based these expenses on the affiliate's costs. See the LG Calculation 
Memo for further discussion.
    For comparisons to EP sales, we made adjustments under section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in 
circumstances of sale for direct selling expenses (including bank 
charges, direct advertising and promotional expenses, and warranties), 
and commissions. Regarding advertising expenses, LG characterized 
certain home market advertising expenses as being direct in nature; 
however, we have reclassified these expenses as indirect because they 
are not product-specific (i.e., they relate to a broader class of 
merchandise than is covered by this investigation). See the LG 
Calculation Memo for further discussion.
    For comparisons to CEP sales, in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410, we deducted from NV 
direct selling expenses (i.e., imputed credit expenses, bank charges, 
direct advertising and promotional expenses, and warranties).
    For all price-to-price comparisons, where commissions were granted 
in the comparison market but not in the U.S. market, we made an upward 
adjustment to NV for the lesser of: (1) The amount of commission paid 
in the comparison market; or (2) the amount of indirect selling 
expenses (including inventory carrying costs) incurred in the 
comparison market. See 19 CFR 351.410(e).
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also deducted home market packing costs and added 
U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of 
the Act.
    Finally, for comparisons to CEP sales, we made a CEP offset 
pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We 
calculated the CEP offset as the lesser of the indirect selling 
expenses on the home market sales or the indirect selling expenses 
deducted from the starting price in calculating CEP. We reclassified 
certain advertising expenses as indirect, as discussed above. We also 
reclassified certain expenses incurred by LG's affiliated retailer in 
maintaining its retail presence in the Korean market as indirect 
selling expenses because these expenses related to rent, sales staff 
salaries, and other overhead expenses and did not result from or bear a 
direct relationship to particular sales. In addition, we recalculated 
LG's home market inventory carrying costs using the company's reported 
COM, revised as stated above. See the LG Calculation Memo for further 
discussion.

Samsung

    We calculated NV based on delivered prices to unaffiliated 
customers and/or prices to affiliated customers that we determined to 
be at arm's-length. We made deductions, where appropriate, from the 
starting price for rebates and billing adjustments. We disallowed 
Samsung's reported early payment discounts because Samsung failed to 
calculate these discounts on a transaction-specific basis as instructed 
by the Department. We also disallowed certain rebates which were not 
calculated in accordance with the stated rebate program terms.
    Finally, regarding an additional rebate program, in a supplemental 
questionnaire dated September 20, 2011, we instructed Samsung to report 
this rebate on a customer-specific, model-specific, and time-period-
specific basis and it failed to do so. Based on information reported in 
Samsung's supplemental questionnaire responses, we believe that it is 
possible for Samsung to report these rebates on a customer-, model-, 
and time-period-specific basis. Therefore, as with U.S. rebates, 
pursuant to section 776(a)(2)(B) of the Act, we find that Samsung 
failed to provide information in the form and manner requested by the 
Department and that it is appropriate to resort to facts otherwise 
available to account for the unreported information. Moreover, we find 
that an adverse inference, pursuant to section 776(b) of the Act, is 
appropriate because: (1) Samsung had the necessary information within 
its control and did not report this information; and (2) it failed to 
put forth the maximum effort to provide the requested information. 
Therefore, for this preliminary determination, we are applying AFA with 
respect to these rebates. As AFA, we based the amounts of this 
additional rebate program on the lowest percentage calculated for any 
home market customer. We intend to request additional information 
concerning Samsung's rebate programs, as well as its rebate reporting 
methodologies, prior to verification for consideration in the final 
determination. See the Samsung Calculation Memo for further discussion.
    We also made deductions for movement expenses, including inland 
freight and warehousing expenses, under section 773(a)(6)(B)(ii) of the 
Act. Regarding inland freight and warehousing expenses, these expenses 
were charged by an affiliated company in the home market. Because 
Samsung's affiliate did not provide the same service to unaffiliated 
parties, nor did Samsung use unaffiliated companies for these services, 
we were unable to test the arm's-length nature of the expenses paid by 
Samsung. Therefore, we based these expenses on the affiliate's costs. 
Finally with respect to inland freight, we reclassified certain 
expenses as indirect selling expenses because they were related to 
merchandise returns. See the Samsung Calculation Memo for further 
discussion.
    For comparisons to EP sales, we made adjustments under section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in 
circumstances of sale for credit expenses, bank charges, and 
warranties. We recalculated EP credit expenses to base the credit 
period on the payment terms offered to the customer because Samsung's 
explanation of its payment date was not consistent with the payment 
terms.

[[Page 67686]]

Regarding warranties, we reclassified a portion of warranty expenses as 
indirect because they appeared to be unrelated to materials or labor 
expenses. Further, we based these expenses on the actual cost of 
Samsung's affiliated warranty provider because Samsung was unable to 
demonstrate that the expenses paid to the affiliate were at arm's 
length. For further discussion, see the Samsung Calculation Memo.
    For comparisons to CEP sales, in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410, we deducted from NV 
direct selling expenses (i.e., imputed credit expenses and warranties 
(adjusted as noted above)).
    For all price-to-price comparisons, we made adjustments for 
differences in costs attributable to differences in the physical 
characteristics of the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also deducted home 
market packing costs and added U.S. packing costs in accordance with 
section 773(a)(6)(A) and (B) of the Act. We based the packing expenses 
for downstream sales on the amounts reported for Samsung's direct home 
market sales because Samsung did not separately report these expenses 
in its downstream sales database.
    Finally, for comparisons to CEP sales, we made a CEP offset 
pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We 
calculated the CEP offset as the lesser of the indirect selling 
expenses on the home market sales or the indirect selling expenses 
deducted from the starting price in calculating CEP. We reclassified 
home market advertising expenses as indirect because they were brand-, 
but not product-, specific. We also recalculated Samsung's home market 
inventory carrying costs using the company's reported COM, revised as 
stated above. For further discussion, see the ``Cost of Production 
Analysis'' section of the notice.

E. Calculation of Normal Value Based on Constructed Value

    In accordance with section 773(a)(4) of the Act, for all of 
Daewoo's sales and for certain refrigerator models sold by LG, we based 
NV on CV because there were no sales in the home market in the ordinary 
course of trade that could be reasonably compared to those U.S. sales.
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the respondents' cost of materials and fabrication 
for the foreign like product, plus amounts for selling, general, and 
administrative expenses, profit, and U.S. packing costs. We calculated 
the cost of materials and fabrication, G&A and interest based on the 
methodology described in the ``Calculation of COP'' section of this 
notice.
    For comparisons to EP, we made a circumstance-of-sale adjustment by 
deducting home market direct selling expenses and adding U.S. direct 
selling expenses. For comparisons to CEP, we deducted from CV the 
weighted-average home market direct selling expenses. We adjusted LG's 
direct selling expenses using the same methodology noted in the 
``Calculation of Normal Value Based on Comparison Market Prices'' 
section of this notice, above. With respect to Daewoo, we adjusted the 
reported home market sales data to: (1) Reclassify certain expenses 
reported as imputed credit expenses to treat them as non-imputed direct 
selling expenses; and (2) recalculate indirect selling expenses 
incurred in Korea to include certain bad debt expenses which had been 
excluded from the calculation. See the Daewoo Calculation Memorandum 
for further information on these adjustments.
    Finally, for comparisons to CEP sales, we made a CEP offset 
pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We 
calculated the CEP offset as the lesser of the indirect selling 
expenses on the comparison market sales or the indirect selling 
expenses deducted from the starting price in calculating CEP.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Critical Circumstances

    On July 29, 2011, the petitioner filed a timely allegation, 
pursuant to section 733(e)(1) of the Act and 19 CFR 351.206, that 
critical circumstances exist with respect to imports of the merchandise 
under investigation. In accordance with 19 CFR 351.206(c)(2)(i), 
because the petitioner submitted its critical circumstances allegation 
more than 20 days before the scheduled date of the preliminary 
determination, the Department must issue a preliminary critical 
circumstances determination not later than the date of the preliminary 
determination.
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A)(i) There is a history 
of dumping and material injury by reason of dumped imports in the 
United States or elsewhere of the subject merchandise; or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period. Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise under 
investigation have been ``massive,'' the Department normally will 
examine: (i) The volume and value of the imports; (ii) seasonal trends; 
and (iii) the share of domestic consumption accounted for by the 
imports. In addition, 19 CFR 351.206(h)(2) provides that an increase in 
imports of 15 percent during the ``relatively short period'' of time 
may be considered ``massive.'' Section 351.206(i) of the Department's 
regulations defines ``relatively short period'' as normally being the 
period beginning on the date the proceeding begins (i.e., the date the 
petition is filed) and ending at least three months later. The 
regulations also provide, however, that if the Department finds that 
importers, exporters, or producers had reason to believe, at some time 
prior to the beginning of the proceeding, that a proceeding was likely, 
the Department may consider a period of not less than three months from 
that earlier time.
    In determining whether the above statutory criteria have been 
satisfied, we examined the evidence presented in the petitioner's 
submission of July 29, 2011, the ITC preliminary injury determination, 
and the respondents' shipment volume submissions.
    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i) of the Act, the Department normally considers evidence 
of an existing antidumping duty order on the subject merchandise in the 
United States or elsewhere to be sufficient. See Preliminary 
Determination of Critical Circumstances: Steel Concrete Reinforcing 
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). The 
petitioner notes that in 2001, after finding both dumping and injury, 
New Zealand imposed antidumping duties on the subject merchandise 
produced in Korea. However, this order was terminated in 2006. 
Moreover, the petitioner did not identify any additional proceedings 
with respect to Korean-origin products, nor are we

[[Page 67687]]

aware of any antidumping duty order in any country on bottom mount 
refrigerators from Korea. For this reason, the Department does not find 
a history of injurious dumping of the subject merchandise from Korea 
pursuant to section 733(e)(1)(A)(i) of the Act.
    To determine whether the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value and 
that there was likely to be material injury by reason of such sales in 
accordance with section 733(e)(1)(A)(ii) of the Act, the Department 
normally considers margins of 25 percent or more for EP sales or 15 
percent or more for CEP transactions sufficient to impute knowledge of 
dumping. See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Certain Lined Paper Products From Indonesia, 71 
FR 15162 (March 27, 2006) unchanged in Final Determination of Sales at 
Less Than Fair Value and Affirmative Final Determination of Critical 
Circumstances: Certain Lined Paper Products From Indonesia, 71 FR 47171 
(August 16, 2006).
    For Daewoo and LG, we preliminarily determine that there is not a 
sufficient basis to find that importers should have known that the 
exporter was selling the subject merchandise at less than its fair 
value and that there was likely to be material injury by reason of such 
sales pursuant to section 733(e)(1)(A)(ii) of the Act, because the 
calculated margins were not 25 percent or more for EP sales, or 15 
percent or more for CEP sales. Because the knowledge criterion has not 
been met for these respondents, we have not addressed the second 
criterion of whether or not imports were massive in the comparison 
period when compared to the base period.
    With respect to Samsung, however, we preliminarily determine that 
there is a sufficient basis to find that importers should have known 
that the exporter was selling the subject merchandise at less than its 
fair value and that there was likely to be material injury by reason of 
such sales pursuant to section 733(e)(1)(A)(ii) of the Act, because 
Samsung's calculated margin exceeded 25 percent or more for EP sales, 
or 15 percent or more for CEP sales. In addition, for the companies 
covered by the ``All Others'' rate, we calculated a preliminary margin 
of 18.15 percent, which meets the 15-percent threshold necessary to 
impute knowledge of dumping for CEP sales, which are the vast majority 
of the sales on which the calculation of the ``All Others'' rate is 
based. Therefore, because the knowledge criterion has been met for 
Samsung and the ``All Others'' rate companies, we must address the 
second criterion of whether imports were massive in the comparison 
period when compared to the base period.
    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to section 733(e)(1)(B) of the 
Act, the Department normally compares the import volumes of the subject 
merchandise for at least three months immediately preceding the filing 
of the petition (i.e., the ``base period'') to a comparable period of 
at least three months following the filing of the petition (i.e., the 
``comparison period''). Imports normally will be considered massive 
when imports during the comparison period have increased by 15 percent 
or more compared to imports during the base period.
    The Department requested and obtained from each of the respondents 
monthly shipment data from January 2008 to July 2011. To determine 
whether imports of subject merchandise have been massive over a 
relatively short period, we compared, pursuant to 19 CFR 
351.206(h)(1)(i), Samsung's export volumes for the four months before 
the filing of the petition (i.e., December 2010--March 2011) to those 
during the four months after the filing of the petition (i.e., April 
through July 2011). These periods were selected based on the 
Department's practice of using the longest period for which information 
is available from the month that the petition was filed through the 
effective date of the preliminary determination. According to the 
monthly shipment information, we found the volume of shipments of 
bottom mount refrigerators increased by more than 15 percent for 
Samsung.
    In determining whether imports for the companies subject to the 
``All Others'' rate were massive, we relied on the experience of 
Daewoo, LG, and Samsung. Because the volume of imports for Daewoo, LG, 
and Samsung increased by more than 15 percent from April to July 2011 
when compared to the import volume in the base period of December 2010 
to March 2011, we find that imports for the companies subject to the 
``All Others'' rate also increased by more than 15 percent.
    For purposes of our ``massive imports'' determination, we also 
considered the impact of seasonality on imports of bottom mount 
refrigerators. Based on our analysis of the company-specific shipment 
data reported for 2008, 2009, 2010, and January-July 2011, we find that 
there is a consistent pattern of seasonality evidenced by a significant 
increase in shipments during quarters 2 and 3, in comparison to 
quarters 1 and 4 in each year. As a result, we find that any surge in 
U.S. imports of bottom mount refrigerators during the period after the 
filing of the petition in this investigation can be explained by 
seasonal trends. Therefore, we preliminarily determine that imports of 
bottom mount refrigerators during the comparison period were not 
massive in accordance with section 733(e)(1)(B) of the Act. See the 
Memorandum to James P. Maeder, Director, Office 2, from The Team 
entitled, ``Antidumping Duty Investigation of Bottom Mount Combination 
Refrigerator-Freezers from Korea--Preliminary Determination of Critical 
Circumstances,'' (Critical Circumstances Memo) dated October 26, 2011.
    In summary, we do not find that there is a reasonable basis to 
believe or suspect importers had knowledge of dumping and the 
likelihood of material injury with respect to bottom mount 
refrigerators from Korea purchased by Daewoo or LG, while we find that 
there is a reasonable basis to believe or suspect importers had 
knowledge of dumping and the likelihood of material injury with respect 
to bottom mount refrigerators from Korea purchased from Samsung and 
companies covered by the ``All Others'' rate. However, we do not find 
that there have been massive imports of bottom mount refrigerators over 
a relatively short period from Samsung or the ``All Others'' rate 
companies due to seasonality. Given the analysis summarized above, and 
described in more detail in the Critical Circumstances Memo, we 
preliminarily determine that critical circumstances do not exist with 
respect to imports of bottom mount refrigerators produced in, and 
exported from, Korea.

Verification

    As provided in section 782(i) of the Act, we will verify 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
CBP to suspend liquidation of all imports of subject merchandise that 
are entered, or withdrawn from warehouse, for consumption on or after 
the date of publication of this notice in the Federal Register.
    Consistent with our practice, where the product under investigation 
is also subject to a concurrent countervailing duty investigation, we 
instruct CBP to require a cash deposit or posting of a bond equal to 
the amount by which the normal value exceeds the export price

[[Page 67688]]

or constructed export price, less the amount of the countervailing duty 
determined to constitute an export subsidy. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Carbazole Violet 
Pigment 23 From India, 69 FR 67306, 67307 (November 17, 2004). In this 
case, although the product under investigation is also subject to a 
concurrent countervailing duty investigation, the Department found no 
countervailing duty determined to constitute an export subsidy. See 
Bottom Mount Combination Refrigerator-Freezers From the Republic of 
Korea: Preliminary Negative Countervailing Duty Determination and 
Alignment of Final Determination With Final Antidumping Determination, 
76 FR 55044 (September 6, 2011). Therefore, we have not offset the cash 
deposit rates shown below for purposes of this preliminary 
determination.
    We will instruct CBP to require a cash deposit or the posting of a 
bond equal to the weighted-average amount by which the NV exceeds EP or 
CEP, as indicated in the chart below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                      Weighted-
                                       average       Critical circum-
       Exporter/ Manufacturer           margin            stances
                                      percentage
------------------------------------------------------------------------
Daewoo Electronics Corporation.....         0.00  No.
LG Electronics, Inc................         4.09  No.
Samsung Electronics Co., Ltd.......        32.20  No.
All Others.........................        18.15  No.
------------------------------------------------------------------------

    The ``All Others'' rate is derived exclusive of all de minimis or 
zero margins and margins based entirely on adverse facts available. 
Specifically, this rate is based on the simple average of the margins 
calculated for LG and Samsung. Because we cannot apply our normal 
methodology of calculating a weighted-average margin due to requests to 
protect business-proprietary information, we find this rate to be the 
best proxy of the actual weighted-average margin determined for these 
respondents. See, e.g., Certain Frozen Warmwater Shrimp From India: 
Final Results of Antidumping Duty Administrative Review, Partial 
Rescission, and Final No Shipment Determination, 76 FR 41203, 41205 
(July 13, 2011). For further discussion of this calculation, see the 
memorandum from Henry Almond, Senior Analyst, to the file entitled, 
``Calculation of the All Others Rate for the Preliminary Results of the 
Antidumping Duty Investigation of Bottom Mount Combination 
Refrigerator-Freezers From Korea'', dated October 26, 2011.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Disclosure

    The Department will disclose to parties the calculations performed 
in connection with this preliminary determination within five days of 
the date of publication of this notice. See 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department no later than seven days after the date of the final 
verification report issued in this proceeding. Rebuttal briefs must be 
filed five days from the deadline date for case briefs. See 19 CFR 
351.309(d). A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. Case briefs must present all arguments that 
continue to be relevant to the Department's final determination, in the 
submitter's view. See 19 CFR 351.309(c)(2). Section 774 of the Act 
provides that the Department will hold a public hearing to afford 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs, provided that such a hearing is requested by 
an interested party. See 19 CFR 351.310(c). If a request for a hearing 
is made in this investigation, the hearing will tentatively be held two 
days after the rebuttal brief deadline date at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, 
within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination no later than 135 days after 
the publication of this notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act and 19 CFR 351.205(c).

    Dated: October 26, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-28415 Filed 11-1-11; 8:45 am]
BILLING CODE 3510-DS-P