[Federal Register Volume 77, Number 18 (Friday, January 27, 2012)]
[Notices]
[Pages 4279-4282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1697]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-869]


Large Residential Washers From the Republic of Korea: Initiation 
of Countervailing Duty Investigation

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

DATES: Effective Date: January 27, 2012.

FOR FURTHER INFORMATION CONTACT: Justin Neuman or Dana Mermelstein, AD/
CVD Operations, Office 6, Import Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone: (202) 482-0486 or (202) 482-1391, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On December 30, 2011, the Department of Commerce (the Department) 
received a countervailing duty (CVD) petition concerning imports of 
large residential washers (washing machines) from the Republic of Korea 
(Korea) filed in proper form by Whirlpool Corporation (the petitioner), 
a domestic producer of washing machines. See ``Large Residential 
Washers from the Republic of Korea and Mexico: Antidumping and 
Countervailing Duty Petitions on Behalf of Whirlpool Corporation,'' 
dated December 30, 2011 (Korea CVD Petition). On January 5 and 6, 2012, 
the Department issued additional requests for information and 
clarification of certain areas of the Korea CVD Petition. Based on the 
Department's requests, the petitioner timely filed additional 
information pertaining to the Korea CVD Petition on January 9, 2012 
(First Supplement to the AD/CVD Petitions). The Department made an 
additional request for information on January 9, 2012, to which the 
petitioner timely filed additional information pertaining to the Korea 
CVD Petition on January 11, 2012 (Second Supplement to the AD/CVD 
Petitions).
    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended, (the Act), the petitioner alleges that producers/exporters of 
washing machines in Korea received countervailable subsidies within the 
meaning of sections 701 and 771(5) of the Act, and that imports from 
these producers/exporters materially injure, or threaten material 
injury to, an industry in the United States.
    The Department finds that the petitioner has filed this CVD 
petition on behalf of the domestic industry because it is an interested 
party as defined in section 771(9)(C) of the Act, and the petitioner 
has demonstrated sufficient industry support with respect to the CVD 
investigation that it is requesting the Department to initiate (see 
``Determination of Industry Support for the CVD Petition'' below).

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
held consultations in Washington, DC with the Government of Korea (GOK) 
with respect to the Korea CVD Petition on January 12, 2012. See 
Memorandum to The File, ``Consultations with the Government of Korea 
Regarding the Countervailing Duty Petition on Large Residential Washers 
from Korea,'' dated January 17, 2012, a public document on file in the 
Central Records Unit (CRU), Room 7046 of the main Department of 
Commerce building.

Period of Investigation

    The period of investigation (POI) is calendar year 2011, i.e., 
January 1, 2011, through December 31, 2011. See 19 CFR 351.204(b)(2).

Scope of the Investigation

    The products covered by this investigation are washing machines 
from Korea. For a full description of the scope of this investigation, 
please see the ``Scope of the Investigation'' Appendix to this notice.

Comments on Scope of the Investigation

    During our review of the Korea CVD Petition, we discussed the scope 
with the petitioner to ensure that it is an accurate reflection of the 
products for which the domestic industry is seeking relief. Moreover, 
as discussed in the preamble to the regulations (See Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997)), we are setting aside a period for interested parties to raise 
issues regarding product coverage. The Department encourages all 
interested parties to submit such comments by the close of business 
February 8, 2012, 20 calendar days from the signature date of this 
notice. All comments must be filed on the records of the simultaneously 
initiated Korea (A-580-868) and Mexico (A-201-841) antidumping duty 
investigations as well as the Korea CVD investigation. All comments and 
submissions to the Department must be filed electronically using Import 
Administration's Antidumping and Countervailing Duty Centralized 
Electronic Service System (IA ACCESS).\1\ An electronically filed 
document must be received successfully in its entirety by the 
Department's electronic records system, IA ACCESS, by the time and date 
noted above. Documents excepted from the electronic submission 
requirements must be filed manually (i.e., in paper form) with the 
Import Administration's APO/Dockets Unit, Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230, and stamped with the date and time of receipt by the deadline 
noted above.
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    \1\ See http://www.gpo.gov/fdsys/pkg/FR-2011-07-06/pdf/2011-16352.pdf for details of the Department's Electronic Filing 
Requirements, which went into effect on August 5, 2011. Information 
on help using IA ACCESS can be found at https://iaaccess.trade.gov/help.aspx and a handbook can be found at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method to poll the industry.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the

[[Page 4280]]

domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (see section 771(10) of the Act), they do so for different 
purposes and pursuant to a separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp., Ltd. v. United 
States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, the petitioner does not 
offer a definition of domestic like product distinct from the scope of 
the investigation. Based on our analysis of the information submitted 
on the record, we have determined that washing machines constitute a 
single domestic like product and we have analyzed industry support in 
terms of that domestic like product. For a discussion of the domestic 
like product analysis in this case, see Countervailing Duty 
Investigation Initiation Checklist: Large Residential Washers from the 
Republic of Korea (Korea CVD Initiation Checklist) at Attachment II, 
Analysis of Industry Support for the Petitions Covering Large 
Residential Washers from the Republic of Korea and Mexico, on file 
electronically in the CRU via IA ACCESS.
    In determining whether the petitioner has standing under section 
702(c)(4)(A) of the Act, we considered the industry support data 
contained in the petition with reference to the domestic like product 
as defined in the ``Scope of the Investigation'' section above. To 
establish industry support, the petitioner provided its shipments of 
the domestic like product in 2010, and compared its shipments to the 
estimated total shipments of the domestic like product for the entire 
domestic industry. See Volume I of the petition, at 10-14; Volume II of 
the petition, at Exhibits 2-3, 5-8, and 9; First Supplement to the AD/
CVD Petitions, at 4-8 and Exhibits A-C; and Second Supplement to the 
AD/CVD Petitions, at 4-5 and Exhibits Q-R. Because total industry 
production data for the domestic like product for 2010 is not 
reasonably available and the petitioner has established that shipments 
are a reasonable proxy for production data, we have relied upon the 
shipment data provided by the petitioner for purposes of measuring 
industry support. For further discussion, see Korea CVD Initiation 
Checklist, at Attachment II.
    Our review of the data provided in the petition, supplemental 
submissions, and other information readily available to the Department 
indicates that the petitioner has established industry support. First, 
the petition established support from domestic producers accounting for 
more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling). See 
section 702(c)(4)(D) of the Act and Korea CVD Initiation Checklist, at 
Attachment II. Second, the domestic producers have met the statutory 
criteria for industry support under section 702(c)(4)(A)(i) of the Act 
because the domestic producers (or workers) who support the petition 
account for at least 25 percent of the total production of the domestic 
like product. See Korea CVD Initiation Checklist, at Attachment II. 
Finally, the domestic producers have met the statutory criteria for 
industry support under section 702(c)(4)(A)(ii) of the Act because the 
domestic producers (or workers) who support the petition account for 
more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition. Accordingly, the Department determines 
that the petition was filed on behalf of the domestic industry within 
the meaning of section 702(b)(1) of the Act. See id.
    The Department finds that the petitioner filed the petition on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and it has demonstrated 
sufficient industry support with respect to the countervailing duty 
investigation that it is requesting the Department initiate. See id.

Injury Test

    Because Korea is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) of the Act 
applies to this investigation. Accordingly, the ITC must determine 
whether imports of the subject merchandise from Korea materially 
injure, or threaten material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that imports of the subject merchandise are 
benefitting from countervailable subsidies and that such imports are 
causing, or threaten to cause, material injury to the U.S. industry 
producing the domestic like product. In addition, the petitioner 
alleges that subject imports exceed the negligibility threshold 
provided for under section 771(24)(A) of the Act.
    The petitioner contends that the industry's injured condition is 
illustrated by reduced market share, reduced shipments, underselling 
and price depression or suppression, a decline in financial 
performance, lost sales and revenue, and an increase in the volume of 
imports and import penetration. See Volume I of the Korea CVD Petition, 
at 1-6 and 156-181; Volume II of the petitions, at Exhibits 1-4, 9, 33-
38, and 49; and First Supplement to the AD/CVD Petitions, at 8-13 and 
Exhibits C-L. We have assessed the allegations and supporting evidence 
regarding material injury, threat of material injury, and causation, 
and we have determined that these allegations are properly supported by 
information reasonable available to the petitioner and meet the 
statutory requirements for initiation. See Korea CVD Initiation 
Checklist at Attachment III, Analysis of Allegations and Evidence of 
Material Injury and Causation for the Petitions Covering Large 
Residential Washers from the Republic of Korea and Mexico.

Initiation of Countervailing Duty Investigation

    Section 702(b)(1) of the Act requires the Department to initiate a 
CVD investigation whenever an interested party files a CVD petition on 
behalf of an industry that: (1) Alleges the elements necessary for an 
imposition of a duty under section 701(a) of the Act; and (2) is 
accompanied by information reasonably available to the petitioner 
supporting the allegations.
    The Department has examined the countervailing duty petition on 
washing machines from Korea and finds that it complies with the 
requirements of

[[Page 4281]]

section 702(b)(1) of the Act. Therefore, in accordance with section 
702(b)(1) of the Act, we are initiating a CVD investigation to 
determine whether Korean producers/exporters of washing machines 
receive countervailable subsidies. For a discussion of evidence 
supporting our initiation determination, see Korea CVD Initiation 
Checklist.
    We are including in our investigation the following programs 
alleged in the Korea CVD Petition to provide countervailable subsidies 
to producers/exporters of the subject merchandise:
    1. Daewoo Electronics Corporation (Daewoo) Restructuring
    a. GOK-Directed Equity Infusions under the Daewoo Workout
    b. GOK-Directed Ongoing Preferential Lending under the Daewoo 
Workout
    2. GOK Facilities Investment Support: Article 26 of the Restriction 
of Special Taxation Act (RSTA)
    3. Tax Reduction for Research and Manpower Development: RSTA 
Article 10(1)(3)
    4. GOK Targeted Green ``Stimulus'' Subsidies
    a. Research, Supply, or Workforce Development Investment Tax 
Deductions for ``New Growth Engines'' Under RSTA Art. 10(1)(1)
    b. Research, Supply, or Workforce Development Expense Tax 
Deductions for ``Core Technologies'' Under RSTA Art. 10(1)(2)
    c. RSTA Art. 25(2) Tax Deductions for Investments in Energy 
Economizing Facilities
    d. GOK Subsidies for ``Green Technology R&D'' and its 
Commercialization
    e. Industrial Bank of Korea (IBK) Preferential Loans to Green 
Enterprises
    f. Support for SME ``Green Partnerships''
    5. Korea Trade Insurance Corporation--Short-Term Export Credit 
Insurance
    6. Korea Export-Import Bank--Export Factoring
    7. Korea Development Bank and IBK Short-Term Discounted Loans for 
Export Receivables
    8. GOK 21st Century Frontier and Other R&D Programs
    9. Gwangju Metropolitan City Production Facilities Subsidies: Tax 
Reductions/Exemptions under Article 276 of the Local Tax Act
    10. GOK Supplier Support Fund Tax Deduction
    For a description of each of these programs and a full discussion 
of the Department's decision to initiate an investigation of these 
programs, see Korea CVD Initiation Checklist.

Respondent Selection

    The petition identifies three Korean producers that export washing 
machines to the United States: Samsung Electronics Co., Ltd. (Samsung), 
LG Electronics, Inc. (LG), and Daewoo Electronics Corporation (Daewoo). 
There is no information indicating that there are other Korean 
producers/exporters of the subject merchandise. Accordingly, the 
Department is selecting Samsung, LG, and Daewoo as mandatory 
respondents in this investigation pursuant to section 777A(e)(1) of the 
Act. Interested parties may submit comments regarding respondent 
selection within five calendar days of publication of this notice. 
Comments should be filed electronically using IA ACCESS.

Distribution of Copies of the CVD Petition

    In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 
351.202(f) copies of the public versions of the Korea CVD Petition and 
amendments thereto have been provided to the GOK. To the extent 
practicable, we will attempt to provide a copy of the public version of 
the Korea CVD Petition to each exporter named in the petition, as 
provided under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which the petition was filed, whether there is a reasonable 
indication that imports of allegedly subsidized washing machines from 
Korea materially injure, or threaten material injury to, a U.S. 
industry. See section 703(a)(2) of the Act. A negative ITC 
determination will result in the investigation being terminated. See 
section 703(a)(1) of the Act. Otherwise, the investigation will proceed 
according to statutory and regulatory time limits.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
administrative protective orders in accordance with 19 CFR 351.305(b). 
On January 22, 2008, the Department published Antidumping and 
Countervailing Duty Proceedings: Documents Submission Procedures; APO 
Procedures (73 FR 3634). Parties wishing to participate in this 
investigation should ensure that they meet the requirements of these 
procedures (e.g., the filing of letters of appearance as discussed at 
19 CFR 351.103(d)). Instructions for filing such applications may be 
found on the Department's Web site at http://ia.ita.doc.gov/apo.
    Any party submitting factual information in an AD/CVD proceeding 
must certify to the accuracy and completeness of that information. See 
section 782(b) of the Act. Parties are hereby reminded that revised 
certification requirements are in effect for company/government 
officials as well as their representatives in all segments of any AD/
CVD proceedings initiated on or after March 14, 2011. See Certification 
of Factual Information to Import Administration During Antidumping and 
Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491 
(February 10, 2011) (Interim Final Rule) and Certification of Factual 
Information to Import Administration During Antidumping and 
Countervailing Duty Proceedings: Supplemental Interim Final Rule, 76 FR 
54697 (September 2, 2011) (Supplement) (amending 19 CFR 351.303(g)). 
The formats for the revised certifications are provided at the end of 
the Interim Final Rule and the Supplement. In this proceeding, the 
Department intends to reject factual submissions if the submitting 
party does not comply with the revised certification requirements.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: January 19, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix I--Scope of the Investigation

    The products covered by this investigation are all large 
residential washers and certain subassemblies thereof from Korea.
    For purposes of this investigation, the term ``large residential 
washers'' denotes all automatic clothes washing machines, regardless 
of the orientation of the rotational axis, with a cabinet width 
(measured from its widest point) of at least 24.5 inches (62.23 cm) 
and no more than 32.0 inches (81.28 cm).
    Also covered are certain subassemblies used in large residential 
washers, namely: (1) All assembled cabinets designed for use in 
large residential washers which incorporate, at a minimum: (a) At 
least three of the six cabinet surfaces; and (b) a bracket; (2) all 
assembled tubs \2\ designed for use in large residential washers 
which incorporate, at a minimum: (a) A tub; and (b) a seal; (3) all 
assembled baskets \3\ designed for use in large

[[Page 4282]]

residential washers which incorporate, at a minimum: (a) A side 
wrapper; \4\ (b) a base; and (c) a drive hub; \5\ and (4) any 
combination of the foregoing subassemblies.
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    \2\ A ``tub'' is the part of the washer designed to hold water.
    \3\ A ``basket'' (sometimes referred to as a ``drum'') is the 
part of the washer designed to hold clothing or other fabrics.
    \4\ A ``side wrapper'' is the cylindrical part of the basket 
that actually holds the clothing or other fabrics.
    \5\ A ``drive hub'' is the hub at the center of the base that 
bears the load from the motor.
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    Excluded from the scope are stacked washer-dryers and commercial 
washers. The term ``stacked washer-dryers'' denotes distinct washing 
and drying machines that are built on a unitary frame and share a 
common console that controls both the washer and the dryer. The term 
``commercial washer'' denotes an automatic clothes washing machine 
designed for the ``pay per use'' market meeting either of the 
following two definitions:
    (1) (a) It contains payment system electronics; \6\ (b) it is 
configured with an externally mounted steel frame at least six 
inches high that is designed to house a coin/token operated payment 
system (whether or not the actual coin/token operated payment system 
is installed at the time of importation); (c) it contains a push 
button user interface with a maximum of six manually selectable wash 
cycle settings, with no ability of the end user to otherwise modify 
water temperature, water level, or spin speed for a selected wash 
cycle setting; and (d) the console containing the user interface is 
made of steel and is assembled with security fasteners; \7\ or
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    \6\ ``Payment system electronics'' denotes a circuit board 
designed to receive signals from a payment acceptance device and to 
display payment amount, selected settings, and cycle status. Such 
electronics also capture cycles and payment history and provide for 
transmission to a reader.
    \7\ A ``security fastener'' is a screw with a non-standard head 
that requires a non-standard driver. Examples include those with a 
pin in the center of the head as a ``center pin reject'' feature to 
prevent standard Allen wrenches or Torx drivers from working.
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    (2) (a) It contains payment system electronics; (b) the payment 
system electronics are enabled (whether or not the payment 
acceptance device has been installed at the time of importation) 
such that, in normal operation,\8\ the unit cannot begin a wash 
cycle without first receiving a signal from a bona fide payment 
acceptance device such as an electronic credit card reader; (c) it 
contains a push button user interface with a maximum of six manually 
selectable wash cycle settings, with no ability of the end user to 
otherwise modify water temperature, water level, or spin speed for a 
selected wash cycle setting; and (d) the console containing the user 
interface is made of steel and is assembled with security fasteners.
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    \8\ ``Normal operation'' refers to the operating mode(s) 
available to end users (i.e., not a mode designed for testing or 
repair by a technician).
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    The products subject to this investigation are currently 
classifiable under subheading 8450.20.0090 of the Harmonized Tariff 
System of the United States (HTSUS). Products subject to this 
investigation may also enter under HTSUS subheadings 8450.11.0040, 
8450.11.0080, 8450.90.2000, and 8450.90.6000. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise subject to this scope is 
dispositive.

[FR Doc. 2012-1697 Filed 1-26-12; 8:45 am]
BILLING CODE 3510-DS-P