[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 75975-75978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31078]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-869]


Large Residential Washers From the Republic of Korea: Final 
Affirmative Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of large residential washers (washing machines) from the Republic of 
Korea (Korea). For information on the estimated subsidy rates, see the 
``Suspension of Liquidation'' section of this notice.

DATES: Effective December 26, 2012.

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

SUPPLEMENTARY INFORMATION:

Background

    The U.S. producer that filed the petition for this investigation is 
Whirlpool Corporation (hereafter, Whirlpool, or ``petitioner''). The 
mandatory respondents in this investigation are: (1) Samsung 
Electronics Co., Ltd., and its cross-owned affiliates Samsung 
Electronics Service and Samsung Electronics Logitech (collectively, 
Samsung); (2) LG Electronics and its cross-owned affiliate, ServeOne 
Co., Ltd. (ServeOne) (collectively, LG); and (3) Daewoo Electronics 
Corporation (Daewoo).

Period of Investigation

    The period of investigation for which we are measuring subsidies is 
January 1, 2011, through December 31, 2011.

Case History

    The following events have occurred since the Department published 
the Preliminary Determination.\1\ From May through September 2012, the 
Department issued several supplemental questionnaires to participating 
respondents. Those parties timely responded to the Department's 
supplemental questionnaires. In addition, on August 6, 2012, the 
Department published the Scope Amendment.\2\
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    \1\ See Large Residential Washers From the Republic of Korea: 
Preliminary Affirmative Countervailing Duty Determination and 
Alignment of Final Determination With Final Antidumping 
Determination, 77 FR 33181 (June 5, 2012) (Preliminary 
Determination).
    \2\ Large Residential Washers From the Republic of Korea: 
Amendment to the Scope of the Countervailing Duty Investigation, 77 
FR 46715 (August 6, 2012) (Scope Amendment).
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    On September 7, 11, and 13, the Department issued verification 
outlines to the Government of Korea (GOK), LG, and Samsung, 
respectively. The Department conducted verification from September 17, 
2012, through September 27, 2012. On October 22, 2012, the Department 
issued verification reports for the GOK, Samsung, and LG. On October 
31, 2012, the GOK filed its case brief. LG and Samsung filed case 
briefs on November 2, 2012. On November 7, 2012, the petitioner filed a 
rebuttal brief. The Department held a public hearing on November 17, 
2012, based on the timely requests of the petitioner, Samsung, and LG.

[[Page 75976]]

    As explained in the Memorandum from the Assistant Secretary for 
Import Administration, the Department has exercised its discretion to 
toll deadlines for the duration of the closure of the Federal 
Government from October 29, through October 30, 2012. Thus, all 
deadlines in this segment of the proceeding have been extended by two 
days. The revised deadline for this final countervailing duty (CVD) 
determination is December 18, 2012.\3\
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    \3\ See Memorandum to the Record from Paul Piquado, Assistant 
Secretary for Import Administration, regarding ``Tolling of 
Administrative Deadlines As a Result of the Government Closure 
During Hurricane Sandy''' (October 31, 2012).
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Scope Comments

    In the Preliminary Determination, the Department stated that it was 
evaluating comments filed by the parties regarding the scope in the 
companion antidumping duty investigation. That analysis was placed on 
the record of this investigation in the Scope Amendment, in which we 
modified the description of the scope of the investigations in the 
manner requested by the petitioner to exclude top-load washing machines 
with a vertical rotational axis and a rated capacity of less than 3.70 
cubic feet. On July 25, 2012, LG requested a modification to the scope. 
The petitioner filed its opposition to LG's request on August 27, 2012. 
We did not modify the scope as requested by LG for purposes of this 
final determination.\4\ In the briefs filed by parties, LG and the 
petitioner commented on the Scope Amendment and LG's request to alter 
the scope of the investigation.
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    \4\ See accompanying Memorandum to Paul Piquado, Assistant 
Secretary for Import Administration, Issues and Decision Memorandum 
for the Final Determination in the Countervailing Duty Investigation 
of Large Residential Washers from the Republic of Korea (Decision 
Memorandum) at Comment 2.
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Scope of the Investigation

    The products covered by this investigation are all large 
residential washers and certain subassemblies thereof.
    For purposes of this investigation, the term ``large residential 
washers'' denotes all automatic clothes washing machines, regardless of 
the orientation of the rotational axis, except as noted below, 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\5\ designed for use in large residential washers which 
incorporate, at a minimum: (a) a tub; and (b) a seal; (3) all assembled 
baskets \6\ designed for use in large residential washers which 
incorporate, at a minimum: (a) a side wrapper;\7\ (b) a base; and (c) a 
drive hub; \8\ and (4) any combination of the foregoing subassemblies.
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    \5\ A ``tub'' is the part of the washer designed to hold water.
    \6\ A ``basket'' (sometimes referred to as a ``drum'') is the 
part of the washer designed to hold clothing or other fabrics.
    \7\ A ``side wrapper'' is the cylindrical part of the basket 
that actually holds the clothing or other fabrics.
    \8\ 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; \9\ (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; \10\ or
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    \9\ ``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.
    \10\ 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,\11\ 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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    \11\ ``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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    Also excluded from the scope are automatic clothes washing machines 
with a vertical rotational axis and a rated capacity of less than 3.70 
cubic feet, as certified to the U.S. Department of Energy pursuant to 
10 CFR Sec.  429.12 and 10 CFR Sec.  429.20, and in accordance with the 
test procedures established in 10 CFR Part 430.
    The products subject to this investigation are currently 
classifiable under subheading 450.20.0090 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.

Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in the Decision Memorandum, which is hereby adopted by this 
notice. A list of the subsidy programs and the issues that parties 
raised and to which we responded in the Decision Memorandum is attached 
to this notice as an Appendix. The Decision Memorandum is a public 
document and is on file electronically via Import Administration's 
Antidumping and Countervailing Duty Centralized Electronic Service 
System (IA ACCESS). IA ACCESS is available to registered users at 
http://iaaccess.trade.gov and in the Central Records Unit, room 7046 of 
the main Department of Commerce building. In addition, a complete 
version of the Decision Memorandum is also accessible on the Web at 
http://www.trade.gov/ia/. The signed Decision Memorandum and the 
electronic versions of the Decision Memorandum are identical in 
content.

[[Page 75977]]

Use of Facts Otherwise Available, Including Adverse Inferences

    For purposes of this final determination, we have continued to rely 
on facts available and have continued to apply adverse inferences in 
accordance with sections 776(a) and (b) of the Tariff Act of 1930, as 
amended (Act), to determine the countervailable subsidy rate for one 
respondent, Daewoo. A full discussion of our decision to apply adverse 
facts available (AFA) is presented in the Decision Memorandum in the 
section ``Application of Facts Available, Including the Application of 
Adverse Inferences.''

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated an individual countervailable subsidy rate for each 
respondent. Section 705(c)(5)(A)(i) of the Act states that for 
companies not individually investigated, we will determine an all-
others rate equal to the weighted average of the countervailable 
subsidy rates established for exporters and producers individually 
investigated, excluding any zero and de minimis countervailable subsidy 
rates, and any rates based entirely on AFA under section 776 of the 
Act.
    In this investigation, the only non-de minimis rate not based 
entirely on AFA is the rate calculated for Samsung. Consequently, the 
rate calculated for Samsung is also assigned as the ``all-others'' 
rate. For Daewoo, which did not participate in this investigation, we 
have determined the subsidy rate based solely on AFA, in accordance 
with sections 776(a) and (b) of the Act.\12\ Therefore, we determine 
the total estimated net countervailable subsidy rates to be:
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    \12\ See the ``Application of Facts Available, Including the 
Application of Adverse Inferences'' section of the Decision 
Memorandum.

 
------------------------------------------------------------------------
                                                          Ad valorem net
                         Company                           subsidy rate
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Daewoo Electronics Corporation..........................   72.30 percent
LG Electronics Inc......................................    0.01 percent
Samsung Electronics Co., Ltd............................    1.85 percent
All-Others..............................................    1.85 percent
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    As a result of our Preliminary Determination and pursuant to 
section 703(d) of the Act, we instructed U.S. Customs and Border 
Protection (CBP) to suspend liquidation of all entries of subject 
merchandise from Korea, other than those produced/exported by LG, which 
received a de minimis countervailable subsidy rate in the Preliminary 
Determination, entered or withdrawn from warehouse, for consumption on 
or after June 5, 2012, the date of the publication of the Preliminary 
Determination in the Federal Register. In accordance with section 
703(d) of the Act, we subsequently issued instructions to CBP to 
discontinue the suspension of liquidation for CVD purposes for subject 
merchandise entered, or withdrawn from warehouse, on or after October 
3, 2012, but to continue the suspension of liquidation of all entries 
from June 5, 2012, through October 2, 2012.
    If the ITC issues a final affirmative injury determination, we will 
issue a CVD order and reinstate the suspension of liquidation, and we 
will require a cash deposit for such entries of merchandise in the 
amounts indicated above. If the ITC determines that material injury, or 
threat of material injury, does not exist, this proceeding will be 
terminated and all estimated duties deposited or securities posted as a 
result of the suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

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

    Dated: December 18, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix

Subsidy Valuation Information

 Cross-Ownership and Attribution of Subsidies
 Allocation Period
 Interest Rate Benchmarks For Loans

Application of Facts Available, Including the Application of Adverse 
Inferences

Analysis of Programs

 Programs Determined To Be Countervailable
    o KDB and IBK Short-Term Discounted Loans for Export Receivables
    o Income Tax Programs
    [squf] Research, Supply, or Workforce Development Investment Tax 
Deductions for ``New Growth Engines'' under RSTA Article 10(1)(1)
    [squf] Research, Supply, or Workforce Development Expense Tax 
Deductions for ``Core Technologies'' under RSTA Article 10(1)(2)
    [squf] Tax Reduction for Research and Manpower Development: RSTA 
10(1)(3)
    [squf] RSTA Article 25(2) Tax Deductions for Investments in 
Energy Economizing Facilities
    [squf] RSTA Article 26 Tax Deduction for Facilities Investment
    o Gwangju Metropolitan City Production Facilities Subsidies: Tax 
Reductions/Exemptions under Article 276 of the Local Tax Act
    o Grant Programs
    [squf] GOK Subsidies for ``Green Technology R&D'' and its 
Commercialization
    [squf] GOK 21st Century Frontier R&D Program/Information Display 
R&D Center Program
    [squf] Support for SME ``Green Partnerships''
    [squf] Grants Discovered at Verification
 Program Determined To Be Not Countervailable
    o K-SURE--Short-term Export Credit Insurance
 Programs Determined To Be Not Used''o Daewoo Restructuring
    [squf] GOK-Directed Equity Infusions under the Daewoo Workout
    [squf] GOK-Directed Ongoing Preferential Lending under the 
Daewoo Workout
    o IBK Preferential Loans to Green Enterprises
    o KEXIM Export Factoring
    o GOK Supplier Support Fund Tax Deduction

Analysis of Comments

Comment 1: Scope Exclusion of Smaller Top-Load Washers
Comment 2: Request To Exclude Larger-Width Washers From the Scope
Comment 3: Whether Samsung's Export Receivables That Were Negotiated 
With KDB and IBK Are Loans

[[Page 75978]]

Comment 4: Whether the Department Erred in Selecting a Benchmark 
Interest Rate To Measure the Benefit to Samsung Under the KDB/IBK 
Loan Program
Comment 5: Whether Premiums Charged by K-SURE Are Adequate to Cover 
the Long-Term Operating Costs and Losses of the Program
Comment 6: Whether RSTA Article 10(1)(3) Is de Facto Specific
Comment 7: Whether Income Tax Credits Should Be Attributed to Non-
Subject Merchandise
Comment 8: Whether RSTA Article 25(2) Is de Facto Specific
Comment 9: Whether RSTA Article 26 is Regionally Specific
Comment 10: Whether the Department Should Offset Exempted 
Acquisition or Registration Taxes by the Amount of Special Rural 
Development Tax Paid
Comment 11: Whether the Green Technology R&D Program Is 
Countervailable
Comment 12: Whether Grants Received by Samsung under the ``21st 
Century Frontier and Other R&D Programs'' Program Are 
Countervailable
Comment 13: Whether the Department Should Adjust Samsung's Total 
Sales Denominator to Exclude Sales of Services or Goods Manufactured 
Outside of Korea
Comment 14: Whether the Department Erred in Its Calculation of the 
Subsidy Rate for LG's Use of the ``Green Technology R&D'' Program
Comment 15: Whether the Department Erred in Finding That the ``SME 
Green Partnerships'' Program Provides a Benefit to LG
Comment 16: Whether the Department Erred in Attributing Subsidies 
Received by ServeOne to LG
Comment 17: Whether the Department Should Continue To Find Other 
Programs To Be Not Countervailable
Comment 18: Whether the Department Should Countervail Other Grants 
Received by Samsung That Were Identified at Verification

[FR Doc. 2012-31078 Filed 12-21-12; 4:15 pm]
BILLING CODE 3510-DS-P