CIT Upholds Commerce's Total AFA Drop in AD Review on Korean Large Power Transformers

The Court of International Trade sustained the Commerce Department's second remand results in the fourth administrative review of the antidumping duty order on large power transformers from Korea, in a July 9 opinion. Chief Judge Mark Barnett upheld the results after Commerce dropped its adverse inference against Hyundai Heavy Industries Co. and Hyosung Corporation when calculating their antidumping duty rate. The result left both respondents in the review with a zero percent duty rate.

The decision is the third in the case after Barnett twice sent back Commerce's results. In the final results from the underlying review, the agency applied total adverse facts available to both Hyundai and Hyosung. Commerce found that Hyundai's reporting of its accessories warranted total AFA and that a certain invoice series covering multiple sales across separate review periods from Hyosung was unreliable and warranted total AFA. Barnett disagreed with both of these findings, sending them back for review.

In the subsequent remand, Commerce said that neither of these determinations warranted total AFA but that its application was still appropriate based on other factors. The agency held in its first remand results that Hyundai "understated its home market gross unit prices by failing to consistently report certain parts in home market sales as foreign like product." Hyosung was still deserving of total AFA since it didn't act to the "best of its ability" when it failed to provide complete and accurate information on its sales adjustments and U.S. sales discounts, Commerce said. Barnett once again disagreed with the reliance on total AFA.

In its second remand, Commerce conceded use of total AFA in line with Barnett's orders, instead applying partial AFA with no adverse inference, under respectful protest. Commerce said Hyundai "understated the gross unit price for a home market sale in which it treated a certain part as non-foreign like product, whereas it had treated the same part as foreign like product in another home market sale," which warranted partial AFA. Hyosung also got hit with partial AFA for the company's failure to accurately report certain price adjustments to U.S. sales. Regardless, both companies received a zero percent antidumping duty rate.

(Hyundai Heavy Industries Co., Ltd. v. United States, Slip Op. 21-84, CIT # 18-00066, dated 07/09/2021, Judge Barnett. Attorneys: David Bond of White & Case for plaintiff Hyundai Heavy Industries Co., Ltd. and Jaehong Park of Arnold & Porter for Hyosung Corporation; Kelly Krystyniak for defendant U.S. government).