CAFC Upholds Zero Rate for Hyundai in Large Power Transformers Review

Minor issues in reporting home market sales in an antidumping duty administrative review don’t rise to the level that would justify an adverse facts available margin for an exporter’s large power transformers from South Korea, nor does the exporter’s purported lack of cooperation in a previous year’s administrative review give Commerce leeway to apply AFA, the U.S. Court of Appeals for the Federal Circuit ruled Aug. 11.

Affirming a Court of International Trade ruling, the Federal Circuit said the errors in a small subset of Hyundai Electric & Energy Systems’ reported home market sales “were inadvertent and were corrected without undue difficulty,” and should not have served as the basis for the 60.81% AFA rate originally assigned by Commerce. On remand, Commerce had dropped its reliance on AFA and calculated a zero percent AD duty rate. Hitachi, petitioner in the case, had appealed.

“Substantial evidence does not support Commerce’s initial decision to disregard all of Hyundai’s price information as unreliable,” the Federal Circuit said in the nonprecedential decision. “As the Court of International Trade discussed, there were two components of the transformers that Hyundai stated were not subject merchandise, and these components affected the price of only one home market sale.”

While Hitachi argued “Commerce had the authority to penalize Hyundai in this Fourth Administrative Review for Hyundai’s lack of cooperation in the Third Administrative Review,” the Federal Circuit ruled “that the information provided for each review must be evaluated independently.”

“Hyundai denies withholding any information, and Commerce did not charge Hyundai with withholding any information at any stage of this review,” CAFC said. “Commerce’s reference to ‘an issue’ with Hyundai’s reporting in the Third Administrative Review does not suggest present misfeasance in the context of Hyundai’s responses here.”

(Hyundai Electric & Energy Systems v. U.S., Fed. Cir. # 21-2312, dated 08/11/22, Judges Pauline Newman, Kara Stoll and Leonard Stark. Attorneys: Ron Kendler of White & Case for plaintiff-appellee Hyundai Electric & Energy Systems; Robert Alan Luberda of Kelley Drye for defendant-appellant Hitachi Energy USA)