Commerce Finds Adverse Facts Still Warranted in Remand Results on Korean Power Transformers

Adverse facts available applied to Hyundai's reporting of parts in an antidumping duty administrative review on Korean power transformers are still warranted despite a previous court remand, the Commerce Department said in the results of a remand published Aug. 15 (Hyundai Electric & Energy Systems Co. v. United States, CIT #20-00108). Commerce said that although facts available are not justifiable with respect to Hyundai’s reporting of parts and components, it will still apply total adverse facts available to Hyundai.

The case concerns the final results in the 2017-2018 administrative review of the antidumping duty order on large power transformers from Korea. Commerce initially assigned Hyundai Electric & Energy Systems Co. Ltd. a final dumping margin of 60.81% based on total AFA.

During the case, CIT granted Hyundai’s motion to “supplement the record with two documents that Hyundai presented at verification. At Commerce’s request, the Court remanded the final results of the review for Hyundai to allow Commerce to consider the two documents. Commerce filed its first remand results in 2021.

CIT again remanded, this time based on Commerce's use of AFA related to the reporting of certain unnamed parts as being not in scope (see 2205180064). In response to Commerce's draft redetermination, circulated in July, Hyundai filed comments arguing that its failure to report service-related revenues “and its completeness test failure at verification are not such 'pervasive and persistent deficiencies' that justify the use of total AFA.”

In its final remand results, Commerce said that it reconsidered its application of facts available with respect to Hyundai’s reporting and did not have a sufficient basis to determine that Hyundai misclassified the parts in question. Therefore, Commerce said, it did not find that Hyundai’s reporting warrants the application of facts available with respect to this issue. "However, based on other failures by Hyundai to provide complete information ...," Commerce said, it "continues to find that ... the application of total AFA is warranted." Specifically, Commerce pointed to "Hyundai’s reporting of service-related revenue and Hyundai’s failure of the completeness test at verification" as reasons for continued applications of AFA.

Commerce said that because of Hyundai's failure to report information, it was unable to account for the value of service-related revenue, in that the value was not provided by Hyundai, and then to ensure that that revenue was properly treated in calculating the U.S. price -- because Hyundai offered no explanation as to whether the unreported service-related revenue was included or excluded from the U.S. price. Commerce’s overall ability to calculate an accurate dumping margin was thus also impeded by lack of reported information. "Thus, contrary to Hyundai’s argument, the failure was not discrete; rather, it was pervasive."

Commerce found that "the combination of the failure to report service-related revenues, and the failure to report one U.S. sale, is a reasonable basis for the application of total AFA."