82 FR 57210 - Large Power Transformers From the Republic of Korea: Initiation of Antidumping Duty Changed Circumstances Review

DEPARTMENT OF COMMERCE
International Trade Administration

Federal Register Volume 82, Issue 231 (December 4, 2017)

The Department of Commerce (the Department) obtained information, with respect to certain entities, sufficient to warrant the self-initiation of a changed circumstances review of the antidumping duty order on large power transformers (LPTs) from the Republic of Korea (Korea). Interested parties are invited to submit comments, as indicated below.

[Federal Register Volume 82, Number 231 (Monday, December 4, 2017)]
[Notices]
[Pages 57210-57212]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26071]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-867]


Large Power Transformers From the Republic of Korea: Initiation 
of Antidumping Duty Changed Circumstances Review

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the Department) obtained 
information, with respect to certain entities, sufficient to warrant 
the self-initiation of a changed circumstances review of the 
antidumping duty order on large power transformers (LPTs) from the 
Republic of Korea (Korea). Interested parties are invited to submit 
comments, as indicated below.

DATES: Applicable December 4, 2017.

FOR FURTHER INFORMATION CONTACT: Moses Song, AD/CVD Operations, Office 
VI, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, 
DC 20230; telephone: (202) 482-5041.

SUPPLEMENTARY INFORMATION:

Background

    On August 31, 2012, the Department published in the Federal 
Register an antidumping duty order on LPTs from Korea.\1\ Hyundai Heavy 
Industries Co., Ltd. (HHI) is one of the producers/exporters reviewed 
in the less-than fair-value investigation and has been reviewed in each 
subsequent administrative review of the Order. During the 2014/2015 
administrative review, which is also the most recently completed 
administrative review, the Department assigned HHI an antidumping duty 
rate of 60.81 percent.\2\ To address concerns that certain merchandise 
may not be entering the United States at the appropriate cash deposit 
rate, the

[[Page 57211]]

Department is self-initiating a changed circumstances review.
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    \1\ See Large Power Transformers from the Republic of Korea: 
Antidumping Duty Order, 77 FR 53177 (August 31, 2012) (the Order).
    \2\ See Large Power Transformers from the Republic of Korea: 
Final Results of Antidumping Duty Administrative Review; 2014-2015, 
82 FR 13432 (March 13, 2017) (2014/2015 Final Results).
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Scope of the Order

    The scope of this Order covers large liquid dielectric power 
transformers having a top power handling capacity greater than or equal 
to 60,000 kilovolt amperes (60 megavolt amperes), whether assembled or 
unassembled, complete or incomplete.
    Incomplete LPTs are subassemblies consisting of the active part and 
any other parts attached to, imported with or invoiced with the active 
parts of LPTs. The ``active part'' of the transformer consists of one 
or more of the following when attached to or otherwise assembled with 
one another: The steel core or shell, the windings, electrical 
insulation between the windings, the mechanical frame for an LPT.
    The product definition encompasses all such LPTs regardless of name 
designation, including but not limited to step-up transformers, step-
down transformers, autotransformers, interconnection transformers, 
voltage regulator transformers, rectifier transformers, and power 
rectifier transformers.
    The LPTs subject to this Order are currently classifiable under 
subheadings 8504.23.0040, 8504.23.0080, and 8504.90.9540 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this Order is dispositive.

Initiation of Changed Circumstances Review

    Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended 
(the Act) and 19 CFR 351.216(d), the Department will conduct a changed 
circumstances review upon receipt of information concerning, or a 
request from an interested party for a review of, an antidumping duty 
order which shows changed circumstances sufficient to warrant such a 
review of the order. In this case, the Department is self-initiating a 
changed circumstances review based on information obtained (1) during 
the course of the 2014/2015 and 2015/2016 administrative reviews, (2) 
via public search, and (3) from U.S. Customs and Border Protection 
(CBP) data, as detailed below.
    On March 13, 2017, the Department published the final results of 
the 2014/2015 antidumping administrative review (covering the period 
August 1, 2014, through July 31, 2015), assigning a dumping rate of 
60.81 percent to HHI.\3\
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    \3\ See 2014/2015 Final Results, 82 FR 13432 (March 13, 2017).
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    On May 24, 2017, in connection with the 2015/2016 administrative 
review (covering the period August 1, 2015, through July 31, 2016), HHI 
submitted English translations of HHI's 2016 Korean language financial 
statements, requested by the Department as part of HHI's response to 
the Department's supplemental questionnaire.\4\ HHI's 2016 
unconsolidated and consolidated financial statements, both of which 
ended on December 31, 2016, and became effective as of March 16, 2017, 
list the ``tentative'' name of a newly established company by ``spin-
off,'' as ``Hyundai Electric and energy Co., Ltd.'' \5\ These financial 
statements also identify HHI as a company that still continued to 
exists after the ``spin-off.'' \6\
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    \4\ See Memorandum, on the subject of ``Placement of Factual 
Information: (1) Hyundai Heavy Industries Co., Ltd.'s Financial 
Statements from the 2015/2016 Administrative Review of the 
Antidumping Duty Order on Large Power Transformers from the Republic 
of Korea and (2) Web site Information Regarding Hyundai Electric & 
Energy System Co., Ltd.,'' dated concurrently with this notice (New 
Factual Information Placement Memorandum) at Attachment 1 (citing 
Letter from HHI to the Department, regarding ``Large Power 
Transformers from South Korea: Hyundai's Response to Questions 48 
and 49 and Question 35e of the Supplemental Section A 
Questionnaire,'' dated May 24, 2017 (HHI's May 24, 2017, 
Questionnaire Response) at Attachment 1). We note that HHI and its 
U.S. affiliate, Hyundai Corporation USA (Hyundai USA), are 
collectively referred to as ``Hyundai'' in HHI's May 24, 2017, 
Questionnaire Response.
    \5\ Id. (citing HHI's May 24, 2017, Questionnaire Response at 
Attachment 1). We note that HHI's May 24, 2017, Questionnaire 
Response at Attachment 1 contains HHI's 2016 unconsolidated 
financial statements named ``Hyundai Heavy Industries Co., Ltd. 
Separate Financial Statements December 31. 2016'' (HHI's 2016 
unconsolidated financial statements). Page 100 of HHI's 2016 
unconsolidated financial statements notes that Hyundai Electric and 
energy Co., Ltd. is a ``{n{time} ewly established company by spin-
off'' and that HHI is a ``{r{time} emaining company after spin-ff.'' 
We also note that this attachment contains HHI's 2016 consolidated 
financial statements named ``Hyundai Heavy Industries Co., Ltd. and 
Subsidiaries Consolidated Financial Statements December 31, 2016'' 
(HHI's 2016 consolidated financial statements). The page 143 of 
HHI's 2016 consolidated financial statements notes that Hyundai 
Electric and energy Co., Ltd. is a ``{n{time} ewly established 
company by spin-off'' and HHI is a ``{r{time} emaining company after 
spin-off.'' Both financial statements indicate that the date of 
spin-off is April 1, 2017.
    \6\ Id. (citing HHI's May 24, 2017, Questionnaire Response at 
Attachment 1).
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    Additionally, on or around August 14, 2017, a representative of 
Georgetown Economic Services, LLC (an economic consulting firm retained 
by Kelly Drye & Warren, LLP, counsel to the petitioner in the LPTs from 
Korea proceeding) contacted the Department.\7\ During this phone 
conversation, the representative expressed concern that subject 
merchandise produced by HHI may be entering the United States under the 
name ``Hyundai Electric and energy Co., Ltd.,'' that this merchandise 
may be subject to the antidumping duty order on LPTs from Korea, and 
may be entering at the ``all-others'' rate of 22 percent, rather than 
the 60.81 percent rate assigned to HHI in the 2014/2015 antidumping 
administrative review.\8\
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    \7\ See Memorandum to the File from Gary Taverman, Deputy 
Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-executive functions and duties of the 
Assistant Secretary for Enforcement and Compliance, regarding 
``Phone Call,'' dated concurrently with this notice (Phone Call 
Memorandum).
    \8\ See Phone Call Memorandum.
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    In light of the information in HHI's 2016 financial statements and 
the phone conversation discussed above, the Department had concerns as 
to whether (1) Hyundai Electric and energy Co., Ltd. may be entering 
subject merchandise produced by HHI into the United States and (2) 
merchandise entered by Hyundai Electric and energy Co., Ltd. is 
entering at the appropriate rate. Because Hyundai Electric and energy 
Co., Ltd. is a new entity, which has not been covered by a prior 
administrative review or the original investigation, it does not have 
its own company-specific cash deposit rate.
    To gather additional information regarding the above-referenced 
company (i.e., Hyundai Electric and energy Co., Ltd.), the Department 
conducted a search of public information and found that Hyundai 
Electric & Energy System Co., Ltd., which has a similar name to the 
company identified in HHI's 2016 financial statements (i.e., Hyundai 
Electric and energy Co., Ltd.), appears to be related to HHI and/or 
involved in the production and sales of power transformers.\9\ 
Additionally, the Department conducted a query of CBP

[[Page 57212]]

import data for entries of subject merchandise that entered the United 
States from the Federal Register publication date of the 2014/2015 
Final Results (i.e., March 13, 2017) to October 31, 2017.\10\ Because 
Hyundai Electric & Energy System Co., Ltd. has not been covered by a 
prior administrative review or the original investigation, it does not 
have its own company-specific cash deposit rate.
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    \9\ See New Factual Information Placement Memorandum, at 
Attachment 2. We note that although the company name is slightly 
different (i.e., ``Hyundai Electric and energy Co., Ltd.'' from 
HHI's 2016 financial statements and ``Hyundai Electric & Energy 
System Co., Ltd.'' from its Web site), the names are very similar 
and HHI's financial statements state that ``Hyundai Electric and 
energy Co., Ltd.'' is a tentative name. According to the Web site, 
Hyundai Electric & Energy System Co., Ltd. was established on April 
3, 2017, which is after the effective date of HHI's 2016 financial 
statements (i.e., March 16, 2017) and the date of spin-off (i.e., 
April 1, 2017) identified in HHI's 2016 financial statements. We 
also note that the Web site of ``Hyundai Electric & Energy System 
Co., Ltd.'' states that ``Hyundai Heavy Industries' Electric Systems 
Division . . . is making a fresh start as Hyundai Electric'' and 
lists ``Power Transformer'' as one of its businesses. The history 
section of this Web site further indicates that Hyundai Electric & 
Energy System Co., Ltd. is engaged in the transformer business. In 
addition, under this Web site, HHI is listed as one of the ``Family 
Site.''
    \10\ See Memorandum, on the subject of ``Release of U.S. Customs 
and Border Protection Import Data,'' dated currently with this 
notice (CBP Memorandum).
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    Based on (1) information contained in the CBP import data, (2) 
concerns that Hyundai Electric and energy Co., Ltd., may be entering 
merchandise produced by HHI, (3) public information indicating that 
Hyundai Electric & Energy System Co., Ltd., which has a name similar to 
that of the company identified in the above-referenced phone call, 
appears to be involved in the production/sales of power transformers, 
and (4) the fact that neither of these entities have their own company-
specific cash deposit rate, there is a serious concern that entries 
made by either of these entities since the 2014/2015 Final Results may 
include merchandise produced by HHI or otherwise may not be entering at 
the appropriate rate.
    In accordance with the above-referenced statute and regulation, and 
based on the information obtained above, the Department finds that 
there is information which shows changed circumstances sufficient to 
warrant initiation of such a review to determine whether action is 
necessary to maintain the integrity of the Order. Therefore, the 
Department is self-initiating a changed circumstances review to 
determine the appropriate cash deposit rate for any merchandise entered 
by either Hyundai Electric and energy Co., Ltd. or Hyundai Electric & 
Energy System Co., Ltd. since the publication of the 2014/2015 Final 
Results. This changed circumstances review may require an examination 
of whether these entities are a successor-in-interest to HHI or should 
be treated as a single entity with HHI pursuant to 19 CFR 351.401(f).

Public Comment

    Interested parties may submit comments on the above-referenced 
information and the notice of initiation of this changed circumstances 
review by no later than 15 calendar days after the date of publication 
of this notice in the Federal Register.\11\ Parties who wish to comment 
on the initiation of this changed circumstances review must file 
comments electronically via Enforcement and Compliance's Antidumping 
and Countervailing Duty Centralized Electronic Service System 
(ACCESS).\12\ Access to ACCESS is available to registered users at 
http://access.trade.gov and is available to all parties in the Central 
Records Unit, Room B8024 of the main Department of Commerce building. 
An electronically filed document must be received successfully in its 
entirety by ACCESS by 5:00 p.m. Eastern Time on the day on which it is 
due.\13\
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    \11\ Or the next business day, if the deadline falls on a 
weekend, federal holiday or any other day when the Department is 
closed. See 19 CFR 351.303(b).
    \12\ See 19 CFR 351.303(b) and (f).
    \13\ See 19 CFR 351.303(b).
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Preliminary and Final Results of the Review

    The Department intends to publish in the Federal Register a notice 
of the preliminary results of the antidumping duty changed 
circumstances review in accordance with 19 CFR 351.221(b)(4) and 
351.221(c)(3)(i), which will set forth the Department's preliminary 
factual and legal conclusions. The Department will issue its final 
results of the changed circumstances review in accordance with the time 
limits set forth in 19 CFR 351.216(e). At the preliminary result of 
this review, if warranted based on the Department's analysis, we may 
instruct CBP as to the appropriate cash deposit rate.

Notification to Interested Parties

    This notice is published in accordance with section 751(b)(1) of 
the Act and 19 CFR 351.221(b)(1).

    Dated: November 28, 2017.
Gary Taverman,
Deputy Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2017-26071 Filed 12-1-17; 8:45 am]
BILLING CODE 3510-DS-P