Utility Scale Wind Towers From the Socialist Republic of Vietnam: Final Determination of Sales at Less Than Fair Value

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

Effective Date: December 24, 2012.

SUMMARY:

On August 2, 2012, the Department of Commerce (“Department”) published its preliminary determination of sales at less than fair value (“LTFV”) and postponement of final determination in the antidumping investigation of utility scale wind towers (“wind towers”) from the Socialist Republic of Vietnam (“Vietnam”). Based on the Department's analysis of the comments received, the Department has made changes from the Preliminary Determination. The Department determines that wind towers from Vietnam are being, or are likely to be, sold in the United States at LTFV, as provided in section 735 of the Tariff Act of 1930, as amended (the “Act”). The final weighted-average dumping margins for this investigation are listed in the “Final Determination” section below.

FOR FURTHER INFORMATION CONTACT:

Magd Zalok or Charles Riggle, AD/CVD Operations, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4162 or (202) 482-0650, respectively.

SUPPLEMENTARY INFORMATION:

Background

The Department published its preliminary determination of sales at LTFV and postponement of final determination on August 2, 2012. Between August 13, 2012, and August 24, 2012, the Department conducted verifications of the mandatory respondent CS Wind Vietnam Co., Ltd. (“CS Wind Vietnam”) and its parent company CS Wind Corporation (“CS Wind Corp.”) (collectively, “CS Wind Group”). Between September 14, 2012, and September 24, 2012, CS Wind Group and the Wind Tower Trade Coalition (“Petitioner”) submitted surrogate value and rebuttal surrogate value comments.

On October 2, 2012, CS Wind Group and Petitioner submitted case briefs. On October 9, 2012, CS Wind Group and Petitioner submitted rebuttal briefs.

On September 4, 2012, Petitioner requested a hearing. However, on October 23, 2012, Petitioner withdrew its request for a hearing, and no other parties requested a hearing.

Period of Investigation

The period of investigation (“POI”) is April 1, 2011, through September 30, 2011. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition, which was December 2011.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation, as well as comments received pursuant to the Department's requests are addressed in the Issues and Decision Memorandum. A list of the issues which the parties raised and to which the Department responded in the Issues and Decision Memorandum is attached to this notice as Appendix I. The Issues and 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”). Access to IA ACCESS is available to registered users at http://iaaccess.trade.gov and is available to all parties in the CRU, room 7046 of the main Department of Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the Internet at http://www.trade.gov/ia/. The signed Issues and Decision Memorandum and the electronic versions of the Issues and Decision Memorandum are identical in content.

Extension of Final Determination Due to Government Closure During Hurricane Sandy

On October 31, 2012, the Department's Import Administration determined that the impact of the recent government closure during Hurricane Sandy would be best minimized by uniformly tolling all Import Administration deadlines for two days. This determination applies to every proceeding before the Import Administration, including this investigation. The Department notes, however, that because the deadline of the final determination of this investigation was originally on December 15, 2012, which falls on a weekend, this deadline would have been automatically extended by two days until the following working day, Monday, December 17, 2012. Therefore, the two day extension of the deadlines due to government closure during Hurricane Sandy does not impact the deadline for the final determination of this investigation.

Changes Since the Preliminary Determination

• The Department revised its calculation of brokerage and handling.
• The Department made price adjustments to certain U.S. sales.
• The Department corrected the shipment dates for certain U.S. sales.
• The Department revised the reported factors of production (“FOPs”) of self-produced and free-of-charge internal components so that the total sum of all FOPs equals the packed weight of the subject merchandise.
• The Department granted a steel scrap offset.
• The Department revised the reported labor hours to include idle labor hours based on verification findings.
• The Department revised the per-unit measurement of insulated wire to reflect meters rather than pieces based on verification findings.
• The Department revised the reported pieces of tarpaulins based on verification findings.
• The Department revised the reported distance from the port to CS Wind Vietnam's manufacturing facility for all imported inputs to the simple average of the two ports used during the POI based on verification findings.
• The Department revised the distance from CS Wind Vietnam's LPG supplier to CS Wind Vietnam's manufacturing facility based on verification findings.
• The Department used the financial statements for Ganges International Pvt Ltd. for purposes of calculating the surrogate financial ratios.

Scope of the Investigation

The merchandise covered by this investigation are certain wind towers, whether or not tapered, and sections thereof. Certain wind towers are designed to support the nacelle and rotor blades in a wind turbine with a minimum rated electrical power generation capacity in excess of 100 kilowatts (“kW”) and with a minimum height of 50 meters measured from the base of the tower to the bottom of the nacelle (i.e., where the top of the tower and nacelle are joined) when fully assembled.

A wind tower section consists of, at a minimum, multiple steel plates rolled into cylindrical or conical shapes and welded together (or otherwise attached) to form a steel shell, regardless of coating, end-finish, painting, treatment, or method of manufacture, and with or without flanges, doors, or internal or external components (e.g., flooring/decking, ladders, lifts, electrical buss boxes, electrical cabling, conduit, cable harness for nacelle generator, interior lighting, tool and storage lockers) attached to the wind tower section. Several wind tower sections are normally required to form a completed wind tower.

Wind towers and sections thereof are included within the scope whether or not they are joined with nonsubject merchandise, such as nacelles or rotor blades, and whether or not they have internal or external components attached to the subject merchandise.

Specifically excluded from the scope are nacelles and rotor blades, regardless of whether they are attached to the wind tower. Also excluded are any internal or external components which are not attached to the wind towers or sections thereof.

Merchandise covered by the investigation are currently classified in the Harmonized Tariff System of the United States (“HTSUS”) under subheadings 7308.20.0020 or 8502.31.0000. Prior to 2011, merchandise covered by the investigation were classified in the HTSUS under subheading 7308.20.0000 and may continue to be to some degree. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.

Scope Comments

The Department received comments regarding the scope of the investigation from Petitioner and CS Wind Group. After analyzing the comments, the Department has made no changes to the scope of this investigation. For a complete discussion of scope issues, see the Issues and Decision Memorandum at Comment 10.

Verification

As provided in section 782(i) of the Act, the Department verified the information submitted by CS Wind Group for use in the final determination. The Department used standard verification procedures, including examination of relevant accounting and production records and original source documents provided by this respondent.

Non-Market Economy Country

The Department considers Vietnam to be a non-market economy (“NME”) country. In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. The Department has not revoked Vietnam's status as an NME country. No party has challenged the designation of Vietnam as an NME country in this investigation. Therefore, the Department continues to treat Vietnam as an NME for purposes of this final determination.

Surrogate Country

In the Preliminary Determination, the Department stated that it selected India as the appropriate surrogate country to use in this investigation pursuant to section 773(c)(4) of the Act based on the following: (1) It is at a similar level of economic development; (2) it is a significant producer of comparable merchandise; and (3) we have reliable data from India that we can use to value the factors of production. As no party has challenged the selection of India since the Preliminary Determination, the Department continues using India as the primary surrogate country.

Single Entity Treatment

In the Preliminary Determination, the Department determined that CS Wind Vietnam and CS Wind Corporation, the Korean parent company of CS Wind Vietnam, are affiliated pursuant to sections 771(33)(E) and (F) of the Act and that these companies should be treated as a single entity for antidumping duty purposes. Furthermore, the Department found a significant potential for manipulation of production and sales decisions between CS Wind Corporation and CS Wind Vietnam. Accordingly, the Department has determined it appropriate to treat CS Wind Corporation and CS Wind Vietnam as a single entity in this proceeding. Since the Preliminary Determination, the Department received no new information to warrant a change in its finding that CS Wind Corporation and CS Wind Vietnam are a single entity. Accordingly, consistent with the Preliminary Determination, the Department continues to find CS Wind Corporation and CS Wind Vietnam to be a single entity for purposes of the final determination.

Separate Rate

In proceedings involving NME countries, the Department holds a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of the subject merchandise in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. The Department analyzes whether each entity exporting the subject merchandise is sufficiently independent under a test arising from Sparklers, as further developed in Silicon Carbide. In accordance with the separate rates criteria, the Department assigns separate rates in NME cases if respondents can demonstrate the absence of both de jure and de facto governmental control over their export activities. If, however, the Department determines that a company is wholly foreign owned, then a separate rate analysis is not necessary to determine whether it is independent from government control.

As indicated in the Preliminary Determination, Petitioner listed only two known Vietnamese exporters/producers in the Petition: CS Wind Vietnam Co., Ltd. (“CS Wind Vietnam”) and Vina-Halla Heavy Industries Ltd. (“Vina-Halla”). As noted in the Preliminary Determination, CS Wind Group, the respondent in this investigation, provided information indicating that it is a wholly-owned foreign enterprise. Since the Preliminary Determination, we found no new information to warrant a change to the ownership status of CS Wind Group. Accordingly, a separate rate analysis is not necessary for this company.

Companies Not Receiving a Separate Rate

In the Preliminary Determination, the Department did not grant a separate rate to Vina-Halla because the company failed to submit a timely response to the Department's questionnaires which requested information regarding separate rate eligibility. As indicated above, CS Wind Vietnam and Vina-Halla are the only two known Vietnamese exporters/producers identified in the Petition. Accordingly and consistent with the Preliminary Determination, the Department did not grant Vina Halla a separate rate in this final determination.

Use of Facts Available and Adverse Facts Available

Section 776(a) of the Act provides that the Department shall apply facts available (“FA”) if (1) necessary information is not on the record, or (2) an interested party or any other person (A) withholds information that has been requested, (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782 of the Act, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified as provided by section 782(i) of the Act.

As FA, we have applied the weighted-average surrogate value of all internal components to the difference between the total packed weight calculated in the normal course of business for purposes of preparing packing lists for shipment, and the total weight of the sum of reported FOPs, less recovered scrap. This issue is discussed at comment 4 of the Issues and Decision Memorandum. In addition, at verification, the Department discovered that CSWG excluded certain idle labor hours from its reported labor hours. As FA, we added CS Wind Vietnam's idle production time to CSWG's reported labor hours and valued the idle labor hours using the same Chapter 6A surrogate value used to value CSWG's reported labor hours. This issue is discussed at comment 7 of the Issues and Decision Memorandum.

Section 776(b) of the Act further provides that the Department may use an adverse inference in applying FA when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. Such an adverse inference may include reliance on information derived from the petition, the final determination, a previous administrative review, or other information placed on the record. We do not find that CSWG failed to cooperate by acting to the best of its ability with respect to either of these two issues, therefore, we did not apply an adverse inference in applying FA.

Vietnam-Wide Entity

As discussed above, Vina-Halla did not respond to the Department's questionnaires, failed to establish its eligibility for a separate rate and, thus, the Department, consistent with the Preliminary Determination, finds that Vina-Halla remains a part of the Vietnam-wide entity. Therefore, we find that the Vietnam-wide entity withheld information requested by the Department, failed to provide information in a timely manner, and significantly impeded the proceeding by not submitting the requested information. The Vietnam-wide entity did not file documents indicating that it was having difficulty providing the requested information nor did it request that it be allowed to submit the information in an alternate form. As a result, pursuant to sections 776(a)(2)(A)-(C) of the Act, and consistent with the Preliminary Determination, we find that the use of facts otherwise available is appropriate to determine the rate for the Vietnam-wide entity.

Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an inference that is adverse to a party if the party failed to cooperate by not acting to the best of its ability to comply with requests for information. The Department continues to find that the Vietnam-wide entity's failure to provide the requested information constitutes circumstances under which it is reasonable to conclude that less than full cooperation has been shown. Because the Vietnam-wide entity did not respond to the Department's requests for information, it has failed to cooperate to the best of its ability. Therefore, the Department finds that, in selecting from among the facts otherwise available, an adverse inference is appropriate.

When employing an adverse inference, section 776(b) of the Act states that the Department may rely upon information derived from the petition, the final determination from the LTFV investigation, a previous administrative review, or any other information placed on the record. In selecting a rate based on adverse facts available (“AFA”), the Department selects a rate that is sufficiently adverse to ensure that the uncooperative party does not obtain a more favorable result by failing to cooperate than if it had fully cooperated. Normally, it is the Department's practice to select, as an AFA rate, the higher of the: (a) Highest dumping margin alleged in the petition, or (b) highest calculated weighted-average dumping margin of any respondent in the investigation. The dumping margins alleged in the Petition are 140.54 percent and 143.29 percent. Either of these rates is higher than the calculated rate for CS Wind Group. Thus, as AFA, the Department's practice would be to assign the rate of 143.29 percent to the Vietnam-wide entity.

Corroboration of Information

Section 776(c) of the Act provides that, when, as FA, the Department relies on secondary information rather than on information obtained in the course of an investigation it must, to the extent practicable, corroborate that information from independent sources reasonably at its disposal. Secondary information is described as “information derived from the petition that gave rise to the investigation or review, the final determination concerning merchandise subject to this investigation, or any previous review under section 751 {of the Act} concerning the merchandise subject to this investigation.” To “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value. Independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

As was the case in the Preliminary Determination, in order to determine the probative value of the dumping margins in the Petition for use as AFA for purposes of the final determination, we examined information on the record and found that we were unable to corroborate either of the dumping margins contained in the Petition. Therefore, for the final determination, we have assigned the Vietnam-wide entity the rate of 58.49 percent, the highest transaction-specific dumping margin for the mandatory respondent, CS Wind Group. No corroboration of this rate is necessary because we are relying on information obtained in the course of this investigation, rather than secondary information from the Petition. The dumping margin for the Vietnam-wide entity applies to all entries of the merchandise under investigation except for entries of merchandise under investigation from the exporter/manufacturer combinations listed in the chart in the “Final Determination” section below.

Combination Rates

In the Initiation Notice, the Department stated that it would calculate combination rates for respondents that are eligible for a separate rate in this investigation. This practice is described in Policy Bulletin 05.1, available at http://www.trade.gov/ia/.

Final Determination

The Department determines that the following weighted-average dumping margins exist for the period April 1, 2011, through September 30, 2011.

* The CS Wind Group consists of CS Wind Vietnam Co., Ltd. and CS Wind Corporation.

** The Vietnam-Wide Entity includes Vina-Halla Heavy Industries Ltd.

Disclosure

We intend to disclose to parties the calculations performed in this proceeding within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, the Department will instruct U.S. Customs and Border Protection (“CBP”) to continue to suspend liquidation of all appropriate entries of utility scale wind towers from Vietnam as described in the “Scope of Investigation” section, entered or withdrawn from warehouse, for consumption, on or after August 2, 2012, the date of publication of the Preliminary Determination in the Federal Register.

The Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which NV exceeds U.S. price, as follows: (1) The rate for the exporter/producer combinations listed in the table above will be the rate the Department has determined in this investigation; (2) for all Vietnamese exporters of merchandise under consideration which have not received their own rate, the rate will be the rate for the Vietnam-wide entity; and (3) for all non-Vietnamese exporters of merchandise under consideration which have not received their own rate, the rate will be the rate applicable to the Vietnamese exporter/producer combination that supplied that non-Vietnamese exporter.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of the final affirmative determination of sales at LTFV. As the Department's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of subject merchandise, or sales (or the likelihood of sales) for importation, of the subject merchandise. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP to assess, upon further instruction by the Department, antidumping duties on all imports of the subject merchandise entered or withdrawn from warehouse, for consumption, on or after the effective date of the suspension of liquidation.

Notification Regarding APO

This notice also serves as a reminder to the parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or 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 sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix I

Issues for Final Determination

1. Steel Plate

2. Surrogate Financial Statements

3. Financial Ratio Adjustments

4. Packed Weight and the Sum of FOPs

5. Scrap Offset

6. Market Economy Purchases

7. Idle Labor

8. Oxygen

9. Carbon Dioxide (CO2)

10. Base Rings

11. Brokerage & Handling

12. Date of Sale

13. Free-of-Charge Inputs