Applying AFA on Transformers
The US government expanded an anti-dumping duty on high-capacity Korean transformers six-fold by overturning a ruling on them which was made two years ago.
According to industry sources on January 14, the US Department of Commerce raised the antidumping tariff on large transformers exported by Hyundai Heavy Industries of Korea early this month to 25 percent. The tariff will apply to products which Hyundai Heavy Industries has been exporting to the US since August 2013 and is more than sextuple the tariff of four percent in 2016. The ruling came after ABB, a US transformer maker, filed a complaint with the US Court of International Trade (CIT), saying that a decision made by the Department of Commerce was not above board. The CIT ordered the Department of Commerce to review the decision last year so the Department of Commerce came up a revised decision.
In particular, the US Department of Commerce is said to have applied the AFA (Adverse Facts Available) regulation on Hyundai Heavy Industries’ transformers while imposing a high-rate anti-dumping duty. The AFA system allows the Department of Commerce to levy a high tariff on a punitive basis if a company does not cooperate when the Department of Commerce requests data necessary for antidumping judgment or if the company hands in inaccurate data. "It is true that Hyundai Heavy Industries failed to submit some documents requested by the US Department of Commerce," said a trade law expert. “However, even though submitted data were not sufficient in the past, if the data did not disable the US Department of Commerce from judging whether or not a company dumped its products, the US Department of Commerce did not find fault with the data. But recently, the US Department of Commerce has been keeping at applying related regulations with tenacity.”
It is estimated that Hyundai Heavy Industries manufactures more than 30% (US $ 200 million) of Korea's transformer exports to the US.