Invoking Adverse Facts Available (AFA) Provision
The United States Department of Commerce made a preliminary determination in its recent sixth annual review to impose an anti-dumping duty of 60.81 percent on transformers Hyundai Electric exports to the United States and 40.73 percent on those exported by other companies such as Hyosung Corp..
The department re-calculates tariff rates each year through its annual review. The rates applied to transformers supplied by South Korean companies have remained high. The department chose the same rate in the fourth and fifth annual reviews when it comes to Hyundai Electric. After the fourth review, the company announced that the department charged an additional fee of 52.9 billion won. As such, the company’s additional losses are likely to total tens of billions of won if the preliminary determination of the sixth review becomes final.
The department re-used the Adverse Facts Available (AFA) provision in imposing the duty on Hyundai Electric. The provision is for the department to impose a tariff arbitrarily when it concludes that a company is not cooperative enough in its investigation. The re-application is contrary to previous expectations. Both Hyundai Electric and South Korean trade authorities actively cooperated in the investigation by, for example, requesting a factory audit.