                            Slip Op.

             UNITED STATES COURT OF INTERNATIONAL TRADE


SAMSUNG ELECTRONICS CO., LTD.,

     Plaintiff,
                                       Before: Nicholas Tsoucalas,
v.
                                               Senior Judge
UNITED STATES,
                                       Court No. 13-00099
     Defendant.
                                       PUBLIC VERSION
WHIRLPOOL CORPORATION,

     Defendant-Intervenor.


                                  OPINION

[The Department of Commerce’s remand determination is sustained.]

                                              Dated: 'HFHPEHU

Warren E. Connelly, J. David Park, and Nazak Nikakhtar, Akin Gump
Strauss Hauer & Feld LLP, of Washington, DC, for Plaintiff.
Phyllis L. Derrick, Akin Gump Strauss Hauer & Feld LLP, of
Washington, DC, consultant for Plaintiff.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of Washington,
DC, for defendant.    With him on the brief were Joyce R. Branda,
Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Franklin E. White, Jr., Assistant Director. Of counsel on the
brief was Whitney Rolig, Attorney, Office of the Chief Counsel for
Trade Enforcement & Compliance, U.S. Department of Commerce, of
Washington, DC.

Jack A. Levy, John D. Greenwald, Myles S. Getlan, Thomas M. Beline,
and Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP, of
Washington, DC, for Defendant-Intervenor.

            Tsoucalas,   Senior    Judge:     This   action   involves     a

challenge   contesting   subsidy    calculations     that   were   made   by
Court No. 13-00099                                                    Page 2


defendant Department of Commerce (“Commerce”) in the final results

of a countervailing duty (“CVD”) investigation covering large

residential washers (“LRWs”) from the Republic of Korea. See Large

Residential Washers From the Republic of Korea: Final Affirmation

Countervailing Duty Determination, 77 Fed Reg. 75,975 (Dec. 26,

2012)(“Final     Determination”);    See   also   Issues   and    Decision

Memorandum for the Final Determination in the CVD Investigation of

LRWs from the Republic of Korea (Dec. 18, 2012) (“IDM”).              Before

the court are the Final Results of Redetermination Pursuant to

Court Order, ECF No. 50 (Apr. 11, 2014) (“Remand Results”), filed

by Commerce pursuant to Samsung Electronics Co., Ltd. v. United

States, 38 CIT __, 973 F.Supp.2d 1321 (2014)(“Samsung I”).               The

relevant facts and procedural history are set forth in Samsung I.

Familiarity with the court’s decision in Samsung I is presumed.

           Plaintiff Samsung Electronics Co., Ltd. (“Samsung” or

“Plaintiff”) contests the Remand Results.          Defendant-intervenor

Whirlpool Corporation supports Commerce’s findings in its Remand

Results.   For the reasons discussed below, the court sustains the

Remand Results.

                  JURISDICTION and STANDARD OF REVIEW

           The    Court   has   jurisdiction   pursuant    to    28   U.S.C.

§ 1581(c) (2006) and section 516A(a)(2)(B)(I) of the Tariff Act of
Court No. 13-00099                                                Page 3


1930 (the “Act”), 1 as amended, 19 U.S.C. § 1516a(a)(2)(B)(I)

(2006).    The court will uphold Commerce’s remand redetermination

in a CVD investigation unless it is “unsupported by substantial

evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(I).

           Additionally, “an agency's interpretation of its own

regulations is entitled to broad deference from the courts.”

Cathedral Candle Co. v. U.S. Int’l Trade Comm’n, 400 F.3d 1352,

1363 (Fed. Cir. 2005).

                              Discussion

           In the original proceeding, Commerce determined that the

Government of Korea (“GOK”) provided countervailable subsidies to

Samsung, warranting the application of a 1.85% ad valorem CVD rate.

See Final Determination, 77 Fed. Reg. at 75,977.          Of particular

relevance to this instant action, Commerce found that Samsung’s

tax credits under the Republic of Korea Restriction of Special

Taxation   Act   (RSTA)   Article   10(1)(3) were   de   facto   specific

because Samsung received a disproportionately large share of the

total benefit the GOK conferred under this program.          See IDM at




1 Further citations to the Tariff Act of 1930 are to the relevant
portions of Title 19 of the U.S. Code, 2006 edition, and all
applicable amendments thereto.
Court No. 13-00099                                                                    Page 4


11–13.      The    GOK    provides      RSTA      Art.   10(1)(3)       tax    credits         to

companies     making      eligible      investments        in    research       and       human

resources     development         (“R&D”).         See    Remand       Results       at    3–4.

Specifically, Commerce determined that Samsung received [[                            ]]% of

the total benefit the GOK conferred under RSTA Art. 10(1)(3), while

the average beneficiary received [[                      ]]%.    See Calculations for

Samsung (Dec. 18, 2012), Confidential Rec. 196, Att. 7 at 1.

            Under        the    Act,    “a     countervailable           subsidy          is   a

subsidy . . . which is specific as described in [19 U.S.C.

§ 1677(5A)].”        19 U.S.C. § 1677(5)(A).                    Where the subsidy in

question is a domestic subsidy, as is the case here, Commerce may

find that the subsidy is specific as a matter of law or as a matter

of fact.    19 U.S.C. § 1677(5A)(D).

            A     domestic      subsidy      is    specific       in    fact     if       “[a]n

enterprise or industry receives a disproportionately large amount

of the subsidy.”         19 U.S.C. § 1677(5A)(D)(iii)(III).                   The Court of

Appeals for the Federal Circuit held that “determinations of

disproportionality . . . are not subject to rigid rules, but rather

must be determined on a case-by-case basis taking into account all

the facts and circumstances of a particular case.”                        AK Steel Corp.

v.   United     States,        192    F.3d     1367,     1385     (Fed.       Cir.    1999).

Accordingly,      the     court      seeks   to    determine      whether       Commerce’s
Court No. 13-00099                                                          Page 5


disproportionality finding in its Remand Results was reasonable

given the facts of the instant case.            Samsung I, 973 F.Supp.2d at

1328.

            In Samsung I, the Court remanded the Final Determination

with    instructions     to   revisit   its    determination      regarding    the

disproportionality       of    Samsung’s      Art.   10(1)(3)      tax    credits.

Samsung I, 973 F.Supp.2d at 1328.           The Court held that “Commerce’s

determination     was    unreasonable      because    it   did    not    adequately

address     how    Samsung’s        Art.      10(1)(3)      tax     credit      was

disproportionately large based on the facts in the case.”                      Id.

The Court stated that “[o]n remand, Commerce is not barred from

comparing Samsung’s share of the total benefit to the share an

average beneficiary received, but it must explain, with specific

reference to the facts of this case, why such a comparison is

indicative of disproportionality.”            Id.

            In its Remand Results, Commerce continued to find that

Samsung received a disproportionately large amount of the benefits

under the RSTA Art. 10(1)(3).              See Remand Results at 4–5.              On

remand, Commerce: (1) clarified its findings with respect to

whether    RSTA   Art.   10(1)(3)    conferred       benefits     pursuant    to   a

“standard pricing mechanism”; (2) analyzed Samsung’s share of

benefits under Art. 10(1)(3) relative to the amount received by
Court No. 13-00099                                                     Page 6


the other 99 largest recipients of benefits under the program; and

(3)    analyzed   Samsung’s   tax   savings   under   RSTA   Art.    10(1)(3)

relative to the tax savings that the other 99 largest recipients

received in relation to their total tax liability.

  I.     Commerce Reasonably Concluded that RSTA Art. 10(1)(3) Does
         Not Confer Benefits According to a Standard Pricing
         Mechanism

            Plaintiff argues that Commerce “continues to erroneously

rely on the very same method for determining disproportionality

that this Court initially found to be unreasonable ‘because it did

not adequately address how Samsung's Art. 10(1)(3) tax credit was

disproportionately large based on the facts in the case.’”              Pl.’s

Br. at 1 (citing Samsung I, 973 F.Supp.2d. at 1328).                 Plaintiff

insists that Commerce incorrectly distinguishes the tax credit in

the instant case from the “standard pricing mechanism” which

conferred    a    benefit   based   on   “usage   levels”    found    in   the

electricity benefit programs considered in Bethlehem Steel v.

United States.     Id. at 4 (citing Bethlehem Steel v. United States,

25 CIT 307, 322, 140 F. Supp. 2d 1354, 1369 (2001), amended by, 25

CIT 627, 155 F.Supp.2d 7071 (2001)).          Plaintiff also argues that

the fact that the amount a beneficiary may claim on their tax

returns differs from the amount of tax credits that beneficiary
Court No. 13-00099                                              Page 7


has earned “does not destroy the proportionality” of the subsidy.

Id. at 6.

            Plaintiff’s arguments are unconvincing.      In Samsung I,

the court noted that Commerce has previously applied the concept

of a “standard pricing mechanism” with regards to analyzing whether

a company received a disproportionate amount of benefits under to

a   subsidy.    See   Final   Affirmative   CVD   Determinations:   Pure

Magnesium and Alloy Magnesium From Canada, 57 Fed. Reg. 30,946

(Jul. 13, 1992); See also Samsung I, 973 F.Supp.2d at 1326–27.

The court also noted that in Bethlehem Steel v. United States, the

Court found that it was reasonable for Commerce to consider an

enterprise or industry’s use of a subsidy program in determining

whether the benefit was proportionate.        See Bethlehem Steel, 25

CIT at 322, 140 F. Supp. 2d at 1369.        In that case, the Korean

steel industry received 51% of the discounts the GOK awarded under

an electricity rate reduction subsidy. Id. Nevertheless, Commerce

found that the benefit was proportionate because high electricity

usage was an inherent characteristic of the steel industry, all

recipients received an identical rate reduction based on a standard

mechanism, and the subsidy was not designed to benefit any one

industry over another.   See id. at 321–23, 140 F. Supp. 2d at 1368–

70.
Court No. 13-00099                                                             Page 8


            Subsequently,             on      remand         Commerce     effectively

distinguished Art. 10(1)(3) from the standard pricing mechanism in

Bethlehem Steel.          See id. at 322, 140 F. Supp. 2d at 1369.                 In

Samsung I, the Court was concerned with the notion that “[i]n

virtually every program that confers benefits based on usage levels

one or more groups will receive a greater share of the benefits[.]”

Samsung I, 973 F.Supp.2d at 1326 (citing Bethlehem Steel, 25 CIT

at 322, 140 F. Supp. 2d at 1369).                  This concern stemmed in part

from the fact that in the original proceeding, Commerce’s analysis

of the structure of Art. 10(1)(3) was limited to the following:

the GOK calculates a company's Art. 10(1)(3) tax credit in one of

two   ways,    either       40%       of   the    difference      between     eligible

expenditures       in    the    tax    year      and   the    average    of   eligible

expenditures in the prior four years, or a maximum of 6% of

eligible expenditures in the current tax year.                    See LRWs From the

Republic of Korea: Preliminary Affirmative CVD Determination and

Alignment     of        Final     Determination        With      Final    Antidumping

Determination, 77 Fed.Reg. 33,181, 33,187 (Jun. 5, 2012). Commerce

addressed the Court’s concern in its Remand Results by providing

evidence supporting its finding that RSTA Art. 10(1)(3) tax credits

are not based strictly on the basis of a company’s qualifying

investments in a given year. Remand Results at 6–7. Specifically,
Court No. 13-00099                                                   Page 9


Commerce found that companies were permitted to claim RSTA Art.

10(1)(3) tax credits by “using one of two formulas: as a percentage

of the difference between qualifying research and development

expenses in the current tax year and the average of qualifying

expenditures from the previous four years, or using a maximum

percentage of total qualifying research and development expenses

for the current tax year.” Id. at 6.       Commerce also found the tax

credits a company was eligible to receive varied due to the fact

that “RSTA Article 10(1)(3) establishes different rates for small-

and medium-sized enterprises [(“SMEs”)] versus larger companies.”

Id. at 7. Additionally, Commerce determined that, “under the first

formula, SMEs may claim up to 50 percent, while larger corporations

may claim only 40 percent; under the second formula, SMEs may claim

up to 25 percent, while larger corporations are limited to a

maximum of six percent.” Id. at 7-8.           Based on these variations,

Commerce    reasonably   distinguished    the    subsidy   program   in   the

instant case from the program present in Bethlehem Steel, which

conferred    benefits    based   solely   on    a   company’s   qualifying

expenditures.     Because under RSTA Art. 10(1)(3) companies with

identical amounts of eligible investments could receive different

amounts of the tax credits, Commerce reasonably concluded based on

the facts in the instant case that RSTA Art. 10(1)(3) tax credits
Court No. 13-00099                                                     Page 10


are   unlike   the    benefits   conferred   in     Bethlehem   Steel.     See

Bethlehem Steel, 25 CIT at 321–23, 140 F. Supp. 2d at 1368–70;

See also Remand Results at 8.

           Commerce also provided further data demonstrating that

it is inappropriate to classify RSTA Art. 10(1)(3) as a standard

pricing mechanism through its analysis of the GOK’s “Minimum Tax

Scheme.”   Remand Results at 8.           Commerce found that the GOK’s

Minimum Tax Scheme limits the amount of tax credits a beneficiary

may claim under the RSTA, effectively creating a “tax ceiling.”

Id.; See also Def.’s App. Accompanying Resp. to Pl.’s Comments

Concerning Remand Results, GOK’s May 30, 2014 Resp. at 2–4.

Specifically,    Commerce    determined      that    Samsung    only   claimed

[[     ]]% of its RSTA Art. 10(1)(3) tax credits earned in 2010,

while deferring the remainder.         Remand Results at 8.      As discussed

above, because a company’s RSTA Art. 10(1)(3) tax credits are based

on a number of variables, such as the formula used, prior years

eligible investments, and the application of Korea’s Minimum Tax

Scheme, Commerce reasonably concluded that RSTA Art 10(1)(3) did

not qualify as a “standard pricing mechanism” which is directly

proportionate    to    a   company’s    qualifying     expenditures.       See

Bethlehem Steel, 25 CIT at 321–23, 140 F. Supp. 2d at 1368–70;

See also Remand Results at 7–9.
Court No. 13-00099                                                 Page 11


  II.   Commerce Reasonably Determined that Samsung Received a
        Disproportionate Amount of the RSTA Art. 10(1)(3) Benefits

             Plaintiff argues that Commerce relied on exactly the

same methodology in its Remand Results, except here Commerce chose

to alter the following: (1) “instead of using the total tax credits

awarded to all 11,764 companies, [Commerce] used the tax credit

awarded to just 100 companies;” (2)”instead of dividing the total

credit by the total number of recipients to derive the average

percentage     of   the   total   benefit   received   by   each   company,

[Commerce] divided the tax credits received by 99 to get the

average percentage credit received by each of the 99 companies.”

Pl.’s Br. at 12–13.       Since the methodology used by Commerce was

“identical in concept” to the original methodology, Plaintiff

therefore insists that Commerce’s findings are insufficient “as a

matter of fact or law to demonstrate disproportionality for the

reasons that this court has previously found.”         Id. at 14.

             Moreover, Plaintiff argues that Commerce improperly used

taxable income as an appropriate variable of comparison between

Samsung and the 99 companies because “the investments that are

eligible for RSTA Art. 10(1)(3) tax credit are not a function of

taxable income.”      See id. at 14-15.       Plaintiff notes that “the

ratio of each company’s R&D expenses that were eligible for tax

credit to its total expenses,” is a better variable of comparison
Court No. 13-00099                                          Page 12


because such ratio would “identify those companies that were

comparable in terms of their investment strategies.”    Id. at 15.

Additionally, Plaintiff contends that Commerce improperly equated

taxable income with size of company.     Id.at 14–15.     Plaintiff

argues that Commerce should have compared companies similar to

Samsung on the basis of “gross sales revenue or, alternatively, by

asset value or number of employees,” as opposed to using “taxable

corporate income [which] is a direct function of gross revenue,

permissible adjustments to revenue, and deductible expenses.” Id.

at 16.   Finally, Plaintiff insists that taxable income as a

variable is “unrelated” to disproportionately. Id. at 17.

          The court is not persuaded by Plaintiff’s arguments.    As

discussed above, in Samsung I, the court held that Commerce failed

to “adequately address how Samsung's Art. 10(1)(3) tax credit was

disproportionately large based on the facts in the case.”   Samsung

I, 973 F.Supp.2d at 1328.    The Court noted that “[o]n remand,

Commerce is not barred from comparing Samsung’s share of the total

benefit to the share an average beneficiary received, but it must

explain, with specific reference to the facts of this case, why

such a comparison is indicative of disproportionality.”     Id.

          In its Remand Results, Commerce continued to find that

Samsung received [[   ]]% of the total benefit the GOK conferred
Court No. 13-00099                                                   Page 13


under RSTA Art. 10(1)(3), while the average beneficiary received

[[      ]]%.      Remand Results at 2.      Additionally, Commerce first

obtained data from the GOK allowing it to compare Samsung’s total

benefit under the subsidy with the 100 largest companies who

received the benefit by taxable income.           Id. at 9–11.      In doing

so, Commerce determined that “Samsung accounted for approximately

[[    ]]% of RSTA Art. 10 tax credits granted to the top 100

recipients, and by its credit was equal to [[           ]]% of the credits

received by the other 99 largest recipients.”           Id. at 10-11.

            Secondly, Commerce conducted an analysis of the data it

received from the GOK in order to allow it to account for company

size and total tax liability.          This analysis allowed Commerce to

compare Samsung’s reduction in taxable income with the remaining

99 companies. Commerce found that the amount of RSTA Art. 10(1)(3)

tax   credits     Samsung   received    reduced   its   tax     liability   by

[[      ]]%.      Id. at 14.   Conversely, the tax credits reduced the

other 99 companies’ tax liability by [[                  ]]%.     Id. at 14.

Ultimately, Commerce found that Samsung received over [[                    ]]

times greater amount of tax benefits than the other companies

analyzed.   Id. at 14.

            The     court   finds   that    Commerce’s     Remand     Results

reasonably addressed its concerns in Samsung I.                 At best, the
Court No. 13-00099                                                    Page 14


Plaintiff’s arguments amount to another reasonable interpretation

of the data before the court.        See Matsushita Elec. Indus. Co. v.

United   States,    750   F.2d     927,   933   (Fed.    Cir.   1984)(“[T]he

possibility   of   drawing   two    inconsistent     conclusions     from   the

evidence does not prevent an administrative agency's finding from

being supported by substantial evidence.”).          Accordingly, based on

the facts of the instant case, Commerce reasonably concluded that

Samsung received a disproportionately large benefit of the RSTA

Art. 10(1)(3) tax benefit.

                                 Conclusion

          For      the    foregoing       reasons,      Commerce’s     remand

redetermination is sustained in its entirety. Judgment will be

entered accordingly.




                                                   /s/ Nicholas Tsoucalas
                                                     Nicholas Tsoucalas
                                                         Senior Judge
Dated: 'HFHPEHU
       New York, New York
