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(LEAD) U.S. department says S. Korea violates subsidy rules

All Headlines 05:27 May 31, 2012

(ATTN: UPDATES throughout with details)
By Lee Chi-dong

WASHINGTON, May 30 (Yonhap) -- In a preliminary ruling against the South Korean government, the U.S. Department of Commerce said Wednesday that Seoul has provided unlawful subsidies to its major washing-machine manufacturers -- Daewoo, Samsung and LG.

The department imposed tentative duties of 70.58 percent on residential washing machines made by Daewoo, 1.20 percent for Samsung and 0.22 percent for LG and .

The move comes half a year after their American rival, Whirlpool, filed a petition with the U.S. authorities, claiming that Samsung and LG have received subsidies that violate U.S. and international trade laws.

"Whirlpool Corporation is pleased with this favorable preliminary decision, given the proven record that South Korean appliance producers have benefited from their government's subsidies that violate trade law," said Kristine Vernier, spokesperson for the Michigan-based firm, in a statement.

She expressed optimism that the department will make the same decision in its final ruling, which sources expect to be available late this year or early next year.

A South Korean trade official here, however, pointed out that Wednesday's ruling is just part of a long and complicated process in the anti-subsidy case.

"Even if the Commerce Department sticks to the preliminary ruling, it requires the same decision by the U.S. International Trade Commission to go into effect," the official said, requesting anonymity.

In the U.S. market, South Korean firms sold an estimated $568 million worth of washing machines last year.

They are required to post bonds or cash deposits based on the preliminary rates as U.S. authorities continue the related investigation.



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