[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23647]


[[Page Unknown]]

[Federal Register: September 23, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-031]

 

Large Power Transformers From Italy; Final Results of Antidumping 
Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On April 7, 1994, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping finding on large power transformers (LPTs) from Italy. 
These final results of review cover one manufacturer/exporter of this 
merchandise and the period from June 1, 1992, through May 31, 1993.
    We gave interested parties an opportunity to comment on the 
preliminary results. Analysis of the comments received resulted in no 
change in the margin for these final results.

EFFECTIVE DATE: September 23, 1994.

FOR FURTHER INFORMATION CONTACT: Joseph Hanley or Michael Rill, Office 
of Antidumping Compliance, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Washington, D.C. 20230; 
telephone: (202) 482-4733.

SUPPLEMENTARY INFORMATION:

Background

    On April 7, 1994, the Department published in the Federal Register 
(59 FR 16616) the preliminary results of its administrative review of 
the antidumping finding on LPTs from Italy (37 FR 11772, June 14, 
1972). The Department has now completed that administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Tariff Act).

Scope of Review

    Imports covered by the review are shipments of LPTs; that is, all 
types of transformers rated 10,000 kVA (kilovolt-amperes) or above, by 
whatever name designated, used in the generation, transmission, 
distribution, and utilization of electric power. The term 
``transformers'' includes, but is not limited to, shunt reactors, 
autotransformers, rectifier transformers, and power rectifier 
transformers. Not included are combination units, commonly known as 
rectiformers, if the entire integrated assembly is imported in the same 
shipment and entered on the same entry and the assembly has been 
ordered and invoiced as a unit, without a separate price for the 
transformer portion of the assembly. This merchandise is currently 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
8504.22.00, 8504.23.00, 8504.34.33, 8504.40.00, and 8504.50.00. The HTS 
item numbers are provided for convenience and Customs purposes. The 
written description remains dispositive.
    The review period is June 1, 1992, through May 31, 1993. The review 
covers one manufacturer/exporter of LPTs, Tamini Costruzioni 
Elettromeccaniche (Tamini).

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case and rebuttal briefs from the 
petitioner, ABB Power T&D Company, Inc. (ABB), and the respondent, 
Tamini.
    Comments: ABB contends that the present factual record in this 
administrative review is insufficient for the Department to issue a 
final determination supported by ``substantial evidence on the 
record.'' ABB asserts that the Department has not collected sufficient 
information to confirm the accuracy of respondent's allocation 
methodology, which uses direct labor costs to allocate indirect 
manufacturing (overhead) costs to the transformers sold to the United 
States. ABB believes that Tamini's allocation methodology may not 
adequately account for the indirect manufacturing costs incurred by 
respondent to produce the U.S. transformers. ABB argues that the 
Department's decision to collect detailed information on the labor 
costs of the two transformers sold to the United States does not 
address the issue of whether the methodology properly allocates 
indirect costs across all units. ABB requests that we also require 
respondent to submit a separate analysis of the direct labor costs for 
all other transformers produced by respondent during the period of 
review (POR). Only by collecting such detailed information on all 
transformers produced during the POR can the Department satisfy itself 
that Tamini has not selected a model with abnormally low direct labor 
costs in an effort to deflate its real cost of production.
    ABB states that, should the Department decide not to conduct a 
separate analysis of the direct labor costs for each transformer 
produced by Tamini during the POR, it should conduct an on-site 
verification or request that Tamini provide the financial documents 
that were used to develop the allocation methodology. Unless the 
Department obtains additional information using one of these 
alternatives, ABB argues that the record will not contain sufficient 
data to calculate a dumping margin and the Department must base its 
final determination on the best information available.
    Tamini claims that ABB's assertions are based entirely on a 
misunderstanding of its allocation methodology. Tamini asserts that, 
despite ABB's comments to the contrary, its allocation methodology does 
not involve the selection of any model for purposes of allocating 
costs. Tamini states that it proportionately allocated actual indirect 
manufacturing costs to the U.S. transformers based on the ratio of the 
actual direct labor costs of the U.S. transformers to the total direct 
labor costs for all transformers.
    Tamini argues that ABB's analysis of its reported actual direct 
labor costs is neither accurate nor objective since it attempts to 
compare a simple average per unit labor cost to the actual labor costs 
of the U.S. transformers. According to Tamini, such a simple per unit 
average does not take into account the vast differences among the 
various transformers produced by Tamini. Furthermore, Tamini claims 
that the simple average calculated by ABB is inaccurate since it 
divides the total labor costs for all transformers by the number of 
units of LPTs sold. Finally, Tamini claims that it has demonstrated 
that all direct labor costs shown on its financial statements were 
accounted for in the allocation methodology and that it has provided 
extensive documentation of the accuracy of the direct labor costs 
submitted for the U.S. transformers.
    Tamini notes that the underlying data which would enable it to 
conduct an analysis of the direct labor costs for each transformer 
produced during the POR are not computerized. Therefore, Tamini 
contends that such a requirement would be extremely time-consuming and 
burdensome. Furthermore, Tamini claims that such detailed cost 
information on all other transformers produced during the POR would be 
pointless since it would not produce information useful for the 
Department's calculations.
    Department's Position: We disagree with ABB's assertion that there 
is insufficient evidence on the record to sustain a final 
determination. Respondent has submitted a substantial amount of 
information to account for all direct labor costs shown on its 
financial statements. Tamini has also provided detailed documentation 
of the direct labor costs incurred to produce the transformers exported 
to the United States. In fact, some of the documentation submitted by 
respondent, such as payroll records and portions of the general ledger, 
is usually only requested at verification. Since Tamini has submitted 
substantial supporting information and we have no reason to suspect 
that the reported direct labor costs used in the allocation do not 
accurately reflect respondent's cost experience, we disagree with ABB's 
argument that it is necessary to collect the total direct labor costs 
for each transformer produced during the POR.
    Furthermore, we agree with Tamini that ABB's analysis of Tamini's 
reported actual direct labor costs is flawed. ABB's calculation of a 
per unit average labor cost uses only LPTs in its denominator, rather 
than all types of transformers produced by respondent during the POR. 
ABB's analysis also does not take into account the fact that the 
respondent produced a variety of transformers of different types, 
almost all of which have unique characteristics. Such analysis 
incorrectly assumes that all of Tamini's products incurred the same 
direct labor costs. Since LPTs are highly complex merchandise which are 
custom designed to the specifications of the individual customers, it 
is necessary to base the constructed value on the actual costs of the 
units sold to the United States rather than an average cost of vastly 
dissimilar units.
    Finally, in accordance with section 353.36(v)(A) of our 
regulations, petitioner may submit a written request for verification 
not later than 120 days after the date of initiation. Considering that 
petitioner's verification request was untimely, that ample 
documentation of the type usually examined at verification has been 
submitted, and that there is no evidence suggesting that the 
information submitted by respondent does not accurately reflect its 
cost experience, we declined to verify.

Final Results of Review

    As a result of this review, we determine no dumping margins exist 
for Tamini for the period June 1, 1992, through May 31, 1993.
    The Department will instruct the Customs Service to assess 
antidumping duties on all appropriate entries. The Department will 
issue appraisement instructions directly to the Customs Service.
    Furthermore, the following cash deposit requirements will be 
effective for all shipments of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of these final results of administrative review, as provided by 
section 751(a)(1) of the Tariff Act: (1) The cash deposit rate for 
Tamini will be the rate established in the final results of this 
administrative review; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; (4) the 
cash deposit rate for all other manufacturers or exporters will be 
92.47 percent.
    On May 25, 1993, the Court of International Trade (CIT) in Floral 
Trade Council v. United States, Slip Op. 93-79, and Federal-Mogul 
Corporation v. United States, Slip Op. 93-83, decided that once an 
``all others'' rate is established, it can only be changed through an 
administrative review. The Department has determined that in order to 
implement these decisions, it is appropriate to reinstate the original 
``all others'' rate from the LTFV investigation (or that rate as 
amended for correction of clerical errors or as a result of litigation) 
in proceedings governed by antidumping duty orders as the ``all 
others'' rate for cash deposits in all current and future 
administrative reviews. In proceedings governed by antidumping 
findings, unless we are able to ascertain the ``all others'' rate from 
the Treasury LTFV investigation, the Department has determined that it 
is appropriate to adopt the ``new shipper'' rate established in the 
first final results of administrative review published by the 
Department (or that rate as amended for correction of clerical errors 
or as a result of litigation) as the ``all others'' rate for the 
purposes of establishing cash deposits in all current and future 
administrative reviews.
    Because this proceeding is governed by an antidumping finding, and 
we are unable to ascertain the ``all others'' rate from the Department 
of Treasury LTFV investigation, the Department has adopted the ``new 
shipper'' rate of 92.47 percent established in the first final results 
published by the Department in the Federal Register on August 6, 1984 
(49 FR 31313).
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning disposition of proprietary information disclosed under APO 
in accordance with 19 CFR 353.34(d). Timely written notification of the 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675 (a)(1)) and 19 CFR 
353.22.

    Dated: September 12, 1994.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 94-23647 Filed 9-22-94; 8:45 am]
BILLING CODE 3510-DS-P