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

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