Import Administration, International Trade Administration, Department of Commerce.
In response to requests by interested parties, the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on certain pasta (“pasta”) from Italy for the period of review (“POR”) July 1, 2005, through June 30, 2006.
We preliminarily determine that during the POR, Rummo S.p.A. Molino e Pastificio (“Rummo”) sold subject merchandise at less than normal value (“NV”). We also preliminarily determine that Atar, S.r.L. (“Atar”) is not the producer of subject merchandise and are preliminarily rescinding the review of Atar. If these preliminary results are adopted in the final results of this administrative review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties equal to the difference between the export price (“EP”) and NV for entries of subject merchandise produced by Rummo and to the All Others rate for entries of subject merchandise claimed to be produced by Atar.
Interested parties are invited to comment on these preliminary results and partial rescission.
August 7, 2007.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Maura Jeffords or Christopher Hargett, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-3146 or (202) 482-4161, respectively.End Further Info End Preamble Start Supplemental Information
On July 24, 1996, the Department published in the Federal Register the antidumping duty order on pasta from Italy. See Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy, 61 FR 38547 (July 24, 1996).
On July 3, 2006, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on certain pasta from Italy. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation: Opportunity to Request Administrative Review, 71 FR 37890 (July 3, 2006). We received requests for review from petitioners1 and from individual Italian exporters/producers of pasta, in accordance with 19 CFR 351.213(b)(1) and (2). On August 30, 2006, the Department published the notice of initiation of this antidumping duty administrative review covering the period July 1, 2005, through June 30, 2006, listing these four companies as respondents: Atar, Rummo, Industria Alimentare Colavita S.p.A. (“Indalco”) and Corticella Molini e Pastifici S.p.A. and its affiliate Pasta Combattenti S.p.A. (collectively, “Corticella/Combattenti”). See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 71 FR 51573 (August 30, 2006) (“Initiation Notice”).
On August 31, 2006, Indalco timely withdrew its request for an administrative review of certain pasta from Italy. On November 28, 2006, Start Printed Page 44083Corticella/Combattenti also timely withdrew its request. The Department rescinded the review of these respondents on July 12, 2007.2
Between August 2006 and May 2007, the Department issued its initial questionnaire and supplemental questionnaires to each respondent, as applicable. We received responses to the Department's initial and supplemental questionnaires on November 13, 2006, April 4, 2007, April 12, 2007, May 1, 2007, and May 11, 2007, from Atar. Rummo provided responses to the Department's initial and supplemental questionnaires on October 10, 2006, October 24, 2006, February 16, 2007, February 27, 2007, May 10, 2007, and July 13, 2007. On February 16, 2007, May 18, 2007, and July 9, 2007, the petitioners filed comments on Atar's responses. On December 15, 2006, March 23, 2007, and June 21, 2007, petitioners filed comments on Rummo's responses. On March 23, 2007, the Department fully extended the due date for the preliminary results of review from April 2, 2007, to July 31, 2007. See Certain Pasta from Italy: Extension of Time Limits for the Preliminary Results of Antidumping Duty Administrative Review, 72 FR 13745 (March 23, 2007).
Preliminary Intent to Rescind the Review of Atar
In Notice of Final Results of the Ninth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy, 72 FR 7011, February 14, 2007 (“Final Results 9th Review”), and accompanying Issues and Decisions Memorandum (“ID Memo 9th Review”), the Department expressed its “serious concerns” regarding Atar's status as a producer by way of tolling arrangements. See ID Memo 9th Review at Comment 1. In the supplemental questionnaires sent to Atar in this current review, the Department asked follow-up questions pertinent to the issue of whether Atar was a producer of subject merchandise during the POR consistent with 19 CFR 351.401(h). However, Atar provided no additional information to address the Department's concerns and to demonstrate that it was the producer of subject merchandise. As discussed in the memorandum from Melissa G. Skinner to Stephen J. Claeys, RE: Status of Atar, S.r.L.("Atar”) as Manufacturer of Subject Merchandise, dated July 31, 2007, the totality of the circumstances surrounding Atar's relationships with its suppliers of tolling services and customers lead to the preliminary determination that under 19 CFR 351.401(h) Atar is not the producer. Since Atar requested the review as “a producer” and Atar does not qualify for producer status, it does not qualify for this administrative review. Accordingly, the Department preliminarily rescinds the review. Because Atar incorrectly claimed to be the manufacturer, and no other manufacturer has been identified, under these circumstances, we will instruct customs to liquidate entries that are claimed to be produced by Atar at the All Others rate.
Scope of the Order
Imports covered by this order are shipments of certain non-egg dry pasta in packages of five pounds four ounces or less, whether or not enriched or fortified or containing milk or other optional ingredients such as chopped vegetables, vegetable purees, milk, gluten, diastasis, vitamins, coloring and flavorings, and up to two percent egg white. The pasta covered by this scope is typically sold in the retail market, in fiberboard or cardboard cartons, or polyethylene or polypropylene bags of varying dimensions.
Excluded from the scope of this order are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. Also excluded are imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by the Instituto Mediterraneo Di Certificazione, by Bioagricoop Scrl, by QC&I International Services, by Ecocert Italia, by Consorzio per il Controllo dei Prodotti Biologici, by Associazione Italiana per l'Agricoltura Biologica, or by Instituto per la Certificazione Etica e Ambientale (“ICEA”) are also excluded from this order. See Memorandum from Audrey Twyman to Susan Kuhbach, dated February 28, 2006, entitled “Recognition of Instituto per la Certificazione Etica e Ambientale (“ICEA”).
The merchandise subject to this order is currently classifiable under item 1902.19.20 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the merchandise subject to the order is dispositive.
In accordance with section 771(16) of the Act, we first attempted to match contemporaneous sales of products sold in the United States and comparison markets that were identical with respect to the following characteristics: (1) pasta shape; (2) type of wheat; (3) additives; and (4) enrichment. When there were no sales of identical merchandise in the comparison market to compare with U.S. sales, we compared U.S. sales with the most similar product based on the characteristics listed above, in descending order of priority. When there were no appropriate comparison market sales of comparable merchandise, we compared the merchandise sold in the United States to constructed value (“CV”), in accordance with section 773(a)(4) of the Act.
For purposes of the preliminary results, where appropriate, we have calculated the adjustment for differences in merchandise based on the difference in the variable cost of manufacturing (“VCOM”) between each U.S. model and the most similar home market model selected for comparison.
Comparisons to Normal Value
To determine whether sales of certain pasta from Italy were made in the United States at less than NV, we compared the EP or constructed export price (“CEP”) to the NV, as described in the “Export Price and Constructed Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transactions. See the Department's “Calculation Memorandum for Rummo S.p.A.” (“Rummo's calculation memo”) (August 30, 2007), available in the CRU.
For the price to the United States, we used, as appropriate, EP or CEP, in accordance with sections 772(a) and (b) of the Act. We calculated EP when the merchandise was sold by the producer or exporter outside of the United States directly to the first unaffiliated purchaser in the United States prior to importation and when CEP was not otherwise warranted based on the facts on the record. We calculated CEP for those sales where a person in the United States, affiliated with the foreign exporter or acting for the account of the exporter, made the sale to the first unaffiliated purchaser in the United States of the subject merchandise. We based EP and CEP on the packed cost-insurance-freight (“CIF”), ex-factory, free-on-board (“FOB”), or delivered prices to the first unaffiliated customer in, or for exportation to, the United States. When appropriate, we reduced these prices to reflect discounts and rebates. Start Printed Page 44084
In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including inland freight from plant or warehouse to port of exportation, foreign brokerage, handling and loading charges, export duties, international freight, marine insurance, U.S. inland freight expenses, warehousing, and U.S. duties. In addition, when appropriate, we increased EP or CEP as applicable, by an amount equal to the countervailing duty rate attributed to export subsidies in the most recently completed administrative review, in accordance with section 772(c)(1)(C) of the Act.
For CEP, in accordance with section 772(d)(1) of the Act, when appropriate, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including direct selling expenses (advertising, cost of credit, warranties, banking, slotting fees, and commissions paid to unaffiliated sales agents). In addition, we deducted indirect selling expenses that related to economic activity in the United States. These expenses include certain indirect selling expenses incurred by its affiliated U.S. distributors. We also deducted from CEP an amount for profit in accordance with sections 772(d)(3) and (f) of the Act. See Rummo's calculation memo.
A. Selection of Comparison Markets
To determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared the respondent's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to sections 773(a)(1)(B) of the Act, because Rummo had an aggregate volume of home market sales of the foreign like product that was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable for Rummo.
B. Cost of Production (“COP”)Analysis
1. Calculation of COP
Before making any comparisons to NV, we conducted a COP analysis of Rummo pursuant to section 773(b) of the Act, to determine whether Rummo's comparison market sales were made at prices below the COP. We calculated the COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for selling, general, and administrative expenses (“SG&A”) and packing, in accordance with section 773(b)(3) of the Act. We relied on the Rummo's' information as submitted.
2. Test of Comparison Market Prices
As required under section 773(b)(2) of the Act, we compared the weighted-average COP to the per-unit price of the comparison market sales of the foreign like product to determine whether these sales had been made at prices below the COP within an extended period of time in substantial quantities, and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time. We determined the net comparison market prices for the below-cost test by subtracting from the gross unit price any applicable movement charges, discounts, rebates, direct and indirect selling expenses (also subtracted from the COP), and packing expenses. See Rummo's calculation memo.
3. Results of COP Test
Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 percent of sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product during the POR were at prices less than the COP, we determined such sales to have been made in “substantial quantities.” See section 773(b)(2)(C) of the Act. The sales were made within an extended period of time, in accordance with section 773(b)(2)(B) of the Act, because they were made over the course of the POR. In such cases, because we compared prices to POR-average costs, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, for Rummo, we disregarded below-cost sales of a given product of 20 percent or more and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act. See Rummo's calculation memo.
D. Calculation of Normal Value Based on Comparison Market Prices
We calculated NV based on ex-works, FOB or delivered prices to comparison market customers. We made deductions from the starting price, when appropriate, for handling, loading, inland freight, warehousing, inland insurance, discounts, and rebates. We added interest revenue. In accordance with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing costs and deducted comparison market packing, respectively. In addition, we made circumstance-of-sale adjustments for direct expenses, including imputed credit expenses, advertising, warranty expenses, commissions, bank charges, and billing adjustments, in accordance with section 773(a)(6)(C)(iii) of the Act.
We also made adjustments for Rummo, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred in the home market or the United States where commissions were granted on sales in one market but not in the other, the “commission offset.” Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less.
When comparing U.S. sales with comparison market sales of similar, but not identical, merchandise, we also made adjustments for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this adjustment on the difference in the VCOM for the foreign like product and subject merchandise, using POR-average costs.
Sales of pasta purchased by the respondent from unaffiliated producers and resold in the comparison market were disregarded, and sales of comingled and tolled pasta were re-coded as “Rummo.”
E. Level of Trade
In accordance with section 773(a)(1)(B) of the Act, we determined NV based on sales in the comparison market at the same level of trade (“LOT”) as the EP and CEP sales, to the extent practicable. When there were no sales at the same LOT, we compared U.S. sales to comparison market sales at a different LOT. When NV is based on CV, the NV LOT is that of the sales from which we derive SG&A expenses and profit.
Pursuant to 19 CFR 351.412, to determine whether comparison market sales were at a different LOT, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated (or arm's-length) customers. If the comparison-market sales were at a different LOT and the differences affect price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison-market sales at the Start Printed Page 44085LOT of the export transaction, we will make an LOT adjustment under section 773(a)(7)(A) of the Act.
Finally, if the NV LOT is more remote from the factory than the CEP LOT and there is no basis for determining whether the differences in LOT between NV and CEP affected price comparability, we will grant a CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 (November 19, 1997).
In the home market, Rummo reported that it sold through two channels of distribution. Rummo reported that the two channels of distribution in the home market constitute one LOT. In the U.S. market, Rummo reported that its sales were made through three channels of distribution, to two LOTs. In the U.S. market, we find that the selling activity differed between the two LOTs such that they can not be considered the same level of trade. The Department has determined that Rummo's home market sales are made at a different, and more advanced, stage of marketing than the LOTs of the U.S. sales. Nonetheless, we are unable to make an LOT adjustment because there is no other data on the record that would allow the Department to establish whether there is a pattern of consistent price differences between sales at different LOTs in the home market. Therefore, We are preliminarily granting a CEP offset for Rummo. For a detailed description of our LOT methodology and a summary of company-specific LOT findings for these preliminary results, see Rummo's calculation memo.
For purposes of these preliminary results, we made currency conversions in accordance with section 773A(a) of the Act, based on the official exchange rates published by the Federal Reserve Bank. See Rummo's calculation memo.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the following weighted-average percentage margin exists for the period July 1, 2005, through June 30, 2006:
The Department will disclose the calculations performed for these preliminary results within five days of the date of publication of this notice to the parties of this proceeding, in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 44 days after the date of publication, or the first working day thereafter. Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the time limit for filing the case briefs, unless the Department alters this time limit. See 19 CFR 351.309(d). Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, and (2) a brief summary of the argument. Further, parties submitting written comments are requested to provide the Department with an additional copy of the public version of any such comments on diskette. Pursuant to 19 CFR 351.213(h), the Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results.
Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of the subject merchandise. Upon issuance of the final results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, we calculated importer-specific assessment rates for the subject merchandise by aggregating the dumping margins for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer. Where appropriate, to calculate the entered value, we subtracted international movement expenses (e.g., international freight) from the gross sales value.
The Department clarified its “automatic assessment” regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the POR produced by companies included in these preliminary results of review for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the All-Others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
Cash Deposit Requirements
To calculate the cash deposit rate for Rummo, we divided its total dumping margin by the total net value of its sales during the review period. The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of pasta from Italy entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Rummo will be the rate established in the final results of this review, except if the rate is less than 0.5 percent and, therefore, de minimis, no cash deposit will be required; (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 final results in which that manufacturer or exporter participated; (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 final results for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be 15.45 percent, the All Others rate established in the LTFV investigation. See Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain Pasta from Italy, 61 FR 38547 (July 24, 1996). These cash deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification to Importers
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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 increase the subsequent assessment of Start Printed Page 44086the antidumping duties by the amount of antidumping duties reimbursed. These preliminary results of this administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).Start Signature
Dated: July 31, 2007.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
1. New World Pasta Company; Dakota Growers Pasta Company; and American Italian Pasta Company.Back to Citation
[FR Doc. E7-15340 Filed 8-6-07; 8:45 am]
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