[Federal Register Volume 63, Number 72 (Wednesday, April 15, 1998)]
[Notices]
[Pages 18364-18366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9869]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818]
Anti-circumvention Inquiry of the Antidumping Duty Order on
Certain Pasta From Italy: Affirmative Preliminary Determination of
Circumvention of the Antidumping Duty Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Affirmative Preliminary Determination of
Circumvention of Antidumping Duty Order.
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SUMMARY: On October 23, 1997, the Department of Commerce received an
allegation of circumvention of the antidumping duty order on certain
pasta from Italy. Pursuant to that allegation, the Department of
Commerce initiated an anti-circumvention inquiry on December 8, 1997.
We preliminarily determine that certain pasta produced in Italy by
Barilla S.r.L. (Barilla) and exported to the United States in packages
of greater than five pounds, which subsequently are repackaged in the
United States into packages of five pounds or less, constitute
circumvention of the antidumping duty order on certain pasta from
Italy, within the meaning of section 781(a) of the Tariff Act of 1930,
as amended, and 19 CFR 351.225(g). Interested parties are invited to
comment on this preliminary determination.
EFFECTIVE DATE: April 15, 1998.
FOR FURTHER INFORMATION CONTACT: Edward Easton or John Brinkmann,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-1777 or (202) 482-5288,
respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act. In addition, unless otherwise indicated,
all citations to the regulations of the Department of Commerce (the
Department) are to the regulations as codified at 19 CFR part 351, 62
FR 27295 (May 19, 1997).
[[Page 18365]]
Background
Since the initiation of this anti-circumvention inquiry on December
8, 1997 (see Initiation of Anti-Circumvention Inquiry on Antidumping
Duty Order on Certain Pasta from Italy, 62 FR 65673 (December 15, 1997)
(Notice of Initiation), the following events have occurred:
On January 2, 1998, the Department issued a questionnaire to
Barilla. On the day that Barilla's response was due (February 9, 1998),
Barilla informed the Department that it would not respond to our
questionnaire.
On January 16, 1998, Barilla proposed a certification scheme which
it states would enable the Department to exclude bulk pasta that is not
to be repackaged after importation, e.g., bulk pasta shipped directly
to institutional or food service users. Specifically, each of Barilla's
independent distributors would certify that it would (1) resell all
pasta purchased from Barilla in the packaging in which the pasta was
delivered to it, and (2) would not repack any pasta in packages greater
than five pounds (hereafter referred to as bulk pasta) into packages of
five pounds or less. At the Department's request, the U.S. Customs
Service (Customs) transmitted to the Department its initial comments on
Barilla's proposed certification program on February 23, 1998 (see
Memorandum to the File dated March 31, 1998).
On February 13, 1998, the petitioners filed a response to Barilla's
January 16 and February 9 letters. The petitioners argued that, given
Barilla's failure to respond to the Department's questionnaire, the
Department should immediately issue an affirmative circumvention ruling
and suspend liquidation on entries of bulk pasta by Barilla. The
petitioners also stated that they did not oppose Barilla's proposed
certification scheme, but have urged the Department to adopt any such
certification scheme for all importers of bulk pasta. Barilla submitted
rebuttal comments on February 20, 1998.
Scope of Antidumping Duty Order
The merchandise currently subject to the antidumping order is
certain non-egg dry pasta in packages of five pounds (2.27 kilograms)
or less, whether or not enriched or fortified or containing milk or
other optional ingredients such as chopped vegetables, vegetable
purees, milk, gluten, diastases, 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 the 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 (IMC), by Bioagricoop Scrl, or by QC&I International
Services. Furthermore, multicolored pasta imported in kitchen display
bottles of decorative glass, which are sealed with cork or paraffin and
bound with raffia, is excluded from the scope of this order.
The merchandise under 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 under
order is dispositive.
Scope of the Anti-Circumvention Inquiry
The product subject to this anti-circumvention inquiry is certain
pasta produced in Italy by Barilla and exported to the United States in
packages of greater than five pounds (2.27 kilograms) that meets all
the requirements for the merchandise subject to the antidumping duty
order, with the exception of packaging size, and which is repackaged
into packages of five pounds (2.27 kilograms) or less after entry into
the United States.
Nature of the Anti-Circumvention Inquiry
Section 781(a)(1) of the Act provides that the Department, after
taking into account any advice provided by the United States
International Trade Commission (ITC) under section 781(e) of the Act,
may include the imported merchandise under review within the scope of
an order if the following criteria have been met: (A) The merchandise
sold in the United States is of the same class or kind as any other
merchandise that is the subject to the antidumping duty order; (B) such
merchandise sold in the United States is completed or assembled in the
United States from parts or components produced in the foreign country
with respect to which such order applies; (C) the process of assembly
or completion in the United States is minor or insignificant; and (D)
the value of the parts or components produced in the foreign country to
which the antidumping duty order applies is a significant portion of
the total value of the merchandise sold in the United States.
Section 781(a)(3) of the Act further provides that, in determining
whether to include parts or components in the order, the Department
shall consider: (1) The pattern of trade, including sourcing patterns;
(2) whether the manufacturer or exporter of the parts or components is
affiliated with the person who assembles or completes the merchandise
sold in the United States; and (3) whether imports into the United
States of the parts or components produced in such foreign country have
increased after the initiation of the investigation which resulted in
the issuance of such order or finding.
The Department's questionnaire, transmitted to Barilla on January
2, 1998, was designed to elicit information for purposes of conducting
both qualitative and quantitative analyses in accordance with the
criteria enumerated at section 781(a) of the Act. This approach is
consistent with our analysis in previous anti-circumvention inquiries.
See, e.g., Certain Carbon Steel Butt-Weld Pipe Fittings from the
People's Republic of China; Affirmative Final Determination of
Circumvention of Antidumping Duty Order, 59 FR 15155 (March 31, 1994).
For the Department to ascertain the value of the completed merchandise
sold in the United States, we requested that Barilla provide cost data
relevant to the production of pasta produced in Italy that is
repackaged and sold in the United States as well as the costs
associated with for the processing and repackaging operations performed
in the United States. Barilla, however, refused to provide any of the
information requested in the Department's questionnaire.
Affirmative Preliminary Determination of Circumvention
For the reasons described below, we preliminarily determine that
circumvention of the antidumping duty order on certain pasta from Italy
is occurring by reason of exports of bulk pasta from Italy produced by
Barilla which subsequently are repackaged in the United States into
packages of five pounds or less for sale in the United States.
Facts Available
Section 776(a) of the Act requires the Department to resort to
facts otherwise available if necessary information is not available on
the record or when an interested party or any other person fails to
provide (requested) information by the deadlines for submission of the
information or in the form and manner
[[Page 18366]]
requested, subject to subsections (c)(1) and (e) of section 782. As
provided in section 782(c)(1) of the Act, if an interested party,
promptly after receiving a request from [the Department] for
information, notifies [the Department] that such party is unable to
submit the information requested in the requested form and manner, the
Department may modify the requirements to avoid imposing an
unreasonable burden on that party. Since Barilla did not provide any
such notification to the Department, subsection (c)(1) does not apply
to this situation. Furthermore, since Barilla failed to respond to the
Department's questionnaire, we must base the preliminary determination
in this inquiry on the facts otherwise available.
Section 776(b) of the Act permits the Department to use an
inference that is adverse to the interests of an interested party if
that party has failed to cooperate by not acting to the best of its
ability to comply with a request for information. Because Barilla
refused to comply with the Department's request for information, we
find that Barilla failed to cooperate by not acting to the best of its
ability to comply with the Department's request. Barilla's refusal to
respond to our questionnaire impedes our ability not only to determine
if circumvention of the antidumping duty order is occurring, but also
to distinguish between its bulk imports for repackaging and any bulk
imports which may have been exempt from the scope of the antidumping
duty order. Therefore, the adverse inference we are relying upon in
accordance with section 776(b) of the Act is that Barilla has been
exporting pasta in bulk packages to the United States, where it has
been repackaged into what would have been subject merchandise had it
been imported directly. The Statement of Administrative Action (SAA),
which accompanied the Uruguay Round Agreements Act, H.R. Doc. No. 316,
103rd Congress, 2nd Session (1994) (URAA), states that information used
to make an adverse inference may include such sources as the petition,
other information placed on the record, or determinations in a prior
proceeding regarding the subject merchandise. SAA at 870. We reviewed
all information on the record including the petitioners' October 23,
1997 application for this anti-circumvention inquiry (see Memorandum
from Gary Taverman to Richard W. Moreland, dated December 8, 1997). We
have concluded that the application alleged each of the elements
required by 781(a) of the Act and was accompanied by supporting data,
and continues to be of probative value.
Barilla's Certification Proposal
The scope of the antidumping duty order on pasta excluded pasta in
packages of greater than five pounds. Our affirmative preliminary
determination in this proceeding is that circumvention of the order is
occurring by reason of imports of bulk pasta produced in Italy by
Barilla which are subsequently repackaged in the United States into
packages of five pounds or less for sale in the United States. This
anti-circumvention inquiry, initiated pursuant to section 781(a) of the
Act with respect to merchandise completed or assembled in the United
States, is not intended to examine bulk pasta produced by Barilla,
imported into the United States, and resold in bulk quantities within
the United States because imports of bulk pasta into the United States
for resale as bulk pasta would not constitute circumvention of the
antidumping duty order.
As discussed in the Background section above, Barilla requested
that the Department implement a certification scheme whereby each of
its independent distributors would certify that it would resell all
pasta purchased from Barilla in the packaging in which the pasta was
delivered to it, and would not repack any pasta from packages greater
than five pounds into packages of five pounds or less. According to
Barilla, this scheme would enable the Department to exclude bulk pasta
that was not destined for repackaging after importation, e.g., bulk
pasta shipped directly to institutional or food service users, from the
scope of the antidumping duty order.
For our final circumvention determination, we will allow Barilla an
additional opportunity to provide the Department with information
necessary to distinguish its exports of bulk pasta for repackaging in
the United States from those imported for sale as bulk pasta. If
Barilla provides sufficient relevant information, we will consider the
certification scheme it proposed. In doing so, we will consult with the
U.S. Customs Service to determine the effectiveness of this scheme and
of alternative proposals.
Suspension of Liquidation
In accordance with section 773(d) of the Act, the Department is
directing the Customs Service to suspend liquidation of all entries of
bulk pasta from Italy produced by Barilla that were entered, or
withdrawn from warehouse, for consumption on or after December 8, 1997,
the date of initiation of this anti-circumvention inquiry.
The merchandise subject to suspension of liquidation is pasta in
packages of greater than five pounds as defined in the ``Scope of the
Anti-circumvention Inquiry'' section of this notice. The U.S. Customs
Service shall require a cash deposit in the amount of 11.26 percent for
all such unliquidated entries.
This suspension of liquidation will remain in effect until further
notice.
Notification of the International Trade Commission
The Department, consistent with section 781(e) of the Act, will
notify the ITC of this preliminary determination to include the
merchandise subject to this inquiry within the antidumping duty order
on certain pasta from Italy. Pursuant to section 781(e) of the Act, the
ITC may request consultations concerning the Department's proposed
inclusion of the subject merchandise. If, after consultations, the ITC
believes that a significant injury issue is presented by the proposed
inclusion, the ITC may provide written advice to the Department. In
such a case, the ITC will have 60 days to provide written advice to the
Department.
Public Comment
Interested parties may request disclosure within five days of the
date of publication of this determination, and may request a hearing
within 10 days of publication. Case briefs and/or written comments from
interested parties may be submitted no later than 20 days from the
publication of this notice. Rebuttal briefs and rebuttals to comments,
limited to issues raised in those briefs or comments, may be filed no
later than 27 days after publication of this notice. Any hearing, if
requested, will be held no later than 34 days after publication of this
notice. The Department will publish the final determination with
respect to this anti-circumvention inquiry, including the results of
its analysis of any written comments.
This affirmative preliminary circumvention determination is in
accordance with section 781(a) of the Act and 19 CFR 351.225 of the
Department's regulations.
Dated: April 7, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-9869 Filed 3-14-98; 8:45 am]
BILLING CODE 3510-DS-P