[Federal Register Volume 63, Number 230 (Tuesday, December 1, 1998)]
[Notices]
[Pages 66121-66123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31983]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-475-819]


Certain Pasta from Italy: Final Results of New Shipper 
Countervailing Duty Administrative Review

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

ACTION: Notice of Final Results of New Shipper Countervailing Duty 
Administrative Review.

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SUMMARY: On Septmember 1, 1998, the Department of Commerce published in 
the Federal Register the preliminary results of its new shipper 
administrative review of the countervailing duty order on certain pasta 
from Italy for the period January 1, 1997, through December 31, 1997. 
We have now completed this review and determine the net subsidy to be 
0.95 percent ad valorem. We will instruct the Customs Service to assess 
countervailing duties with respect to all shipments of the subject 
merchandise by Co. R. EX. S.r.L., the new shipper to this review, 
entered during this period.

EFFECTIVE DATE: December 1, 1998.

FOR FURTHER INFORMATION CONTACT: Vincent Kane or Sally Hastings, Office 
of AD/CVD Enforcement, Group I, Import Administration, U.S. Department 
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-2815 or 482-3464, 
respectively.
    Applicable Statute: Unless otherwise indicated, all citations to 
the statute are references to the provisions of the Tariff Act of 1930, 
as amended by the Uruguay Round Agreements Act (URAA), effective 
January 1, 1995 (the Act). The Department of Commerce (the Department) 
is conducting this administrative review in accordance with section 
751(a) of the Act. All other references are to the Department's 
regulations codified at 19 CFR Part 351 et seq. Antidumping Duties; 
Countervailing Duties; Final Rule 62 FR 27296 (May 19, 1997), unless 
otherwise indicated.

SUPPLEMENTARY INFORMATION:

Background

    On September 1, 1998, the Department published in the Federal 
Register (63 FR 46411) the preliminary results of the new shipper 
administrative review of the countervailing duty order on certain pasta 
from Italy. The Department has now completed this new shipper 
administrative review pursuant to section 751(a)(2)(B) of the Act, and 
in accordance with 19 CFR 351.214. We invited interested parties to 
comment on the preliminary results. We received no comments. The review 
covers CO.R.EX., an exporter of the subject merchandise, and CO.R.EX.'s 
subcontractor. (CO.R.EX. does not produce pasta but has a subcontractor 
produce pasta for it from semolina supplied by Co.R.EX.) This review 
covers 24 programs.

Scope of the Review

    The merchandise under review consists of certain non-egg dry pasta 
in packages of five pounds (or 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 polyethyelen or polypropylene bags, 
of varying dimensions.
    Excluded from the scope of this review 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 one of the following agencies: 
Instituto Mediterraneo Di Certificazione, Bioagricoop Scrl 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 review.

[[Page 66122]]

    The merchandise under review is currently classified 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, or written description of the scope of this review is 
dispositive.
    Furthermore, on July 30, 1998, the Department issued a scope ruling 
that multipacks consisting of six one-pound packages of pasta, which 
are shrink wrapped into a single package, are within the scope of the 
orders. (See July 30, 1998, letter from Susan H. Kunbach, Acting Deputy 
Assistant Secretary for Import Administration, to Barbara P. Sidari, 
Vice President, Joseph A. Sidari Company, Inc.)

Period of Review

    The period of review (``POR'') for which we are measuring subsidies 
is calendar year 1997.

Subsidies Valuation Information

    Benchmark for Long-term Loans and Discount Rate: The companies 
under review did not take out any long-term, fixed-rate, lira-
denominated loans or other debt obligations which could be used as 
benchmarks in any of the years in which grants were received or 
government loans under investigation were given. In the Final 
Affirmative Countervailing Duty Determination; Certain Stainless Steel 
Wire Rod from Italy, 63 FR 87077 (July 29, 1998), the Department 
determined, based on information gathered during verification, that the 
Italian Bankers' Association (ABI) prime rate is the most suitable 
benchmark for long-term financing to Italian companies. Therefore, we 
used the Italian ABI prime rate increased by the average spread over 
the ABI prime rate charged by banks on loans to commercial customers as 
the benchmark for long-term loans and the discount rate.
    Allocation Period: In British Steel plc. v. United States, 879 F. 
Supp. 1254, 1289 (CIT 1955), aff'd in part and rev'd in part on other 
grounds, 127 F.3d 1471 (Fed. Cir. 1997), the U.S. Court of 
International Trade (the Court) ruled against the allocation 
methodology for non-recurring subsidies that the Department had 
employed for the past decade, which was articulated in the General 
Issues Appendix, appended to the Final Countervailing Duty 
Determination; Certain Steel Products from Austria, 58 FR 37225 (July 
9, 1993) (``GIA''). In accordance with the Court's remand order, the 
Department determined that the most reasonable method of deriving the 
allocation period for nonrecurring subsidies is a company-specific 
average useful life (``AUL'') of non-renewable physical assets. This 
remand determination was affirmed by the Court on July 4, 1996. See 
British Steel plc v. United States, 929 F. Supp 426, 439 (CIT 1996). 
Accordingly, the Department has applied this method to determine the 
appropriate allocation period in this review.
    Consistent with our approach in the investigation segment of this 
proceeding, Final Affirmative Countervailing Duty Determination: 
Certain Pasta (``Pasta'') from Italy (61 FR 30288, June 14, 1996) 
(``Pasta from Italy''), we determined that the Law 64/86 grant received 
by CO.R.EX.'s subcontractor was non-recurring. For purposes of 
allocating the Law 64/86 grant, CO.R.EX.'s subcontractor submitted an 
AUL calculation based on depreciation and asset values of productive 
assets reported in its financial statements. This AUL was derived by 
dividing the sum of average gross book value of depreciable fixed 
assets over the past ten years by the average depreciation charges over 
this period. We found this calculation to be reasonable and consistent 
with our company-specific AUL objective. In this manner, we calculated 
an AUL for CO.R.EX.'s subcontractor. We have used this calculated AUL 
for the allocation period for the Law 64/86 industrial development 
grant, the only non-recurring subsidy received by respondents.

Analysis of Programs

I. Programs Conferring Subsidies

    Based upon our analysis of the responses to our questionnaires and 
the record of this review, we determine the following:
Programs Previously Determined to Confer Subsidies
    In the preliminary results, we found that the programs listed below 
conferred countervailable benefits on the subject merchandise. We did 
not receive any comments on these programs from interested parties. Our 
review of the record, however, has led us to modify the calculations 
for each of these programs. First, we revised the denominator used to 
calculate the subsidy rate for each of the programs listed below. For 
the preliminary results, we based the denominator on f.o.b. sales 
values calculated on the basis of estimates of inland freight charges. 
For these final results, we have used actual inland freight charges in 
calculating f.o.b. sales values. These revised f.o.b. sales values 
served as the denominators for calculating the subsidy rate for each of 
these programs.
    Further, we corrected an error in the calculation of the discount 
rate used to allocate the benefit amount for a Law 64/86 industrial 
development grant to CO.R.EX.'s subcontractor and for the Law 341/95 
consolidation loan received by CO.R.EX. For a further discussion of 
this correction, see Memorandum to File: Calculation Notes for Final 
Results, dated November 22, 1998 (a public version of which is on file 
in room B099 of the main Commerce Building).
    As a result of the calculation changes described above, the subsidy 
rates for the programs listed below changed as follows:
A. Industrial Development Grants Under Law 64/86
    The subsidy rate for this program decreased from 0.18 percent to 
0.15 percent ad valorem.
B. Social Security Reductions and Exemptions
1. Sgravi Benefits
    The subsidy rate for this program decreased from 0.01 percent to 
0.00 percent ad valorem.
2. Fiscalizzazione Benefits
    The subsidy rate for this program decreased from 0.06 percent to 
0.04 percent ad valorem.
3. Law 407/90 Benefits
    The subsidy rate for this program decreased from 0.06 percent to 
0.04 percent ad valorem.
4. Law 863 Benefits
    The subsidy rate for this program decreased from 0.03 percent to 
0.01 percent ad valorem.
Program Determined in This Review to Confer Subsidies
    In the preliminary results, we found that the program listed below 
conferred countervailable benefits on the subject merchandise. We did 
not receive any comments on this program from interested parties. Our 
review of the record, however, has led us to modify the calculations 
for this program, as described above in the section.
Programs Previously Determined to Confer Subsidies
Debt Consolidation Law 341/95
    The subsidy rate for this program decreased from 0.93 percent to 
0.88 percent ad valorem.

II. Programs Determined To Be Not Used

    We determine that CO.R.EX. and its subcontractor did not apply for 
or

[[Page 66123]]

receive benefits under the following programs during the POR:

A. VAT Reductions
B. Export Credits Under Law 227/77
C. Capital Grants Under Law 675/77
D. Retraining Grants Under Law 675/77
E. Interest Contributions on Bank Loans Under Law 675/77
F. Interest Grants Financed by IRI Bonds
G. Preferential Financing for Export Promotion Under Law 394/81
H. Corporate Income Tax (IRPEG) Exemptions
I. European Agricultural Guidance and Guarantee Fund
J. Urban Redevelopment Under Law 181
K. Local Income Tax (ILOR) Exemptions
L. Industrial Development Loans Under Law 64/86
M. Export Marketing Grants Under Law 304/90
N. Lump-Sum Interest Payment Under the Sabatini Law for Companies in 
Southern Italy
O. Remission of Taxes on Export Credit Insurance under Article 33 of 
Law 227/77
P. European Social Fund
Q. European Regional Development Fund
R. Export Restitution Payments

    We did not receive any comments on these programs from the 
interested parties and our review of the record has not led us to 
change our findings from the preliminary results.

Final Results of Review

    For the period January 1, 1997 through December 31, 1997, we 
determine the net subsidy for CO.R.EX. to be 0.95 percent ad valorem. 
We will instruct the Customs Service to assess countervailing duties at 
this net subsidy rate on all entries of the subject merchandise from 
CO.R.EX. entered, or withdraw from warehouse, for consumption on or 
after January 1, 1997 and on or before December 31, 1997.
    The Department also intends to instruct the Customs Service to 
collect a cash deposit of estimated countervailing duties of 0.95 
percent of the f.o.b. invoice value on all shipments of the subject 
merchandise from CO.R.EX. entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of the final results of 
this new shipper review. The cash deposit rates for all other 
producers/exporters remain unchanged from the last completed 
administrative review (see Final Results of Countervailing Duty 
Administrative Review: Certain Pasta from Italy 63 FR 35665 (August 14, 
1998)).
    This administrative review and notice are in accordance with 
sections 751(a) (2) (B) and 777 (i) (1) of the Act and 19 CFR 351.214.

    Dated: November 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-31983 Filed 11-30-98; 8:45 am]
BILLING CODE 3510-DS-M