[Federal Register Volume 64, Number 27 (Wednesday, February 10, 1999)]
[Notices]
[Pages 6615-6631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3277]


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DEPARTMENT OF COMMERCE

[International Trade Administration]
[A-475-818]


Notice of Final Results and Partial Rescission of Antidumping 
Duty Administrative Review: Certain Pasta From Italy

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

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SUMMARY: On August 7, 1998, the Department of Commerce published the 
preliminary results of its administrative review of the antidumping 
duty order on certain pasta from Italy. The review covers shipments of 
this merchandise to the United States by eight respondents during the 
period January 19, 1996, through June 30, 1997.
    For our final results, we have found that, for certain exporters, 
sales of the subject merchandise have been made below normal value. We 
will instruct the Customs Service to assess antidumping duties equal to 
the difference between the export price or constructed export price and 
the normal value.

EFFECTIVE DATE: February 10, 1999.

FOR FURTHER INFORMATION CONTACT: John Brinkmann, Office of AD/CVD 
Enforcement, Group I, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-5288.

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 (``URAA''). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's (``the 
Department's'') regulations refer to the regulations codified at 19 CFR 
Part 351, as published in the Federal Register on May 19, 1997 (62 FR 
27296).

Case History

    This review covers the following manufacturers/exporters of 
merchandise subject to the antidumping duty order on certain pasta from 
Italy: (1) Arrighi S.p.A. Industrie Alimentari (``Arrighi''); (2) 
Barilla Alimentari S.r.L. (``Barilla''); (3) F. lli De Cecco di Filippo 
Fara S. Martino S.p.A. (``De Cecco''); (4) Industria Alimentari 
Colavita S.p.A. (``Indalco''); (5) La Molisana Industrie Alimentari 
S.p.A. (``La Molisana''); (6) Pastificio Fratelli Pagani S.p.A. 
(``Pagani''); (7) N. Puglisi & F. Industria Paste Alimentari S.p.A. 
(``Puglisi''); and (8) Rummo S.p.A. Molino e Pastificio (``Rummo'').
    On August 7, 1998, the Department published the preliminary results 
of this review. See Notice of Preliminary Results and Partial Recission 
of Antidumping Duty Administrative Review: Certain Pasta from Italy, 63 
FR 42368 (Preliminary Results). From July 22 through July 30, 1998, we 
verified the cost information submitted by De Cecco 1. From 
July 27 through July 31, 1998, we verified the cost information 
submitted by Puglisi. On September 23 and September 24, 1998, we 
received case briefs from the following parties: (1) Borden Foods 
Corp., Hershey Pasta and Grocery Group, Inc., and Gooch Foods, Inc. 
(collectively, ``the petitioners''), (2) the five manufacturers/
exporters that responded to our requests for information (De Cecco, 
Indalco, La Molisana, Puglisi, and Rummo); (3) Barilla; and (4) World 
Finer Foods, Inc. (``World Finer Foods''), an importer of pasta 
produced by Arrighi. We received rebuttal briefs from the petitioners, 
De Cecco, Indalco, Puglisi, and Rummo from October 6 through October 8, 
1998. On the basis of requests by interested parties, a public hearing 
was held on October 19, 1998.
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    \1\ We verified De Cecco's sales information prior to the 
Preliminary Results, from May 4-8, 1998.
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Scope of Review

    Imports covered by this review are shipments of 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 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 the Instituto Mediterraneo Di 
Certificazione (IMC), by Bioagricoop Scrl, by QC&I International 
Services or by Ecocert Italia.
    The merchandise subject to review 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.

Scope Rulings

    (1) On August 25, 1997, the Department issued a scope ruling that 
multicolored pasta, imported in kitchen display bottles of decorative 
glass that are sealed with cork or paraffin and bound with raffia, is 
excluded from the scope of the antidumping and countervailing duty 
orders, (see Memorandum from Edward Easton to Richard Moreland, dated 
August 25, 1997).
    (2) On July 30, 1998, the Department issued a scope ruling, finding 
that multipacks consisting of six one-pound packages of pasta that are 
shrink-wrapped into a single package are within the scope of the 
antidumping and countervailing duty orders. (See letter from Susan H. 
Kuhbach, Acting Deputy Assistant Secretary for Import Administration, 
to Barbara P. Sidari, Vice President, Joseph A. Sidari Company, Inc., 
dated July 30, 1998.)
    (3) On October 23, 1997, the petitioners filed an application 
requesting that the Department initiate an anti-circumvention 
investigation against Barilla S.r.L., an Italian producer and exporter 
of pasta. On October 5, 1998, the Department issued its final 
determination that, pursuant to section 781(a) of the Act, 
circumvention of the

[[Page 6616]]

antidumping duty order 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. (See Anti-circumvention Inquiry of the Antidumping Duty 
Order on Certain Pasta from Italy: Affirmative Final Determination of 
Circumvention of the Antidumping Duty Order, 63 FR 54672 (October 13, 
1998).)
    (4) On October 26, 1998, we self-initiated a scope inquiry to 
determine whether a package weighing over five pounds as a result of 
allowable industry tolerances may be within the scope of the 
antidumping and countervailing duty orders. On November 18, 1998, the 
Department received comments regarding this scope inquiry. The 
Department received rebuttal comments on November 30, 1998. In 
accordance with 19 CFR 351.225(f)(iii)(5), the Department will issue a 
scope ruling within 120 days of the initiation of the inquiry.

Partial Rescission

    As noted in the preliminary results, on September 2, 1997, the 
petitioners withdrew their request for reviews of Castelletti S.p.A., 
Societa Transporti Castelletti, General Noli S.p.A., and R. Queirolo & 
Co., S.p.A. In addition, Petrini, S.p.A. (``Petrini'') withdrew its 
request for a review on October 24, 1997, and Delverde Srl 
(``Delverde'') and Tamma Industrie Alimentari di Capitanata, SrL 
(``Tamma'') withdrew their requests for a review on November 10, 1997. 
Because there were no other requests for reviews of these companies, 
and because the letters withdrawing the requests for reviews were 
timely filed, we rescinded the review with respect to these companies 
in accordance with 19 CFR 351.213(d)(1).

Use of Facts Available

    Arrighi, Barilla, and Pagani ``failed to cooperate by not 
responding to our antidumping questionnaire and, thus, have not acted 
to the best of their abilities to comply with requests for information 
* * * .'' See Preliminary Results, 63 FR at 42369. Accordingly, we 
based the antidumping duty rate for these companies on facts otherwise 
available and assigned to them the highest margin from the petition, as 
adjusted by the Department, 71.49 percent. For the reasons described 
below, we are continuing to assign Arrighi, Barilla, and Pagani the 
highest margin from the petition, as adjusted by the Department, for 
these final results.
    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 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.
    Arrighi communicated with the Department concerning the 
difficulties which impeded its ability to respond to the Department's 
questionnaire. In a letter dated October 1, 1997, Arrighi stated that 
it would be unable to respond to the Department's questionnaire due to 
a deficiency of financial and personnel resources. Arrighi did add, 
however, that it ``might be able to supply limited information if the 
Department felt that might be worthwhile or helpful in the context of 
this [review].''
    While responding to the Department's questionnaire may be a burden 
on Arrighi, the company has not demonstrated that it was unable to do 
so. The company made only general claims regarding limited personnel 
and financial resources, which is true for many companies that respond 
to our questionnaires. Arrighi gave neither specific reasons why it 
could not respond nor any specific proposal for what the company was 
prepared to do and why it could do no more. Instead, the statements in 
Arrighi's letter of October 1, 1997, demonstrate that the company 
merely made a business decision not to allocate resources to this task. 
Furthermore, it was also evident from the letter, taken as a whole, 
that any ``limited information'' Arrighi might provide would be 
insufficient to calculate a dumping margin. Therefore, given that the 
company did not demonstrate an inability to respond to our 
questionnaire or a willingness to cooperate to the best of its ability, 
we find that the use of facts available in accordance with section 
776(a) of the Act is warranted.
    Barilla and Pagani neither responded to the Department's 
questionnaire nor provided any notification or information to the 
Department pursuant to section 782(c)(1) of the Act. Accordingly, we 
find that these companies did not cooperate to the best of their 
abilities and the use of facts available is appropriate for Barilla and 
Pagani.
    Where the Department must resort to facts available because a 
respondent failed to cooperate to the best of its ability, section 
776(b) of the Act authorizes the use of an inference adverse to the 
interests of that respondent in selecting from among the facts 
available. As discussed above, Arrighi, Barilla, and Pagani failed to 
act to the best of their abilities to comply with our requests for 
information. Accordingly, we have determined that an adverse inference 
with respect to Arrighi, Barilla, and Pagani is warranted.
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available information derived from the petition, the 
final determination in the antidumping investigation, a previous 
administrative review, or any other information placed on the record. 
Section 776(c) of the Act provides that the Department shall, to the 
extent practicable, corroborate that secondary information from 
independent sources reasonably at its disposal. The Statement of 
Administrative Action (SAA) provides that ``corroborate'' means simply 
that the Department will satisfy itself that the secondary information 
has probative value (see H.R. Doc. 316, Vol. 1, 103d Cong., 2d sess. 
870 (1994)).
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. The petition margin is reliable if, in light of 
evidence reasonably available, it provides a reasonable estimate of a 
level at which dumping occurred during the period of investigation 
(``POI''). With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render a margin not 
relevant. Where circumstances indicate that a selected margin is not 
appropriate as adverse facts available, the Department will disregard 
the margin and determine an appropriate margin (see, e.g., Fresh Cut 
Flowers from Mexico: Final Results of Antidumping Duty Administrative 
Review, 61 FR 6812 (February 22, 1996)).
    In this instance, as discussed below in Comment 5, we have no 
reason to believe that the application of the highest petition margin 
for Italian pasta, as revised by the Department, is inappropriate. 
Therefore, for purposes of these final results, we are continuing to 
assign Arrighi, Barilla, and Pagani the rate of 71.49 percent as 
adverse facts

[[Page 6617]]

available. We find that this margin continues to be of probative value 
and continues to be an appropriate basis for facts otherwise available. 
We note that the SAA, at 870, states that ``the fact that corroboration 
may not be practicable in a given circumstance will not prevent the 
agencies from applying an adverse inference * * * .'' In addition, the 
SAA at 869, emphasizes that the Department need not prove that the 
facts available are the best alternative information.

Comparisons

    We calculated export price (EP), constructed export price (CEP), 
and normal value based on the same methodology used in the Preliminary 
Results, with the following exceptions:

General

    For those companies which have both CEP sales and commissions, we 
have revised our commission and CEP-offset calculation (see Comments 2 
and 3).
    For those companies which have CEP sales, we have included U.S. 
commissions in the calculation of the total selling expenses that we 
deducted from revenues to determine the CEP-profit amount for 
calculation of the CEP-profit rate (see memorandum from Jarrod 
Goldfeder to the file, Analysis Memorandum for F. lli De Cecco di 
Filippo Fara S. Martino S.p.A., December 7, 1998).
    We have corrected a clerical error which had caused the weighted-
average normal value to be calculated over the 90/60-day 
contemporaneity period rather than monthly (see Comment 8).

Indalco

    We recalculated certain Indalco home market discounts (see a 
separate business proprietary memorandum from Cindy Robinson to John 
Brinkmann, Recalculation of Certain Home Market Discount for Industria 
Alimentare Colavita, S.p.A in the Final Results of the First 
Administrative Review of Certain Pasta from Italy, December 7, 1998). 
We have corrected the following three computer-programming errors: (1) 
An error concerning our level-of-trade comparison which matched EP 
sales erroneously to only one level-of-trade (LOT-1) in the home market 
when we intended to match to all home market sales (see Comment 8); (2) 
an error concerning Indalco's U.S. invoice adjustments in which we 
subtracted Indalco's invoice adjustments erroneously from, rather than 
added them to, the reported U.S. gross unit price or U.S. sales 
quantity, respectively (see memorandum from Cindy Robinson to the file, 
Analysis Memorandum for Industria Alimentare Colavita, S.p.A, December 
7, 1998); and (3) an error which prevented the computer program from 
implementing an intended correction for commissions paid to one of 
Indalco's home market sales agents (see Id.).

La Molisana

    We matched U.S. sales to sales at the LOT1 level of trade (see 
Comment 10B) and corrected a clerical error which caused us to double-
count the cost of vitamins in the U.S. total and variable costs of 
manufacturing (see memorandum from Constance Handley to the file, 
Analysis Memorandum for La Molisana Industrie Alimentari S.p.A., 
December 7, 1998) (La Molisana Analysis Memo).

Rummo

    We used November 3, 1997, as a surrogate payment date to calculate 
credit expenses for those sales without a reported date of payment (see 
Comment 21). In addition, we corrected a programing error which 
converted inventory carrying cost to a kilogram basis incorrectly. The 
expense had already been reported in kilograms (see memorandum from 
James Kemp to the file, Analysis Memorandum for Rummo S.p.A. Molino e 
Pastificio, December 7, 1998).

Cost of Production

    As discussed in the preliminary results, we conducted an 
investigation to determine whether each of the five respondents 
participating in the review made home market sales of the foreign like 
product during the POR at prices below its cost of production (COP) 
within the meaning of section 773(b)(1) of the Act.
    We calculated the COP for these final results following the same 
methodology as in the preliminary results, with the following 
exceptions:

De Cecco

    Based on minor corrections presented at the onset of the cost 
verification, we revised the total cost of manufacture for several 
control numbers and the interest expense factor. We also excluded the 
general and administrative expenses (G&A) of Molino, De Cecco's 
affiliated semolina supplier, in the calculation of the G&A rate (see 
memorandum from Garri Gzirian to Neal Halper, Cost of Production and 
Constructed Value Adjustments for the Final Determination, December 5, 
1998).

Puglisi

    We recalculated G&A to include the input of government grants 
received (see Comment 13). We also adjusted Puglisi's product-specific 
manufacturing costs in the following ways: (1) By reallocating the 
product-specific depreciation and electricity expenses (see Comments 17 
and 18); (2) by using the transfer prices for services provided by 
Puglisi's affiliate (see Comment 16); and (3) by including certain 
lease payments and a portion of the garbage tax paid at the end of the 
year (see memorandum from Laurens van Houten to Neal Halper, Cost of 
Production and Constructed Value Adjustments Calculations in the Final 
Results of Pasta from Italy--N. Puglisi & F. Industria Paste Alimentari 
S.p.A., November 24, 1998 (``Puglisi COP Memo'')).

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. As noted above, we received comments and rebuttal 
comments from the petitioners and respondents.

I. General Issues

Comment 1: Level-of-Trade Methodology and Constructed Export Price 
(``CEP'') Offset

    The petitioners argue that the Department applied an improper 
methodology when conducting its level-of-trade analysis for De Cecco, 
Rummo, and Puglisi. Specifically, they claim that the Department 
granted De Cecco, Rummo, and Puglisi a CEP offset incorrectly on the 
grounds that the Department conducted its level-of-trade analysis based 
on the adjusted CEP, rather than the CEP starting price, and cite 
Borden Inc. v. United States, 4 F. Supp. 2d 1221 (Ct. Int'l Trade 1998) 
(``Borden''), and the Final Remand Results for Borden, Inc. et al. v. 
United States, Consol. Court No. 96-08-01970 (August 28, 1998) 
(``Remand Results''). In addition, the petitioners comment on the 
Department's apparent intent to consider the level of trade of the CEP 
starting price in determining the CEP offset, after the Department had 
already established the level of trade of the adjusted CEP price. The 
petitioners contend that section 773(a)(7)(B) of the Act grants the CEP 
offset but it does not envision the use of two distinct and different 
levels of trade. They urge the Department to revise its decision.
    De Cecco argues that the Department examined CEP properly in 
conducting its level-of-trade analysis for De Cecco and that the 
Department's decision to grant a CEP offset is valid and correct and 
should be sustained. It maintains that the petitioners' arguments 
concerning the application of a CEP offset are immaterial to De Cecco

[[Page 6618]]

because De Cecco is entitled to the CEP offset regardless of whether 
the Department conducts its analysis of level of trade based on the 
U.S. starting price or the CEP.
    Rummo states that the Department granted Rummo a CEP offset 
properly after a level-of-trade analysis that was based on the CEP 
price after adjustments made pursuant to section 772(d) of the Act. 
Citing the Final Determination of Sales at Less than Fair Value: Static 
Random Access Memory Semiconductors from the Republic of Korea, 63 FR 
8934 (February 23, 1998) (SRAMs), Rummo claims that it has been the 
Department's long-standing practice and is consistent with the statute 
and SAA to analyze the level of trade of CEP sales at the constructed 
export level price, i.e., after expenses associated with economic 
activities in the United States have been deducted. Therefore, Rummo 
contends that the petitioners' arguments are contrary to the statute, 
the SAA, and the Department's long-standing policy. Furthermore, Rummo 
notes that the Borden case the petitioners cite is not final or 
conclusive because the Department is appealing that decision. Rummo 
urges the Department to continue to apply the same level-of-trade 
analysis for the final results.
    Puglisi argues that the Department's level-of-trade methodology in 
this review is both lawful and in accordance with each of the Court's 
five stated guidelines in Borden. Specifically, concurring with the 
Department in its remand results in Borden, Puglisi maintains that 
``the Court did not explicitly require the Department to determine the 
level of trade of the CEP based upon the CEP starting price.'' 
Furthermore, Puglisi states that the Department's level-of-trade 
methodology focused on the selling functions, not the adjustments to 
price, and as such was analytically distinct from the price 
calculation. Finally, Puglisi states that the CEP offset was not 
applied automatically as suggested by the petitioners; rather it was 
only applied after the Department determined that there was no 
information to provide an appropriate basis for determining a level-of-
trade adjustment. Therefore, Puglisi urges the Department to sustain 
its preliminary decisions.
    DOC Position: We agree with De Cecco, Rummo, and Puglisi that we 
were consistent with the statute and with our long-standing policy when 
we granted a CEP offset to De Cecco, Rummo, and Puglisi after 
conducting both qualitative and quantitative level-of-trade analyses 
based on adjusted CEP, rather than the CEP starting price. The Borden 
case the petitioners cite is not a final and conclusive decision 
because it is still subject to appeal. Accordingly, the Borden decision 
is not binding on the Department.
    As stated in the level-of-trade memorandum from John Brinkmann to 
Susan Kuhbach, dated July 31, 1998, our level-of-trade analyses for De 
Cecco, Rummo, and Puglisi showed that each company had only one CEP 
level of trade in the U.S. market. This CEP level of trade differed 
considerably from the single level of trade in the home market for each 
company and was at a less advanced stage of distribution than the home 
market level of trade. Consequently, we could not match to sales at the 
same level of trade in the home market nor could we determine a level-
of-trade adjustment based on these three respondents' home market 
sales. Furthermore, we have no other information that provides an 
appropriate basis for determining a level-of-trade adjustment. Because 
this is so, and because the normal value is at a more advanced level of 
trade than the CEP, we made a CEP offset in accordance with section 
773(a)(7)(B) of the Act.
    Inasmuch as our level-of-trade methodology is consistent with the 
statute and with our practice, we continued to apply the same 
methodology to make level-of-trade comparisons based on the adjusted 
CEP starting price for the purposes of the final results.

Comment 2: Commission Offset

    The petitioners contend that the Department made a commission 
offset to account for the difference in the commissions amount paid by 
Rummo when U.S. commissions are greater than home market commissions. 
They claim that an offset is authorized under 19 CFR 351.410(e) only 
when there is a commission paid in one market but none in the other 
market. If the Department disagrees with the petitioners' contention, 
then they believe that a similar offset should be made when home market 
commissions are greater than U.S. commissions. Further, with regard to 
CEP sales, the petitioners point out that there was no offset made for 
instances where there were commissions in the home market but none in 
the U.S. market.
    Rummo argues that the offset was applied correctly because Rummo 
did not pay commissions on all of its home market sales. In a review, 
Rummo contends, the Department compares individual U.S. sales to 
monthly weighted-average prices in the home market. Therefore, because 
Rummo had commissions on some sales, it states that the result was 
weighted-average prices with small commissions which were significantly 
less than commissions paid on U.S. sales. Rummo contends that the 
Department's offset methodology is intended to compensate for this 
imbalance.
    DOC Position: We applied the EP commission offset in the 
preliminary results correctly. When calculating normal value for EP 
comparisons, the Department makes a circumstance-of-sale adjustment by 
deducting home market commissions and adding U.S. commissions. In this 
case, only a portion of home market sales have commissions; therefore, 
only that portion of home market sales was reduced by a home market 
commission. To account for those home market sales with no commissions, 
we calculated a weighted-average surrogate home market commission based 
on indirect selling expenses incurred on home market sales and deducted 
that amount from the weighted-average monthly normal value, limited by 
the amount of the difference between U.S. commissions and home market 
commissions. Because we look at each individual sale in the U.S. 
market, this problem does not occur and therefore there is no reason to 
make an adjustment when U.S. commissions are lower than home market 
commissions as suggested by the petitioners.
    We agree with the petitioners that, for CEP sales, a commission 
offset should be made in those instances where there were commissions 
in the home market and none in the U.S. market. We have done so for 
these final results. See Notice of Final Results and Partial Rescission 
of Antidumping Duty Administrative Review; Canned Pineapple Fruit from 
Thailand, 63 FR 43661, 43671 (August 14, 1998).

Comment 3: Segregation of Commission and CEP Offsets

    The petitioners argue the Department erred in combining the CEP and 
commission offsets in its computer program, thereby failing to limit 
the CEP offset by the amount of U.S. indirect selling expenses.
    Rummo and De Cecco agree with the petitioners that the offsets 
should be segregated. Rummo points out that the offsets are intended to 
accomplish different goals; the CEP offset is meant to be a surrogate 
level-of-trade adjustment and the commission offset is meant to account 
for the presence of commissions in one market and not the other (or for 
unbalanced commission situations). Rummo contends these

[[Page 6619]]

offsets should be treated separately in the final results.
    De Cecco also contends that the Department calculated the CEP 
offset incorrectly based on the relationship of home market and U.S. 
commissions. According to De Cecco, where commissions are paid in both 
the domestic and U.S. markets on CEP sales, the Department calculates 
the offset as the lower of home market indirect selling expenses 
(including imputed expenses) or the sum of U.S. indirect selling 
expenses (excluding those expenses incurred in the home market) and 
U.S. commissions. Thus, De Cecco maintains this offset is assigned 
without regard to the relationship between commissions in the two 
markets.
    DOC Position: While commissions and CEP offsets are two separate 
offsets, separating them in the computer program could result in our 
double-counting indirect selling expenses incurred in the home market. 
The Department's regulations state that ``the amount of the [CEP] 
offset will be the amount of indirect selling expenses included in 
normal value, up to the amount of indirect selling expenses deducted in 
determining constructed export price.'' 19 CFR 351.412(f)(2). Thus, 
like the commission offset, the CEP offset is based on home market 
indirect selling expenses. We will not deduct an amount greater than 
home market indirect selling expenses for the combination of the two 
offsets.
    We do recognize, however, that the language in the computer program 
for the preliminary results did not combine the two offsets properly. 
We have used different programming language for the final results, 
which allows us to combine the two offsets and limit the combined 
deduction at the amount of home market indirect selling expenses. In 
other words, the applicable offset is the full amount of the commission 
offset, plus a CEP offset. The CEP offset is the lower of indirect 
selling expenses incurred in the United States or the indirect selling 
expenses incurred in the home market that remain after making the 
commission offset.

II. Company-Specific Comments

Arrighi and Barilla

Comment 4: Use of an Adverse Inference for Arrighi and Barilla

    World Finer Foods, who was an unaffiliated U.S. importer of 
Arrighi's pasta products during the POR, and Barilla submitted comments 
addressing the Department's application of the highest rate from the 
petition, i.e., 71.49 percent, as the adverse facts available rate 
assigned at the Preliminary Results.

Arrighi

    World Finer Foods submitted comments addressing the Department's 
application of an adverse inference in determining a rate for Arrighi. 
According to World Finer Foods, and as noted in the ``Facts Available'' 
section above, Arrighi stated in a letter dated October 1, 1997, that 
it would be unable to respond to the Department's questionnaire due to 
deficiency of financial and personnel resources. World Finer Foods 
notes that Arrighi did add, however, that it ``might be able to supply 
limited information if the Department felt that might be worthwhile or 
helpful in the context of this [review].'' Citing Allied Signal 
Aerospace Co. v. United States, 996 F.2d 1185, 1192-93 (Fed. Cir. 
1993), World Finer Foods argues further that the Department may not 
find a respondent uncooperative where a respondent is experiencing 
financial difficulties impeding its ability to provide the information 
as requested and where it suggests alternative reporting methods.
    World Finer Foods also argues that in a letter dated October 20, 
1997, it offered to supply the Department with information concerning 
its purchases from Arrighi. An officer of World Finer Foods met with 
Department officials on January 8, 1998, and subsequently submitted 
such information for the Department's examination on March 10, 1998. On 
the basis of this information, the company asserts that the Department 
had information demonstrating that during the POR Arrighi had 
significantly increased its selling price to World Finer Foods since 
the less-than-fair-value (LTFV) investigation. According to World Finer 
Foods, the Department could have reasonably created a surrogate for 
Arrighi's home market prices by using other respondents' information 
``in order to develop a reasonably complete estimate of Arrighi's costs 
and prices during the period of review.'' Moreover, World Finer Foods 
alleges that the results of this review will affect only World Finer 
Foods with respect to the assessment of antidumping duties, inasmuch as 
Arrighi no longer sells its products in the U.S. market. Given World 
Finer Foods' cooperation by responding to the best of its ability, it 
asserts that the Department should not use an adverse inference in 
applying the facts available to Arrighi.
    With respect to Arrighi's failure to respond, the petitioners 
contend that Arrighi made a deliberate business decision not to 
respond, and indeed never filed any questionnaire responses, but only 
stated that it might be able to supply limited information. The 
petitioners note that, in Arrighi's October 1 letter to the Department, 
the company acknowledged that it could not respond to the Department's 
questionnaire because its company resources were dedicated to 
developing alternative markets upon ceasing sales to the United States. 
The petitioners distinguish Arrighi's situation from that of a company 
in Certain Fresh Cut Flowers From Colombia: Final Results of 
Antidumping Administrative Review, 59 FR 15159 (March 31, 1994), where 
the Department acknowledged that a respondent undergoing liquidation 
proceedings was precluded from utilizing its financial and personnel 
resources toward providing a response to the Department's 
questionnaire. The petitioners argue further that Arrighi's offer to 
supply limited information does not in itself constitute a willingness 
to cooperate fully since piecemeal data is not sufficient to conduct a 
complete and accurate dumping analysis.
    DOC Position: We disagree with World Finer Foods. As discussed in 
the ``Facts Available'' section above, we have concluded that the 
record demonstrates that Arrighi has not cooperated to the best of its 
ability. Therefore, we are continuing to assign Arrighi 71.49 percent 
as facts available for purposes of these final results.
    Section 776(b) of the Act states that we may draw an adverse 
inference where the party has not acted to the best of its ability to 
comply with our requests for necessary information. Despite the 
numerous arguments put forth by World Finer Foods, we disagree with 
World Finer Foods' contention that Arrighi acted to the best of its 
ability, given its financial circumstances, to comply with our requests 
for information in this administrative review. Under certain limited 
circumstances, such as where a company informs the Department in a 
timely manner that it cannot comply with the Department's information 
requests due to the liquidation of its assets, it may be appropriate 
not to use an adverse inference in applying the facts available. 
However, where a respondent continues to produce the subject 
merchandise but fails altogether to provide information, we find that 
it has failed to act to the best of its ability. See Certain Fresh Cut 
Flowers From Colombia: Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review, 62 FR 16772, 16775 (April 8, 
1997), and Certain Fresh Cut Flowers From Colombia: Final Results and 
Partial Rescission of Antidumping Duty Administrative Review, 62 FR 
53287 (October 14, 1997)

[[Page 6620]]

(``Flowers from Colombia'') (an adverse inference is warranted where a 
respondent states merely ``that it was on the verge of bankruptcy'' but 
provides no further information).
    In the instant case, Arrighi was still in operation and reported 
that it was devoting its company resources toward developing 
alternative markets to the United States. Thus, unlike the respondent 
in Flowers From Colombia, Arrighi made a conscious business decision 
not to respond to the Department's questionnaire. Under these 
circumstances, we find that Arrighi was unwilling, rather than unable, 
to comply with our requests for information.
    We also find that World Finer Foods' argument concerning Allied 
Signal is unpersuasive. In Allied Signal, the Court held that the 
Department's determination that SNFA, the respondent, had refused to 
cooperate was unreasonable because it supplied some of the requested 
information and also offered an alternative proposal to provide the 
remaining information in a simplified form. However, in the present 
case, Arrighi did not submit any information for the record nor did it 
suggest any alternative or simplified reporting method. Arrighi merely 
ended its letter of October 1, 1997, with a general offer to supply 
limited information if it would be helpful. However, if a respondent 
cannot provide information in the form or manner requested, section 
782(c) of the Act places on the respondent the burden of suggesting 
alternative forms in which the party is able to submit the information. 
In this case Arrighi neither demonstrated that it could not respond in 
the form or manner requested nor proposed an alternative.
    Furthermore, we noted in the Preliminary Results that we examined 
the documentation submitted by World Finer Foods, an importer that is 
not a respondent in this review, and determined that it was 
insufficient for purposes of calculating a dumping margin for Arrighi 
in accordance with the statute. We find World Finer Foods' argument 
that we had information demonstrating that Arrighi had significantly 
increased its selling price to it during the POR, as compared to the 
selling price during the LTFV investigation, to be unpersuasive. The 
basis for the Department's determination of whether subject merchandise 
has been sold at LTFV is a comparison between the export price or 
constructed export price and normal value or constructed value. In this 
case, we cannot determine the normal value of the subject merchandise.
    Furthermore, we examined the information submitted by World Finer 
Foods and have determined that it is inadequate for purposes of 
estimating Arrighi's U.S. prices during the period of review. The 
information is so incomplete that World Finer Foods' efforts cannot 
overcome Arrighi's failure to respond.
    Finally, we find that World Finer Foods' argument concerning the 
effect the results of this review will have on an importer, such as 
itself, is unpersuasive. Section 737(b)(1) of the Act requires that any 
antidumping duties in excess of the amount deposited be collected when 
the amount deposited is lower than the duty determined. Therefore, 
importers are on notice that the cash deposit rate is not a duty 
assessment rate but, rather, an estimate. Assessment may depend upon 
the results of a review and, hence, the continued cooperation of the 
exporter. There is no guarantee that the final assessment rate will not 
be higher than the cash deposit rate. ``When a U.S. importer deals with 
a foreign company that is subject to an antidumping duty order, the 
importer must realize that the dumping margin could change to its 
benefit or detriment.'' Union Camp Corporation v. United States, CIT 
Court No. 97-03-00483, Slip Op. 98-38 at 22 (March 27, 1998).

Barilla

    Barilla maintains that it informed the Department at the onset of 
the review that it would not respond to the Department's questionnaire 
due to the company's expenditures associated with building a new plant 
in Iowa. Accordingly, Barilla characterizes its communication with the 
Department as a ``course of action designed to minimize the 
administrative inconvenience for the Department'' and, therefore, has 
been ``as cooperative as possible within the constraints of reasonable 
business practices.'' Thus, Barilla contends that an adverse inference 
was not warranted.
    The petitioners assert that the Department was justified in 
assigning Barilla the highest petition rate as adverse facts available. 
Since Barilla did not file any questionnaire responses and did not lack 
the resources to do so, as evidenced by its ability to hire counsel to 
file case briefs, the petitioners contend that Barilla's participation 
in this review cannot be properly characterized as cooperative.
    DOC Position: We disagree with Barilla. With respect to Barilla's 
claim of cooperation in this review, we find the company's arguments 
unpersuasive. Barilla has stated unequivocally that it made a 
deliberate decision not to respond to the Department's questionnaire. 
The primary issue is not administrative inconvenience, but rather the 
Department's responsibility to conduct a review and calculate a margin. 
It is evident, therefore, that Barilla's refusal to comply with the 
Department's requests for information has significantly impeded this 
proceeding. Therefore, we find that Barilla has failed to cooperate by 
not acting to the best of its ability.

Comment 5: Reliability of the Highest Petition Margin

    Barilla submitted comments addressing the use of the highest 
petition margin as the facts available rate. According to Barilla, the 
adverse facts available rate should be the highest calculated margin 
from any segment of the proceeding, which is more reliable, reflective 
of current market conditions, and consistent with the Department's 
recent practice and judicial rulings. Barilla argues further that the 
highest margin from the petition cannot be corroborated and has been 
discredited by calculated, verified margins. Barilla also notes that, 
in the LTFV investigation, the Department used an average of the 
petition margins in applying adverse facts available to De Cecco, a 
respondent the Department found to have significantly impeded the 
Department's investigation, at considerable inconvenience and expense, 
by not cooperating, citing Borden Inc. et al. v. United States, Consol. 
Ct. No. 96-08-01970 (August 28, 1998 (``Redetermination on Remand'') 
2. As such, Barilla asserts that it should not receive a 
more adverse rate than that applied to De Cecco.
---------------------------------------------------------------------------

    \2\ In litigation arising out of the LTFV investigation, the CIT 
remanded to the Department its decision to use an adverse inference 
for De Cecco and its determination of the appropriate rate to use as 
facts available. Even if the Department determined that an adverse 
inference was warranted, the CIT instructed the Department that it 
could use a rate of no more than 21.34 percent, the highest 
calculated and verified margin from the LTFV investigation. In 
performing this remand, the Department applied this rate as adverse 
facts available but argued that ``the use of this rate thwarts the 
purpose of the adverse inference provision of the Statute by failing 
to provide the necessary incentive for cooperation.'' On December 
16, 1998, the CIT affirmed the Department's decision to use an 
adverse inference and the CIT's decision to apply an antidumping 
duty margin of 21.34 percent for De Cecco.
---------------------------------------------------------------------------

    World Finer Foods considers the Department's application of the 
highest rate of the petition as adverse facts available to be punitive, 
arbitrary, and inconsistent with the statute, the Department's 
regulations, judicial decisions, and the Department's normal

[[Page 6621]]

practice. It alleges that, because the results of this review will only 
affect World Finer Foods with respect to the assessment of antidumping 
duties (inasmuch as Arrighi no longer sells the subject merchandise in 
the U.S. market) and given World Finer Foods' cooperation by responding 
to the best of its ability, the Department should not apply the highest 
petition rate as an adverse inference against Arrighi.
    The petitioners agree with the Department's application of the 
highest petition margin as adverse facts available. They assert that 
the facts between De Cecco in the LTFV investigation and Arrighi and 
Barilla in the instant review are different. According to the 
petitioners, De Cecco was assigned an average rate from the petition 
because it had made some effort to cooperate, although not to the best 
of its ability, whereas Arrighi and Barilla never attempted to respond 
to the Department's questionnaire. The petitioners contend further that 
the Department assigned the highest margin from the petition as an 
adverse facts available rate properly inasmuch as the Department need 
not prove that the petition margins are the best alternative 
information. They argue further that the Department must ensure that 
Arrighi and Barilla do not benefit from their failure to respond to the 
Department's questionnaire.
    DOC Position: We disagree with Barilla and World Finer Foods. 
Section 776(b) of the Act notes that adverse inferences may include 
reliance on information derived from (1) the petition; (2) a final 
determination in the investigation; (3) any previous review; or (4) any 
other information placed on the record. Thus, the statute does not 
limit the specific sources from which the Department may obtain 
information for use as facts available. The SAA recognizes the 
importance of facts available as an investigative tool in antidumping 
duty proceedings. The Department's potential use of facts available 
provides the only incentive to foreign exporters and producers to 
respond to the Department's questionnaires. See SAA at 868.
    In this segment of the proceeding, we have chosen as adverse facts 
available the highest rate based on corroborated petition data, 71.49 
percent. Our decision to use a rate higher than the average petition 
rate is consistent with our decision in the LTFV investigation. In the 
investigation, we determined that ``[b]ecause De Cecco made some effort 
to cooperate, even though it did not cooperate to the best of its 
ability, we did not choose the most adverse rate based on the 
petition.'' See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Pasta from Italy, 61 FR 30326, 30329 (June 14, 
1996). See also Oil Country Tubular Goods From Japan; Final Results of 
Antidumping Duty Administrative Review, 62 FR 48594 (September 16, 
1997), and Certain Cut-to-Length Carbon Steel Plate From Sweden: Final 
Results of Antidumping Duty Administrative Review, 62 FR 46947 
(September 5, 1997). Thus, the Department chose an adverse facts 
available rate of 46.67 percent; this represented the average rate 
based on corroborated petition data.3
---------------------------------------------------------------------------

    \3\  On December 16, 1998, the CIT affirmed the revised 
antidumping duty margin of 21.34 percent for De Cecco, stating that 
``De Cecco's new margin of [21.34%] fulfills the statutory purposes 
to provide an incentive to cooperate with Commerce without utilizing 
punitive, aberrational, or uncorroborated margins.'' The Department 
has until February 16, 1999, to file an appeal with the Court of 
Appeals for the Federal Circuit.
---------------------------------------------------------------------------

    In this case, Arrighi, Barilla, and Pagani did not cooperate at all 
with our requests for information. Since they made no attempt to 
cooperate, we agree with the petitioners that these companies should 
not receive the same or a lower rate than that of a company that made 
some effort to cooperate with our requests for information. Moreover, 
we believe that the highest petition margin is sufficiently adverse to 
induce cooperation in subsequent administrative reviews. Therefore, for 
purposes of these final results, we are continuing to assign the 
highest margin from the petition as adverse facts available.
    At the time of initiation of the LTFV investigation, we reviewed 
all of the data the petitioners had submitted and the assumptions they 
made in estimating dumping margins and, as a result, we adjusted the 
petition rates. See Notice of Initiation of Antidumping Duty 
Investigations: Certain Pasta from Italy and Turkey, 60 FR 30268, 30269 
(June 8, 1995). For purposes of these final results, we compared the 
petition rates with the range of transaction margins we found during 
the investigation based on actual data submitted, which were the basis 
for the final company-specific weighted-average dumping margins. See 
``The Facts Available Rate and Corroboration of Secondary Information'' 
memorandum, dated February 3, 1999. Specifically, we reviewed the 
transaction margins for those fully cooperative respondents that were 
found to have dumping margins in the investigation and found that 
certain respondents had a number of calculated margins in excess of the 
highest petition margin. Thus, we concluded that the petition rates 
were within the range of transaction dumping margins found for certain 
respondents during the POI. Therefore, the petition rates represent a 
reasonable estimate of a level of dumping that occurred during the POI, 
i.e., they are reliable. In addition, there is no evidence of 
circumstances that would render the petition margin inappropriate as 
facts available. Therefore, we consider the petition rates 
corroborated. Moreover, we have compared the petition rates with the 
range of transaction margins calculated for the final results of this 
review. Id. We found that the petition rates fall within the range of 
individual transaction margins calculated for cooperative respondents. 
While it is not necessary to find that the petition rates fall within 
the range of margins calculated in this review, this evidence further 
confirms the reliability of these rates in this case. Thus, we have 
considered information reasonably at our disposal and no record 
evidence exists indicating that the highest petition rate, as adjusted 
by the Department, is aberrational, uncorroborated, or unduly punitive.

De Cecco

Comment 6: Major Inputs

    De Cecco argues that, for the final results, the Department should 
not use transfer prices to value transactions between De Cecco and its 
affiliated semolina supplier, Molino F.lli De Cecco di Filippo S.p.A. 
(``Molino''). Instead, De Cecco suggests that, for purposes of 
computing cost of production and constructed value, the Department 
should value transfers of semolina, the major input of pasta, from 
Molino to De Cecco at Molino's cost.
    De Cecco argues that the corporate entity Molino, 97.9 percent of 
which is owned by De Cecco and the remainder by shareholders of De 
Cecco's parent company, is in essence a wholly owned subsidiary of De 
Cecco. De Cecco contends that sections 773(f)(2) (``transactions 
disregarded'') and 773(f)(3) (``major-input rule'') of the Act do not 
apply in this instance because, although Molino is incorporated 
separately from De Cecco, Molino's semolina production and De Cecco's 
pasta-manufacturing operation are part of a single integrated 
production process under the same ownership. According to De Cecco, 
Molino's sole purpose is to process grain, selected by De Cecco, into 
semolina that is then transferred to De Cecco, which consumes all of 
Molino's semolina production. Therefore, De Cecco contends that the 
Department

[[Page 6622]]

should value transfers of semolina from Molino to De Cecco at Molino's 
cost in order to reflect the economic and operational reality of the 
relationship and transactions between these two companies. De Cecco 
points out that the application of the major-input rule could subject 
it to a dumping margin on the basis of an element of profit to the De 
Cecco Group which De Cecco has chosen to accord to Molino rather than 
to itself. The respondent argues that these matters are tax-driven and 
not issues of economics or production.
    Noting that the Department ``collapsed'' De Cecco and Molino e 
Pastificio F.lli De Cecco S.p.A. (``Pescara''), another affiliated 
supplier of semolina and a pasta producer, De Cecco argues that Molino 
should be granted the same treatment since, as a provider of semolina 
to De Cecco, Molino is no different than Pescara. De Cecco claims that, 
because it conducts operations essential to De Cecco, Molino is in fact 
more integral to De Cecco than Pescara. De Cecco asserts that it would 
be inconsistent with the reasoning set forth in Final Results of 
Antidumping Administrative Review: Certain Cold Rolled and Corrosion-
Resistant Carbon Steel Flat Products From Korea, 62 FR 18430 (April 15, 
1997), to treat transfers of semolina from Molino to De Cecco 
differently from transfers of semolina from Pescara to De Cecco.
    The petitioners maintain that sections 773(f)(2) and (3) of the Act 
permit the Department to value major inputs between affiliated 
companies at the higher of transfer price, market price, or the cost to 
the affiliated producer to value raw materials or services fairly used 
in the production of subject merchandise. Citing Small Diameter 
Circular Seamless Carbon and Alloy Steel Standard, Line and Pressure 
Pipe from Germany: Final Results of Antidumping Duty Administrative 
Review, 63 FR 13217, 13218 (March 18, 1998), the petitioners argue that 
for the final results the Department should continue to apply the 
transactions-disregarded and major-input rules in this case.
    The petitioners point out that the Department's criteria for 
``collapsing'' two or more affiliated producers are the following: (1) 
the producers must be affiliated; (2) the producers must have 
production facilities for similar or identical products that would not 
require substantial retooling of either facility in order to 
restructure manufacturing priorities; and (3) there must be a 
significant potential for manipulation of price or production, citing 
Certain Welded Carbon Steel Pipes and Tubes from Thailand: Preliminary 
Results of Antidumping Duty Administrative Review, 63 FR 16974, 16975 
(April 7, 1998). The petitioners also cite the Final Determination of 
Sales at Less Than Fair Value: Fresh Atlantic Salmon from Chile, 63 FR 
31411, 31421-27 (June 9, 1998), which, according to the petitioners, 
demonstrates the Department's application of sections 773(f)(2) and 
773(f)(3) of the Act. The petitioners contend that, since Molino is a 
supplier of semolina and not a producer of subject merchandise, the 
affiliation between De Cecco and Molino does not satisfy the three 
criteria stated above, and, therefore, the transactions-disregarded and 
major-input provisions of the statute should continue to be applied.
    DOC Position: The Department does not agree that semolina De Cecco 
purchased from its affiliated supplier, Molino, should be exempt from 
the application of the major-input rule. Thus, we have continued to 
rely on the higher of transfer price, market value, or the affiliate's 
cost of production in accordance with sections 773(f)(2) and (3) of the 
Act to value those transactions.
    Sections 773(f)(2) and (3) of the Act prescribe how the Department 
is to treat affiliated-party transactions in the calculation of cost of 
production and constructed value. With respect to major inputs 
purchased from affiliated suppliers, the Department's practice is that 
such inputs will normally be valued at the higher of the affiliated 
party's transfer price, the market price of the inputs, or the actual 
costs incurred by the affiliated supplier in producing the input.
    Since implementation of the URAA, the Department has applied this 
interpretation consistently (see, e.g., Fresh Atlantic Salmon From 
Chile: Final Determination of Sales at Less Than Fair Value, 63 FR 
31426, 31427 (June 9, 1998) (Comment 22); Small Diameter Circular 
Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe From 
Germany: Final Results of Antidumping Duty Administrative Review, 63 FR 
13217, 13218 (March 18, 1998) (Comment 1)), except in those situations 
where it treats respondents who are producers of the subject 
merchandise as a single entity for purposes of sales reporting and 
margin calculations (see, e.g., Steel Flat Products from Korea (Comment 
19)).
    Each company in question, De Cecco and Molino, is a separate legal 
entity in Italy. We disagree with the respondent that the operational 
reality of close association between the two companies outweighs the 
legal form of the entities. The Department has observed the legal 
status of the responding parties to the proceeding consistently when 
determining if the ``transactions-disregarded'' and ``major-input'' 
rule sections of the Act are applicable. See, e.g., Final Results of 
Antidumping Duty Administrative Review: Certain Forged Steel 
Crankshafts From the United Kingdom, 61 FR 54613, 54614 (October 21, 
1996) (Comment 1) (``Crankshafts''). In Crankshafts, UES Steels and UEF 
were unincorporated divisions of the same corporation and, thus, we did 
not apply the ``transactions-disregarded'' and ``major-input rule'' 
sections of the Act.
    We disagree with De Cecco that Molino should be granted the same 
treatment as Pescara, a producer of the subject merchandise, because 
Molino's operational relationship to De Cecco renders it more integral 
to the respondent than Pescara. We collapsed the sales and production 
activities of Pescara and DeCecco in accordance with 19 CFR 351.401(f), 
not because of the integral nature of what each entity does for the 
other. Section 351.401(f) of the regulations provides for special 
treatment of affiliated producers where the potential for manipulation 
of prices or production in an effort to evade antidumping duties 
imposed on the sale of subject merchandise exists. In accordance with 
this section of the regulations, we collapse all sales prices and 
production costs of the affiliated entities as if they were a single 
company. Since we do not apply the major-input rule for transactions 
within the same company, the major-input rule does not apply for 
transactions between Pescara and DeCecco. Inasmuch as Molino is not a 
producer of the subject merchandise, is solely a producer of semolina, 
and, unlike Pescara, has not been collapsed with De Cecco for purposes 
of sales reporting and margin calculation, we have continued to treat 
De Cecco and Molino as separate entities for the purposes of reporting 
costs. We have continued to treat De Cecco and Pescara, which is both a 
producer of the subject merchandise and a semolina supplier, as a 
single entity for sales reporting and the calculation of an antidumping 
margin for the final results. Thus, consistent with the exception to 
the major-input rule established in the Steel Flat Products from Korea 
case, we have collapsed De Cecco and Pescara for cost calculation 
purposes. In effect, the Department, for purposes of these final 
results, has treated De Cecco and Pescara as one entity and, thus, the 
major-input rule is not applicable.

[[Page 6623]]

Therefore, we have used the actual COP to value semolina obtained by De 
Cecco from Pescara.

Indalco

Comment 7: Treatment of Artiginal Pasta

    The petitioners argue that the Department should disregard the 
added pasta-shape codes and the corresponding product control numbers 
(CONNUMs) for artiginal pasta which was produced by Indalco's 
affiliate. They maintain that these added shape codes and CONNUMs are 
improper because they were derived from differences in plant 
facilities, a non-physical characteristic, rather than for differences 
in shapes, as claimed by Indalco. According to the petitioners, Indalco 
has not demonstrated in its response any bona fide differences in shape 
or quality between artiginal pasta and other Indalco pasta produced in 
its own facility (hereafter referred to as industrial pasta). They also 
contend that Indalco failed to tie the cost difference associated with 
artiginal pasta to differences in shapes of pasta. Therefore, they urge 
the Department to consolidate Indalco's reported CONNUMs and revise 
Indalco's reported COP and CV database to calculate a single, weighted-
average COP and CV for each product, as defined by the Department's 
questionnaire.
    The petitioners argue further that Indalco's use of line speeds to 
differentiate artiginal pasta from industrial pasta is unwarranted 
because the slower line speeds associated with artiginal production 
could be attributable to the age or inefficiency at the artiginal pasta 
plant, which is unrelated to pasta shape. By contrast, the petitioners 
note that the Department's use of line speeds in the original 
investigation to distinguish pasta shapes produced on the same 
production line was warranted because some pasta cuts require slower 
line speeds than other cuts. They argue that the issue of line speeds 
in the original investigation and the line speed for artiginal pasta in 
this review differs in that the shape of pasta dictated the line speed 
during the investigation, but it is the production facility, rather 
than pasta shape, that dictates the line speed for artiginal pasta.
    Indalco maintains that artiginal pasta has distinctive physical 
characteristics--such as rougher texture, unique hand-made appearance 
and shape--which require it to be identified separately and matched 
with other artiginal pasta and not with Indalco's industrial pasta. 
Indalco notes that artiginal pasta's different characteristics are 
obtained by using coarser semolina, bronze dies, smaller machines, and 
lower temperature and slower speeds during the extrusion and drying 
processes. Indalco argues that these distinctive physical 
characteristics are commercially significant and relevant to consumers 
and that they enable Indalco to command a selling price three to five 
times higher for artiginal pasta than for industrial pasta.
    With respect to the petitioners' argument regarding line speeds, 
Indalco maintains that its affiliate's artiginal facility was newly 
established in 1997 and, therefore, the differences in processing 
artiginal and industrial pasta are not accidental differences in 
efficiency or age of machinery but are specifically designed to produce 
the unique artiginal characteristics. According to Indalco, artiginal 
pasta cannot be produced on its industrial-pasta machinery using the 
high-speed, high-temperature industrial process; rather, it must be 
produced using slower, lower pressure and lower temperature during the 
extrusion and drying processes in order to preserve artiginal pasta's 
unique physical characteristics.
    Indalco argues further that, in the original investigation, the 
Department established seven pasta-shape categories to differentiate 
the hundreds of pasta shapes that the pasta industry produces. Indalco 
claims that, except in the most broad terms (long, short, nested, 
etc.), the Department did not use the exact physical shape to classify 
its shape categories. Rather, Indalco states, the Department used line 
speed and the resulting impact on production cost and final price as a 
distinguishing characteristic for classifying shape categories. Indalco 
claims that, since the differences in line speed, production cost and 
end price between industrial and artiginal shapes are far greater than 
the differences the Department has already recognized among the various 
industrial shape categories it identified, creation of the two new 
artiginal shape categories is consistent and appropriate. Indalco notes 
further that the Department's questionnaire contains instructions for 
companies to follow in modifying shape classifications based on 
documented differences in line speed.
    DOC Position: We agree with Indalco that information on the record 
in this case, including a video showing the production process, 
supports Indalco's position that artiginal pasta merits separate 
treatment. We also agree that it is the nature of the artiginal 
production process, rather than the age and inefficiency of the 
artiginal production plant, that leads to the slower line speeds for 
the production of artiginal pasta cuts. As Indalco stated in its 
response, its standard high-speed industrial pasta production lines can 
produce hundreds of pieces of pasta simultaneously through Teflon-
coated dies while its artiginal machine produces only one or just a few 
pieces at a time.
    We agree with the petitioners that we used a 75 percent line-speed 
benchmark in the investigation to distinguish pasta shape for 
speciality long and short pasta cuts from regular long and short pasta 
cuts produced on the same long or short production line. Typically, 
pasta producers dedicate specific production lines to either long or 
short pasta cuts and the purpose of the benchmark was to assign a 
``speciality'' shape category to pasta cuts on a dedicated long or 
short production line that were produced at less than 75 percent of the 
rated line capacity. Thus, the use of line speed to distinguish 
speciality shapes within long and short pasta cuts was not due to any 
special physical differences in pasta cuts within the long or short 
shape category (other than being long or short) but rather was 
attributable solely to the higher production costs associated with 
slower line speeds. For example, fettuccine, linguine, vermicelli, and 
spaghetti are classified in the shape category for ``long cuts'' and 
capellini and bucatini are classified in the shape category for 
``speciality long cuts.'' All are generally produced on the same long 
production line. While they share the same ``long'' shape 
characteristic, they differ physically from one another in other 
visible shape features (e.g., width and thickness). Yet we segregated 
them ultimately into regular long or speciality long shape categories 
on the basis of line speed. We used this shape-classification 
methodology in both the original investigation and in this 
administrative review and it has been communicated to respondents both 
in instructions to the questionnaire, as well as in addressing 
respondent requests for assigning shape classifications to shapes not 
included in our questionnaire shape list (see, e.g., letters to William 
Silverman of Rogers and Wells, dated October 27, 1995, and October 30, 
1997).
    While we agree with the petitioners that artiginal long and short 
pasta cuts are produced on different production lines and in a 
different factory than Indalco's industrial long and short pasta cuts, 
the difference in line speeds between artiginal and industrial pasta of 
the same general shape category (long or

[[Page 6624]]

short) is dramatic and must be addressed. The fact that a long or short 
artiginal pasta cut takes up to 20 times longer to produce than the 
comparable industrial long or short pasta cut is sufficiently 
significant to warrant the creation of a special shape category for 
artiginal pasta long or short cuts for the same reason that led the 
Department to create speciality long and short shapes for industrial 
pasta long or short cuts; in other words, the production cost for 
artiginal pasta is significantly influenced by the slower line speeds 
required to produce the same long or short industrial pasta cut. We 
also note that artiginal long and short pasta cuts have different 
physical characteristics than the same cuts produced on Indalco's 
industrial pasta line. Rigatoni, for example, is classified as a 
regular short cut but artiginal rigatoni differs significantly in 
texture, shape, thickness and length from the industrial rigatoni. 
Accordingly, we agree with Indalco that the artiginal pasta constitutes 
a separate shape category and for these final results have continued to 
assign separate product-control numbers to artiginal pasta. For the 
same reason, we disagree with the petitioners that we should revise 
Indalco's reported COP and CV database to calculate a single, weighted-
average COP and CV for industrial and artiginal pasta of the same shape 
category. Therefore, we have continued to assign COP and CV to the 
artiginal product-control numbers based on the cost associated with 
manufacturing artiginal pasta.
    Comment 8: Level-of-trade Comparison
    The petitioners state that, according to the Department's 
preliminary level-of-trade analysis, Indalco's home market consists of 
two groups of customers which constitute two levels of trade: group 1 
(LOT 1) (including wholesalers, supermarket chains and retailers), and 
group 2 (LOT 2) (including food service entities). They claim that 
Indalco's U.S. sales should be compared to its home market sales to LOT 
2 customers on the grounds that the selling activities associated with 
Indalco's U.S. sales were more similar to those associated with home 
market LOT 2 customers.
    Indalco argues that its U.S. sales to distributors should not be 
matched to its home market sales to end-users (LOT 2). Rather, the 
respondent contends, they should be matched to its home market sales to 
wholesalers and supermarket chain distributors (LOT 1) on the following 
grounds: (1) Both U.S. sales and home market LOT 1 sales were high-
volume, produced-to-order, direct sales, while home market LOT 2 sales 
were small-lot, warehouse sales from inventory; and (2) home market LOT 
1 customers are at a very early level of trade while the end-users 
further down the chain of distribution are at the most advanced level-
of-trade.
    Indalco argues further that the Department's level-of-trade 
quantitative analysis erred in characterizing the warehousing function 
as ``low'' for home market LOT 2 sales. According to Indalco, a 
significant portion of home market LOT 2 sales were made from Indalco's 
own on-site warehouse, the cost of which was included in the production 
cost and, therefore, was excluded from the Department's level-of-trade 
quantitative analysis.
    DOC Position: We agree with Indalco in part. We agree that U.S. 
sales should not be compared only to Indalco's home market LOT 2 sales, 
but we disagree with Indalco that its U.S. sales should be compared 
only to its home market LOT 1 sales. In this review, all of Indalco's 
U.S. sales were EP sales made at a single level of trade. We found that 
there were significant differences between the selling activities 
associated with the U.S. sales and those associated with each of the 
home market levels of trade. Consequently, we matched the U.S. sales to 
home market sales without regard to level of trade and made no level-
of-trade adjustment. As noted in the ``Level-of-trade Findings'' 
memorandum from John Brinkmann to Susan Kuhbach dated July 31, 1998, 
because we determined that U.S. and home market sales were not made at 
the same level of trade, our intention in the preliminary results was 
to match Indalco's U.S. sales without regard to level of trade. 
However, in our preliminary computer program, we inadvertently matched 
U.S. sales only to home market sales at LOT 1. We have corrected the 
programming error in our final results.

Comment 9: Treatment of Indalco's Certain Home Market On-Invoice 
Discounts

    This comment contains proprietary information which cannot be 
summarized here (see proprietary memorandum from Cindy Robinson to John 
Brinkmann, Recalculation of Certain Home Market Discount for Industria 
Alimentare Colavita, S.p.A in the Final Results of the First 
Administrative Review of Certain Pasta from Italy, December 7, 1998).
    La Molisana
    Comment 10: Level of Trade
    La Molisana submitted comments proposing the following level-of-
trade methodologies: (1) the Department should use brand distinctions 
in determining a level of trade (see Comment 10A below); (2) if the 
Department does not use brand distinctions, it should determine that 
the sole level of trade in the United States is similar to the least 
advanced level in the home market (see Comment 10B below); or (3) the 
Department should use price-averaging groups in making price-to-price 
comparisons (see Comment 10C below).

Comment 10A: Use of Brand Distinctions in Determining Level of Trade

    In the U.S. and home markets, La Molisana sells both its own La 
Molisana brand pasta and private-label brands. La Molisana argues that, 
when customers contract with La Molisana to produce what is really the 
customer's product (i.e., a private label), those customers occupy a 
different point in the chain of distribution. In effect, the respondent 
contends, such customers are ``co-manufacturers'' as compared to those 
customers which purchase pasta under the La Molisana brand. In this 
case, according to the respondent, the sole U.S. customer occupies two 
different places in the chain of distribution depending on the brand of 
pasta that it purchases.
    Further, La Molisana states that different selling activities are 
performed for the two different brands. For example, it asserts it 
performs a high degree of advertising and promotional activities in 
connection with its own brand and none for private label brands. Also, 
La Molisana maintains an inventory of its own brand both at the factory 
and at regional warehouses, whereas all private-label sales are made to 
order. In terms of sales support, La Molisana uses both commissioned 
sales agents and internal sales people to sell the La Molisana brand, 
whereas all private-label sales are handled through its plant.
    The petitioners point out that the Department already determined in 
a July 31, 1998, memorandum to the file, ``La Molisana's Proposed 
Level-of-trade Categories,'' that La Molisana's brand distinctions do 
not satisfy the criteria for establishing that La Molisana and private-
label sales were made in different stages of the marketing process. 
Finally, according to La Molisana, the U.S. distributor orders both 
brands and occupies only one place in the chain of distribution.
    DOC Position: We agree with the petitioners. As we stated in our 
memorandum to the file, differences in selling functions alone do not 
establish a level of trade. See Memorandum from John Brinkman to the 
file, La Molisana's Proposed Level-of-trade Categories (July

[[Page 6625]]

31, 1998). La Molisana's original response did not classify buyers of 
the private-label merchandise as a distinct customer category with a 
distinct channel of distribution. La Molisana's single U.S. customer 
for both La Molisana and private-label merchandise is defined by La 
Molisana in its response as a distributor, a classification that does 
not change depending on the brand purchased. Furthermore, in the case 
of this customer, the difference in selling functions between the two 
brands of merchandise rests primarily on advertising, which is not 
sufficient to establish differences in levels of trade in this case. 
Several home market customer categories, as defined by La Molisana, buy 
both La Molisana and private-label brands, and there is no evidence on 
the record to suggest that the channels of distribution within these 
customer categories vary greatly depending on the brand purchased or 
that a particular customer cannot receive both brands through the same 
channel. Therefore, we did not use brand distinctions to determine 
level of trade in these final results.

Comment 10B: Whether the U. S. Level of Trade is Comparable to the 
Least-Advanced Level in the Home Market

    La Molisana argues that miscategorization of the level of certain 
selling functions caused the Department to conclude that the U.S. level 
of trade was not similar to either of the two home market levels of 
trade. First, La Molisana contends that distributors should be in the 
same level of trade as wholesalers, buying consortia and supermarket 
chains (HM1). Like these customers, the respondent asserts, 
distributors act as middlemen who do not sell directly to end 
customers, unlike the supermarkets, restaurants and retailers with whom 
distributors were grouped for the preliminary results.
    Second, La Molisana claims that the Department did not look at the 
same sales and marketing selling functions in the two markets, looking 
at four factors (discounts, two types of rebates and commissions) in 
the home market, none of which were considered in the analysis of the 
U.S. level of trade. La Molisana comments that, in the quantitative 
frequency analysis of home market sales and marketing selling functions 
in the home market, the Department looked at the number of observations 
with positive values for each of the four factors considered and then 
used those values to determine an overall average frequency for the 
sales and marketing support category. La Molisana contends that the 
Department, by not taking into account those factors which had no 
observations with positive values, calculated an erroneous average. 
Further, in the Preliminary Results La Molisana observes, the 
Department gave equal weight to commissions and the three different 
categories of discounts and rebates when calculating the average. 
According to La Molisana, this resulted in understating the importance 
of the use of a sales agent as a selling function. La Molisana argues 
that the Department should consider discounts and rebates as a single 
factor and commissions as another factor within the sales and marketing 
support category; then it should give equal weight to both when 
averaging them. If commissions were given their proper weight, La 
Molisana contends, distributors would be found highly comparable to 
supermarket chains in relation to the level of sales-processing 
activity.
    Third, La Molisana argues that customers in HM1, all of which 
purchase both La Molisana and private-label brands, benefit from a 
lesser degree of advertising and promotional activities because those 
activities are only performed for the La Molisana brand. La Molisana 
claims that the composition of sales to distributors with respect to 
the two brands is comparable to that of the other groups in the HM1 
category.
    Finally, La Molisana contends that the Department misclassified the 
level of activity for certain selling functions in the United States. 
Freight and delivery arrangements made for U.S. sales are, according to 
La Molisana, made in the same manner as those for the home market and 
should be classified accordingly. If the Department corrects these 
alleged miscategorizations, La Molisana believes it will conclude that 
the single level of trade in the U.S. market is comparable to the HM1 
level of trade in the home market. La Molisana points out that in the 
underlying investigation the Department determined that sales were made 
at the same level of trade in both markets, and it contends that 
circumstances have not changed significantly.
    The petitioners agree with the Department's level-of-trade analysis 
in the preliminary results. The petitioners point out that including 
the zero-frequency percentages in the quantitative portion of the 
``sales and administration and marketing support'' category analysis 
would not have a large enough effect on the result to change the 
conclusion about the level of sales and marketing support provided by 
distributors. They point out further that, if the Department were to 
use the same factors to evaluate the U.S. sales and marketing support 
that were used in the home market (i.e. discounts, rebates, and 
commissions), the result would not change. With regard to La Molisana's 
contention that the circumstances have not changed since the 
investigation, the petitioners point out that the Department has 
refined its level-of-trade analysis since the original investigation 
and now conducts a more detailed examination.
    DOC Position: We agree with La Molisana, in part. For the final 
results, where possible, we have compared La Molisana's U.S. sales to 
the HM1 level of trade in the home market and have included 
distributors in the HM1 level of trade.
    With regard to the classification of La Molisana's selling 
functions, we recognize that the use of a sales agent is an important 
consideration in the sales administration and marketing support 
category. Therefore, in these final results we have given more weight 
to the fact that agents are not used for sales to distributors. 
Further, we have reviewed our analysis of the off-price-list discounts 
received by distributors and have found them comparable to those 
received by the other customers in HM1 (see La Molisana Analysis Memo). 
In terms of the quantitative frequency analysis we performed for the 
preliminary results, in which we determined the number of observations 
with positive values for each selling-function variable, we emphasize 
that this quantitative analysis was intended only as a guide for use in 
the final analysis. The existence of any zero frequencies, together 
with all other relevant factors as outlined in the narrative portion of 
the response, was taken into account in the qualitative portion of our 
level-of-trade analysis. Therefore, it is unnecessary to revise the 
quantitative portion of the analysis. We acknowledge that we did not 
look at the same functions in both the U.S. and home markets because 
the same fields in the computer database did not exist for both. With 
regard to the level of advertising and promotions support incurred by 
distributers, the data show La Molisana's statement that the 
composition of sales with respect to the two brands being similar 
between distributors and the other customers in the HM1 category is 
erroneous. We have not re-categorized the level of advertising support 
to distributors in our final level-of-trade analysis.
    In considering the U.S. freight arrangements, we agree with La 
Molisana that these arrangements do require a comparable level of 
activity as the freight arrangements made in the

[[Page 6626]]

home market, and we have factored that into our final level-of-trade 
analysis.
    Finally, to determine whether home market sales are at a different 
level of trade than U.S. sales, we examine whether the home market 
sales are at different stages in the marketing process than the U.S. 
sales. The marketing process in both markets begins with goods being 
sold by the producer and extends to the sale to the final user. The 
chain of distribution between the two may have many or few links, with 
the respondent's sales occurring somewhere along this chain. See Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate From South Africa, 62 FR 6173 (November 
19, 1997). In looking at the chain of distribution to see where the 
customer categories in the U.S. and home markets fall, it is clear that 
La Molisana's U.S. customer is at the same point in the chain of 
distribution as its customers in the home market level of trade HM1. 
All of the home market customers in HM1 are the first to take 
possession of the merchandise from La Molisana and none of them sells 
directly to end-users. While position in the chain of distribution 
alone does not determine level of trade, we feel that the selling 
functions of these customers are sufficiently similar to those of the 
U.S. customer to warrant considering them the same level of trade.
    Even without changing the analysis with regard to advertising, our 
revised analysis with regard to sales administration and marketing 
support and chain of distribution warrants including distributors in 
the HM1 level of trade with wholesalers, supermarket chains and buying 
consortia.

Comment 10C: Use of Price-Averaging Groups in Making Price-to-Price 
Comparisons

    La Molisana argues that, if the Department does not match to the 
HM1 level of trade, it should continue with its practice established in 
the investigation of comparing sales by using price-averaging groups 
based on customer category.
    The petitioners argue that use of price-averaging groups based on 
customer category would effectively substitute customer categories as 
defined by the respondent itself for the detailed level-of-trade 
analysis carried out by the Department.
    DOC Position: Because we have decided to match La Molisana's sales 
at the HM 1 level of trade, this argument is moot.

Comment 11: Calculation of the Difference-in-Merchandise Adjustment

    La Molisana argues that the only ``physical difference'' between 
U.S. and Italian pasta that it produces is the vitamin enrichment in 
the U.S. pasta. Any other differences in cost do not result in a 
physical difference and should not be included in the calculation of 
the difference-in-merchandise (difmer adjustment). It claims a cost 
differential arises between different types of pasta within a given 
shape category because of different extrusion times involved in 
producing them.
    The petitioners claim that La Molisana's cost differences were 
based on brand distinctions and the Department calculated a weighted-
average cost using the two submitted costs correctly to determine one 
unique cost of manufacturing for each control number and used that cost 
in the calculation of the difmer appropriately.
    DOC Position: Contrary to the Department's instructions in Section 
D, page D-1, of the antidumping questionnaire, which requested that the 
respondent report one weighted-average cost for each unique control 
number, La Molisana reported two costs for each control number based on 
brand distinctions. The difference in these costs was not related to 
extrusion times as claimed by La Molisana in its brief. See La 
Molisana's November 10, 1998, section D response, p. D-20 and exhibit 
D-9. Therefore, we have continued to use the weighted-average figure 
based on the two costs presented by La Molisana as the basis for the 
difmer.

Comment 12: Comparing Green Nested Pasta to Constructed Value

    La Molisana claims that its green nested pasta is sufficiently 
different from any other pasta type that it should be compared to 
constructed value (CV). In the preliminary results, the Department 
matched across shape, additives and enrichment resulting in a 
comparison of vitamin-enriched green nested pasta to unenriched, plain 
nested or, in some cases, specialty long cut pasta. Although the 
calculated difmer falls just within the 20 percent range the Department 
uses normally, La Molisana contends that in this case it results in an 
unreasonable comparison of dissimilar merchandise.
    The petitioners point out that the home market sales that the 
Department used to compare La Molisana's U.S. sales of green nested 
pasta do not exceed the 20 percent difmer test. They contend that the 
Department's application of the decision in Cemex, S.A. v. the United 
States (``Cemex'') dictates that the Department use similar merchandise 
rather than CV to calculate margins when there are no comparison sales 
of identical merchandise.
    DOC Position: We agree with the petitioners. Although the 20 
percent difmer test is not mandated by the statute, the Department has 
used it continuously for a long period of time and in 1992 established 
a clear policy on its use. See Policy Bulletin 92.2 Difference in 
Merchandise; 20% rule (July 29, 1992). While the bulletin states that 
we are not inflexibly bound to this guideline, we find no basis for 
making an exception to this policy in this case. Moreover, La 
Molisana's green nested pasta, which goes through the same production 
process as the other pasta types and has largely the same ingredients, 
is not sufficiently dissimilar from other pasta types to make these 
comparisons unreasonable.

Puglisi

Comment 13: Offset to G&A for Government Grants and Restitution of 
Lease Payments

    Puglisi maintains that during Fiscal Year (FY) 1996 the company 
received (1) grants for equipment purchases and (2) loan-restitution 
payments for leased production equipment. Puglisi argues that the 
Department should uphold its long-standing and consistent practice and 
treat the grants for equipment purchases and the loan-restitution 
payments as offsets to G&A expenses as it did in previous cases, 
including the Final Determination of Sales at Less Than Fair Value: 
Certain Pasta from Italy, 61 FR 30326 (July 14, 1996) (Pasta from 
Italy), and Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol from South Africa, 60 FR 22550, 22556 (May 8, 1995) 
(Furfuryl Alcohol from South Africa).
    The petitioners contend that the Department should exclude non-
production-related offsets from the calculation of G&A as was done in 
the preliminary analysis. The petitioners argue that, because the 
machinery-investment subsidy is available to all Italian companies, it 
is general in nature. Therefore, they argue that the Department should 
continue to exclude this subsidy as an offset to G&A for the final 
results.
    DOC Position: We agree with Puglisi that the grants for equipment 
purchases and loan-restitution payments for leased production equipment 
should be treated as offsets to total G&A expenses. The grants relate 
specifically to the company's general operations. Consistent with our 
findings in Pasta

[[Page 6627]]

from Italy, 61 FR 30326, 30355, and Furfuryl Alcohol from South Africa, 
60 FR 22550, 22556, we have included the grants received for equipment 
purchases and loan-restitution payments for leased production equipment 
by the Italian government as offsets to total G&A expense for the final 
margin calculation.

Comment 14: Gain on Sale of Puglisi's U.K. Property

    Puglisi contends that the gain on the sale of the company's U.K. 
property should be treated as an offset to G&A expense because the 
property was used not only as a residence but also as an administrative 
office and was therefore related to the general operations and 
administration of the company. Puglisi argues that the Department 
referred to the sale of the U.K. property incorrectly as a gain on a 
sale of investments in its Preliminary Results. According to Puglisi, 
the company sold an apartment in London in FY 1996, which had been used 
as the residence and administrative office of the managing director of 
an affiliated company, Puglisi Pasta (U.K.) Ltd. According to Puglisi, 
the use of the property was treated as compensation to the director of 
the affiliated company and benefitted the management operations as a 
whole and therefore was not a passive investment. Puglisi contends that 
the Department has treated the sales of fixed assets such as the London 
property consistently as a G&A item in various cases including Final 
Determination of Sales at Less Than Fair Value: Certain Welded 
Stainless Steel Pipe From the Republic of Korea, 57 FR 53693, 53704 
(Nov. 12, 1992) (Pipe from Korea), and Final Results of Antidumping 
Administrative Review: Fresh Kiwifruit from New Zealand, 59 FR 48596, 
48608 (September 22, 1994) (Kiwifruit 1994). Puglisi argues that 
compensation to a shareholder/director, in kind or otherwise (e.g., the 
provision of a residence/office), has been held by the Department to be 
included properly in the calculation of COP. Thus, according to 
Puglisi, any gain or loss on the sale of this compensating item should 
also be included in G&A.
    The petitioners contend that, for the final results, the Department 
should disallow the gain on the sale of real estate located in the 
United Kingdom as an offset to G&A expense. The petitioners argue that, 
according to the case record, the U.K. property had been used as a 
residence of the managing director and there is no evidence that this 
property related to the production of subject merchandise. Further, the 
petitioners contend that the gain on the sale of the U.K. real estate 
was not related to the general operations of the company and the 
disposition of the property does not reasonably reflect costs 
associated with the production and sale of the merchandise under 
review; therefore, they conclude, it should be excluded from G&A for 
the final results.
    DOC Position: In its case brief, Puglisi indicated for the first 
time that this property is part of the compensation package paid to one 
of the shareholders who is the director of its affiliated company 
located in the United Kingdom. Pulgisi did not provide any support or 
documentation for this assertion. Even if we treated the gain on sale 
of the residential real estate as a G&A-type item and record support 
existed, the use of the dwelling was part of the total compensation 
package to the director of the affiliated company located in the United 
Kingdom, not Puglisi. Thus, we disagree that the gain should be 
included in Puglisi's G&A rate computation because the gain relates to 
an asset that directly benefits the operations of the U.K. company (the 
entity for which the compensated director works), not Puglisi. 
Accordingly, we have disallowed this gain as an offset to Puglisi's G&A 
expenses for the final results.

Comment 15: Inclusion of Purchased Products in the G&A Allocation 
Denominator

    Puglisi argues that the cost of the merchandise purchased for 
resale should be included in the denominator in calculating the G&A 
ratio because G&A expenses are the costs incurred by a company that 
relate to the administrative activities of the company as a whole and 
are not specific to one production line, one production facility or to 
self-produced merchandise. Puglisi contends that the exclusion of these 
cost-of-sales totals from the denominator used in the calculation of 
the G&A ratio would not only distort the G&A calculation but contradict 
clear and consistent Department policy. Puglisi argues that the 
Department has held that G&A expenses, like selling expenses, are to be 
treated as period-specific costs, relating to the general operations of 
the company during a particular period and not to production activities 
during the period. Puglisi also adds that the most recent version of 
the Department's antidumping manual confirms that ``G&A is calculated 
by dividing the fiscal year G&A expense by the fiscal year cost of 
goods sold (adjusted for categories of expense not included in the cost 
of manufacture (COM), such as packing) and then applying the percentage 
to the COM of the product,'' citing the AD manual, Chapter 8, 
XIII(c)(1)(d), pages 58-59. Therefore, Puglisi argues that G&A expenses 
should be allocated over the total cost of goods sold, not over the 
total cost of goods produced or over the total sales of goods produced.
    The petitioners contend that the Department should exclude the cost 
of merchandise purchased for resale from the cost-of-goods-sold 
denominator used to calculate the G&A expense ratio in its final margin 
calculation. The petitioners argue that it would be inappropriate to 
allocate G&A expenses to merchandise that is purchased for resale 
because minimal, if any, G&A expenses would be incurred for this 
merchandise. In fact, according to the petitioners, any expenses 
Puglisi would incur related to the pasta purchased for resale may more 
appropriately be considered selling expenses.
    DOC Position: We agree with Puglisi that the denominator we used to 
compute the company's G&A expense rate should be the total cost of 
sales as reported on the company's audited financial statements, 
including that related to the pasta purchased for resale. As was 
explained in the CIT decision in U.S. Steel Group, et al. v. United 
States, et al., 998 F.Supp. 1151 (CIT 1998), G&A expenses are those 
expenses which relate to the general operations of the company as a 
whole rather than to the production process. As part of its normal 
operations, Puglisi is sometimes required to purchase pasta for resale 
to satisfy customer needs. Therefore, we consider the pasta purchased 
for resale to be related to the general operations of Puglisi as a 
whole and, for the final results, we recomputed Puglisi's G&A expense 
rate inclusive of the cost of sales related to the pasta purchased for 
resale.

Comment 16: Valuation of Inputs from Affiliated Parties

    Puglisi argues that the Department should use the actual cost of 
the services provided by its affiliate and not the transfer price 
because the value of those services is not a significant percentage of 
COM. Further, since Puglisi collapsed the two companies for purposes of 
reporting cost of manufacturing, the major-input rule as provided under 
section 773(f)(2) of the Act does not apply. Puglisi concludes that, in 
the absence of the major-input rule, it is the Department's preference 
to use the actual cost of inputs as reflected in the affiliated party's 
accounting records and financial statements. Puglisi cites to Notice of 
Final Determination of Sales at Less Than Fair Value: Stainless Steel 
Wire Rod From Korea, 63 FR

[[Page 6628]]

40404, 40421 (July 29, 1998) (Korean Rod), to support its contention 
that intra-company transactions between affiliated parties should be 
valued at cost.
    The petitioners argue that Puglisi should report the higher of 
transfer price or actual cost of services provided by its affiliated 
supplier, in accordance with the major-input rule.
    DOC Position: We agree with Puglisi that, because the affiliated-
party input in question is not a major input, the major-input rule does 
not apply. We disagree, however, that we should not use the transfer 
price between Puglisi and its affiliate. Section 773(f)(2) of the Act 
directs the Department to disregard transactions between two affiliated 
persons if such transactions did not occur at arm's-length prices. In 
this instance, we have determined that the transfer price between the 
two companies occurred at an arm's-length price. Because there were no 
comparable transactions between two non-affiliated parties to compare 
to the transfer price between Puglisi and its affiliate, we compared 
the transfer price to the affiliate's COP, noting that the transfer 
price exceeded the COP. Thus, there is no reason not to use the 
transfer price between Puglisi and its affiliate. See Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Wire 
Rod from Japan, 63 FR 40434, 40440 (July 29, 1998).
    We disagree with Puglisi that the facts in this case related to 
collapsing the costs of Puglisi and its affiliated supplier are the 
same as those in the Korean Rod case. In Korean Rod, we collapsed the 
affiliated parties under 19 CFR 351.401(f) which concerns special 
treatment of affiliated producers where there the potential for 
manipulation of prices or production in an effort to evade antidumping 
duties exists. In this case, Puglisi decided on its own to ``collapse'' 
itself and its affiliate for the purpose of reporting cost. However, 
the Department does not collapse affiliated companies for margin-
calculation purposes unless both companies produce or sell the subject 
merchandise since the Department collapses affiliated companies only 
where the potential for price manipulation exists. In this case, the 
affiliated company does not produce or sell the subject merchandise; 
rather it provides certain services to Puglisi. Puglisi's unilateral 
decision to collapse the two companies and to use its affiliate's COP 
rather than the transfer price for transactions occurring between the 
two parties during the POR was not in accordance with Department 
practice. Therefore, we used transfer prices rather than COP for the 
purposes of the final results.

Comment 17: Allocation of Electricity Expenses

    Puglisi argues that it allocated production-line electricity costs 
accurately and reasonably on the basis of total relative production 
throughput times. According to Puglisi, this method accounts for 
differences in electricity consumption or operating efficiencies 
between production machines reasonably, as well as accounting for 
differences in electricity usage due to drying times of the different 
pasta shape types. Puglisi disagrees with the Department's contention 
in the memorandum from Laurens van Houten to Christian B. Marsh, 
Verification of the Cost of Production and Constructed Value Data, at 
p.3, August 21, 1998 (Verification Report) that, because one particular 
shape of pasta is produced predominately on a machine that uses much 
less electricity than the other production lines, the reported 
electricity cost was misallocated to that pasta shape. Puglisi argues 
that, because it used relative production times, the electricity costs 
were allocated to all pasta shapes properly.
    The petitioners argue that Puglisi did not use the most reasonable 
and verifiable method of electricity allocation available to it. 
Because one shape code was produced predominantly on a machine that 
uses significantly less electricity than the other machines, the 
petitioners contend that the shape code produced on that machine should 
be allocated less electricity consumption per standard machine time 
than the other shapes. The petitioners maintain that the smaller 
machine which produces the shape code in question is not more efficient 
but uses less electricity because it is ``significantly smaller.'' The 
petitioners argue that, because the shape code in question was produced 
predominately on this older, smaller machine and company officials 
indicated that this production line uses significantly less 
electricity, electricity costs were over-allocated to that shape code.
    DOC Position: We agree with Puglisi that it is reasonable to 
allocate production-line electricity costs on the basis of total 
relative production throughput times only if all the pasta production 
machines consume the same amount of electricity per standard throughput 
time. At verification, company officials indicated that one of 
Puglisi's machines consumes significantly less electricity than the 
other machines (see Verification Report at page 18). Since the shape 
code in question was produced predominantly on the one machine which 
consumed significantly less electricity per standard throughput time, 
the electricity cost assigned to this shape is unreasonably high.
    Evidence on the record shows that virtually all shapes produced by 
Puglisi, with the exception of the shape code in question, can only be 
made on the larger machines (see Verification Report, exhibit 20). 
Because the reported costs for those few shapes (other than the shape 
code in question) that can be produced on either the smaller or larger 
machines were based on standard machine times of the larger machines, 
we conclude that these shapes were produced predominantly on the larger 
machines. It follows that, because the reported costs for the shape 
code in question were based on the standard machine times for the small 
machine only, we conclude that the shape code in question was produced 
predominantly on the smaller machine. Therefore, for the final results 
we have adjusted Puglisi's reported product-specific electricity costs 
to take into account the lower electricity consumption of the older 
machine in question.

Comment 18: Allocation of Depreciation Expenses

    Puglisi argues that it reported its depreciation expenses in a 
reasonable manner consistent with principles of Italian Generally 
Accepted Accounting Principles (``GAAP''), Italian tax law, and 
pursuant to its normal accounting practices. According to Puglisi, 
these depreciation expenses include a multitude of capital expenditures 
for repair, maintenance, modernization and calibration of machines of 
various ages which Puglisi cannot isolate by production line. However, 
it believes that the allocation of total depreciation expenses by 
relative production throughput times accounts for any such repair or 
improvement expense made after the initial purchase as well as any 
``reasonable use allowance'' remaining on the older machines. Puglisi 
maintains that it is not required under Italian GAAP or Italian tax law 
to charge depreciation costs or expenses on a machine-specific basis. 
Puglisi therefore does not do so in its normal accounting records 
because there are too many additions to the depreciation expense 
account which would require an extraordinary manual accounting effort 
to isolate the costs per production line. Puglisi argues that the older 
production line requires more maintenance, repair and modernization 
expenditures than

[[Page 6629]]

the newer lines and, thus, carries a higher proportion of the 
depreciable expenses for renovation maintenance from prior years than 
the newer machines. Puglisi contends that, by treating the older 
machine in a similar manner as the newer machines, it not only took 
into account the many capital expenditures which were incurred over all 
lines, but also the reasonable use allowance of a machine that was 
purchased earlier than the other machines.
    Puglisi argues that the Department should accept its method of 
allocating depreciation expenses because this method is used in the 
company's normal accounting records. Furthermore, citing section 
773(f)(1)(A) of the Act, Puglisi asserts that the Department's long-
standing practice is to rely on data from a respondent's normal books 
and records if they are prepared in accordance with the home country's 
GAAP and reasonably reflect the cost of producing the merchandise.
    The petitioners argue that the Department should reallocate 
depreciation expenses for the final results based on its verification 
findings. They contend that, because Puglisi treated all production 
lines equally with respect to depreciation expense per standard machine 
time, despite the fact that one line is significantly older, 
depreciation expenses should be reallocated. The petitioners argue 
that, while Puglisi states that there is ``a multitude of machine-
related expenses for repair, maintenance, calibration and modernization 
of the various product lines'' and that the Department reviewed sample 
invoices and documents for services and capital improvements made to 
the long and short lines in FY 1992, there is no indication of this in 
the Department's verification report.
    DOC Position: We agree with Puglisi that the allocation of total 
depreciation expenses by relative production throughput time is 
reasonable as long as all production lines incur approximately the same 
amount of depreciation expense. However, in this situation, we have 
reason to believe this is not the case. At verification, we had 
concerns as to whether Puglisi's oldest production line, which is 
significantly older than the other lines, had any depreciable basis 
remaining. We requested company officials to provide records to support 
that the oldest production line still had a depreciable basis remaining 
during the POR. Company officials failed to provide any such support 
(see Verification Report at page 19).
    In its case brief, Puglisi for the first time makes the claim that 
its oldest production line incurred significantly more maintenance, 
repair, and modernization costs than the other lines, and, thus, its 
depreciable basis is comparable to that of the other lines. First, we 
note that normally repairs and maintenance costs are expensed in the 
year incurred, not capitalized and depreciated. Second, at 
verification, Puglisi provided no evidence to support its claim that it 
incurred and capitalized amounts related to repairs, maintenance, and 
modernization for either its oldest or newer machines.
    Finally, we disagree with Puglisi that we should accept its method 
of allocating depreciation expense because it is used in the company's 
normal accounting records. Puglisi does not allocate depreciation 
expense to specific products in the normal course of business. Rather, 
it developed its reporting methodology specifically for antidumping 
purposes. For the final results, we adjusted Puglisi's allocation 
methodology for depreciation by allocating depreciation expense only to 
those products produced on the newer production lines.

Comment 19: Adjusted Leasing Costs

    The petitioners argue that Puglisi made an adjustment incorrectly 
to its recorded machinery leasing costs for a particular leased 
machine. Accordingly, the petitioners contend that the Department 
should adjust for this error for the final results.
    Puglisi argues that the petitioners' assertion that it had adjusted 
certain recorded machinery leasing cost incorrectly, for amounts posted 
to the accounts after June 30, 1997, is an inherently factual issue 
that must be decided based on the facts on the record. Puglisi contends 
that this issue is entirely distinct from the other issue concerning 
machinery-leasing restitution payments which are discussed separately 
in its briefs.
    DOC Position: We agree with the petitioners that Puglisi made an 
adjustment to its recorded machinery leasing costs incorrectly. The 
purpose of the adjustment was to take into account the fact that it did 
not receive a particular leased machine until after the POR. Puglisi 
believed that in its normal books and records it had recorded the first 
lease payment related to this machinery during the first six months of 
1997 (which falls within the POR). A review of the leasing account, 
however, shows that the lease payment for which Puglisi adjusted the 
account was not posted until after June 30, 1997. Thus, Puglisi reduced 
its recorded costs by an amount that was not included initially. For 
the final results, we increased Puglisi's costs to account for this 
error.

Rummo

Comment 20: Bug-Infested and Defective Pasta

    Rummo argues that the Department should reverse the position it 
took in the preliminary results and exclude U.S. sales of defective or 
bug-infested pasta to food banks from the margin calculation or, in the 
alternative, craft a methodology to account for the 
unrepresentativeness and distortive nature of the food-bank sales. 
Rummo identifies five options for resolving this issue: (1) It contends 
that the Department has considerable discretion to exclude U.S. sales 
from the margin calculation when the sales are found to be distortive 
or unrepresentative. Otherwise, according to Rummo, the Department is 
required to employ a methodology which compensates for the distortion. 
(2) It claims that the merchandise sold to food banks constitutes a by-
product of pasta and as such should be excluded from the margin 
calculation with revenue earned from the food bank sales applied to 
costs as an offset. (3) It contends that the Department has the 
authority to weight-average U.S. sales to account for the 
unrepresentativeness of distress sales of scope merchandise in the 
United States. The company asserts that, if the Department chooses not 
to exclude the sales in question altogether, this is a situation in 
which the Department should use its discretion to weight-average U.S. 
prices. (4) It contends that, if the Department does not exclude the 
food-bank sales from the margin calculation, the Department should 
compare the food-bank sales to constructed value, since the food-bank 
sales are not ``like'' its home market sales of prime merchandise. 
Rummo continues that, since merchandise sold to food banks constitutes 
a by-product, the Department should adjust constructed value by 
deducting the sales revenue generated from the sales in question. (5) 
Rummo argues that, if the Department does not exclude all food-bank 
sales from the margin calculation, it must exclude one sale to a food 
bank for which no consideration was received.
    The petitioners respond that Rummo has not placed sufficient 
evidence on the record to support its claim that the merchandise sold 
to food banks was, in fact, bug-infested or defective. Additionally, 
the petitioners argue that the record evidence does not demonstrate 
that the entire volume of

[[Page 6630]]

sales coded as food-bank sales in the database was sold to food banks. 
The petitioners contend that the Department must affirm the preliminary 
results because Rummo has not placed additional information on the 
record that would alter the Department's preliminary decision on this 
issue.
    The petitioners claim that Rummo's internal memoranda and bills of 
lading, placed on the record to explain the managerial decision to sell 
the merchandise to food banks and to demonstrate that the merchandise 
actually went to food banks, do not account for the entire volume of 
sales coded as food-bank sales in Rummo's database. Furthermore, the 
petitioners argue that the internal memoranda are contradictory in that 
they indicate that some of the pasta discussed in the memoranda may not 
have been actually sold to food banks as Rummo claims.
    DOC Position: We agree with the petitioners that Rummo has not 
demonstrated that the pasta coded as food-bank sales was defective or 
bug-infested nor that it was actually sold to food banks. Therefore, 
the arguments put forth by Rummo to account for the unrepresentative 
and distortive nature of these low-price sales are moot. We have 
included all of these sales in the margin calculation without making 
any special adjustment or consideration for sales identified as food-
bank sales.
    To support its claim that the merchandise in question was defective 
or bug-infested and was sold to food banks, Rummo provided the 
Department with four internal memoranda in its November 3, 1998, 
section A response and eight bills of lading in a March 17, 1998, 
submission. While the memoranda discuss food banks as a possible outlet 
for defective pasta, but not bug-infested pasta, they refer to only a 
small quantity of merchandise and provide no definitive evidence that 
any defective pasta was sold to food banks. The memoranda also discuss 
a problem with bug infestation, but they never refer to food banks as 
an outlet for that merchandise and, instead, mention a different remedy 
for the problem. Moreover, the quantity of problem merchandise 
discussed in the memoranda is not linked directly to sales in the 
database or to the bills of lading Rummo provided to document the food-
bank sales.
    Likewise, the eight bills of lading, which document a quantity far 
below that claimed as food-bank sales by Rummo, provide no direct link 
between the pasta listed on the bills of lading and the observations 
coded as food-bank sales in the database. Moreover, there is no 
indication that the merchandise on the bills of lading was defective or 
bug-infested, and, since we cannot link the pasta from the bills of 
lading to that in the internal memoranda, we have no basis to conclude 
that this merchandise was defective or bug-infested. Additionally, two 
of the bills of lading list pasta products that are not coded as food-
bank sales in the database, which brings into question whether Rummo 
reported the product type of the merchandise sold to food banks 
properly. Therefore, we have concluded that the bills of lading do not 
demonstrate sufficiently that the merchandise shipped to food banks was 
defective or bug-infested. Finally, we note that Rummo did not provide 
any information linking any of the food-bank sales in the database to 
its support documentation.
    Therefore, we have concluded that, while the documentation seems to 
indicate that Rummo had a problem with some quantity of defective and 
bug-infested pasta and may have shipped a portion of it to food banks, 
the memoranda and bills of lading do not confirm the quantity nor do 
they offer sufficient proof that any of the pasta labeled as food-bank 
sales in the database was defective or insect-infested and subsequently 
sold to food banks during the POR.

Comment 21: Credit Expenses

    Rummo requests that the Department correct the calculation error in 
its reported U.S. credit expenses that it identified in its September 
4, 1998, submission. Rummo contends that it erred in calculating credit 
expenses for U.S. sales in its supplemental response on sales for which 
Rummo had not yet received payment. Rummo explains that, for sales with 
missing payment dates, it calculated a weighted-average credit expense 
on a customer-specific basis, when there were other sales to the same 
customer for which Rummo had received payment. In cases where there 
were no other sales to the same customer, Rummo states that it 
calculated an overall credit expense based on all U.S. sales. Rummo 
continues that an error occurred because it based the overall and 
customer specific weighted-average credit expenses on a combination of 
sales, without adjusting for differences in currencies, where credit 
was reported in lira/kg for EP sales and $/lb for CEP sales. According 
to Rummo, the flawed calculation inflated the credit expense for the 
sales in question and resulted in a higher margin for Rummo.
    The petitioners respond that the Department should recalculate 
credit expense using the date of the final results as payment date. 
They contend that it is the Department's practice to use the date of 
the final results as the surrogate payment date when the respondent 
does not provide the payment date.
    DOC Position: Our review of Rummo's methodology for calculating the 
credit expense for U.S. and home market sales with missing dates of 
payment shows that Rummo calculated the credit expense using 
inconsistent methodologies in each market. We have rejected Rummo's 
methodology for calculating U.S. credit expense for sales with a 
missing date of payment based on the average credit expense for a 
specific customer or for aggregate customers because the credit expense 
was calculated using average expense, rather than average credit days. 
Furthermore, this methodology differs from the home market where Rummo 
calculated credit expense for sales with a missing date of payment 
using November 3, 1997, the date that Rummo submitted its sections A, 
B, & C questionnaire responses to the Department, as the surrogate date 
of payment. In order to achieve consistency in our calculations, we 
have recalculated the credit expense for Rummo's U.S. sales with a 
missing date of payment using November 3, 1997, as the date of payment.
    We do not agree with the petitioners' assertion that we should use 
the date of the final results as the payment date for U.S. sales 
without a known date of payment. Although the Department has used the 
date of the final results as a surrogate for date of payment in past 
proceedings, we find that such a methodology would constitute an 
adverse inference and is not warranted in this case.
    Therefore, for these final results, we have revised our 
calculations from the preliminary results by calculating credit expense 
in both markets for sales with missing dates of payment by using 
November 3, 1997, as the date of payment.

Final Results of Review

    As a result of our review, we determine that the following margins 
exist for the period January 19, 1996, through June 30, 1997:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Arrighi....................................................        71.49
Barilla....................................................        71.49
De Cecco...................................................     \1\ 0.32
Indalco....................................................         2.00
La Molisana................................................        12.26
Pagani.....................................................        71.49
Puglisi....................................................         1.46

[[Page 6631]]

 
Rummo......................................................        7.02
------------------------------------------------------------------------
\1\ De minimis.

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. In accordance 
with 19 CFR 351.212 (b)(1), we have calculated importer-specific 
assessment rates by dividing the dumping margin found on the subject 
merchandise examined by the entered value of such merchandise. We will 
direct the Customs Service to assess antidumping duties by applying the 
assessment rate to the entered value of the merchandise entered during 
the POR, except where the assessment rate is de minimis (see 19 CFR 
351.106(c)(2)).
    Furthermore, the following 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) 
of the Act: (1) For the companies named above, the cash deposit rate 
will be the rate listed above, except if the rate is less than 0.5 
percent and, therefore, de minimis, the cash deposit will be zero; (2) 
for merchandise exported by manufacturers or exporters not covered in 
this review but covered in a previous segment of this proceeding, the 
cash deposit rate will continue to be the company-specific rate 
published in the most recent final results in which that manufacturer 
or exporter participated; (3) if the exporter is not a firm covered in 
this review or in any previous segment of this proceeding, but the 
manufacturer is, the cash deposit rate will be that established for the 
manufacturer of the merchandise in these final results of review or in 
the most recent final results; and (4) if neither the exporter nor the 
manufacturer is a firm covered in this review or in any previous 
segment of this proceeding, the cash deposit rate will be 11.26 
percent, the all-others rate established in the LTFV investigation. 
These deposit requirements shall remain in effect until publication of 
the final results of the next administrative review.
    This notice also serves as final reminder to importers of their 
responsibility 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 in the subsequent assessment of double antidumping 
duties.
    This notice also is the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to 
comply is a violation of the APO.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 3, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-3277 Filed 2-9-99; 8:45 am]
BILLING CODE 3510-DS-P