[Federal Register Volume 65, Number 153 (Tuesday, August 8, 2000)]
[Notices]
[Pages 48467-48474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19946]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-818]


Notice of Preliminary Results and Partial Recission of 
Antidumping Duty Administrative Review and Intent To Revoke Antidumping 
Duty Order in Part: Certain Pasta From Italy

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

ACTION: Notice of Preliminary Results and Partial Recission of 
Antidumping Duty Administrative Review and Intent to Revoke the 
Antidumping Duty Order in Part.

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SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on certain pasta 
(``pasta'') from Italy in response to requests by the following 
companies: Commercio-Rappresentanze-Export S.r.l. (``Corex''); F.lli De 
Cecco di Filippo Fara S. Martino S.p.A. (``De Cecco''); La Molisana 
Industrie Alimentari S.p.A. (``La Molisana''); Pastificio Fratelli 
Pagani S.p.A. (``Pagani''); Pastificio Antonio Pallante (``Pallante''); 
P.A.M. S.r.l. (``PAM''); Pastificio Maltagliati S.p.A. 
(``Maltagliati''); N. Puglisi & F. Industria Paste Alimentare S.p.A. 
(``Puglisi''); and Rummo S.p.A. Molino e Pastificio (``Rummo''). The 
review covers exports of pasta to the United States for the period of 
review (``POR'') July 1, 1998 through June 30, 1999.
    We preliminarily determine that during the POR, La Molisana and PAM 
sold subject merchandise at less than normal value (``NV''). If these 
preliminary results are adopted in the final results of this 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties equal to the difference between the export 
price (``EP'') or constructed export price (``CEP'') and NV.
    We preliminarily determine that during the POR, Corex, De Cecco, 
Pallante, Pagani and Puglisi did not make sales of the subject 
merchandise at less than NV (i.e., ``zero'' or de minimis dumping 
margins). If these preliminary results are adopted in the final results 
of administrative review, we will instruct the U.S. Customs Service to 
liquidate appropriate entries without regard to antidumping duties. 
Also, if these preliminary results are adopted in our final results of 
this administrative review, we intend to revoke the antidumping order 
with respect to De Cecco, based on three years of sales at not less 
than NV. See ``Intent to Revoke'' section of this notice.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit comments in this proceeding should also 
submit with them: (1) A statement of the issues; (2) a brief summary of 
the comments; and (3) a table of authorities. Further, we would 
appreciate it if parties submitting written comments would provide the 
Department with an additional copy of the public version of any such 
comments on diskette.

DATES: Effective Date: August 8, 2000.

FOR FURTHER INFORMATION CONTACT: John Brinkmann or Jarrod Goldfeder, 
AD/CVD Enforcement, Office 6, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4126 or (202) 482-2305, respectively.

SUPPLEMENTARY INFORMATION:

The 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 Department regulations refer to 
the regulations codified at 19 CFR part 351 (April 1999).

Background

    On July 24, 1996, the Department published in the Federal Register 
the antidumping duty order on pasta from Italy (61 FR 38547). On July 
15, 1999, we published in the Federal Register the notice of 
``Opportunity to Request an Administrative Review'' of this order, for 
the period July 1, 1998 through June 30, 1999 (64 FR 38181).
    In accordance with 19 CFR 351.213(b)(2) the following producers 
and/or exporters of pasta from Italy requested an administrative review 
of their sales: Corex; De Cecco; La Molisana; Maltagliati; Pagani; 
Pallante; PAM; Puglisi; and Rummo. On July 28, 2000, De Cecco also 
requested revocation of the order with respect to its sales of subject 
merchandise. On August 30, 1999, we published the notice of initiation 
of this antidumping duty administrative review covering the period July 
1, 1998 through June 30, 1999 for all nine companies. Notice of 
Initiation, 64 FR 47167 (August 30, 1999).\1\
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    \1\ Puglisi was inadvertently omitted from the August 30, 1999 
initiation notice. The Notice of Initiation was amended on September 
8, 1999 to include Puglisi (64 FR 48897).
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    For De Cecco, La Molisana, Pagani, PAM, Puglisi and Rummo, the 
Department disregarded sales that failed the cost test during the most 
recently completed segment of the proceeding in which each company 
participated. Therefore, pursuant to section 773(b)(2)(A)(ii) of the 
Act, we had reasonable grounds to believe or suspect that sales by 
these companies of the foreign like product under consideration for the 
determination of NV in this review were made at prices below the cost 
of production (``COP''). Therefore, we initiated cost investigations on 
these six companies at the time we initiated the antidumping review. 
During the course of this review, we completed the administrative 
review for the period July 1, 1997 through June 30, 1998. See

[[Page 48468]]

Notice of Final Results of Antidumping Duty Administrative Review, 65 
FR 7349 (February 14, 2000). Because the Department had disregarded 
sales for Corex, Maltagliati, and Pallante that failed the cost test 
during this recently completed review, on February 9, 2000, for the 
same reasons noted above, we initiated cost investigations on Corex, 
Maltagliati and Pallante.
    On August 30, 1999, we issued an antidumping questionnaire \2\ to 
all of the companies subject to review. After several extensions, the 
respondents submitted their responses to sections A through C of the 
questionnaire by October 29, 1999, and Section D responses by January 
3, 2000 (except Corex, which submitted its Section D response on 
February 22, 2000). Pallante voluntarily submitted its section D 
response on December 12, 1999, prior to the February 9, 2000 initiation 
of the cost investigation for Pallante.
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    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the sales of the 
merchandise in all of its markets. Sections B and C of the 
questionnaire request comparison market sales listings and U.S. 
sales listings, respectively. Section D requests additional 
information about the cost of production of the foreign like product 
and constructed value (``CV'') of the merchandise under review.
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    The Department issued supplemental section A through C 
questionnaires to the responding companies by January 7, 2000, and 
second supplemental questionnaires to De Cecco on January 3, 2000, and 
to Pallante on March 2, 2000. Supplemental section D questionnaires 
were issued to all companies, except Corex, by February 18, 2000. 
Second supplemental section D questionnaires were issued to Pallante on 
March 2, 2000, and to PAM on April 4, 2000. Responses to all 
supplemental questionnaires were received by April 18, 2000.
    We verified the sales information submitted by De Cecco from 
February 17-19 and March 13-17, 2000; Pagani from March 20-24, 2000; 
PAM from May 15-19, 2000; and La Molisana from May 22-26, 2000, and 
June 8-9, 2000. We verified the cost information submitted by De Cecco 
from May 8-16, 2000, and La Molisana from May 15-19, 2000.
    On February 4, 2000, the Department published a notice postponing 
the preliminary results of this review until June 30, 2000 (65 FR 
5591). On June 28, 2000, the Department published a notice further 
postponing the preliminary results of this review until July 31, 2000 
(65 FR 39868).

Partial Rescission of Antidumping Duty Administrative Review

    On August 26, 1999, Rummo withdrew its request for a review. On 
November 26, 1999, Maltagliati withdrew its request for a review. 
Because there were no other requests for review for Rummo and 
Maltagliati, and because the letters withdrawing the requests were 
timely filed, we are rescinding the review with respect to Rummo and 
Maltagliati in accordance with 19 CFR 351.213(d)(1).

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, 
diastasis, vitamins, coloring and flavorings, and up to two percent egg 
white. The pasta covered by this scope is typically sold in the retail 
market, in fiberboard or cardboard cartons, or polyethylene or 
polypropylene bags of varying dimensions.
    Excluded from the scope of this 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 Institute Metatherian Di 
Certification, by Bioagricoop Scrl, by QC&I International Services, by 
Ecocert Italia or by Consorzio per il Controllo dei Prodotti Biologici.
    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

    The Department has issued the following scope rulings to date:
    (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, in the case file in the Central Records Unit, main 
Commerce building, room B-099 (``the CRU'').
    (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, which is available in the CRU.
    (3) On October 23, 1997, the petitioners filed an application 
requesting that the Department initiate an anti-circumvention 
investigation of Barilla, an Italian producer and exporter of pasta. 
The Department initiated the investigation on December 8, 1997 (62 FR 
65673). On October 5, 1998, the Department issued its final 
determination that Barilla's importation of pasta in bulk and 
subsequent repackaging in the United States into packages of five 
pounds or less constitutes circumvention, with respect to the 
antidumping duty order on pasta from Italy pursuant to section 781(a) 
of the Act and 19 CFR 351.225(b). 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, the Department self-initiated a scope 
inquiry to determine whether a package weighing over five pounds as a 
result of allowable industry tolerances is within the scope of the 
antidumping and countervailing duty orders. On May 24, 1999 we issued a 
final scope ruling finding that, effective October 26, 1998, pasta in 
packages weighing or labeled up to (and including) five pounds four 
ounces is within the scope of the antidumping and countervailing duty 
orders. See Memorandum from John Brinkmann to Richard Moreland, dated 
May 24, 1999, which is available in the CRU. The following scope ruling 
is pending:
    (1) On April 27, 2000, the Department self-initiated an anti-
circumvention inquiry to determine whether Pagani's importation of 
pasta in bulk and subsequent repackaging in the United States into 
packages of five pounds or less constitutes circumvention, with respect 
to the antidumping and countervailing duty orders on pasta from Italy 
pursuant to section 781(a) of the Act and 19 CFR 351.225(b). See 
Certain Pasta from Italy: Notice of Initiation of Anti-circumvention 
Inquiry

[[Page 48469]]

of the Antidumping and Countervailing Duty Orders, 65 FR 26179 (May 5, 
2000).

Verification

    As provided in section 782(i) of the Act, we verified sales and 
cost information provided by De Cecco and La Molisana, and the sales 
information provided by Pagani and PAM. We used standard verification 
procedures, including on-site inspection of the manufacturers' 
facilities and examination of relevant sales and financial records. Our 
verification results are outlined in the company-specific verification 
reports placed in the case file in the CRU.

Product Comparisons

    In accordance with section 771(16) of the Act, we first attempted 
to match contemporaneous sales of products sold in the United States 
and comparison markets that were identical with respect to the 
following characteristics: (1) pasta shape; (2) type of wheat; (3) 
additives; and (4) enrichment. Where there were no sales of identical 
merchandise in the home market to compare with U.S. sales, we compared 
U.S. sales with the most similar product based on the characteristics 
listed above, in descending order of priority. Where there were no 
appropriate comparison market sales of comparable merchandise, we 
compared the merchandise sold in the United States to CV, in accordance 
with section 773(a)(4) of the Act.
    For purposes of the preliminary results, where appropriate, we have 
calculated the adjustment for differences in merchandise based on the 
difference in the variable cost of manufacturing between each U.S. 
model and the most similar home market model selected for comparison.

Comparisons to Normal Value

    To determine whether sales of certain pasta from Italy were made in 
the United States at less than fair value, we compared the EP or CEP to 
the NV, as described in the ``Export Price and Constructed Export 
Price'' and ``Normal Value'' sections of this notice. In accordance 
with section 777A(d)(2) of the Act, we calculated monthly weighted-
average prices for NV and compared these to individual U.S. 
transactions.

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, in accordance with sections 772(a) and (b) of the Act. We 
calculated EP where the merchandise was sold by the producer or 
exporter outside of the United States directly to the first 
unaffiliated purchaser in the United States prior to importation and 
CEP was not otherwise warranted based on the facts on the record. We 
calculated CEP where sales to the first unaffiliated purchaser took 
place in the United States. We based EP and CEP on the packed CIF, ex-
factory, FOB, or delivered prices to the first unaffiliated customer 
in, or for exportation to, the United States. Where appropriate, we 
reduced these prices to reflect discounts and rebates.
    In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including inland 
freight from plant or warehouse to port of exportation, foreign 
brokerage, handling and loading charges, export duties, international 
freight, marine insurance, U.S. duties, and U.S. inland freight 
expenses (freight from port to the customer). In addition, where 
appropriate, we increased the EP and CEP by the amount of the 
countervailing duties imposed that were attributable to an export 
subsidy, in accordance with section 772(c)(1)(C).
    For CEP, in accordance with section 772(d)(1) of the Act, where 
appropriate, we deducted from the starting price those selling expenses 
that were incurred in selling the subject merchandise in the United 
States, including direct selling expenses (advertising, cost of credit, 
warranties, and commissions paid to unaffiliated sales agents). In 
addition, we deducted indirect selling expenses that related to 
economic activity in the United States. These expenses include certain 
indirect selling expenses incurred in the exporting country and the 
indirect selling expenses of affiliated U.S. distributors. We also 
deducted from CEP an amount for profit in accordance with sections 
772(d)(3) and (f) of the Act.
    Certain respondents reported the resale of subject merchandise 
purchased in Italy from unaffiliated producers. Where an unaffiliated 
producer of the subject pasta knew at the time of the sale that the 
merchandise was destined for the United States, the relevant basis for 
the export price would be the price between that producer and the 
respondent. See Dynamic Random Access Memory Semiconductors of One 
Megabit or Above From the Republic of Korea: Final Results of 
Antidumping Duty Administrative Review, Partial Rescission of 
Administrative Review and Notice of Determination Not to Revoke Order, 
63 FR 50867, 50876 (September 23, 1998). In this review, we determined 
that it was reasonable to assume that the unaffiliated producers knew 
or had reason to know at the time of sale that the ultimate destination 
of the merchandise was the United States because virtually all enriched 
pasta is sold to the United States. Accordingly, consistent with our 
methodology in prior reviews (see Notice of Preliminary Results and 
Partial Rescission of Antidumping Duty Administrative Review: Certain 
Pasta From Italy, 63 FR 42368, 42370 (August 7, 1998)), when 
respondents purchased pasta from other producers and we were able to 
identify resales of this merchandise to the United States, we excluded 
these sales of the purchased pasta from the margin calculation. Where 
the purchased pasta was commingled with the respondent's production and 
the respondent could not identify the resales, we examined both sales 
of produced pasta and resales of purchased pasta. Inasmuch as the 
percentage of pasta purchased by any single respondent was an 
insignificant part of its U.S. sales database, we included the sales of 
commingled purchased pasta in our margin calculations.

Normal Value

A. Selection of Comparison Markets

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared each respondent's volume of home market sales of the 
foreign like product to the volume of its U.S. sales of the subject 
merchandise. Pursuant to sections 773(a)(1)(B) and (C) of the Act, 
because, with the exception of Corex, each respondent's aggregate 
volume of home market sales of the foreign like product was greater 
than five percent of its aggregate volume of U.S. sales of the subject 
merchandise, we determined that the home market was viable for all 
producers, except Corex.
    Corex reported that it made no home market sales during the POR. 
Therefore, in accordance with section 773(a)(1)(B)(ii) of the Act, we 
have based NV on the price at which the foreign like product was first 
sold for consumption in the respondent's largest third-country market, 
Australia, which had an aggregate sales quantity greater than five 
percent of the aggregate quantity sold in the United States.

B. Arm's Length Test

    Sales to affiliated customers for consumption in the home market 
which were determined not to be at arm's length were excluded from our 
analysis. To test whether these sales were made at arm's length, we 
compared the prices of sales of comparison products to affiliated and 
unaffiliated customers, net

[[Page 48470]]

of all movement charges, direct selling expenses, discounts, and 
packing. Pursuant to 19 CFR 351.403(c) and in accordance with our 
practice, where the prices to the affiliated party were on average less 
than 99.5 percent of the prices to unaffiliated parties, we determined 
that the sales made to the affiliated party were not at arm's length. 
See e.g., Notice of Final Results and Partial Recission of Antidumping 
Duty Administrative Review: Roller Chain, Other Than Bicycle, From 
Japan, 62 FR 60472, 60478 (November 10, 1997), and Antidumping Duties; 
Countervailing Duties: Final Rule (``Antidumping Duties''), 62 FR 
27295, 27355-56 (May 19, 1997). We included in our NV calculations 
those sales to affiliated customers that passed the arm's-length test 
in our analysis. See 19 CFR 351.403; Antidumping Duties, 62 FR at 
27355-56.

C. Cost of Production Analysis

1. Calculation of COP
    Before making any comparisons to NV, we conducted a COP analysis, 
pursuant to section 773(b) of the Act, to determine whether the 
respondents' comparison market sales were made below the COP. We 
calculated the COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for selling, 
general, and administrative expenses (``SG&A'') and packing, in 
accordance with section 773(b)(3) of the Act. We relied on the 
respondents' information as submitted, except in the specific instances 
discussed below.
    Corex: We recalculated the indirect selling expense ratio based on 
information submitted by Corex on October 6, 1999. See Memorandum from 
Cindy Robinson to John Brinkmann dated July 31, 2000 (``Corex Analysis 
Memo'').
    For certain products, or control numbers (``CONNUMs''), Corex did 
not provide complete cost information in its COP database. For these 
CONNUMS, we calculated COP using the cost of manufacturing (``COM'') 
reported in Corex's sales database. We calculated interest expense and 
G&A using information submitted in Corex's October 6 and December 27, 
1999 responses. See, Corex Analysis Memo.
    De Cecco: We adjusted the G&A ratio by excluding packing from the 
cost of sales denominator in the G&A calculation because the G&A ratio 
should be applied to a COM amount that does not include the cost of 
packing. We also adjusted the interest expense factor by deducting 
packing from the COM used in the denominator of the calculation. We 
changed the numerator of the interest expense factor by including the 
interest expense of other affiliated companies owned by the De Cecco 
family. See Office of Accounting Memorandum from Michael P. Harrison to 
Neal Halper, ``De Cecco Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Determination,'' dated July 
31, 2000.
    La Molisana: We adjusted La Molisana's reported G&A ratio to 
exclude direct income taxes and to include certain expenses which were 
non-deductable for income tax purposes. We also adjusted La Molisana's 
reported interest expense ratio to exclude foreign exchange rate gains 
and losses on accounts receivable. See Office of Accounting Memorandum 
from Ernest Gziryan and Heidi Norris to Neal Halper, ``La Molisana Cost 
of Production and Constructed Value Calculation Adjustments for the 
Preliminary Determination,'' dated July 31, 2000.
    Pagani: We adjusted the numerator of the G&A expense ratio 
calculation by excluding expenses related to Molino Rovato and 
including Pagani's other operating expenses. For the denominator we 
used Pagani's unconsolidated cost of goods sold (``COGS'') instead of 
the reported consolidated figure. In addition, we adjusted Pagani's 
COGS by adding Pagani's inventory adjustments, and deducting other 
operating expenses, the write-down of receivables, packing expenses, 
and G&A expenses.
    We recalculated Pagani's financial expense ratio to include only 
those interest expenses related to Alimco, the consolidated parent 
company. For the numerator, we used the interest expenses for Alimco as 
reported in the consolidated audited financial statements instead of 
the reported summation of interest expenses for Pagani, Molino Rovato, 
Foods Control, and Alimco. For the denominator, we deducted G&A 
expenses, the write-down of receivables, and other operating charges 
from Alimco's consolidated COGS figure. As a result, we recalculated 
the company's interest expense ratio. See Office of Accounting 
Memorandum from Gina Lee to Neal Halper, ``Pagani Cost of Production 
and Constructed Value Calculation Adjustments for the Preliminary 
Determination,'' dated July 31, 2000.
    PAM: Based on the lack of differentiation between the types and 
mixes of wheat used by PAM in pasta production, we have weight-averaged 
the costs of four of the five wheat types reported by PAM, leaving only 
two wheat types with separate costs. See PAM Sales Verification Report 
and the Office of Accounting Memorandum from Heidi Norris to Neal 
Halper, ``PAM Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Determination,'' dated July 31, 2000 
(``PAM Accounting Memorandum'').
    In addition, we have revised the fixed overhead expenses to exclude 
packaging and packing costs that should be reported as a sales price 
adjustment. We also revised PAM's financial expense ratio to exclude 
offsets for income earned on fixed bonds, treasury bonds, common funds, 
and sales of bonds. Finally, we revised the denominator in PAM's G&A 
and financial expense ratio calculations to exclude G&A, selling, and 
packing expenses. Id.
2. Test of Comparison Market Prices
    As required under section 773(b) of the Act, we compared the 
weighted-average COP to the per unit price of the comparison market 
sales of the foreign like product, to determine whether these sales had 
been made at prices below the COP within an extended period of time in 
substantial quantities, and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time. We 
determined the net comparison market prices for the below-cost test by 
subtracting from the gross unit price any applicable movement charges, 
discounts, rebates, direct and indirect selling expenses, and packing 
expenses.
3. Results of COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the 12 month period were at prices less than the 
COP, we determined such sales to have been made in ``substantial 
quantities'' within an extended period of time in accordance with 
section 773(b)(2)(B) and (C) of the Act. In such cases, because we 
compared prices to POR-average costs, we also determined that such 
sales were not made at prices which would permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act. Therefore, for purposes of this administrative 
review, we disregarded the below-cost sales and used the remaining 
sales as the basis for determining NV, in accordance with

[[Page 48471]]

section 773(b)(1) of the Act. Specifically, we have disregarded below-
cost sales made by Corex, De Cecco, La Molisana, PAM, Pallante, Pagani, 
and Puglisi in this administrative review.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on ex-works, FOB or delivered prices to 
comparison market customers. We made deductions from the starting price 
for handling, loading, inland freight, warehousing, inland insurance, 
discounts, and rebates. In accordance with sections 773(a)(6)(A) and 
(B) of the Act, we added U.S. packing costs and deducted comparison 
market packing, respectively. In addition, we made circumstance of sale 
(``COS'') adjustments for direct expenses, including imputed credit 
expenses, advertising, warranty expenses, commissions, bank charges, 
billing adjustments, and interest revenue, in accordance with section 
773(a)(6)(C)(iii) of the Act.
    When comparing U.S. sales with comparison market sales of similar, 
but not identical, merchandise, we also made adjustments for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and section 19 CFR 351.411 of the 
Department's regulations. We based this adjustment on the difference in 
the variable COM for the foreign like product and subject merchandise, 
using POR-average costs.
    We also made adjustments, in accordance with 19 CFR 351.410(e), for 
indirect selling expenses incurred on comparison market or U.S. sales 
where commissions were granted on sales in one market but not in the 
other (the ``commission offset''). Specifically, where commissions are 
incurred in one market, but not in the other, we make an allowance for 
the indirect selling expenses in the other market up to the amount of 
the commissions.
    Sales of pasta purchased by the respondents from unaffiliated 
producers and resold in the comparison market were treated in the same 
manner described above in the ``Export Price and Constructed Export 
Price'' section of this notice.

E. Normal Value Based on CV

    For Corex, where we could not determine the NV based on comparison 
market sales because there were no contemporaneous sales of a 
comparable product in the ordinary course of trade, we compared the EP 
to CV. In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the cost of manufacturing of the product sold in 
the United States, plus amounts for SG&A expenses, profit, and U.S. 
packing costs. In accordance with section 773(e)(2)(A) of the Act, we 
based SG&A expenses and profit on the amounts incurred by Corex in 
connection with the production and sale of the foreign like product in 
the comparison market. We calculated Corex's CV based on the 
methodology described in the Cost of Production Analysis section of 
this notice, above.
    For price-to-CV comparisons, we made adjustments to CV for COS 
differences, in accordance with section 773(a)(8) of the Act and 19 CFR 
351.410. We made COS adjustments by deducting direct selling expenses 
incurred on comparison market sales and adding U.S. direct selling 
expenses.

F. Level of Trade (``LOT'')

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same LOT as the EP 
and CEP sales, to the extent practicable. When there were no sales at 
the same LOT, we compared U.S. sales to comparison market sales at a 
different LOT. When NV is based on CV, the NV LOT is that of the sales 
from which we derive SG&A expenses and profit.
    Pursuant to section 351.412 of the Department's regulations, to 
determine whether comparison market sales were at a different LOT, we 
examined stages in the marketing process and selling functions along 
the chain of distribution between the producer and the unaffiliated (or 
arm's length) customers. If the comparison-market sales were at a 
different LOT and the differences affected price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we made a LOT adjustment under section 
773(a)(7)(A) of the Act.
    Finally, if the NV LOT was more remote from the factory than the 
CEP LOT and there was no basis for determining whether the differences 
in LOT between NV and CEP affected price comparability, we granted a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 
(November 19, 1997).
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see the 
July 31, 2000, ``98/99 Administrative Review of Pasta from Italy and 
Turkey: Preliminary Determination Level of Trade Findings'' memoranda 
on file in the CRU. The company-specific LOT analysis is included in 
the business proprietary analysis memorandum for each company.
    The U.S. Court of International Trade (``CIT'') has held that the 
Department's practice of determining LOT for CEP transactions after CEP 
deductions is an impermissible interpretation of section 772(d) of the 
Act. See Borden, Inc., v. United States, 4 F. Supp.2d 1221, 1241-42 
(CIT March 26, 1998) (Borden II). The Department believes, however, 
that its practice is in full compliance with the statute. On June 4, 
1999, the CIT entered final judgment in Borden II on the LOT issue. See 
Borden, Inc., v. United States, Court No. 96-08-01970, Slip Op. 99-50 
(CIT, June 4, 1999). The government has appealed Borden II to the Court 
of Appeals for the Federal Circuit. Consequently, the Department has 
continued to follow its normal practice of adjusting CEP under section 
772(d) of the Act prior to starting a LOT analysis, as articulated in 
the Department's regulations at section 351.412.

G. Company-Specific Issues

    De Cecco: Pursuant to sections 772(a) and 772(b) of the Act, we 
reclassified De Cecco's reported EP sales as CEP sales since the 
agreement for sale occurred in the United States between PMI, De 
Cecco's U.S. affiliate, and the unaffiliated customer. See Memorandum 
from John Brinkmann to Melissa Skinner, ``Reclassification of De Cecco 
EP Sales as CEP Sales,'' dated July 31, 2000.
    La Molisana: Based on verification findings, we revised the 
calculation of the ENASARCO (commission benefit) expense and other 
discounts in the home market database, and recalculated marine 
insurance, billing adjustments, other U.S. transportation expenses, and 
commissions in the U.S. database. See Memorandum from Jarrod Goldfeder 
and Russell Morris to John Brinkmann, ``Analysis Memorandum for La 
Molisana Industrie Alimentari S.p.A.,'' dated July 31, 2000. In 
addition, we reclassified as indirect selling expenses incurred in the 
United States, certain indirect advertising expenses incurred in the 
United States that La Molisana had included as part of U.S. indirect 
selling expenses incurred in Italy. Id.
    Pallante: We recalculated home market imputed credit expenses and 
billing adjustments to correct errors discovered during our analysis of 
the home market database. See Memorandum from Dennis McClure to John 
Brinkmann, ``Analysis

[[Page 48472]]

Memorandum for Pastificio Antonio Pallante s.r.l. (PAP) and its 
affiliate, Industrie Alimentari Molisane s.r.l. (IAM),'' dated July 31, 
2000.
    Pagani: Based on verification findings, we revised quantity 
discounts in the home market database and recalculated credit expenses 
in the U.S. database. See Memorandum from Geoff Craig and Russell 
Morris to John Brinkmann, ``Analysis Memorandum for Pastificio Fratelli 
Pagani S.p.A.,'' dated July 31, 2000.
    PAM: Based on verification findings, we recalculated indirect 
selling expenses and commission benefits in the home market database, 
and foreign brokerage and handling, packing costs and discounts in the 
U.S. sales database. We also revised certain prices that were 
incorrectly reported in the U.S. Sales databbase. See Memorandum from 
Jarrod Goldfeder to John Brinkmann, ``Analysis Memorandum for PAM 
S.r.l.,'' dated July 31, 2000. In addition, we excluded from the home 
market database, certain reported sales that we determined were not 
Italian market sales. We also included in the U.S. database certain 
sales made to a customer in Italy that were exported to the United 
States, and excluded from the U.S. database duplicate sales that were 
erroneously reported. Furthermore, based on our findings at the sales 
verification, we found that there were insignificant differences 
between four of PAM's five reported wheat types. See Memorandum from 
Jarrod Goldfeder to John Brinkmann, ``Verification of the Sales 
Response of P.A.M. S.r.l. in the 98/99 Administrative Review of the 
Antidumping Duty Order of Certain Pasta from Italy,'' dated June 6, 
2000. Accordingly, where appropriate, we have combined these four wheat 
types and revised PAM's control numbers used for product matching. See 
``Product Comparisons'' section above.

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve.

Intent To Revoke

    On July 28, 1999, De Cecco submitted a letter to the Department 
requesting, pursuant to 19 CFR 351.222(b), revocation of the 
antidumping duty order with respect to its sales of the subject 
merchandise.
    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Act. 
While Congress has not specified the procedures that the Department 
must follow in revoking an order, the Department has developed a 
procedure for revocation that is described in 19 CFR 351.222. This 
regulation requires, inter alia, that one or more exporters and 
producers covered by the order submit the following: (1) A 
certification that the company has sold the subject merchandise at not 
less than NV in the current review period and that the company will not 
sell at less than NV in the future; (2) a certification that the 
company sold the subject merchandise in each of the three years forming 
the basis of the request in commercial quantities; and (3) an agreement 
to immediate reinstatement of the order if the Department concludes 
that the company, subsequent to the revocation, has sold subject 
merchandise at less than normal value. See 19 CFR 351.222(e)(1). Upon 
receipt of such a request, the Department will consider the following 
in determining whether to revoke the order in part: (1) Whether the 
producer or exporter requesting revocation has sold subject merchandise 
at not less than NV for a period of at least three consecutive years; 
(2) whether it is not likely in the future to sell the subject 
merchandise at less than NV; and (3) whether the producer or exporter 
requesting revocation in part has agreed in writing to the immediate 
reinstatement of the order, as long as any exporter or producer is 
subject to the order, if the Department concludes that the exporter or 
producer, subsequent to revocation, sold the subject merchandise at 
less than NV. See 19 CFR. 351.222(b)(2).
    In its July 28, 1999 request for revocation in part, De Cecco 
submitted the required certifications and agreement. On October 26, 
1999, the Department established a time frame for parties to submit 
factual information relating to the Department's consideration of De 
Cecco's request for the revocation of the antidumping duty order with 
respect to its sales of subject merchandise. We did not receive any 
comments in response to this request.
    Based on the preliminary results in this review and the final 
results of the two preceding reviews, De Cecco has had de minimis 
dumping margins for three consecutive reviews. Further, in determining 
whether three years of no dumping establish a sufficient basis to make 
a revocation determination, the Department must be able to determine 
that the company continued to participate meaningfully in the U.S. 
market during each of the three years at issue. See Certain Corrosion-
Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate From Canada; Final Results of Antidumping Duty 
Administrative Reviews and Determination To Revoke in Part, 64 FR 2173, 
2175 (January 13, 1999); see also Pure Magnesium From Canada; Final 
Results of Antidumping Duty Administrative Review and Determination Not 
to Revoke Order in Part, 64 FR 12977, 12979 (March 16, 1999); and 
Notice of Final Results of Antidumping Duty Administrative Review and 
Determination Not to Revoke the Antidumping Order: Brass Sheet and 
Strip from the Netherlands, 65 FR 742 (January 6, 2000). This practice 
has been codified in section 351.222(d)(1) of the Department's 
regulations, which states that, ``before revoking an order or 
terminating a suspended investigation, the Secretary must be satisfied 
that, during each of the three (or five) years, there were exports to 
the United States in commercial quantities of the subject merchandise 
to which a revocation or termination will apply.'' 19 CFR 351.222(d)(1) 
(emphasis added); see also 19 CFR 351.222(e)(1)(ii). For purposes of 
revocation, the Department must be able to determine that past margins 
are reflective of a company's normal commercial activity. Sales during 
the POR which, in the aggregate, are an abnormally small quantity do 
not provide a reasonable basis for determining that the discipline of 
the order is no longer necessary to offset dumping.
    With respect to the threshold matter of whether De Cecco made sales 
of subject merchandise to the United States in commercial quantities, 
we find that De Cecco's aggregate sales to the United States were made 
in commercial quantities during all segments of this proceeding. 
Although both the quantity and number of De Cecco's shipments to the 
United States of subject merchandise have decreased since the 
imposition of the antidumping duty order, they have remained at 
sufficiently high levels to be considered commercial quantities. 
Therefore, we can reasonably conclude that the ``zero'' or de minimis 
margins calculated for De Cecco in each of the last three 
administrative reviews are reflective of the company's normal 
commercial experience. See Memorandum from Jarrod Goldfeder to File, 
``Shipments of Pasta to the United States by De Cecco,'' dated July 31, 
2000.
    With respect to 19 CFR 351.222(b)(2)(ii), the likelihood issue, 
``when additional evidence is on the record concerning the likelihood 
of future dumping, the Department is, of course obligated to consider 
the

[[Page 48473]]

evidence by the parties which relates to the likelihood of future 
dumping.'' Steel Wire Rope From the Republic of Korea: Final Results of 
Antidumping Duty Administrative Review and Revocation in Part of 
Antidumping Duty Order, 63 FR 17986, 17988 (April 13, 1998) (citing 
Brass Sheet and Strip From Germany; Final Results of Antidumping Duty 
Administrative Review and Determination Not to Revoke in Part, 61 FR 
49727, 49730 (September 23, 1996)). In doing so, the Department may 
consider such ``factors as conditions and trends in the domestic and 
home market industries, currency movements, and the ability of the 
foreign entity to compete in the U.S. marketplace without [sales at 
less than normal value].'' Id.; see also Proposed Regulation Concerning 
the Revocation of Antidumping Duty Orders, 64 FR 29818, 29820 (June 3, 
1999) (explaining that when additional evidence as to whether the 
continued application of an antidumping duty order is necessary to 
offset dumping is placed on the record, ``the Department may consider 
trends in prices and costs, investment, currency movements, production 
capacity, as well as all other market and economic factors relevant to 
a particular case''). Thus, based upon three consecutive reviews 
resulting in zero or de minimis margins, the Department presumes that 
the company requesting revocation is not likely to resume selling 
subject merchandise at less than the NV in the near future unless the 
Department has been presented with evidence to demonstrate that dumping 
is likely to resume if the order were revoked. In this proceeding, we 
have not received any evidence that would demonstrate that De Cecco is 
likely to resume dumping in the future if the order were revoked. 
Therefore, we also preliminarily determine that the order is no longer 
necessary to offset dumping.
    Because all requirements under the regulation have been satisfied, 
if these preliminary findings are affirmed in our final results, we 
intend to revoke the antidumping duty order with respect to merchandise 
produced and exported by De Cecco. In accordance with 19 CFR 
351.222(f)(3), if these findings are affirmed in our final results, we 
will terminate the suspension of liquidation for any such merchandise 
entered, or withdrawn from warehouse, for consumption on or after the 
first day after the period under review, and will instruct the U.S. 
Customs Service to refund any cash deposit.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following percentage weighted-average margins exist for the period July 
1, 1998, through June 30, 1999:

------------------------------------------------------------------------
          Manufacturer/exporter                  Margin  (percent)
------------------------------------------------------------------------
Corex....................................  Zero.
De Cecco.................................  0.23 (de minimis).
La Molisana..............................  5.41.
Pagani...................................  0.49 (de minimis).
Pallante.................................  0.08 (de minimis).
PAM......................................  11.18.
Puglisi..................................  0.07 (de minimis).
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of this 
proceeding in accordance with 19 CFR 351.224(b). An interested party 
may request a hearing within 30 days of publication of these 
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of publication 
of these preliminary results of review. Rebuttal briefs and rebuttals 
to written comments, limited to issues raised in such briefs or 
comments, may be filed no later than 37 days after the date of 
publication. Parties who submit arguments are requested to submit with 
the argument (1) a statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, we would appreciate 
it if parties submitting written comments would provide the Department 
with an additional copy of the public version of any such comments on 
diskette. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, or at a hearing, if requested, 
within 120 days of publication of these preliminary results.

Assessment Rate

    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this administrative review, if any 
importer-specific assessment rates calculated in the final results are 
above de minimis (i.e., at or above 0.5 percent), the Department will 
issue appraisement instructions directly to the U.S. Customs Service to 
assess antidumping duties on appropriate entries by applying the 
assessment rate to the entered value of the merchandise. For assessment 
purposes, we calculated importer-specific assessment rates for the 
subject merchandise by aggregating the dumping margins for all U.S. 
sales to each importer and dividing the amount by the total entered 
value of the sales to that importer. Where appropriate, in order to 
calculate the entered value, we subtracted international movement 
expenses (e.g., international freight) from the gross sales value.

Cash Deposit Requirements

    To calculate the cash-deposit rate for each producer and/or 
exporter included in this administrative review, we divided the total 
dumping margins for each company by the total net value for that 
company's sales during the review period.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of certain pasta from Italy entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rates 
for the companies listed above will be the rates established in the 
final results of this review, except if the rate is less than 0.5 
percent and, therefore, de minimis, the cash deposit will be zero; (2) 
for previously reviewed or investigated companies not listed above, the 
cash deposit rate will continue to be the company-specific rate 
published for the most recent final results in which that manufacturer 
or exporter participated; (3) if the exporter is not a firm covered in 
this review, a prior review, or the original less-than-fair-value 
(``LTFV'') investigation, but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent final results for 
the manufacturer of the merchandise; and (4) if neither the exporter 
nor the manufacturer is a firm covered in this or any previous review 
conducted by the Department, the cash deposit rate will be 11.26 
percent, the ``All Others'' rate established in the LTFV investigation. 
See Notice of Antidumping Duty Order and Amended Final Determination of 
Sales at Less Than Fair Value: Certain Pasta from Italy, 61 FR 38547 
(July 24, 1996).
    These cash deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the

[[Page 48474]]

reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 31, 2000.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-19946 Filed 8-7-00; 8:45 am]
BILLING CODE 3510-DS-P