[Federal Register Volume 65, Number 153 (Tuesday, August 8, 2000)]
[Notices]
[Pages 48474-48477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19947]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-489-805]


Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review: Certain Pasta from Turkey

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

ACTION: Notice of preliminary results and partial rescission of 
antidumping duty administrative review.

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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 Turkey in response to a request by Filiz Gida Sanayi 
ve Ticaret A.S (``Filiz''). 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, Filiz did not make 
sales of the subject merchandise at less than normal value (``NV''). If 
these preliminary results are adopted in our final results of this 
administrative review, we will instruct the Customs Service to 
liquidate entries of subject merchandise by this company without regard 
to antidumping duties.
    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 
their 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.

EFFECTIVE DATE: August 8, 2000.

FOR FURTHER INFORMATION CONTACT: John Brinkmann or Cindy Robinson, 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) 482-3797, 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 Turkey (61 FR 38545). 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 Turkey requested an administrative 
review of their sales: Filiz and Pastavilla Makarnacilik Sanayi ve 
Ticaret A.S. (``Pastavilla''). 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 Filiz and 
Pastavilla. Notice of Initiation, 64 FR 47167, (August 30, 1999).
    Because the Department disregarded sales that failed the cost test 
during the most recently completed segment of the preceding in which 
Filiz and Pastavilla participated, 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 a cost 
investigation on Filiz and Pastavilla at the time we initiated the 
antidumping review. In its August 25, 1999, request for an 
administrative review, Filiz stated that it had no U.S. entries or 
sales during the POR prior to January 1, 1999, and therefore requested 
that, for purposes of reporting home market sales and cost data, the 
POR be shortened to the six-month period from January 1 through June 
30, 1999. Accordingly, on September 1, 1999, we informed Filiz that it 
could limit its reporting of home market data to the period January 1 
through June 30, 1999. In that letter we also advised Filiz that if it 
elected to limit its reporting of home market data to the six-month 
period, in the sales-below-cost investigation, it would forego the 
application of the ``recovery of cost'' test pursuant to section 
773(b)(2)(D) of the Act.
    On August 30, 1999, we issued an antidumping questionnaire \1\ to 
Filiz and Pastavilla. On September 16, 1999, Pastavilla withdrew its 
request for a review. Filiz submitted its section A questionnaire 
response on September 23, 1999, and sections B, C, D on October 20, 
1999.
    The Department issued a supplemental section A through D 
questionnaire to Filiz on December 16, 1999. Filiz submitted its 
response to our supplemental questionnaire on January 13, 2000.
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    \1\ 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 COP of the foreign like product and 
constructed value (``CV'') of the merchandise under review.
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    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).
    We verified the sales and cost information submitted by Filiz from 
April 10-19, 2000.

Partial Rescission of Antidumping Duty Administrative Review

    On September 16, 1999, Pastavilla withdrew its request for a 
review. Because there were no other requests for review for Pastavilla, 
and because Pastavilla's letter withdrawing its request was timely 
filed, we are rescinding the review with respect to Pastavilla 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

[[Page 48475]]

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.
    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 ruling to date:
    (1) 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, in the case file in the Central Records Unit, main 
Commerce building, room B-099 (``the CRU'').

Verification

    As provided in section 782(i) of the Act, we verified sales and 
cost information provided by Filiz. We used standard verification 
procedures, including on-site inspection of the manufacturer's 
facilities and examination of relevant sales and financial records. Our 
verification results are outlined in the verification report placed in 
the case file in the CRU.

Product Comparisons

    In accordance with section 771(16) of the Act, the Department first 
attempted to match contemporaneous sales of products sold in the U.S. 
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.
    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 Turkey were made 
in the United States at less than fair value, we compared the export 
price (``EP'') to the NV, as described in the ``Export Price'' and 
``Normal Value'' sections of this notice. Because Turkey's economy 
experienced high inflation during the POR (over 60 percent), as is 
Department practice, we limited our comparisons to home market sales 
made during the same month in which the U.S. sale occurred and did not 
apply our ``90/60 contemporaneity rule (see, e.g., Notice of Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review: Certain Pasta From Turkey, 63 FR 68429, 68430 (December 11, 
1998) and Certain Porcelain on Steel Cookware from Mexico: Final 
Results of Antidumping Duty Administrative Review, 62 FR 42496, 42503 
(August 7, 1997)). This methodology minimizes the extent to which 
calculated dumping margins are overstated or understated due solely to 
price inflation that occurred in the intervening time period between 
the U.S. and home market sales.

Export Price

    For the price to the United States, we used EP in accordance with 
section 772(a) of the Act because the merchandise was sold by the 
producer or exporter outside the United States to the first 
unaffiliated purchaser in the United States prior to importation and 
constructed export price (``CEP'') was not otherwise warranted based on 
the facts on the record. We based EP on the packed C&F prices to the 
first unaffiliated customer in the United States.
    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, insurance, 
foreign brokerage handling and loading charges, and international 
freight. In addition, we increased the EP by the amount of the 
countervailing duties imposed that were attributable to an export 
subsidy, in accordance with section 772(c)(1)(C).
    Based on our findings at verification, we revised Filiz' short-term 
interest rate used in its imputed credit calculation by excluding two 
long-term loans. See Memorandum from Cindy Robinson to John Brinkmann 
dated July 31, 2000 (``Filiz Analysis Memo'').

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 Filiz' volume of home market sales of the foreign like 
product to the volume of its U.S. sales of the subject merchandise. 
Pursuant to section 773(a)(1)(B) of the Act, because Filiz' 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 Filiz.

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 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,

[[Page 48476]]

pursuant to section 773(b) of the Act, to determine whether Filiz' 
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. With the exception of the interest 
expense ratio, we relied on Filiz' information as submitted. We revised 
Filiz' reported interest expense ratio, by excluding packing cost from 
the cost of goods sold. See Filiz Analysis Memo.
    As noted above, we determined that the Turkish economy experienced 
high inflation during the POR. Therefore, to avoid the distortive 
effect of inflation on our comparison of costs and prices, we requested 
that Filiz submit the product-specific cost of manufacturing (``COM'') 
incurred during each month of the six-month period for which it 
reported home market sales. We then calculated a six-month average COM 
for each product after indexing the reported monthly costs during the 
six-month period to an equivalent currency level using the Turkish 
wholesale price index from the International Financial Statistics 
published by the International Monetary Fund (IMF). We then restated 
the six-month average COM in the currency value of each respective 
month.
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. Since Filiz limited its reporting of home 
market sales to a six-month period, we did not conduct an analysis to 
determine 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 six-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 of the 
limited six-month reporting period used by Filiz, 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 
sections 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 
section 773(b)(1) of the Act.

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 inland freight, 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 costs, 
respectively. In addition, we made circumstance of sale adjustments for 
direct expenses, including imputed credit, advertising, promotions, and 
warranties, 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. Pursuant to section 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 six-month average costs, as adjusted for inflation for each month 
of the six-month period, as described in the Cost of Production 
Analysis section above.

E. 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 U.S. 
EP 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.
    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.
    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: Level of Trade Findings Memoranda'' on file in the CRU. The 
company-specific LOT analysis is included in the business proprietary 
Filiz Analysis Memo. 

Currency Conversion

    Because this proceeding involves a high-inflation economy, we 
limited our comparison of U.S. and home market sales to those occurring 
in the same month (as described above) and only used daily exchange 
rates. (See, Notice of Final Results and Partial Rescission of 
Antidumping Duty Administrative Review: Certain Pasta From Turkey, 63 
FR 68429 (December 11, 1998).)
    The Department's preferred source for daily exchange rates is the 
Federal Reserve Bank. However, the Federal Reserve Bank does not track 
or publish exchange rates for the Turkish Lira. Therefore, we made 
currency conversions based on the daily exchange rates from the Dow 
Jones Service, as published in the Wall Street Journal.

Preliminary Results of Review

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

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Filiz.......................................................         0.0
------------------------------------------------------------------------

    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

[[Page 48477]]

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 Turkey entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate 
for Filiz will be zero; (2) for previously reviewed or investigated 
companies, 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 51.49 
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 Turkey, 61 FR 38546 
(July 24, 1996).
    These cash deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and 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. 00-19947 Filed 8-7-00; 8:45 am]
BILLING CODE 3510-DS-P