[Federal Register Volume 67, Number 154 (Friday, August 9, 2002)]
[Notices]
[Pages 51827-51833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20237]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-818]


Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review and Intent Not To Revoke in 
Part: Certain Pasta From Italy

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

ACTION: Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review and Intent Not to Revoke in 
Part.

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SUMMARY: In response to requests by interested parties, the Department 
of Commerce (``the Department'') is conducting an administrative review 
of the antidumping duty order on certain pasta (``pasta'') from Italy 
for the period of review (``POR'') July 1, 2000 through June 30, 2001.
    We preliminarily determine that during the POR, (1) Pastificio 
Garofalo S.p.A. (``Garofalo'') and (2) Italian

[[Page 51828]]

American Pasta Company (``IAPC''), 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, (1) Pastificio 
Guido Ferrara S.r.l. (``Ferrara'') and (2) Pastificio Fratelli Pagani 
S.p.A. (``Pagani'') did not make sales of the subject merchandise at 
less than NV (i.e., made sales at ``zero'' or de minimis dumping 
margins). If these preliminary results are adopted in the final results 
of this administrative review, we will instruct the U.S. Customs 
Service to liquidate appropriate entries without regard to antidumping 
duties. Furthermore, we preliminarily intend not to revoke the 
antidumping duty order with respect to subject merchandise produced and 
also exported by Pagani because its sales were not made in commercial 
quantities (see 19 CFR 351.222 (e)); see Intent Not 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, parties 
submitting written comments are requested to provide the Department 
with an additional copy of the public version of any such comments on 
diskette.

EFFECTIVE DATE: August 9, 2002.

FOR FURTHER INFORMATION CONTACT: Brian Ledgerwood or Mark Young, 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-
3836 or (202) 482-6397, 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. In addition, unless otherwise 
indicated, all citations to the Department's regulations refer to the 
regulations codified at 19 CFR part 351 (2001).

Case History

    On July 24, 1996, the Department published in the Federal Register 
the antidumping duty order on pasta from Italy (61 FR 38547). On July 
2, 2001, we published in the Federal Register the notice of 
``Opportunity to Request Administrative Review'' of this order, for the 
POR July 1, 2000 through June 30, 2001 (66 FR 34910).
    On July 30 and July 31, 2001, we received requests for review from: 
(1) COREX S.p.A. (``Corex''), (2) Ferrara, (3) Pagani, (4) Garofalo, 
(5) IAPC, (6) La Molisana Industrie Alimentari S.p.A. (``La 
Molisana''), and (7) N. Puglisi & F. Industria Paste Alimentari S.p.A. 
(``Puglisi'') in accordance with 19 CFR 351.213(b)(2). In addition, on 
July 31, 2001, Pagani requested that the Department revoke the 
antidumping duty order with respect to it. See ``Intent Not to Revoke'' 
section of this notice.
    On August 20, 2001, we published the notice of initiation of this 
antidumping duty administrative review covering the period July 1, 
2000, through June 30, 2001, listing these seven companies as 
respondents. Notice of Initiation, 66 FR 43570 (August 20, 2001).
    On August 28, 2001, we sent questionnaires to all seven companies.
    On September 19, and November 2, 2001, La Molisana and Puglisi, 
respectively, withdrew their requests for administrative review of the 
antidumping duty order.
    On January 3, 2002, the Department revoked the antidumping order 
with respect to Corex and Puglisi, based on three years of sales in 
commercial quantities at not less than NV. See Notice of Final Results 
of Antidumping Duty Administrative Review, Partial Rescission of 
Antidumping Duty Administrative Review and Revocation of Antidumping 
Duty Order in Part: Certain Pasta From Italy, 67 FR 300 (January 3, 
2002).
    During the most recently completed segment in which Pagani \1\ 
participated, the Department disregarded sales that failed the cost 
test. Pursuant to section 773(b)(2)(A)(ii) of the Act, we have 
reasonable grounds to believe or suspect that sales by Pagani of the 
foreign like product under consideration for the determination of NV 
were made at prices below the cost of production (``COP''). Therefore, 
we initiated a cost investigation of Pagani in the instant review.
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    \1\ The fourth administrative review covering the period July 1, 
1999, through June 30, 2000, was the most recently completed review 
for Pagani. See Certain Pasta From Italy: Final Results of 
Antidumping Duty Administrative Review, 67 FR 300 (January 3, 2002).
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    After several extensions, the remaining respondents submitted their 
responses to sections A through C of the questionnaire by October 25, 
2001, and to section D by November 1, 2001. IAPC, Ferrara, and Garofalo 
were not required to respond to section D.
    As stated in its questionnaire response, IAPC filed a Section D 
response because some of its U.S. sales had no contemporaneous home 
market matches during the appropriate window period. See IAPC's 
response to the Section D questionnaire (November 1, 2002). Although 
IAPC had a viable home market, for those sales which did not have a 
home market match we used constructed value (``CV'').
    On March 12, 2002, the Department published an extension of 
preliminary results of this review until July 30, 2002.\2\ See Certain 
Pasta from Italy and Turkey: Extension of Preliminary Results of 
Antidumping Duty Administrative Reviews, 67 FR 11095 (March 12, 2002).
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    \2\ There was a typographical error in the notice of ``Extension 
of Preliminary Results of Antidumping Duty Administrative Reviews'; 
the preliminary results of this review are actually due on July 31, 
2002.
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    During March, April, May, June, and July of 2002, the Department 
issued supplemental and second supplemental questionnaires.
    In their March 8, and April 11, 2002, submissions, the petitioners 
argued that the Department should collapse Pastaficio Antonio Amato & 
C. S.p.A. (``Amato'') and Garofalo because of alleged affiliation 
between the two companies. In its rebuttal submission on March, 26, 
2002, Garofalo rejected the petitioners' claims, citing a previous 
court decision as precedence. The Department has determined not to 
collapse Amato and Garofalo. For a more detailed discussion, see 
Memorandum on ``Whether To Collapse Garofalo and Amato in the 
Preliminary Results'', dated July 31, 2002, in the case file in the 
Central Records Unit, main Commerce building, room B-099 (``the CRU'').
    On April 17, 2002, the Department extended the deadline for the 
submission of factual information regarding revocation of the 
antidumping duty order, in part. Submissions were received from the 
petitioners \3\ and Pagani on May 1, 2002, and rebuttal comments were 
received from the parties on May 8, 2002.
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    \3\ New World Pasta Company; Dakota Growers Pasta Company; 
Borden Foods Corporation; and American Italian Pasta Company.

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[[Page 51829]]

    We verified the sales information submitted by: (1) Garofalo from 
June 3 through June 7, 2002; (2) IAPC from June 10 through June14, 
2002; (3) and Pagani from June 7 through June 12, 2002. We verified the 
cost information submitted by IAPC from June 11 through June 14, 2002, 
and Pagani from June 3 through June 6, 2002. We also verified 
revocation information submitted by Pagani on June 13, 2002.

Partial Rescission

    We initiated a review of seven companies, see Notice of Initiation, 
supra. On September 19, 2001 and November 2, 2001, respectively, La 
Molisana and Puglisi withdrew their requests for a review. These 
requests were submitted within 90 days of the publication of the Notice 
of Initiation. Because there were no other requests for review of La 
Molisana and Puglisi, and because the letters withdrawing the requests 
were timely filed, we are rescinding the review with respect to La 
Molisana and Puglisi in accordance with 19 CFR 351.213(d)(1). Although 
Corex did not submit a letter withdrawing its request for review, 
because Corex is no longer covered by the antidumping order, effective 
July 1, 2000, we are also rescinding the review with respect to it.

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 Instituto Mediterraneo Di 
Certificazione, by Bioagricoop Scrl, by QC&I International Services, by 
Ecocert Italia, by Consorzio per il Controllo dei Prodotti Biologici, 
or by Associazione Italiana per l'Agricoltura Biologica.
    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 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 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 IAPC and Pagani, and the sales information 
provided by Garofalo. 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. We revised certain sales and cost 
data based on verification findings. See the company-specific 
verification reports and calculation memoranda.

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. When 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. When 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 (``VCOM'') between 
each

[[Page 51830]]

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 NV, 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. See the 
company-specific verification reports and calculation memoranda.

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 when 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 
for those sales where a person in the United States, affiliated with 
the foreign exporter, made the sale to the first unaffiliated purchaser 
in the United States of the subject merchandise. 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. 
When 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, when 
appropriate, we increased EP or CEP as applicable, by an amount equal 
to the countervailing duty rate attributed to export subsidies in the 
most recently completed administrative review, in accordance with 
section 772(c)(1)(C).
    For CEP, in accordance with section 772(d)(1) of the Act, when 
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 by 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. In those situations in 
which 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 EP 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. See 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, 65 FR 4867, 4869 (August 8, 2000). Accordingly, consistent with 
our methodology in prior reviews (see id.), when a respondent 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 for that respondent. 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 773(a)(1)(C) of the 
Act, because 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.

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, when 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 
Rescission 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 of 
Pagani, pursuant to section 773(b) of the Act, to determine whether the 
respondent's 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 
respondent's information as submitted, except in instances where we 
used revised data based on verification findings. See the company-
specific calculation memoranda on file in the CRU, for a description of 
any changes that we made.

[[Page 51831]]

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 (also 
subtracted from the COP), 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 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 section 773(b)(1) of the Act. Specifically, we are 
preliminarily disregarding below-cost sales made by Pagani 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, when appropriate, for handling, loading, inland freight, 
warehousing, inland insurance, discounts, and rebates. We added 
interest revenue. 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, 
and billing adjustments, in accordance with section 773(a)(6)(C)(iii) 
of the Act.
    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 will limit the amount 
of such allowance to the amount of the other selling expenses incurred 
in the one market or the commissions allowed in the other market, 
whichever is less.
    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 VCOM for the foreign like product and subject merchandise, using 
POR-average costs.
    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. Calculation of Normal Value Based on Constructed Value

    For IAPC, when we could not determine the NV based on comparison 
market sales because there were no contemporaneous sales of a 
comparable product, 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 (``COM'') 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 IAPC in connection with 
the production and sale of the foreign like product in the comparison 
market.
    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

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same level of trade 
(``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 are at a 
different LOT and the differences affect 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 make a LOT adjustment under section 
773(a)(7)(A) of the Act.
    Finally, if the NV LOT is more remote from the factory than the CEP 
LOT and there is no basis for determining whether the differences in 
LOT between NV and CEP affected price comparability, we grant 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). Specifically in this review, we did not make an 
LOT adjustment for any respondent. However, we granted a CEP offset for 
IAPC.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see the 
company-specific verification reports, calculation memoranda, and LOT 
memoranda, all on file in the CRU.

G. Company-Specific Issues

    We relied on the respondents' information as submitted, except in 
instances where, based on verification findings, we made modifications 
to the calculation of NV and EP or CEP. See the company-specific 
calculation memoranda on file in the CRU.

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.

[[Page 51832]]

Intent Not To Revoke

    On July 31, 2001, Pagani, submitted a letter to the Department 
requesting, pursuant to 19 CFR 351.222(e), revocation of the 
antidumping duty order with respect to its sales of the subject 
merchandise. Pagani submitted along with its revocation request a 
certification stating that: (1) the company sold subject merchandise at 
not less than NV during the POR, and that in the future it would not 
sell such merchandise at less than NV (see 19 CFR 351.222(e)(1)(i)); 
(2) the company sold the subject merchandise to the United States in 
commercial quantities during each of the past three years (see 19 CFR 
351.222(e)(1)(ii)); and (3) the company agrees to immediate 
reinstatement of the order, if the Department concludes that the 
company, subsequent to revocation, has sold the subject merchandise at 
less than NV (see 19 CFR 351.222(b)(1)(iii)).
    On April 4, 2002, the petitioners opposed the request for 
revocation, arguing that Pagani's sales to the United States during the 
past three periods (including the current period) were not made in 
commercial quantities, and if the order were revoked, Pagani would sell 
subject merchandise at less than NV in the United States in the future. 
At the request of the Department, the petitioners and Pagani submitted 
comments on Pagani's request for revocation (see May 1, and May 8, 
2002, revocation submissions submitted by the parties).
    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Act. 
See section 751(d) 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. The regulation requires that exporters or producers 
covered by the order and desiring revocation 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 for at least three consecutive 
years 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 NV. 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 the continued application of the 
antidumping duty order is otherwise necessary to offset dumping; 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).
    Pagani submitted the required certifications and agreements. 
However, after applying the criteria outlined in section 351.222(b) of 
the Department's regulations, and after considering the comments of the 
parties and of the evidence on the record, we have preliminarily 
determined that one of the Department's requirements for revocation has 
not been met. Specifically, although we preliminarily find that Pagani 
has demonstrated three consecutive years of sales at not less than NV, 
we also preliminarily find that, based on Pagani's U.S. shipment data, 
its sales to the United States have not been made in commercial 
quantities during each of the three review periods at issue, in 
accordance with 19 CFR 351.222(d) and 351.222(e)(1)(ii).
    In particular, data on the record indicate that the amount of 
subject merchandise sold in the U.S. market by Pagani during the third, 
fourth, and fifth (i.e., the current) POR is small in quantity relative 
to Pagani's total U.S. sales volume during the period of investigation 
(``POI''). We conclude that Pagani's sales during these PORs do not 
provide any meaningful information concerning Pagani's normal 
commercial practice. Consequently, we find that Pagani's shipments 
during these PORs are not a reasonable basis for finding commercial 
quantities.\4\
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    \4\ Pagani's history of subject merchandise pasta sales is as 
follows: Pagani's 3rd POR sales of subject pasta were 2.98% of its 
POI sales of subject pasta. Pagani's 4th POR sales of subject pasta 
were 0.94% of its POI sales of subject pasta. Pagani's 5th POR sales 
of subject pasta were 1.06% of its POI sales of subject pasta.
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    Therefore, we have determined that the requirements for revocation 
have not been met because Pagani has not made sales to the United 
States in commercial quantities during the third, fourth, or fifth 
segment of this proceeding.\5\ Based on our examination of these facts 
at verification and our review of Pagani's sales practices, we find 
that, consistent with Department practice, we do not have a sufficient 
basis to conclude that the de minimis dumping margin calculated for 
Pagani for the third, fourth, or fifth administrative review is 
reflective of the company's normal commercial experience. See, e.g., 
Silicon Metal from Brazil, 65 FR at 7498 (finding that because sales 
and volume figures were so small the Department could not conclude that 
the reviews reflected what the company's normal commercial experience 
would be absent an antidumping duty order). Because Pagani has not met 
the commercial quantities requirement, we have not examined the issue 
as to whether the antidumping duty order is necessary to offset future 
dumping (see Silicon Metal from Brazil, 65 FR at 7505).
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    \5\ As we noted in 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) (Pure 
Magnesium from Canada), sales in commercial quantities is a 
threshold requirement that must be met by parties seeking 
revocation. We also note that while the regulation requiring sales 
in commercial quantities may have developed from the unreviewed 
intervening year regulation, its application in all revocation cases 
based on the absence of dumping is reasonable and mandated by the 
regulations. The application of this requirement to all such cases 
is reflected not only in the provision for unreviewed intervening 
years (see 19 C.F.R. 351.222 (d)(1)), but also in the new general 
requirement that parties seeking revocation certify to sales in 
commercial quantities in each of the years on which revocation is to 
be based. See 19 C.F.R. 351.222(e)(1)(ii). This requirement ensures 
that the Department's revocation determination is based upon a 
sufficient breadth of information regarding a company's normal 
commercial practice. See Pure Magnesium from Canada, 64 FR at 12979.
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    Pagani attempts to explain that the significant decrease in its 
sales volume during the third, fourth, and fifth administrative review 
periods was due to the alleged effect of the antidumping duty cash 
deposit rate required on its U.S. shipments of pasta as a result of the 
final results of the first administrative review of the order on Pasta 
from Italy (64 FR 6615, February 10, 1999). Pagani states that the cash 
deposit rate was a major factor affecting its substantial reduction in 
U.S. sales during the subsequent PORs. Whether this is the case or not 
does not detract from the record evidence which unequivocally 
demonstrates that the volume of such sales was far below the volume of 
Pagani's sales prior to the imposition of the antidumping duty 
order.\6\ Moreover,

[[Page 51833]]

it is the volume of these sales (not Pagani's alleged reasons for their 
size in this case) that is the focus of the Department's analysis with 
respect to whether they can be considered to be in commercial 
quantities.
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    \6\ While we note that Pagani argues that the U.S. market is a 
vibrant and changing market, dominated by large integrated domestic 
producers (see Pagani's May 8, 2002 revocation rebuttal submission), 
it has not submitted any information on the record which would 
indicate the U.S. consumer market has diminished since the 
imposition of the order, or that Pagani has made any permanent 
changes in its own business practices in the U.S. market. See 
Professional Electric Cutting Tools From Japan: Final Results of the 
Fifth Antidumping Duty Administrative Review and Revocation of the 
Antidumping Order in Part, 64 FR 71411 (December 21, 1999). See 
also, Polyvinyl Alcohol From Taiwan: Final Results of Third 
Antidumping Duty Administrative Review and Determination Not To 
Revoke Order in Part, 65 FR 60615 (October 12, 2000) and 
accompanying Decision Memorandum at Comment 1.a.: Application of the 
Commercial Quantities Regulation to Chang Chun's U.S. Sales of 
Subject Merchandise.
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    Based on the foregoing analysis, we have preliminarily determined 
that Pagani has not met one of the threshold requirements for 
revocation (i.e., sales in commercial quantities during the three 
consecutive PORs). We therefore preliminarily intend not to revoke the 
order, with respect to pasta produced and also exported by Pagani, if 
these preliminary findings are affirmed in our final results.

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, 1999, through June 30, 2000:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
IAPC........................................................        7.04
Ferrara.....................................................        0.38
Garofalo....................................................        0.77
Pagani......................................................        0.00
------------------------------------------------------------------------

    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 no 
later than 30 days after the date of publication of these preliminary 
results of review. Rebuttal briefs limited to issues raised in such 
briefs, 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, parties submitting 
written comments are requested to 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.
    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 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 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, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-20237 Filed 8-8-02; 8:45 am]
BILLING CODE 3510-DS-P