[Federal Register Volume 69, Number 151 (Friday, August 6, 2004)]
[Notices]
[Pages 47876-47879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18036]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-489-805]


Certain Pasta From Turkey: Notice of Preliminary Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request by the petitioners, New World Pasta 
Company, American Italian Pasta Company, and Dakota Growers Pasta 
Company, the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain pasta 
(pasta) from Turkey for the period July 1, 2002, through June 30, 2003.
    We preliminarily determine that during the period of review (POR), 
Filiz Gida Sanayi ve Ticaret A.S. (Filiz) and Tat Konserve A.S. (Tat), 
successor-in-interest to Pastavilla Makarnacilik San. V. Tic. A.S., 
(Pastavilla) \1\ 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 and 
Border Protection (CBP) to assess antidumping duties based on the 
difference between the export price (EP) and NV.
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    \1\ The Department has previously determined that Tat is the 
successor-in-interest to Pastavilla Makarnacilik San. V. Tic. A.S. 
(Pastavilla), and that Tat retains the antidumping and 
countervailing duty deposit rates assigned to Pastavilla by the 
Department in the most recently completed antidumping and 
countervailing duty administrative reviews. See Notice of Final 
Results of Antidumping and Countervailing Duty Changed Circumstances 
Reviews: Certain Pasta from Turkey, 69 FR 1280 (January 8, 2004).
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    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 6, 2004.

FOR FURTHER INFORMATION CONTACT: Lyman Armstrong or Mark Young, AD/CVD 
Enforcement, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3601 or (202) 482-6397, respectively.

SUPPLEMENTARY INFORMATION

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 
2, 2003, we published in the Federal Register the notice of 
``Opportunity to Request Administrative Review'' of this order, for the 
period July 1, 2002, through June 30, 2003 (68 FR 39511).
    On July 31, 2003, we received a request for review on behalf of 
petitioners, for Filiz, Tat, Beslen Makarna Gida Sanayi ve Ticaret, 
A.S., and Beslen Pazarlarma Gida Sanayi ve Ticaret A.S., respectively 
(collectively Beslen), Gidasa Sabanci Gida Sanayi ve Ticaret, A.S. 
(successor to Maktas Makarnacilik ve Ticaret, A.S.) (Gidasa), and Oba 
Makarnacilik Sanayi ve Ticaret, A.S., (Oba) in accordance with 19 CFR 
351.213(b)(1). On August 22, 2003, we published the notice of 
initiation of this antidumping duty administrative review covering the 
period July 1, 2002, through June 30, 2003, for Filiz, Tat, Beslen, 
Gidasa, and Oba. See Notice of Initiation, 68 FR 50750 (August 22, 
2003).
    On September 10, 2003, we sent the antidumping duty questionnaires 
to Filiz, Tat, Beslen, Gidasa, and Oba.\2\
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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 investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales or, if the home 
market is not viable, of sales in the most appropriate third-country 
market (this section is not applicable to respondents in non-market 
economy cases). Section C requests a complete listing of U.S. sales. 
Section D requests information on the cost of production of the 
foreign like product and the constructed value of the merchandise 
under investigation. Section E requests information on further 
manufacturing.
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    On September 29, 2003, Oba sent a letter to the Department stating 
that it had no shipments of subject merchandise to the United States. 
On October 3, 2003, petitioners withdrew their request for review for 
Beslen, Gidasa, and Oba.
    For both Filiz and Tat, the Department disregarded sales below the 
cost of production during the most recently completed segment of the 
proceeding in which these companies participated.\3\ Therefore, 
pursuant to section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as 
amended (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). Thus, we initiated a cost 
investigation of Filiz and Tat at the time we initiated the antidumping 
review.
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    \3\ For Tat, the fourth administrative review covering the 
period July 1, 1999, through June 30, 2000, was the most recently 
completed review. See Certain Pasta From Turkey: Final Results of 
Antidumping Duty Administrative Review and Determination Not To 
Revoke the Antidumping Duty Order in Part, 67 FR 298 (January 3, 
2002) (Pasta from Turkey 4). For Filiz, the fifth administrative 
review covering the period July 1, 2000, through June 30, 2001, was 
the most recently completed review. See Certain Pasta From Turkey: 
Final Results of Antidumping Duty Administrative Review and 
Determination Not To Revoke the Antidumping Duty Order in Part, 68 
FR 6880 (February 11, 2003) (Pasta from Turkey 5).
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    Filiz and Tat submitted their sections A through D questionnaire 
responses on October 31, 2003, and November 12, 2003, respectively. 
Both Tat and Filiz submitted voluntary supplemental submissions to the 
Department on December 18, 2003. Tat and Filiz also

[[Page 47877]]

submitted a second voluntary submission on February 24, and February 
26, 2004, respectively.
    The Department issued supplemental sections A through D 
questionnaires to Tat on February 26, 2004, March 11, 2004, and March 
25, 2004. Tat submitted its responses to our supplemental 
questionnaires on March 25, 2004, April 8, 2004, and April 15, 2004, 
respectively. The Department issued supplemental sections A through D 
questionnaires to Filiz on March 25, 2004. Both Filiz's and Tat's 
supplemental sections A through D questionnaires were based upon 
submissions filed on October 31, 2003, November 12, 2003, and December 
18, 2003, respectively. Filiz submitted its response to our 
supplemental questionnaire on April 19, 2004.
    On April 28, 2004, the Department returned Tat's and Filiz's second 
voluntary submission dated February 24, and February 26, 2004, 
respectively, as untimely filed new factual information pursuant to 19 
CFR 351.301(b)(2). See Memorandum to File Re: Tat and Filiz to Strike 
Unsolicited Questionnaire Responses from the Record, dated April 28, 
2004.
    On March 17, 2004, the Department published a notice postponing the 
preliminary results of this review until July 29, 2004.\4\ See Certain 
Pasta from Italy and Turkey: Extension of Preliminary Results 2002/2003 
Antidumping Duty Administrative Reviews, 69 FR 12641 (March 17, 2004).
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    \4\ 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 30, 
2004.
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    We verified the sales and cost information submitted by Tat from 
May 10 through May 21, 2004. We did not verify the sales or cost 
information submitted by Filiz in the instant review.

Scope of Review

    Imports covered by this review are shipments of certain non-egg dry 
pasta in packages of five pounds (2.27 kilograms) or less, whether or 
not enriched or fortified or containing milk or other optional 
ingredients such as chopped vegetables, vegetable purees, milk, gluten, 
diastases, vitamins, coloring and flavorings, and up to two percent egg 
white. The pasta covered by this scope is typically sold in the retail 
market, in fiberboard or cardboard cartons, or polyethylene or 
polypropylene bags of varying dimensions.
    Excluded from the scope of this review are refrigerated, frozen, or 
canned pastas, as well as all forms of egg pasta, with the exception of 
non-egg dry pasta containing up to two percent egg white.
    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.

Verification

    As provided in section 782(i) of the Act, we verified the cost and 
sales information provided by Tat. 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 a verification report placed in 
the case file in the central records unit (CRU). We revised certain 
sales and cost data based on verification findings; see Tat's 
Preliminary Calculation Memorandum (Preliminary Calculation Memorandum) 
(July 30, 2004) and Verification of the Sales Questionnaire of Tat 
(July 30, 2004) on 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 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.
    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.

Proposed Modification to Wheat Codes

    Besides the wheat codes outlined in their questionnaire 
responses,\5\ Filiz and Tat have classified an additional variety of 
wheat used in the production of pasta as a separate wheat code. In the 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Pasta From Italy, 61 FR 30326 (June 14, 1996) (Pasta Investigation), we 
established that differences in wheat quality may be commercially 
significant as measured by ash content, gluten content and cost. See 
Pasta Investigation at 30346. Where respondents have been able to 
justify differences due to ash and gluten content, as well as cost, the 
Department has found that these differences result in more appropriate 
product matches, as contemplated by section 771(16) of the Act. Id.
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    \5\ 100 percent durum semolina and 100 percent whole wheat.
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    However, we preliminarily determine that both Filiz and Tat's 
second wheat code (Wheat code 2) has failed to meet the standards 
outlined in the Pasta Investigation. Specifically, Filiz and Tat failed 
to provide any evidence that indicate ash content, gluten content or 
cost differed among their wheat codes. Therefore, Tat's and Filiz's 
wheat codes 1 and 2 were combined for the purposes of these preliminary 
results. For further discussion of the wheat code, see the company-
specific calculation memoranda on file in the CRU.

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, 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., Pasta from Turkey 5 and Notice of Preliminary Results 
of Antidumping Duty Administrative Review: Certain Welded Carbon Steel 
Pipe and Tube From Turkey, 69 FR 18049 (April 6, 2004) (Carbon Steel 
Pipe and Tube). 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 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.

[[Page 47878]]

    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, 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).

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 Tat and Filiz'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 section 773(a)(1)(B) of the Act, because Tat 
and Filiz's aggregate volume of home market sales of the foreign like 
product was greater than five percent of the companies' aggregate 
volume of U.S. sales of the subject merchandise, we determined that the 
home market was viable for both companies.

B. Arm's-Length Test

    Tat and Filiz reported sales of the foreign like product to an 
affiliated end-user and an affiliated reseller. The Department 
calculates the NV based on a sale to an affiliated party only if it is 
satisfied that the price to the affiliated party is comparable to the 
price at which sales are made to parties not affiliated with the 
producer or exporter, i.e., sales at arms's-length. See 19 CFR 
351.403(c). To test whether these sales were made at arm's-length, we 
compared the starting prices of sales to affiliated and unaffiliated 
customers net of all movement charges, direct selling expenses, 
discounts and packing. In accordance with the Department's current 
practice, if the prices charged to an affiliated party were, on 
average, between 98 and 102 percent of the prices charged to 
unaffiliated parties for merchandise identical or most similar to that 
sold to the affiliated party, we consider the sales to be at arm's-
length prices. See 19 CFR 351.403(c). Conversely, where sales to the 
affiliated party did not pass the arm's-length test, all sales to that 
affiliated party have been excluded from the NV calculation. See 
Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course 
of Trade, 67 FR 69186 (Nov. 15, 2002).

C. Cost of Production Analysis

1. Calculation of Cost of Production (COP)
    Before making any comparisons to NV, we conducted a COP analysis, 
pursuant to section 773(b) of the Act, to determine whether each 
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 the cost of all 
expenses incidental to packing and preparing the foreign like product 
for shipment, in accordance with section 773(b)(3) of the Act. We 
relied on the respondents' 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.
    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 each respondent submit the product-specific cost of manufacturing 
(COM) incurred during each month of the period for which it reported 
home market sales. We then calculated an average COM for each product 
after indexing the reported monthly costs 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 average COM in the currency value of each 
respective month. See, e.g., Pasta from Turkey 5 and Pasta from Turkey 
4.
2. Test of Comparison Market Prices
    As required under section 773(b) of the Act, for Filiz and Tat, we 
compared the weighted-average COP to the weighted-average per unit 
price of the comparison market sales of the foreign like product, to 
determine whether their respective sales had been made at prices below 
the COP within an extended period of time in substantial quantities. 
For Tat and Filiz, 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 Tat or Filiz's sales of a 
given product during the twelve-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 (indexed for inflation), 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, for Tat and Filiz we disregarded the below-cost 
sales of a given product of 20 percent or more 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-factory or delivered prices to 
comparison market customers. We made deductions from the starting price 
for inland freight, warehousing, 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 twelve-month average costs, as adjusted for inflation for each 
month of the twelve-month period, as described in the Cost of 
Production Analysis section above.

[[Page 47879]]

E. Level of Trade (LOT)

    In accordance with section 773(a)(1)(B) of the Act, we determine NV 
based on sales in the comparison market at the same LOT as the U.S. EP 
sales, to the extent practicable. When there are no sales at the same 
LOT, we compare 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 are at a different LOT, we 
examine 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 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 make a LOT adjustment under section 
773(a)(7)(A) of the Act.
    Tat and Filiz reported only one level of trade in both the U.S. and 
home markets. We compared all EP sales to these home market sales. 
Therefore, no LOT adjustment was necessary.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see, 
Preliminary Calculation Memorandum for each company on file in the CRU.

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 Carbon Steel Pipe and Tube.
    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. See, e.g., 
Pasta from Turkey 5 and Pasta from Turkey 4.

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, 2002, through June 30, 2003:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
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Tat.........................................................       10.86
Filiz.......................................................        8.65
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    The Department will disclose the 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, 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

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates on the basis of the ratio of the total amount of 
antidumping duties calculated for the examined sales to the total 
entered value of the examined sales for that importer. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer.

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 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 rates for the companies 
listed above will be the rates established in the final results of this 
review; (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 and countervailing 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 and/or countervailing 
duties occurred and the subsequent assessment of double antidumping 
duties increased by the amount of antidumping and/or countervailing 
duties reimbursed.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18036 Filed 8-5-04; 8:45 am]
BILLING CODE 3510-DS-P