[Federal Register Volume 71, Number 66 (Thursday, April 6, 2006)]
[Notices]
[Pages 17440-17445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5031]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-475-819]


Certain Pasta From Italy: Preliminary Results of the Ninth 
Countervailing Duty Administrative Review and Notice of Intent To 
Revoke Order, in Part

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

SUMMARY: The Department of Commerce is conducting an administrative 
review of the countervailing duty order on certain pasta from Italy for 
the period January 1, 2004, through December 31, 2004. We preliminarily 
find that the countervailing duty rates during the period of review for 
all of the producers/exporters under review are either zero or de 
minimis. See the ``Preliminary Results of Review'' section, below. We 
are also preliminarily revoking the order with respect to Pasta Lensi 
S.r.l., in accordance with section 751(d)(1) of the Tariff Act of 1930, 
as amended (``the Act''), and 19 CFR 351.222(c)(3). See the ``Partial 
Revocation'' section, below. Interested parties are invited to comment 
on these preliminary results (see the ``Public Comment'' section of 
this notice).

DATES: Effective Date: April 6, 2006.

FOR FURTHER INFORMATION CONTACT: Audrey Twyman or Brandon Farlander, 
AD/CVD Operations, Office 1, Import Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-3534 and (202) 482-0182, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On July 24, 1996, the Department of Commerce (``the Department'') 
published a countervailing duty order on certain pasta (``pasta'' or 
``subject merchandise'') from Italy. See Notice of Countervailing Duty 
Order and Amended Final Affirmative Countervailing Duty Determination: 
Certain Pasta From Italy, 61 FR 38544 (July 24, 1996). On July 1, 2005, 
the Department published a notice of ``Opportunity to Request 
Administrative Review'' of this countervailing duty order for calendar 
year 2004, the period of review (``POR''). See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 70 FR 38099 (July 1, 
2005). On July 28, 2005, we received a request for review from 
Pastificio Laporta S.a.s (``Laporta''). On July 29, 2005, we received 
requests for reviews from the following four producers/exporters of 
subject merchandise: Pastificio Antonio Pallante S.r.l. (``Pallante''), 
Corticella Molini e Pastifici S.p.a. (``Corticella'')/Pasta Combattenti 
S.p.a. (``Combattenti'') (collectively, ``Corticella/Combattenti''), 
Atar S.r.l. (``Atar''), and Moline e Pastificio Tomasello S.r.l. 
(``Tomasello''). On August 1, 2005, we received a request for review 
and a request for revocation from Pasta Lensi S.r.l. (``Pasta 
Lensi'').\1\ (See the ``Partial Revocation'' section, below.) In 
accordance with 19 CFR 351.221(c)(1)(i), we published a notice of 
initiation of the review on August 29, 2005. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Requests 
for Revocation in Part, 70 FR 51009 (August 29, 2005).
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    \1\ Pasta Lensi is the successor-in-interest to IAPC Italia 
S.r.1. See Notice of Final Results of Antidumping and Countervailing 
Duty Changed Circumstances Reviews: Certain Pasta from Italy, 68 FR 
41553 (July 14, 2003).
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    On August 31, 2005, we issued countervailing duty questionnaires to 
the Commission of the European Union, the Government of Italy 
(``GOI''), Pallante, Corticella/Combattenti, Pasta Lensi, Tomasello, 
Laporta, and Atar. We received all responses to our questionnaire in 
October 2005. We issued supplemental questionnaires to

[[Page 17441]]

the respondents in November 2005, and we received responses to our 
supplemental questionnaires in November and December 2005.
    On September 15, 2005, Laporta withdrew its request for review. On 
September 29, 2005, Tomasello withdrew its request for review. On 
October 25, 2005, Pallante withdrew its request for review. As 
discussed in the ``Partial Rescission'' section, below, we have 
rescinded this administrative review for Laporta, Tomasello, and 
Pallante.

Period of Review

    The period for which we are measuring subsidies, or POR, is January 
1, 2004, through December 31, 2004.

Scope of the Order

    Imports covered by the order are shipments of certain non-egg dry 
pasta in packages of five pounds four ounces 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 the order 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, Bioagricoop S.r.l., QC&I International Services, 
Ecocert Italia, Consorzio per il Controllo dei Prodotti Biologici, 
Associazione Italiana per l'Agricoltura Biologica, or Codex S.r.l. In 
addition, based on publicly available information, the Department has 
determined that, as of August 4, 2004, imports of organic pasta from 
Italy that are accompanied by the appropriate certificate issued by 
Bioagricert S.r.l. are also excluded from this order. See memorandum 
from Eric B. Greynolds to Melissa G. Skinner, dated August 4, 2004, 
which is on file in the Department's Central Records Unit (``CRU'') in 
Room B-099 of the main Department building. In addition, based on 
publicly available information, the Department has determined that, as 
of March 13, 2003, imports of organic pasta from Italy that are 
accompanied by the appropriate certificate issued by Instituto per la 
Certificazione Etica e Ambientale (ICEA) are also excluded from this 
order. See memorandum from Audrey Twyman to Susan Kuhbach, dated 
February 28, 2006, entitled ``Recognition of Instituto per la 
Certificazione Etica e Ambientale (ICEA) as a Public Authority for 
Certifying Organic Pasta from Italy'' which is on file in the 
Department's Central Records Unit (``CRU'') in Room B-099 of the main 
Department building.
    The merchandise subject to review is currently classifiable under 
items 1901.90.9095 and 1902.19.20 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). Although the HTSUS subheadings are 
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, which is on file 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 to Barbara P. Sidari, 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 S.r.l. (``Barilla''), an Italian producer and 
exporter of pasta. The Department initiated the investigation on 
December 8, 1997. See Initiation of Anti-Circumvention Inquiry on 
Antidumping Duty Order on Certain Pasta From Italy, 62 FR 65673 
(December 15, 1997). On October 5, 1998, the Department issued its 
final determination that, pursuant to section 781(a) of the Tariff Act 
of 1930, as amended by the Uruguay Round Agreements Act (``URAA'') 
effective January 1, 1995 (``the Act''), circumvention of the 
antidumping order on pasta from Italy was occurring by reason of 
exports of bulk pasta from Italy produced by Barilla which subsequently 
were repackaged in the United States into packages of five pounds or 
less for sale in the United States. See Anti-Circumvention Inquiry of 
the Antidumping Duty Order on Certain Pasta from Italy: Affirmative 
Final Determination of Circumvention of the Antidumping Duty Order, 63 
FR 54672 (October 13, 1998).
    (4) On October 26, 1998, 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.
    (5) On April 27, 2000, the Department self-initiated an anti-
circumvention inquiry to determine whether Pastificio Fratelli Pagani 
S.p.A.'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). On September 19, 2003, we published 
an affirmative finding of the anti-circumvention inquiry. See Anti-
Circumvention Inquiry of the Antidumping and Countervailing Duty Orders 
on Certain Pasta from Italy: Affirmative Final Determinations of 
Circumvention of Antidumping and Countervailing Duty Orders, 68 FR 
54888 (September 19, 2003).

Partial Revocation

    On August 1, 2005, Pasta Lensi requested revocation of the 
countervailing duty order as it pertains to its sales. Under section 
751(d)(1) of the Act, the Department ``may revoke, in whole or in 
part'' a countervailing duty order upon completion of a review. 
Although 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 set forth under 19 CFR 351.222. Under 
19 CFR 351.222(c)(3)(i), in determining whether to revoke a 
countervailing duty order in part, the Secretary will consider: (1) 
Whether one or more exporters or producers covered by the order have 
not applied for or received any net

[[Page 17442]]

countervailable subsidy on the subject merchandise for a period of at 
least five consecutive years; (2) whether, for any exporter or producer 
that the Secretary previously has determined to have received any net 
countervailable subsidy on the subject merchandise, the exporter or 
producer agrees in writing to their immediate reinstatement in the 
order, if the Secretary concludes that the exporter or producer, 
subsequent to the revocation, has received any net countervailable 
subsidy on the subject merchandise; and (3) whether the continued 
application of the countervailing duty order is otherwise necessary to 
offset subsidization.
    A request for revocation of an order in part must address these 
four elements, per 19 CFR 351.222(e)(2)(iii). The company requesting 
the revocation must do so in writing and submit the following 
statements with the request: (1) The company's certification that it 
has not applied for or received any net countervailable subsidy on the 
subject merchandise for a period of at least five consecutive years; 
(2) the company's certification that it will not apply for or receive 
any net countervailable subsidy on the subject merchandise from any 
program the Secretary has found countervailable; (3) the company's 
certification that during each of the consecutive years, the company 
sold the subject merchandise to the United States in commercial 
quantities; and (4) the company's agreement in writing to their 
immediate reinstatement in the order, if the Secretary concludes that 
the exporter or producer, subsequent to the revocation, has received 
any net countervailable subsidy on the subject merchandise.
    We preliminarily find that the request from Pasta Lensi meets all 
of the criteria under 19 CFR 351.222. Pasta Lensi's revocation request 
includes the necessary certifications in accordance with 19 CFR 
351.222(e)(2)(iii). With regard to the criteria of 19 CFR 
351.222(e)(2)(iii)(A), our preliminary results show that Pasta Lensi 
did not receive countervailable subsidies during the POR and, 
therefore, the net subsidy rate for Pasta Lensi is zero. See 
``Preliminary Results of Review'' section, below. In addition, Pasta 
Lensi had zero net subsidy rates in the four previous administrative 
reviews in which it was involved. See Certain Pasta from Italy: Final 
Results of the Eighth Countervailing Duty Administrative Review, 70 FR 
37084 (June 28, 2005), covering the period January 1, 2003, through 
December 31, 2003; Certain Pasta from Italy: Final Results of the 
Seventh Countervailing Duty Administrative Review, 69 FR 70657 
(December 7, 2004), covering the period January 1, 2002, through 
December 31, 2002; Certain Pasta from Italy: Final Results of the Sixth 
Countervailing Duty Administrative Review, 68 FR 48599 (August 14, 
2003), covering the period January 1, 2001, through December 31, 2001; 
and Certain Pasta from Italy: Final Results of the Fifth Countervailing 
Duty Administrative Review, 67 FR 52452 (August 12, 2002), covering the 
period January 1, 2000, through December 31, 2000.
    Based on our examination of the data submitted by Pasta Lensi, we 
preliminarily find that Pasta Lensi qualifies for revocation of the 
order pursuant to 19 CFR 351.222(c)(3) and 351.222(e)(2)(iii). We also 
preliminarily find that the order with respect to merchandise produced 
and exported by Pasta Lensi should be revoked. If these preliminary 
findings are affirmed in our final results, we will revoke the order, 
in part, with respect to pasta from Italy produced and exported by 
Pasta Lensi. In accordance with 19 CFR 351.222(f)(3), we will terminate 
the suspension of liquidation for pasta produced and exported by Pasta 
Lensi that was entered, or withdrawn from warehouse, for consumption on 
or after January 1, 2005, and will instruct U.S. Customs and Border 
Protection (``CBP'') to refund any cash deposits for such entries.

Partial Rescission

    The Department's regulations at 19 CFR 351.213(d)(1) provide that 
the Department will rescind an administrative review, in whole or in 
part, if a party that requested a review withdraws the request within 
90 days of the date of publication of the notice of initiation of the 
requested review. On September 15, 2005, Laporta withdrew its request 
for review. On September 29, 2005, Tomasello withdrew its request for 
review. On October 25, 2005, Pallante withdrew its request for review. 
All parties submitted their withdrawal requests within the 90-day 
deadline. No other party requested a review of Pallante's, Laporta's, 
or Tomasello's sales.
    Therefore, because these withdrawal requests were timely filed, and 
because no other interested party requested that they be reviewed, we 
rescinded this review with respect to Pallante, Tomasello, and Laporta 
in accordance with 19 CFR 351.213(d)(1). See Certain Pasta from Italy: 
Notice of Partial Rescission of Countervailing Duty Administrative 
Review, 70 FR 59723 (October 13, 2005); Certain Pasta from Italy: 
Notice of Partial Rescission of Countervailing Duty Administrative 
Review, 70 FR 61788 (October 26, 2005); and Certain Pasta from Italy: 
Notice of Partial Rescission of Countervailing Duty Administrative 
Review, 70 FR 69515 (November 16, 2005).
    We have instructed CBP to liquidate any entries from Pallante, 
Laporta, and Tomasello during the POR and to assess countervailing 
duties at the rate that was applied at the time of entry.

Subsidies Valuation Information

Allocation Period

    Pursuant to 19 CFR 351.524(b), non-recurring subsidies are 
allocated over a period corresponding to the AUL of the renewable 
physical assets used to produce the subject merchandise. The 
Department's regulations create a rebuttable presumption that the AUL 
will be taken from the U.S. Internal Revenue Service's 1977 Class Life 
Asset Depreciation Range System (``IRS Tables''). See 19 CFR 
351.524(d)(2). For pasta, the IRS Tables prescribe an AUL of 12 years. 
None of the responding companies or interested parties objected to this 
allocation period. Therefore, we have used the 12-year allocation 
period for all respondents.

Attribution of Subsidies

    Pursuant to 19 CFR 351.525(b)(6), the Department will attribute 
subsidies received by certain companies to the combined sales of those 
companies. Based on our review of the responses, we preliminarily find 
that ``cross-ownership'' exists with respect to certain companies, as 
described below, and we have attributed subsidies accordingly:
    Pasta Lensi: Pasta Lensi is an Italian producer and exporter of 
pasta. As further discussed in the April 3, 2006, proprietary 
memorandum entitled ``Pasta Lensi S.r.l.--Attribution Issues,'' which 
is on file in the Department's CRU, Pasta Lensi has reported that IAPC 
Leasing S.r.l., another company owned by the parent company of Pasta 
Lensi, did not receive any benefits under the programs being examined. 
Therefore, there are no benefits to this company that require 
attribution. Moreover, IAPC Leasing S.r.l. does not produce subject 
merchandise. Thus, we are attributing any subsidies received to Pasta 
Lensi's sales only.
    Corticella/Combattenti: Corticella/Combattenti is an Italian 
producer and exporter of pasta. As further discussed in the April 3, 
2006, memorandum entitled ``Attribution Issues: Corticella Molini e 
Pastifici S.p.a. and Pasta Combattenti S.p.a.,'' which is on file in 
the Department's CRU, Corticella/

[[Page 17443]]

Combattent has reported that affiliates Certosa, CLC, and the parent 
company Euricom, did not receive any benefits under the programs being 
examined. Therefore, there are no benefits to these companies that 
require attribution. Thus, we are attributing any subsidies received to 
the combined sales of Corticella and Combattenti.
    Atar: Atar has reported that it has no affiliates or cross-
ownership. Thus, we are attributing any subsidies received to Atar's 
sales only.

Discount Rates

    Pursuant to 19 CFR 351.524(d)(3)(i)(B), we used the national 
average cost of long-term, fixed-rate loans as a discount rate for 
allocating non-recurring benefits over time because no company for 
which we need such discount rates took out any loans in the years in 
which the government agreed to provide the subsidies in question. 
Consistent with past practice in this proceeding, for years prior to 
1995, we used the Bank of Italy reference rate adjusted upward to 
reflect the mark-up an Italian commercial bank would charge a corporate 
customer. See, e.g., Certain Pasta from Italy: Preliminary Results and 
Partial Recision of the Eighth Countervailing Duty Administrative 
Review, 70 FR 17971 (April 8, 2005) (decision unchanged in the final 
results, Certain Pasta from Italy: Final Results of the Eighth 
Countervailing Duty Administrative Review, 70 FR 37084 (June 28, 
2005)). For benefits received in 1995 and later, we used the Italian 
Bankers' Association interest rate, increased by the average spread 
charged by banks on loans to commercial customers plus an amount for 
bank charges. See Memorandum the File, ``Calculations for the 
Preliminary Results for Corticella Molini e Pastifici S.p.a. and Pasta 
Combattenti S.p.a.'' (April 3, 2006) (``Corticella/Combattenti 
Calculation Memorandum'')

Analysis of Programs

I. Program Preliminarily Determined to be Countervailable

A. Export Marketing Grants Under Law 304/90
    Under Law 304/90, the GOI provided grants to promote the sale of 
Italian food and agricultural products in foreign markets. The grants 
were given for pilot projects aimed at developing links and integrating 
marketing efforts between Italian food producers and foreign 
distributors. The emphasis was on assisting small and medium-sized 
enterprises.
    Corticella received a grant under this program in 1993 to assist it 
in establishing a sales office and network in the United States. No 
other respondent covered by this review received benefits under this 
program during the POR.
    In the Final Affirmative Countervailing Duty Determination: Certain 
Pasta from Italy, 61 FR 30288 (June 14, 1996) (``Pasta 
Investigation''), the Department determined that these export marketing 
grants confer a countervailable subsidy within the meaning of section 
771(5) of the Act. They are a direct transfer of funds from the GOI 
bestowing a benefit in the amount of the grant. See Sections 
771(5)(D)(i) and (E) of the Act. Also, these grants were found to be 
specific within the meaning of section 771(5A)(B) of the Act because 
their receipt was contingent upon export performance. In this review, 
neither the GOI nor the responding companies have provided new 
information that would warrant reconsideration of our determination 
that these grants confer a countervailable subsidy.
    Also in the Pasta Investigation, the Department treated these 
export marketing grants as non-recurring. No new information has been 
placed on the record of this review that would cause us to depart from 
this treatment.
    Because the amount of the grant that was approved by the GOI 
exceeded 0.5 percent of Corticella's exports to the United States in 
the year of approval, we used the grant methodology described in 19 CFR 
351.524(d) to allocate the benefit over the AUL. We divided the benefit 
attributable to the POR by the value of the companies' total exports to 
the United States in the POR.
    On this basis, we preliminarily determine the countervailable 
subsidy from these Law 304/90 export marketing grants to be 0.12 
percent ad valorem for Corticella/Combattenti. See the Corticella/
Combattenti Calculation Memorandum.
B. Social Security Reductions and Exemptions--Sgravi (Article 44 of Law 
448/01)
    Italian law allows companies, particularly those located in the 
Mezzogiorno region (southern Italy), to use a variety of exemptions 
from and reductions (sgravi) of payroll contributions that employers 
make to the Italian social security system for health care benefits, 
pensions, etc. The sgravi benefits are regulated by a complex set of 
laws and regulations, and are sometimes linked to conditions such as 
creating more jobs. We have found in past segments of this proceeding 
that the benefits under some of these laws (e.g., Laws 183/76 and 449/
97) are available only to companies located in the Mezzogiorno and 
other disadvantaged regions. Other laws (e.g., Laws 407/90 and 863/84) 
provide benefits to companies all over Italy, but the level of benefits 
is higher for companies in the south than for companies in other parts 
of the country.
    The law identified as having provided countervailable sgravi 
benefits during the POR is the following: Article 44 of Law 448/01.
    In the instant review, no party in this proceeding challenged our 
past determinations in the Pasta Investigation and subsequent reviews 
that sgravi benefits were countervailable for companies located within 
the Mezzogiorno region. Additionally, no new information or evidence of 
changed circumstances was received that would warrant reconsideration 
of these past determinations.
    Article 44 of Law 448/01 is provided to encourage employment in the 
Mezzogiorno region by reducing the amount of the portion of social 
security contributions paid by the employer on behalf of the employee. 
Effectively, the government undertakes to pay a portion of the social 
security amount on behalf of the employer. This benefit is provided for 
three years after the hire of a new employee in the Mezzogiorno region. 
To receive the benefit, companies must increase their number of 
employees from that in existence as of December 31, 2001. This program 
was terminated on January 1, 2003. Atar is located in the Mezzogiorno 
region and made use of this program.
    We find that this program confers a countervailable subsidy because 
the GOI has foregone tax revenues that are otherwise due pursuant to 
section 771(5)(D)(ii) of the Act, which provided a benefit to Atar in 
the amount of the revenue forgone, pursuant to section 771(5)(E) of the 
Act. This program is specific within the meaning of section 
771(5A)(D)(iv) of the Act because the program is limited to the 
Mezzogiorno region of Italy. On this basis, we preliminarily determine 
the countervailable subsidy from Article 44 of Law 448/01 to be 0.20 
percent ad valorem for Atar. See Memorandum the File, ``Calculations 
for the Preliminary Results for Atar S.r.l.'' (April 3, 2006).

II. Programs Preliminarily Determined To Be Not Countervailable

A. Social Security Reductions and Exemptions--Sgravi (Law 407/90, Law 
223/91, Law 337/90, and Article 120 of Law 388/00)
    Other various laws identified as having also provided sgravi 
benefits

[[Page 17444]]

during the POR are the following: Law 407/90 (Pasta Lensi), Law 223/91 
(Pasta Lensi and Combattenti), Law 337/90 (Corticella), and Article 120 
of Law 388/00 (Pasta Lensi, Corticella, Combattenti, and Atar).
    In the instant review, no party in this proceeding challenged our 
past determinations in the Pasta Investigation and subsequent reviews 
that sgravi benefits were not countervailable for companies located 
outside of the Mezzogiorno region because the program was generally 
available throughout Italy at a lower rate and therefore, not specific 
within the meaning of section 771(5A) of the Act. Moreover, under such 
circumstances, there is no benefit under 19 CFR 351.503(d)(1). 
Additionally, no new information or evidence of changed circumstances 
was received that would warrant reconsideration of our past 
determinations. Therefore, because Pasta Lensi and Corticella/
Combattenti are not located in the Mezzogiorno region, we preliminarily 
find that these companies did not receive countervailable subsidies 
under Law 407/90, Law 223/91, and Law 337/90 during the POR.
    Unlike these other sgravi programs, Article 120 of Law 388/00 
(fiscalizzazione program) is a nationwide sgravi program that provides 
an equivalent level of deductions throughout Italy and is not specific 
to the Mezzogiorno region or to the pasta industry pursuant to section 
771(5A) of the Act. Article 120 of Law 388/00 provides a deduction of 
certain social security payments related to health care or insurance. 
The government takes over a minimal amount of the payments for social 
contributions which are owed to the Instituto Nazionale Previdenza 
Sociale (``INPS''). Therefore, we preliminarily find that Article 120 
of Law 388/00 is not a countervailable subsidy because the subsidy is 
not specific. Accordingly, we determine that Atar, Pasta Lensi, and 
Corticella/Combattenti did not receive countervailable subsidies under 
this program during the POR.
B. Brescia Chamber of Commerce Fairs and Exhibition Grants
    The Brescia Chamber of Commerce provided grants to small and 
medium-sized enterprises, artisan and agricultural enterprises, and 
pools and cooperatives in the province of Brescia for their direct 
participation in fairs and exhibitions abroad during calendar year 
2004.
    Pasta Lensi was the only respondent in this proceeding that 
reported receiving grants from the Brescia Chamber of Commerce. 
Specifically, Pasta Lensi reported receiving a grant in 2004 for a fair 
in Germany. However, because there is no indication that the Brescia 
Chamber of Commerce constitutes a ``public entity'' under section 
771(5)(B)(iii) of the Act, or that the Brescia Chamber of Commerce was 
entrusted or directed by the GOI to provide the grant, we preliminarily 
determine that this grant does not confer a countervailable subsidy.
C. Tremonti Law 383/01 (Formerly Law 357/94 and 489/94)
    Tremonti Law 383/01 allowed for a deduction from taxable income of 
50 percent of the difference between investments in new plant and 
equipment and the average investment rate for the preceding five years. 
Pasta Lensi has stated that one of its affiliates, IAPC Leasing, 
claimed a deduction for tax benefits under this law on its 2003 tax 
return but that no benefits were received in the POR because IAPC 
Leasing was in a tax loss position. Regardless of whether there was a 
benefit during the POR, we find that there is no evidence on the record 
that indicates that any subsidies under this program are specific 
pursuant to section 771(5A) of the Act. Therefore, we preliminarily 
determine that this program did not confer a countervailable subsidy.

III. Programs Preliminarily Determined To Not Be Used

    We examined the following programs and preliminarily determine that 
the producers and/or exporters of the subject merchandise under review 
did not apply for or receive benefits under these programs during the 
POR:

A. Industrial Development Grants Under Law 488/92
B. Industrial Development Loans Under Law 64/86
C. European Regional Development Fund Grants
D. Law 236/93 Training Grants
E. Law 1329/65 Interest Contributions (Sabatini Law) (Formerly Lump-Sum 
Interest Payment Under the Sabatini Law for Companies in Southern 
Italy)
F. Development Grants Under Law 30 of 1984
G. Law 908/55 Fondo di Rotazione Iniziative Economiche (Revolving Fund 
for Economic Initiatives) Loans
H. Industrial Development Grants Under Law 64/86
I. Law 317/91 Benefits for Innovative Investments
J. Brescia Chamber of Commerce Training Grants
K. Ministerial Decree 87/02
L. Law 10/91 Grants to Fund Energy Conservation
M. Export Restitution Payments
N. Export Credits Under Law 227/77
O. Capital Grants Under Law 675/77
P. Retraining Grants Under Law 675/77
Q. Interest Contributions on Bank Loans Under Law 675/77
R. Preferential Financing for Export Promotion Under Law 394/81
S. Urban Redevelopment Under Law 181
T. Industrial Development Grants under Law 183/76
U. Interest Subsidies Under Law 598/94
V. Duty-Free Import Rights
W. European Social Fund Grants
X. Law 113/86 Training Grants
Y. European Agricultural Guidance and Guarantee Fund
Z. Law 341/95 Interest Contributions on Debt Consolidation Loans 
(Formerly Debt Consolidation Law 341/95)
AA. Interest Grants Financed by IRI Bonds
BB. Grant Received Pursuant to the Community Initiative Concerning the 
Preparation of Enterprises for the Single Market (PRISMA)

IV. Programs Preliminarily Determined To Have Been Terminated

    We examined the following programs at verification and 
preliminarily determine they have been terminated prior to the POR and 
that there will be no remaining subsidy benefits from these programs 
after this POR.

A. Regional Tax Exemptions Under IRAP
B. VAT Reductions Under Laws 64/86 and 675/55
C. Corporate Income Tax (IRPEG) Exemptions
D. Remission of Taxes on Export Credit Insurance Under Article 33 of 
Law 227/77
E. Export Marketing Grants Under Law 304/90
F. Tremonti Law 383/01

Verification

    In accordance with 19 CFR 351.222(f)(2)(ii) and 351.307(b)(1)(iii), 
we verified information submitted by the GOI for Pasta Lensi, Atar, 
Corticella, and Combattenti in Rome, Italy on February 13-15, 2006. See 
``Verification of the Questionnaire Responses of the Government of 
Italy in the 9th Administrative Review,'' dated March 31, 2006. We 
verified information submitted by Pasta Lensi in Verolanuova, Italy on 
February 17 and 20, 2006. See ``Verification of the Questionnaire 
Responses of Pasta Lensi S.r.l. in the 9th Administrative Review,'' 
dated March 31, 2006.

[[Page 17445]]

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for Atar and Corticella/Combattenti. Pasta 
Lensi had no countervailable subsidies. For the period January 1, 2004, 
through December 31, 2004, we preliminarily find the net subsidy rates 
for the producers/exporters under review to be those specified in the 
chart shown below:

------------------------------------------------------------------------
             Producer/exporter                    Net subsidy rate
------------------------------------------------------------------------
Pasta Lensi S.r.l.........................  0.00 percent.
Corticella Molini e Pastifici S.p.a./Pasta  0.12 percent (de minimis).
 Combattenti S.p.a.
Atar S.r.l................................  0.20 percent (de minimis).
------------------------------------------------------------------------

    If the final results of this review remain the same as these 
preliminary results, because the countervailing duty rates for all of 
the above-noted companies are less than 0.5 percent and, consequently 
are either zero or de minimis, we will instruct CBP to liquidate 
entries during the period January 1, 2004, through December 31, 2004, 
without regard to countervailing duties in accordance with 19 CFR 
351.106(c)(1). The Department will issue appropriate instructions 
directly to CBP within 15 days of publication of these final results of 
this review.
    For all other companies that were not reviewed (except Barilla G. e 
R. F.lli S.p.A. and Gruppo Agricoltura Sana S.r.l., which are excluded 
from the order), the Department has directed CBP to assess 
countervailing duties on all entries between January 1, 2004, and 
December 31, 2004, at the rates in effect at the time of entry.
    The Department also intends to instruct CBP to collect cash 
deposits of estimated countervailing duties. For the companies noted 
above (except Pasta Lensi) the cash deposit rate is zero because each 
company's rate is de minimis. If the revocation in part becomes final 
for Pasta Lensi, suspension of liquidation will cease and, 
consequently, no duties will be collected.
    For all non-reviewed firms (except Barilla G. e R. F.lli S.p.A. and 
Gruppo Agricoltura Sana S.r.l., which are excluded from the order), we 
will instruct CBP to collect cash deposits of estimated countervailing 
duties at the most recent company-specific or ``all others'' rate 
applicable to the company. These rates shall apply to all non-reviewed 
companies until a review of a company assigned these rates is 
requested.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice.
    Pursuant to 19 CFR 351.309(c)(ii), interested parties may submit 
written arguments in case briefs within 30 days of the date of 
publication of this notice. Rebuttal briefs, limited to issues raised 
in case briefs, may be filed no later than five days after the date of 
filing the case briefs, in accordance with 19 CFR 351.309(d). Parties 
who submit briefs in this proceeding should provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Copies of case briefs and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f).
    Interested parties may request a hearing within 30 days after the 
date of publication of this notice, pursuant to 19 CFR 351.310(c). Any 
hearing, if requested, will be held two days after the scheduled date 
for submission of rebuttal briefs.
    The Department will publish a notice of the final results of this 
administrative review within 120 days from the publication of these 
preliminary results, in accordance with section 751(a)(3) of the Act.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

    Dated: March 31, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-5031 Filed 4-5-06; 8:45 am]
BILLING CODE 3510-DS-P