[Federal Register Volume 71, Number 111 (Friday, June 9, 2006)]
[Notices]
[Pages 33439-33441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9007]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-489-806]


Certain Pasta from Turkey: Preliminary Results of Countervailing 
Duty Administrative Review

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 Turkey 
for the period January 1, 2004, through December 31, 2004. We have 
preliminarily determined that Gidasa Sabanci Gida Sanayi ve Ticaret 
A.S. did not receive countervailable subsidies during the period of 
review. If the final results remain the same as these preliminary 
results, we will instruct U.S. Customs and Border Protection to 
liquidate without regard to countervailing duties, as detailed in the 
``Preliminary Results of Review'' section of this notice. Interested 
parties are invited to comment on these preliminary results (see the 
``Public Comment'' section of this notice).

EFFECTIVE DATE: June 9, 2006.

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

SUPPLEMENTARY INFORMATION:

Background

    On July 24, 1996, the Department of Commerce (``the Department'') 
published in the Federal Register the countervailing duty order on 
certain pasta from Turkey. See Notice of Countervailing Duty Order: 
Certain Pasta from Turkey, 61 FR 38546 (July 24, 1996). On July 1, 
2005, the Department published in the Federal Register, a notice of 
``Opportunity to Request Administrative Review'' of this countervailing 
duty order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
70 FR 38099 (July 1, 2005). We received one request for review on July 
29, 2005, and initiated the review for calendar year 2004, 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). In accordance with 19 CFR 351.213(b), this review of 
the order covers Gidasa Sabanci Gida Sanayi ve Ticaret A.S. 
(``Gidasa'').
    On September 8, 2005, we issued countervailing duty questionnaires 
to the Government of Turkey and Gidasa. We received responses to our 
questionnaires on November 14 and 17, 2005, and issued supplemental 
questionnaires on January 31, 2006. Responses to the supplemental 
questionnaires were received on February 23, and March 17, 2006.
    On March 14, 2006, the Department postponed the preliminary results 
of review until June 5, 2006. See Certain Pasta from Turkey: Extension 
of Time Limit for Preliminary Results of the Countervailing Duty 
Administrative Review, 71 FR 13966 (March 20, 2006).
    On April 5, 2006, we provided Gidasa an opportunity to place 
information on the record concerning the world market price for durum 
wheat, and international freight rates. We received Gidasa's submission 
on April 17, 2006.

Scope of Order

    Covered by the order 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 order is typically sold in the retail market, in 
fiberboard or cardboard cartons or polyethylene or polypropylene bags, 
of varying dimensions.
    Excluded from 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.
    The merchandise under review is currently classifiable under 
subheading 1902.19.20 of the Harmonized Tariff Schedule of the United 
States (``HTSUS''). Although the HTSUS subheading is provided for 
convenience and customs purposes, our written description of the scope 
of the order is dispositive.

Scope Ruling

    To date, the Department has issued the following scope ruling:
    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 may be within the scope of the 
countervailing duty order. 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 countervailing duty order. See Memorandum from 
John Brinkman to Richard Moreland, dated May 24, 1999, which is on file 
in the Central Records Unit (``CRU'') in Room B-099 of the main 
Commerce building.

Period of Review

    The period of review (``POR'') for which we are measuring subsidies 
is from January 1, 2004, through December 31, 2004.

Analysis of Programs

I. Programs Preliminarily Determined To Not Provide a Countervailable 
Benefit

1. Purchases of Domestic Wheat from the Turkish Grain Board (``TMO'') 
under Decree 2003/5468

    There are three main ways for Turkish pasta producers to obtain 
wheat for semolina pasta: (1) from the TMO, (2) from local growers and 
traders, or (3) through imports. Prices for wheat in Turkey are set 
above world market prices as part of a price support scheme benefitting 
domestic wheat growers. However, companies holding an Inward Processing 
License can obtain lower

[[Page 33440]]

priced wheat (when compared to the equivalent domestic-priced wheat) by 
purchasing Turkish wheat from the TMO under Decree 2003/5468, and using 
the wheat to produce products for export. The Government of Turkey and 
Gidasa have stated that the price of wheat purchased under Decree 2003/
5468 is at or above the world market price, as measured by the price 
from international tender auctions held by the TMO to sell Turkish 
wheat to foreign buyers. To purchase wheat, companies using Inward 
Processing Licenses must consume the wheat in the production of pasta 
for export only.
    Under this program, the Government of Turkey provides a financial 
contribution per section 771(5)(D)(iii) of the Tariff Act of 1930, as 
amended (``the Act''), by providing a good (durum wheat). This program 
is specific per section 771(5A)(B) of the Act because it is contingent 
upon export performance. A benefit exists to the extent that the wheat 
is being provided on more favorable terms than the terms applicable to 
the provision of like or directly competitive products for use in the 
production of goods for domestic consumption, unless such terms or 
conditions are not more favorable than those commercially available on 
world markets to exporters. The world market price must be inclusive of 
delivery charges. 19 CFR 351.516(a)(1) and (2).
    In response to our request for information, Gidasa provided 
arguments concerning world market prices and delivery charges for 
purposes of determining whether a benefit exists under this program. 
Concerning delivery charges, Gidasa argues that the Department should 
use a freight rate that closely resembles the actual freight paid on 
imports of durum wheat into Turkey. In this regard, the Government of 
Turkey provided import data showing that imports of durum wheat into 
Turkey during the POR came only from European Union countries. 
Therefore, Gidasa argues, the delivery charge should reflect freight 
from countries in close proximity to Turkey. Gidasa could not find 
publicly available freight rates from countries near Turkey. Instead, 
Gidasa provided U.S. import statistics for durum wheat. These 
statistics show international freight for shipments of durum wheat from 
Canada to the United States.
    Concerning the world market price of durum wheat, the Government of 
Turkey has reported details on the single auction sale that it made in 
2004 to an international purchaser. This sale could also be considered 
to provide a world market price because we are satisfied that it was an 
open and fair auction. However, Gidasa has argued that the wheat sold 
at this auction was durum grade 1, whereas the wheat it purchased under 
Decree 2003/5468 was durum grades 2 and 3. The quality differences 
between the grade 1 durum sold internationally and the grades purchased 
by Gidasa makes a simple unadjusted price comparison inappropriate, 
according to Gidasa.
    Gidasa points instead to U.S. import statistics as providing the 
most specific world market prices of durum wheat. In particular, only 
U.S. import statistics distinguish between grades 1 and 2 durum wheat. 
Therefore, Gidasa argues that the Department should compare the prices 
Gidasa paid for grades 2 and 3 durum wheat, to the average 2004 import 
price of durum grade 2 wheat (HTSUS subheading 1001.10.00.96) from the 
U.S. import statistics.
    For these preliminary results, we agree with Gidasa that the 
delivery charges should reflect the specific characteristics of the 
Turkish trade in durum wheat. Like Gidasa, we have been unable to find 
publicly available freight rates for durum wheat shipments to Turkey 
from nearby countries and, therefore, we preliminarily used the 
delivery charges from Canada to the United States.
    Regarding the selection of a world market price, the Department 
finds that it does not matter whether we use the U.S. import statistics 
for durum grade 2 (as suggested by Gidasa), or the international 
auction price (as we did in the preceding review) as the world market 
price. (The Department has been unable to find any additional grade 
specific data.) The result is the same in that the Department finds 
that the prices that Gidasa paid for wheat purchased under Decree 2004/
5468 in the POR were higher than world market prices, inclusive of 
delivery charges. Therefore, we preliminarily find that this program 
does not confer a countervailable benefit. See Memorandum to the File, 
``Calculations for the Preliminary Results for Gidasa Sabanci Gida 
Sanayi ve Ticaret A.S.'' (June 5, 2006).
II. Programs Preliminarily Determined To Be Not Used
1. VAT Support for Domestic Machinery and Equipment Purchases
2. Pre-Shipment Export Loans
3. Resource Utilization Support Fund (``KKDF'') Tax Exemption on 
Export-Related Loans
4. Banking and Insurance (``BIST'') Tax Exemption on Export-Related 
Loans
5. Normal Foreign Currency Export Loans
6. GIEP
    a. Additional Refunds of VAT
    b. Postponement of VAT on Imported Goods
    c. Exemption from Certain Taxes, Duties, Fees (Other Tax 
Exemptions)
    d. Exemption from Certain Customs Duties and Fund Levies
    e. Payment of Certain Obligations of Firms Undertaking Large 
Investments
    f. Subsidized Turkish Lira Credit Facilities
    g. Land Allocation
    h. Interest Spread Return Program
    i. Energy Support
7. Exemption from Mass Housing Fund Levy (Duty Exemptions)
8. Direct Payments to Exporters of Wheat Products to Compensate for 
High Domestic Input prices
9. Export Credit Through Foreign Trade Corporate Companies Credit 
Facility
10. Pasta Export Grants
11. Corporate Tax Deferral
12. Subsidized Credit for Proportion of Fixed Expenditures
13. Subsidized Credit in Foreign Currencies
14. Subsidized Turkish Lira Credit Facilities
15. Exemption from Mass Housing Fund Levy (Duty Exemptions)
16. Performance Foreign Currency Loans

Preliminary Results of Review

    For the period January 1, 2004, through December 31, 2004, we 
preliminarily determine the net subsidy rate for Gidasa to be that 
specified in the chart shown below. If the final results of this review 
remain the same as these preliminary results, the Department will 
instruct U.S. Customs and Border Protection (``CBP'') to liquidate all 
entries without regard to countervailing duties.
    The Department also intends to instruct CBP to collect cash 
deposits of estimated countervailing duties at the rate below on the 
FOB value of all shipments of the subject merchandise from Gidasa that 
are entered, or withdrawn from warehouse, for consumption on or after 
the date of publication of the final results of this administrative 
review.

------------------------------------------------------------------------
                                                            Ad valorem
                         Company                               rate
------------------------------------------------------------------------
Gidasa Sabanci Gida Sanayi ve Ticaret A.S...............    0.00 percent
------------------------------------------------------------------------


[[Page 33441]]

    The calculations will be disclosed to the interested parties in 
accordance with 19 CFR 351.224(b).
    For companies that were not named in our notice initiating this 
administrative review, 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.
    For all non-reviewed firms, we will instruct CBP to collect cash 
deposits of estimated countervailing duties at the most recent company-
specific or country-wide rate applicable to the company. Accordingly, 
the cash deposit rates that will be applied to non-reviewed companies 
covered by this order are those established in the Notice of 
Countervailing Duty Order: Certain Pasta (``Pasta'') From Turkey, 61 FR 
38546 (July 24, 1996), or the company-specific rate published in the 
most recent final results of an administrative review in which a 
company participated. These rates shall apply to all non-reviewed 
companies until a review of a company assigned these rates is 
requested.

Public Comment

    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 not later 
than five days after the date of filing the case briefs. 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. Any hearing, if requested, will be 
held two days after the scheduled date for submission of rebuttal 
briefs.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs are due. See 19 CFR 351.309(c)(ii).
    The Department will publish a notice of the final results of this 
administrative review within 120 days from the publication of these 
preliminary results.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 5, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-9007 Filed 6-8-06; 8:45 am]
BILLING CODE 3510-DS-S