[Federal Register Volume 72, Number 151 (Tuesday, August 7, 2007)]
[Notices]
[Pages 44082-44086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15340]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-475-818)


Certain Pasta from Italy; Notice of Preliminary Results and 
Partial Rescission of Tenth Antidumping Duty Administrative Review:

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
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, 2005, through June 30, 2006.
    We preliminarily determine that during the POR, Rummo S.p.A. Molino 
e Pastificio (``Rummo'') sold subject merchandise at less than normal 
value (``NV''). We also preliminarily determine that Atar, S.r.L. 
(``Atar'') is not the producer of subject merchandise and are 
preliminarily rescinding the review of Atar. If these preliminary 
results are adopted in the final results of this administrative review, 
we will instruct U.S. Customs and Border Protection (``CBP'') to assess 
antidumping duties equal to the difference between the export price 
(``EP'') and NV for entries of subject merchandise produced by Rummo 
and to the All Others rate for entries of subject merchandise claimed 
to be produced by Atar.
    Interested parties are invited to comment on these preliminary 
results and partial rescission.

EFFECTIVE DATE: August 7, 2007.

FOR FURTHER INFORMATION CONTACT: Maura Jeffords or Christopher Hargett, 
AD/CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3146 or (202) 482-4161, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 24, 1996, the Department published in the Federal Register 
the antidumping duty order on pasta from Italy. 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).
    On July 3, 2006, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
certain pasta from Italy. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation: Opportunity to Request 
Administrative Review, 71 FR 37890 (July 3, 2006). We received requests 
for review from petitioners\1\ and from individual Italian exporters/
producers of pasta, in accordance with 19 CFR 351.213(b)(1) and (2). On 
August 30, 2006, the Department published the notice of initiation of 
this antidumping duty administrative review covering the period July 1, 
2005, through June 30, 2006, listing these four companies as 
respondents: Atar, Rummo, Industria Alimentare Colavita S.p.A. 
(``Indalco'') and Corticella Molini e Pastifici S.p.A. and its 
affiliate Pasta Combattenti S.p.A. (collectively, ``Corticella/
Combattenti''). See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 71 FR 51573 
(August 30, 2006) (``Initiation Notice'').
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    \1\ New World Pasta Company; Dakota Growers Pasta Company; and 
American Italian Pasta Company.
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    On August 31, 2006, Indalco timely withdrew its request for an 
administrative review of certain pasta from Italy. On November 28, 
2006,

[[Page 44083]]

Corticella/Combattenti also timely withdrew its request. The Department 
rescinded the review of these respondents on July 12, 2007.\2\
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    \2\ See Notice of Partial Rescission of Antidumping Duty 
Administrative Review: Tenth Administrative Review of the 
Antidumping Duty Order on Certain Pasta from Italy, 72 FR 38060, 
July 12, 2007.
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    Between August 2006 and May 2007, the Department issued its initial 
questionnaire and supplemental questionnaires to each respondent, as 
applicable. We received responses to the Department's initial and 
supplemental questionnaires on November 13, 2006, April 4, 2007, April 
12, 2007, May 1, 2007, and May 11, 2007, from Atar. Rummo provided 
responses to the Department's initial and supplemental questionnaires 
on October 10, 2006, October 24, 2006, February 16, 2007, February 27, 
2007, May 10, 2007, and July 13, 2007. On February 16, 2007, May 18, 
2007, and July 9, 2007, the petitioners filed comments on Atar's 
responses. On December 15, 2006, March 23, 2007, and June 21, 2007, 
petitioners filed comments on Rummo's responses. On March 23, 2007, the 
Department fully extended the due date for the preliminary results of 
review from April 2, 2007, to July 31, 2007. See Certain Pasta from 
Italy: Extension of Time Limits for the Preliminary Results of 
Antidumping Duty Administrative Review, 72 FR 13745 (March 23, 2007).

Preliminary Intent to Rescind the Review of Atar

    In Notice of Final Results of the Ninth Administrative Review of 
the Antidumping Duty Order on Certain Pasta from Italy, 72 FR 7011, 
February 14, 2007 (``Final Results 9th Review''), and accompanying 
Issues and Decisions Memorandum (``ID Memo 9th Review''), the 
Department expressed its ``serious concerns'' regarding Atar's status 
as a producer by way of tolling arrangements. See ID Memo 9th Review at 
Comment 1. In the supplemental questionnaires sent to Atar in this 
current review, the Department asked follow-up questions pertinent to 
the issue of whether Atar was a producer of subject merchandise during 
the POR consistent with 19 CFR 351.401(h). However, Atar provided no 
additional information to address the Department's concerns and to 
demonstrate that it was the producer of subject merchandise. As 
discussed in the memorandum from Melissa G. Skinner to Stephen J. 
Claeys, RE: Status of Atar, S.r.L.(Atar'') as Manufacturer 
of Subject Merchandise, dated July 31, 2007, the totality of the 
circumstances surrounding Atar's relationships with its suppliers of 
tolling services and customers lead to the preliminary determination 
that under 19 CFR 351.401(h) Atar is not the producer. Since Atar 
requested the review as ``a producer'' and Atar does not qualify for 
producer status, it does not qualify for this administrative review. 
Accordingly, the Department preliminarily rescinds the review. Because 
Atar incorrectly claimed to be the manufacturer, and no other 
manufacturer has been identified, under these circumstances, we will 
instruct customs to liquidate entries that are claimed to be produced 
by Atar at the All Others rate.

Scope of the Order

    Imports covered by this 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 this 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, by Bioagricoop Scrl, by QC&I International Services, by 
Ecocert Italia, by Consorzio per il Controllo dei Prodotti Biologici, 
by Associazione Italiana per l'Agricoltura Biologica, or 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'').
    The merchandise subject to this order 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.

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 comparison 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 
constructed value (``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 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 constructed 
export price (``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 Department's ``Calculation Memorandum for 
Rummo S.p.A.'' (``Rummo's calculation memo'') (August 30, 2007), 
available in the CRU.

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 when 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 or acting for the account of the 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 cost-
insurance-freight (``CIF''), ex-factory, free-on-board (``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.

[[Page 44084]]

    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. inland freight expenses, warehousing, 
and U.S. duties. 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) of the 
Act.
    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, banking, slotting fees, 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 its 
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. See 
Rummo's calculation memo.
    Normal Value

A. Selection of Comparison Markets

    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 
the 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) of the Act, because Rummo had an 
aggregate volume of home market sales of the foreign like product that 
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 Rummo.

B. Cost of Production (``COP'')Analysis

1. Calculation of COP
    Before making any comparisons to NV, we conducted a COP analysis of 
Rummo pursuant to section 773(b) of the Act, to determine whether 
Rummo's comparison market sales were made at prices 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 Rummo's' 
information as submitted.
2. Test of Comparison Market Prices
    As required under section 773(b)(2) 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. See Rummo's calculation 
memo.
3. Results of COP Test
    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities.'' 
See section 773(b)(2)(C) of the Act. The sales were made within an 
extended period of time, in accordance with section 773(b)(2)(B) of the 
Act, because they were made over the course of the POR. 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 Rummo, we disregarded 
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. See Rummo's calculation memo.

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 
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 for Rummo, in accordance with 19 CFR 
351.410(e), for indirect selling expenses incurred in the home market 
or the United States 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 either the 
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 19 CFR 351.411. 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 respondent from unaffiliated 
producers and resold in the comparison market were disregarded, and 
sales of comingled and tolled pasta were re-coded as ``Rummo.''

E. 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 19 CFR 351.412, to determine whether comparison market 
sales were at a different LOT, we examined stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated (or arm's-length) customers. If the 
comparison-market sales were at a different LOT and the differences 
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

[[Page 44085]]

LOT of the export transaction, we will make an 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 will 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).
    In the home market, Rummo reported that it sold through two 
channels of distribution. Rummo reported that the two channels of 
distribution in the home market constitute one LOT. In the U.S. market, 
Rummo reported that its sales were made through three channels of 
distribution, to two LOTs. In the U.S. market, we find that the selling 
activity differed between the two LOTs such that they can not be 
considered the same level of trade. The Department has determined that 
Rummo's home market sales are made at a different, and more advanced, 
stage of marketing than the LOTs of the U.S. sales. Nonetheless, we are 
unable to make an LOT adjustment because there is no other data on the 
record that would allow the Department to establish whether there is a 
pattern of consistent price differences between sales at different LOTs 
in the home market. Therefore, We are preliminarily granting a CEP 
offset for Rummo. For a detailed description of our LOT methodology and 
a summary of company-specific LOT findings for these preliminary 
results, see Rummo's calculation memo.

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 Bank. See 
Rummo's calculation memo.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following weighted-average percentage margin exists for the period July 
1, 2005, through June 30, 2006:

------------------------------------------------------------------------
                Manufacturer/exporter                  Margin (percent)
------------------------------------------------------------------------
Rummo...............................................                1.54
------------------------------------------------------------------------

    The Department will disclose the calculations performed for these 
preliminary results 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 case briefs, may be filed no later than 
five days after the time limit for filing the case briefs, unless the 
Department alters this time limit. See 19 CFR 351.309(d). Parties who 
submit arguments are requested to submit with the argument (1) a 
statement of the issue, and (2) a brief summary of the argument. 
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. Pursuant to 19 CFR 351.213(h), the 
Department intends to 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 CBP 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, to calculate the entered 
value, we subtracted international movement expenses (e.g., 
international freight) from the gross sales value.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the POR produced by companies included in 
these preliminary results of review for which the reviewed companies 
did not know their merchandise was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the All-Others rate if there is no rate for the intermediate 
company(ies) involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash Deposit Requirements

    To calculate the cash deposit rate for Rummo, we divided its total 
dumping margin by the total net value of its 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 
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 rate for Rummo will be the rate 
established in the final results of this review, except if the rate is 
less than 0.5 percent and, therefore, de minimis, no cash deposit will 
be required; (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 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 15.45 
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 increase the 
subsequent assessment of

[[Page 44086]]

the antidumping duties by the amount of antidumping duties reimbursed. 
These preliminary results of this administrative review are issued and 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act and 19 CFR 351.221(b)(4).

    Dated: July 31, 2007.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E7-15340 Filed 8-6-07; 8:45 am]
BILLING CODE 3510-DS-S