[Federal Register Volume 79, Number 95 (Friday, May 16, 2014)]
[Notices]
[Pages 28481-28483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11390]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-818]


Certain Pasta From Italy: Notice of Preliminary Results of 
Antidumping Duty Changed Circumstances Review

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: On August 10, 2012, the Department of Commerce 
(``Department'') initiated a changed circumstances review of the 
antidumping duty order on certain pasta from Italy in order to 
determine whether Delverde Industrie Ailimentari S.p.A. (``Delverde'') 
is the successor-in-interest to Del Verde S.p.A., a company excluded 
from the order.\1\ We preliminarily determine that Delverde is not the 
successor-in-interest to Del Verde S.p.A. Interested parties are 
invited to comment on these preliminary results.
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    \1\ See Certain Pasta from Italy: Notice of Initiation of the 
Antidumping Duty Changed Circumstances Review, 77 FR 47816 (May 10, 
2012) (``Initiation Notice'').

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DATES: Effective Date: May 16, 2014.

FOR FURTHER INFORMATION CONTACT: James Terpstra, Office III, AD/CVD 
Operations, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 14th and Constitution 
Avenue NW., Washington, DC 20230; telephone: (202) 482-3965.

SUPPLEMENTARY INFORMATION: 

Background

    On July 24, 1996, the Department published in the Federal Register 
the antidumping duty order on pasta from

[[Page 28482]]

Italy.\2\ Pursuant to a decision by the Court of International Trade, 
the Department determined that Del Verde S.p.A. had a de minimis 
dumping margin and should be excluded Del Verde S.p.A. from the 
order.\3\
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    \2\ 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); see also Notice of Second 
Amendment to the Final Determination and Antidumping Duty Order: 
Certain Pasta From Italy; 61 FR 42231 (August 14, 1996).
    \3\ See Notice of Amendment of Final Determination of Sales at 
Less Than Fair Value Pursuant to Court Decision and Revocation in 
Part: Certain Pasta from Italy, 66 FR 65889 (December 21, 2001).
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    On July 18, 2012, Delverde requested a changed circumstances 
review. On August 10, 2012 the Department initiated this review.\4\ On 
August 16, 2012, the Department requested additional information from 
Delverde, which was submitted on September 20, 2012 (``Supplemental 
Response'').
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    \4\ See Initiation Notice.
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    On October, 31, 2012, and November 29, 2012, Petitioners \5\ 
submitted comments on this review. On December 14, 2012, the Department 
requested additional information from Delverde, which was provided, in 
part, on January 18, 2013, and after an extension granted, the 
remainder was submitted on March 5, 2013 (``Second Supplemental 
Response'').
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    \5\ Petitioners are New World Pasta Company, Dakota Growers 
Pasta Company, and American Italian Pasta Company.
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    On February 25, 2013, Petitioners submitted additional comments. On 
March 12, 2013, the Department requested additional information from 
Delverde, which was provided on March 26, 2013 (``Third Supplemental 
Response'').

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 certified by a 
European Union (``EU'') authorized body and accompanied by a National 
Organic Program import certificate for organic products.\6\ Effective 
July 1, 2008, gluten free pasta is also excluded from this order.\7\
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    \6\ On October 10, 2012, the Department revised the ``Scope of 
the Order'' to recognize the EU-authorized Italian agents for 
purposes of the antidumping and countervailing duty orders on pasta 
from Italy. See Memorandum from Yasmin Nair to Susan Kuhbach, titled 
``Recognition of EU Organic Certifying Agents for Certifying Organic 
Pasta from Italy,'' dated October 10, 2012, which is on file in the 
Department's Central Records Unit.
    \7\ See Certain Pasta from Italy: Notice of Final Results of 
Antidumping Duty Changed Circumstances Review and Revocation, in 
Part, 74 FR 41120 (August 14, 2009).
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    The merchandise subject to this order is currently classifiable 
under items 1902.19.20 and 1901.90.9095 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.

Preliminary Results of Changed Circumstances Review

    In this changed circumstances review, pursuant to section 751(b) of 
the Tariff Act of 1930, as amended (``the Act''), the Department 
conducted a successor-in-interest analysis. In making such a successor-
in-interest determination, the Department examines several factors 
including, but not limited to, changes in: (1) Management; (2) 
production facilities; (3) supplier relationships; and (4) customer 
base.\8\ While no one or several of these factors will necessarily 
provide a dispositive indication, the Department will generally 
consider the new company to be the successor to the previous company if 
its resulting operation is not materially dissimilar to that of its 
predecessor.\9\ Thus, if the evidence demonstrates that, with respect 
to the production and sale of the subject merchandise, the new company 
operates as the same business entity as the former company, the 
Department will assign the new company the cash deposit rate of its 
predecessor.\10\
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    \8\ See, e.g., Pressure Sensitive Plastic Tape from Italy: 
Preliminary Results of Antidumping Duty Changed Circumstances 
Review, 75 FR 8925 (February 26, 2010), unchanged in Pressure 
Sensitive Plastic Tape From Italy: Final Results of Antidumping Duty 
Changed Circumstances Review, 75 FR 27706 (May 18, 2010); and Brake 
Rotors From the People's Republic of China: Final Results of Changed 
Circumstances Antidumping Duty Administrative Review, 70 FR 69941 
(November 18, 2005) (Brake Rotors), citing Brass Sheet and Strip 
from Canada: Final Results of Antidumping Duty Administrative 
Review, 57 FR 20460 (May 13, 1992).
    \9\ See, e.g., Brake Rotors.
    \10\ See id.; see also, e.g., Notice of Initiation and 
Preliminary Results of Antidumping Duty Changed Circumstances 
Review: Certain Frozen Warmwater Shrimp From India, 77 FR 64953 
(October 24, 2012), unchanged in Final Results of Antidumping Duty 
Changed Circumstances Review: Certain Frozen Warmwater Shrimp From 
India, 77 FR 73619 (December 11, 2012).
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    Delverde explained that in 2005, Del Verde S.p.A. became insolvent 
and entered bankruptcy; the company's assets (such as production 
facilities and trademark) were subsequently purchased by a newly formed 
company, Delverde, owned by Faro S.r.L. (``Faro''), an Italian 
turnaround investment fund which made a number of investments and 
changes to the company (discussed below). From 2006 through 2009, 
Delverde was in operation, and Faro described this as the ``Re-Launch'' 
period. Between 2008 and 2010, Molinos Rio De La Plata S.A. 
(``Molinos''), a large Argentinian food company, purchased and assumed 
full control of Delverde.
    In conducting a successor-in-interest analysis, while we generally 
consider information from immediately before and after the formation of 
a new entity, the Department considers all information on the record 
relevant to the determination.\11\ In the instant case, we analyzed the 
effect that the bankruptcy had on the company and the changes to the 
management, production facilities, supplier relationships, and customer 
base that occurred as a result of the bankruptcy and liquidation of Del 
Verde S.p.A and its change of ownership in 2005.
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    \11\ See, e.g., Diamond Sawblades and Parts Thereof from the 
People's Republic of China: Final Results and Termination, in part, 
of the Antidumping Duty Changed Circumstance Review, 76 FR 64898 
(October 19, 2011).
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    First, we find that there are four critical aspects of the 
bankruptcy: (1) The court found that because Del Verde S.p.A.'s losses 
``had completely wiped out the company's stated capital,'' and because 
its shareholders were unable to make shareholders decisions since June 
8, 2004, Del Verde S.p.A., (i.e., the legal entity that was excluded 
from this antidumping duty order) was deprived of ``the ability to 
operate,'' which provided ``grounds for dissolution of the company;'' 
\12\ (2) Faro acquired Del Verde S.p.A.'s production facility and 
trademark, and the sale was approved by the bankruptcy judge on October 
13, 2005; \13\ (3) the owners of Delverde are different from the owners 
of Del Verde S.p.A.; \14\ (4) the operations of Del Verde S.p.A. 
ceased, and another legal entity produced and sold pasta under the name 
of Delverde Industrie Alimentari, S.p.A. \15\
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    \12\ See Second Supplemental Response, at 2.
    \13\ See Changed Circumstance Request, at 3.
    \14\ See id.
    \15\ See Second Supplemental Response, at 2.

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[[Page 28483]]

    With respect to the management, we find that there were several 
important changes to management as a result of the bankruptcy and 
change in ownership in 2005. Delverde states that Faro ``. . . added 
top-level executive supervisors'' and installed ``top executive 
managers in a few key positions.'' \16\ While Delverde characterizes 
these changes as minor, we find that these were significant changes in 
the top level management.\17\ We also find that there were significant 
changes to Delverde's suppliers as a result of the bankruptcy and 
change in ownership, though we do not find that there were significant 
changes to Delverde's customers or production facilities immediately 
following the bankruptcy. However, we find that the bankruptcy resulted 
in a significant change to the company because (1) the company Delverde 
S.p.A. effectively ceased to exist as a commercial entity; and (2) the 
company that purchased the existing assets, Faro, took extensive 
measures to ``relaunch'' or ``restart'' the pasta business that used to 
be Delverde S.p.A.; and (3) although the pasta factory and the Delverde 
brand name were constant elements through the history of these 
entities, the magnitude of the changes, as discussed above and in the 
``Prelim Memo'' as a result of the bankruptcy and change in ownership 
reflect the creation of a new entity. For example, Faro's investments 
in the factory totaled approximately 2.8 million Euros, and affected 
machinery, plant facilities, and laboratory equipment. These 
investments were made to restart operations, improve productive and 
administrative efficiency, and to upgrade product quality.\18\ 
Therefore, we preliminarily find that the record evidence does not 
support Delverde's claim that it is the successor-in-interest to Del 
Verde S.p.A.
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    \16\ See Changed Circumstance Request, at 5.
    \17\ Because of the proprietary nature of the information 
concerning the changes to management as a result of the 2005 
bankruptcy and change in ownership, for further discussion see 
``Preliminary Successor-in-Interest Determination Analysis 
Memorandum'' (``Prelim Memo''), dated concurrently with this notice.
    \18\ See Third Supplemental Response, at 1-3.
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    Consequently, we preliminarily determine that Delverde should not 
be given the same antidumping duty treatment as Del Verde S.p.A, which 
was excluded from the order. Instead, Delverde, as a new entity, is not 
excluded from the order.\19\ This determination will apply to all 
entries of the subject merchandise entered or withdrawn from warehouse, 
for consumption on or after the date of publication of the final 
results of this changed circumstances review.\20\ This deposit rate 
shall remain in effect until further notice.
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    \19\ See Certain Pasta From Italy: Notice of Final Results of 
16th Antidumping Duty Administrative Review; 2011-2012, 79 FR 11409 
(February 28, 2014), in which Delverde Industrie Alimentari S.p.A. 
was assigned a company-specific cash deposit rate of 13.09 percent.
    \20\ See Granular Polytetrafluoroethylene Resin from Italy: 
Final Results of Changed Circumstances Review, 68 FR 25327 (May 12, 
2003).
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Public Comment

    Pursuant to 19 CFR 351.309(c), interested parties may submit cases 
briefs not later than 10 days after the date of publication of this 
notice via Enforcement and Compliance's Antidumping and Countervailing 
Duty Centralized Electronic Service System (IA ACCESS). Access to IA 
ACCESS is available to registered users at http://iaaccess.trade.gov 
and is available to all parties in the Central Records Unit, Room 7046 
of the main Department of Commerce building. Rebuttal briefs, limited 
to issues raised in the case briefs, may be filed not later than five 
days after the date for filing case briefs. Parties who submit case 
briefs or rebuttal briefs in this proceeding are encouraged to submit 
with each argument: (1) A statement of the issue; (2) a brief summary 
of the argument; and (3) a table of authorities.
    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, or to participate if one is requested, must submit a 
written request to the Assistant Secretary for Enforcement and 
Compliance, filed electronically via IA ACCESS. An electronically filed 
document must be received successfully in its entirety by IA ACCESS, no 
later than 5:00 p.m. Eastern Time within 10 days after the date of 
publication of this notice. Requests should contain: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of issues to be discussed. Issues raised in the hearing 
will be limited to those raised in case briefs.
    Consistent with 19 CFR 351.216(e), we will issue the final results 
of this changed circumstances review no later than 270 days after the 
date on which this review was initiated, or within 45 days after the 
publication of the preliminary results if all parties in this review 
agree to our preliminary results.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(b) and 777(i)(1) of the Act and 19 CFR 
351.216 and 351.221.

    Dated: May 12, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2014-11390 Filed 5-15-14; 8:45 am]
BILLING CODE 3510-DS-P