Certain Pasta from Italy: Final Results of the Seventh Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

ACTION:

Notice of final results of countervailing duty administrative review.

SUMMARY:

On July 30, 2004, the U.S. Department of Commerce published in the Federal Register its preliminary results of the administrative review of the countervailing duty order on certain pasta from Italy for the period January 1, 2002 through December 31, 2002. Based on information received since the preliminary results and our analysis of the comments received, we have revised the net subsidy rates for Pasta Zara S.p.A./Pasta Zara 2 S.p.A. and Pastificio Corticella S.p.A./Pastificio Combattenti S.p.A. Therefore, the final results differ from the preliminary results. The final net subsidy rates for the reviewed companies are listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

December 7, 2004.

FOR FURTHER INFORMATION CONTACT:

Melani Miller Harig or Andrew Smith, AD/CVD Operations, Office 1, Import Administration, U.S. Department of Commerce, Room 3099, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-0116 and (202) 482-1276, respectively.

SUPPLEMENTARY INFORMATION:

Case History

On July 24, 1996, the U.S. 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).

In accordance with 19 CFR 351.213(b), this review of the order covers the following producers or exporters of the subject merchandise for which a review was specifically requested: Pastificio Fratelli Pagani S.p.A. (“Pagani”), Pastificio Corticella S.p.A./Pastificio Combattenti S.p.A. (collectively, “Corticella/Combattenti”), Pasta Zara S.p.A./Pasta Zara 2 S.p.A. (“Pasta Zara 2”)¹ (collectively “Pasta Zara/Pasta Zara 2”), Pasta Lensi S.r.l. (“Lensi”),² and Pastificio Carmine Russo S.p.A./Pastificio Di Nola S.p.A..

Based on withdrawal of the request for review, we rescinded this administrative review for Pastificio Antonio Pallante S.r.l. (See Certain Pasta from Italy: Preliminary Results and Partial Rescission of the Seventh Countervailing Duty Administrative Review, 69 FR 45676 (July 30, 2004) (“Preliminary Results”).)

Since the publication of the Preliminary Results, case briefs were submitted on August 30, 2004 by Pasta Zara/Pasta Zara 2 and Corticella/Combattenti. The Department did not conduct a hearing in this review because none was requested.

Scope of the Review

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

Excluded from the scope of this review are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. 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.

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 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 Pagani'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).

Period of Review

The period for which we are measuring subsidies, or POR, is January 1, 2002 through December 31, 2002.

Analysis of Comments Received

All issues raised by the interested parties to this administrative review in the case briefs are addressed in the November 29, 2004 “Issues and Decision Memorandum” from Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, to James J. Jochum, Assistant Secretary for Import Administration (“Decision Memorandum”), which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/ under the heading “Italy.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes to the Preliminary Results

Based on our analysis of the comments submitted in the case briefs, we have made changes in our calculation of the net subsidy rates for Pasta Zara/Pasta Zara 2 and Corticella/Combattenti. These changes are discussed in the relevant section of the Decision Memorandum.

Final Results of Review

In accordance with section 751(a)(1)(A) of the Act and 19 CFR 351.221(b)(5), we calculated an individual subsidy rate for each producer/exporter covered by this administrative review. For the period January 1, 2002 through December 31, 2002, we determine the net subsidy rates for producers/exporters under review to be those specified in the chart shown below:

The calculations will be disclosed to the interested parties in accordance with 19 CFR 351.224(b).

Because the countervailing duty rates for all of the above-noted companies are less than 0.5 percent and, consequently, de minimis, we will instruct U.S. Customs and Border Protection (“Customs”) to liquidate entries during the period January 1, 2002 through December 31, 2002 without regard to countervailing duties in accordance with 19 CFR 351.106(c)(1). The Department will issue appropriate instructions directly to Customs 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 Customs to assess countervailing duties on all entries between January 1, 2002 and December 31, 2002 at the rates in effect at the time of entry.

The Department will also instruct Customs to collect cash deposits of estimated countervailing duties for the above-noted companies at the above-noted rates on the f.o.b. value of all shipments of the subject merchandise from the producers/exporters under review that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review. 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 Customs 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.

This notice serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Appendix

List of Comments and Issues in the Decision Memorandum

Comment 1: Corticella/Combattenti and Sgravi Benefits

Comment 2: Benefit for Pasta Zara/Pasta Zara 2's First Law 908/55 Fondo di Rotazione Iniziative Economiche (Revolving Fund for Economic Initiatives) (“FRIE”) Loan

Comment 3: Benefit for Pasta Zara 2's Second Law 908/55 FRIE Loan