Certain Pasta from Italy: Final Results of the Ninth Countervailing Duty Administrative Review and Notice of Revocation of Order, in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On April 6, 2006, the U.S. Department of Commerce (“the Department”) 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, 2004, through December 31, 2004. See Certain Pasta From Italy: Preliminary Results of the Ninth Countervailing Duty Administrative Review and Notice of Intent to Revoke Order, In Part, 71 FR 17440 (April 6, 2006) (“Preliminary Results”). We preliminarily found that the countervailing duty rates during the period of review (“POR”) for all of the producers/exporters under review are less than 0.5 percent and are, consequently, zero or de minimis. We did not receive any comments on our preliminary results, and we have made no revisions. The final net subsidy rates for the reviewed companies are listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

June 26, 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 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 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).

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 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. Based on withdrawals of the requests for review, we rescinded this administrative review for Laporta, Tomasello, and Pallante. See Certain Pasta from Italy: Notice of Partial Rescission of Countervailing Duty Administrative Review, 70 FR 59723 (October 13, 2005) (rescinding review for Laporta); Certain Pasta from Italy: Notice of Partial Rescission of Countervailing Duty Administrative Review, 70 FR 61788 (October 26, 2005) (rescinding review for Tomasello); and Certain Pasta from Italy: Notice of Partial Rescission of Countervailing Duty Administrative Review, 70 FR 69515 (November 16, 2005) (rescinding review for Pallante). We have instructed U.S. Customs and Border Protection (“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.

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,” (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.

Since the publication of the Preliminary Results, we invited interested parties to submit briefs or request a hearing. The Department did not conduct a hearing in this review because none was requested, and no briefs were received.

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 1901.90.90.95 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 that 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: (A) whether one or more exporters or producers covered by the order have not applied for or received any net countervailable subsidy on the subject merchandise for a period of at least five consecutive years; (B) 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 (C) 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), in writing: (A) 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; (B) 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; (C) 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 (D) 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 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 final 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 “Final 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 find that Pasta Lensi qualifies for revocation of the order pursuant to 19 CFR 351.222(c)(3) and 351.222(e)(2)(iii). Therefore, we are revoking the order, in part, with respect to pasta from Italy produced and exported by Pasta Lensi.

Final Results of Review

Neither the petitioners nor respondents commented on the preliminary results, and we found that no changes were warranted. Therefore, we have made no changes to the net countervailable subsidy rates for the POR.

In accordance with 19 CFR 351.221(b)(5), we calculated an individual subsidy rate for Atar and Corticella/Combattenti. Pasta Lensi had no countervailable subsidies. Listed below are the programs we examined in the review and our findings with respect to each of these programs. For a complete analysis of the programs found to be countervailable, and the basis for the Department's determination, see Preliminary Results.

I. Program Determined to be Countervailable

A. Export Marketing Grants Under Law 304/90 ---------- 0.12 percent

Note: applies to Corticella/Combattenti only.

B. Social Security Reductions and Exemptions

- Sgravi (Article 44 of Law 448/01) ---------- 0.20 percent

Note: applies to Atar only.

II. Programs 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)

B. Brescia Chamber of Commerce Fairs and Exhibition Grants

C. Tremonti Law 383/01 (Formerly Law 357/94 and 489/94)

III. Programs Determined to Not be Used

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 Determined To Have Been Terminated

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

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 either less than 0.5 percent and, consequently, de minimis, or zero, we will instruct CBP to liquidate entries of these companies during the period January 1, 2004, through December 31, 2004, without regard to countervailing duties in accordance with 19 CFR 351.106(c). 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.

We are revoking 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 CBP to refund any cash deposits for such entries.

Since the countervailable subsidy rates for Corticella/Combattenti and Atar are de minimis, the Department will instruct CBP to continue to suspend liquidation of entries, but to collect no cash deposits of estimated countervailing duties for the above-noted companies on all shipments of the subject merchandise 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 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.

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.