Notice of Final Results of the Sixth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy and Determination Not to Revoke in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke in Part.

SUMMARY:

On August 7, 2003, the Department of Commerce published the preliminary results and partial rescission of the sixth administrative review and intent not to revoke the order in part, for the antidumping duty order on certain pasta from Italy. The review covers ten manufacturers/exporters of the subject merchandise: (1) Pastificio Guido Ferrara S.r.l. (“Ferrara”), (2) Pastificio Lucio Garofalo S.p.A. (“Garofalo”), (3) Pasta Lensi S.r.l. (“Lensi')¹, (4) Industria Alimentare Colavita, S.p.A. (“Indalco”) and its affiliate Fusco S.r.l. (“Fusco”) (collectively “Indalco”), (5) PAM S.p.A. (“PAM”), (6) Pastificio Fratelli Pagani S.p.A. (“Pagani”), (7) Pastificio Antonio Pallante S.r.l. (“Pallante”) and its affiliate Industrie Alimentari Molisane S.r.l (“IAM”) (collectively “Pallante”), (8) Rummo S.p.A. Molino e Pastificio (“Rummo”), (9) Molino e Pastificio Tomasello S.r.l. (“Tomasello”), and (10) Pastificio Zaffiri S.r.l. (“Zaffiri”). The period of review (“POR”) is July 1, 2001, through June 30, 2002.

As a result of our analysis of the comments received, these final results differ from the preliminary results. For our final results, we have found that during the POR, Garofalo, Indalco, PAM, Tomasello, and Zaffiri, sold subject merchandise at less than normal value (“NV”). We have also found that Ferrara, Pallante, Pagani, Lensi and Rummo did not make sales of the subject merchandise at less than NV (i.e., they had “zero” or de minimis dumping margins). We have also determined not to revoke the antidumping duty order with respect to subject merchandise produced and also exported by Pagani. The final results are listed in the section “Final Results of Review” below.

EFFECTIVE DATE:

February 10, 2004.

FOR FURTHER INFORMATION CONTACT:

Alicia Kinsey or Mark Young, AD/CVD Enforcement Office VI, Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-4793 or (202) 482-6397, respectively.

SUPPLEMENTARY INFORMATION:

Background

On August 7, 2003, the Department published the preliminary results of the sixth administrative review of the antidumping duty order on certain pasta from Italy. See Notice of Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review and Intent Not to Revoke in Part: For the Sixth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy, 68 FR 47020 (August 7, 2003) (“Preliminary Results”). Although the Department initiated the review of twelve companies, we rescinded the review of two of those companies. See Partial Rescission section of the Preliminary Results for a more detailed explanation. The review covers the remaining ten manufacturers/exporters. We invited parties to comment on our Preliminary Results. Petitioners² filed case briefs on September 24, 2003, regarding Rummo, Ferrara, Zaffiri, Garofalo, Indalco, and Pagani. On September 22 through September 24, 2003, PAM, Tomasello, Zaffiri, Lensi, Garofalo, and Rummo filed case briefs. On October 1, 2003, petitioners, Ferrara, Indalco, Pagani, Zaffiri, Garofalo, and Rummo submitted rebuttal briefs. On October 21, 2003, a public hearing was held at the Department of Commerce with respect to PAM. On November 21, 2003, the Department published the extension of final results of the antidumping administrative review of pasta from Italy. See Certain Pasta from Italy: Extension of Final Results of Antidumping Administrative Review, 68 FR 65679 (November 21, 2003).

Scope of 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, 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 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, 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 Codex S.R.L.

The merchandise subject to review 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.

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, Senior Analyst, Office of AD/CVD Office V, to Richard Moreland, Deputy Assist Secretary, “Scope Ruling Concerning Pasta from Italy,” dated August 25, 1997, which is on file in the Central Records Unit (“CRU”), room B-099 of the main Commerce Department Building.

(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, Acting Deputy Assistant Secretary for Import Administration, to Barbara P. Sidari, Vice President, Joseph A. Sidari Company, Inc., 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, an Italian producer and exporter of pasta. The Department initiated the investigation on December 8, 1997 (62 FR 65673). On October 5, 1998, the Department issued its final determination that Barilla'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 duty order on pasta from Italy pursuant to section 781(a) of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.225(b). 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, Program Manager, Office of AD/CVD Enforcement VI, to Richard Moreland, Deputy Assistant Secretary, “Final Scope Ruling,” 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 on 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).

Intent Not to Revoke Order

For the reasons outlined in the “Issues and Decision Memorandum” (“Decision Memo”) from Holly A. Kuga, Acting Deputy Assistant Secretary for Import Administration, to James J. Jochum, Assistant Secretary for Import Administration, dated February 3, 2004, which is hereby adopted by this notice, we have determined not to revoke the antidumping duty order with respect to subject merchandise produced and also exported by Pagani because Pagani failed to demonstrate that for three consecutive years it sold the subject merchandise to the United States in commercial quantities in accordance with 19 CFR 351.222(e).

Use of Adverse Facts Available

As discussed in detail in the Preliminary Results, we have determined to use facts otherwise available for PAM, in arriving at the final dumping margin; and as noted in the Preliminary Results, we determine that, in accordance with sections 776(a) and (b) of the Act, the use of adverse facts available is appropriate for PAM, who failed verification. The Department received comments from PAM and petitioners. The comments are addressed in the Decision Memo. As a result of our analysis of the arguments presented in the briefs, the Department confirms its decision to use adverse facts available to arrive at the final dumping margin for PAM.

Use of Partial Facts Available

There were several errors in Indalco's reporting of its selling expenses, and Indalco did not bring these errors to the Department's attention until after Indalco's submission of minor corrections at verification. Consequently, in the Preliminary Results, we applied partial facts available to determine Indalco's dumping margin. See also Memorandum to Eric Greynolds, Program Manager, from Mark Young and Tipten Troidl, Case Analysts, Re: Verification of the Sales Response of Industria Alimentare Colavita, S.p.A. (“INDALCO”) and Fusco S.r.l. (“Fusco”) in the 01/02 Administrative Review of the Antidumping Duty Order of Certain Pasta from Italy, which is available in the CRU. We received no comments on this issue. Therefore, pursuant to section 776(a)(2)(A) of the Act, we continue to apply partial facts otherwise available to determine Indalco's dumping margin in the final results.

Analysis of Comments Received

All issues raised in the case and rebuttal brief by parties to this administrative review are addressed in the Decision Memo, which is hereby adopted by this notice. A list of the issues which parties have raised, and to which we have responded in the Decision Memo, is attached to this notice as an Appendix. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memo are identical in content.

Final Results of Review

We determine that the following weighted-average margins exist for the period July 1, 2001, through June 30, 2002:

Assessment

The Department shall determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we have calculated exporter/importer-specific duty assessment rates by aggregating the dumping margins for the examined U.S. sales for each importer and dividing the amount by the total entered value of the sales for that importer. In situations in which the importer-specific assessment rate is above de miminis, we will instruct CBP to assess antidumping duties on that importer's entries of subject merchandise. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of review.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of the administrative review for all shipments of pasta from Italy entered, or withdrawn from warehouse, for consumption on or after the date of publication of these final results, as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for the reviewed companies will be the rates shown above, except where the margin is de minimis or zero we will instruct CBP not to collect cash deposits; (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 period; (3) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 11.26 percent, the “All Others” rate established in the less than fair value 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 deposit requirements shall remain in effect until publication of the final results of the next administrative review.

Notification

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties or countervailing duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement may result in the Secretary's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent increase in antidumping duties by the amount of antidumping and/or countervailing duties reimbursed.

This notice also 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. Timely notification of return/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 are sanctionable violations.

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

Appendix I

List of Comments and Issues in the Decision Memorandum

List of Comments:

Pasta Lensi S.r.l.

Comment 1: Clerical Error

Comment 2: Exclusion of Sales of Pasta Produced by Other Manufacturers

Industria Alimentare Colavita, S.p.A. and Fusco S.r.l.

Comment 3: Clerical Error

Comment 4: Disallowed Credit

Comment 5: Credit Amortization

Comment 6: Double Counted Amortization

Comment 7: Offsetting Positive Margins

Comment 8: Calculation of Entry Value

PAM S.p.A.

Comment 9: Rescission of the Administrative Review

Comment 10: Department's Application of Adverse Facts Available (“AFA”)

Comment 11: The Reasonableness of the AFA Rate Applied by the Department

Pastificio Fratelli Pagani S.p.A.

Comment 12: Revocation

Rummo S.p.A. Molino e Pastificio

Comment 13: Treatment of Rummo USA's Customer's Note Receivable as a Rebate

Comment 14: Reimbursement of Antidumping Duties

Comment 15: Error in the Home Market Credit Expense Calculation

Comment 16: Inconsistencies in Rummo's Reporting of Certain Sales of Subject Merchandise

Comment 17: Exclusion of Political Contributions from General & Administrative Expenses (“G&A”) Expense Ratio

Molino e Pastificio Tomasello S.r.l.

Comment 18: Incorrect Denominator Used in Calculation of U.S. Credit Expense

Comment 19: Calculation of Packing Costs for Home Market Net Prices

Comment 20: Calculation of DIRSEL3U for One U.S. Invoice

Comment 21: Change in Wheat Inventory

Comment 22: Pasta Scrap Production

Comment 23: Cost of Goods Sold (“COGS”) used in the G&A and Interest Expense Ratio Calculation

Comment 24: Other G&A and Interest Adjustments

Pastificio Lucio Garofalo S.p.A.

Comment 25: The Department Should Collapse Garofalo and Amato

Comment 26: The Department Should Not Accept Garofalo's Definition of a Third Wheat Code

Comment 27: Matching of Wheat Codes

Comment 28: Subtracting DISCREBH from NETPRICOP

Comment 29: Incorporation of Only Home Market Sales that Passed the Cost Test

Comment 30: Revised Interest Amounts Should be Used in the Calculation of Constructed Value (“CV”)

Comment 31: Conversion of Home Market Sales Data into Italian Lire rather than to Euros

Comment 32: Semolina Purchases

Comment 33: Failure to Include Commingled Sales in Garofalo's Margin Calculation

Comment 34: Use of Wrong Affiliated Party Arm's Length Test

Comment 35: Non-Use of Revised Total Cost of Manufacturing (“RTOTCOM”)

Pastificio Zaffiri S.r.l.

Comment 36: Proper Matching of Zaffiri's Sales at the Same Level of Trade (“LOT”)

Comment 37: Calculation of Imputed Credit Expense

Comment 38: Treatment of Piazzista Expenses

Comment 39: Treatment of the U.S. Billing Adjustment

Comment 40: Treatment of Free Pasta Program in the United States

Comment 41: Currency Conversions in Computer Program

Comment 42: Purchased Pasta

Comment 43: By-product Revenue Offset in the COGS Denominator of the Interest Expense and G&A Expense Ratios

Comment 44: Packing Cost in the COGS Denominator of the G&A and Interest Expense Ratios

Comment 45: Trade Show Revenue as Offset to G&A Expense

Comment 46: Foreign Exchange Loss

Comment 47: Expenses on Invoice Payables and Loss on Sale of Assets

Comment 48: Packing Costs

Pastificio Guido Ferrara S.r.l.

Comment 49: Offset to Ferrara's Depreciation for Italian Subsidies

Comment 50: Offset to Fixed Overhead Relating to Ferrara's Performance Bond Claim

Comment 51: Use of “Die Type” as a Product Matching Hierarchy