[Federal Register Volume 63, Number 193 (Tuesday, October 6, 1998)]
[Notices]
[Pages 53641-53643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26779]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818]
Certain Pasta from Italy: Preliminary Results of New Shipper
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of new shipper antidumping duty
administrative review.
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EFFECTIVE DATE: October 6, 1998.
SUMMARY: In response to a request by CO.R.EX. S.r.l, the Department of
Commerce is conducting a new shipper administrative review of the
antidumping duty order on certain pasta from Italy. The review covers
sales during the period July 1, 1997 through December 31, 1997. We
preliminarily determine that CO.R.EX. S.r.l. did not sell subject
merchandise at less than normal value during the period of review.
Interested parties are invited to comment on these preliminary
results. Parties who do so are requested to submit, along with each
argument, (1) a statement of the issue, and (2) a brief summary of the
argument.
FOR FURTHER INFORMATION CONTACT: Constance Handley or John Brinkmann,
AD/CVD Enforcement, Group I, Office 2, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, DC 20230; telephone:
(202) 482-0631, or 482-5288, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department of Commerce's regulations
are to the regulations provided in 19 CFR Part 351, as published in the
Federal Register on May 19, 1997 (62 FR 27296).
Case History
The Department of Commerce (the Department) published the
antidumping duty order on certain pasta from Italy on July 24, 1996 (61
FR 38547). On January 16, 1998, CO.R.EX. S.r.l. (Corex) requested a new
shipper review pursuant to section 751(a)(2)(B) of the Act and 19 CFR
351.214.
On March 4, 1998, the Department published a notice of initiation
of the new shipper review of Corex (63 FR 10590). On July 16, 1998, the
Department published a notice postponing the preliminary results of
this review until September 30, 1998 (63 FR 38371).
[[Page 53642]]
Scope of the Review
Imports covered by this review are shipments of certain non-egg dry
pasta in packages of five pounds (or 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, by Bioagricoop Scrl, or by QC&I International Services.
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, our written description of the scope is dispositive.
Period of Review
The review covers one Italian producer/exporter, Corex, and the
period July 1, 1997 through December 31, 1997.
Scope Rulings
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 this proceeding. In addition, the Department
issued a scope ruling on July 30, 1998, 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 duty and countervailing
duty orders. (See July 30, 1998 letter from Susan H. Kuhbach, Acting
Deputy Assistant Secretary for Import Administration to Barbara P.
Sidari, Vice President, Joseph A. Sidari Company, Inc.)
Treatment of Sales of Tolled Merchandise
Pursuant to section 351.401(h) of its regulations, the Department
will not consider a toller or subcontractor to be a manufacturer or
producer when the toller or subcontractor does not acquire ownership of
the finished products and does not control the relevant sales of the
subject merchandise and the foreign like product. In determining
whether a company that uses a subcontractor in a tolling arrangement is
a producer pursuant to 19 CFR 351.401(h), we examine all relevant facts
surrounding a tolling agreement.
Corex claims that under the tolling arrangement with its
unaffiliated subcontractor, Corex is the producer of the pasta at
issue. In support of this claim, Corex reports that it: (1) purchases
all of the inputs, (2) pays the subcontractor a processing fee, and (3)
maintains ownership at all times of the inputs as well as the final
product. Corex also notes that it conducts independent product testing
and marketing research. Further, Corex claims that it is solely
responsible for the marketing and sales of the product and any freight
arrangements and that there is no contact between the subcontractor and
Corex's customers. Based on this evidence, we preliminarily determine
that Corex is the producer of the tolled merchandise, and hence the
appropriate respondent.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondent, covered by the description in the
Scope of the Review section and sold in the comparison market during
the period of review (POR), to be foreign like products for the purpose
of determining appropriate product comparisons to U.S. sales. Where
there were no sales of identical merchandise in the comparison market
to compare to U.S. sales, we compared U.S. sales to the most similar
foreign like product on the basis of the characteristics listed in the
Department's antidumping questionnaire. In making the product
comparisons, we matched foreign like products based on the physical
characteristics reported by the respondent.
Comparisons to Normal Value
To determine whether sales of subject merchandise by the respondent
to the United States were made at less than normal value, we compared
export price (EP) to normal value (NV), as described in the ``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.
Export Price
We calculated the price of United States sales based on EP, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold to unaffiliated purchasers in the United States
prior to the date of importation and the constructed export price
methodology was not indicated by the facts of record.
We calculated EP based on packed prices to unaffiliated customers
in the United States. Where appropriate, we made deductions from the
starting price for movement expenses, which included export customs
duties and container loading fee.
Normal Value
Corex reported no home market sales during the POR. Therefore, in
accordance with section 773(a)(1)(B)(ii) of the Act, we have based NV
on the price at which the foreign like product was first sold for
consumption in the respondent's largest third-country market,
Australia, which had an aggregate sales quantity greater than 5 percent
of the aggregate quantity sold in the United States.
We made adjustments to NV for differences in packing in accordance
with sections 773(a)(6)(A) and (B)(i) of the Act, and we deducted
movement expenses consistent with section 773(a)(6)(B)(ii) of the Act.
In addition, where applicable, we made adjustments for differences in
cost attributable to differences in physical characteristics of the
merchandise pursuant to section 773(a)(6)(C)(ii) of the Act, as well as
for differences in circumstances of sale (COS) in accordance with
section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act, H.R. Doc. 316, Vol. 1, 103d Cong., at 829-831 (1994),
to the extent practicable, the Department will calculate NV based on
sales at the same level of trade (LOT) as the U.S. sales. We examined
information on the selling activities associated with each channel of
trade in each of Corex's markets. Corex's Australian sales were all FOB
Naples and its U.S. sales were ex-factory. Given that the only
differences in selling activities between the two markets was the
provision of freight services to the port for Australian sales, we
determined that there was a single LOT in each market and that these
LOTs were comparable.
[[Page 53643]]
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the official exchange rates in effect on the dates
of the U.S. sales as certified by the Federal Reserve Bank of New York.
Section 773A(a) of the Act directs the Department to use a daily
exchange rate in order to convert foreign currencies into U.S. dollars,
unless the daily rate involves a ``fluctuation.'' In accordance with
the Department's practice, we have determined that a fluctuation exists
when the daily exchange rate differs from a benchmark by 2.25 percent.
See, e.g., Certain Stainless Steel Wire Rods from France: Preliminary
Results of Antidumping Duty Administrative Review (61 FR 8915, 8918,
March 6, 1996). The benchmark is defined as the rolling average of
rates for the past 40 business days. When we determined a fluctuation
existed, we substituted the benchmark for the daily rate.
Use of a Combination Rate
19 CFR 351.107 states that in the case of subject merchandise that
is exported to the United States by a company that is not the producer
of the merchandise, the Department ``may establish a combination cash
deposit rate for each combination of exporter and its supplying
producer(s).'' Although Corex, not its toller, is considered to be the
producer within the meaning of 19 CFR 351.401(h), Corex's primary
business is not that of a producer of the subject merchandise but
rather it is a trading company, which buys and resells many types of
food products. In the future, Corex may buy and resell pasta to the
United States that is sourced from other manufacturers. In these cases,
Corex would not be considered the producer of the subject merchandise
and the rate assigned to Corex as a producer of tolled merchandise
should not apply. As stated in the preamble to 19 CFR 351.107,
``Establishing a deposit rate for an exporter and, without regard to
the identity of the supplier, applying that rate to all future exports
by that exporter could lead to the application of that rate even if
other suppliers sold to the exporter with knowledge of exportation to
the United States. This would enable a producer with a relatively high
deposit rate to avoid the application of its own rate by selling to the
United States through an exporter with a low rate.'' See 62 FR 27303.
Therefore, in view of Corex's primary business as a reseller, the rate
determined in this review will be applicable only to subject
merchandise produced and exported by Corex. Because it would be
difficult for the Customs Service to distinguish between merchandise
produced by Corex, and that which is simply being resold by Corex as a
trading company, the strong possibility for circumvention exists in
this situation. Accordingly, any entries of merchandise exported and
produced by Corex must identify Corex as the producer in order that the
deposit rate established in this review will apply. If Corex is not the
producer, the deposit rate will be the rate for the identified
producer. Otherwise, the ``all others'' rate will apply.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
weighted-average dumping margin for Corex is 0.00 percent.
Parties to this proceeding may request disclosure within five days
of publication of this notice and any interested party may request a
hearing within 30 days of publication. 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 and/or written
comments no later than 30 days after the date of publication. Rebuttal
briefs and rebuttals to written comments, limited to issues raised in
such briefs or comments, may be filed no later than 37 days after the
date of publication of this notice. The Department will publish a
notice of the final results of the administrative review, including its
analysis of issues raised in any written comments or at a hearing, not
later than 90 days after the date of publication of this notice.
Cash Deposit
The following cash deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act. The cash deposit rate for
Corex will be the rate established in the final results of this
administrative review (except that no deposit will be required for
firms with zero or de minimis margins, i.e., margins lower than 0.5
percent).
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f)(2) 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 the subsequent
assessment of double antidumping duties.
This determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: September 30, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-26779 Filed 10-5-98; 8:45 am]
BILLING CODE 3510-DS-P
