E5-820. Notice of Preliminary Results of New Shipper Review of the Antidumping Duty Order on Certain Pasta From Italy

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request by Atar, S.r.L. (“Atar”), the Department of Commerce (“the Department”) is conducting a new shipper review of the antidumping duty order on certain pasta (“pasta”) from Italy for the period of review (“POR”) July 1, 2003 through June 30, 2004. We preliminarily determine that during the POR, Atar did not sell subject merchandise at less than normal value (“NV”). Much of the information upon which we relied to analyze the bona fides of Atar's sales to the United States is business proprietary, therefore our full analysis is set forth in the Memorandum to Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, Pasta from Italy: New Shipper Review of Atar S.r.L. (Atar), dated February 22, 2005 (Atar Memo), which is on file in the Central Records Unit (“CRU”), room B-099 of the main Commerce Building. Interested parties are invited to comment on these preliminary results.

If these preliminary results are adopted in the final results of this new shipper review, we will instruct U.S. Customs and Border Protection (“CBP”) to liquidate without regard to antidumping duties.

DATES:

Effective Date: March 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Dennis McClure or Maura Jeffords, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On July 24, 1996, the Department published in the Federal Register the antidumping duty order on pasta from Italy. See Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain Pasta from Italy, 61 FR 38547. On July 30, 2004, we received a request from Atar to initiate a new shipper review of Atar's U.S. sales of pasta from Italy. On September 1, 2004, the Department published the notice of initiation of this new shipper antidumping duty review covering the period July 1, 2003 through June 30, 2004. See Certain Pasta from Italy: Notice of Initiation of New Shipper Antidumping Duty Review, 69 FR 53413 (Sept. 1, 2004).

On September 1, 2004, we sent a questionnaire to Atar and instructed Atar to respond to Sections A-E of the questionnaire, as appropriate. On October 22, 2004, Atar submitted its response to Sections A, C, and D of the original questionnaire. On November 5, 2004, Atar submitted its cost reconciliation under Section D of the questionnaire.

On November 8 and 10, 2004, the Department issued supplemental questionnaires to Atar. On December 1, 2004, we received Atar's response to the supplemental questionnaires. On December 27, 2004, the Department received a supplemental questionnaire response relating to Atar's quantity and value reconciliation requested in Section A of the questionnaire.

On December 7, 2004, we sent Atar a verification outline. We conducted verification of Atar's sales and cost information from January 10, 2005 through January 14, 2005.

Scope of 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 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, or by Associazione Italiana per l'Agricoltura Biologica.

The merchandise subject to this order 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.

Verification

As provided in section 782(i) of the Tariff Act of 1930, as amended (“the Act”), we conducted verification of the sales and cost information provided by Atar. We used standard verification procedures, including examination of relevant sales and financial records. Our verification results are detailed in the verification reports placed in the case file in the CRU. We made certain minor revisions to certain sales and cost data based on verification findings. See January 25, 2005, Memorandum to James Terpstra from Dennis McClure and Maura Jeffords, regarding Verification of the Sales and Cost Response of Atar S.r.L. (“Atar”) in the New Shipper Review of the Antidumping Duty Order of Certain Pasta from Italy (“Sales and Cost Verification Report”).

Product Comparisons

In accordance with section 771(16) of the Act, we matched contemporaneous sales of products sold in the United States with constructed value (“CV”) based on the following characteristics: (1) Pasta shape; (2) type of wheat; (3) additives; and (4) enrichment.

Comparisons to Normal Value

Because we could not determine the NV of the subject merchandise based on a comparison market price, under section 773(a)(1) of the Act, in accordance with section 773(a)(4) of the Act, we compared the export price (“EP”) to the CV, as described in the “Export Price” and “Normal Value” sections of this notice to determine whether sales of certain pasta from Italy were made in the United States at less than NV. See Atar's Sales and Cost Verification Report and February 22, 2005, Memorandum to James Terpstra from Dennis McClure and Maura Jeffords, Analysis Memorandum for Atar S.r.L., available in the CRU.

Export Price

For the price to the United States, we used EP in accordance with section 772(a) of the Act. We calculated EP because all of Atar's U.S. sales of subject merchandise were sold directly to the first unaffiliated purchaser in the United States prior to importation. We based EP on the packed free-on-board (“FOB”) prices to the first unaffiliated customer in, or for exportation to, the United States.

In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including foreign brokerage and handling. In addition, when appropriate, we increased EP by an amount equal to the countervailing duty rate attributed to export subsidies established in the countervailing duty investigation, in accordance with section 772(c)(1)(C) of the Act.

Normal Value

A. Selection of Comparison Markets

To determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared Atar's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to sections 773(a)(1)(B) and 773(a)(1)(C) of the Act, we determined that Atar did not have an aggregate volume of home market sales of the foreign like product that was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise. Atar did not have any third-country market sales of the subject merchandise. As a result, we determined that Atar did not have a viable comparison market.

B. Calculation of Normal Value Based on Constructed Value

In accordance with section 773(e) of the Act, we calculated CV based on the sum of the cost of manufacturing (“COM”) of the product sold in the United States, plus amounts for SG&A expenses, profit, and U.S. packing costs. Because Atar was a producer of subject merchandise through a tolling arrangement, we based the COM on the price Atar paid for the raw materials from its unaffiliated suppliers and the price Atar paid for the processing. In accordance with section 773(e)(2)(B) (i) and (ii) of the Act, we based SG&A expenses on Atar's actual expenses incurred during its 2004 fiscal year and profit on publicly available information related to other pasta companies which sell subject merchandise in Italy.

For price-to-CV comparisons, we made adjustments to CV for circumstance-of-sale (“COS”) differences, in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS adjustments by adding U.S. direct selling expenses.

Currency Conversion

For purposes of these preliminary results, we made currency conversions in accordance with section 773A(a) of the Act, based on the official exchange rates published by the Federal Reserve.

Preliminary Results of New Shipper Review

As a result of our review, we preliminarily determine that the following percentage weighted-average margin exists for Atar for the period July 1, 2003 through June 30, 2004:

Producer/exporter	Margin (percent)
Produced and Exported by Atar S.r.L.	0.00

The Department will disclose the calculations performed within five days of the date of publication of this notice to the parties of this proceeding in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, ordinarily will be held 44 days after the date of publication of these preliminary results, or the first working day thereafter. Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results. See 19 CFR 351.309(c)(ii). Rebuttal briefs limited to issues raised in such briefs, may be filed no later than 35 days after the date of publication. See 19 CFR 351.309(d).

Parties who submit arguments are requested to submit with the argument (1) a statement of the issue and (2) a brief summary of the argument. Further, parties submitting briefs are requested to provide the Department with an additional copy of the public version of any such briefs on diskette. The Department will issue the final results of this review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results.

Assessment Rate

Pursuant to 19 CFR 351.212(b), the Department will calculate an assessment rate for each importer of the subject merchandise produced by Atar. Upon issuance of the final results of this new shipper review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, we will calculate importer-specific assessment rates for the subject merchandise produced by Atar by aggregating the dumping margins for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer. Where appropriate, to calculate the entered value, we will subtract international movement expenses (e.g., brokerage and handling) from the gross sales value.

Cash Deposit Requirements

To calculate the cash deposit rate for Atar, we divided the total dumping margin by the total net value for that company's sales during the review period. The following deposit rate will be effective upon publication of the final results of this new shipper review for shipments of certain pasta from Italy entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: For subject merchandise produced and exported by Atar, the cash deposit rate will be the rate established in the final results of this review, except if the rate is less than 0.5 percent and, therefore, de minimis, the cash deposit will be zero. This cash deposit requirement, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping and/or countervailing 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 and/or countervailing duties occurred and the subsequent increase in antidumping duties by the amount of antidumping and/or countervailing duties reimbursed.

This administrative review is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: February 22, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

APPENDIX I

Unpublished Memorandum