02-20387. Certain Pasta from Italy: Final Results of the Fifth Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results of Countervailing Duty Administrative Review.

SUMMARY:

On April 8, 2002, the Department of Commerce published in the Federal Register its preliminary results of the fifth administrative review of the countervailing duty order on certain pasta from Italy for the period January 1 through December 31, 2000.

We have made no changes to our preliminary findings as a result of either our analysis of the comments received or of any new information or evidence of changed circumstances. Therefore, the final results do not differ from the preliminary results of this review.

EFFECTIVE DATE:

August 12, 2002.

FOR FURTHER INFORMATION CONTACT:

Craig Matney, Audrey Twyman, or Stephen Cho, AD/CVD Enforcement, Group I, Office 1, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone [phone], or 482-3798, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions of the Tariff Act of 1930, as amended by the Uruguay Round Agreements Act (“URAA”), effective January 1, 1995 (“the Act”). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR 351 et seq. (2002).

Background

On July 24, 1996, the Department of Commerce (“the Department”) published in the Federal Register (61 FR 38544) the countervailing duty order on certain pasta from Italy.

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: F.lli De Cecco di Filippo Fara S. Martino S.p.A. (“De Cecco”); Delverde S.p.A. (“Delverde”); Italian American Pasta Company, S.r.L. (“IAPC”); and Labor S.r.L. (“Labor”).

Based on withdrawal of the request for review, we rescinded this administrative review for N. Puglisi & F. Industria Paste Alimentari S.p.A. (“Puglisi”). (S ee, Certain Pasta from Italy: Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review, 67 FR 16722 (April 8, 2002) (“Preliminary Results”).

Since the publication of the Preliminary Results, a case brief was submitted on May 8, 2002, by Delverde. The Department did not conduct a hearing in this review because none was requested.

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, 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 Istituto Mediterraneo Di Certificazione, Bioagricoop Scrl, QC&I International Services, Ecocert Italia, Consorzio per il Controllo dei Prodotti Biologici, Associazione Italiana per l'Agricoltura Biologica, or Codex S.r.L.--

The merchandise subject to review is currently classifiable under item 1902.19.20 of the H armonized 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 countervailing duty order.(See August 25, 1997, memorandum from Edward Easton to Richard Moreland, which is on file in the Central Records Unit (“CRU”) in Room B-099 of the main Commerce 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 countervailing duty order. (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., which is on file in the CRU.)

(3) 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 may be within the scope of the countervailing duty order. 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 countervailing duty order. (See May 24, 1999, memorandum from John Brinkmann to Richard Moreland, which is on file in the CRU.)

Period of Review

The period of review (“POR”) for which we are measuring subsidies is from January 1 through December 31, 2000.

Analysis of Comments Received

All issues raised in the case brief by the interested party to this administrative review are addressed in the August 6, 2002, Issues and Decision Memorandum (“Decision Memorandum”) from Richard W. Moreland, Deputy Assistant Secretary, Import Administration, to Faryar Shirzad, Assistant Secretary for Import Administration, which is hereby adopted by this notice. Attached to this notice as Appendix I 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, Room B-099 of the Department. 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 Since the Preliminary Results

We have made no changes to our preliminary findings as a result of either our analysis of the comments received or of any new information or evidence of changed circumstances. Therefore, the final results do not differ from the preliminary results of this review.

Final Results of Review

In accordance with 19 CFR 351.221(b)(4)(i), we calculated an individual subsidy rate for each producer/exporter subject to this administrative review. For the period January 1 through December 31, 2000, we determine the net subsidy rates for producers/exporters under review to be those specified in the chart shown below.

Company	Ad valorem rate
F.lli De Cecco di Filippo Fara San Martino, S.p.A.	1.90 percent
Delverde S.p.A.	2.83 percent
Italian American Pasta ­Company, S.r.L.	0.00 percent
Labor, S.r.L.	1.57 percent

We will instruct the U.S. Customs Service (“Customs”) to assess countervailing duties as indicated above. The Department will also instruct Customs to collect cash deposits of estimated countervailing duties in the percentage detailed above of the f.o.b. invoice prices on all shipments of the subject merchandise from the producers/exporters under review, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review.

The cash deposit rates for all companies not covered by this review are not changed by the results of this review. Thus, we will instruct Customs to continue to collect cash deposits for non-reviewed companies, except Barilla G. e R. F.lli S.p.A. (“Barilla”) and Gruppo Agricoltura Sana S.r.L. (“Gruppo”) (which were excluded from the order during the investigation), at the most recent rate applicable to the company. These rates shall apply to all non-reviewed companies until a review of the companies assigned these rates is completed. In addition, for the period January 1 through December 31, 2000, the assessment rates applicable to all non-reviewed companies covered by these orders are the cash deposit rates in effect at the time of entry.

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 351.301. 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.

This administrative review and notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

DATED: August 6, 2002.

Faryar Shirzad,

Assistant Secretaryfor Import Administration.

Appendix I- Issues discussed in the Decision Memorandum

I. -Subsidies Valuation Methodology

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1. -Change in Ownership

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2. -Benchmarks for Long-term Loans and Discount Rates

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3. -Allocation Period

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4. -Attribution

II. -Analysis of Programs

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A. -Programs Previously Determined to Confer Subsidies

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1. -Law 64/86 Industrial Development Grants

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2. -Law 488/92 Industrial Development Grants

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3. -Industrial Development Loans Under Law 64/86

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4. -Law 341/95 Interest Contributions on Debt ConsolidationLoans

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5. -Social Security Reductions and Exemptions - Sgravi

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6. -IRAP Exemptions

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7. -Law 304/90 Export Marketing Grants

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8. -Export Restitution Payments

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9. -IRPEG Exemptions

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B. -Programs Determined to Be Not Used

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1. -Law 64/86 VAT Reductions

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2. -Export Credits under Law 227/77

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3. -Capital Grants under Law 675/77

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4. -Retraining Grants under Law 675/77

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5. -Interest Contributions on Bank Loans under Law 675/77

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6. -Interest Grants Financed by IRI Bonds

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7. -Preferential Financing for Export Promotion under Law 394/81

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8. -Urban Redevelopment under Law 181

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9. -Grant Received Pursuant to the Community Initiative Concerning the Preparation of Enterprises for the Single Market (“PRISMA”)

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10. -Law 183/76 Industrial Development Grants

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11. -Law 598/94 Interest Subsidies

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12. -Law 236/93 Training Grants

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13. -European Regional Development Fund (“ERDF”)

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14. -Duty-Free Import Rights

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15. -Remission of Taxes on Export Credit Insurance Under Article 33 of Law 227/77

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16. -Law 1329/65 Interest Contributions (“Sabatini Law”)

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17. -European Social Fund (“ESF”)

III.-Analysis of Comments

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Comment 1: -Application of the Department's privatization methodology to Delverde (Delverde)

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Comment 2: -Presumption that subsidies continue after a change in ownership (Delverde)

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Comment 3: -Privatization and the U.K. Lead Bar Panel (Delverde)

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Comment 4: -Sale of shares vs. assets (Delverde)

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Comment 5: -Continuity of business operations (Delverde)