[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Notices]
[Pages 42368-42373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21230]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818]
Notice of Preliminary Results and Partial Rescission of
Antidumping Duty Administrative Review: Certain Pasta From Italy
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping order on certain pasta from Italy. This
review covers eight producers and/or exporters of the subject
merchandise. The period of review (``POR'') is January 19, 1996,
through June 30, 1997.
We have preliminarily found that, for certain producers and/or
exporters, sales of the subject merchandise have been made below normal
value. If these preliminary results are adopted in our final results of
this review, we will instruct the Customs Service to assess antidumping
duties equal to the difference between the export price or constructed
export price and the normal value.
EFFECTIVE DATE: August 7, 1998.
FOR FURTHER INFORMATION CONTACT: Edward Easton or John Brinkmann,
Office 2 AD/CVD Enforcement, Group I, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue N.W., Washington, D.C. 20230; telephone:
(202) 482-1777 or (202) 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. In addition, unless otherwise
indicated, all citations to the Department of Commerce's (``the
Department's'') regulations are to the regulations codified at 19 CFR
Part 351, as published in the Federal Register on May 19, 1997 (62 FR
27296).
Case History
On July 24, 1996, the Department published in the Federal Register
the antidumping duty order on certain pasta (``pasta'') from Italy (61
FR 38547). On July 21, 1997, we published in the Federal Register the
notice of ``Opportunity to Request an Administrative Review'' of this
order, for the POR (62 FR 38973).
The following producers and/or exporters of pasta from Italy
requested a review in accordance with 19 CFR 351.213(b)(2): (1) Rummo
S.p.A. Molino e Pastificio (``Rummo''); (2) F. lli De Cecco di Filippo
Fara S. Martino S.p.A. (``De Cecco''); (3) La Molisana Industrie
Alimentari S.p.A. (``La Molisana''); (4) Delverde Srl (``Delverde'');
(5) Tamma Industrie Alimentari di Capitanata, SrL (``Tamma'');
1 (6) Industria Alimentari Colavita S.p.A. (``Indalco'');
and (7) Petrini, S.p.A. (``Petrini''). Three of these seven companies,
Petrini, Delverde, and Tamma, later withdrew their requests. See
Partial Rescission of Antidumping Duty Administrative Review section,
below.
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\1\ During the antidumping investigation, the Department
determined that Delverde and Tamma were affiliated parties within
the meaning of section 771(33) of the Act and, moreover, that it was
appropriate to ``collapse'' both companies into a single entity for
the purpose of calculating an antidumping duty margin.
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On July 31, 1997, the petitioners requested a review of ten
producers and/or exporters of pasta from Italy; however, on September
2, 1997, they withdrew their request for review of all of these
companies except: (1) Arrighi S.p.A. Industrie Alimentari
(``Arrighi''); (2) Barilla Alimentari S.R.L.. (``Barilla''); (3) N.
Puglisi & F. Industria Paste Alimentari S.p.A. (``Puglisi''); (4) La
Molisana; (5) Pastificio Fratelli Pagani S.p.A. (``Pagani''); and (6)
Rummo. See Partial Recision of Antidumping Duty Administrative Review
section, below.
On August 28, 1997, we published the notice of initiation of this
antidumping duty administrative review (62 FR 45621) and on September
4, 1997, the Department issued the antidumping questionnaire
2 to counsel for the companies subject to review. After
several extensions, the respondents submitted responses to sections A
through C of the antidumping questionnaire on November 3 and 10, 1997.
The Department issued its supplemental questionnaires in January, 1998.
Responses to the supplemental questionnaires were received in March,
1998.
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\2\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under investigation that it sells, and the sales of
the merchandise in all of its markets. Sections B and C request home
market sales listings and U.S. sales listings, respectively. Section
D requests information on the cost of production of the foreign like
product and constructed value of the merchandise under
investigation.
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On October 20, 1997, World Finer Foods, Inc. (``World Finer
Foods''), an importer of pasta produced by Arrighi, wrote to the
Department to indicate that Arrighi had ceased exporting pasta to the
United States and would not participate in the review. World Finer
Foods indicated that it did not seek the return of the antidumping duty
deposits it had already made on imports of Arrighi pasta, but that it
could not afford additional antidumping duties. An officer of World
Finer Foods met with Department officials on January 8, 1998, and
offered to submit information concerning its purchases from Arrighi for
the Department's examination. This information was submitted on March
10, 1998. On April 9, 1998, petitioners submitted a response
indicating, among other things, that they believed the information
submitted by World Finer Foods was inadequate for calculating an
antidumping duty margin for Arrighi.
[[Page 42369]]
The Department has examined World Finer Foods' documentation and
determined that it is not possible, pursuant to the statute, to
calculate a margin from the information in the submission. Moreover,
inasmuch as Arrighi refused to participate in the review, the
Department has assigned an adverse margin to Arrighi. See Use of Facts
Available section, below.
On November 21 and 24, 1997, the petitioners alleged that Indalco,
Rummo, and Puglisi had sold the foreign like product below the cost of
production (``COP''). On December 24, 1997, we initiated a cost-of-
production investigation with respect to these companies. The three
companies submitted their responses to section D of the antidumping
questionnaire in January, 1998.3
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\3\ Because the Department had disregarded sales below the cost
of production during the antidumping investigation of La Molisana
and had initiated a cost investigation of De Cecco prior to
assigning the company a margin based on adverse facts available, we
had reasonable grounds to believe or suspect that sales by these
companies of the foreign like product under consideration for the
determination of normal value in this review may have been made at
prices below the cost of production. Therefore, we initiated cost
investigations of De Cecco and La Molisana at the time we initiated
the antidumping review.
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On January 28, 1998, the Department published a notice postponing
the preliminary results of this review until July 1, 1998 (63 FR 4218).
On June 10, 1998, the Department published a notice further postponing
the preliminary results of this review until no later than July 31,
1998 (63 FR 31735).
Partial Rescission of Antidumping Duty Administrative Review
On September 2, 1997, the petitioners withdrew their request for
reviews of Castelletti S.p.A., Societa Transporti Castelletti, General
Noli S.p.A., and R. Queirolo & Co., S.p.A. There were no other requests
for reviews of these companies and, accordingly, we are rescinding the
review with respect to these companies.
On October 24, 1997, Petrini withdrew its request for a review.
Delverde and Tamma withdrew their requests for a review on November 10,
1997. Because there were no other requests for reviews of Petrini,
Delverde, and Tamma, and because the companies' letters withdrawing
their requests for reviews were timely filed, we are rescinding the
review with respect to these companies in accordance with 19 CFR
351.213(d)(1).
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.
Furthermore, on August 25, 1997, the Department issued a scope
ruling that multicolored pasta, imported in kitchen display bottles of
decorative glass, which are sealed with cork or paraffin and bound with
raffia, is excluded from the scope of this proceeding.
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 subheadings are provided for convenience
and for customs purposes, our written description of the scope is
dispositive.
Verification
As provided in section 782(i) of the Act, we verified sales
information provided by De Cecco. We used standard verification
procedures, including on-site inspection of the manufacturer's
facilities and examination of relevant sales and financial records. Our
verification results are outlined in the verification report placed in
the case file.
Use of Facts Available
Section 776(a) of the Act requires the Department to resort to
facts otherwise available (``facts available'') if necessary
information is not available on the record or when an interested party
or any other person ``fails to provide [requested] information by the
deadlines for submission of the information or in the form and manner
requested, subject to subsections (c)(1) and (e) of section 782.'' As
provided in section 782(c)(1) of the Act, if an interested party
``promptly after receiving a request from [the Department] for
information, notifies [the Department] that such party is unable to
submit the information requested in the requested form and manner,''
the Department may modify the requirements to avoid imposing an
unreasonable burden on that party. Since Arrighi, Barilla, and Pagani
did not provide any such notification to the Department, subsections
(c)(1) and (e) do not apply to this situation. Accordingly, we
preliminarily find, in accordance with section 776(a) of the Act, that
the use of facts available is appropriate for Arrighi, Barilla, and
Pagani.
Where the Department must resort to facts available because a
respondent failed to cooperate to the best of its ability, section
776(b) of the Act authorizes the use of an inference adverse to the
interests of that respondent in selecting from among the facts
available. Because Arrighi, Barilla, and Pagani failed to cooperate by
not responding to our antidumping questionnaire and, thus, have not
acted to the best of their abilities to comply with requests for
information, we have determined that an adverse inference with respect
to these companies is warranted.
Section 776(b) of the Act also authorizes the Department to use as
adverse facts available information derived from the petition, the
final determination in the antidumping investigation, a previous
administrative review, or any other information placed on the record.
Section 776(c) of the Act provides that the Department shall, to the
extent practicable, corroborate that secondary information from
independent sources reasonably at its disposal. The Statement of
Administrative Action (``SAA'') provides that ``corroborate'' means
simply that the Department will satisfy itself that the secondary
information has probative value. (See H.R. Doc. 316, Vol. 1, 103d
Cong., 2d sess. 870 (1994).)
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information used. However, in an administrative review, the Department
will not engage in updating the petition to reflect the prices and
costs that are found during the current review. Rather, the process of
corroboration is to determine that the significant elements used to
derive a margin in a petition are reliable and relevant to the
conditions upon which the petition is based.
With respect to the relevance aspect of corroboration, the
Department will consider information reasonably at its disposal as to
whether there are circumstances that would render a margin not
relevant. Where
[[Page 42370]]
circumstances indicate that the selected margin is not appropriate as
adverse facts available, the Department will disregard the margin and
determine an appropriate margin. See, e.g., Fresh Cut Flowers from
Mexico: Final Results of Antidumping Duty Administrative Review, 61 FR
6812 (February 22, 1996). In this instance, we have no reason to
believe that the application of the highest petition margin, calculated
based on our revisions to the estimated margins in the petition
concerning Italian pasta, is inappropriate.4 We note that
the SAA, at 870, states that ``the fact that corroboration may not be
practicable in a given circumstance will not prevent the agencies from
applying an adverse inference * * *.'' In addition, the SAA, at 869,
emphasizes that the Department need not prove that the facts available
are the best alternative information. We therefore have assigned
Arrighi, Barilla, and Pagani the highest margin from the petition,
i.e., 71.49 percent, for purposes of these preliminary results. See,
Notice of Initiation of Antidumping Duty Investigations: Certain Pasta
from Italy and Turkey, 60 FR 30268, 30269 (June 8, 1995).
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\4\ During the antidumping investigation, we assigned an adverse
facts available margin of 46.67 percent to De Cecco. As we explained
in our final determination in the investigation, ``[b]ecause De
Cecco made some effort to cooperate, even though it did not
cooperate to the best of its ability, we did not choose the most
adverse rate based on the petition.'' Final investigation
determination, 61 FR 30326, 30329.
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Comparisons to Normal Value
To determine whether sales of certain pasta from Italy were made in
the United States at less than normal value (``NV''), we compared the
export price (``EP'') or constructed export price (``CEP'') to the NV.
We first attempted to compare contemporaneous sales of products sold in
the United States and home markets that were identical with respect to
the following characteristics: shape; wheat type; additives; and
enrichment. However, we did not find any appropriate home market sales
of merchandise that were identical in these respects to the merchandise
sold in the United States. Accordingly, we compared products sold to
the United States with the most similar merchandise sold in the home
market based on the characteristics listed above, in that order of
priority.
Export Price and Constructed Export Price
For the price to the United States, we used, as appropriate, EP or
CEP, in accordance with sections 772(a) and (b) of the Act. We
calculated EP where the merchandise was sold directly to the first
unaffiliated purchaser in the United States prior to importation and
CEP was not otherwise warranted based on the facts on our record. We
calculated CEP where sales to the first unaffiliated purchaser took
place after importation.
For all respondents, we calculated EP and CEP based on the packed
FOB, CIF, or delivered price to the first unaffiliated customer in, or
for exportation to, the United States. We reduced these prices to
reflect discounts and rebates. In accordance with section 772(c)(2) of
the Act, we made deductions, where appropriate, for foreign brokerage
and handling, freight expenses between the factory and the U.S.
distributor's warehouse, freight insurance, export fees, brokerage and
handling, U.S. inspection fees, U.S. duties, and U.S. freight.
In accordance with section 772(d)(1) of the Act, we made deductions
from CEP, where appropriate, for direct selling expenses (including
advertising), credit, warranties, and commissions paid to unaffiliated
distributors. In addition, we deducted those indirect selling expenses
that related to economic activity in the United States. These included
inventory carrying costs, certain indirect selling expenses incurred in
the home market, and the indirect selling expenses of affiliated U.S.
distributors. Finally, we made adjustments for CEP profit in accordance
with section 772 (d)(3) and (f) of the Act.
Where payment dates were not reported, we used average credit
days--by customer--as a proxy to calculate credit expenses. Where we
could not establish the average credit days on a per customer basis, we
used the date of these preliminary results.
Certain respondents reported the resale of subject merchandise
purchased in Italy from unaffiliated producers. Where the unaffiliated
producers of the subject pasta knew at the time of the sale that the
merchandise was destined for the United States, the relevant basis for
the export price would be the price between the producer and the
respondents. In this review, the unaffiliated producers knew or had
reason to know at the time of sale that the ultimate destination of the
merchandise was the United States because virtually all enriched pasta
is sold to the United States. For such transactions, therefore, the
price between the respondents and their U.S. customers was not used as
the basis for the export price.
When respondents purchased pasta from other producers and we were
able to identify resales of this merchandise to the United States, we
excluded sales of the purchased pasta from the margin calculation.
Where the purchased pasta was commingled with the company's production
and we could not identify the resales, we examined both sales of
produced pasta and resales of purchased pasta. Inasmuch as the
percentage of pasta purchased by any single respondent was an
insignificant part of its U.S. sales data base, we included the sales
of commingled purchased pasta in our margin calculations. See
Proprietary Memorandum to the File, dated July 31, 1998.
Company-Specific Issues
La Molisana
During the POR, La Molisana made EP sales. La Molisana based its
date of sale on the date of shipment, whether identified by the invoice
or the bill of lading. Petitioners have alleged that the distribution
contract between La Molisana and La Pace is a long-term contract. For
the reasons specified in the Proprietary Memorandum to the File, dated
July 31, 1998, we have preliminarily determined that the date of sale,
as reported, is appropriate. (Memoranda prepared for the record in this
review and cited in this notice are on file in Import Administration's
Central Records Unit (Room B-099 of the main Commerce building).)
Normal Value
In order 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 each respondent'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 (C) of the Act,
because each respondent's aggregate volume of home market sales of the
foreign like product was greater than five percent of its aggregate
volume of U.S. sales of the subject merchandise, we determined that the
home market was viable.
We calculated NV based on FOB, CIF or delivered prices to home
market customers. We made deductions from the starting price for inland
freight and inland insurance expenses, discounts, and rebates. In
accordance with section 773(a)(6) of the Act, we deducted home market
packing costs and added U.S. packing costs. In addition, we made
circumstance of sale adjustments for direct expenses, including imputed
credit expenses, advertising expenses, and warranty expenses, in
accordance with section 773(a)(6)(C)(iii) of the Act.
We also made adjustments, when comparing U.S. sales with home
market
[[Page 42371]]
sales of similar, but not identical, merchandise, for physical
differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act. We based this adjustment on the difference
in the variable costs of manufacturing the foreign like product and
subject merchandise.
We also made adjustments where commissions were granted on sales in
the U.S. market but not in the home market. We made a downward
adjustment to normal value for the lesser of (1) the amount of the
commission paid in the U.S. market, or (2) the amount of indirect
selling expenses incurred in the comparison market.
Cost of Production Analysis
Based on the results of the antidumping investigation and on the
timely allegations filed by the petitioners during this review, we
initiated COP investigations for each of the five respondents
participating in the review to determine whether sales were made at
prices below the COP. See Footnote 3, above, and Memoranda from Case
Analysts to Richard W. Moreland, dated January 12, 1998.
We conducted the COP analysis as described below.
Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
weighted-average COP on a product-specific basis for each respondent,
based on the sum of the costs of materials and fabrication of the
foreign like product, plus amounts for home market selling, general,
and administrative expenses (``SG&A''), and packing costs. As facts
available, where a respondent sold both pasta it produced and pasta it
purchased and these were commingled, we calculated a weight-average COP
based on the costs of production and the acquisition price of the
commingled pasta. We relied on each respondent's submitted COP data,
except in the following instances:
De Cecco
We valued semolina De Cecco purchased from its affiliated producer,
Molino, by applying the higher of transfer price, market price, or the
cost to the affiliated entity to produce the input. We invite
interested parties to comment on whether the Department should apply
the major input rule (see 19 CFR 351.407(b)) for the valuation of these
purchases of semolina in the final results of this review.
Indalco
We revised the G&A expense applied to handmade pasta produced by
Indalco's affiliated supplier. The revision results from a correction
to the affiliated company's cost of sales. See, Memorandum to the File,
dated July 31, 1998.
La Molisana
We revised the company's reported interest expense rate to include
foreign exchange losses in the calculation of the rate. We also revised
the company's reported cost of manufacture, G&A and interest expenses
to reflect a single weighted average cost for each product produced.
See Memorandum to Christian Marsh from Taija Slaughter, dated July 31,
1998. For the pasta types that La Molisana both purchased and produced,
we calculated a weighted-average cost.
Puglisi
We revised Puglisi's reported G&A expense rate based on our
exclusion of certain non-production related offsets. See Memorandum to
Christian Marsh from Stan T. Bowen, dated July 15, 1998.
Rummo
For the pasta types that the respondent both purchased and
produced, we calculated a weighted-average cost.
Test of Home Market Sales Prices
As required under section 773(b) of the Act, we compared the
weighted-average COP for each respondent to the comparison market sales
of the foreign like product, to determine whether these sales had been
made at prices below the COP within an extended period of time and in
substantial quantities, and whether such prices were sufficient to
permit the recovery of all costs within a reasonable period of time. On
a product-specific basis, we compared the COP (less selling expenses)
to the home market prices, less any applicable movement charges, taxes,
rebates, commissions and other direct and indirect selling expenses.
Results of the COP Test
Pursuant to 773(b)(2)(C) of the Act, where less than 20 percent of
a respondent's sales of a given product were made at prices less than
the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product were at prices less than the COP, we
determined such sales to have been made in ``substantial quantities''
within an extended period of time, in accordance with section
773(b)(2)(B) and (C) of the Act, and disregarded the below-cost sales
from our analysis. We used the remaining sales in our margin analysis,
in accordance with section 773(b)(1).
General Price-to-Price Comparison Issues
We excluded sales of pasta from the respondents to their employees
from the home market sales because the volumes of these sales were
small and the companies' records of these sales were difficult to
access for the detailed information we requested. Where possible, we
also excluded pasta purchased by the respondents from unaffiliated
producers and resold in the home market. However, where the purchased
pasta was commingled with the respondent's production and we could not
identify the resales, we examined both sales of the produced pasta and
resales of the purchased pasta in the home market. Inasmuch as the
percentage of pasta purchased by any single respondent was an
insignificant part of its home market data base, we included the sales
of the commingled pasta in our calculation of NV.
Company-Specific Issues
De Cecco
At verification, De Cecco disclosed that it had mistakenly included
sales made to a third country in its home market data base. We
corrected the data base by removing these sales.
Indalco
We disallowed the flat-fee commission expense claimed for one sales
agent because the expense was based on a flat fee that was not directly
linked to reported sales of pasta. We removed the reported amount from
commission expenses and added it to the company's indirect expenses.
La Molisana
We treated reported warranty expenses as indirect selling expenses
rather than as direct selling expenses.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, we determined
NV at the same level of trade as the U.S. sales (either EP or CEP). To
the extent practicable, when there were no sales at the same level of
trade, we compared U.S. sales to home market sales at a different level
of trade.
To determine whether home market and U.S. sales were at different
levels of
[[Page 42372]]
trade, we examined stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customers. If the home market sales were at a different
level of trade and the differences affected price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and sales at the level of trade of the
export transaction, we made a level-of-trade adjustment under section
773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level was more remote from the
factory than the CEP level and there was no basis for determining
whether the difference in levels between NV and CEP affected price
comparability, we granted a CEP offset, as provided in section
773(a)(7)(B) of the Act. See Notice of Final Determination Of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997). For a company-specific
description of our level-of-trade analysis for these preliminary
results, See Level-of-Trade Memorandum to Susan H. Kuhbach, July 31,
1998.
Company-Specific Product Comparison Issues
De Cecco
During our verification of De Cecco's sales response, we found
sales of vitamin-enriched pasta in the home market for three different
pasta types sold in the United States. Vitamin enrichment is very rare
and an unusual characteristic for pasta produced for consumption in
Italy. Home market sales of such pasta were so small as to be
insignificant. On this basis, we have determined that these sales of
vitamin-enriched pasta are outside the ``ordinary course of trade'' as
that term is used in 19 CFR 351.102. Therefore, we deleted these sales
from the sales data base. In each case, we matched U.S. sales to
similar, but not identical, home market sales of those same pasta types
(i.e., those without vitamin enrichment).
De Cecco reported combination sales of different pasta shapes and
of pasta with bottled olive oil in the home market. Inasmuch as these
combinations were not sold to the United States and were not similar to
U.S. sales, we excluded these sales from the sales data base.
Indalco
Indalco argued that its handmade pasta and its machine-produced
pasta should be treated as different products for product-matching
purposes. Indalco reported that the two have different shapes and are
produced at significantly different speeds. During the course of the
antidumping investigation, we classified pasta on the basis of whether
it was a long, short, or specialty cut, and found that line speeds were
a useful way of distinguishing specialty cuts from the standard long
and short cuts. We agree with Indalco that the significantly different
output rates for the production of handmade pasta and machine-made
shapes constitute a legitimate basis for classifying them as different
products. Therefore, we have assigned sales of handmade pasta separate
shape codes to distinguish them from regular and specialty cuts and
compared sales of handmade pasta in the United States with sales of
handmade pasta in the home market. See, Memorandum to Richard W.
Moreland, dated July 31, 1998.
La Molisana
La Molisana claimed a level of trade adjustment on the basis of
different selling activities associated with their La Molisana (``LM'')
brand and private label (``PL'') products sold in both the home market
and the United States. For the reasons we stated in the Proprietary
Memorandum to the File (from page 19), dated July 31, 1998, we found
that different brands are not an appropriate basis for establishing
different levels of trade. With respect to La Molisana's statements
concerning the different product characteristics of the LM brand and
the PL products, the information on the record is not adequate to
establish that the reported differences in product characteristics are
measurable or that they would result in more appropriate product
matches contemplated in section 771(16) of the Act. See, Proprietary
Memorandum to the File, dated July 31, 1998.
Rummo
Rummo reported sales of both insect-infested and defective quality
pasta to food banks. The company argues that these sales are not
representative of its commercial sales in the United States and that
their unusually low prices exaggerate dumping margins when these sales
are compared to commercial sales in the home market. On March 17, 1998,
Rummo requested that the Department issue a scope ruling to the effect
that its transactions with food banks were outside the scope of the
antidumping duty order. On May 1, 1998, the Department responded to the
request, stating that the transactions are covered by the scope of the
order because the antidumping order covers all entries of pasta in
packages of five pounds or less.
On May 15, 1998, counsel for Rummo again raised the issue with the
Department. We recommended that the company provide the Department with
enough information to enable us to distinguish among the different
transactions. See Memorandum to the File, dated July 31, 1998. On May
21, 1998, Rummo submitted additional information on the issue with the
request that the Department develop a methodology to remove these sales
from our antidumping margin calculations. On June 24, 1998, petitioners
objected to the request to remove these transactions from margin
calculations. Finally, on June 30, 1998, Rummo recapitulated its
position on its transactions with food banks, citing to the documents
that it had submitted for the record on the subject.
Although it is possible that some of the transactions involving the
insect-infested and defective quality pasta may not have constituted
commercial sales, from the information Rummo submitted for the record,
we are unable to distinguish between sales transactions and
transactions that were not commercial sales. Accordingly, in
conformance with our practice to include all U.S. sales of subject
merchandise in our comparisons, we have preliminarily determined to
include all transactions with U.S. food banks in our margin
calculations.
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. 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 as a general matter that a
fluctuation exists when the daily exchange rate differs from a
benchmark by 2.25 percent. The benchmark is defined as the rolling
average of rates for the past 40 business days. When we determine that
a fluctuation exists, we substitute the benchmark for the daily rate.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following percentage weighted-average margins exists for the POR:
------------------------------------------------------------------------
Margin
Producer and/or exporter (percent)
------------------------------------------------------------------------
Arrighi.................................................... 71.49
[[Page 42373]]
Barilla.................................................... 71.49
De Cecco................................................... 0.36
Indalco.................................................... 1.62
La Molisana................................................ 14.33
Pagani..................................................... 71.49
Puglisi.................................................... 2.03
Rummo...................................................... 7.04
------------------------------------------------------------------------
We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the publication date of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within thirty days of publication. See 19 CFR 351.310(c). Any
hearing, if requested, will be held 44 days after the publication of
this notice, or the first workday thereafter. Interested parties are
invited to comment on these preliminary results. Interested parties may
submit case briefs within 30 days of the date of publication of this
notice. Parties who submit case briefs in this proceeding should
provide a summary of the arguments, not to exceed five pages and a
table of statutes, regulations, and cases cited. Rebuttal briefs,
limited to issues raised in the case briefs, may be filed not later
than 37 days after the date of publication. The Department will publish
a notice of the final results of this administrative review, which will
include the results of its analysis of issues raised in any such
written comments or at the hearing, within 120 days from the
publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service.
For EP sales which were not imported by an affiliated party, we
divided the total dumping margins (calculated as the difference between
normal value and EP) for each importer/customer by the total value of
the sales to that importer/customer. We will direct the Customs Service
to assess the resulting ad valorem dollar amount against each
importer's/customer's entries under the order during the review period.
For CEP sales, we divided the total dumping margins for the
reviewed sales by the total entered value of the reviewed sales for
each importer. Where an affiliated party acts as an importer for EP
sales, we included the applicable EP sales in this assessment-rate
calculation. We will direct the Customs Service to assess the resulting
percentage margin against the entered customs values for the subject
merchandise on each of that importer's entries under the order during
the period of review.
To calculate the cash-deposit rate for each producer and/or
exporter included in these administrative reviews, we divided the total
dumping margins for each company by the total net value for that
company's sales during the review period. To derive a single deposit
rate for each producer and/or exporter, we weight-averaged the EP and
CEP deposit rates (using the EP and the CEP as the weighing factors).
We will direct the Customs Service to collect the resulting percentage
deposit rate against the entered value of each producer's and/or
exporter's entries of the subject merchandise entered, or withdrawn
from warehouse, for consumption on or after the date of publication of
the notice of the final results of this review. Accordingly, as
provided in section 751(a)(2)(C) of the Act, the following deposit
rates will be effective upon publication of the final results of this
for all shipments of certain pasta from Italy entered, or withdrawn
from warehouse, for consumption on or after that publication date: (1)
The cash deposit rate for companies listed above will be the rate
established in the final results of this review, except if the rate is
less than 0.5 percent, in which case it is de minimis and the cash
deposit will be zero; (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 antidumping 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) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
review conducted by the Department, the cash deposit rate will be 11.26
percent, the ``All Others'' rate established in the antidumping
investigation. See, final investigation determination.
These cash deposit rates, when imposed, shall remain in effect
until the publication of the final results of the next administrative
review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402 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: July 31, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-21230 Filed 8-6-98; 8:45 am]
BILLING CODE 3510-DS-P