[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Notices]
[Pages 42373-42377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21231]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-805]
Notice of Preliminary Results and Partial Recission of
Antidumping Duty Administrative Review: Certain Pasta From Turkey
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on certain pasta from Turkey. This
review covers three exporters of the subject merchandise. The period of
review is January 19, 1996, through June 30, 1997.
We have preliminarily found that, for certain exporters, sales of
the subject merchandise have been made below normal value. If these
preliminary results are adopted in our final results, 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.
We preliminarily find that, for the one company that had shipments
during the review period and participated in the review, sales have not
been made below normal value. If these preliminary results are adopted
in the final results, we will instruct the Customs Service not to
assess antidumping duties on the subject merchandise exported by this
company.
EFFECTIVE DATE: August 7, 1998.
FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or John Brinkmann,
Office of 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) 482-0192 or (202) 482-5288, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to
[[Page 42374]]
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 refer 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 from Turkey (61 FR 38545).
On July 21, 1997, we published in the Federal Register the notice of
``Opportunity to Request an Administrative Review'' of this order for
the period January 19, 1996 through June 30, 1997 (62 FR 38973). In
accordance with 19 CFR 351.213(b), on July 31, 1997, the petitioners
requested a review of the following producers and exporters of certain
pasta: Filiz Gida Sanayi ve Ticaret (Filiz); and Nuh Ticaret ve Sanayi
A.S. (Nuh Ticaret). Also on July 31, 1997, Pastavilla Kartal
Makarnacilik Sanayi ve Ticaret A.S. (Pastavilla), requested an
administrative review, in accordance with 19 CFR 351.213(b)(2). On
August 28, 1997, we published the notice of initiation of this
antidumping duty administrative review covering the period of January
19, 1996 through June 30, 1997 (Notice of Initiation, 62 FR 45621).
On September 4, 1997, we issued an antidumping questionnaire to
Filiz, Nuh Ticaret, and Pastavilla.1 In its request for an
administrative review, Pastavilla requested that its period of review
(POR) be truncated on the basis that it had no U.S. entries, exports,
or sales during the POR prior to May 1997. Accordingly, on September
11, 1997, we informed Pastavilla that it could limit its reporting of
data to the period January 1 through June 30, 1997. In that letter we
advised Pastavilla that if it elected to limit its reporting of data to
the six-month period, and the Department subsequently initiated a
sales-below-cost investigation, it would forego the application of the
``recovery of cost'' test pursuant to section 773(b)(2)(D) of the Act.
Pastavilla submitted its questionnaire response on October 20, 1997.
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\1\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under review that it sells, and the sales of the
merchandise in all of its markets. Sections B and C of the
questionnaire request home market sales listings and U.S. sales
listings, respectively. Section D requests additional information
about the cost of production of the foreign like product and
constructed value of the merchandise under review.
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On November 21, 1997, petitioners alleged that Pastavilla had sold
the foreign like product at prices below the cost of production (COP).
On December 24, 1997, we initiated a sales-below-cost investigation
with respect to Pastavilla. Pastavilla submitted its section D COP
response on January 23, 1998.
The Department issued a supplemental questionnaire for sections A,
B, and C to Pastavilla on February 27, 1998. On March 11, 1998, the
Department issued a supplemental section D questionnaire to Pastavilla.
Pastavilla's responses to the section A-C and section D supplemental
questionnaires were received on March 16 and 27, 1998, respectively.
The Department issued a second supplemental section D questionnaire on
May 7, 1998, and Pastavilla filed its response May 21, 1998.
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 extending
the deadline for the preliminary results of this review until no later
than July 31, 1998 (63 FR 31735).
Partial Rescission
In the Notice of Initiation, we initiated a review of Filiz, Nuh
Ticaret, and Pastavilla. However, on October 6, 1997, Nuh Ticaret
informed the Department that it had no shipments of the subject
merchandise to the United States during the POR. We have preliminarily
confirmed this with information from the United States Customs Service.
Therefore, in accordance with section 351.213(d)(3) of the Department's
regulations and consistent with Department practice, we are
preliminarily rescinding our review of Nuh Ticaret (see, e.g., Certain
Welded Carbon Steel Pipe and Tube from Turkey: Final Results and
Partial Rescission of Antidumping Administrative Review, 63 FR 35191
(June 29, 1998) (Turkish Pipe and Tube) and Certain Fresh Cut Flowers
From Colombia; Final Results and Partial Rescission of Antidumping Duty
Administrative Review, 62 FR 53287, 53288 (October 14, 1997).
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.
Imports of subject merchandise are currently classifiable under
items 1902.19.20 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
proceeding is dispositive.
Use of Facts Available
Filiz did not respond to the Department's antidumping
questionnaire. We have confirmed that the questionnaire was received by
Filiz (see Memorandum to the File dated March 4, 1998) and,
accordingly, for the reasons described below, we are assigning to Filiz
a margin based on adverse 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 Filiz 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 Filiz.
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 Filiz failed to cooperate by not responding to our
[[Page 42375]]
antidumping questionnaire and, thus, having not acted to the best of
its ability to comply with requests for information, we have determined
that an adverse inference with respect to Filiz 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 to be used. However, in an annual 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 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 Turkish pasta, is
inappropriate. We have assigned Feliz the rate of 63.29 percent as
adverse facts available, for purposes of these preliminary results.
This margin is the same margin derived from the petition that was
corroborated and assigned to Feliz during the investigation. (See,
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Pasta from Turkey, 61 FR 30309 (June 14, 1996).) For purposes of this
preliminary determination, we find that this margin continues to be of
probative value. 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.
Comparisons to Normal Value
To determine whether sales of certain pasta from Turkey were made
in the United States at less than fair value, we compared the
constructed export price (CEP) to the normal value (NV). Because
Turkey's economy experienced high inflation during the POR (over 70
percent), as is Department practice, we limited our comparisons to home
market sales made during the same month in which the U.S. sale occurred
and did not apply our ``90/60 contemporaneity rule (see, e.g., Turkish
Pipe and Tube and Certain Porcelain on Steel Cookware from Mexico:
Final Results of Antidumping Duty Administrative Review, 62 FR 42496,
42503 (August 7, 1997)). This methodology minimizes the extent to which
calculated dumping margins are overstated or understated due solely to
price inflation that occurred in the intervening time period between
the U.S. and home market sales.
We first attempted to compare products sold in the U.S. and home
markets that were identical with respect to the following
characteristics: pasta shape; type of wheat; additives; and enrichment.
However, we did not find any home market sales of merchandise that were
identical in these respects to the merchandise sold in the United
States. Accordingly, we compared U.S. products with the most similar
merchandise sold in the home market based on the characteristics listed
above, in that order of priority.
Constructed Export Price
We calculated CEP for Pastavilla, in accordance with subsections
772(b), (c) and (d) of the Act, because sales to the first unaffiliated
purchaser took place after importation into the United States. We based
CEP on packed delivered prices to the first unaffiliated customer in
the United States.
In accordance with section 772(c)(2)(A) of the Act, we made
deductions for movement expenses including inland freight from plant or
warehouse to port of exportation, foreign brokerage and handling,
international freight, marine insurance, U.S. duties, and U.S. inland
freight expenses (freight from port to the customer). We revised the
reported U.S. inland freight expenses to include the amount of the
taxes shown on the freight invoice. In addition, we increased the CEP
by the amount of the countervailing duties paid that were attributable
to an export subsidy, in accordance with section 772(c)(1)(c).
In accordance with section 772(d)(1), we deducted from the starting
price those selling expenses that were incurred in selling the subject
merchandise, including direct selling expenses (credit costs and bank
charges) and indirect selling expenses, that related to economic
activity in the United States. We also deducted from CEP an amount for
profit in accordance with section 772(d)(3) of the Act.
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 Pastavilla'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 Pastavilla'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.
Sales to Affiliated Parties
Pastavilla and its affiliated home market distributor made home-
market sales to an affiliated supermarket chain during the POR. Because
Pastavilla could not report the price to the unaffiliated customers of
the supermarket chain, in accordance with section 351.403(c) of the
Department's regulations, we performed an analysis to determine whether
the prices to the affiliated supermarket chain were comparable to the
prices to unaffiliated parties. We compared Pastavilla's sales prices
to the affiliated supermarket chain, for identical products, to sales
prices to all other unaffiliated customers, net of all movement
charges, discounts, rebates, direct expenses, and packing. Where prices
to the affiliated party were on average 99.5 percent or more of the
price to the unaffiliated parties, we determined that sales made to the
affiliated party were at arm's length (see 19 CFR 351.403(c) and 62 FR
at 27355). We only included in our margin analysis those sales to the
affiliated party that were made at arm's length.
[[Page 42376]]
Cost of Production Analysis
Before making any comparisons to normal value, we conducted a COP
analysis to determine whether Pastavilla's home market sales were made
below the cost of production. We calculated the COP based on the sum of
Pastavilla's cost of materials and fabrication for the foreign like
product, plus amounts for selling, general, and administrative expenses
(SG&A) and packing, in accordance with section 773(b)(3) of the Act. We
relied on Pastavilla's information as submitted, except in the specific
instances discussed below.
As noted above, we determined that the Turkish economy experienced
significant inflation during the POR. Therefore, to avoid the
distortive effect of inflation on our comparison of costs and prices,
we requested that Pastavilla submit the product-specific cost of
manufacturing (COM) incurred during each month of the POR. We
calculated a POR-average COM for each product after indexing the
reported monthly costs during the POR to an equivalent currency level
using the Turkish wholesale price index from the International
Financial Statistics published by the International Monetary Fund
(IMF). We then restated the POR-average COM in the currency value of
each respective month.
We revised Pastavilla's submitted G&A expense rate to exclude
Duzey's G&A expenses and its cost of sales from the calculation of the
rate. In addition, we calculated a severance rate and multiplied the
revised G&A expense rate, the reported interest expense rate, and the
severance expense rate by the monthly COMs to derive product-specific
monthly COPs. (See Memorandum to Christian Marsh from Stan Bowen dated
July 31, 1998 for further details.)
Test of Home Market Prices
We compared the product-specific monthly COPs (less selling
expenses) to home market sales of the foreign like product in order to
determine whether sales had been made at prices below the COP. We
determined the net home market prices for the below-cost test by
subtracting from the gross unit price any applicable movement charges,
discounts, rebates, direct and indirect selling expenses, and packing
expenses.
Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of Pastavilla's sales of a given product were 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 during the six-month period 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).
Price-to-Price Comparisons
We calculated NV based on CIF or delivered prices to home market
customers. We made deductions from the starting price for inland
freight, inland insurance, 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 adjustments for direct
expenses, including imputed credit expenses, advertising, warranty
expenses, and interest revenue, in accordance with section
773(a)(6)(C)(iii) of the Act. We recalculated credit expenses and
inventory carrying costs using the monthly short-term Turkish interest
rates from the Economist.\2\
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\2\ The Economist was the only source we found that published
short-term lending rates for Turkey.
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We also made adjustments 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 for the foreign like product and subject merchandise,
using POR-average costs as adjusted for inflation for each month of the
POR, as described in the Cost of Production Analysis section above.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, we determined
NV based on sales in the comparison market at the same level of trade
as the U.S. CEP sales, 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 sales were at different levels of
trade we examined stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated (or arm's length) customers. If the comparison-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 comparison-
market 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, 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 detailed description of our level-of-trade analysis
for these preliminary results, see the July 31, 1998, Level of Trade
Memorandum to Susan Kuhbach, on file in Import Administration's Central
Records Unit (Room B-099) of the main Commerce building.
Currency Conversion
Because this proceeding involves a high-inflation economy, we
limited our comparison of U.S. and home market sales to those occurring
in the same month (as described above) and only used daily exchange
rates. (See Steel Cookware from Mexico and Notice of Final
Determination of Sales at Less Than Fair Value: Certain Pasta from
Turkey, 61 FR 30309 (June 14, 1996).)
The Department's preferred source for daily exchange rates is the
Federal Reserve Bank. However, the Federal Reserve Bank does not track
or publish exchange rates for the Turkish Lira. Therefore, we made
currency conversions based on the daily exchange rates from the Dow
Jones Service, as published in the Wall Street Journal.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following percentage weighted-average margins exist for the period
January 19, 1996 through June 30, 1997:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Pastavilla................................................. 0
Filiz Gida................................................. 63.29
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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 30 days of the date of publication of this notice. (see
19 CFR 351.310(c)). Any hearing, if
[[Page 42377]]
requested, will be held 44 days after the date of publication, or the
first workday thereafter. 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. If these
preliminary results are adopted in our final results, we will instruct
the Customs Service not to assess antidumping duties on Pastavilla's
entries of the merchandise subject to the review. Upon completion of
this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of certain pasta from Turkey entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rates
for Pastavilla and Filiz 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; (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 (LTFV) 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 60.87
percent, the ``All Others'' rate established in the LTFV investigation
(See Notice of Antidumping Duty Order and Amended Final Determination
of Sales at Less Than Fair Value: Certain Pasta from Turkey, 61 FR
38546 (July 24, 1996)).
These cash deposit requirements, when imposed, shall remain in
effect until 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. 98-21231 Filed 8-6-98; 8:45 am]
BILLING CODE 3510-DS-P