Certain Pasta from Italy: Final Results of the Eleventh (2006) Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The U.S. Department of Commerce (“the Department”) has completed its administrative review of the countervailing duty order on certain pasta from Italy for the period January 1, 2006 through December 31, 2006. We find that De Matteis Agroalimentare S.p.A. (“De Matteis”), Pastificio Lucio Garofalo S.p.A. (“Garofalo”), and F.lli De Cecco di Filippo Fara San Martino S.p.A. (“De Cecco”) received countervailable subsidies, and that Pastificio Felicetti SrL (“Felicetti”) did not receive any countervailable subsidies. The final net subsidy rates for the reviewed companies are listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

February 3, 2009.

FOR FURTHER INFORMATION CONTACT:

Andrew McAllister or Brandon Farlander, AD/CVD Operations, Office 1, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1174 and (202) 482-0182, respectively.

SUPPLEMENTARY INFORMATION:

Background

On August 6, 2008, the Department published in the Federal Register its preliminary results of the administrative review of the countervailing duty order on certain pasta from Italy for the period January 1, 2006, through December 31, 2006. See Certain Pasta from Italy: Preliminary Results of the 11th (2006) Countervailing Duty Administrative Review, 73 FR 45721 (Aug. 6, 2008) (“Preliminary Results”).

Since the signing of the Preliminary Results, we sent a supplemental questionnaire to the Government of Italy (“GOI”) on July 31, 2008, and received the GOI response on August 13, 2008. We invited interested parties to comment on the preliminary results. A case brief was received from Garofalo on September 5, 2008. No rebuttal briefs were received, and the Department did not conduct a hearing in this review because none was requested.

Based on our analysis of the supplemental questionnaire response from the GOI, we have revised the net subsidy rates for De Matteis, Garofalo, and De Cecco. Therefore, the final results differ from the preliminary results.

Period of Review

The period of review (“POR”) for which we are measuring subsidies is January 1, 2006, through December 31, 2006.

Scope of the Order

Imports covered by the 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 the 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, Bioagricoop S.r.l., QC&I International Services, Ecocert Italia, Consorzio per il Controllo dei Prodotti Biologici, Associazione Italiana per l'Agricoltura Biologica, or Codex S.r.l. In addition, based on publicly available information, the Department has determined that, as of August 4, 2004, imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by Bioagricert S.r.l. are also excluded from this order. See Memorandum from Eric B. Greynolds to Melissa G. Skinner, dated August 4, 2004, which is on file in the Department's Central Records Unit (“CRU”) in Room 1117 of the main Department building. In addition, based on publicly available information, the Department has determined that, as of March 13, 2003, imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by Instituto per la Certificazione Etica e Ambientale (ICEA) are also excluded from this order. See Memorandum from Audrey Twyman to Susan Kuhbach, dated February 28, 2006, entitled “Recognition of Instituto per la Certificazione Etica e Ambientale (ICEA) as a Public Authority for Certifying Organic Pasta from Italy” which is on file in the Department's CRU.

The merchandise subject to review is currently classifiable under items 1901.90.90.95 and 1902.19.20 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are 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 antidumping and countervailing duty orders. See Memorandum from Edward Easton to Richard Moreland, dated August 25, 1997, which is on file in the CRU.

(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 antidumping and countervailing duty orders. See Letter from Susan H. Kuhbach to Barbara P. Sidari, dated July 30, 1998, which is available 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 is within the scope of the antidumping and countervailing duty orders. 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 antidumping and countervailing duty orders. See Memorandum from John Brinkmann to Richard Moreland, dated May 24, 1999, which is available in the CRU.

(4) On April 27, 2000, the Department self-initiated an anti-circumvention inquiry to determine whether Pastificio Fratelli Pagani S.p.A.'s importation of pasta in bulk and subsequent repackaging in the United States into packages of five pounds or less constitutes circumvention with respect to the antidumping and countervailing duty orders on pasta from Italy pursuant to section 781(a) of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.225(b). See Certain Pasta from Italy: Notice of Initiation of Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders, 65 FR 26179 (May 5, 2000). On September 19, 2003, we published an affirmative finding of the anti-circumvention inquiry. See Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders on Certain Pasta from Italy: Affirmative Final Determinations of Circumvention of Antidumping and Countervailing Duty Orders, 68 FR 54888 (September 19, 2003).

Information Considered Since the Preliminary Results

In the seventh administrative review and the preliminary results of this review, we found the following social security reductions and exemptions (sgravi) programs countervailable: Law 223/91, Article 8, Paragraph 2 and Article 25, Paragraph 9. We provided the GOI with two opportunities to demonstrate that these programs are not countervailable but the GOI did not respond to the industry usage portion of these supplemental questionnaires.

For another social security benefit (provided under Legislative Decree 276/03), we stated in the preliminary results that we needed additional information. However, the GOI did not provide industry usage data in response to our post-preliminary questionnaire. Moreover, based on our review of the record evidence, we find that Legislative Decree 276/03 is a continuation of one or more other programs determined to be countervailable in the seventh administrative review (Law 25/55 or Law 56/87).

Based on the above, we find that the GOI has not provided sufficient information that would lead us to reconsider our prior findings that Social Security benefits under Law 223/91, Article 8, Paragraph 2 and Law 223/91, Article 25, Paragraph 9 are countervailable. Further, we find that, based upon record evidence, Legislative Decree 276/03 provides for a continuation of subsidy benefits which we previously determined were countervailable. Therefore, we are treating these benefits as countervailable subsidies for the final results.

For additional details, see January 27, 2009, Issues and Decision Memorandum for the Eleventh (2006) Countervailing Duty Administrative Review of Certain Pasta from Italy (“Decision Memorandum”).

As a result of the Department's finding with respect to Legislative Decree 276/03, there has been one change since the Preliminary Results which affects the subsidy rate for De Matteis, De Cecco, and Garofalo. See Decision Memorandum.

All issues raised in the case brief filed by Garofalo are addressed in the Decision Memorandum, which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which this interested party 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 Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/index.html. The paper copy and electronic version of the Decision Memorandum are identical in content.

Final Results of Review

In accordance with 19 CFR 351.221(b)(4)(i), we calculated individual subsidy rates for De Matteis, Garofalo, and De Cecco. For the revised rate calculations, see Memorandum to the File, “2006 Final Results Calculation Memorandum for De Matteis Agroalimentare S.p.A.,” dated January 27, 2009 (“De Matteis Final Calc Memo”); Memorandum to the File, “2006 Final Results Calculation Memorandum for F.lli De Cecco di Filippo Fara San Martino S.p.A.,” dated January 27 , 2009 (“De Cecco Final Calc Memo”); and Memorandum to the File, “2006 Final Results Calculation Memorandum for Pastificio Lucio Garofalo S.p.A.,” dated January 27, 2009 (“Garofalo Final Calc Memo”). For a complete analysis of the programs found to be countervailable and the basis for the Department's determination, see the Decision Memorandum.

For the period January 1, 2006, through December 31, 2006, we find the net subsidy rates for the producers/exporters under review to be those specified in the chart shown below:

The calculations will be disclosed to the interested parties in accordance with 19 CFR 351.224(b).

Because the countervailing duty rate for Felicetti is zero, we will instruct U.S. Customs and Border Protection (“CBP”) to liquidate entries for Felicetti during the period January 1, 2006, through December 31, 2006, without regard to countervailing duties in accordance with 19 CFR 351.106(c). For De Matteis, Garofalo, and De Cecco, the Department will instruct CBP to assess countervailing duties at these net subsidy rates. The Department will issue appropriate instructions directly to CBP 15 days after publication of these final results of review.

For all other companies that were not reviewed (except Barilla G. e R. F.lli S.p.A. and Gruppo Agricoltura Sana S.r.l., which are excluded from the order, and Pasta Lensi S.r.l. which was revoked from the order), the Department has directed CBP to assess countervailing duties on all entries between January 1, 2006, and December 31, 2006, at the rates in effect at the time of entry.

The Department also intends to instruct CBP to collect cash deposits of estimated countervailing duties at the rates shown above on all shipments of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review. Since the countervailable subsidy rate for Felicetti is zero, the Department will instruct CBP to continue to suspend liquidation of entries, but to collect no cash deposits.

For all non-reviewed firms (except Barilla G. e R. F.lli S.p.A. and Gruppo Agricoltura Sana S.r.l., which are excluded from the order, and Pasta Lensi S.r.l. which was revoked from the order), we will instruct CBP to collect cash deposits of estimated countervailing duties at the most recent company-specific or all-others rate applicable to the company. These rates shall apply to all non-reviewed companies until a review of a company assigned these rates is requested.

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 351.305(a)(3). 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.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

APPENDIX

List of Comments and Issues in the Decision Memorandum

Comment 1: Garofalo's Benchmark Rate for Its 1998 Loan under Law 64/86

Comment 2: Garofalo's Discount Rate for Grants under Law 64/86