63 FR 66121
NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
[C-475-819]
Certain Pasta from Italy: Final Results of New Shipper Countervailing Duty
Administrative Review
Tuesday, December 1, 1998
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AGENCY: Import Administration, International Trade Administration, Department of
Commerce.
ACTION: Notice of Final Results of New Shipper Countervailing Duty Administrative Review.
SUMMARY: On Septmember 1, 1998, the Department of Commerce published in the Federal Register
the preliminary results of its new shipper administrative review of the countervailing duty
order on certain pasta from Italy for the period January 1, 1997, through December 31, 1997.
We have now completed this review and determine the net subsidy to be 0.95 percent ad valorem.
We will instruct the Customs Service to assess countervailing duties with respect to all
shipments of the subject merchandise by Co. R. EX. S.r.L., the new shipper to this review, entered
during this period.
EFFECTIVE DATE: December 1, 1998.
FOR FURTHER INFORMATION CONTACT: Vincent Kane or Sally Hastings, Office of AD/CVD
Enforcement, Group I, Import Administration, U.S. Department of Commerce, Room 3099, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-2815 or
482-3464, respectively.
Applicable Statute: 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). The Department of Commerce (the Department) is conducting
this administrative
review in accordance with section 751(a) of the Act. All other references are to the Department's
regulations codified at 19 CFR Part 351 et seq. Antidumping Duties; Countervailing Duties;
Final Rule 62 FR 27296 (May 19, 1997), unless otherwise indicated.
SUPPLEMENTARY INFORMATION:
Background
On September 1, 1998, the Department published in the Federal Register (63 FR 46411) the
preliminary results of the new shipper administrative review of the countervailing duty order
on certain pasta from Italy. The Department has now completed this new shipper administrative
review pursuant to section 751(a)(2)(B) of the Act, and in accordance with 19 CFR 351.214. We
invited interested parties to comment on the preliminary results. We received no comments. The
review covers CO.R.EX., an exporter of the subject merchandise, and CO.R.EX.'s subcontractor.
(CO.R.EX. does not produce pasta but has a subcontractor produce pasta for it from semolina
supplied by Co.R.EX.) This review covers 24 programs.
Scope of the Review
The merchandise under review consists 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 polyethyelen 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 one of the following agencies: Instituto Mediterraneo Di Certificazione,
Bioagricoop Scrl 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 review.
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The merchandise under review is currently classified under item 1902.19.20 of the Harmonized
Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for
convenience and customs purposes, or written description of the scope of this review is dispositive.
Furthermore, on July 30, 1998, the Department issued a scope ruling that
multipacks consisting of six one-pound packages of pasta, which are shrink wrapped into a single
package, are within the scope of the orders. (See July 30, 1998, letter from Susan H. Kunbach, Acting
Deputy Assistant Secretary for Import Administration, to Barbara P. Sidari, Vice President, Joseph
A. Sidari Company, Inc.)
Period of Review
The period of review ("POR") for which we are measuring subsidies is calendar year 1997.
Subsidies Valuation Information
Benchmark for Long-term Loans and Discount Rate: The companies under review did not take out
any long-term, fixed-rate, lira-denominated loans or other debt obligations which could be used as
benchmarks in any of the years in which grants were received or government loans under
investigation were given. In the Final Affirmative Countervailing Duty Determination; Certain
Stainless Steel Wire Rod from Italy, 63 FR 87077 (July 29, 1998), the Department
determined, based on information gathered during verification, that the Italian Bankers' Association
(ABI) prime rate is the most suitable benchmark for long-
term financing to Italian companies. Therefore, we used the Italian ABI prime rate increased by the
average spread over the ABI prime rate charged by banks on loans to commercial customers as the
benchmark for long-term loans and the discount rate.
Allocation Period: In British Steel plc. v. United States, 879 F. Supp. 1254, 1289 (CIT 1955), aff'd
in part and rev'd in part on other grounds, 127 F.3d 1471 (Fed. Cir. 1997), the U.S. Court of
International Trade (the Court) ruled against the allocation methodology for non-recurring
subsidies that the Department had employed for the past decade, which was articulated in the
General Issues Appendix, appended to the Final Countervailing Duty Determination; Certain
Steel Products from Austria, 58 FR 37225 (July 9, 1993) ("GIA"). In accordance with the Court's
remand order, the Department determined that the most reasonable method of deriving the
allocation period for nonrecurring subsidies is a company-specific average useful life ("AUL") of
non-renewable physical assets. This remand determination was affirmed by the Court on July 4,
1996. See British Steel plc v. United States, 929 F. Supp 426, 439 (CIT 1996). Accordingly, the
Department has applied this method to determine the appropriate allocation period in this review.
Consistent with our approach in the investigation segment of this proceeding, Final Affirmative
Countervailing Duty Determination: Certain Pasta ("Pasta") from Italy (61 FR 30288, June
14, 1996) ("Pasta from Italy"), we
determined that the Law 64/86 grant received by CO.R.EX.'s subcontractor was non-recurring. For
purposes of allocating the Law 64/86 grant, CO.R.EX.'s subcontractor submitted an AUL calculation
based on depreciation and asset values of productive assets reported in its financial statements. This
AUL was derived by dividing the sum of average gross book value of depreciable fixed assets over
the past ten years by the average depreciation charges over this period. We found this calculation to
be reasonable and consistent with our company-specific AUL objective. In this manner, we
calculated an AUL for CO.R.EX.'s subcontractor. We have used this calculated AUL for the allocation
period for the Law 64/86 industrial development grant, the only non-recurring subsidy received by
respondents.
Analysis of Programs
I. Programs Conferring Subsidies
Based upon our analysis of the responses to our questionnaires and the record of this review, we
determine the following:
Programs Previously Determined to Confer Subsidies
In the preliminary results, we found that the programs listed below conferred countervailable
benefits on the subject merchandise. We did not receive any comments on these programs from
interested parties. Our review of the record, however, has led us to modify the calculations for each
of these programs. First, we revised the denominator used to calculate the subsidy rate for each of
the programs listed below. For the preliminary results, we based the denominator on f.o.b. sales
values calculated on the basis of estimates of inland freight charges. For these final results, we have
used actual inland freight charges in calculating f.o.b. sales values. These revised f.o.b. sales values
served as the denominators for calculating the subsidy rate for each of these programs.
Further, we corrected an error in the calculation of the discount rate used to allocate the benefit
amount for a Law 64/86 industrial development grant to CO.R.EX.'s subcontractor and for the Law
341/95 consolidation loan received by CO.R.EX. For a further discussion of this correction, see
Memorandum to File: Calculation Notes for Final Results, dated November 22, 1998 (a public
version of which is on file in room B099 of the main Commerce Building).
As a result of the calculation changes described above, the subsidy rates for the programs listed
below changed as follows:
A. Industrial Development Grants Under Law 64/86
The subsidy rate for this program decreased from 0.18 percent to 0.15 percent ad valorem.
B. Social Security Reductions and Exemptions
1. Sgravi Benefits
The subsidy rate for this program decreased from 0.01 percent to 0.00 percent ad valorem.
2. Fiscalizzazione Benefits
The subsidy rate for this program decreased from 0.06 percent to 0.04 percent ad valorem.
3. Law 407/90 Benefits
The subsidy rate for this program decreased from 0.06 percent to 0.04 percent ad valorem.
4. Law 863 Benefits
The subsidy rate for this program decreased from 0.03 percent to 0.01 percent ad valorem.
Program Determined in This Review to Confer Subsidies
In the preliminary results, we found that the program listed below conferred countervailable
benefits on the subject merchandise. We did not receive any comments on this program from
interested parties. Our review of the record, however, has led us to modify the calculations for this
program, as described above in the section.
Programs Previously Determined to Confer Subsidies
Debt Consolidation Law 341/95
The subsidy rate for this program decreased from 0.93 percent to 0.88 percent ad valorem.
II. Programs Determined To Be Not Used
We determine that CO.R.EX. and its subcontractor did not apply for or
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receive benefits under the following programs during the POR:
A. VAT Reductions
B. Export Credits Under Law 227/77
C. Capital Grants Under Law 675/77
D. Retraining Grants Under Law 675/77
E. Interest Contributions on Bank Loans Under Law 675/77
F. Interest Grants Financed by IRI Bonds
G. Preferential Financing for Export Promotion Under Law 394/81
H. Corporate Income Tax (IRPEG) Exemptions
I. European Agricultural Guidance and Guarantee Fund
J. Urban Redevelopment Under Law 181
K. Local Income Tax (ILOR) Exemptions
L. Industrial Development Loans Under Law 64/86
M. Export Marketing Grants Under Law 304/90
N. Lump-Sum Interest Payment Under the Sabatini Law for Companies in Southern Italy
O. Remission of Taxes on Export Credit Insurance under Article 33 of Law 227/77
P. European Social Fund
Q. European Regional Development Fund
R. Export Restitution Payments
We did not receive any comments on these programs from the interested parties and our review of
the record has not led us to change our findings from the preliminary results.
Final Results of Review
For the period January 1, 1997 through December 31, 1997, we determine the net subsidy for
CO.R.EX. to be 0.95 percent ad valorem. We will instruct the Customs Service to assess
countervailing duties at this net subsidy rate on all entries of the subject merchandise from
CO.R.EX. entered, or withdraw from warehouse, for consumption on or after January 1, 1997 and on
or before December 31, 1997.
The Department also intends to instruct the Customs Service to collect a cash deposit of estimated
countervailing duties of 0.95 percent of the f.o.b. invoice value on all shipments of the
subject merchandise from CO.R.EX. entered, or withdrawn from warehouse, for consumption on or
after the date of publication of the final results of this new shipper review. The cash deposit rates for
all other producers/exporters remain unchanged from the last completed administrative review
(see Final Results of Countervailing Duty
Administrative Review: Certain Pasta from Italy 63 FR 35665 (August 14, 1998)).
This administrative review and notice are in accordance with sections 751(a) (2) (B) and 777 (i) (1)
of the Act and 19 CFR 351.214.
Dated: November 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-31983 Filed 11-30-98; 8:45 am]
BILLING CODE 3510-DS-M