[Federal Register: August 6, 2004 (Volume 69, Number 151)]
[Notices]
[Page 47876-47879]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au04-43]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-805]
Certain Pasta From Turkey: Notice of Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to a request by the petitioners, New World Pasta
Company, American Italian Pasta Company, and Dakota Growers Pasta
Company, the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain pasta
(pasta) from Turkey for the period July 1, 2002, through June 30, 2003.
We preliminarily determine that during the period of review (POR),
Filiz Gida Sanayi ve Ticaret A.S. (Filiz) and Tat Konserve A.S. (Tat),
successor-in-interest to Pastavilla Makarnacilik San. V. Tic. A.S.,
(Pastavilla) \1\ sold subject merchandise at less than normal value
(NV). If these preliminary results are adopted in the final results of
this administrative review, we will instruct the U.S. Customs and
Border Protection (CBP) to assess antidumping duties based on the
difference between the export price (EP) and NV.
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\1\ The Department has previously determined that Tat is the
successor-in-interest to Pastavilla Makarnacilik San. V. Tic. A.S.
(Pastavilla), and that Tat retains the antidumping and
countervailing duty deposit rates assigned to Pastavilla by the
Department in the most recently completed antidumping and
countervailing duty administrative reviews. See Notice of Final
Results of Antidumping and Countervailing Duty Changed Circumstances
Reviews: Certain Pasta from Turkey, 69 FR 1280 (January 8, 2004).
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Interested parties are invited to comment on these preliminary
results. Parties who submit comments in this proceeding should also
submit with them: (1) A statement of the issues; (2) a brief summary of
their comments; and (3) a table of authorities. Further, we would
appreciate it if parties submitting written comments would provide the
Department with an additional copy of the public version of any such
comments on diskette.
EFFECTIVE DATE: August 6, 2004.
FOR FURTHER INFORMATION CONTACT: Lyman Armstrong or Mark Young, AD/CVD
Enforcement, Office 3, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3601 or (202) 482-6397, respectively.
SUPPLEMENTARY INFORMATION
Background
On July 24, 1996, the Department published in the Federal Register
the antidumping duty order on pasta from Turkey (61 FR 38545). On July
2, 2003, we published in the Federal Register the notice of
``Opportunity to Request Administrative Review'' of this order, for the
period July 1, 2002, through June 30, 2003 (68 FR 39511).
On July 31, 2003, we received a request for review on behalf of
petitioners, for Filiz, Tat, Beslen Makarna Gida Sanayi ve Ticaret,
A.S., and Beslen Pazarlarma Gida Sanayi ve Ticaret A.S., respectively
(collectively Beslen), Gidasa Sabanci Gida Sanayi ve Ticaret, A.S.
(successor to Maktas Makarnacilik ve Ticaret, A.S.) (Gidasa), and Oba
Makarnacilik Sanayi ve Ticaret, A.S., (Oba) in accordance with 19 CFR
351.213(b)(1). On August 22, 2003, we published the notice of
initiation of this antidumping duty administrative review covering the
period July 1, 2002, through June 30, 2003, for Filiz, Tat, Beslen,
Gidasa, and Oba. See Notice of Initiation, 68 FR 50750 (August 22,
2003).
On September 10, 2003, we sent the antidumping duty questionnaires
to Filiz, Tat, Beslen, Gidasa, and Oba.\2\
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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 manner in
which it sells that merchandise in all of its markets. Section B
requests a complete listing of all home market sales or, if the home
market is not viable, of sales in the most appropriate third-country
market (this section is not applicable to respondents in non-market
economy cases). Section C requests a complete listing of U.S. sales.
Section D requests information on the cost of production of the
foreign like product and the constructed value of the merchandise
under investigation. Section E requests information on further
manufacturing.
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On September 29, 2003, Oba sent a letter to the Department stating
that it had no shipments of subject merchandise to the United States.
On October 3, 2003, petitioners withdrew their request for review for
Beslen, Gidasa, and Oba.
For both Filiz and Tat, the Department disregarded sales below the
cost of production during the most recently completed segment of the
proceeding in which these companies participated.\3\ Therefore,
pursuant to section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as
amended (the Act), we had reasonable grounds to believe or suspect that
sales by these companies of the foreign like product under
consideration for the determination of NV in this review were made at
prices below the cost of production (COP). Thus, we initiated a cost
investigation of Filiz and Tat at the time we initiated the antidumping
review.
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\3\ For Tat, the fourth administrative review covering the
period July 1, 1999, through June 30, 2000, was the most recently
completed review. See Certain Pasta From Turkey: Final Results of
Antidumping Duty Administrative Review and Determination Not To
Revoke the Antidumping Duty Order in Part, 67 FR 298 (January 3,
2002) (Pasta from Turkey 4). For Filiz, the fifth administrative
review covering the period July 1, 2000, through June 30, 2001, was
the most recently completed review. See Certain Pasta From Turkey:
Final Results of Antidumping Duty Administrative Review and
Determination Not To Revoke the Antidumping Duty Order in Part, 68
FR 6880 (February 11, 2003) (Pasta from Turkey 5).
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Filiz and Tat submitted their sections A through D questionnaire
responses on October 31, 2003, and November 12, 2003, respectively.
Both Tat and Filiz submitted voluntary supplemental submissions to the
Department on December 18, 2003. Tat and Filiz also
[[Page 47877]]
submitted a second voluntary submission on February 24, and February
26, 2004, respectively.
The Department issued supplemental sections A through D
questionnaires to Tat on February 26, 2004, March 11, 2004, and March
25, 2004. Tat submitted its responses to our supplemental
questionnaires on March 25, 2004, April 8, 2004, and April 15, 2004,
respectively. The Department issued supplemental sections A through D
questionnaires to Filiz on March 25, 2004. Both Filiz's and Tat's
supplemental sections A through D questionnaires were based upon
submissions filed on October 31, 2003, November 12, 2003, and December
18, 2003, respectively. Filiz submitted its response to our
supplemental questionnaire on April 19, 2004.
On April 28, 2004, the Department returned Tat's and Filiz's second
voluntary submission dated February 24, and February 26, 2004,
respectively, as untimely filed new factual information pursuant to 19
CFR 351.301(b)(2). See Memorandum to File Re: Tat and Filiz to Strike
Unsolicited Questionnaire Responses from the Record, dated April 28,
2004.
On March 17, 2004, the Department published a notice postponing the
preliminary results of this review until July 29, 2004.\4\ See Certain
Pasta from Italy and Turkey: Extension of Preliminary Results 2002/2003
Antidumping Duty Administrative Reviews, 69 FR 12641 (March 17, 2004).
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\4\ There was a typographical error in the notice of ``Extension
of Preliminary Results of Antidumping Duty Administrative Reviews;''
the preliminary results of this review are actually due on July 30,
2004.
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We verified the sales and cost information submitted by Tat from
May 10 through May 21, 2004. We did not verify the sales or cost
information submitted by Filiz in the instant review.
Scope of Review
Imports covered by this review are shipments of certain non-egg dry
pasta in packages of five pounds (2.27 kilograms) or less, whether or
not enriched or fortified or containing milk or other optional
ingredients such as chopped vegetables, vegetable purees, milk, gluten,
diastases, vitamins, coloring and flavorings, and up to two percent egg
white. The pasta covered by this scope is typically sold in the retail
market, in fiberboard or cardboard cartons, or polyethylene or
polypropylene bags of varying dimensions.
Excluded from the scope of this review are refrigerated, frozen, or
canned pastas, as well as all forms of egg pasta, with the exception of
non-egg dry pasta containing up to two percent egg white.
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 subheading is provided for convenience and
Customs purposes, the written description of the merchandise subject to
the order is dispositive.
Verification
As provided in section 782(i) of the Act, we verified the cost and
sales information provided by Tat. 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 a verification report placed in
the case file in the central records unit (CRU). We revised certain
sales and cost data based on verification findings; see Tat's
Preliminary Calculation Memorandum (Preliminary Calculation Memorandum)
(July 30, 2004) and Verification of the Sales Questionnaire of Tat
(July 30, 2004) on file in the CRU.
Product Comparisons
In accordance with section 771(16) of the Act, the Department first
attempted to match contemporaneous sales of products sold in the United
States and comparison markets that were identical with respect to the
following characteristics: (1) Pasta shape; (2) type of wheat; (3)
additives; and (4) enrichment. Where there were no sales of identical
merchandise in the home market to compare with U.S. sales, we compared
U.S. sales with the most similar product based on the characteristics
listed above, in descending order of priority.
For purposes of the preliminary results, where appropriate, we have
calculated the adjustment for differences in merchandise based on the
difference in the variable cost of manufacturing between each U.S.
model and the most similar home market model selected for comparison.
Proposed Modification to Wheat Codes
Besides the wheat codes outlined in their questionnaire
responses,\5\ Filiz and Tat have classified an additional variety of
wheat used in the production of pasta as a separate wheat code. In the
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Pasta From Italy, 61 FR 30326 (June 14, 1996) (Pasta Investigation), we
established that differences in wheat quality may be commercially
significant as measured by ash content, gluten content and cost. See
Pasta Investigation at 30346. Where respondents have been able to
justify differences due to ash and gluten content, as well as cost, the
Department has found that these differences result in more appropriate
product matches, as contemplated by section 771(16) of the Act. Id.
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\5\ 100 percent durum semolina and 100 percent whole wheat.
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However, we preliminarily determine that both Filiz and Tat's
second wheat code (Wheat code 2) has failed to meet the standards
outlined in the Pasta Investigation. Specifically, Filiz and Tat failed
to provide any evidence that indicate ash content, gluten content or
cost differed among their wheat codes. Therefore, Tat's and Filiz's
wheat codes 1 and 2 were combined for the purposes of these preliminary
results. For further discussion of the wheat code, see the company-
specific calculation memoranda on file in the CRU.
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 export
price (EP) to the NV, as described in the Export Price and Normal Value
sections of this notice. Because Turkey's economy experienced high
inflation during the POR, 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., Pasta from Turkey 5 and Notice of Preliminary Results
of Antidumping Duty Administrative Review: Certain Welded Carbon Steel
Pipe and Tube From Turkey, 69 FR 18049 (April 6, 2004) (Carbon Steel
Pipe and Tube). 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.
Export Price
For the price to the United States, we used EP in accordance with
section 772(a) of the Act because the merchandise was sold by the
producer or exporter outside the United States to the first
unaffiliated purchaser in the United States prior to importation and
constructed export price was not otherwise warranted based on the facts
on the record. We based EP on the packed C&F prices to the first
unaffiliated customer in the United States.
[[Page 47878]]
In accordance with section 772(c)(2) of the Act, we made
deductions, where appropriate, for movement expenses including inland
freight from plant or warehouse to port of exportation, foreign
brokerage handling and loading charges, and international freight. In
addition, we increased the EP by the amount of the countervailing
duties imposed that were attributable to an export subsidy, in
accordance with section 772(c)(1)(C).
Normal Value
A. Selection of Comparison Markets
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 Tat and Filiz'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 section 773(a)(1)(B) of the Act, because Tat
and Filiz's aggregate volume of home market sales of the foreign like
product was greater than five percent of the companies' aggregate
volume of U.S. sales of the subject merchandise, we determined that the
home market was viable for both companies.
B. Arm's-Length Test
Tat and Filiz reported sales of the foreign like product to an
affiliated end-user and an affiliated reseller. The Department
calculates the NV based on a sale to an affiliated party only if it is
satisfied that the price to the affiliated party is comparable to the
price at which sales are made to parties not affiliated with the
producer or exporter, i.e., sales at arms's-length. See 19 CFR
351.403(c). To test whether these sales were made at arm's-length, we
compared the starting prices of sales to affiliated and unaffiliated
customers net of all movement charges, direct selling expenses,
discounts and packing. In accordance with the Department's current
practice, if the prices charged to an affiliated party were, on
average, between 98 and 102 percent of the prices charged to
unaffiliated parties for merchandise identical or most similar to that
sold to the affiliated party, we consider the sales to be at arm's-
length prices. See 19 CFR 351.403(c). Conversely, where sales to the
affiliated party did not pass the arm's-length test, all sales to that
affiliated party have been excluded from the NV calculation. See
Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course
of Trade, 67 FR 69186 (Nov. 15, 2002).
C. Cost of Production Analysis
1. Calculation of Cost of Production (COP)
Before making any comparisons to NV, we conducted a COP analysis,
pursuant to section 773(b) of the Act, to determine whether each
respondent's comparison market sales were made below the COP. We
calculated the COP based on the sum of the cost of materials and
fabrication for the foreign like product, plus amounts for selling,
general, and administrative expenses (SG&A) and the cost of all
expenses incidental to packing and preparing the foreign like product
for shipment, in accordance with section 773(b)(3) of the Act. We
relied on the respondents' information as submitted, except in
instances where we used revised data based on verification findings.
See the company-specific calculation memoranda on file in the CRU, for
a description of any changes that we made.
As noted above, we determined that the Turkish economy experienced
high inflation during the POR. Therefore, to avoid the distortive
effect of inflation on our comparison of costs and prices, we requested
that each respondent submit the product-specific cost of manufacturing
(COM) incurred during each month of the period for which it reported
home market sales. We then calculated an average COM for each product
after indexing the reported monthly costs 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 average COM in the currency value of each
respective month. See, e.g., Pasta from Turkey 5 and Pasta from Turkey
4.
2. Test of Comparison Market Prices
As required under section 773(b) of the Act, for Filiz and Tat, we
compared the weighted-average COP to the weighted-average per unit
price of the comparison market sales of the foreign like product, to
determine whether their respective sales had been made at prices below
the COP within an extended period of time in substantial quantities.
For Tat and Filiz, we determined the net comparison 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 (also subtracted from the COP), and packing expenses.
3. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of 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 Tat or Filiz's sales of a
given product during the twelve-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. In such cases, because we
compared prices to POR-average costs (indexed for inflation), we also
determined that such sales were not made at prices which would permit
recovery of all costs within a reasonable period of time, in accordance
with section 773(b)(2)(D) of the Act. Therefore, for purposes of this
administrative review, for Tat and Filiz we disregarded the below-cost
sales of a given product of 20 percent or more and used the remaining
sales as the basis for determining NV, in accordance with section
773(b)(1) of the Act.
D. Calculation of Normal Value Based on Comparison Market Prices
We calculated NV based on ex-factory or delivered prices to
comparison market customers. We made deductions from the starting price
for inland freight, warehousing, discounts, and rebates. In accordance
with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing
costs and deducted comparison market packing costs, respectively. In
addition, we made circumstance of sale adjustments for direct expenses,
including imputed credit, advertising, promotions, and warranties, in
accordance with section 773(a)(6)(C)(iii) of the Act.
When comparing U.S. sales with comparison market sales of similar,
but not identical, merchandise, we also made adjustments for physical
differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act. Pursuant to section 351.411 of the
Department's regulations, we based this adjustment on the difference in
the variable COM for the foreign like product and subject merchandise,
using twelve-month average costs, as adjusted for inflation for each
month of the twelve-month period, as described in the Cost of
Production Analysis section above.
[[Page 47879]]
E. Level of Trade (LOT)
In accordance with section 773(a)(1)(B) of the Act, we determine NV
based on sales in the comparison market at the same LOT as the U.S. EP
sales, to the extent practicable. When there are no sales at the same
LOT, we compare U.S. sales to comparison market sales at a different
LOT.
Pursuant to section 351.412 of the Department's regulations, to
determine whether comparison market sales are at a different LOT, we
examine 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 are at a
different LOT 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 LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act.
Tat and Filiz reported only one level of trade in both the U.S. and
home markets. We compared all EP sales to these home market sales.
Therefore, no LOT adjustment was necessary.
For a detailed description of our LOT methodology and a summary of
company-specific LOT findings for these preliminary results, see,
Preliminary Calculation Memorandum for each company on file in the CRU.
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 Carbon Steel Pipe and Tube.
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. See, e.g.,
Pasta from Turkey 5 and Pasta from Turkey 4.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following percentage weighted-average margins exist for the period July
1, 2002, through June 30, 2003:
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Margin
Manufacturer/exporter (percent)
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Tat......................................................... 10.86
Filiz....................................................... 8.65
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The Department will disclose the calculations performed within five
days of the date of publication of this notice to the parties of this
proceeding in accordance with 19 CFR 351.224(b). An interested party
may request a hearing within 30 days of publication of these
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested,
will be held 44 days after the date of publication, or the first
working day thereafter. Interested parties may submit case briefs no
later than 30 days after the date of publication of these preliminary
results of review. Rebuttal briefs, limited to issues raised in such
briefs, may be filed no later than 37 days after the date of
publication. Parties who submit arguments are requested to submit with
the argument (1) a statement of the issue, (2) a brief summary of the
argument and (3) a table of authorities. Further, we would appreciate
it if parties submitting written comments would provide the Department
with an additional copy of the public version of any such comments on
diskette. The Department will issue the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such comments, or at a hearing, if requested,
within 120 days of publication of these preliminary results.
Assessment Rate
Upon completion of this administrative review, pursuant to 19 CFR
351.212(b), the Department will calculate an assessment rate on all
appropriate entries. We will calculate importer-specific duty
assessment rates on the basis of the ratio of the total amount of
antidumping duties calculated for the examined sales to the total
entered value of the examined sales for that importer. Where the
assessment rate is above de minimis, we will instruct CBP to assess
duties on all entries of subject merchandise by that importer.
Cash Deposit Requirements
To calculate the cash-deposit rate for each producer and/or
exporter included in this administrative review, we divided the total
dumping margins for each company by the total net value for that
company's sales during the review period.
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 the companies
listed above will be the rates established in the final results of this
review; (2) for previously reviewed or investigated companies, the cash
deposit rate will continue to be the company-specific rate published
for the most recent final results in which that manufacturer or
exporter participated; (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 final results 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 51.49
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.
Notification to Importers
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f) to file a certificate regarding
the reimbursement of antidumping and countervailing 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 and/or countervailing
duties occurred and the subsequent assessment of double antidumping
duties increased by the amount of antidumping and/or countervailing
duties reimbursed.
This administrative review is issued and published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18036 Filed 8-5-04; 8:45 am]