[Federal Register: September 19, 2003 (Volume 68, Number 182)]
[Notices]
[Page 54888-54890]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19se03-47]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818, C-475-819]
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
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
ACTION: Affirmative Final Determinations of Circumvention of
Antidumping and Countervailing Duty Orders.
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SUMMARY: On April 27, 2000, the Department of Commerce (the Department)
self-initiated an anti-circumvention inquiry to determine whether an
Italian producer of pasta is circumventing the antidumping and
countervailing duty orders on certain pasta from Italy, issued July 24,
1996. The period of inquiry is July 1, 1998 through June 30, 1999. On
August 6, 2003, we preliminarily determined that certain pasta produced
in Italy by Pastificio Fratelli Pagani S.p.A. (Pagani) and exported to
the United States in packages of greater than five pounds, which are
subsequently repackaged in the United States into packages of five
pounds or less, constitutes circumvention of the antidumping and
countervailing duty orders on certain pasta from Italy, within the
meaning of section 781(a) of the Tariff Act of 1930, as amended (the
Act), and 19 CFR 351.225(g). We invited interested parties to comment
on our preliminary determinations. Interested parties did not submit
case briefs or request a hearing. Consequently, our preliminary
determinations remain unchanged for these final determinations.
EFFECTIVE DATE: September 19, 2003.
FOR FURTHER INFORMATION CONTACT: Zev Primor or Ronald Trentham, AD/CVD
Enforcement, Office IV, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, D.C. 20230; telephone: (202) 482-4114 or (202) 482-6320.
SUPPLEMENTARY INFORMATION:
Scope of Antidumping and Countervailing Duty Orders
Imports covered by these orders 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,
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 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 S.r.L., by QC&I International Services, by Ecocert Italia,
by Consorzio per il Controllo dei Prodotti Biologici, by Associazione
Italiana per l'Agricoltura Biologica, or Codex S.r.L.
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
these orders 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, on file in the Central Records Unit (CRU) of the main
Commerce Building, Room B-099.
[[Page 54889]]
(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, Acting Deputy Assistant Secretary for Import Administration,
to Barbara P. Sidari, Vice President, Joseph A. Sidari Company, Inc.,
dated July 30, 1998, on file in the CRU.
(3) On October 23, 1997, the petitioners filed a request that the
Department initiate an anti-circumvention investigation against Barilla
S.r.L. (Barilla). On October 5, 1998, the Department issued a final
determination that, pursuant to section 781(a) of the Act, Barilla was
circumventing the antidumping duty order by exporting bulk pasta from
Italy which it subsequently repackaged in the United States into
packages of five pounds or less for sale in the United States. See
Anti-Circumvention Inquiry of the Antidumping Duty Order on Certain
Pasta from Italy: Affirmative Final Determination of Circumvention of
the Antidumping Duty Order, 63 FR 54672 (October 13, 1998) (Barilla
Circumvention Inquiry).
(4) 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 may be 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 up to (and including) five pounds four ounces, and so
labeled, is within the scope of the antidumping and countervailing duty
orders. See Memorandum from John Brinkmann to Richard Moreland, dated
May 24, 1999, on file in the CRU.
Scope of the Anti-Circumvention Inquiry
The product subject to this anti-circumvention inquiry is certain
pasta produced in Italy by Pagani and exported to the United States in
packages of greater than five pounds (2.27 kilograms) that meets all
the requirements for the merchandise subject to the antidumping and
countervailing duty orders, with the exception of packaging size, and
which is repackaged into packages of five pounds (2.27 kilograms) or
less after entry into the United States.
Background
On August 30, 1999, we issued an antidumping questionnaire to
Pagani for the third administrative review of the antidumping duty
order, covering the period July 1, 1998 through June 30, 1999. In its
October 1, 1999, questionnaire response, Pagani stated that it
``exported sacks of non-subject bulk pasta for repackaging after
importation.'' Based upon our verification of Pagani's questionnaire
responses in the third administrative review, we initiated this
inquiry. See Certain Pasta from Italy: Notice of Initiation of Anti-
circumvention Inquiry on the Antidumping and Countervailing Duty
Orders, 65 FR 26179 (May 5, 2000) (Notice of Initiation). Since the
initiation of this inquiry, the following events have occurred.
On May 10, 2000, the Department issued a circumvention
questionnaire to Pagani. We requested information with respect to
Pagani's corporate structure, sales and shipment information, process
of repackaging in the United States, value of merchandise repackaged in
the United States, and pattern of trade and levels of imports.
On June 14, 2000, Pagani responded to the Department's
questionnaire. Pagani's response revealed that it did not have its own
manufacturing or repackaging facility in the United States. Rather, all
of the repackaging activity in the United States was conducted by an
unaffiliated party. Section 781(a) of the Act sets forth the criteria
the Department must examine when determining whether to include
merchandise completed or assembled in the United States within the
scope of an existing order. We determined it was necessary to collect
information from the unaffiliated U.S. party participating in the
repackaging operations to examine these criteria. Accordingly, on
December 7, 2000, the Department issued a supplemental circumvention
questionnaire to the unaffiliated U.S. repacker and a U.S. customer
that participated in repackaging. In addition, on December 7, 2000, we
issued a supplemental questionnaire to Pagani. On January 29, 2001,
Pagani responded to the Department's supplemental questionnaire. We did
not receive a response from the unaffiliated U.S. repacker or the U.S.
customer.
On August 6, 2003, we preliminarily determined that certain pasta
produced in Italy by Pagani and exported to the United States in
packages of greater than five pounds, which are subsequently repackaged
in the United States into packages of five pounds or less, constitutes
circumvention of the antidumping and countervailing duty orders on
certain pasta from Italy. See Anti-Circumvention Inquiry of the
Antidumping and Countervailing Duty Orders on Certain Pasta from Italy:
Affirmative Preliminary Determinations of Circumvention of Antidumping
and Countervailing Duty Orders, 68 FR 46571 (August 6, 2003) (Notice of
Preliminary Determinations). We invited interested parties to comment
on our preliminary determinations. Interested parties did not submit
case briefs or request a hearing.
Analysis
As detailed in the Notice of Preliminary Determinations, to make an
affirmative determination of circumvention, the elements under section
781(a)(1) of the Act must be satisfied, taking into account the factors
under section 781(a)(2) and 781(a)(3) of the Act. For these final
determinations, we adopt the analysis set forth in the Notice of
Preliminary Determinations, and determine that during the period
examined there was circumvention of the orders as a result of Pagani's
repackaging. First, the merchandise repackaged and sold in the United
States is within the same class or kind of merchandise that is subject
to the order. Second, bulk pasta was exported to the United States and
then assembled into smaller packages of five pounds or less after
importation. Third, we find that the process of assembly or completion
in the United States is minor and insignificant, since (A) the level of
investment in the United States is minimal; (B) the level of research
and development in the United States is non-existent; (C) the nature of
the production process in the United States is minor relative to the
entire process of pasta production; (D) the extent of the production
facilities in the United States is limited; and (E) the value of the
processing performed in the United States represents a small proportion
of the value of the merchandise sold in the United States. See Notice
of Preliminary Determinations, at 46574-46475. Fourth, the value of
imported parts or components is a significant portion of the total
value of the merchandise sold in the United States. Thus, we find
affirmative evidence of circumvention in accordance with sections
781(a)(1) and (2) of the Act.
We next considered the factors required by section 781(a)(3) of the
Act, in reaching our determinations. As explained in detail in the
Notice of Preliminary Determinations, the facts concerning pattern of
trade, sourcing, affiliation, and import trends indicate during the
period under consideration there was circumvention of the pasta orders.
Consequently, our statutory requirements lead us to find that during
the period examined there was
[[Page 54890]]
circumvention of the orders as a result of the repackaging operation
discussed above.
Certification Option
Pagani certified that the U.S. repackaging operation, which began
in the third quarter of 1997, was terminated for long cuts in 1999.
With regard to short cuts, Pagani submitted a certification from the
U.S. repacker stating that short cuts of pasta from Pagani were last
invoiced on February 8, 2000. Thus, Pagani asserts that the repackaging
operations have ceased.
As discussed in the Notice of Preliminary Determinations, Pagani
requested that the Department implement a certification scheme, whereby
each of Pagani's unaffiliated U.S. customers would certify that it
would resell all pasta purchased from Pagani in the packaging in which
the pasta was delivered to the U.S. customer, and would not repack any
pasta from packages greater than five pounds into packages of five
pounds or less. According to Pagani, this scheme would enable the
Department to exclude from the scope of the antidumping and
countervailing duty orders bulk pasta that was not destined for
repackaging after importation, e.g., bulk pasta shipped directly to
institutional or food service users.
For these final determinations, we determine to adopt the
certification scheme proposed by Pagani. According to that scheme,
Pagani and each of Pagani's unaffiliated customers who purchase bulk
pasta would certify that the customer would not repackage any bulk
pasta into packages of five pounds or less.
Suspension of Liquidation
We have made affirmative final determinations that Pagani's
activities for the repacking of bulk pasta into packages of five pounds
or less for sale in the United States constitute circumvention. The
merchandise subject to suspension of liquidation is pasta in packages
of greater than five pounds as defined in the Scope of the Anti-
Circumvention Inquiry section of this notice, unaccompanied by the
appropriate certification.
In accordance with section 773(d) of the Act, the Department
normally would direct the U.S. Bureau of Customs and Border Protection
(BCBP) to suspend liquidation and to require a cash deposit of
estimated duties, at the applicable rate, on all unliquidated entries
of bulk pasta from Italy produced by Pagani, not accompanied by
appropriate certification, that were entered, or withdrawn from
warehouse, for consumption on or after April 27, 2000, the date of
initiation of this anti-circumvention inquiry. However, due to
cessation of Pagani's circumvention activity, the Department will not
instruct BCBP to require such certification until such time as
petitioner or other interested parties provide to the Department a
reasonable basis to believe or suspect that the order is being again
circumvented. If such information is provided, we will require
certification only for the product(s) for which evidence is provided
that such products are being used in the circumvention of the order.
Normally we will require only the importer of record to certify to the
end-use of the imported merchandise. If it later proves necessary for
adequate implementation, we may also require Pagani to provide such
certification on invoices accompanying shipments to the United States.
See Notice of Final Determinations of Sales at Less Than Fair Value:
Certain Large Diameter Carbon and Alloy Seamless Standard, Line and
Pressure Pipe from Japan; and Certain Small Diameter Carbon and Alloy
Seamless Standard, Line and Pressure Pipe from Japan and the Republic
of South Africa, 65 FR 25907 (May 4, 2000).
These affirmative final circumvention determinations are in
accordance with section 781(a) of the Act and 19 CFR 351.225.
Dated: September 12, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-23961 Filed 9-18-03; 8:45 am]