Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Notices 39285 

1New World Pasta Company, Dakota Growers 

Pasta Company, and American Italian Pasta 

Company. 

2See Memorandum to James Terpstra, from the 

Team regarding Selection of Respondents for 

Individual Review, September 25, 2008. 

3See Certain Pasta From Italy: Notice of Partial 

Rescission of Antidumping Duty Administrative 

Review, 74 FR 23392 (May 19, 2009). 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–475–818] 

Certain Pasta from Italy: Notice of 

Preliminary Results of Twelfth 

Antidumping Duty Administrative 

Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to requests by 

interested parties, the Department of 

Commerce (‘‘the Department’’) is 

conducting an administrative review of 

the antidumping duty order on certain 

pasta (‘‘pasta’’) from Italy for the period 

of review (‘‘POR’’) July 1, 2007, through 

June 30, 2008. This review covers four 

producers/exporters of subject 

merchandise. We preliminarily 

determine that during the POR, 

respondents 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 U.S. Customs 

and Border Protection (‘‘CBP’’) to assess 

antidumping duties on all appropriate 

entries of subject merchandise during 

the POR. Interested parties are invited to 

comment on these preliminary results. 

DATES: Effective Date: August 6, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Hargett or Victoria Cho, 

AD/CVD Operations, Office 3, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–4161 or (202) 482– 

5075, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 24, 1996, the Department 

published in the Federal Register the 

antidumping duty order on pasta from 

Italy. See Notice of Antidumping Duty 

Order and Amended Final 

Determination of Sales at Less Than 

Fair Value: Certain Pasta From Italy, 61 

FR 38547 (July 24, 1996). 

On July 11, 2008, the Department 

published a notice of opportunity to 

request an administrative review of the 

antidumping duty order on certain pasta 

from Italy. See Antidumping or 

Countervailing Duty Order, Finding, or 

Suspended Investigation: Opportunity 

to Request Administrative Review, 73 

FR 39948 (July 11, 2008). We received 

requests for review from petitioners 1

and from individual Italian exporters/ 

producers of pasta, in accordance with 

19 CFR 351.213(b)(1) and (2). On August 

26, 2008, the Department published the 

notice of initiation of this antidumping 

duty administrative review covering the 

period July 1, 2007, through June 30, 

2008, listing the following companies as 

respondents: Arrigi, S.p.A. (‘‘Arrigi’’), 

Domenico Paone fu Erasmo S.p.A., F. 

Divella SpA (‘‘Divella’’), Industria 

Alimentare Colavita, S.p.A., P.A.M. 

S.p.A. (‘‘PAM’’), Pasta Lensi, Pasta Zara 

SpA (‘‘Zara’’), Pastificio Di Martino 

Gaetano & F.lli S.r.L. (‘‘Di Martino’’), 

Pastificio Felicetti S.r.L. (‘‘Felicetti’’), 

Pastificio Fratelli Pagani S.p.A., 

Pastificio Labor S.r.L., Pastificio Lucio 

Garofalo (‘‘Garofalo’’), Pastificio 

Riscossa F.Illi Mastromauro S.r.L., 

Rummo S.p.A. Molino e Pastificio, and 

Rustichella d’Abruzzo S.p.A. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews, 73 FR 50308 (August 26, 2008) 

(‘‘Initiation Notice’’). 

On August 26, 2008, due to the 

significant number of requests received 

and the Department’s resource 

constraints at the time of initiation of 

the instant review, the Department 

informed known interested parties its 

intent to limit the number of companies 

examined in the current review, and 

requested comments. See memo to 

Melissa Skinner, through James 

Terpstra, from Christopher Hargett, 

‘‘2007–2008 Antidumping Duty 

Administrative Review of Certain Pasta 

from Italy: Customs and Border 

Protection Data for Selection of 

Respondents for Individual Review,’’ 

dated August 26, 2008. 

On September 25, 2008, the 

Department selected the two exporters/ 

producers accounting for the largest 

volume of exports—PAM and Garofalo, 

as mandatory respondents.2

As a result of timely withdrawals of 

request for review, we rescinded this 

review, in part, with respect to Zara, 

Felicetti, Divella, Di Martino, and 

Arrighi.3

Between September 2008 and May 

2009, the Department issued its initial 

questionnaire and supplemental 

questionnaires to each respondent, as 

applicable. We received responses to the 

Department’s initial and supplemental 

questionnaires on December 3, 2008, 

December 10, 2008, March 5, 2009, 

April 10, 2009, May 4, 2009, May 11, 

2009, and May 29, 2009, from PAM. 

Garofalo provided responses to the 

Department’s initial and supplemental 

questionnaires on November 10, 2008, 

November 24, 2008, December 10, 2009, 

April 15, 2009, May 14, 2009, and July 

7, 2009. 

On March 16, 2009, the Department 

fully extended the due date for the 

preliminary results of review from April 

2, 2009, to July 31, 2009. See Certain 

Pasta from Italy: Extension of Time 

Limits for the Preliminary Results of 

Twelfth Antidumping Duty 

Administrative Review, 74 FR 11084 

(March 16, 2009). 

On May 8, 2009, the petitioners 

alleged that a particular market situation 

exists with respect to the Italian market 

for certain pasta that warrants the 

Department rejecting home market 

prices as the basis for NV and instead, 

relying on constructed value (‘‘CV’’). On 

May 20, 2009, the Department requested 

additional information from the 

petitioners regarding their allegation. 

On June 12, 2009, the petitioners 

provided the information requested. On 

June 22, 2009, the respondents 

submitted rebuttal comments. 

Scope of the Order 

Imports covered by this 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 this 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, 

by Bioagricoop Scrl, by QC&I 

International Services, by Ecocert Italia, 

by Consorzio per il Controllo dei 

Prodotti Biologici, by Associazione 

Italiana per l’Agricoltura Biologica, or 

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, ‘‘Recognition 

of Instituto per la Certificazione Etica e 

Ambientale .’’ 

The merchandise subject to this order 

is currently classifiable under 

subheadings 1901.90.95 and 1902.19.20 


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4 In addition, we sent a letter on June 4, 2009, 

soliciting additional information from PAM and 

Garafolo. PAM and Garafolo submitted responses 

on July 7, 2009. 

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. 

Model Match Clarification 

In the eleventh review of pasta from 

Italy the Department stated that it would 

solicit comments from interested parties 

with respect to the appropriate 

standards and criteria to be applied in 

differentiating among wheat codes, and 

make any necessary changes and/or 

clarifications to the model match 

criteria for pasta to apply to all future 

respondents. See Certain Pasta from 

Italy: Notice of Final Results of the 

Eleventh Administrative Review and 

Partial Rescission of Review, 73 FR 

75400 (December 11, 2008). 

On January 9, 2009, we contacted 

interested parties and solicited 

comments on the following four factors: 

(1) Industry standards, (2) measuring 

material cost differences, (3) defining 

commercial significance, and (4) 

physical characteristics. Parties 

submitted comments on February 23, 

2009, and rebuttal comments on March 

10, 2009.4

Because of a lack of consistency in the 

Department’s treatment of separate 

wheat codes in model match decisions 

in previous determinations, we solicited 

comments in order to articulate a clearer 

statement of our policy. Our goal was to 

develop objective criteria that would 

apply in each review of this 

antidumping duty order. Petitioners and 

the two respondents in this review 

submitted factual information and 

comments. Based on our analysis of 

these comments, and our review of prior 

determinations, we propose to clarify 

and modify our treatment of the wheat 

code physical characteristic. See 

memorandum from James Terpstra, 

Program Manager, to John M. Andersen, 

Acting Deputy Assistant Secretary, 

entitled ‘‘Preliminary Model Match 

Clarification on Pasta Wheat Code 

Classifications,’’ dated July 31, 2009. We 

propose replacing the existing single 

Wheat Code field with the following 

three fields: Wheat species, form, and 

protein content. 

We note that the threshold set forth in 

Protein Content corresponds to the 

minimum protein content of 12.5 

percent established by the Italian 

Commodity Exchanges. We are 

requesting that interested parties 

provide comments on the proposed 

model match changes included there in. 

We will evaluate comments on the 

proposed methodology. Any new model 

match criteria developed will be 

applicable in the 2008–2009 and 

subsequent administrative reviews of 

pasta from Italy. 

Product Comparisons 

In accordance with section 771(16) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’), we 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, by quarter. When 

there were no sales of identical 

merchandise in the comparison 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. When 

there were no appropriate comparison 

market sales of comparable 

merchandise, we compared the 

merchandise sold in the United States to 

CV, in accordance with section 773(a)(4) 

of the Act. 

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 (‘‘VCOM’’) between each 

U.S. model and the most similar home 

market model selected for comparison. 

Comparisons to Normal Value 

To determine whether sales of certain 

pasta from Italy were made in the 

United States at less than NV, we 

compared the export price (‘‘EP’’) or 

constructed export price (‘‘CEP’’) to the 

NV by quarter, as described in the 

‘‘Export Price/Constructed Export Price’’ 

and ‘‘Normal Value’’ sections of this 

notice. In accordance with section 

777A(d)(2) of the Act, we calculated 

monthly weighted-average prices for NV 

and compared these to individual U.S. 

transactions. Because we are using a 

quarterly costing approach, we have not 

made price-to-price comparisons 

outside of a quarter to lessen the 

potential distortion to sales prices 

which result from significantly changing 

costs. See Memorandum Through James 

Terpstra from Christopher Hargett titled 

‘‘Sales Analysis Memorandum—PAM 

S.p.A., Liguori Pastificio dal 1820 S.p.A. 

(‘‘Liguori’’), and Chirico Molini e 

Pastificio S.p.A. (‘‘Chirico’’) 

(collectively, ‘‘PAM’’)’’ (‘‘PAM Sales 

Analysis Memo’’), and Memorandum 

from Christopher Hargett to James 

Terpstra titled ‘‘Sales Analysis 

Memorandum—Pastificio Lucio 

Garofalo (‘‘Garofalo’’)’’ (‘‘Garofalo Sales 

Analysis Memorandum’’), both dated 

July 31, 2009, and available in the 

Central Records Unit (‘‘CRU’’) in Room 

1117 of the Main Commerce Building. 

Export Price/Constructed Export Price 

For the price to the United States, we 

used, as appropriate, EP or CEP, in 

accordance with sections 772(a) and (b) 

of the Act. We calculated EP when the 

merchandise was sold by the producer 

or exporter outside of the United States 

directly to the first unaffiliated 

purchaser in the United States prior to 

importation and when CEP was not 

otherwise warranted based on the facts 

on the record. We calculated CEP for 

those sales where a person in the United 

States, affiliated with the foreign 

exporter or acting for the account of the 

exporter, made the sale to the first 

unaffiliated purchaser in the United 

States of the subject merchandise. We 

based EP and CEP on the packed costinsurance-freight (‘‘CIF’’), ex-factory, 

free-on-board (‘‘FOB’’), or delivered 

prices to the first unaffiliated customer 

in, or for exportation to, the United 

States. When appropriate, we reduced 

these prices to reflect discounts and 

rebates. 

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, export duties, international 

freight, marine insurance, U.S. inland 

freight expenses, warehousing, and U.S. 

duties. In addition, when appropriate, 

we increased EP or CEP as applicable, 

by an amount equal to the 

countervailing duty (‘‘CVD’’) rate 

attributed to export subsidies in the 

most recently completed CVD 

administrative review, in accordance 

with section 772(c)(1)(C) of the Act. 

For CEP, in accordance with section 

772(d)(1) of the Act, when appropriate, 

we deducted from the starting price 

those selling expenses that were 

incurred in selling the subject 

merchandise in the United States, 

including direct selling expenses 

(advertising, cost of credit, warranties, 

banking, slotting fees, and commissions 

paid to unaffiliated sales agents). In 

addition, we deducted indirect selling 

expenses that related to economic 

activity in the United States. These 

expenses include certain indirect selling 

expenses incurred by its affiliated U.S. 

distributors. We also deducted from CEP 

an amount for profit in accordance with 


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5See Fresh Kiwifruit from New Zealand: Final 

Results of Antidumping Administrative Review, 61 

FR 46438 (September 3, 1996); Certain Cold-Rolled 

and Corrosion-Resistant Carbon Steel Flat Products 

from Korea: Final Results of Antidumping Duty 

Administrative Review, 62 FR 18404 (April 15, 

1997) (‘‘Cold-Rolled from Korea’’); Notice of Final 

Results of Antidumping Duty Administrative 

Review: Furfuryl Alcohol from South Africa, 62 FR 

61804 (November 14, 1997); Notice of Final 

Determination of Sales at Less than Fair Value: 

Fresh Atlantic Salmon from Chile, 63 FR 31411 

(June 9, 1998); Final Results of Antidumping Duty 

Administrative Review: Electrolytic Manganese 

Dioxide from Greece, 65 FR 68978 (November 15, 

2000); Notice of Final Determinations of Sales at 

Less Than Fair Value: Certain Durum Wheat and 

Hard Red Spring Wheat from Canada, 68 FR 52741 

(September 5, 2003) (‘‘Wheat from Canada’’); 

Certain Hot-Rolled Carbon Steel Flat Products From 

Thailand: Preliminary Results and Partial 

Rescission of Antidumping Duty Administrative 

Review, 68 FR 68336 (December 8, 2003), 

unchanged in final, Certain Hot-Rolled Carbon Steel 

Flat Products From Thailand: Final Results and 

Partial Rescission of Antidumping Duty 

Administrative Review, 69 FR 19388 (April 13, 

2004) (‘‘Hot-Rolled from Thailand’’). 

sections 772(d)(3) and (f) of the Act. See 

PAM’s Sales Analysis Memo; see also 

Garofalo’s Sales Analysis Memo. 

Normal Value 

A. Selection of Comparison Markets 

Section 773(a)(1) of the Act directs 

that NV be based on the price of the 

foreign like product sold in the home 

market, provided that the merchandise 

is sold in sufficient quantities (or value, 

if quantity is inappropriate) and that 

there is no particular market situation 

that prevents a proper comparison with 

the export price or constructed export 

price. The statute contemplates that 

quantities (or value) normally be 

considered insufficient if they are less 

than five percent of the aggregate 

quantity (or value) of sales of the subject 

merchandise to the United States. 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 each 

respondent’s volume of home market to 

serve as a viable basis for calculating 

NV, we compared each respondent’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 PAM and Garofalo each 

had an aggregate volume of home 

market sales of the foreign like product 

that 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 for 

both PAM and Garofalo. 

On May 8, 2009, the petitioners 

alleged that a particular market situation 

existed in the Italian pasta market that 

prevents a proper comparison with the 

export price or constructed export price. 

Neither the antidumping statute nor the 

Statement of Administrative Action 

(‘‘SAA’’) that accompanied the Uruguay 

Round Agreements Act specifically 

defines the term ‘‘particular market 

situation.’’ The SAA, however, states 

that a particular market situation might 

exist where, for instance, a single sale in 

the home market constitutes five 

percent of sales to the United States, 

there is government control over pricing 

to such an extent that home market 

prices cannot be considered to be 

competitively set, or the demand 

patterns in the home market are 

different from those in the United 

States. See SAA at 822. In their May 8, 

2009 filing, the petitioners submitted a 

February 2009 press release of the 

Italian Competition Authority (‘‘ICA’’) 

which contains a summary of its 

findings regarding an agreement among 

Italian pasta producers to increase 

prices for non-egg dry pasta. The 

petitioners claimed that these findings 

demonstrate that the respondents’ 

reported home market prices are per se 

unrepresentative and prevent a proper 

comparison with the respondents’ U.S. 

sale prices. The petitioners requested, 

therefore, that the Department reject 

home market prices and rely on CV as 

the basis for NV. On June 12, 2009, the 

petitioners provided the Department a 

complete English translation of the ICA 

report and stated that a review of the 

complete report shows that the ICA was 

focused solely on anticompetitive 

conduct in the Italian market and did 

not cover export sales. The petitioners 

also noted that the ICA report is an 

Italian government finding. In this 

connection, the petitioners noted that 

the Italian government regularly 

participates in CVD reviews on pasta 

and the Department considers the 

evidence and information provided by 

the Italian government in its CVD 

findings. Finally, the petitioners noted 

that, in this review, they are only 

requesting that the Department resort to 

the statutorily-approved, alternative 

calculation for NV using CV because of 

the non-market nature of the home 

market prices. 

On June 22, 2009, the respondents 

submitted rebuttal comments in which 

they noted that the ICA’s decision is 

currently being appealed, that no fines 

have been paid to date, and thus, no 

final determination has been made by 

the ICA. Additionally, the respondents 

argued that the ICA did not find that 

home market prices were not marketbased. Rather, the respondents asserted 

that the ICA specifically found that each 

producer set its prices in accordance 

with its own market position and cost 

structure. The respondents further 

argued that the Department properly is 

not interested in the various reasons 

dumping may occur, such as conditions 

of competition in the comparison 

market including the existence of a 

monopoly or oligopoly, or high import 

duty rates. Further, anticompetitive 

behavior in the home market is not 

covered by AD law. The respondents 

also asserted that the Department 

should not consider the ICA report 

because, unlike in a CVD review, the 

Italian government is not a party to this 

case, and the underlying data is not 

subject to review or verification. 

In past cases, the Department has 

recognized a strong preference to use 

home market prices in its dumping 

calculations and, therefore, has 

established a high threshold for 

rejecting home market prices based 

upon a particular market situation.5

Based on the information and arguments 

submitted by the petitioners and the 

respondents, the Department has 

considered whether a particular market 

situation exists in the Italian pasta 

market that would warrant rejection of 

home market prices as the basis for NV. 

As discussed below, the Department 

preliminarily finds that there is not a 

particular market situation in the Italian 

pasta market that would prevent a 

proper comparison with the export price 

or constructed export price. 

At the outset we note that, unlike in 

prior cases where the Department has 

examined whether home market prices 

were not competitively set and, 

therefore, could not be used as the basis 

for NV, in this case, petitioners’ 

allegation claims that Italian producers 

of pasta colluded to increase home 

market prices. Specifically, the 

petitioners assert that according to the 

ICA press release and report, the ICA 

found that between October 2006 and at 

least March 2008, members of the Italian 

pasta industry had a concerted strategy 

to change prices in the Italian market. 

Further, the petitioners claim that just 

because the ‘‘non-competitive’’ behavior 

results in an increase in home market 

prices (and potentially dumping 

margins) does not diminish the fact that 

the behavior is ‘‘non-competitive’’ and 

therefore, rejection of home market 

prices is appropriate. 

The Department has a longstanding 

practice of evaluating each particular 

market situation independently based 

on the facts of the record. In prior cases 

where the Department has evaluated 

whether home market prices were 

competitively set, the Department has 

found that government participation in 


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6See Notice of Preliminary Determinations of 

Sales at Less Than Fair Value: Certain Durum 

Wheat and Hard Red Spring Wheat From Canada, 

68 FR 24707 (May 8, 2003) (‘‘Wheat from Canada 

prelim’’), unchanged in final Wheat from Canada. 

7 See Hot-Rolled from Thailand. 

8We note that contrary to the petitioners’ 

assertion that the Department should resort to CV 

for calculating NV, were the Department to find that 

a particular market situation exists in the home 

market, preventing proper comparison with the 

export price or constructed export price, section 

773(a)(1)(B)(ii) of the Act instructs the Department 

to use the price at which the foreign like product 

is first sold (or, in the absence of a sale, offered for 

sale) for consumption in a country other than the 

exporting country or the United States. The 

petitioners have not alleged that a basis exists for 

rejecting third country prices and, in fact, have 

specifically stated that the findings of the ICA do 

not apply to exports from Italy. 

the market place, and the government 

control, by itself, was not sufficient 

enough to determine that home market 

prices could not be considered to be 

competitively set. For example, in ColdRolled from Korea the Department noted 

that the petitioners provided evidence 

indicative of a not insubstantial level of 

government interest and involvement in 

the day-to-day operations of the Korean 

steel industry, including domestic price 

levels. The Department determined that 

absent substantial evidence that 

government control is so extensive that 

prices are not competitively set, the 

Department cannot find the Korean 

home market not viable. 

Further, in Wheat from Canada 

prelim,6 the Department noted that the 

fact that the Canadian Wheat Board, a 

government entity, operated as a 

monopoly buyer and seller of wheat in 

the Canadian domestic market raised 

legitimate concerns that a particular 

market situation might exist with 

respect to the Canadian home market. 

The Department, nonetheless, based on 

the record evidence, determined that the 

Canadian government did not control 

prices to such an extent that home 

market prices were non-competitive and 

inappropriate for use in the 

Department’s dumping analyses. 

Additionally, in Hot-Rolled from 

Thailand, the Department examined 

whether a government-imposed price 

ceiling, possibly affecting producers’ 

ability to set prices competitively, 

constituted a particular market situation 

sufficient to warrant rejection of home 

market prices as the basis for NV. Based 

on the evidence on the record in that 

case, the Department found that the 

government-imposed price ceilings did 

not warrant a finding that a particular 

market situation existed that would 

prevent a proper comparison between 

home market prices and export price or 

constructed export price.7

In this case, there is no evidence of 

government control or intervention to 

suppress home market prices, although 

the evidence indicates that the majority 

of Italian pasta producers may have 

colluded to raise home market prices of 

pasta. However, there is no evidence 

that Italian pasta producers agreed upon 

a particular ceiling or floor price. 

Rather, each company set its own prices 

with its customers independently. 

Additionally, as we discuss more fully 

below, there was a change in the cost of 

manufacturing (‘‘COM’’) that was 

primarily attributed to the price 

volatility of semolina. Thus, the 

respondents’ price increases could have 

resulted from objective market 

conditions (i.e., significant increases in 

the price of inputs) rather than 

particular anti-competition conduct. 

Accordingly, we do not find sufficient 

evidence to conclude that a particular 

market situation exists that warrants a 

determination that home market prices 

cannot form the basis for a proper 

comparison. Therefore, the Department 

has not requested that either respondent 

report sales to its largest third country 

market.8

B. Cost Reporting Period 

The Department’s normal practice is 

to calculate an annual weighted-average 

cost for the entire POR. See, e.g., Certain 

Pasta from Italy: Final Results of 

Antidumping Duty Administrative 

Review, 65 FR 77852 (Dec. 13, 2000) 

(Pasta from Italy), and accompanying 

Issues and Decision Memorandum at 

Comment 18 and Notice of Final Results 

of Antidumping Duty Administrative 

Review of Carbon and Certain Alloy 

Steel Wire Rod from Canada, 71 FR 

3822 (Jan. 24, 2006) (Wire Rod from 

Canada), and accompanying Issues and 

Decision Memorandum at Comment 5 

(explaining the Department’s practice of 

computing a single weighted-average 

cost for the entire period). This 

methodology is predictable and 

generally applicable in all proceedings. 

However, the Department recognizes 

that possible distortions may result 

when our annual average cost method is 

used during a period of significant cost 

changes. In these circumstances, in 

determining whether to deviate from 

our normal methodology, the 

Department has evaluated the casespecific record evidence using two 

primary factors: (1) The change in the 

COM recognized by the respondent 

during the POR must be deemed 

significant; and (2) the record evidence 

must show that sales during the shorter 

averaging periods could be reasonably 

linked with the COP or CV during the 

same shorter averaging periods. See, 

e.g., Stainless Steel Plate in Coils From 

Belgium: Final Results of Administrative 

Review, 73 FR 75398, 75399 (December 

11, 2008) (SSPC from Belgium) and 

Stainless Steel Sheet and Strip in Coils 

from Mexico: Final Results of 

Administrative Review, 74 FR 6365 

(February 9, 2009) (2006–2007 Final 

Results). 

1. Significance of Cost Changes 

In the instant case, record evidence 

shows that both respondents, PAM and 

Garofalo, experienced significant 

changes (i.e., changes that exceeded 25 

percent) between the high and low 

quarterly COM during the POR, and that 

the change in COM is primarily 

attributable to the price volatility of 

semolina, the primary input consumed 

in the production of the merchandise 

under consideration. In examining the 

company-specific inventory records and 

commodity exchanges within Italy, we 

found that semolina prices changed 

dramatically throughout the POR and 

directly affected the total cost of 

manufacturing for pasta. Specifically, 

the record data shows that the 

percentage difference between the high 

and low quarterly costs for pasta 

products exceeded 25 percent during 

the POR. As a result, we have 

determined for the preliminary results 

that the changes in COM for both PAM 

and Garofalo are significant enough to 

warrant a departure from our standard 

annual costing approach for direct 

materials, as these significant cost 

changes create distortions in the 

Department’s sales-below-cost test as 

well as the overall margin calculation. 

2. Linkage Between Cost and Sales 

Information 

The Department evaluated whether 

there is evidence of linkage between the 

cost changes and the sales prices during 

the POR. The Department’s definition of 

linkage does not require direct 

traceability between specific sales and 

their specific production cost, but rather 

relies on whether there are elements 

which would demonstrate a reasonable 

correlation between the underlying 

costs and the final sales prices levied by 

the company. See Certain Welded 

Stainless Steel Pipes From the Republic 

of Korea: Final Results of Antidumping 

Duty Administrative Review, 74 FR 

31242, 31244 (June 30, 2009) (SSP from 

Korea). These correlative elements may 

be measured and defined in a number 

of ways depending on the associated 

industry and the overall production and 

sales processes. 

To examine the correlation, we 

conducted a price and cost trend 

analysis using the quarterly net sale 

prices for the five most frequently sold 


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control numbers (‘‘CONNUMs’’) in the 

U.S. market and the corresponding 

quarterly costs of this merchandise. Our 

comparison reveals that sales and costs 

for each of the sample CONNUMs 

generally trended in the same direction 

and demonstrated a high degree of 

correlation between the sales and cost 

data. The inventory records for both 

respondents demonstrate that the raw 

material and finished goods inventory 

are relatively low, indicating a minimal 

time lag between production and sale 

dates. 

In light of the two factors discussed 

above, we have preliminarily 

determined that a quarterly costing 

approach, with respect to both PAM and 

Garofalo, would lead to more accurate 

comparisons in our antidumping duty 

calculations. Thus, we used quarterly 

indexed annual average direct material 

costs and annual weighted-average 

conversion costs in the cost of 

production (‘‘COP’’) and CV 

calculations. 

C. Cost of Production Analysis 

The Department disregarded sales 

below the COP in the last completed 

review in which each respondent, PAM 

and Garofalo, participated. See Notice of 

Final Results of the Seventh 

Administrative Review of the 

Antidumping Duty Order on Certain 

Pasta from Italy and Determination to 

Revoke in Part, 70 FR 6832 (February 9, 

2005) (Pasta Seven); see also Amended 

Final Results of the Sixth 

Administrative Review of the 

Antidumping Duty Order on Certain 

Pasta from Italy and Determination Not 

to Revoke in Part, 69 FR 22761 (April 

27, 2004) (Pasta Six). We therefore have 

reasonable grounds to believe or 

suspect, pursuant to section 

773(b)(2)(A)(ii) of the Act, that sales of 

the foreign like product under 

consideration for the determination of 

NV in this review may have been made 

at prices below COP. Thus, pursuant to 

section 773(b)(1) of the Act, we 

examined whether sales from PAM and 

Garofalo in the home market were made 

at prices below the COP. 

We compared sales of the foreign like 

product in the home market with 

model-specific COP figures. In 

accordance with section 773(b)(3) of the 

Act, we calculated COP based on the 

sum of the costs of materials and 

fabrication employed in producing the 

foreign like product, plus selling, 

general and administrative (‘‘SG&A’’) 

expenses, financial expenses and all 

costs and expenses incidental to placing 

the foreign like product in packed 

condition and ready for shipment. In 

our sales-below-cost analysis, we relied 

on home market sales and COP 

information provided by PAM and 

Garofalo in its questionnaire responses, 

except where noted below. 

PAM 

We are relying on PAM’s reported 

quarterly indexed direct material costs 

and annual conversion costs. 

We collapsed products PAM 

classified as wheat code ‘‘1’’ (i.e., pasta 

made from superior semolina) with 

products classified as wheat code ‘‘2’’ 

(i.e., pasta made from normal semolina), 

as we did in Pasta Seven at Comment 

21. Therefore we recalculated the 

weighted-average costs for this 

merchandise. 

We revised the general and 

administrative expense rate numerator 

to include costs related to the 

bankruptcy of Chirico, a producing 

entity within the PAM Group. See PAM 

Sales Analysis Memo and Memorandum 

from Angela Strom to Neal Halper ‘‘Cost 

of Production and Constructed Value 

Calculation Adjustments for the 

Preliminary Results—PAM S.p.A., 

Liguori Pastificio dal 1820 S.p.A. 

(‘‘Liguori’’), and Chirico Molini e 

Pastificio S.p.A. (‘‘Chirico’’) 

(collectively, ‘‘PAM’’),’’ dated July 31, 

2009 (‘‘PAM Cost Calculation Memo’’). 

Garofalo 

We are relying on quarterly direct 

material costs and annual conversion 

costs. 

1. Calculation of COP 

Before making any comparisons to 

NV, we conducted a COP analysis of 

PAM and Garofalo pursuant to section 

773(b) of the Act, to determine whether 

PAM’s and Garofalo’s comparison 

market sales were made at prices below 

the COP, by quarter. We calculated the 

COP based on the sum of the cost of 

materials and fabrication for the foreign 

like product, plus amounts for SG&A 

expenses and packing, in accordance 

with section 773(b)(3) of the Act. 

2. Test of Comparison Market Prices 

As required under section 773(b)(2) of 

the Act, we compared the quarterly 

weighted-average COP to the per-unit 

price of the comparison market sales of 

the foreign like product to determine 

whether these sales had been made at 

prices below the COP within an 

extended period of time in substantial 

quantities, and whether such prices 

were sufficient to permit the recovery of 

all costs within a reasonable period of 

time. We determined the net 

comparison market prices for the belowcost 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. See PAM’s Sales Analysis 

Memo; see also Garofalo’s Sales 

Analysis Memo. 

3. Results of COP Test 

Pursuant to section 773(b)(2)(C)(i) of 

the Act, where less than 20 percent of 

sales of a given product during the POR 

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 POR were 

at prices less than the COP we 

determined such sales to have been 

made in ‘‘substantial quantities.’’ See 

section 773(b)(2)(C) of the Act. The sales 

were made within an extended period of 

time, in accordance with section 

773(b)(2)(B) of the Act, because they 

were made over the course of the POR. 

In such cases, because we compared 

prices to weighted-average costs, 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 PAM and Garofalo, we 

disregarded 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. See PAM’s 

Sales Analysis Memo; see also 

Garofalo’s Sales Analysis Memo. 

D. Calculation of Normal Value Based 

on Comparison Market Prices 

We calculated NV based on ex-works, 

FOB or delivered prices to comparison 

market customers. We made deductions 

from the starting price, when 

appropriate, for handling, loading, 

inland freight, warehousing, inland 

insurance, 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, respectively. In 

addition, we made circumstance-of-sale 

adjustments for direct expenses, 

including imputed credit expenses, 

advertising, warranty expenses, 

commissions, bank charges, and billing 

adjustments, in accordance with section 

773(a)(6)(C)(iii) of the Act. We also 

made adjustments for PAM and 

Garofalo, in accordance with 19 CFR 

351.410(e), for indirect selling expenses 

incurred in the home market or the 

United States where commissions were 

granted on sales in one market but not 

in the other, the ‘‘commission offset.’’ 


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Specifically, where commissions are 

incurred in one market, but not in the 

other, we will limit the amount of such 

allowance to the amount of either the 

selling expenses incurred in the one 

market or the commissions allowed in 

the other market, whichever is less. 

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 and 19 CFR 351.411. We 

based this adjustment on the difference 

in the variable cost of manufacture 

(‘‘VCOM’’) for the foreign like product 

and subject merchandise, using 

weighted-average costs. 

Sales of pasta purchased by the 

respondents from unaffiliated producers 

and resold in the comparison market 

were disregarded. See PAM’s Sales 

Analysis Memo; see also Garofalo’s 

Sales Analysis Memo. 

E. 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 

(‘‘LOT’’) as the EP and CEP sales, to the 

extent practicable. When there were no 

sales at the same LOT, we compared 

U.S. sales to comparison market sales at 

a different LOT. When NV is based on 

CV, the NV LOT is that of the sales from 

which we derive SG&A expenses and 

profit. 

Consistent with 19 CFR 351.412, to 

determine whether comparison market 

sales were at a different LOT, we 

examined stages in the marketing 

process and selling functions along the 

chain of distribution between the 

producer and the unaffiliated (or arm’slength) customers. If the comparison 

market sales were at a different LOT and 

the differences affect 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 will make 

an LOT adjustment under section 

773(a)(7)(A) of the Act. 

Finally, if the NV LOT is more remote 

from the factory than the CEP LOT and 

there is no basis for determining 

whether the differences in LOT between 

NV and CEP affected price 

comparability, we will grant 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, 61732–33 (November 19, 

1997). 

Both respondents claim two LOTs in 

the home market. PAM reported that it 

sold through three channels of 

distribution to nine customer categories. 

Garofalo reported that it sold through 

three channels of distribution to four 

customer categories. 

We disagree with both PAM and 

Garofalo that there are two LOTs in the 

home market. Section 351.412 (c)(2) of 

the Department’s regulations provides 

that the Department will determine that 

sales are made at different LOTs if they 

are made at different marketing stages 

(or their equivalent). Substantial 

differences in selling activities are a 

necessary, but not sufficient, condition 

for determining that there is a difference 

in the stage of marketing. Some overlap 

in selling activities will not preclude a 

determination that two sales are at 

different stages of marketing. 

Our analysis of the selling activities 

for PAM shows that there is overlap in 

these activities for channels of 

distribution and customer categories. In 

other words, PAM performs similar 

selling activities for all customer 

categories and channels of distribution. 

Although there are differences in 

intensity of these activities for some of 

the claimed customer categories, this, in 

and of itself, does not show a substantial 

difference in selling activities that 

would form the basis for finding a 

different LOT. See, e.g., Certain Frozen 

Warmwater Shrimp from Ecuador: Final 

Results of Antidumping Duty 

Administrative Review, 72 FR 52070 

(September 12, 2007), and 

accompanying Issues and Decision 

Memorandum at Comment 4. Due to the 

proprietary nature of this issue, please 

refer to PAM’s Sales Analysis Memo for 

further discussion. 

Our analysis of the selling activities 

for Garofalo shows that Garofalo also 

performs similar selling activities for 

different customer categories, although 

some of the activities were at different 

levels of intensity. Moreover, some 

selling activities within the claimed 

LOT1 are at higher level of intensity 

while other selling activities are at 

lower level of intensity than the same 

selling activities in the claimed LOT2. 

In addition, there is overlap among the 

channels of distribution for the different 

customer categories in these two 

claimed LOTs. The differences in 

Garofalo’s selling activities chart do not 

rise to a level of substantial differences 

that would support a finding that there 

are two LOTs in the home market. Due 

to the proprietary nature of this issue, 

please refer to Garofalo’s Sales Analysis 

Memo for further discussion. 

In the U.S. market, both PAM and 

Garofalo reported that their sales were 

made through one channel of 

distribution to one customer category, 

and therefore, at one LOT. The 

Department has determined that PAM’s 

and Garofalo’s home market sales were 

made at LOT1 and at the same stage of 

marketing as the U.S. sales LOT. 

Therefore, the Department will not 

make an LOT adjustment for PAM and 

Garofalo’s sales to the United States. 

Currency Conversion 

For purposes of these preliminary 

results, we made currency conversions 

in accordance with section 773A(a) of 

the Act, based on the official exchange 

rates published by the Federal Reserve 

Bank. See PAM’s Sales Analysis Memo; 

see also Garofalo’s Sales Analysis 

Memo. 

Preliminary Results of Review 

As a result of our review, we 

preliminarily determine that the 

following weighted-average percentage 

margins exist for the period July 1, 2007, 

through June 30, 2008, for the 

mandatory respondents: 

Manufacturer/exporter Margin 

(percent) 

PAM .......................................... 15.77 

Garofalo .................................... 15.91 

For those companies not selected as 

mandatory respondents, Domenico 

Paone fu Erasmo S.p.A., Industria 

Alimentare Colavita, S.p.A.,, Pasta 

Lensi, Pastificio Fratelli Pagani S.p.A., 

Pastificio Labor S.r.L., Pastificio 

Riscossa F.Illi Mastromauro S.r.L., 

Rummo S.p.A. Molino e Pastificio, and 

Rustichella d’Abruzzo S.p.A., we 

preliminarily determine that the 

following simple average percentage 

margin (based on the two reviewed 

companies) exists for the period July 1, 

2007, through June 30, 2008, is 15.84 

percent. 

The Department will disclose the 

calculations performed for these 

preliminary results 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). The Department intends to 

verify the information upon which we 

will rely in making our final 

determination. As a result, we intend to 

establish the briefing schedule upon the 

completion of verification. 

Pursuant to 19 CFR 351.213(h), the 

Department intends to issue the final 

results of this administrative review, 

which will include the results of its 

analysis of issues raised in any such 


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comments, or at a hearing, if requested, 

within 120 days of publication of these 

preliminary results. 

Assessment Rate 

Pursuant to 19 CFR 351.212(b), the 

Department calculated an assessment 

rate for each importer of the subject 

merchandise. Upon issuance of the final 

results of this administrative review, if 

any importer-specific assessment rates 

calculated in the final results are above 

de minimis (i.e., at or above 0.5 percent), 

the Department will issue appraisement 

instructions directly to CBP to assess 

antidumping duties on appropriate 

entries by applying the assessment rate 

to the entered value of the merchandise. 

For assessment purposes, we calculated 

importer-specific assessment rates for 

the subject merchandise by aggregating 

the dumping margins for all U.S. sales 

to each importer and dividing the 

amount by the total entered value of the 

sales to that importer. Where 

appropriate, to calculate the entered 

value, we subtracted international 

movement expenses (e.g., international 

freight) from the gross sales value. For 

the responsive companies which were 

not selected for individual review, we 

have calculated an assessment rate 

based on the simple average of the cash 

deposit rates calculated for the 

companies selected for individual 

review. 

The Department clarified its 

‘‘automatic assessment’’ regulation on 

May 6, 2003 (68 FR 23954). This 

clarification will apply to entries of 

subject merchandise during the POR 

produced by companies included in 

these preliminary results of review for 

which the reviewed companies did not 

know their merchandise was destined 

for the United States. In such instances, 

we will instruct CBP to liquidate 

unreviewed entries at the all-others rate 

if there is no rate for the intermediate 

company(ies) involved in the 

transaction. For a full discussion of this 

clarification, see Antidumping and 

Countervailing Duty Proceedings: 

Assessment of Antidumping Duties, 68 

FR 23954 (May 6, 2003). 

Cash Deposit Requirements 

To calculate the cash deposit rate for 

PAM and Garofalo, we divided its total 

dumping margin by the total net value 

of its sales during the review period. For 

the responsive companies which were 

not selected for individual review, we 

have calculated a cash deposit rate 

based on the simple average of the cash 

deposit rates calculated for the 

companies selected for individual 

review. 

The following deposit rates will be 

effective upon publication of the final 

results of this administrative review for 

all shipments of pasta from Italy 

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 rate for companies subject to 

this review 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, no cash deposit 

will be required; (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 final 

results for a review 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 15.45 percent, the 

all-others rate established in the LTFV 

investigation. See Implementation of the 

Findings of the WTO Panel in U.S.— 

Zeroing (EC): Notice of Determination 

Under Section 129 of the Uruguay 

Round Agreements Act and Revocations 

and Partial Revocations of Certain 

Antidumping Duty Orders, 72 FR 25261 

(May 4, 2007). These cash deposit 

requirements, when imposed, shall 

remain in effect until further notice. 

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 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 

increase the subsequent assessment of 

the antidumping duties by the amount 

of antidumping duties reimbursed. 

These preliminary results of 

administrative review are issued and 

published in accordance with sections 

751(a)(1) and 777(i)(1) of the Act and 19 

CFR 351.221(b)(4). 

Dated: July 31, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–18884 Filed 8–5–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–952, A–583–844)] 

Narrow Woven Ribbons with Woven 

Selvedge from the People’s Republic 

of China and Taiwan: Initiation of 

Antidumping Duty Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: August 6, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Eastwood at (202) 482–3874 or 

Miriam Eqab at (202) 482–3693 

(Taiwan), AD/CVD Operations, Office 2; 

Maisha Cryor at (202) 482–5831 or 

Zhulieta Willbrand at (202) 482–3147 

(the People’s Republic of China (the 

‘‘PRC’’)), AD/CVD Operations, Office 4, 

Import Administration, International 

Trade Administration, U.S. Department 

of Commerce, 14th Street and 

Constitution Avenue, NW, Washington, 

DC 20230. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On July 9, 2009, the Department of 

Commerce (the ‘‘Department’’) received 

petitions concerning imports of narrow 

woven ribbons with woven selvedge 

(‘‘narrow woven ribbon’’) from the PRC 

and Taiwan filed in proper form by 

Berwick Offray LLC and its wholly– 

owned subsidiary Lion Ribbon 

Company, Inc. (collectively, the 

‘‘Petitioner’’). See Petitions for the 

Imposition of Antidumping and 

Countervailing Duties on Narrow 

Woven Ribbons with Woven Selvedge 

from the People’s Republic of China and 

Taiwan dated July 9, 2009 (the 

‘‘Petitions’’). On July 14, 2009, the 

Department contacted the Petitioner by 

telephone seeking additional 

information and clarification regarding 

the Petition. See Memo to the File from 

Matthew Glass, ‘‘Scope Call with the 

Petitioner,’’ dated July 14, 2009. On July 

15, 2009, and July 22, 2009, the 

Department issued a request for 

additional information and clarification 

of certain areas of the Petitions. Also, on 

July 23, 2009, the Department contacted 

the Petitioner by telephone seeking 

additional information and clarification 


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