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###### Department of Commerce

###### International Trade Administration 

          - [A-475-818, C-475-819] 

# AGENCY:

Import Administration, International Trade Administration, Department of Commerce. 

# SUMMARY:

The Department of Commerce (the Department) is self-initiating 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. 

# EFFECTIVE DATE:

May 5, 2000. 

# FOR FURTHER INFORMATION CONTACT:

John Brinkmann or Jarrod Goldfeder, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4126 or (202) 482-2305, respectively. 

# SUPPLEMENTARY INFORMATION:

## Applicable Statute and Regulations 

                    Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments                           ( print page 26180)                        made to the Tariff Act of 1930 (the Act), by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations refer to the regulations codified at 19 CFR part 351 (April 1999).                 

## 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, 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 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 (IMC), by Bioagricoop Scrl, by QC&I International Services, by Ecocert Italia or by Consorzio per il Controllo dei Prodotti Biologici. 

                    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.                 

                    (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, an Italian producer and exporter of pasta. 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.                 

## Background

On August 30, 1999, we issued an antidumping questionnaire to Pastificio Fratelli Pagani S.p.A. (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 nonsubject bulk pasta for repackaging after importation.” Based on a supplemental questionnaire issued to Pagani on January 24, 2000, Pagani provided more detail regarding its repackaging operation. 

## 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. 

## Initiation of Anti-Circumvention Proceeding 

In accordance with section 781(a) of the Act, the Department may include merchandise completed or assembled in the United States within the scope of an existing order when the following four conditions are met: (A) The merchandise sold in the United States is of the same class or kind as any other merchandise that is the subject of an antidumping or countervailing duty order; (B) such merchandise sold in the United States is completed or assembled in the United States from parts or components produced in the foreign country with respect to which such order applies; (C) the process of assembly or completion in the United States is minor or insignificant; and (D) the value of the parts or components produced in the foreign country to which the antidumping and countervailing duty order apply is a significant portion of the total value of the merchandise sold in the United States. 

In determining whether to include parts or components in an order, the Act states at section 781(a)(3) that the Department must take into account: (1) The pattern of trade, including sourcing patterns; (2) whether the manufacturer or exporter of the parts or components is affiliated with the person who assembles or completes the merchandise sold in the United States; and (3) whether imports into the United States of the parts or components produced in such foreign country have increased after the initiation of the investigation which resulted in the issuance of such order or finding. 

                    Based upon our review of the information submitted in the context of the third administrative review with respect to the preceding criteria, we find that the all of the elements that warrant an anti-circumvention inquiry are present (                    *see*                     Memorandum from Holly A. Kuga to Troy H. Cribb, “Initiation of Anti-circumvention Inquiry of the Antidumping and Countervailing Duty Orders on Certain Pasta from Italy,” dated April 21, 2000, on file in the CRU. This information indicates that there is reason to believe that Pagani's repackaging operation in the United States has allowed it to evade                           ( print page 26181)                        antidumping and countervailing duties on its sales of subject pasta in the United States. Therefore, we are self-initiating an anti-circumvention inquiry to determine whether Pagani's importation of pasta in bulk and subsequent repackaging in the United States constitutes circumvention, with respect to the antidumping and countervailing duty orders on pasta from Italy pursuant to section 781(a) of the Act and 19 CFR 351.225(b).                 

We intend to notify the International Trade Commission in the event of an affirmative preliminary determination of circumvention, in accordance with 19 CFR 351.225(f)(7). 

The Department will not order the suspension of liquidation at this time. However, in accordance with 19 CFR 351.225(l)(2), the Department will instruct the U.S. Customs Service to suspend liquidation in the event of an affirmative preliminary determination of circumvention. Although interested parties may comment prior to the preliminary determination, the Department will establish a formal schedule for submission of final comments after the preliminary determination. 

This notice is issued and published pursuant to section 781 of the Act (19 U.S.C. 1677j) and 19 CFR 351.225. 

Dated: April 27, 2000.

Troy H. Cribb, 

Acting Assistant Secretary for Import Administration. 

[FR Doc. 00-11306 Filed 5-4-00; 8:45 am] 

BILLING CODE 3510-DS-P