43616 Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 

preliminary results. Unless extended by 

the Department, case briefs are to be 

submitted within 30 days after the date 

of publication of this notice. Rebuttal 

briefs, limited to arguments raised in 

case briefs, may be submitted no later 

than five days after the time limit for 

filing case briefs. Parties who submit 

arguments in this proceeding are 

requested to submit with the argument: 

(1) A statement of the issues; (2) a brief 

summary of the argument; and (3) a 

table of authorities. See 19 CFR 

351.309(c)(2). Case and rebuttal briefs 

must be served on interested parties in 

accordance with 19 CFR 351.303(f). 

Also, pursuant to 19 CFR 351.310(c), 

interested parties who wish to request a 

hearing or to participate if one is 

requested must submit a written request 

to the Assistant Secretary for Import 

Administration within 30 days of the 

publication of this notice. Requests 

should contain (1) The party’s name, 

address and telephone number; (2) the 

number of participants; and, (3) a list of 

issues to be raised. Issues raised in the 

hearing will be limited to those raised 

in the respective case briefs. Unless the 

Secretary specifies otherwise, the 

hearing, if requested, will be held two 

days after the date for submission of 

rebuttal briefs. Parties will be notified of 

the time and location. 

The Department will publish the final 

results of this administrative review, 

including the results of its analysis of 

issues raised in any case brief, rebuttal 

brief, or hearing no later than 120 days 

after publication of these preliminary 

results, unless extended. See 

751(a)(3)(A) of the Act and 19 CFR 

351.213(h). 

These preliminary results 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, 2007. 

Stephen J. Claeys, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. E7–15215 Filed 8–3–07; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–475–819] 

Certain Pasta from Italy: Preliminary 

Results of the Tenth Countervailing 

Duty Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

is conducting an administrative review 

of the countervailing duty order on 

certain pasta from Italy for the period 

January 1, 2005, through December 31, 

2005. We preliminarily find that 

Pastificio Antonio Pallante S.r.L. 

(‘‘Pallante’’) and De Matteis 

Agroalimetare S.p.A. (‘‘De Matteis’’) 

received countervailable subsidies in 

this review, and Atar S.r.L. (‘‘Atar’’) did 

not receive any countervailable 

subsidies in this review and its rate is, 

consequently, zero. See the 

‘‘Preliminary Results of Review’’

section, below. Interested parties are 

invited to comment on these 

preliminary results. See the ‘‘Public 

Comment’’ section of this notice. 

DATES: Effective Date: August 6, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Audrey Twyman or Brandon Farlander, 

AD/CVD Operations, Office 1, Import 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–3534 and (202) 

482–0182, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 24, 1996, the Department of 

Commerce (‘‘the Department’’) 

published a countervailing duty order 

on certain pasta (‘‘pasta’’ or ‘‘subject 

merchandise’’) from Italy. See Notice of 

Countervailing Duty Order and 

Amended Final Affirmative 

Countervailing Duty Determination: 

Certain Pasta From Italy, 61 FR 38544 

(July 24, 1996) (‘‘Pasta Order’’). On July 

3, 2006, the Department published a 

notice of ‘‘Opportunity to Request 

Administrative Review’’ of this 

countervailing duty order for calendar 

year 2005, the period of review (‘‘POR’’). 

See Antidumping or Countervailing 

Duty Order, Finding, or Suspended 

Investigation; Opportunity to Request 

Administrative Review, 71 FR 37890 

(July 3, 2006). On July 31, 2006, we 

received a request for review from Atar 

and Pallante. On July 31, 2006, we 

received a request for review for De 

Matteis on behalf of New World Pasta 

Company, American Italian Pasta 

Company, and Dakota Growers Pasta 

Company (‘‘petitioners’’). In accordance 

with 19 CFR 351.221(c)(1)(i), we 

published a notice of initiation of the 

review on August 30, 2006. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Requests for Revocation in 

Part, 70 FR 51573 (August 30, 2006). 

On August 31, 2006, we issued 

countervailing duty questionnaires to 

the Commission of the European Union, 

the Government of Italy (‘‘GOI’’), 

Pallante, De Matteis, and Atar. We 

received responses to our questionnaire 

in October and November 2006. We 

issued supplemental questionnaires to 

the respondents in November 2006, and 

we received responses to our 

supplemental questionnaires in 

December 2006 and January 2007. In 

November 2006, we also requested that 

Agritalia S.r.L. (‘‘Agritalia’’) provide a 

full questionnaire response because of 

its status as a trading company for 

Italian pasta producers participating in 

this review. We received Agritalia’s 

questionnaire response in January 2007. 

On March 2, 2007, we sent out 

supplemental questionnaires to 

Agritalia, De Matteis and the GOI. We 

received responses on April 11, 2007. 

We sent out additional supplemental 

questionnaires to Agritalia, De Matteis, 

Atar, Pallante, and the GOI on May 11, 

2007, and received responses in May 

and June 2007. We sent out additional 

supplemental questionnaires to De 

Matteis, Agritalia, and Pallante on June 

19, 2007, and received responses on July 

5, 2007. 

In accordance with 19 CFR 

351.213(b), this review covers only 

those producers or exporters for which 

a review was specifically requested. The 

companies subject to this review are De 

Matteis, Atar, and Pallante. 

Period of Review 

The POR for which we are measuring 

subsidies is January 1, 2005, through 

December 31, 2005. 

Scope of the Order 

Imports covered by the 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 the 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, 

Bioagricoop S.r.l., QC&I International 

Services, Ecocert Italia, Consorzio per il 

Controllo dei Prodotti Biologici, 

Associazione Italiana per l’Agricoltura 

Biologica, or Codex S.r.l. In addition, 

based on publicly available information, 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 43617 

1See Certain Pasta from Italy: Preliminary Results 

and Partial Rescission of Countervailing Duty 

Administrative Review, 66 FR 40987 (August 6, 

2001) (‘‘Fourth Administrative Review’’); 

(unchanged in Final Results) Certain Pasta From 

Italy: Final Results of the Fourth Countervailing 

Duty Administrative Review, 66 FR 64214 

(December 12, 2001). 

the Department has determined that, as 

of August 4, 2004, imports of organic 

pasta from Italy that are accompanied by 

the appropriate certificate issued by 

Bioagricert S.r.l. are also excluded from 

this order. See memorandum from Eric 

B. Greynolds to Melissa G. Skinner, 

dated August 4, 2004, which is on file 

in the Department’s Central Records 

Unit (‘‘CRU’’) in Room B–099 of the 

main Department building. In addition, 

based on publicly available information, 

the Department has determined that, as 

of March 13, 2003, imports of organic 

pasta from Italy that are accompanied by 

the appropriate certificate issued 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, entitled 

‘‘Recognition of Instituto per la 

Certificazione Etica e Ambientale (ICEA) 

as a Public Authority for Certifying 

Organic Pasta from Italy’’ which is on 

file in the Department’s Central Records 

Unit (‘‘CRU’’) in Room B–099 of the 

main Department building. 

The merchandise subject to review is 

currently classifiable under items 

1901.90.9095 and 1902.19.20 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. 

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, which is on file in the CRU. 

(2) On July 30, 1998, the Department 

issued a scope ruling finding that 

multipacks consisting of six one-pound 

packages of pasta that are shrinkwrapped into a single package are 

within the scope of the antidumping 

and countervailing duty orders. See 

Letter from Susan H. Kuhbach to 

Barbara P. Sidari, dated July 30, 1998, 

which is available in the CRU. 

(3) 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 is 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 or labeled 

up to (and including) five pounds four 

ounces is within the scope of the 

antidumping and countervailing duty 

orders. See Memorandum from John 

Brinkmann to Richard Moreland, dated 

May 24, 1999, which is available in the 

CRU. 

(4) On April 27, 2000, the Department 

self-initiated an anti-circumvention 

inquiry to determine whether Pastificio 

Fratelli Pagani S.p.A.’s importation of 

pasta in bulk and subsequent 

repackaging in the United States into 

packages of five pounds or less 

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). See Certain Pasta from Italy: 

Notice of Initiation of AntiCircumvention Inquiry of the 

Antidumping and Countervailing Duty 

Orders, 65 FR 26179 (May 5, 2000). On 

September 19, 2003, we published an 

affirmative finding of the anticircumvention inquiry. See AntiCircumvention Inquiry of the 

Antidumping and Countervailing Duty 

Orders on Certain Pasta from Italy: 

Affirmative Final Determinations of 

Circumvention of Antidumping and 

Countervailing Duty Orders, 68 FR 

54888 (September 19, 2003). 

Subsidies Valuation Information 

Allocation Period 

Pursuant to 19 CFR 351.524(b), nonrecurring subsidies are allocated over a 

period corresponding to the average 

useful life (‘‘AUL’’) of the renewable 

physical assets used to produce the 

subject merchandise. The Department’s 

regulations create a rebuttable 

presumption that the AUL will be taken 

from the U.S. Internal Revenue Service’s 

1977 Class Life Asset Depreciation 

Range System (‘‘IRS Tables’’). See 19 

CFR 351.524(d)(2). For pasta, the IRS 

Tables prescribe an AUL of 12 years. 

None of the responding companies or 

interested parties objected to this 

allocation period. Therefore, we have 

used the 12-year allocation period for all 

respondents. 

Attribution of Subsidies 

Pursuant to 19 CFR 351.525(b)(6), the 

Department will attribute subsidies 

received by certain companies to the 

combined sales of those companies. 

Based on our review of the responses, 

we preliminarily find that ‘‘crossownership’’ exists with respect to 

certain companies, as described below, 

and we have attributed subsidies 

accordingly: 

Pallante: Pallante has reported that it 

is affiliated with Vitelli Foods LLC 

(‘‘Vitelli’’), which is a U.S. importer of 

subject merchandise and other products 

from Italy and other countries. See 

Pallante’s questionnaire response at 

pages 1–2 (October 31, 2006). Pallante 

also explained that until April 2003 it 

was affiliated with Industrie Alimentare 

Molisane (‘‘IAM’’), another Italian pasta 

producer, but that the affiliation has 

ended and they were not affiliated 

during the POR. See Pallante’s 

questionnaire response at pages 2–4 

(October 31, 2006). Because IAM is no 

longer cross-owned with Pallante, and 

because Vitelli is located in the United 

States, we are attributing Pallante’s 

subsidies to the sales of Pallante only. 

De Matteis: De Matteis has reported 

that it is affiliated with De Matteis 

Construzioni S.r.L. (‘‘Construzioni’’) by 

virtue of being 100 percent owned by 

Construzioni. See De Matteis’

questionnaire response at pages 2–3 

(October 31, 2007). In the Fourth 

Administrative Review 1 De Matteis had 

another affiliate, Demaservice S.r.l. De 

Matteis reported that Demaservice S.r.l. 

is no longer in existence as of December 

21, 2001. See De Matteis’ January 16, 

2006, first supplemental questionnaire 

response at pages 16–17. De Matteis has 

reported that Construzioni did not 

receive any subsidies during the POR or 

AUL period. See De Matteis’ Second 

Supplemental Response at 1 (April 13, 

2007). Therefore, we are attributing De 

Matteis’ subsidies to its sales only. 

Atar: Atar has reported that it has no 

affiliates or cross-ownership. Thus, we 

are attributing any subsidies received to 

Atar’s sales only. 

Discount Rates 

Pursuant to 19 CFR 

351.524(d)(3)(i)(B), we used the national 

average cost of long-term, fixed-rate 

loans as a discount rate for allocating 

non-recurring benefits over time 

because no company for which we need 

such discount rates took out any loans 

in the years in which the government 

agreed to provide the subsidies in 

question. Consistent with past practice 

in this proceeding, for years prior to 

1995, we used the Bank of Italy 

reference rate adjusted upward to reflect 

the mark-up an Italian commercial bank 


sroberts on PROD1PC70 with NOTICES
43618 Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 

2See Certain Pasta From Italy: Preliminary 

Results of Countervailing Duty Administrative 

Review, 64 FR 17618 (April 12, 1999) (‘‘Second 

Administrative Review’’); (unchanged in Final 

Results) Certain Pasta From Italy: Final Results of 

Second Countervailing Duty Administrative Review, 

64 FR 44489 (August 16, 1999). 

would charge a corporate customer. See, 

e.g., Certain Pasta from Italy: 

Preliminary Results and Partial Recision 

of the Eighth Countervailing Duty 

Administrative Review, 70 FR 17971 

(April 8, 2005) (decision unchanged in 

the final results, Certain Pasta from 

Italy: Final Results of the Eighth 

Countervailing Duty Administrative 

Review, 70 FR 37084 (June 28, 2005)). 

For benefits received in 1995–2004, we 

used the Italian Bankers’ Association 

prime interest rate (as reported by the 

Bank of Italy), increased by the average 

spread charged by banks on loans to 

commercial customers plus an amount 

for bank charges. The Bank of Italy 

ceased reporting this rate in 2004. 

Because the ABI prime rate was no 

longer reported after 2004, for these 

preliminary results, for 2005 we have 

used the ‘‘Bank Interest Rates on Euro 

Loans: Outstanding Amounts, NonFinancial Corporations, Loans With 

Original Maturity More Than Five 

Years’’ published by the Bank of Italy 

and provided by the Government of 

Italy in their October 24, 2006, 

Questionnaire Response at Exhibit 9. To 

this rate we made the adjustments 

described above. See Memorandum to 

the File, ‘‘Calculations for the 

Preliminary Results for De Matteis 

Agroalimentare S.p.A.’’ (July 31, 2007) 

(‘‘De Matteis Calc Memo’’). 

Analysis of Programs 

I. Program Preliminarily Determined to 

be Countervailable 

A. Industrial Development Grants Under 

Law 64/86 

Law 64/86 provided assistance to 

promote development in the 

Mezzogiorno (the south of Italy). Grants 

were awarded to companies 

constructing new plants or expanding or 

modernizing existing plants. Pasta 

companies were eligible for grants to 

expand existing plants but not to 

establish new plants because the market 

for pasta was deemed to be close to 

saturated. Grants were made only after 

a private credit institution chosen by the 

applicant made a positive assessment of 

the project. 

In 1992, the Italian Parliament 

abrogated Law 64/86 and replaced it 

with Law 488/92 (see below). This 

decision became effective in 1993. 

However, companies whose projects 

had been approved prior to 1993 were 

authorized to continue receiving grants 

under Law 64/86 after 1993. 

DeMatteis and Pallante received 

grants under Law 64/86 which 

conferred a benefit during the POR. 

In the Pasta Investigation, the 

Department determined that these 

grants confer a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. See Final Affirmative 

Countervailing Duty Determination: 

Certain Pasta (‘‘Pasta’’) from Italy, 61 

FR 30288 (June 14, 1996) (‘‘Pasta 

Investigation’’). They are a direct 

transfer of funds from the GOI 

bestowing a benefit in the amount of the 

grant. Also, these grants were found to 

be regionally specific within the 

meaning of section 771(5A) of the Act. 

In this review, neither the GOI nor the 

responding companies have provided 

new information which would warrant 

reconsideration of our determination 

that these grants are countervailable 

subsidies. 

In the Pasta Investigation, the 

Department treated the industrial 

development grants as non-recurring. 

No new information has been placed on 

the record of this review that would 

cause us to depart from this treatment. 

We have followed the methodology 

described in 19 CFR 351.524(b)(2) 

which directs us to allocate over time 

those non-recurring grants whose total 

authorized amount exceeds 0.5 percent 

of the recipient’s sales in the year of 

authorization. Where the total amount 

authorized is less than 0.5 percent of the 

recipient’s sales in the year of 

authorization, the benefit is 

countervailed in full (‘‘expensed’’) in 

the year of receipt. We determined that 

the grants received by De Matteis and 

Pallante under law 64/86 exceeded 0.5 

percent of their sales in the year in 

which the grants were approved, as was 

done in the Fourth Administrative 

Review. 

We used the grant methodology 

described in section 351.524(d) of the 

regulations to calculate the 

countervailable subsidy from those 

grants that were allocated over time. We 

divided the benefit received by each 

company in the POR by its total sales in 

the POR. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from the Law 64/86 industrial 

development grants to be 0.07 percent 

ad valorem for DeMatteis, and 0.28 

percent ad valorem for Pallante. See De 

Matteis Calc Memo; Memorandum to 

the File, ‘‘Calculations for the 

Preliminary Results for Pastificio 

Antonio Pallante S.r.L.’’ (July 31, 2007) 

(‘‘Pallante Calc Memo’’). 

B. Industrial Development Grants Under 

Law 488/92 

In 1986, the European Union (‘‘EU’’) 

initiated an investigation of the GOI’s 

regional subsidy practices. As a result of 

this investigation, the GOI changed the 

regions eligible for regional subsidies to 

include depressed areas in central and 

northern Italy in addition to the 

Mezzogiorno. After this change, the 

areas eligible for regional subsidies are 

the same as those classified as Objective 

1 (underdeveloped regions), Objective 2 

(declining industrial regions), or 

Objective 5(b) (declining agricultural 

regions) areas by the EU. The new 

policy was given legislative form in Law 

488/92 under which Italian companies 

in the eligible sectors (manufacturing, 

mining, and certain business services) 

may apply for industrial development 

grants. 

Law 488/92 grants are made only after 

a preliminary examination by a bank 

authorized by the Ministry of Industry. 

On the basis of the findings of this 

preliminary examination, the Ministry 

of Industry ranks the companies 

applying for grants. The ranking is 

based on indicators such as the amount 

of capital the company will contribute 

from its own funds, the number of jobs 

created, regional priorities, etc. Grants 

are then made based on this ranking. 

DeMatteis and Pallante received 

grants under Law 488/92 which 

conferred a benefit during the POR. 

Industrial development grants under 

Law 488/92 were found countervailable 

in the Second Administrative Review 2. 

The grants are a direct transfer of funds 

from the GOI bestowing a benefit in the 

amount of the grant. Also, these grants 

were found to be regionally specific 

within the meaning of section 771(5A) 

of the Act. In this review, neither the 

GOI nor the responding companies have 

provided new information which would 

warrant reconsideration of our 

determination that these grants are 

countervailable subsidies. 

In the Second Administrative Review, 

the Department treated industrial 

development grants under Law 488/92 

as non-recurring. No new information 

has been placed on the record of this 

review that would cause us to depart 

from this treatment. In accordance with 

section 351.524(b)(2) of the regulations, 

we determined that the grants received 

by De Matteis and Pallante under law 

488/92 exceeded 0.5 percent of their 

sales in the year in which the grants 

were approved, as was the case in the 

Fourth Administrative Review. 

We used the grant methodology as 

described in section 351.524(d) of the 

regulations to calculate the subsidy for 

those grants that were allocated over 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 43619 

time. We divided the benefits received 

by Pallante in the POR by its total sales 

in the POR, and the benefits received by 

De Matteis in the POR by its sales of 

subject merchandise in the POR. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from the Law 488/92 industrial 

development grants to be 0.81 percent 

ad valorem for DeMatteis and 0.61 

percent ad valorem for Pallante. See De 

Matteis Calc Memo and Pallante Calc 

Memo. 

C. European Regional Development 

Fund (‘‘ERDF’’) Programma Operativo 

Plurifondo (P.O.P.) Grant 

The ERDF is one of the European 

Union’s Structural Funds. It was created 

pursuant to the authority in Article 130 

of the Treaty of Rome in order to reduce 

regional disparities in socio-economic 

performance within the EU. The ERDF 

program provides grants to companies 

located within regions which meet the 

criteria of Objective 1 (underdeveloped 

regions), Objective 2 (declining 

industrial regions), or Objective 5(b) 

(declining agricultural regions) under 

the Structural Funds. 

DeMatteis received a P.O.P. Grant 

from the Regione Campania in 1998. See 

Fourth Administrative Review. The 

P.O.P. Grants were funded by the 

European Union, the GOI and the 

Regione Campania. 

In the Pasta Investigation, the 

Department determined that ERDF 

grants confer a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. They are a direct transfer of 

funds bestowing a benefit in the amount 

of the grant. Also, these grants were 

found to be regionally specific within 

the meaning of section 771(5A) of the 

Act. In this review, neither the EU, the 

GOI nor the responding companies have 

provided new information which would 

warrant reconsideration of our 

determination that ERDF grants are 

countervailable subsidies. 

In the Pasta Investigation, the 

Department treated ERDF grants as nonrecurring. No new information has been 

placed on the record of this review that 

would cause us to depart from this 

treatment. In accordance with section 

351.524(b)(2) of the regulations, we 

determined that the ERDF grant 

received by De Matteis exceeded 0.5 

percent of its sales in the year in which 

the grant was approved, as was the case 

in the Fourth Administrative Review. 

We used the grant methodology 

described in section 351.524(d) of the 

regulations to calculate the 

countervailable benefit. We divided the 

benefit received De Matteis in the POR 

by its total sales in the POR. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from the ERDF grant to be 0.06 percent 

ad valorem for DeMatteis. See De 

Matteis Calc Memo. 

D. Social Security Reductions and 

Exemptions—Sgravi 

Italian law allows companies, 

particularly those located in the 

Mezzogiorno region (southern Italy), to 

use a variety of exemptions from and 

reductions (sgravi) of payroll 

contributions that employers make to 

the Italian social security system for 

health care benefits, pensions, etc. The 

sgravi benefits are regulated by a 

complex set of laws and regulations, 

and are sometimes linked to conditions 

such as creating more jobs. We have 

found in past segments of this 

proceeding that the benefits under some 

of these laws (e.g., Laws 183/76 and 

449/97) are available only to companies 

located in the Mezzogiorno and other 

disadvantaged regions. Other laws (e.g., 

Laws 407/90 and 863/84) provide 

benefits to companies all over Italy, but 

the level of benefits is higher for 

companies in the south than for 

companies in other parts of the country. 

In the Pasta Investigation and 

subsequent reviews, the Department 

determined that the various forms of 

social security reductions and 

exemptions confer countervailable 

subsidies within the meaning of section 

771(5) of the Act. They represent 

revenue foregone by the GOI bestowing 

a benefit in the amount of the savings 

received by the companies. Also, they 

were found to be regionally specific 

within the meaning of section 

771(5A)(D)(iv) of the Act because they 

were limited to companies in the 

Mezzogiorno or because the higher 

levels of benefits were limited to 

companies in the Mezzogiorno. 

In the instant review, no party in this 

proceeding challenged our past 

determinations in the Pasta 

Investigation and subsequent reviews 

that sgravi benefits were countervailable 

for companies located within the 

Mezzogiorno region. Additionally, no 

new information or evidence of changed 

circumstances was received that would 

warrant reconsideration of these past 

determinations. 

The laws identified as having 

provided countervailable sgravi benefits 

during the POR are the following: Law 

407/90 (De Matteis and Pallante), 196/ 

97 (De Matteis), 223/91 Article 8 

Paragraph 2 (Pallante), and Law 223/91 

Article 25 Paragraph 9 (Pallante). All of 

these companies are located in the 

Mezzogiorno region of Italy and, 

therefore, the programs provide 

countervailable subsidies to these 

companies. 

1. Law 407/90 

Law 407/90 grants a two-year 

exemption from social security taxes 

when a company hires a worker who 

has been previously unemployed for a 

period of two years. A 100 percent 

exemption is allowed for companies in 

southern Italy. However, companies 

located in northern Italy receive only a 

50 percent exemption. 

In accordance with section 351.524(c) 

of the Department’s regulations and 

consistent with our methodology in the 

Pasta Investigation and in reviews 

subsequent to the Pasta Investigation, 

we have treated social security 

reductions and exemptions as recurring 

benefits. To calculate the 

countervailable subsidy, we divided De 

Matteis’s and Pallante’s savings in social 

security contributions during the POR 

by their total sales in the POR. On this 

basis, we preliminarily determine the 

countervailable subsidy from the sgravi 

program to be 0.04 percent ad valorem 

for De Matteis and 0.03 percent ad 

valorem for Pallante. See De Matteis 

Calc Memo and Pallante Calc Memo. 

2. Law 196/97 

Law 196/97 allows for a reduction or 

exemption from social security 

contributions for workers between the 

ages of 16 and 32 hired under labor or 

training contacts. Reductions range from 

25 percent to 100 percent depending on 

the location. The newly hired worker(s) 

must increase the company’s total work 

force or the worker must be 29 years old 

or younger. For newly hired workers 

under a temporary contract, employers 

are exempt from paying a social security 

contribution for up to 2 years. If workers 

are then switched to a permanent 

contract, the exemption may apply for 

another 12 months. These benefits will 

only apply if the worker who is 

switched from a temporary to a 

permanent contract increases the 

number of employees in the enterprise. 

In accordance with section 351.524(c) 

of the Department’s regulations and 

consistent with our methodology in the 

Pasta Investigation and in reviews 

subsequent to the Pasta Investigation, 

we have treated social security 

reductions and exemptions as recurring 

benefits. To calculate the 

countervailable subsidy, we divided De 

Matteis’s savings in social security 

contributions during the POR by its total 

sales in the POR. On this basis, we 

preliminarily determine the 

countervailable subsidy from the sgravi 

program to be 0.04 percent ad valorem 


sroberts on PROD1PC70 with NOTICES
43620 Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 

for De Matteis. See De Matteis Calc 

Memo. 

3. Law 223/91 Article 8, Paragraph 2 

Law 223/91, Article 8, Paragraph 2 is 

intended to encourage the hiring of laid 

off workers or mobility-listed people. 

Companies who hire unemployed 

people are allowed to pay lower social 

security taxes for up to a maximum of 

18 months for employees hired under a 

long-term contract with no expiration 

date. If an employee is hired for a shortterm contract, then the benefit will last 

as long as the contract. If the short-term 

contract is renewed, the benefit can be 

used for an additional 12 months. In the 

seventh review preliminary results we 

stated that record information for law 

223/91 shows that this law is regionally 

specific within the meaning of section 

771(5A)(D)(iv) of the Act because the 

higher levels of benefits were limited to 

companies in the Mezzogiorno and to 

handicraft enterprises. See Certain Pasta 

from Italy: Preliminary Results and 

Partial Rescission of the Seventh 

Countervailing Duty Administrative 

Review, 69 FR 45676, 45683 (July 30, 

2004); (unchanged in Final Results) 

Certain Pasta from Italy: Final Results of 

the Seventh Countervailing Duty 

Administrative Review, 69 FR 70657 

(December 7, 2004). 

In accordance with section 351.524(c) 

of the Department’s regulations and 

consistent with our methodology in the 

Pasta Investigation and in reviews 

subsequent to the Pasta Investigation, 

we have treated social security 

reductions and exemptions as recurring 

benefits. To calculate the 

countervailable subsidy, we divided 

each company’s savings in social 

security contributions during the POR 

by its total sales in the POR. On this 

basis, we preliminarily determine the 

countervailable subsidy from the sgravi 

program to be 0.05 percent ad valorem 

for Pallante. See Pallante Calc Memo. 

4. Law 223/91 Article 8, Paragraph 4 

Law 223/91, Article 8, Paragraph 4 is 

intended to encourage the hiring of 

mobility-listed people. Companies who 

hire unemployed people on a 

permanent and full time contract are 

granted a credit of 50 percent of what 

the employee would have received in 

unemployment benefits. 

In the 7th Administrative Review 

results we stated that record information 

for law 223/91 shows that this law is 

regionally specific within the meaning 

of section 771(5A)(D)(iv) of the Act 

because the higher levels of benefits 

were limited to companies in the 

Mezzogiorno and to handicraft 

enterprises. See Certain Pasta from 

Italy: Preliminary Results and Partial 

Rescission of the Seventh 

Countervailing Duty Administrative 

Review, 69 FR 45676, 45683 (July 30, 

2004); (unchanged in Final Results) 

Certain Pasta from Italy: Final Results of 

the Seventh Countervailing Duty 

Administrative Review, 69 FR 70657 

(December 7, 2004). 

In accordance with section 351.524(c) 

of the Department’s regulations and 

consistent with our methodology in the 

Pasta Investigation and in reviews 

subsequent to the Pasta Investigation, 

we have treated social security 

reductions and exemptions as recurring 

benefits. To calculate the 

countervailable subsidy, we divided 

Pallante’s savings in social security 

contributions during the POR by its total 

sales in the POR. On this basis, we 

preliminarily determine the 

countervailable subsidy from the sgravi 

program to be 0.01 percent ad valorem 

for Pallante. See Pallante Calc Memo. 

E. Law 289/02 

1. Article 62—Investments in 

Disadvantaged Areas 

We preliminarily find that Article 62 

of Law 289/02 is a credit towards taxes 

payable. The law was established to 

promote investment in disadvantaged 

areas by providing a tax credit to 

companies that make investments such 

as the purchase of new equipment for 

existing structures, or the building of 

new structures. See the GOI’s Second 

Supplemental Response at 3–4 and 

Annex 1, 2, 5, and 6 (April 13, 2007). 

We preliminarily determine that 

Article 62 of Law 289/02 confers a 

countervailable subsidy in the form of a 

financial contribution within the 

meaning of section 771(5)(D)(ii) of the 

Act because it represents revenue 

foregone by the GOI. A benefit is 

conferred in the amount of the tax 

savings received by the companies per 

section 771(5)(E)(iv) of the Act. Also, 

the program is specific within the 

meaning of 751(5A)(D)(iv) of the Act 

because it is limited to certain 

geographical regions in Italy, 

specifically, the regions of Calabria, 

Campania, Basilicata, Pugilia, Sicilia, 

and Sardegna, and certain 

municipalities in the Abruzzo and 

Molise region, and certain 

municipalities in central and northern 

Italy. See GOI Third Supplemental 

Response at 3 and Annex 1 and 2, (May 

25, 2007). 

De Matteis is located in Campania, 

therefore, it could take advantage of this 

program. De Matteis explained that it 

received the benefit for the construction 

of a new semolina milling facility, 

including wheat silos, by-product 

storage silos, semolina silos, and milling 

equipment. See De Matteis’ Second 

Supplemental Response at 2 (April 13, 

2007). The Department is treating this 

program as a credit towards taxes 

payable per 19 CFR 351.509. Normally, 

the Department will allocate the benefit 

of a tax exemption to the year in which 

the benefit is considered to have been 

received per 19 CFR 351.509(c), treating 

the benefit as recurring per 19 CFR 

351.524(c). However, the Department 

may find a benefit to be non-recurring 

by considering the criteria in 19 CFR 

351.524(c)(2)(i)–(iii). In this case, the tax 

program is exceptional because it was 

only available for a limited period of 

time, and was dependent upon 

companies making specific investments. 

Further, the subsidy required the 

government of Italy’s express 

authorization, and the subsidy was tied 

to capital assets of the firm. 

In accordance with section 

351.524(b)(2) of the regulations, we 

determined that the tax credit received 

by De Matteis exceeded 0.5 percent of 

its sales in the year in which the tax 

credit was approved. We used the nonrecurring benefit calculation described 

in 19 CFR 351.524(d) of the regulations 

to calculate the countervailable benefit. 

We divided the benefit received by De 

Matteis in the POR by its total sales in 

the POR. On this basis, we preliminarily 

determine the countervailable subsidy 

from Law 289/02 Article 62 to be 0.35 

percent ad valorem for De Matteis. See 

De Matteis Calc Memo. 

Pallante is located in Campania and, 

therefore, it could also take advantage of 

this program. In accordance with 

section 351.524(b)(2) of the regulations, 

we determined that the tax credit 

received by Pallante exceeded 0.5 

percent of its sales in the year in which 

the tax credit was approved. We used 

the non-recurring benefit calculation 

described in 19 CFR 351.524(d) of the 

regulations to calculate the 

countervailable benefit. We divided the 

benefit received by Pallante in the POR 

by its total sales in the POR. On this 

basis, we preliminarily determine the 

countervailable subsidy from Law 289/ 

02 Article 62 to be 1.04 percent ad 

valorem for Pallante. See Pallante Calc 

Memo. 

2. Article 63—Increase in Employment 

We preliminarily find that Article 63 

of Law 289/02 is a credit towards taxes 

payable. The law was established to 

promote employment by providing a tax 

credit to companies that hire new 

employees. The tax credit is 100 euros 

for a new hire for any company in Italy. 

If the employee is over 45 the amount 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 43621 

increases to 150 euros. An additional 

300 euros will be granted if the 

company is located in certain regions of 

Italy. See GOI Second Supplemental 

Response at 3–4 and Annex 3, 4, 7, and 

8 (April 13, 2007). 

We preliminarily determine that 

Article 63 of Law 289/02 confers a 

countervailable subsidy in the form of a 

financial contribution within the 

meaning of section 771(5)(D)(ii) of the 

Act because it represents revenue 

foregone by the GOI. A benefit is 

conferred in the amount of the tax 

savings received by the companies per 

section 771(5)(E)(iv) of the Act. The 

program is specific within the meaning 

of 751(5A)(D)(iv) of the Act because the 

greater benefit amount is limited to 

certain geographical regions in Italy, 

specifically, Campania, Basilicata, 

Puglia, Calabria, Sicilia, Sardegna, 

Abruzzo, Molise, and the municipalities 

of Tivoli, Formia, Sora, Cassino, 

Frosnone, Viterbo, and Massa. See GOI 

Third Supplemental Response at 3–4 

(May 25, 2007). However, if a company 

is located outside the higher subsidy 

area, then the program is not 

countervailable because it is not 

specific. 

De Matteis is located in Campania 

and, therefore, it could take advantage 

of the higher subsidy rate. The 

Department is treating this program as a 

credit towards taxes payable per 19 CFR 

351.509. Normally, the Department will 

allocate the benefit of a credit towards 

taxes payable to the year in which the 

benefit is considered to have been 

received per 19 CFR 351.509. ‘‘The 

Secretary normally will consider the 

benefit as having been received on the 

date on which the recipient firm would 

otherwise have had to pay the taxes 

associated with the exemption or 

remission. Normally, this date will be 

the date on which the firm filed its tax 

return.’’ See 19 CFR 351.509(b). In 

expensing the complete benefit in one 

year, the Department is considering this 

program as recurring per 19 CFR 

351.524(c) which states that ‘‘{t}he 

Secretary normally will treat the 

following types of subsidies as 

providing recurring benefits: Direct tax 

exemptions and deductions; * * *’’ To 

calculate the countervailable subsidy, 

we divided De Matteis’ tax credit used 

on the tax return filed during the POR 

by its total sales in the POR. On this 

basis, we preliminarily determine the 

countervailable subsidy from Law 289/ 

02 Article 63 to be 0.03 percent ad 

valorem for De Matteis. See De Matteis 

Calc Memo. 

F. Law 662/96 

The GOI describes the Patti 

Territoriali grant (Law 662/96 Article 2, 

Paragraph 203, Letter d) as provided to 

companies for entrepreneurial 

initiatives such as new plants, 

additions, modernization, restructuring, 

conversion, reactivation, or transfer. 

Companies that can apply for the grants 

must be involved in mining, 

manufacturing, production of thermal or 

electric power from biomasses, service 

companies, tourist companies, 

agricultural, maritime and salt-water 

fishing businesses, aquaculture 

enterprises, or their associations. The 

Patti Territoriali provides grants to 

companies located within regions which 

meet the criteria of Objective 1 or 

Objective 2 under the Structural Funds 

or article 87.3.c of the Treaty of Rome. 

See the GOI’s Second Supplemental 

Response at 4–5 and Annex 9–13 (April 

13, 2007). 

The GOI has stated that De Matteis 

received disbursements from the Patti 

Territoriali in 2000 and 2004 from a 

grant approved on January 29, 1999. 

The Department preliminarily 

determines that the Patti Territoriali 

grant confers a countervailable subsidy 

within the meaning of section 

771(5)(D)(i) of the Act because it is a 

direct transfer of funds. A benefit is 

conferred in the full amount of the 

grant. Further, the grant is regionally 

specific within the meaning of section 

771(5A)(D)(iv) of the Act because it is 

limited to companies located within 

regions which meet the criteria of 

Objective 1 or Objective 2 under the 

Structural Funds or article 87.3.c of the 

Treaty of Rome. 

We normally treat grants as nonrecurring. In accordance with section 

351.524(b)(2) of the regulations, we 

determined that the Patti Territoriali 

grant received by De Matteis exceeded 

0.5 percent of its sales in the year in 

which the grant was approved and, 

therefore, we will allocate the grant over 

the 12 year AUL. 

We used the grant methodology 

described in section 351.524(d) of the 

regulations to calculate the 

countervailable benefit. We divided the 

benefit received by De Matteis in the 

POR by its total sales in the POR. On 

this basis, we preliminarily determine 

the countervailable subsidy from the 

Patti Territoriali grant to be 0.57 percent 

ad valorem for De Matteis. See De 

Matteis Calc Memo. 

On July 23, 2007, petitioners 

submitted ‘‘Comments In Anticipation 

of Preliminary Results.’’ In these 

comments, petitioners have made a 

further claim concerning this program. 

Because we did not have time to issue 

a supplemental questionnaire, we are 

not acting on the claim at this time. 

Following the publication of these 

preliminary results, the Department will 

decide whether to issue any further 

supplemental questionnaires concerning 

this program. 

II. Programs Preliminarily Determined 

to be Not Countervailable 

A. Social Security Reductions and 

Exemptions—Sgravi (Article 120 of Law 

388/00) 

Atar has reported receiving benefits 

from Article 120 of Law 388/00. Unlike 

many other sgravi programs, Article 120 

of Law 388/00 (fiscalizzazione program) 

is a nationwide sgravi program that 

provides an equivalent level of 

deductions throughout Italy and is not 

specific to the Mezzogiorno region or to 

the pasta industry pursuant to section 

771(5A) of the Act. Article 120 of Law 

388/00 provides a deduction of certain 

social security payments related to 

health care or insurance. The 

government takes over a minimal 

amount of the payments for social 

contributions which are owed to the 

Instituto Nazionale Previdenza Sociale 

(‘‘INPS’’). In the ninth administrative 

review we found this program to be 

non-countervailable. See Certain Pasta 

from Italy: Preliminary Results of the 

Ninth Countervailing Duty 

Administrative Review and Notice of 

Intent to Revoke Order, in Part, 71 FR 

17440 (April 6, 2006); and Certain Pasta 

from Italy: Final Results of the Ninth 

Countervailing Duty Administrative 

Review and Notice of Revocation of 

Order, in Part, 71 FR 36318 (June 26, 

2006). Therefore, we continue to find 

that Article 120 of Law 388/00 is not a 

countervailable subsidy because the 

subsidy is not specific. Accordingly, we 

determine that Atar did not receive 

countervailable subsidies under this 

program. 

III. Programs Preliminarily Determined 

to Not be Used 

We examined the following programs 

and preliminarily determine that the 

producers and/or exporters of the 

subject merchandise under review did 

not apply for or receive benefits under 

these programs during the POR: 

A. Industrial Development Loans 

Under Law 64/86. 

B. Law 236/93 Training Grants. 

C. Law 1329/65 Interest Contributions 

(Sabatini Law) (Formerly Lump-Sum 

Interest Payment Under the Sabatini 

Law for Companies in Southern Italy). 

D. Development Grants Under Law 30 

of 1984. 


sroberts on PROD1PC70 with NOTICES
43622 Federal Register / Vol. 72, No. 150 / Monday, August 6, 2007 / Notices 

E. Law 908/55 Fondo di Rotazione 

Iniziative Economiche (Revolving Fund 

for Economic Initiatives) Loans. 

F. Law 317/91 Benefits for Innovative 

Investments. 

G. Brescia Chamber of Commerce 

Training Grants. 

H. Ministerial Decree 87/02. 

I. Law 10/91 Grants to Fund Energy 

Conservation. 

J. Export Restitution Payments. 

K. Export Credits Under Law 227/77. 

L. Capital Grants Under Law 675/77. 

M. Retraining Grants Under Law 675/ 

77. 

N. Interest Contributions on Bank 

Loans Under Law 675/77. 

O. Preferential Financing for Export 

Promotion Under Law 394/81. 

P. Urban Redevelopment Under Law 

181. 

Q. Industrial Development Grants 

Under Law 183/76. 

R. Interest Subsidies Under Law 598/ 

94. 

S. Duty-Free Import Rights. 

T. European Social Fund Grants. 

U. Law 113/86 Training Grants. 

V. European Agricultural Guidance 

and Guarantee Fund. 

W. Law 341/95 Interest Contributions 

on Debt Consolidation Loans (Formerly 

Debt Consolidation Law 341/95). 

X. Interest Grants Financed by IRI 

Bonds. 

Y. Grant Received Pursuant to the 

Community Initiative Concerning the 

Preparation of Enterprises for the Single 

Market (PRISMA). 

Z. Article 44 of Law 448/01. 

IV. Programs Preliminarily Determined 

To Have Been Terminated 

We examined the following programs 

at verification during the 9th 

Administrative Review and 

preliminarily determine in this review 

that they have been terminated prior to 

the current POR and that there will be 

no remaining subsidy benefits from 

these programs after this POR. See 

‘‘Verification of the Questionnaire 

Responses of the Government of Italy in 

the 9th Administrative Review’’ (March 

31, 2006) which was placed on the 

record of this proceeding on July 31, 

2007. 

A. Social Security Reductions and 

Exemptions—Sgravi Article 44 of Law 

448/01. 

B. Social Security Reductions and 

Exemptions—Sgravi Law 337/90. 

Preliminary Results of Review 

In accordance with 19 CFR 

351.221(b)(4)(i), we calculated an 

individual subsidy rate for Pallante and 

De Matteis. Atar had no countervailable 

subsidies. We did not calculate an 

individual rate for Agritalia because a 

review was not requested for Agritalia. 

Agritalia was only asked to participate 

because of the possible effect of 

subsidies it received on its suppliers 

who are included in this review. We 

have preliminarily found that Agritalia 

did not receive any subsidies which 

affected any suppliers’ rates. For the 

period January 1, 2005, through 

December 31, 2005, we preliminarily 

find the net subsidy rates for the 

producers/exporters under review to be 

those specified in the chart shown 

below: 

Producer/exporter 

Net subsidy 

rate 

(percent) 

De Matteis Agroalimetare S.p.A 1.97 

Pastificio Antonio Pallante S.r.L 2.02 

Atar S.r.l .................................... 0.00 

The calculations will be disclosed to 

the interested parties in accordance 

with 19 CFR 351.224(b). 

If the final results of this review 

remain the same as these preliminary 

results, the Department intends to 

instruct Customs to assess 

countervailing duties at these net 

subsidy rates. The Department will 

issue appropriate instructions directly 

to Customs within 15 days of 

publication of the final results of this 

review. 

For all other companies that were not 

reviewed (except Barilla G. e R. F.lli 

S.p.A. and Gruppo Agricoltura Sana 

S.r.l., which are excluded from the 

order, and Pasta Lensi S.r.l. which was 

revoked from the order), the Department 

has directed CBP to assess 

countervailing duties on all entries 

between January 1, 2005, and December 

31, 2005, at the rates in effect at the time 

of entry. Agritalia has been reviewed 

previously and has its own exporter 

specific rate of 2.92 percent. 

The Department also intends to 

instruct CBP to collect cash deposits of 

estimated countervailing duties. 

For all non-reviewed firms (except 

Barilla G. e R. F.lli S.p.A. and Gruppo 

Agricoltura Sana S.r.l., which are 

excluded from the order, and Pasta 

Lensi S.r.l. which was revoked from the 

order), we will instruct CBP to collect 

cash deposits of estimated 

countervailing duties at the most recent 

company-specific or ‘‘all others’’ rate 

applicable to the company. These rates 

shall apply to all non-reviewed 

companies until a review of a company 

assigned these rates is requested. 

Public Comment 

Pursuant to 19 CFR 351.224(b), the 

Department will disclose to parties to 

the proceeding any calculations 

performed in connection with these 

preliminary results within five days 

after the date of the public 

announcement of this notice. 

Pursuant to 19 CFR 351.309(c)(ii), 

interested parties may submit written 

arguments in case briefs within 30 days 

of the date of publication of this notice. 

Rebuttal briefs, limited to issues raised 

in case briefs, may be filed no later than 

five days after the date of filing the case 

briefs, in accordance with 19 CFR 

351.309(d). Parties who submit briefs in 

this proceeding should provide a 

summary of the arguments not to exceed 

five pages and a table of statutes, 

regulations, and cases cited. Copies of 

case briefs and rebuttal briefs must be 

served on interested parties in 

accordance with 19 CFR 351.303(f). 

Interested parties may request a 

hearing within 30 days after the date of 

publication of this notice, pursuant to 

19 CFR 351.310(c). Any hearing, if 

requested, will be held two days after 

the scheduled date for submission of 

rebuttal briefs. 

The Department will publish a notice 

of the final results of this administrative 

review within 120 days from the 

publication of these preliminary results, 

in accordance with section 751(a)(3) of 

the Act. 

We are issuing and publishing these 

results in accordance with sections 

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

CFR 351.221(b)(4). 

Dated: July 31, 2007. 

Stephen J. Claeys, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. 07–3832 Filed 8–3–07; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

Mission Statement; Afghanistan 

International Carpet Fair; August 26–

28, 2007 

AGENCY: International Trade 

Administration, Department of 

Commerce. 

ACTION: Notice. 

Mission Description 

U.S. Secretary of Commerce 

Gutierrez’s priorities for Afghanistan 

include helping the country develop 

three sectors in which it has a 

comparative advantage: rugs, dried 

fruits and nuts, and mining. The 

International Trade Administration of 

the Department of Commerce is 


sroberts on PROD1PC70 with NOTICES