Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 45721 

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 US—

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 30, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–18026 Filed 8–5–08; 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 11th (2006) 

Countervailing Duty Administrative 

Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(‘‘Department’’) is conducting an 

administrative review of the 

countervailing duty order on certain 

pasta from Italy for the period January 

1, 2006, through December 31, 2006. We 

preliminarily find that De Matteis 

Agroalimentare S.p.A. (‘‘De Matteis’’), 

Pastificio Lucio Garofalo S.p.A. 

(‘‘Garofalo’’), and F.lli De Cecco di 

Filippo Fara San Martino S.p.A. (‘‘De 

Cecco’’) received countervailable 

subsidies, and that Pastificio Felicetti 

SrL (‘‘Felicetti’’) did not receive any 

countervailable subsidies. 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. 

EFFECTIVE DATE: August 6, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Andrew McAllister 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) 

482–1174 and (202) 482–0182, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 24, 1996, 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, 2007, the Department published a 

notice of ‘‘Opportunity to Request 

Administrative Review’’ of this 

countervailing duty order for calendar 

year 2006, the period of review (‘‘POR’’). 

See Antidumping or Countervailing 

Duty Order, Finding, or Suspended 

Investigation; Opportunity to Request 

Administrative Review, 72 FR 36420 

(July 3, 2007). On July 31, 2007, we 

received requests for review from 

Garofalo, Valdigrano Di Flavio Pagani 

SrL (‘‘Valdigrano’’), Felicetti, and 

Prodotti Mediterranei, Inc. on behalf of 

De Cecco. On July 31, 2007, we received 

a request for review from New World 

Pasta Company, American Italian Pasta 

Company, and Dakota Growers Pasta 

Company (‘‘petitioners’’) for De Matteis. 

In accordance with 19 CFR 

351.221(c)(1)(i), we published a notice 

of initiation of the review on August 24, 

2007. See Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Requests for Revocation in 

Part, 72 FR 48613 (August 24, 2007). 

On September 11, 2007, we issued 

countervailing duty questionnaires to 

the Commission of the European Union 

(‘‘EU’’), the Government of Italy 

(‘‘GOI’’), Garofalo, Valdigrano, Felicetti, 

De Cecco, and De Matteis. On October 

16, 2007, Valdigrano withdrew its 

request for review. On November 5, 

2007, we rescinded the review with 

respect to Valdigrano. See Certain Pasta 

from Italy: Notice of Partial Rescission 

of Countervailing Duty Administrative 

Review, 72 FR 62437 (November 5, 

2007). 

We received responses to our 

questionnaires in November 2007. We 

issued supplemental questionnaires to 

the respondents and GOI in February, 

March, April, May, June, and July 2008, 

and we received responses to our 

supplemental questionnaires in March, 

April, May, June, and July 2008. 

Period of Review 

The POR for which we are measuring 

subsidies is January 1, 2006, through 

December 31, 2006. 

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, 

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 

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45722 Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 

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 shrink–

wrapped 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 Anti–

Circumvention 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 anti–

circumvention inquiry. See Anti–

Circumvention Inquiry of the 

Antidumping and Countervailing Duty 

Orders on Certain Pasta from Italy: 

Affirmative Final Determinations of 

Circumvention of Antidumping and 

Countervailing Duty Orders, 68 FR 

54888 (September 19, 2003). 

Subsidies Valuation Information 

Allocation Period 

Pursuant to 19 CFR 351.524(b), non–

recurring 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 ‘‘cross–

ownership’’ exists with respect to 

certain companies, as described below, 

and we have attributed subsidies 

accordingly: 

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’s 

November 21, 2007, questionnaire 

response (‘‘QR’’) at 2–3. De Matteis has 

reported that Construzioni did not 

receive any subsidies during the POR or 

AUL period. See De Matteis’s April 1, 

2008, supplemental questionnaire 

response (‘‘SQR’’) at 1. Therefore, we are 

attributing De Matteis’s subsidies to its 

sales only. 

Garofalo: Garofalo has reported that it 

has no affiliates. Thus, we are 

attributing any subsidies received to 

Garofalo’s sales only. 

De Cecco: De Cecco has responded on 

behalf of two members of the De Cecco 

Group: F.lli De Cecco di Filippo Fara 

San Martino S.p.A. (‘‘Pastificio’’) and 

Molino e Pastificio F.lli De Cecco S.p.A. 

(‘‘Pescara’’). Pastificio and Pescara 

manufacture pasta for sale in Italy, to 

third- countries, and to the United 

States. Pastificio and Pescara are 

directly or indirectly 100 percent–

owned by members of the De Cecco 

family. Effective January 1, 1999, 

Molino F.lli De Cecco di Filippo S.p.A. 

(‘‘Molino’’), a third member of the De 

Cecco Group on whose behalf De Cecco 

responded in the fourth administrative 

review, was merged with Pastifico and 

ceased to be a separate entity. The 

Department will continue to consider 

countervailable any benefits received by 

Molino in past administrative review 

periods and allocated over a period that 

extends into or beyond the current POR. 

In accordance with 19 CFR 

351.525(b)(6)(i) and (ii), we are 

attributing subsidies received by 

Pastificio and Pescara to the combined 

sales of both. 

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 

would charge a corporate customer. See, 

e.g., Certain Pasta from Italy: 

Preliminary Results and Partial 

Rescission of the Eighth Countervailing 

Duty Administrative Review, 70 FR 

17971 (April 8, 2005); Certain Pasta 

from Italy: Final Results of the Eighth 

Countervailing Duty Administrative 

Review, 70 FR 37084 (June 28, 2005) 

(unchanged in Final Results). For 

benefits received in 1995–2004, we used 

the Italian Bankers’ Association (‘‘ABI’’) 

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 

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Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 45723 

1 Final Affirmative Countervailing Duty 

Determination: Certain Pasta (‘‘Pasta’’) from Italy, 

61 FR 30288 (June 14, 1996) (‘‘Pasta Investigation’’). 

longer reported after 2004, for 2005 and 

2006, we have used the ‘‘Bank Interest 

Rates on Euro Loans: Outstanding 

Amounts, Non–Financial Corporations, 

Loans With Original Maturity More 

Than Five Years’’ published by the Bank 

of Italy and provided by the GOI in its 

November 8, 2007, QR at Exhibit 5. We 

made the adjustments described above 

to this rate. 

Analysis of Programs 

I. Programs 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. De Matteis, 

Garofalo, and De Cecco received grants 

under Law 64/86 which conferred a 

benefit during the POR. 

In the Pasta Investigation,1 the 

Department determined that these 

grants confer a countervailable subsidy 

within the meaning of section 771(5) of 

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

Act’’). They are a direct transfer of funds 

from the GOI bestowing a benefit in the 

amount of the grant. See section 

771(5)(D)(i); see also 19 CFR 351.504(a). 

Also, these grants were found to be 

regionally specific within the meaning 

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

grants received by De Matteis, Garofalo, 

and De Cecco under Law 64/86 

exceeded 0.5 percent of their sales in 

the year in which the grants were 

approved. 

We used the grant methodology 

described in 19 CFR 351.524(d) to 

allocate the benefits 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 0.05 percent 

ad valorem for De Matteis, 0.59 percent 

ad valorem for Garofalo, and 0.56 

percent ad valorem for De Cecco. See 

Memorandum to the File, ‘‘2006 

Preliminary Results Calculation 

Memorandum for De Matteis 

Agroalimentare S.p.A.,’’ dated July 30, 

2008 (‘‘De Matteis Calc Memo’’); 

Memorandum to the File, ‘‘2006 

Preliminary Results Calculation 

Memorandum for Pastificio Lucio 

Garofalo S.p.A.,’’ dated July 30, 2008 

(‘‘Garofalo Calc Memo’’); and 

Memorandum to the File, ‘‘2006 

Preliminary Results Calculation 

Memorandum for F.lli De Cecco di 

Filippo Fara San Martino S.p.A.,’’ dated 

July 30, 2008 (‘‘De Cecco Calc Memo’’). 

B. Industrial Development Loans Under 

Law 64/86 

In addition to the Law 64/86 

industrial development grants discussed 

above, Law 64/86 also provided 

reduced–rate industrial development 

loans with interest contributions paid 

by the GOI on loans taken by companies 

constructing new plants or expanding or 

modernizing existing plants in the 

Mezzogiorno. As with the grants 

discussed above, pasta companies were 

eligible for interest contributions to 

expand existing plants, but not to 

establish new plants. The fixed–interest 

rates on these long–term loans were set 

at the reference rate with the GOI’s 

interest contributions serving to reduce 

this rate. Although Law 64/86 was 

abrogated in 1992 (effective 1993), 

projects approved prior to 1993 were 

authorized to receive interest subsidies 

after 1993. 

Garofalo and De Cecco had Law 64/ 

86 industrial development loans 

outstanding during the POR. 

In the Pasta Investigation, the 

Department determined that Law 64/86 

loans confer a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. They are a direct transfer of 

funds from the GOI providing a benefit 

in the amount of the difference between 

the benchmark interest rate and the 

interest rate paid by the companies after 

accounting for the GOI’s interest 

contributions. See Section 751(5)(E)(ii). 

Also, these loans were found to be 

regionally specific within the meaning 

of section 771(5A)(D)(iv) 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 accordance with 19 CFR 

351.505(c)(2), we calculated the benefit 

for the POR by computing the difference 

between the payments Garofalo and De 

Cecco made on their Law 64/86 loans 

net of GOI interest contributions and the 

payments Garofalo and De Cecco would 

have made on the benchmark loan. We 

divided the benefit received by Garofalo 

and De Cecco by their respective total 

sales in the POR. 

On this basis, we determine the 

countervailable subsidy from the Law 

64/86 industrial development loans to 

be 0.16 percent ad valorem for Garofalo 

and 0.02 percent ad valorem for De 

Cecco. See Garfalo Calc Memo and De 

Cecco Calc Memo. 

C. Industrial Development Grants Under 

Law 488/92 

In 1986, the 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. 

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2See Certain Pasta From Italy: Preliminary 

Results of Countervailing Duty Administrative 

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

Administrative Review’’); Certain Pasta From Italy: 

Final Results of Second Countervailing Duty 

Administrative Review, 64 FR 44489 (August 16, 

1999) (unchanged in Final Results). 

3See Certain Pasta from Italy: Preliminary Results 

and Partial Rescission of Countervailing Duty 

Administrative Review, 66 FR 40987 (August 6, 

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

Pasta From Italy: Final Results of Fourth 

Countervailing Duty Administrative Review, 66 FR 

64214 (December 12, 2001) (unchanged in Final 

Results). 

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. 

De Matteis, Garofalo, and De Cecco 

received grants under Law 488/92 

which conferred a benefit during the 

POR. Based upon findings at 

verification, we adjusted De Matteis’s 

reported disbursement amounts to 

include an interest amount received by 

De Matteis reflecting a lag in payment. 

See Memorandum to the File, 

‘‘Verification of the Questionnaire 

Responses of De Matteis Agroalimentare 

S.p.A. in the 11th Administrative 

Review,’’ dated July 30, 2008 (‘‘De 

Matteis Verification Report’’), at 8; see 

also De Matteis Calc Memo. 

In the Second Administrative 

Review,2 the Department determined 

that these grants confer a 

countervailable subsidy within the 

meaning of section 771(5) of the Act. 

They are a direct transfer of funds from 

the GOI bestowing a benefit in the 

amount of the grant. See section 

771(5)(D)(i); see also 19 CFR 351.504(a). 

Also, these grants were found to be 

regionally specific within the meaning 

of section 771(5A)(D)(iv) 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 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 expensed in 

the year of receipt. We determined that 

grants received by De Matteis, Garofalo, 

and De Cecco under Law 488/92 

exceeded 0.5 percent of their sales in 

the year in which the grants were 

approved. 

We used the grant methodology 

described in 19 CFR 351.524(d) to 

allocate the benefits 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 488/92 industrial 

development grants to be 1.11 percent 

ad valorem for De Matteis, 0.81 percent 

ad valorem for Garofalo, and 0.25 

percent ad valorem for De Cecco. See De 

Matteis Calc Memo, Garofalo Calc 

Memo, and De Cecco Calc Memo. 

D. European Regional Development 

Fund (‘‘ERDF’’) Programma Operativo 

Plurifondo (P.O.P.) Grant 

The ERDF is one of the EU’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, as described above, of Objective 

1, Objective 2, or Objective 5(b) under 

the Structural Funds. 

De Matteis received a P.O.P. Grant 

from the Regione Campania in 1998.3

The P.O.P. Grants were funded by the 

EU, the GOI, and the Regione Campania. 

In the Pasta Investigation, the 

Department determined that ERDF 

P.O.P. Grants confer a countervailable 

subsidy within the meaning of section 

771(5) of the Act. They are a direct 

transfer of funds from the GOI 

bestowing a benefit in the amount of the 

grant. See section 771(5)(D)(i); see also 

19 CFR 351.504(a). Also, these grants 

were found to be regionally specific 

within the meaning of section 

771(5A)(D)(iv) 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 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 19 CFR 

351.524(b)(2), 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 19 CFR 351.524(d) to 

allocate the benefits over time. 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 ERDF P.O.P. Grant to be 0.05 

percent ad valorem for De Matteis. See 

De Matteis Calc Memo. 

E. Social Security Reductions and 

Exemptions – Sgravi 

Italian law allows companies, 

particularly those located in the 

Mezzogiorno region, 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 benefits under some of 

these laws (e.g., Laws 183/76, 449/97, 

and 223/91) are available only to 

companies located in the Mezzogiorno 

and other disadvantaged regions. 

Certain 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 

Mezzogiorno and other disadvantaged 

regions than for companies in other 

parts of the country. Still, other laws 

provide benefits that are not linked to 

any region. 

In the Pasta Investigation and 

subsequent reviews, the Department 

determined that certain types 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. See section 771(5)(D)(ii) of 

the Act. 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, generally, were 

countervailable for companies located 

within the Mezzogiorno region. 

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Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 45725 

4See Memorandum to the File, ‘‘Verification of 

the Questionnaire Responses of the Government of 

Italy in the 11th Administrative Review,’’ dated July 

30, 2008 (‘‘GOI Verification Report’’). 

However, the GOI has submitted 

information claiming that benefits 

provided under Article 8 of Law 223/91 

should be found not countervailable. 

See Memorandum to the File, ‘‘GOI’s 

June 11, 2008, Letter,’’ dated July 30, 

2008. 

The laws identified as having 

provided sgravi benefits during the POR 

are the following: Law 863/84 (De 

Matteis and Garofalo), Law 196/97 (De 

Matteis), Law 407/90 (De Matteis and 

Garofalo), Law 223/91 Article 8 

Paragraph 2 (De Matteis), and Law 223/ 

91 Article 25 Paragraph 9 (De Matteis). 

These companies are located in the 

Mezzogiorno region of Italy. 

1) Law 863/84 

Law 863/84 provides social security 

reductions or exemptions when a 

company hires a worker under a non–

renewable contract with a term of 24 

months or less and the contract includes 

an educational or training component. 

The GOI refers to these as ‘‘skilling’’

contracts. See GOI Verification Report,4

at 10–11. The employer may receive 

reductions or exemptions from social 

security contributions for a period of up 

to 24 months. Id. Typically, employees 

hired under these contracts must be no 

more than 29 years old, but in the 

Mezzogiorno, the maximum age is 32 

years old. Id. Also, a company in the 

Mezzogiorno is exempted from making 

social security contributions for 

employees hired under these skilling 

contracts, while companies in other 

areas of Italy received a 25 percent 

reduction in social security 

contributions. Id. 

Legislative Decree (‘‘L.D.’’) 276/03 

repealed the provision related to skilling 

contracts by private companies and, as 

of November 2004, no new skilling 

contracts could be made. Id. However, 

for skilling contracts entered into as of 

October 2004, benefits could be realized 

for the duration of the two–year period. 

Id. 

In the Pasta Investigation, we 

determined Law 863/84 conferred a 

countervailable subsidy within the 

meaning of section 771(5) of the Act. 

The reduction or exemption of taxes is 

revenue forgone and is, therefore, a 

financial contribution within the 

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

Act. The benefit is the difference in the 

amount of the tax savings between 

companies located in the Mezzigiorno 

and companies located in the rest of 

Italy in accordance with 19 CFR 

351.509(a). Additionally, the program is 

regionally specific within the meaning 

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

because higher levels of benefits are 

limited to companies in the 

Mezzogiorno region. 

In accordance with 19 CFR 351.524(c) 

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 for De Matteis 

and Garofalo, we calculated the 

difference during the POR between the 

savings for each of these respondent 

companies located in the Mezzogiorno 

and the savings a company located in 

the rest of Italy would have received. 

This amount was divided by the 

respondent’s total sales in the POR. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from Law 863/84 to be 0.01 percent ad 

valorem for De Matteis and 0.03 percent 

ad valorem for Garofalo. See De Matteis 

Calc Memo and Garofalo Calc Memo. 

2) Law 196/97 

Law 196/97 is closely related to Law 

863/84. See GOI Verification Report, at 

11–12. It provides additional 

exemptions for employers in the 

Mezzogiorno that hire on a long–term 

(or permanent) basis, employees hired 

under skilling contracts. Id. Law 196/97 

permits such employers a total 

exemption from social security 

contributions for an additional 12–

month period. 

Benefits from Law 196/97 could only 

be requested after an employee had 

participated in a 24–month skilling 

contract under Law 863/84. As noted 

above, no new skilling contracts under 

Law 863/84 could be made after October 

31, 2004. Thus, the last possible date to 

request exemptions under Law 196/97 

was October 31, 2006. Moreover, 

because the exemption granted under 

Law 196/97 only lasts for twelve 

months, benefits were set to expire by 

October 31, 2007. 

In the Fourth Administrative Review, 

we determined Law 196/97 confers a 

countervailable subsidy within the 

meaning of section 771(5) of the Act. 

The reduction or exemption of taxes is 

revenue forgone and is, therefore, a 

financial contribution within the 

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

Act . The benefit is the amount of the 

tax savings in accordance with 19 CFR 

351.509(a). Additionally, the program is 

regionally specific within the meaning 

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

because benefits are limited to 

companies in the Mezzogiorno region. 

In accordance with 19 CFR 351.524(c) 

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 Law 196/97 to be 0.09 percent ad 

valorem for De Matteis. See De Matteis 

Calc Memo. 

3) Law 407/90 

Law 407/90 grants an exemption from 

social security taxes for three years 

when a company hires a worker who (1) 

has received wage supplementation for 

a period of at least two years, or (2) has 

been previously unemployed for a 

period of two years. See GOI 

Verification Report, at 12–13. A 100–

percent exemption is allowed for 

companies in the Mezzogiorno, while 

companies located in the rest of Italy 

receive a 50–percent reduction. 

In the Pasta Investigation, we 

determined Law 407/90 confers a 

countervailable subsidy within the 

meaning of section 771(5) of the Act. 

The reduction or exemption of taxes is 

revenue forgone and is, therefore, a 

financial contribution within the 

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

Act. The benefit is the difference in the 

amount of the tax savings between 

companies located in the Mezzigiorno 

and companies located in the rest of 

Italy in accordance with 19 CFR 

351.509(a). Additionally, the program is 

regionally specific within the meaning 

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

because higher levels of benefits are 

limited to companies in the 

Mezzogiorno region. 

In accordance with 19 CFR 351.524(c) 

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 for De Matteis 

and Garofalo, we divided the difference 

during the POR between the savings for 

each respondent company located in the 

Mezzogiorno and the savings a company 

located in the rest of Italy would have 

received. This amount was divided by 

the respondent’s total sales in the POR. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from Law 407/90 to be 0.03 percent ad 

valorem for De Matteis and 0.01 percent 

ad valorem for Garofalo. See De Matteis 

Calc Memo and Garofalo Calc Memo. 

4) Law 223/91 

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45726 Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 

5See Certain Pasta from Italy: Preliminary Results 

and Partial Rescission of the Seventh 

Countervailing Duty Administrative Review, 69 FR 

45676, 45683 (July 30, 2004) (‘‘Seventh 

Administrative Review’’); Certain Pasta from Italy: 

Final Results of the Seventh Countervailing Duty 

Administrative Review, 69 FR 70657 (December 7, 

2004) (unchanged in Final Results). 

6See Certain Pasta From Italy: Preliminary 

Results of the Tenth Countervailing Duty 

Administrative Review, 72 FR 43616 (August 6, 

2007) (‘‘Tenth Administrative Review’’); Certain 

Pasta From Italy: Final Results of the Tenth (2005) 

Countervailing Duty Administrative Review, 72 FR 

7251 (February 7, 2008) (unchanged in Final 

Results). 

Law 223/91 is designed to increase 

employment by providing benefits to 

companies that hire unemployed 

workers on a special mobility list. The 

mobility list comprises recently fired 

workers in certain sectors of the 

economy, but companies in any sector 

may hire workers off the mobility list. 

(a) Article 8, Paragraph 2 

Under Law 223/91, Article 8, 

Paragraph 2, the employer is exempted 

from social security contributions when 

a mobility–listed worker is hired under 

a short–term contract of up to 12 

months. See GOI Verification Report, at 

13–14. The employer receives such 

benefits for the length of the contract to 

a maximum of 12 months. Id. But, if the 

short–term contract is converted to a 

permanent contract, the employer 

receives benefits for an additional 12 

months. Id. 

In the Seventh Administrative 

Review,5 we determined that Law 223/ 

91 conferred a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. The reduction or exemption of 

taxes was treated as revenue forgone 

and was, therefore, a financial 

contribution within the meaning of 

section 771(5)(D)(ii) of the Act. The 

benefit is the amount of tax savings in 

accordance with 19 CFR 351.509(a). 

Additionally, we found that the program 

was regionally specific within the 

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

Act because it was limited to companies 

in the Mezzogiorno or because the 

higher levels of benefits were limited to 

companies in the Mezzogiorno. 

Based on our review of the record of 

the seventh administrative review and 

our verification in this administrative 

review, we continue to find the 

exemption or reduction of taxes as 

revenue forgone, with the benefit equal 

to the amount not collected; however, 

we now find no basis for de jure 

specificity under Law 223/91, Article 8, 

Paragraph 2. See GOI Verification 

Report, at 13–14. However, on June 16, 

2008, we sent a supplemental 

questionnaire to the GOI which in part 

asked for a list of the industries that 

received benefits under this law. The 

GOI did not respond to this portion of 

the supplemental questionnaire. See 

GOI’s June 27, 2008, SQR. Therefore, the 

GOI has not provided information to 

support a finding that Law 223/91, 

Article 8, Paragraph 2, is not de facto 

specific, within the meaning of section 

771(5A)(iii) of the Act. Accordingly, we 

continue to find the exemptions 

provided under Law 223/91, Article 8, 

Paragraph 2, countervailable. After these 

preliminary results, we intend to issue 

another supplemental questionnaire to 

the GOI asking about industry usage of 

Law 223/91, Article 8, Paragraph 2. 

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 Law 223/91, Article 8, Paragraph 2 

to be 0.02 percent ad valorem for De 

Matteis. See De Matteis Calc Memo. 

(b) Article 25, Paragraph 9 

Under Law 223/91, Article 25, 

Paragraph 9, an employer is exempted 

from social security contributions for a 

period of 18 months when the worker is 

hired from the mobility list on a 

permanent basis. See GOI Verification 

Report, at 13–14. 

In the Seventh Administrative Review, 

we determined that Law 223/91 

conferred a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. The reduction or exemption of 

taxes was treated as revenue forgone 

and was, therefore, a financial 

contribution within the meaning of 

section 771(5)(D)(ii) of the Act. The 

benefit is the amount of tax savings in 

accordance with 19 CFR 351.509(a). 

Additionally, we found that the program 

was regionally specific within the 

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

Act because it was limited to companies 

in the Mezzogiorno or because the 

higher levels of benefits were limited to 

companies in the Mezzogiorno. 

Based on our review of the record of 

the seventh administrative review and 

our verification in this administrative 

review, we continue to find the 

exemption or reduction of taxes as 

revenue forgone, with the benefit equal 

to the amount not collected; however, 

we now find no basis for de jure 

specificity under Law 223/91, Article 

25, Paragraph 9. See GOI Verification 

Report, at 13–14. However, on June 16, 

2008, we sent a supplemental 

questionnaire to the GOI which in part 

asked for a list of the industries that 

received benefits under this Law. The 

GOI did not respond to this portion of 

the supplemental questionnaire. See 

GOI’s June 27, 2008, SQR. Therefore, the 

GOI has not provided information to 

support a finding that Law 223/91, 

Article 25, Paragraph 9, is not de facto 

specific, within the meaning of section 

771(5A)(iii) of the Act. Accordingly, we 

continue to find the exemptions 

provided under Law 223/91, Article 25, 

Paragraph 9, countervailable. After these 

preliminary results, we intend to issue 

another supplemental questionnaire to 

the GOI asking about industry usage of 

Law 223/91, Article 25, Paragraph 9. 

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 Law 223/91, Article 25, Paragraph 

9, to be 0.00 percent ad valorem for De 

Matteis. See De Matteis Calc Memo. 

F. Law 289/02 

1) Article 62 - Investments in 

Disadvantaged Areas 

Article 62 of Law 289/02 provides a 

benefit in the form of a credit towards 

direct taxes, indirect taxes, or social 

security contributions. See GOI 

Verification Report, at 2–4. The credit 

must be used within three years. Id. The 

law was established to promote 

investment in disadvantaged areas by 

providing credits to companies that 

undertake new investment by 

purchasing capital goods, equipment, 

patents, licenses, or know how. Id. The 

granting of new benefits under Article 

62 of Law 289/02 expired as of 

December 31, 2006, but the credits 

obtained prior to this date may be used 

in future years. Id. 

In the Tenth Administrative Review,6

we determined that Article 62 of Law 

289/02 confers a countervailable 

subsidy. The credits are a financial 

contribution within the meaning of 

section 771(5)(D)(ii) of the Act because 

they represent revenue foregone by the 

GOI, and a benefit is conferred in the 

amount of the tax savings in accordance 

with 19 CFR 351.509(a). Finally, 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. No new information has been 

placed on the record of this review that 

would cause us to depart from this 

treatment. 

De Matteis is located in Campania and 

took advantage of this program. It did so 

by constructing a new semolina milling 

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7See 19 CFR 351.509(b). 

facility, including wheat silos, by–

product storage silos, semolina silos, 

and milling equipment. A tax credit for 

De Matteis was approved in 2005 and a 

portion was used to reduce the 

company’s income taxes for 2005 and 

2006. 

In the Tenth Administrative Review, 

the Department treated the amount 

credited against 2005 income as a non–

recurring grant in accordance with the 

criteria in 19 CFR 351.524(c)(2)(i)-(iii). 

Specifically, the tax credit is 

exceptional because it was only 

available for a limited period of time, 

and was dependent upon companies 

making specific investments. Further, 

the tax credit required the GOI’s 

authorization, and was tied to capital 

assets of the firm. Moreover, in 

accordance with 19 CFR 351.524(b)(2), 

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. Therefore, 

we treated the portion of the tax credit 

used to offset income in 2005 as a grant 

received in that year and allocated the 

benefit over the AUL using the formula 

described in 19 CFR 351.524(d). 

We have followed the same 

methodology for the portion of the tax 

credit used to offset income earned 

during the POR. Consequently, we 

divided the benefit received by De 

Matteis from the 2005 and 2006 grants 

in the POR by the company’s total sales 

in the POR. On this basis, we 

preliminarily determine the 

countervailable subsidy from Law 289/ 

02 Article 62 to be 0.74 percent ad 

valorem for De Matteis. See De Matteis 

Calc Memo. 

2) Article 63 - Increase in 

Employment 

Article 63 of Law 289/02 provides a 

benefit in the form of a credit towards 

direct taxes, indirect taxes, or social 

security contributions. See GOI 

Verification Report, at 4–5. The law was 

established to promote employment by 

providing a tax credit to companies that 

increase the number of employees at the 

company by hiring new workers to 

long–term contracts. Id. The monthly 

credit is 100 euros for a new hire for any 

company in Italy. If the employee is 45 

years old or older, the monthly amount 

increases to 150 euros. The monthly 

credit is 300 euros if the company is 

located in the Mezzogiorno. Id. Under 

the law, the granting of new credits 

ceased as of December 31, 2006. Id. 

There is no limit as to when the credits 

can be applied as these credits carry 

over from one year to the next. Id. 

However, as of 2007, the credits must be 

used as soon as possible and failure to 

do so forfeits the portion of the credit 

that could have been taken during the 

given year. Id. 

In the Tenth Administrative Review, 

we determined that Article 63 of Law 

289/02 confers a countervailable 

subsidy. The credits are a financial 

contribution within the meaning of 

section 771(5)(D)(ii) of the Act because 

they represent revenue foregone by the 

GOI, and a benefit is conferred in the 

amount of the tax savings in accordance 

with 19 CFR 351.509(a). Finally, 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. No new 

information has been placed on the 

record of this review that would cause 

us to depart from this treatment. 

De Matteis and Garofalo are located in 

Campania; however, only De Matteis 

claimed the higher tax credits on the 

income tax forms filed during the POR. 

Consistent with the Tenth 

Administrative Review, we are treating 

these as recurring subsidies and 

attributing the benefit to the year in 

which the taxes would otherwise have 

been due, i.e., the year in which the 

company filed its tax form.7 Based upon 

findings at verification, we revised De 

Matteis’s reported amount to reflect the 

amount associated with the tax return 

filed during the POR. See De Matteis 

Verification Report and De Matteis Calc 

Memo. To calculate the countervailable 

subsidy, we divided the credit taken by 

De Matteis 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 0.05 

percent ad valorem for De Matteis. See 

De Matteis Calc Memo. 

G. Law 662/96 

The GOI describes Patti Territoriali 

grants (Law 662/96 Article 2, Paragraph 

203, Letter d) as being 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. 

A Patti Territoriali is signed between the 

provincial government and the GOI. See 

GOI Verification Report, at 5–7. Based 

upon project submissions, the 

provincial government ranks the 

projects and selects the projects it 

considers to be the best. Id. The 

provincial government submits the 

detailed plans to the GOI and, if 

approved, a special authorizing decree 

is issued for each company specifying 

the investment required and a schedule 

of the benefits. Id. 

The GOI reported that De Matteis 

received disbursements from the Patti 

Territoriali in 2000 and 2004 from a 

grant approved on January 29, 1999. 

In the Tenth Administrative Review, 

the Department determined that this 

grant confers a countervailable subsidy 

within the meaning of section 771(5) of 

the Act. It is a direct transfer of funds 

from the GOI bestowing a benefit in the 

amount of the grant. See Section 

771(5)(D)(i); see also 19 CFR 351.504(a). 

Also, this grant was found to be 

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. 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 Tenth Administrative Review, 

the Department treated the Patti 

Territoriali grant 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 expensed in 

the year of receipt. We determined that 

the grant received by De Matteis under 

Law 662/96 exceeded 0.5 percent of its 

sales in the year in which the grant as 

approved. 

We used the grant methodology 

described in 19 CFR 351.524(d) to 

allocate the benefits over time. We 

divided the benefit received by De 

Matteis in the POR by its total sales in 

the POR. 

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45728 Federal Register / Vol. 73, No. 152 / Wednesday, August 6, 2008 / Notices 

8See Certain Pasta From Italy: Preliminary 

Results of the First Countervailing Duty 

Administrative Review, 63 FR 17372 (April 9, 1998) 

(‘‘First Administrative Review’’); Certain Pasta From 

Italy: Final Results of Countervailing Duty 

Administrative Review, 63 FR 43905 (August 17, 

1998) (unchanged in Final Results). 

On this basis, we preliminarily 

determine the countervailable subsidy 

from the Patti Territoriali grant to be 

0.50 percent ad valorem for De Matteis. 

See De Matteis Calc Memo. 

II. Programs Preliminarily Determined to 

be Not Countervailable 

A. Research and Investigation Program 

of Legislative Decree 297/99 and 

Ministerial Decree 593/00 

Garofalo has reported receiving 

benefits under Legislative Decree 

(‘‘L.D.’’) 297/99 which is implemented 

by Ministerial Decree (‘‘M.D.’’) 593/00. 

M.D. 593/00 provides a tax credit or 

contribution to costs for planned 

research or analytical investigations 

aimed at acquiring new knowledge for 

new products, production processes, or 

services or to improve existing products, 

production processes, or services. See 

GOI’s April 1, 2008, SQR at Exhibit 3. 

Requests for these benefits can be filed 

by (1) companies engaged in industrial 

activities aimed at the production of 

goods and/or services, (2) companies 

engaged in transportation by land, sea, 

or air; (3) companies engaged in 

handicraft activities; (4) research 

centers, and (5) consortia companies. 

See GOI’s April 1, 2008, SQR. The 

benefits are paid automatically after the 

filing of the request and after 

verification of eligibility. Id. 

Additionally, M.D. 593 has no 

provisions that restrict eligibility by 

region. 

We preliminarily find that L.D. 297/ 

99 is a nationwide program that 

potentially provides a similar level of 

deductions to all recipients and is not 

de jure specific to any particular 

company or industry pursuant to 

sections 771(5A)(D)(i) or 771(5A)(D)(ii) 

of the Act. We reviewed the translated 

text of this law and find the only 

location requirement for consideration 

under L.D. 297/99 Article 5 is that 

applicants must have a permanent 

establishment in the national territory. 

See GOI’s April 1, 2008, SQR at Exhibit 

3. Therefore, it appears to be not 

regionally specific under section 

771(5A)(D)(iv) of the Act. Additionally, 

we find that L.D. 297/99/M.D. 593/00 is 

not de facto specific pursuant to 

771(5A)(D)(iii), as during the POR, 

companies from diverse sectors were 

granted benefits under this law and the 

agro–food sector received only 3.7 

percent of the total disbursements 

granted by the Ministry of University 

and Research. See GOI’s May 19, 2008, 

SQR at Exhibit 2. Moreover, there is no 

record evidence indicating that there are 

a limited number of recipients under 

this program. See section 

771(5A)(D)(iii)(I) of the Act. 

Accordingly, we preliminarily 

determine that assistance provided 

under L.D. 297/99 and M.D. 593/00 is 

not countervailable. 

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. Grant Received Pursuant to the 

Community Initiative Concerning the 

Preparation of Enterprises for the Single 

Market (PRISMA) 

PRISMA, a program funded by the 

European Structural Fund, seeks to 

contribute to the creation of a single EU 

market by improving standardization 

and quality control procedures, and 

seeks to assist small- and medium–sized 

enterprises in Objective 1 regions to 

adapt to a single EU market and 

increased competition. Garofalo 

received a PRISMA grant in 1996. 

In the First Administrative Review,8

the Department determined that 

PRISMA grants confer a countervailable 

subsidy within the meaning of section 

771(5) of the Act. They are a direct 

transfer of funds from the GOI 

bestowing a benefit in the amount of the 

grant. See section 771(5)(D)(i); see also 

19 CFR 351.504(a). Also, these grants 

were found to be regionally specific 

within the meaning of section 

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

are limited to firms located in 

designated geographic regions. 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. 

Because the grant received by 

Garofalo was less than 0.5 percent of the 

company’s sales in 1996, the year in 

which the grant was approved, we 

expensed the entire grant in the year of 

receipt, i.e., 1996. Therefore, this 

program was not used in the POR. See 

Garofalo Calc Memo. 

B. European Regional Development 

Fund (‘‘ERDF’’) Programma Operativo 

Multiregionale (P.O.M.) Grant 

The P.O.M. Grants are managed by the 

central government and the Ministry of 

Industry (now the Ministry of Economic 

Development) is responsible for the 

administration of grants related to 

industry and services. See GOI’s May 

19, 2008, SQR. 

Garofalo was approved to receive a 

P.O.M. Grant from the GOI in 1998. The 

P.O.M. Grants are co–funded by the EU 

and the GOI. Because the amount was 

less than 0.5 percent of Garofalo’s sales 

in 1998, we expensed the entire grant in 

the years of receipt, i.e., 1998 and 2000. 

Therefore, this program was not used in 

the POR. See Garofalo Calc Memo. 

C. Certain Social Security Reductions 

and Exemptions – Sgravi (including 

Law 223/91, Article 8, Paragraph 4) 

D. Law 236/93 Training Grants 

E. Law 1329/65 Interest Contributions 

(Sabatini Law) (Formerly Lump–Sum 

Interest Payment Under the Sabatini 

Law for Companies in Southern Italy) 

F. Development Grants Under Law 30 of 

1984 

G. Law 908/55 Fondo di Rotazione 

Iniziative Economiche (Revolving Fund 

for Economic Initiatives) Loans 

H. Law 317/91 Benefits for Innovative 

Investments 

I. Brescia Chamber of Commerce 

Training Grants 

J. Ministerial Decree 87/02 

K. Law 10/91 Grants to Fund Energy 

Conservation 

L. Export Restitution Payments 

M. Export Credits Under Law 227/77 

N. Capital Grants Under Law 675/77 

O. Retraining Grants Under Law 675/77 

P. Interest Contributions on Bank Loans 

Under Law 675/77 

Q. Preferential Financing for Export 

Promotion Under Law 394/81 

R. Urban Redevelopment Under Law 

181 

S. Industrial Development Grants under 

Law 183/76 

T. Interest Subsidies Under Law 598/94 

U. Duty–Free Import Rights 

V. European Social Fund Grants 

W. Law 113/86 Training Grants 

X. European Agricultural Guidance and 

Guarantee Fund 

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Y. Law 341/95 Interest Contributions on 

Debt Consolidation Loans (Formerly 

Debt Consolidation Law 341/95) 

Z. Interest Grants Financed by IRI Bonds 

AA. Article 44 of Law 448/01 

IV. Programs for Which More 

Information is Required 

A. Social Security Reductions and 

Exemptions – Sgravi 

1) Legislative Decree (‘‘L.D.’’) 276/03 

De Matteis, Garofalo, and De Cecco 

have reported receiving benefits under 

L.D. 276/03. L.D. 276/03 is aimed at 

making the labor market more flexible 

by providing incentives for apprentice 

contracts. See GOI’s April 1, 2008, SQR. 

Companies receive benefits for hiring 

workers under mixed contracts 

possessing a work component and a 

training component. See GOI 

Verification Report, at 14–15. 

Specifically, three categories of 

employee contracts recognized under 

this decree are: (1) working toward 

completion of compulsory schooling, (2) 

working toward completion of trade 

schooling, and (3) high–level training of 

special skills for a worker. Id. 

Except for a weekly flat fee paid by 

the employer on behalf of the employee, 

the employer receives a total exemption 

from its social security contribution. See 

GOI Verification Report, at 14–15. The 

contributions are applied in equal 

measure across Italy and the decree may 

be used in all sectors of activity. See 

GOI’s May 19, 2008, SQR and Exhibit 1; 

see also GOI Verification Report, at 14–

15. 

Based on our review of the record of 

this administrative review and our 

verification, we find no basis for de jure 

specificity. Additionally, based on 

record evidence and our verification, 

the law does not appear to be regionally 

specific under section 771(5A)(D)(iv) of 

the Act. However, at this time, we do 

not have sufficient information to 

determine whether this program is de 

facto specific under section 

771(5A)(D)(iii) of the Act. Therefore, we 

intend to seek further information 

regarding specificity of this program 

from the GOI and we will provide 

parties an opportunity to comment on 

this information before the final results. 

Verification 

In accordance with 19 CFR 

351.222(f)(2)(ii) and 351.307(b)(1)(v), we 

verified information submitted by the 

GOI for De Matteis in Rome, Italy on 

May 26–28, 2008. See GOI Verification 

Report. We verified information 

submitted by De Matteis in Flumeri, 

Italy on May 29–30, 2008. See De 

Matteis Verification Report. 

Preliminary Results of Review 

In accordance with 19 CFR 

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

individual subsidy rates for De Matteis, 

Garofalo, and De Cecco. Felicetti had no 

countervailable subsidies. 

For the period January 1, 2006, 

through December 31, 2006, we 

preliminarily determine the net subsidy 

rates for the producers/exporters under 

review to be those specified in the chart 

shown below: 

Producer/Exporter Net Subsidy 

Rate 

De Matteis Agroalimentare 

S.p.A. ................................ 2.65% 

Pastificio Lucio Garofalo 

S.p.A. ................................ 1.60% 

F.lli De Cecco di Filippo Fara 

San Martino S.p.A. ............ 0.83% 

Pastificio Felicetti SrL ........... 0.00% 

All–Others Rate .................... 3.85% 

Consequently, if these preliminary 

results are adopted in our final results 

of this review, the Department will 

instruct U.S. Customs and Border 

Protection (‘‘CBP’’) to assess 

countervailing duties at these net 

subsidy rates. The Department will 

issue appropriate instructions directly 

to CBP 15 days after 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, 2006, and December 

31, 2006, at the rates in effect at the time 

of entry. 

The Department also intends to 

instruct CBP to collect cash deposits of 

estimated countervailing duties in the 

amounts shown above. No cash deposits 

of estimated duties will be required for 

Felicetti. 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 30, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–18030 Filed 8–5–08; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–928] 

Uncovered Innerspring Units from the 

People’s Republic of China: 

Preliminary Determination of Sales at 

Less Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: August 6, 2008. 

SUMMARY: We preliminarily determine 

that uncovered innerspring units 

(‘‘innersprings’’) from the People’s 

Republic of China (‘‘PRC’’) are being, or 

are likely to be, sold in the United States 

at less than fair value (‘‘LTFV’’), as 

provided in section 733 of the Tariff Act 

of 1930, as amended (‘‘the Act’’). The 

estimated margins of sales at LTFV are 

shown in the ‘‘Preliminary 

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