[Federal Register Volume 79, Number 95 (Friday, May 16, 2014)]
[Notices]
[Pages 28481-28483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11390]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818]
Certain Pasta From Italy: Notice of Preliminary Results of
Antidumping Duty Changed Circumstances Review
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: On August 10, 2012, the Department of Commerce
(``Department'') initiated a changed circumstances review of the
antidumping duty order on certain pasta from Italy in order to
determine whether Delverde Industrie Ailimentari S.p.A. (``Delverde'')
is the successor-in-interest to Del Verde S.p.A., a company excluded
from the order.\1\ We preliminarily determine that Delverde is not the
successor-in-interest to Del Verde S.p.A. Interested parties are
invited to comment on these preliminary results.
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\1\ See Certain Pasta from Italy: Notice of Initiation of the
Antidumping Duty Changed Circumstances Review, 77 FR 47816 (May 10,
2012) (``Initiation Notice'').
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DATES: Effective Date: May 16, 2014.
FOR FURTHER INFORMATION CONTACT: James Terpstra, Office III, AD/CVD
Operations, Enforcement and Compliance, International Trade
Administration, U.S. Department of Commerce, 14th and Constitution
Avenue NW., Washington, DC 20230; telephone: (202) 482-3965.
SUPPLEMENTARY INFORMATION:
Background
On July 24, 1996, the Department published in the Federal Register
the antidumping duty order on pasta from
[[Page 28482]]
Italy.\2\ Pursuant to a decision by the Court of International Trade,
the Department determined that Del Verde S.p.A. had a de minimis
dumping margin and should be excluded Del Verde S.p.A. from the
order.\3\
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\2\ See Notice of Antidumping Duty Order and Amended Final
Determination of Sales at Less Than Fair Value: Certain Pasta From
Italy, 61 FR 38547 (July 24, 1996); see also Notice of Second
Amendment to the Final Determination and Antidumping Duty Order:
Certain Pasta From Italy; 61 FR 42231 (August 14, 1996).
\3\ See Notice of Amendment of Final Determination of Sales at
Less Than Fair Value Pursuant to Court Decision and Revocation in
Part: Certain Pasta from Italy, 66 FR 65889 (December 21, 2001).
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On July 18, 2012, Delverde requested a changed circumstances
review. On August 10, 2012 the Department initiated this review.\4\ On
August 16, 2012, the Department requested additional information from
Delverde, which was submitted on September 20, 2012 (``Supplemental
Response'').
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\4\ See Initiation Notice.
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On October, 31, 2012, and November 29, 2012, Petitioners \5\
submitted comments on this review. On December 14, 2012, the Department
requested additional information from Delverde, which was provided, in
part, on January 18, 2013, and after an extension granted, the
remainder was submitted on March 5, 2013 (``Second Supplemental
Response'').
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\5\ Petitioners are New World Pasta Company, Dakota Growers
Pasta Company, and American Italian Pasta Company.
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On February 25, 2013, Petitioners submitted additional comments. On
March 12, 2013, the Department requested additional information from
Delverde, which was provided on March 26, 2013 (``Third Supplemental
Response'').
Scope of the Order
Imports covered by this order are shipments of certain non-egg dry
pasta in packages of five pounds four ounces or less, whether or not
enriched or fortified or containing milk or other optional ingredients
such as chopped vegetables, vegetable purees, milk, gluten, diastasis,
vitamins, coloring and flavorings, and up to two percent egg white. The
pasta covered by this scope is typically sold in the retail market, in
fiberboard or cardboard cartons, or polyethylene or polypropylene bags
of varying dimensions.
Excluded from the scope of this order are refrigerated, frozen, or
canned pastas, as well as all forms of egg pasta, with the exception of
non-egg dry pasta containing up to two percent egg white. Also excluded
are imports of organic pasta from Italy that are certified by a
European Union (``EU'') authorized body and accompanied by a National
Organic Program import certificate for organic products.\6\ Effective
July 1, 2008, gluten free pasta is also excluded from this order.\7\
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\6\ On October 10, 2012, the Department revised the ``Scope of
the Order'' to recognize the EU-authorized Italian agents for
purposes of the antidumping and countervailing duty orders on pasta
from Italy. See Memorandum from Yasmin Nair to Susan Kuhbach, titled
``Recognition of EU Organic Certifying Agents for Certifying Organic
Pasta from Italy,'' dated October 10, 2012, which is on file in the
Department's Central Records Unit.
\7\ See Certain Pasta from Italy: Notice of Final Results of
Antidumping Duty Changed Circumstances Review and Revocation, in
Part, 74 FR 41120 (August 14, 2009).
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The merchandise subject to this order is currently classifiable
under items 1902.19.20 and 1901.90.9095 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.
Preliminary Results of Changed Circumstances Review
In this changed circumstances review, pursuant to section 751(b) of
the Tariff Act of 1930, as amended (``the Act''), the Department
conducted a successor-in-interest analysis. In making such a successor-
in-interest determination, the Department examines several factors
including, but not limited to, changes in: (1) Management; (2)
production facilities; (3) supplier relationships; and (4) customer
base.\8\ While no one or several of these factors will necessarily
provide a dispositive indication, the Department will generally
consider the new company to be the successor to the previous company if
its resulting operation is not materially dissimilar to that of its
predecessor.\9\ Thus, if the evidence demonstrates that, with respect
to the production and sale of the subject merchandise, the new company
operates as the same business entity as the former company, the
Department will assign the new company the cash deposit rate of its
predecessor.\10\
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\8\ See, e.g., Pressure Sensitive Plastic Tape from Italy:
Preliminary Results of Antidumping Duty Changed Circumstances
Review, 75 FR 8925 (February 26, 2010), unchanged in Pressure
Sensitive Plastic Tape From Italy: Final Results of Antidumping Duty
Changed Circumstances Review, 75 FR 27706 (May 18, 2010); and Brake
Rotors From the People's Republic of China: Final Results of Changed
Circumstances Antidumping Duty Administrative Review, 70 FR 69941
(November 18, 2005) (Brake Rotors), citing Brass Sheet and Strip
from Canada: Final Results of Antidumping Duty Administrative
Review, 57 FR 20460 (May 13, 1992).
\9\ See, e.g., Brake Rotors.
\10\ See id.; see also, e.g., Notice of Initiation and
Preliminary Results of Antidumping Duty Changed Circumstances
Review: Certain Frozen Warmwater Shrimp From India, 77 FR 64953
(October 24, 2012), unchanged in Final Results of Antidumping Duty
Changed Circumstances Review: Certain Frozen Warmwater Shrimp From
India, 77 FR 73619 (December 11, 2012).
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Delverde explained that in 2005, Del Verde S.p.A. became insolvent
and entered bankruptcy; the company's assets (such as production
facilities and trademark) were subsequently purchased by a newly formed
company, Delverde, owned by Faro S.r.L. (``Faro''), an Italian
turnaround investment fund which made a number of investments and
changes to the company (discussed below). From 2006 through 2009,
Delverde was in operation, and Faro described this as the ``Re-Launch''
period. Between 2008 and 2010, Molinos Rio De La Plata S.A.
(``Molinos''), a large Argentinian food company, purchased and assumed
full control of Delverde.
In conducting a successor-in-interest analysis, while we generally
consider information from immediately before and after the formation of
a new entity, the Department considers all information on the record
relevant to the determination.\11\ In the instant case, we analyzed the
effect that the bankruptcy had on the company and the changes to the
management, production facilities, supplier relationships, and customer
base that occurred as a result of the bankruptcy and liquidation of Del
Verde S.p.A and its change of ownership in 2005.
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\11\ See, e.g., Diamond Sawblades and Parts Thereof from the
People's Republic of China: Final Results and Termination, in part,
of the Antidumping Duty Changed Circumstance Review, 76 FR 64898
(October 19, 2011).
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First, we find that there are four critical aspects of the
bankruptcy: (1) The court found that because Del Verde S.p.A.'s losses
``had completely wiped out the company's stated capital,'' and because
its shareholders were unable to make shareholders decisions since June
8, 2004, Del Verde S.p.A., (i.e., the legal entity that was excluded
from this antidumping duty order) was deprived of ``the ability to
operate,'' which provided ``grounds for dissolution of the company;''
\12\ (2) Faro acquired Del Verde S.p.A.'s production facility and
trademark, and the sale was approved by the bankruptcy judge on October
13, 2005; \13\ (3) the owners of Delverde are different from the owners
of Del Verde S.p.A.; \14\ (4) the operations of Del Verde S.p.A.
ceased, and another legal entity produced and sold pasta under the name
of Delverde Industrie Alimentari, S.p.A. \15\
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\12\ See Second Supplemental Response, at 2.
\13\ See Changed Circumstance Request, at 3.
\14\ See id.
\15\ See Second Supplemental Response, at 2.
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[[Page 28483]]
With respect to the management, we find that there were several
important changes to management as a result of the bankruptcy and
change in ownership in 2005. Delverde states that Faro ``. . . added
top-level executive supervisors'' and installed ``top executive
managers in a few key positions.'' \16\ While Delverde characterizes
these changes as minor, we find that these were significant changes in
the top level management.\17\ We also find that there were significant
changes to Delverde's suppliers as a result of the bankruptcy and
change in ownership, though we do not find that there were significant
changes to Delverde's customers or production facilities immediately
following the bankruptcy. However, we find that the bankruptcy resulted
in a significant change to the company because (1) the company Delverde
S.p.A. effectively ceased to exist as a commercial entity; and (2) the
company that purchased the existing assets, Faro, took extensive
measures to ``relaunch'' or ``restart'' the pasta business that used to
be Delverde S.p.A.; and (3) although the pasta factory and the Delverde
brand name were constant elements through the history of these
entities, the magnitude of the changes, as discussed above and in the
``Prelim Memo'' as a result of the bankruptcy and change in ownership
reflect the creation of a new entity. For example, Faro's investments
in the factory totaled approximately 2.8 million Euros, and affected
machinery, plant facilities, and laboratory equipment. These
investments were made to restart operations, improve productive and
administrative efficiency, and to upgrade product quality.\18\
Therefore, we preliminarily find that the record evidence does not
support Delverde's claim that it is the successor-in-interest to Del
Verde S.p.A.
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\16\ See Changed Circumstance Request, at 5.
\17\ Because of the proprietary nature of the information
concerning the changes to management as a result of the 2005
bankruptcy and change in ownership, for further discussion see
``Preliminary Successor-in-Interest Determination Analysis
Memorandum'' (``Prelim Memo''), dated concurrently with this notice.
\18\ See Third Supplemental Response, at 1-3.
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Consequently, we preliminarily determine that Delverde should not
be given the same antidumping duty treatment as Del Verde S.p.A, which
was excluded from the order. Instead, Delverde, as a new entity, is not
excluded from the order.\19\ This determination will apply to all
entries of the subject merchandise entered or withdrawn from warehouse,
for consumption on or after the date of publication of the final
results of this changed circumstances review.\20\ This deposit rate
shall remain in effect until further notice.
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\19\ See Certain Pasta From Italy: Notice of Final Results of
16th Antidumping Duty Administrative Review; 2011-2012, 79 FR 11409
(February 28, 2014), in which Delverde Industrie Alimentari S.p.A.
was assigned a company-specific cash deposit rate of 13.09 percent.
\20\ See Granular Polytetrafluoroethylene Resin from Italy:
Final Results of Changed Circumstances Review, 68 FR 25327 (May 12,
2003).
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Public Comment
Pursuant to 19 CFR 351.309(c), interested parties may submit cases
briefs not later than 10 days after the date of publication of this
notice via Enforcement and Compliance's Antidumping and Countervailing
Duty Centralized Electronic Service System (IA ACCESS). Access to IA
ACCESS is available to registered users at http://iaaccess.trade.gov
and is available to all parties in the Central Records Unit, Room 7046
of the main Department of Commerce building. Rebuttal briefs, limited
to issues raised in the case briefs, may be filed not later than five
days after the date for filing case briefs. Parties who submit case
briefs or rebuttal briefs in this proceeding are encouraged to submit
with each argument: (1) A statement of the issue; (2) a brief summary
of the argument; and (3) a table of authorities.
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 Enforcement and
Compliance, filed electronically via IA ACCESS. An electronically filed
document must be received successfully in its entirety by IA ACCESS, no
later than 5:00 p.m. Eastern Time within 10 days after the date of
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 discussed. Issues raised in the hearing
will be limited to those raised in case briefs.
Consistent with 19 CFR 351.216(e), we will issue the final results
of this changed circumstances review no later than 270 days after the
date on which this review was initiated, or within 45 days after the
publication of the preliminary results if all parties in this review
agree to our preliminary results.
We are issuing and publishing this determination and notice in
accordance with sections 751(b) and 777(i)(1) of the Act and 19 CFR
351.216 and 351.221.
Dated: May 12, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2014-11390 Filed 5-15-14; 8:45 am]
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