71 FR 33439, June 9, 2006
DEPARTMENT OF COMMERCE
International Trade Administration
[C-489-806]
Certain Pasta from Turkey: Preliminary Results of 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 Turkey
for the period January 1, 2004, through December 31, 2004. We have
preliminarily determined that Gidasa Sabanci Gida Sanayi ve Ticaret
A.S. did not receive countervailable subsidies during the period of
review. If the final results remain the same as these preliminary
results, we will instruct U.S. Customs and Border Protection to
liquidate without regard to countervailing duties, as detailed in the
``Preliminary Results of Review'' section of this notice. Interested
parties are invited to comment on these preliminary results (see the
``Public Comment'' section of this notice).
EFFECTIVE DATE: June 9, 2006.
FOR FURTHER INFORMATION CONTACT: Brandon Farlander or Audrey Twyman,
AD/CVD Operations, Office 1, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
0182 and (202) 482-3534, respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 24, 1996, the Department of Commerce (``the Department'')
published in the Federal Register the countervailing duty order on
certain pasta from Turkey. See Notice of Countervailing Duty Order:
Certain Pasta from Turkey, 61 FR 38546 (July 24, 1996). On July 1,
2005, the Department published in the Federal Register, a notice of
``Opportunity to Request Administrative Review'' of this countervailing
duty order. See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity to Request Administrative Review,
70 FR 38099 (July 1, 2005). We received one request for review on July
29, 2005, and initiated the review for calendar year 2004, on August
29, 2005. See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Requests for Revocation in Part, 70 FR 51009
(August 29, 2005). In accordance with 19 CFR 351.213(b), this review of
the order covers Gidasa Sabanci Gida Sanayi ve Ticaret A.S.
(``Gidasa'').
On September 8, 2005, we issued countervailing duty questionnaires
to the Government of Turkey and Gidasa. We received responses to our
questionnaires on November 14 and 17, 2005, and issued supplemental
questionnaires on January 31, 2006. Responses to the supplemental
questionnaires were received on February 23, and March 17, 2006.
On March 14, 2006, the Department postponed the preliminary results
of review until June 5, 2006. See Certain Pasta from Turkey: Extension
of Time Limit for Preliminary Results of the Countervailing Duty
Administrative Review, 71 FR 13966 (March 20, 2006).
On April 5, 2006, we provided Gidasa an opportunity to place
information on the record concerning the world market price for durum
wheat, and international freight rates. We received Gidasa's submission
on April 17, 2006.
Scope of Order
Covered by the order are shipments of certain non-egg dry pasta in
packages of five pounds (2.27 kilograms) or less, whether or not
enriched or fortified or containing milk or other optional ingredients
such as chopped vegetables, vegetable purees, milk, gluten, diastases,
vitamins, coloring and flavorings, and up to two percent egg white. The
pasta covered by this order is typically sold in the retail market, in
fiberboard or cardboard cartons or polyethylene or polypropylene bags,
of varying dimensions.
Excluded from 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.
The merchandise under review is currently classifiable under
subheading 1902.19.20 of the Harmonized Tariff Schedule of the United
States (``HTSUS''). Although the HTSUS subheading is provided for
convenience and customs purposes, our written description of the scope
of the order is dispositive.
Scope Ruling
To date, the Department has issued the following scope ruling:
On October 26, 1998, the Department self-initiated a scope inquiry
to determine whether a package weighing over five pounds as a result of
allowable industry tolerances may be within the scope of the
countervailing duty order. 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 countervailing duty order. See Memorandum from
John Brinkman to Richard Moreland, dated May 24, 1999, which is on file
in the Central Records Unit (``CRU'') in Room B-099 of the main
Commerce building.
Period of Review
The period of review (``POR'') for which we are measuring subsidies
is from January 1, 2004, through December 31, 2004.
Analysis of Programs
I. Programs Preliminarily Determined To Not Provide a Countervailable
Benefit
1. Purchases of Domestic Wheat from the Turkish Grain Board (``TMO'')
under Decree 2003/5468
There are three main ways for Turkish pasta producers to obtain
wheat for semolina pasta: (1) from the TMO, (2) from local growers and
traders, or (3) through imports. Prices for wheat in Turkey are set
above world market prices as part of a price support scheme benefitting
domestic wheat growers. However, companies holding an Inward Processing
License can obtain lower
[[Page 33440]]
priced wheat (when compared to the equivalent domestic-priced wheat) by
purchasing Turkish wheat from the TMO under Decree 2003/5468, and using
the wheat to produce products for export. The Government of Turkey and
Gidasa have stated that the price of wheat purchased under Decree 2003/
5468 is at or above the world market price, as measured by the price
from international tender auctions held by the TMO to sell Turkish
wheat to foreign buyers. To purchase wheat, companies using Inward
Processing Licenses must consume the wheat in the production of pasta
for export only.
Under this program, the Government of Turkey provides a financial
contribution per section 771(5)(D)(iii) of the Tariff Act of 1930, as
amended (``the Act''), by providing a good (durum wheat). This program
is specific per section 771(5A)(B) of the Act because it is contingent
upon export performance. A benefit exists to the extent that the wheat
is being provided on more favorable terms than the terms applicable to
the provision of like or directly competitive products for use in the
production of goods for domestic consumption, unless such terms or
conditions are not more favorable than those commercially available on
world markets to exporters. The world market price must be inclusive of
delivery charges. 19 CFR 351.516(a)(1) and (2).
In response to our request for information, Gidasa provided
arguments concerning world market prices and delivery charges for
purposes of determining whether a benefit exists under this program.
Concerning delivery charges, Gidasa argues that the Department should
use a freight rate that closely resembles the actual freight paid on
imports of durum wheat into Turkey. In this regard, the Government of
Turkey provided import data showing that imports of durum wheat into
Turkey during the POR came only from European Union countries.
Therefore, Gidasa argues, the delivery charge should reflect freight
from countries in close proximity to Turkey. Gidasa could not find
publicly available freight rates from countries near Turkey. Instead,
Gidasa provided U.S. import statistics for durum wheat. These
statistics show international freight for shipments of durum wheat from
Canada to the United States.
Concerning the world market price of durum wheat, the Government of
Turkey has reported details on the single auction sale that it made in
2004 to an international purchaser. This sale could also be considered
to provide a world market price because we are satisfied that it was an
open and fair auction. However, Gidasa has argued that the wheat sold
at this auction was durum grade 1, whereas the wheat it purchased under
Decree 2003/5468 was durum grades 2 and 3. The quality differences
between the grade 1 durum sold internationally and the grades purchased
by Gidasa makes a simple unadjusted price comparison inappropriate,
according to Gidasa.
Gidasa points instead to U.S. import statistics as providing the
most specific world market prices of durum wheat. In particular, only
U.S. import statistics distinguish between grades 1 and 2 durum wheat.
Therefore, Gidasa argues that the Department should compare the prices
Gidasa paid for grades 2 and 3 durum wheat, to the average 2004 import
price of durum grade 2 wheat (HTSUS subheading 1001.10.00.96) from the
U.S. import statistics.
For these preliminary results, we agree with Gidasa that the
delivery charges should reflect the specific characteristics of the
Turkish trade in durum wheat. Like Gidasa, we have been unable to find
publicly available freight rates for durum wheat shipments to Turkey
from nearby countries and, therefore, we preliminarily used the
delivery charges from Canada to the United States.
Regarding the selection of a world market price, the Department
finds that it does not matter whether we use the U.S. import statistics
for durum grade 2 (as suggested by Gidasa), or the international
auction price (as we did in the preceding review) as the world market
price. (The Department has been unable to find any additional grade
specific data.) The result is the same in that the Department finds
that the prices that Gidasa paid for wheat purchased under Decree 2004/
5468 in the POR were higher than world market prices, inclusive of
delivery charges. Therefore, we preliminarily find that this program
does not confer a countervailable benefit. See Memorandum to the File,
``Calculations for the Preliminary Results for Gidasa Sabanci Gida
Sanayi ve Ticaret A.S.'' (June 5, 2006).
II. Programs Preliminarily Determined To Be Not Used
1. VAT Support for Domestic Machinery and Equipment Purchases
2. Pre-Shipment Export Loans
3. Resource Utilization Support Fund (``KKDF'') Tax Exemption on
Export-Related Loans
4. Banking and Insurance (``BIST'') Tax Exemption on Export-Related
Loans
5. Normal Foreign Currency Export Loans
6. GIEP
a. Additional Refunds of VAT
b. Postponement of VAT on Imported Goods
c. Exemption from Certain Taxes, Duties, Fees (Other Tax
Exemptions)
d. Exemption from Certain Customs Duties and Fund Levies
e. Payment of Certain Obligations of Firms Undertaking Large
Investments
f. Subsidized Turkish Lira Credit Facilities
g. Land Allocation
h. Interest Spread Return Program
i. Energy Support
7. Exemption from Mass Housing Fund Levy (Duty Exemptions)
8. Direct Payments to Exporters of Wheat Products to Compensate for
High Domestic Input prices
9. Export Credit Through Foreign Trade Corporate Companies Credit
Facility
10. Pasta Export Grants
11. Corporate Tax Deferral
12. Subsidized Credit for Proportion of Fixed Expenditures
13. Subsidized Credit in Foreign Currencies
14. Subsidized Turkish Lira Credit Facilities
15. Exemption from Mass Housing Fund Levy (Duty Exemptions)
16. Performance Foreign Currency Loans
Preliminary Results of Review
For the period January 1, 2004, through December 31, 2004, we
preliminarily determine the net subsidy rate for Gidasa to be that
specified in the chart shown below. If the final results of this review
remain the same as these preliminary results, the Department will
instruct U.S. Customs and Border Protection (``CBP'') to liquidate all
entries without regard to countervailing duties.
The Department also intends to instruct CBP to collect cash
deposits of estimated countervailing duties at the rate below on the
FOB value of all shipments of the subject merchandise from Gidasa that
are entered, or withdrawn from warehouse, for consumption on or after
the date of publication of the final results of this administrative
review.
------------------------------------------------------------------------
Ad valorem
Company rate
------------------------------------------------------------------------
Gidasa Sabanci Gida Sanayi ve Ticaret A.S............... 0.00 percent
------------------------------------------------------------------------
[[Page 33441]]
The calculations will be disclosed to the interested parties in
accordance with 19 CFR 351.224(b).
For companies that were not named in our notice initiating this
administrative review, the Department has directed CBP to assess
countervailing duties on all entries between January 1, 2004, and
December 31, 2004, at the rates in effect at the time of entry.
For all non-reviewed firms, we will instruct CBP to collect cash
deposits of estimated countervailing duties at the most recent company-
specific or country-wide rate applicable to the company. Accordingly,
the cash deposit rates that will be applied to non-reviewed companies
covered by this order are those established in the Notice of
Countervailing Duty Order: Certain Pasta (``Pasta'') From Turkey, 61 FR
38546 (July 24, 1996), or the company-specific rate published in the
most recent final results of an administrative review in which a
company participated. These rates shall apply to all non-reviewed
companies until a review of a company assigned these rates is
requested.
Public Comment
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 not later
than five days after the date of filing the case briefs. 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. Any hearing, if requested, will be
held two days after the scheduled date for submission of rebuttal
briefs.
Representatives of parties to the proceeding may request disclosure
of proprietary information under administrative protective order no
later than 10 days after the representative's client or employer
becomes a party to the proceeding, but in no event later than the date
the case briefs are due. See 19 CFR 351.309(c)(ii).
The Department will publish a notice of the final results of this
administrative review within 120 days from the publication of these
preliminary results.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: June 5, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-9007 Filed 6-8-06; 8:45 am]
BILLING CODE 3510-DS-S