Certain Pasta From Italy: Preliminary Results of the 14th (2009) Countervailing Duty Administrative Review, 48130-48142 [2011-20070]
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48130
Federal Register / Vol. 76, No. 152 / Monday, August 8, 2011 / Notices
publication date, as provided by section
751(a)(2)(C) of the Act: (1) The cash
deposit rate for companies subject to
this review will be the rate established
in the final results of this review, except
if the rate is less than 0.5 percent and,
therefore, de minimis, no cash deposit
will be required; (2) for previously
reviewed or investigated companies not
listed above, the cash deposit rate will
continue to be the company-specific rate
published for the most recent final
results for a review in which that
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
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: August 1, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
DEPARTMENT OF COMMERCE
DEPARTMENT OF COMMERCE
International Trade Administration
International Trade Administration
Southern Illinois University, et al.;
Notice of Decision on Applications for
Duty-Free Entry of Scientific
Instruments
[C–475–819]
This is a decision pursuant to Section
6(c) of the Educational, Scientific, and
Cultural Materials Importation Act of
1966 (Pub. L. 89–651, as amended by
Pub. L. 106–36; 80 Stat. 897; 15 CFR
part 301). Related records can be viewed
between 8:30 a.m. and 5 p.m. in Room
3720, U.S. Department of Commerce,
14th and Constitution Ave., NW.,
Washington, DC 20230.
Comments: None received. Decision:
Approved. Reasons: We know of no
instruments of equivalent or comparable
scientific value to the foreign
instruments described below, for the
intended purposes, that were being
manufactured in the United States at the
time of their order.
Docket Number: 11–032. Applicant:
Southern Illinois University, Integrated
Microscopy and Graphic Expertise
(IMAGE) Center, 750 Communications
Drive—Mailcode 4402, Carbondale, IL
62901. Instrument: Quanta 450 scanning
electron microscope. Manufacturer: FEI
Company, Czech Republic. Intended
Use: See application notice at 76 FR
39070, July 5, 2011.
Docket Number: 11–037. Applicant:
Tulane University, 6823 St. Charles
Avenue, New Orleans, LA 70118.
Instrument: Field-emission transmission
electron microscope. Manufacturer: FEI
Company, the Netherlands. Intended
Use: See application notice at 76 FR
39070, July 5, 2011.
Docket Number: 11–038. Applicant:
Battelle Memorial Institute, Pacific
Northwest National Laboratory, 3335 Q
Avenue, Richland, WA 99354.
Instrument: Scanning transmission
electron microscope. Manufacturer: FEI
Company, the Netherlands. Intended
Use: See application notice at 76 FR
39070, July 5, 2011.
Dated: July 28, 2011.
Supriya Kumar,
Acting Director, Subsidies Enforcement
Office, Office of Policy, Import
Administration.
[FR Doc. 2011–19932 Filed 8–5–11; 8:45 am]
BILLING CODE 3510–DS–P
[FR Doc. 2011–20067 Filed 8–5–11; 8:45 am]
BILLING CODE 3510–DS–P
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Certain Pasta From Italy: Preliminary
Results of the 14th (2009)
Countervailing Duty Administrative
Review
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, 2009, through December 31, 2009. We
preliminarily find that Molino e
Pastificio Tomasello S.p.A.
(‘‘Tomasello’’) and Pastificio Antonio
Pallante S.r.L. (‘‘Pallante’’) received
countervailable subsidies and that F.lli
De Cecco di Filippo Fara San Martino
S.p.A. (‘‘De Cecco’’) received de
minimis countervailable subsidies. We
also find that Pastificio Fabianelli S.p.A.
(‘‘Fabianelli’’) received countervailable
subsidies that were expensed prior to
2009 and did not confer any benefit to
Fabianelli during the period of review
(‘‘POR’’). See the ‘‘Preliminary Results
of Review’’ section of this notice below.
Interested parties are invited to
comment on these preliminary results.
See the ‘‘Disclosure and Public
Comment’’ section of this notice below.
DATES: Effective Date: August 8, 2011.
FOR FURTHER INFORMATION CONTACT:
Mahnaz Khan or Christopher Siepmann,
AD/CVD Operations, Office 1, Import
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–0914 and (202)
482–7958, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
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). On July 1, 2010, the
Department published a notice of
‘‘Opportunity to Request Administrative
Review’’ of this countervailing duty
order for the POR corresponding to
calendar year 2009. See Antidumping or
Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity
To Request Administrative Review, 75
FR 38074 (July 1, 2010). On July 29,
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2010, we received such a request from
De Cecco. On July 31, 2010, we received
a request from New World Pasta
Company, American Italian Pasta
Company, and Dakota Growers Pasta
Company (‘‘the petitioners’’). In their
request letter, the petitioners requested
that the Department initiate a review on
Pallante, Fabianelli, and Tomasello. In
accordance with 19 CFR
351.221(c)(1)(i), we published a notice
of initiation of this review on August 31,
2010. See Initiation of Antidumping and
Countervailing Duty Administrative
Reviews and Deferral of Initiation of
Administrative Review, 75 FR 53274
(August 31, 2010).
On September 20, 2010, we issued
countervailing duty questionnaires to
the Commission of the European Union
(‘‘EU’’), the Government of Italy
(‘‘GOI’’), De Cecco, Fabianelli,
Tomasello, and Pallante. We received
responses to our questionnaires in
November 2010. We issued
supplemental questionnaires to De
Cecco on February 10, and June 27,
2011, and we received responses to our
supplemental questionnaires on
February 18, April 5, and June 30, 2011.
We issued supplemental questionnaires
to Fabianelli on March 1, April 15, and
May 17, 2011, and received responses to
our supplemental questionnaires on
March 30, May 16, and May 19, 2011.
On March 1, and May 25, 2011, the
Department issued supplemental
questionnaires to Tomasello, and we
received responses to our supplemental
questionnaire on April 13, and June 24,
2011. We issued supplemental
questionnaires to Pallante on March 3,
June 27, and June 28, 2011, and received
responses to our supplemental
questionnaires on March 31, and June
30, 2011. We issued supplemental
questionnaires to the GOI on March 16,
May 12, June 17, June 28, and July 11,
2011, and received responses on April
15, June 13, July 1, and July 25, 2011.
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Period of Review
The POR for which we are measuring
subsidies is January 1, 2009, through
December 31, 2009.
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 the scope
of the order is typically sold in the retail
market, in fiberboard or cardboard
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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 Italila, 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
the order. See Memorandum from Eric
B. Greynolds to Melissa G. Skinner,
dated August 4, 2004, which is on file
in the Department’s CRU. In addition,
based on publicly available information,
the Department has determined that, as
of March 13, 2003, imports of organic
pasta from Italy that are accompanied by
the appropriate certificate issued by
Instituto per la Certificazione Etica e
Ambientale are also excluded from the
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 CRU. Pursuant
to the Department’s May 12, 2011
changed circumstances review, effective
January 1, 2009, gluten-free pasta is also
excluded from the scope of the CVD
order. See Certain Pasta From Italy:
Final Results of Countervailing Duty
Changed Circumstances Review and
Revocation, In Part, 76 FR 27634 (May
12, 2011).
The merchandise subject to review is
currently classifiable under items
1901.90.90.95 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
finding that multicolored pasta,
imported in kitchen display bottles of
decorative glass that are sealed with
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cork or paraffin and bound with raffia,
is excluded from the scope of the
antidumping and countervailing duty
orders. See Memorandum from Edward
Easton to Richard Moreland, dated
August 25, 1997, which is on file in the
CRU.
(2) On July 30, 1998, the Department
issued a scope ruling finding that
multipacks consisting of six one-pound
packages of pasta that are shrinkwrapped into a single package are
within the scope of the antidumping
and countervailing duty orders. See
Letter from Susan H. Kuhbach to
Barbara P. Sidari, dated July 30, 1998,
which is on file in the CRU.
(3) On May 24, 1999, the Department
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 on file 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 Tariff Act of
1930, as amended (‘‘the Act’’), and 19
CFR 351.225(b). See Certain Pasta From
Italy: Notice of Initiation of AntiCircumvention Inquiry on the
Antidumping and Countervailing Duty
Orders, 65 FR 26179 (May 5, 2000). On
September 19, 2003, we published an
affirmative finding of the anticircumvention inquiry. See AntiCircumvention Inquiry of the
Antidumping and Countervailing Duty
Orders on Certain Pasta from Italy:
Affirmative Final Determinations of
Circumvention of Antidumping and
Countervailing Duty Orders, 68 FR
54888 (September 19, 2003).
Use of Facts Otherwise Available and
Adverse Inferences
Sections 776(a)(1) and (2) of the Act,
provide that the Department shall apply
‘‘facts otherwise available’’ if necessary
information is not on the record or an
interested party or any other person: (A)
Withholds information that has been
requested; (B) fails to provide
information within the deadlines
established, or in the form and manner
requested by the Department, subject to
subsections (c)(1) and (e) of section 782
of the Act; (C) significantly impedes a
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proceeding; or (D) provides information
that cannot be verified as provided by
section 782(i) of the Act. Section 776(b)
of the Act further provides that the
Department may use an adverse
inference in applying the facts
otherwise available when a party has
failed to cooperate by not acting to the
best of its ability to comply with a
request for information. The
Department’s practice when selecting an
adverse rate from among the possible
sources of information is to ensure that
the result is sufficiently adverse ‘‘as to
effectuate the statutory purposes of the
adverse facts available rule to induce
respondents to provide the Department
with complete and accurate information
in a timely manner.’’ See Notice of Final
Determination of Sales at Less than Fair
Value: Static Random Access Memory
Semiconductors From Taiwan, 63 FR
8909, 8932 (February 23, 1998). The
Department’s practice also ensures ‘‘that
the party does not obtain a more
favorable result by failing to cooperate
than if it had cooperated fully.’’ See
Statement of Administrative Action
accompanying the Uruguay Round
Agreements Act, H.R. Doc. No. 103–316,
vol. 1, at 870 (1994).
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GOI—Previously Uninvestigated
Programs
On April 13, 2011, Tomasello
informed the Department that it
received subsidies from the GOI under
seven programs that were not reported
in Tomasello’s November 3, 2010
questionnaire response. Except for Law
46/1982,1 it appeared that the
Department had not previously
investigated the countervailability of
these programs in the Pasta
Investigation or in subsequent reviews;
therefore, on May 12, 2011, we asked
the GOI to respond to the full
questionnaire for all seven programs.
We received its response on June 13,
2011, and discovered that it contained
numerous deficiencies. The GOI failed
to respond to most of our questions for
all but one program. It also failed to
provide the related law for four of the
1 The Department determined not to investigate
this program in the countervailing duty
investigation of certain pasta from Italy because it
was previously found not countervailable. See
Notice of Initiation of Countervailing Duty
Investigations: Certain Pasta (‘‘Pasta’’) From Italy
and Turkey, 60 FR 30280, 30281–82 (June 8, 1995)
(‘‘Pasta Investigation Initiation’’). See also Final
Affirmative Countervailing Duty Determination:
Certain Pasta (‘‘Pasta’’) From Italy, 61 FR 30288
(June 14, 1996) (‘‘Pasta Investigation’’) and
accompanying Issues and Decision Memorandum at
Comment 28 (summarizing the Department’s
determination not to investigate this program). Our
rationale for revisiting this determination can be
found in the Law 46/1982 program description,
below.
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programs and did not translate one of
the laws it did provide, despite our
request to provide translated laws for
each program. See 19 CFR 351.303(e). In
addition, the GOI failed to identify the
industries or enterprises that received
benefits under these programs and the
corresponding amounts given to them
(‘‘usage data’’). Because the GOI’s
response did not provide us with
enough information to determine
whether any of these seven programs are
countervailable, we requested this
information a second time. This second
attempt consisted of two questionnaires
issued on June 17, and June 28, 2011,
respectively. The GOI filed a timely
response to the June 17, questionnaire,
but failed to respond to many of the
questions in the questionnaire,
including questions concerning usage
for three programs. The GOI then failed
to provide usage data for the remaining
four programs in its July 25, 2011
questionnaire response, although it did
confirm that two programs (Measure
3.14 and Regional Law 15/1993) are
regionally specific.
The statute identifies specificity as
one of three necessary elements of a
countervailable subsidy. See sections
771(5)(A) and 771(5A) of the Act. We
normally rely on information from the
government to determine whether a
program is specific. See, e.g., Certain
Magnesia Carbon Bricks From the
People’s Republic of China: Final
Affirmative Countervailing Duty
Determination, 75 FR 45472 (August 2,
2010) and accompanying Issues and
Decision Memorandum at Comment 6.
Although it was given multiple
opportunities, the GOI’s responses left
us without the necessary information to
determine whether many of the
programs reported by Tomasello on
April 13, 2011, are countervailable.
We preliminarily determine that the
GOI has withheld necessary information
that was requested of it for five of the
seven programs. The GOI also failed to
provide information requested by the
Department by the deadline for the
submission of the information. Because
the record is incomplete for these
programs, the Department must rely on
‘‘facts available.’’ See sections 776(a)(1),
776(a)(2)(A) and 776(a)(2)(B) of the Act.
Moreover, the GOI has failed to
cooperate by not acting to the best of its
ability to comply with our request for
information, so we are applying an
adverse inference in our use of facts
available. See section 776(b) of the Act.
Due to the GOI’s failure either to
provide information necessary for our
determination about these programs, or
to provide this information in a timely
manner, we are finding as adverse facts
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available that benefits from five of these
seven programs are specific.2 See section
771(5A) of the Act. An analysis of these
programs is found in the ‘‘Analysis of
Programs’’ section below.
Section 776(c) of the Act provides
that, when the Department relies on
secondary information rather than on
information obtained in the course of an
investigation or review, it shall, to the
extent practicable, corroborate that
information from independent sources
that are reasonably at its disposal.
Secondary information is defined as
‘‘information derived from the petition
that gave rise to the investigation or
review, the final determination
concerning the subject merchandise, or
any previous review under section 751
of the Act concerning the subject
merchandise.’’
The facts available decisions
described above do not rely on
secondary information. Our
determinations regarding the specificity
of these programs are based on the
unwillingness of the GOI to provide
necessary information pertaining to the
access to, or the distribution of, the
subsidies. The corroboration
requirement of section 776(c) of the Act
is, therefore, not applicable to the use of
facts available in this review.
Subsidies Valuation Information
Allocation Period
Pursuant to 19 CFR 351.524(b),
benefits from 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
Class Life Asset Depreciation Range
System (‘‘IRS Tables’’). See 19 CFR
351.524(d)(2). For pasta, the most recent
IRS Tables prescribe an AUL of 12
years. None of the responding
companies or other interested parties
objected to this allocation period.
Therefore, we have used a 12-year
allocation period.
Attribution of Subsidies
Pursuant to 19 CFR 351.525(b)(6), the
Department will attribute subsidies
received by companies with crossownership to the combined sales of
those companies.
2 For two of the programs, i.e. Measure 3.14 and
Regional Law 15/1993, the GOI provided
information indicating that the programs are
regionally specific. See discussion, supra.
Accordingly, the Department has made specificity
determinations for these two programs without
resorting to facts available.
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De Cecco: In the instant review, De
Cecco has responded on behalf of itself
and three other members of the De
Cecco group of companies: Molino e
Pastificio De Decco S.p.A. (‘‘De Cecco
Pescara’’), Centrale Elettrica F.lli De
Cecco S.r.L. (‘‘Centrale’’), and Consorzio
Elettrico Imprese De Cecco (‘‘C.E.I.D.’’).
See De Cecco questionnaire response
dated November 3, 2010 at 5.
De Cecco manufactures pasta for sale
in Italy, to third-country markets, and to
the United States. Id. at 7. De Cecco
Pescara manufactures pasta for sale to
De Cecco and to unaffiliated third
parties in Italy. Id. For the reasons
explained in the Business Proprietary
Memorandum from Mahnaz Khan to
Susan Kuhbach, ‘‘Information
Concerning Respondents’ Attribution,’’
dated August 1, 2011 (‘‘Respondents’
Attribution Memo’’), we find that cross
ownership exists between De Cecco
Pescara and De Cecco within the
meaning of 19 CFR 351.525(b)(6)(vi). Id.
at 2. Therefore, in accordance with 19
CFR 351.525(b)(6)(ii), we are attributing
subsidies received by De Cecco and De
Cecco Pescara to the combined sales of
both, excluding inter-company sales.
Effective January 1, 1999, Molino F.lli
De Cecco di Filippo S.p.A. (‘‘De Cecco
Molino’’), another member of the De
Cecco group on whose behalf De Cecco
responded in the fourth administrative
review, was merged with De Cecco and
ceased to be a separate entity. See
Certain Pasta From Italy: Final Results
of the Fourth Countervailing Duty
Administrative Review, 66 FR 64214
(December 12, 2001) (‘‘Fourth
Administrative Review Final’’) and
accompanying Issues and Decision
Memorandum. The Department will
continue to consider countervailable
any benefits received by De Cecco
Molino in past administrative review
periods and allocated over a period that
extends into or beyond the current POR
as benefits attributable to De Cecco. See
Memorandum to the File, ‘‘2009
Preliminary Results Calculation
Memorandum for F.lli De Cecco di
Filippo Fara San Martino S.p.A..,’’ dated
August 1, 2011 (‘‘De Cecco Preliminary
Calc Memo’’).
Finally, De Cecco has reported it
purchased electricity from C.E.I.D. that
was produced by Centrale. Centrale is
majority owned by members of the De
Cecco family. See De Cecco
questionnaire response dated November
3, 2010 at 6. C.E.I.D. is a consortium
consisting of Centrale and De Cecco.
Neither Centrale nor C.E.I.D. received
any subsidies during the POR or AUL
period. Id. Therefore, we do not reach
the issue of whether cross-ownership
exists or whether subsidies to Centrale
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or C.E.I.D. would be attributable to the
pasta sold by De Cecco under 19 CFR
351.525(b)(6).
Fabianelli: FABFIN S.p.A.
(‘‘FABFIN’’) is a company that actively
produced and sold subject pasta
between 2001 and 2006. Although it
stopped all production in 2006, it still
exists as a legal entity. Fabianelli stated
in its response that it owned 95 percent
of the shares of FABFIN at the beginning
of 2009. On June 19, 2009, Fabianelli
purchased the remaining five percent of
FABFIN’s shares, making FABFIN a
wholly-owned subsidiary of Fabianelli.
See Fabianelli questionnaire response
dated November 3, 2010 at 3. Therefore,
we determine that cross ownership
exists between FABFIN and Fabianelli
as defined by 19 CFR 351.525(b)(6)(vi).
Based on their questionnaire
responses, we preliminarily determine
that Pallante and Tomasello have no
affiliates for which cross-ownership
exists. See Pallante questionnaire
response dated November 3, 2010 at 3
and Tomasello questionnaire response
dated November 3, 2010 at 3; see also
Respondents’ Attribution Memo. Thus,
we are attributing any subsidies
received by Pallante and Tomasello to
their respective sales only.
Changes in Ownership
Fabianelli reported that on March 1,
2001, its subsidiary FABFIN acquired
the assets of Pastificio Maltagliati
(‘‘Maltagliati’’) in a bankruptcy trustee
sale. See Fabianelli questionnaire
response dated March 30, 2011 at 1. We
find that prior to entering bankruptcy,
Maltagliati was granted reductions to its
social security payments under Law
863/84 and received export restitution
payments within the AUL period. We
consider both of these programs to
confer recurring benefits, in accordance
with 19 CFR 351.524(c) and consistent
with our treatment of these programs in
the investigation and previous reviews.
See, e.g., Pasta Investigation, 61 FR at
30294–95. Therefore, subsidies given to
Maltagliati did not confer
countervailable benefits upon Fabianelli
because the subsidies received by
Maltagliati were expensed in the years
that they were received.
Benchmarks for Long-Term Loans and
Discount Rates
Pursuant to 19 CFR 351.505(a), the
Department will use the actual cost of
comparable borrowing by a company as
a loan benchmark, when available.
According to 19 CFR 351.505(a)(2), a
comparable commercial loan is defined
as one that, when compared to the
government-provided loan in question,
has similarities in the structure of the
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loan (e.g., fixed interest rate versus
variable interest rate), the maturity of
the loan (e.g., short-term versus longterm), and the currency in which the
loan is denominated.
On June 24, 2011, Tomasello
informed us that it received several
commercial loans within the AUL
period. We issued questionnaires to
both Tomasello and the GOI to
determine, based on the criteria found at
19 CFR 351.505(a)(2), whether these
loans could be compared to the loans
Tomasello received under programs
covered in this review. We received
responses from Tomasello on July 20,
2011, and from the GOI on July 25,
2011.
One of the loans Tomasello submitted
to us was provided by the Regional
Institute for the Financing of Industries
in Sicily (‘‘IRFIS’’). Based on
information on the record, we
preliminarily determine that IRFIS is a
government-owned special purpose
bank within the meaning of 19 CFR
351.505(a)(2)(ii). See Business
Proprietary Memorandum to the File
from Christopher Siepmann, ‘‘2009
Preliminary Results Calculation
Memorandum for Molino e Pastificio
Tomasello, S.p.A.,’’ (August 1, 2011)
(‘‘Tomasello Preliminary Calc Memo’’).
See also Memorandum to File from
Christopher Siepmann, ‘‘Placement of
Certain Information Related to IRFIS On
the Record’’ (July 22, 2011), and GOI
fifth supplemental questionnaire
response dated July 25, 2011 at 1.
Therefore, we have not used this loan to
calculate a benchmark.
The remainder of the information we
have used in our evaluation of these
loans is business proprietary. See
Tomasello Preliminary Calc Memo.
Based on this information, we
preliminarily determine that none of the
loans submitted by Tomasello can serve
as a loan benchmark pursuant to 19 CFR
351.505(a)(2) for the loans Tomasello
received under programs covered by
this review.
Because Fabianelli, De Cecco, and
Pallante did not report the receipt of any
comparable commercial loans in the
years in which the GOI agreed to
provide loans under the programs
covered in this review, and because we
have not found comparable loans among
those submitted by Tomasello, we used
as our benchmark a national average
interest rate for comparable commercial
loans, pursuant to 19 CFR
351.505(a)(3)(ii). Consistent with our
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
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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 section I.B.,
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 Cecco and Pallante received
grants under Law 64/86 that conferred
a benefit during the POR. See De
Cecco’s questionnaire response dated
November 3, 2010 at Exhibit 9, and
Pallante’s questionnaire response dated
November 3, 2010 at Exhibit 5.
In the Pasta Investigation, 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) of the Act; 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.
As stated in Live Swine from Canada,3
‘‘it is well-established that where the
Department has determined that a
program is (or is not) countervailable, it
is the Department’s policy not to reexamine the issue of that program’s
countervailability in subsequent reviews
unless new information or evidence of
changed circumstances is submitted
which warrants reconsideration.’’ Also,
this policy is reflected in the
Department’s standard questionnaire
used in countervailing duty
administrative reviews which states that
‘‘absent new information or evidence of
changed circumstances, we do not
intend to reexamine the
countervailability of programs
previously found to be
countervailable.’’ 4
In this review, neither the GOI nor the
respondent companies have provided
Analysis of Programs
new information that would warrant
I. Programs Preliminarily Determined To reconsideration of our determination
that these grants are countervailable
Be Countervailable
subsidies.
A. Industrial Development Grants Under
In the Pasta Investigation, the
Law 64/86
Department treated the industrial
development grants as non-recurring.
Law 64/86 provided assistance to
No new information has been placed on
promote development in the
Mezzogiorno (the south of Italy). Grants the record of this review that would
cause us to depart from this treatment.
were awarded to companies
constructing new plants or expanding or Therefore, we have followed the
modernizing existing plants. Pasta
3 See Live Swine from Canada; Final Results of
companies were eligible for grants to
Countervailing Duty Administrative Reviews, 61 FR
expand existing plants but not to
52408, 52420 (October 7, 1996) (‘‘Live Swine from
establish new plants because the market Canada’’).
for pasta was deemed to be close to
4 See Department’s November 10, 2009 letter to
the Embassy of Italy, at enclosure.
saturated. Grants were made only after
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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),
unchanged in Certain Pasta from Italy:
Final Results of the Eighth
Countervailing Duty Administrative
Review, 70 FR 37084 (June 28, 2005).
For benefits received in 1995–2004, we
used the Italian Bankers’ Association
(‘‘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. See Certain
Pasta from Italy: Preliminary Results of
the 12th (2007) Countervailing Duty
Administrative Review, 74 FR 25489,
25491 (May 28, 2009) (‘‘12th (2007)
Administrative Review Preliminary
Results’’), unchanged in Certain Pasta
from Italy: Final Results of the 12th
(2007) Countervailing Duty
Administrative Review, 74 FR 47204
(September 15, 2009). The Bank of Italy
ceased reporting this rate in 2004. See
12th (2007) Administrative Review
Preliminary Results, 74 FR at 25491.
Because the ABI prime rate was no
longer reported after 2004, for 2005–
2009, 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 1, 2010, questionnaire
response at Exhibits 3, 4, 5 and 6. Id. We
increased this rate by the mark-up and
bank charges described above.
Also, none of the companies reported
loan interest rates that could be used as
discount rates (see 19 CFR
351.524(d)(3)(A)). Therefore, in order to
allocate non-recurring benefits over
time, we calculated discount rates for
these companies by using the national
average cost of long-term, fixed-rate
loans pursuant to 19 CFR
351.524(d)(3)(B).
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methodology described in 19 CFR
351.524(b), which directs us to allocate
over time those non-recurring grants
whose total authorized amount exceeds
0.5 percent of the recipient’s sales in the
year of authorization. Where the total
amount authorized is less than 0.5
percent of the recipient’s sales in the
year of authorization, the benefit is
countervailed in full (‘‘expensed’’) in
the year of receipt. We determined that
the grants received by De Cecco and
Pallante under Law 64/86 exceeded 0.5
percent of their sales in the years in
which the grants were approved.
Consequently, we used the grant
methodology described in 19 CFR
351.524(d) to allocate the benefit from
those grants. We divided the amounts
allocated to the POR by the respective
total sales of De Cecco and Pallante.
On this basis, we preliminarily
determine the countervailable subsidy
from the Law 64/86 industrial
development grants to be 0.19 percent
ad valorem for De Cecco and 0.01
percent ad valorem for Pallante. See De
Cecco Preliminary Calc Memo, and
Memorandum to the File, ‘‘2009
Preliminary Results Calculation
Memorandum for Pastificio Antonio
Pallante S.r.L.,’’ dated August 1, 2011
(‘‘Pallante Preliminary Calc Memo’’).
B. 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 regions and sectors
(manufacturing, mining, and certain
business services) could apply for
industrial development grants.
Law 488/92 grants are made only after
a preliminary examination by a bank
authorized by the Ministry of Industry.
On the basis of the findings of this
preliminary examination, the Ministry
of Industry ranks the companies
applying for grants. The ranking is
based on indicators such as the amount
of capital the company will contribute
from its own funds, the number of jobs
created, regional priorities, etc. Grants
are then made based on this ranking. De
Cecco, Tomasello and Pallante received
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grants under Law 488/92 that conferred
a benefit during the POR.
In the Second Administrative
Review,5 the Department determined
that Law 488/92 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) of the Act; 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 the instant review, neither
the GOI nor the respondent companies
have provided new information which
would warrant reconsideration of our
determination that these grants are
countervailable subsidies. See Live
Swine from Canada, 61 FR at 52420.
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.
Therefore, we have followed the
methodology described in 19 CFR
351.524(b) and because the grants
received by De Cecco, Tomasello and
Pallante under Law 488/92 exceeded 0.5
percent of their sales in the year in
which the grants were approved, we
allocated the benefits over time using
the grant methodology described in 19
CFR 351.524(d). We divided the
amounts allocated to the POR by the
respective total sales of De Cecco,
Pallante and Tomasello in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from the Law 488/92 industrial
development grants to be 0.15 percent
ad valorem for De Cecco, 0.31 percent
ad valorem for Pallante, and 3.34
percent ad valorem for Tomasello. See
De Cecco Preliminary Calc Memo,
Pallante Preliminary Calc Memo, and
Tomasello Preliminary Calc Memo.
C. Interest Contributions Under Law
488/92
In the second administrative review of
this order, the Department found that
‘‘loans are not provided under Law 488/
92.’’ Second Administrative Review, 64
FR at 17620. However, the GOI later
provided documentation that a May 14,
2005 Law at Article 80 and
implementing decree changed this
practice to permit companies to obtain
5 See Certain Pasta from Italy: Preliminary Results
of Countervailing Duty Administrative Review, 64
FR 17618, 17620 (April 12, 1999) (‘‘Second
Administrative Review’’), unchanged in Certain
Pasta From Italy: Final Results of the Second
Countervailing Duty Administrative Review, 64 FR
44489 (August 16, 1999).
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loans, in addition to grants, for
initiatives in the areas eligible for such
assistance under Law 488/92. See
Certain Pasta From Italy: Preliminary
Results of the 13th (2008)
Countervailing Duty Administrative
Review, 75 FR 18806 (April 13, 2010),
unchanged in Certain Pasta from Italy:
Final Results of the 13th (2008)
Countervailing Duty Administrative
Review, 75 FR 37386 (June 29, 2010).
The preliminary examination of
companies’ loan applications by an
authorized bank, the ranking by the
Ministry of Economic Development, and
the award of loans based on the ranking
are similar to the process described for
Law 488/92 grants (see section I.B.,
above). Id. In addition, the bank is
responsible for assessing the company’s
credit. Id.
Under this modification to Law 488/
92, the loans must have a duration not
exceeding 15 years and not less than six
years. Id. The fixed-interest rates on
these long-term loans are set at a rate of
0.50 percent with the GOI covering the
difference in interest amount between
that rate and the market rate. Id. De
Cecco received interest contributions
under Law 488/92 during the POR. See
De Cecco’s November 3, 2010
questionnaire response at 14, 23–37.
We preliminarily determine that these
interest contributions are
countervailable subsidies 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. See section
751(5)(E)(ii) of the Act. Also, these
interest contributions are regionally
specific within the meaning of section
771(5A)(D)(iv) of the Act because they
are limited to companies located within
regions which meet the criteria of
Objective 1, Objective 2, and Objective
5(b) areas determined by the EU.
In accordance with 19 CFR
351.505(c)(2) and 351.508(c)(2), we
calculated the benefit for the POR by
computing the difference between the
amount of interest paid during the POR
by De Cecco on its Law 488/92 loan and
the amount of interest De Cecco would
have paid at the benchmark interest
rate. We divided the benefit received by
De Cecco in the POR by its sales in the
POR.
On this basis, we preliminarily
determine the countervailable subsidy
from the Law 488/92 interest
contributions to be 0.05 percent ad
valorem for De Cecco. See De Cecco
Preliminary Calc Memo.
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D. Measure 3.14 of the POR Sicilia
2000/2006
The POR Sicilia 2000/2006 is a
regional development program designed
to encourage stable economic growth in
southern Italy. See GOI fifth
questionnaire response dated July 25,
2011 at 1. Measure 3.14 of the POR
Sicilia 2000/2006 provides assistance in
the form of grants to companies that
undertake approved industrial research
projects. Companies may apply for
funding under two provisions. The first
provides support to companies for
developing best practices in a number of
fields. Most grants are given under the
second provision, which funds
industrial research projects, particularly
those that are undertaken in partnership
with other companies or with research
institutions such as universities. See
Tomasello questionnaire response dated
April 13, 2011 at Exhibit 3. Tomasello
stated that it received grants under
Measure 3.14 in 2008 and 2009. See
Tomasello questionnaire response dated
April 13, 2011 at 3; see also Tomasello
questionnaire response dated June 24,
2011 at 4. The GOI also reported that
Tomasello received grants under this
program, but the amounts reported by
the two parties differ. See GOI
questionnaire response dated July 25,
2011 at 4. We intend to seek
clarification of this discrepancy for the
final results. For purposes of these
preliminary results, we have used the
amount reported by Tomasello.
Tomasello has argued that subsidies
received under Measure 3.14 should not
be considered countervailable because
the grants are for precompetitive
research and development activities.
Section 771(5B) of the Act describes
research and development subsidies as
being non-countervailable; however, in
accordance with section 771(5B)(G)(i),
this provision regarding
noncountervailability expired in 2000.
Therefore, we do not consider benefits
received under Measure 3.14 to be
entitled to treatment as so-called ‘‘greenlight,’’ or noncountervailable, subsidies.
We preliminarily determine that
grants under Measure 3.14 confer a
countervailable subsidy within the
meaning of section 771(5) of the Act.
They provide a direct transfer of funds
from the GOI bestowing a benefit in the
amount of the grant. They are also
specific within the meaning of section
771(5A)(D)(iv) of the Act because the
GOI limits benefits under this program
to companies in certain regions. See GOI
fourth questionnaire response dated July
25, 2011 at 3.
We also preliminarily determine that
Measure 3.14 grants are non-recurring
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because they are exceptional events.
Recipients must file a separate
application for each project they seek
funding for and cannot expect funding
on an ongoing basis. See Tomasello
questionnaire response dated April 13,
2011 at 4. Therefore, we have followed
the methodology described in 19 CFR
351.524(b) and because the grants
received by Tomasello under Measure
3.14 exceeded 0.5 percent of its 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 benefit from
these grants. We divided the amount
allocated to the POR by Tomasello’s
total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from the Measure 3.14 research grants to
be 0.12 percent ad valorem for
Tomasello. See Tomasello Preliminary
Calc Memo.
E. European Social Fund
The European Social Fund (‘‘ESF’’),
one of the Structural Funds operated by
the EU, was established to improve
workers’ opportunities through training
and to raise workers’ standards of living
throughout the European Community by
increasing their employability. There
are six different objectives identified by
the Structural Funds: Objective 1 covers
projects located in underdeveloped
regions, Objective 2 addresses areas in
industrial decline, Objective 3 relates to
the employment of persons under 25
years of age, Objective 4 funds training
for employees in companies undergoing
restructuring, Objective 5 pertains to
agricultural areas, and Objective 6
pertains to regions with very low
population (i.e., the far north).
Tomasello received ESF grants in 2008
and 2009 under Objective 1 (through
Measure 3.09 of the POR Sicilia 2000/
2006) for the purpose of training its
workers in improved quality control
techniques. See Tomasello
questionnaire response dated April 13,
2011 at 5 and Exhibit 4; see also GOI
fifth questionnaire response dated July
25, 2011 at Exhibit 2.
In the Pasta Investigation, the
Department determined that ESF grants
confer a countervailable subsidy within
the meaning of section 771(5) of the Act.
See Pasta Investigation, 61 FR at 30294.
We consider worker training programs
to provide a countervailable benefit to a
company when the company is relieved
of an obligation it would have otherwise
incurred. Id. Since companies normally
incur the costs of training to enhance
the job related skills of their own
employees, we determine that this ESF
grant relieves Tomasello of obligations it
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would have otherwise incurred.
Consequently, the ESF grant is a
financial contribution as described in
section 771(5)(D)(i) of the Act which
provides a benefit to the recipient in the
amount of the grant.
The ESF grant received by Tomasello
provided funding from three sources:
the EU, the GOI, and the Region of
Sicily. Consistent with prior cases, we
have examined the specificity of the
ESF funding under Objective 1
separately from any funding under other
objectives. See Final Affirmative
Countervailing Duty Determination:
Certain Stainless Steel Wire Rod From
Italy, 63 FR 40474, 40487 (July 29, 1998)
(‘‘Wire Rod from Italy’’). Moreover,
since funding for this Objective 1 grant
was provided through the regional
operational program from three sources,
we have examined the specificity of the
funding for each source of funds,
consistent with our treatment of the ESF
in the Second Administrative Review.
See Second Administrative Review, 64
FR at 44492.
In the Pasta Investigation, the
Department determined that the ESF
funds for Objective 1 provided by the
EU and the GOI are limited to
underdeveloped regions and, hence,
regionally specific within the meaning
of section 771(5A)(D)(iv) of the Act.
Regarding funding from the regional
government, we requested usage
information from the GOI on two
occasions: first, on May 12, 2011; and
second, on June 17, 2011. The GOI did
not provide this information either time.
As explained above under ‘‘Use of
Facts Otherwise Available and Adverse
Inferences,’’ in cases where there is not
enough information on the record for us
to determine whether a program is
specific (see section 776(a)(1) of the
Act), and in cases where an interested
party fails to provide information that
has been requested by the Department
by the deadline for the submission of
that information (see section
776(a)(2)(B) of the Act), we use facts
otherwise available. We further
explained that an adverse inference is
warranted where a party fails to
cooperate by not acting to the best of its
ability to comply with a request for
information from the Department.
Therefore, we preliminarily determine
as adverse facts available that the
regional component of Tomasello’s ESF
grant is also specific.
The Department normally considers
the benefits from worker training
programs to be recurring. See CFR
351.524(c)(1). However, consistent with
the Department’s determination in Wire
Rod From Italy that these grants relate
to specific, individual projects, and
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based on information on the record of
this review, we have treated these grants
as non-recurring because each required
separate government approval. See Wire
Rod From Italy, 63 FR at 40487.
Accordingly, we have followed the
methodology described in 19 CFR
351.524(b) and because the grants
received by Tomasello under this
program exceeded 0.5 percent of its
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 benefit from
these grants. We divided the amount
allocated to the POR by Tomasello’s
total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from the ESF grants to be 0.10 percent
ad valorem for Tomasello. See
Tomasello Preliminary Calc Memo.
F. Tax Credits Under Article 280 of Law
296/2006
Article 280 of Law 296/2006
authorizes a tax credit to companies of
up to ten percent of the costs associated
with eligible research activities, or a tax
credit of up to fifteen percent for
research expenses associated with
contracts between companies and
research institutions. See Tomasello
questionnaire response dated April 13,
2011 at Exhibit 6; see also GOI
questionnaire response dated June 13,
2011 at Exhibit 4, and GOI fourth
questionnaire response dated July 25,
2011 at 6. Tomasello reported receiving
a tax credit under this provision in
2009. It identified the benefits as having
been received under Legislative Decree
76/2008, which contains regulations for
the implementation of the credit. See
Tomasello questionnaire response dated
April 13, 2011 at 11; see also GOI fourth
questionnaire response dated July 25,
2011 at 6.
We preliminarily determine that tax
credits under Article 280 of Law 296/
2006 confer a countervailable subsidy
within the meaning of section 771(5) of
the Act. The credits are a financial
contribution in the form of revenue
forgone (see section 771(D)(ii) of the
Act) and they confer a financial
contribution within the meaning of
section 771(5)(D)(ii) of the Act in the
amount of the difference between the
taxes that Tomasello paid in 2009, and
the taxes that Tomasello would have
been required to pay if it had not taken
advantage of the credit.
In its July 1, and July 25, 2011
submissions, the GOI stated that this tax
credit is available throughout Italy and
is not limited by region or industrial
sector. However, the GOI did not
respond to either of our requests for
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program usage information, which we
issued on May 12, and June 28, 2011.
As explained above under ‘‘Use of
Facts Otherwise Available and Adverse
Inferences,’’ in cases where there is not
enough information on the record for us
to determine whether a program is
specific (see section 776(a)(1) of the
Act), and in cases where an interested
party fails to provide information that
has been requested by the Department
by the deadline for the submission of
that information (see section
776(a)(2)(B) of the Act), we use facts
otherwise available. We further
explained that an adverse inference is
warranted where a party fails to
cooperate by not acting to the best of its
ability to comply with a request for
information from the Department.
Therefore, we preliminarily determine
as adverse facts available that the tax
credits granted under Article 280 of Law
296/2006 are specific.
In accordance with 19 CFR
351.524(c), we generally consider tax
credits to confer recurring benefits. In
order to calculate the countervailable
subsidy that Tomasello received, we
divided the amount of the tax credit
applied by Tomasello on its 2009 tax
return by Tomasello’s total sales in the
POR.
On this basis, we preliminarily
determine the countervailable subsidy
from Article 280 of Law 296/2006 to be
0.68 percent ad valorem for Tomasello.
See Tomasello Preliminary Calc Memo.
G. Article 14 of Law 46/1982 (Fondo
Innovazione Tecnologica)
Article 14 of Law 46/1982 authorized
the creation of a revolving fund for
technology innovation, also known as
the ‘‘FIT Program.’’ Through the fund,
the Ministry for Economic Development
provides aid for experimental and
industrial research projects in the form
of soft loans, grants against interest, and
capital grants. After an application is
submitted to one of the banks approved
by the Ministry to administer the
program, the application is evaluated on
a number of scientific, technological
and economic criteria. Subject matter
experts in relevant fields may be asked
to help evaluate the technical merits of
the proposal. Within 90 days from the
submission of an application, the bank
is required to report to the Ministry of
Economic Development whether it
believes the project is feasible. Projects
that pass this examination are funded in
order of highest to lowest score, until
the all the resources appropriated for
the program have been exhausted. See
GOI questionnaire response dated June
13, 2011 at 3; see also GOI fourth
questionnaire response dated July 25,
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2011 at 5. Tomasello reported receiving
both a grant and a loan under Article 14
of Law 46/1982. See Tomasello
questionnaire response dated April 13,
2011 at 7. The GOI also reported that
Tomasello received a grant and a loan
under this program, but the grant
amounts reported by the two parties
differ. See GOI fourth questionnaire
response dated July 25, 2011 at Exhibit
7. We intend to seek clarification of this
discrepancy for the final results.
Because the amounts reported by the
GOI are more consistent with the
underlying decree, we have used them
for these preliminary results.
In the Pasta Investigation, the
petitioners asked us to investigate this
program as a possible countervailable
subsidy. We declined because we had
found Law 46/1982 to be
noncountervailable in a previous
investigation. See Pasta Investigation
Initiation, 60 FR at 30281–82. As
previously explained, we generally will
not re-examine the countervailability of
a program that has been found to be
non-countervailable. See, e.g., Live
Swine from Canada, 61 FR at 52420.
However, information Tomasello
submitted in its questionnaire response
suggested that although funds are
available across Italy, additional funds
are available to companies in specific
regions. See Tomasello questionnaire
response dated April 13, 2011, at
Exhibit 5. Therefore, we included Law
46/1982 among the programs for which
we asked the GOI to provide
information on May 12, and June 17,
2011.
The GOI failed to provide a timely
response to our request for information.
In its July 25, 2011 supplemental
questionnaire response, the GOI
provided limited information about this
program, but because the deadline for
submission of this information was July
1, 2011, we are rejecting this
information as untimely in accordance
with 19 CFR 351.302(d) and 19 CFR
351.104(a)(2)(ii)(A).
As explained above under ‘‘Use of
Facts Otherwise Available and Adverse
Inferences,’’ in cases where there is not
enough information on the record for us
to determine whether a program is
specific (see section 776(a)(1) of the
Act), and in cases where an interested
party fails to provide information that
has been requested by the Department
by the deadline for the submission of
that information (see section
776(a)(2)(B) of the Act), we use facts
otherwise available. We further
explained that an adverse inference is
warranted where a party fails to
cooperate by not acting to the best of its
ability to comply with a request for
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information from the Department.
Therefore, we preliminarily determine
as adverse facts available that the
assistance received by Tomasello under
Article 14 of Law 46/1982 is specific.
We further determine preliminarily
that the grants and loans provided
under Article 14 of Law 46/1982 are
financial contributions because they are
a direct transfer of funds from the GOI.
See section 771(5)(D)(i) of the Act.
In accordance with 19 CFR
351.504(a), the benefit provided by the
grant is the amount of the grant.
Moreover, because companies must file
a separate application and receive the
government’s express authorization for
each grant, we preliminarily determine
that these subsidies are non-recurring.
Accordingly, we have followed the
methodology described in 19 CFR
351.524(b) and because the grants
received by Tomasello under this
program exceeded 0.5 percent of its
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 benefit from
these grants. We divided the amount
allocated to the POR by Tomasello’s
total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from the Law 46/1982 research grant to
be 0.17 percent ad valorem for
Tomasello. See Tomasello Preliminary
Calc Memo.
We also preliminarily determine that
loans under Article 14 of Law 46/1982
convey a countervailable subsidy within
the meaning of section 771(5) of the Act
because they provide a benefit from the
GOI in the amount of the difference
between the interest a company paid on
the loan and the interest the company
would have paid on a comparable
commercial loan. In accordance with 19
CFR 351.505(c)(2), we calculated the
countervailable benefit Tomasello
received from this loan in the POR by
computing the difference between the
payments Tomasello made on the loan
during the POR and the payments
Tomasello would have made on a
benchmark loan. See the ‘‘Benchmarks
for Long-Term Loans and Discount
Rates’’ section of this notice above. We
divided the benefit received by
Tomasello by its total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from Law 46/1982 research loans to be
0.12 percent ad valorem for Tomasello.
See Tomasello Preliminary Calc Memo.
H. Regional Law 15/1993, as Amended
by Regional Law 66/1995
Regional Law 15/1993 authorizes
interest contributions for companies
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that agree to consolidate their short-term
debt. These contributions are equal to
40 percent of the reference interest rate
in effect on the date that the
consolidated loan is opened.
Participating companies may receive
interest contributions for up to ten
years, following a grace period of one
year. See Tomasello questionnaire
response dated April 13, 2011 at Exhibit
9. According to the GOI, benefits under
this program are limited to enterprises
or industries within certain regions. See
GOI fourth questionnaire response dated
July 25, 2011 at 13.
Tomasello has reported conflicting
information about the interest
contributions it received under Regional
Law 15/1993. See Tomasello
questionnaire response dated April 13,
2011 at 16; see also Tomasello
questionnaire response dated July 20,
2011 at Exhibit 5. In light of this, and
because we received this information
just before our statutory deadline to
publish the preliminary results, we have
used the information in Tomasello’s
earlier (April 13, 2011) questionnaire
response to calculate the benefit it
received under Regional Law 15/1993.
We will seek clarification of this
discrepancy for the final results.
Based on information provided by the
GOI, we preliminarily determine that
interest contributions under Regional
Law 15/1993 are regionally specific
within the meaning of section
771(5A)(D)(iv) of the Act. See GOI
fourth questionnaire response dated July
25, 2011 at 13. Moreover, we
preliminarily determine that these
interest contributions are a financial
contribution in the form of a direct
transfer of funds (see section 771(D)(i) of
the Act) and they confer a benefit within
the meaning of section 771(5)(E) of the
Act in the amount of the contribution.
To calculate the benefit, we divided the
amount Tomasello received in the POR
by its total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from interest contributions under
Regional Law 15/1993 to be 0.06 percent
ad valorem for Tomasello. See
Tomasello Preliminary Calc Memo.
I. Regional Law 34/1988
Under Regional Law 34/1988, the
Regional Department of Industry in
Sicily may provide interest
contributions to companies that belong
to ‘‘Consorzi di Garanzia Fidi,’’ which
are consortia made up of a number of
companies. The GOI’s contributions are
made against interest paid by
consortium members on lines of credit
taken out through the consortium. See
Tomasello questionnaire response dated
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April 13, 2011 at 18; see also GOI
questionnaire response dated June 13,
2011 at 2.
Tomasello has reported conflicting
information about the interest
contributions it received under Regional
Law 34/1988. See Tomasello
questionnaire response dated April 13,
2011 at 18; see also Tomasello
questionnaire response dated July 20,
2011 at Exhibit 6. In light of this, and
because we received this information
just before our statutory deadline to
publish the preliminary results, we have
used the information in Tomasello’s
earlier (April 13, 2011) questionnaire
response to calculate the benefit it
received under Regional Law 34/1998.
We intend to seek clarification of this
discrepancy for the final results.
On May 12, 2011, we asked the GOI
to provide a full response to the
appropriate questionnaire appendices
for this program. In particular, we asked
it to describe whether benefits under
this program are limited to companies
in specific sectors or regions, and to
provide us with information regarding
how benefits under this program are
distributed across Sicily. Although the
GOI provided some information, it did
not answer our questions or provide
enough information for us to determine
whether the program is specific. We
asked the GOI to answer these questions
a second time on June 28, 2011. Apart
from providing a translation of part of
a related law, the GOI did not respond
to the questionnaire appendices
altogether in its July 25, 2011 response,
nor did it provide program usage
information.
As explained above under ‘‘Use of
Facts Otherwise Available and Adverse
Inferences,’’ in cases where there is not
enough information on the record for us
to determine whether a program is
specific (see section 776(a)(1) of the
Act), and in cases where an interested
party fails to provide information that
has been requested by the Department
by the deadline for the submission of
that information (see section
776(a)(2)(B) of the Act), we use facts
otherwise available. We further
explained that an adverse inference is
warranted where a party fails to
cooperate by not acting to the best of its
ability to comply with a request for
information from the Department.
Therefore, we preliminarily determine
as adverse facts available that the
interest contributions received by
Tomasello under Law 34/1988 are
specific.
On this basis, we preliminarily
determine that interest contributions
under Regional Law 34/1988 confer a
countervailable subsidy within the
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meaning of section 771(5) of the Act.
They are a financial contribution in the
form of a direct transfer of funds (see
section 771(5)(D)(i) of the Act) and they
confer a benefit within the meaning of
section 771(5)(E) of the Act in the
amount of the contribution. To calculate
the benefit, we divided the amount
Tomasello received in the POR by its
total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from interest contributions under
Regional Law 34/1988 to be 0.10 percent
ad valorem for Tomasello. See
Tomasello Preliminary Calc Memo.
J. Article 23 of Legislative Decree 38/
2000
Article 23 of Legislative Decree 38/
2000 (‘‘LD 38/2000’’) helps certain
companies comply with the workplace
safety regulations contained in
Legislative Decree 626/94 by providing
assistance to those companies. The
program is administered by the National
Institute for Insurance Against Injuries
in the Workplace, or INAIL, which is an
agency of the Italian government. In
order to be eligible for assistance, firms
must be operating in the agricultural or
artisanal sectors and qualify as small- to
medium-sized companies (i.e., they
must have fewer than 250 employees,
and their total annual turnover must be
less than 40 million Euros, or they must
have total assets of less than 27 million
Euros). See GOI questionnaire response
dated June 13, 2011, at 10.
INAIL is authorized to award funds in
the form of grants or loans. It pays all
interest and fees on the loans directly to
the issuing bank, effectively making the
loans interest-free to the recipient. See
GOI questionnaire response dated June
13, 2011, at 10 and Exhibit 5; see also
Tomasello questionnaire response dated
April 13, 2011, at Exhibit 13, and
Tomasello questionnaire response dated
June 24, 2011 at Exhibit 5. Tomasello
and Fabianelli both reported receiving
assistance during the POR under LD 38/
2000. Tomasello received a loan at zero
percent interest for facility
improvements, and Fabianelli received
grants for expenses related to worker
training. See Tomasello questionnaire
response dated April 13, 2011 at 21; and
Tomasello questionnaire response dated
June 24, 2011 at Exhibit 5; see also
Fabianelli questionnaire response dated
November 3, 2010 at 19.
The GOI reported that benefits under
LD 38/2000 are limited to companies in
the agricultural and artisanal industries,
but did not provide us with enough
information to determine how the
companies in this review can be
classified. See GOI questionnaire
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response dated June 13, 2011 at 10. It
also did not address our questions
regarding whether benefits are limited
by region, nor did it submit information
pertaining to how benefits were
distributed across Italy. We requested
this information twice, in supplemental
questionnaires dated May 12, and June
28, 2011. Pursuant to 19 CFR
351.502(d), we do not regard a subsidy
as being specific under section
771(5A)(D) of the Act solely because the
subsidy is limited to the agricultural
sector. However, because the GOI failed
to provide us with enough information
to determine how benefits are limited by
region, and did not provide us with
usage information, we are unable to
determine whether benefits under this
program are otherwise specific.
As explained above under ‘‘Use of
Facts Otherwise Available and Adverse
Inferences,’’ in cases where there is not
enough information on the record for us
to determine whether a program is
specific (see section 776(a)(1) of the
Act), and in cases where an interested
party fails to provide information that
has been requested by the Department
by the deadline for the submission of
that information (see section
776(a)(2)(B) of the Act), we use facts
otherwise available. We further
explained that an adverse inference is
warranted where a party fails to
cooperate by not acting to the best of its
ability to comply with a request for
information from the Department.
Therefore, we preliminarily determine
as adverse facts available that benefits
received by Tomasello and Fabianelli
under LD 38/2000 are specific.
We further determine preliminarily
that the grants and loans provided
under LD 38/2000 are financial
contributions because they are a direct
transfer of funds from the GOI. See
section 771(5)(D)(i) of the Act.
In accordance with 19 CFR
351.504(a), the benefit provided by the
grant is the amount of the grant.
Pursuant to 19 CFR 351.524(b)(2), the
Department will normally expense
nonrecurring benefits provided under a
particular subsidy program to the year
in which benefits are received if the
total amount approved under the
program is less than 0.5 percent of
relevant sales during the year in which
the subsidy was approved. Because the
GOI approved Fabianelli for amounts
equaling less than 0.5 percent of
Fabianelli’s sales in the year in which
the grant was approved, we have treated
this grant as having been expensed prior
to the POR in accordance with 19 CFR
351.524(b)(2). Thus, no countervailable
benefit was provided to Fabianelli
during the POR as a result of this
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program. See Business Proprietary
Memorandum to the File, ‘‘2009
Preliminary Results Calculation
Memorandum for Pastificio Fabianelli
S.p.A.’’ (August 1, 2011).
We also preliminarily determine that
loans under LD 38/2000 provide a
countervailable subsidy within the
meaning of section 771(5) of the Act
because they provide a benefit from the
GOI in the amount of the difference
between the interest a company paid on
the loan and the interest the company
would have paid on a comparable
commercial loan. In accordance with 19
CFR 351.505(c)(2), we calculated the
countervailable benefit Tomasello
received in the POR by computing the
difference between the payments
Tomasello made on the loan during the
POR and the payments Tomasello
would have made on a benchmark loan.
See the ‘‘Benchmarks for Long-Term
Loans and Discount Rates’’ section of
this notice above. We divided the
benefit received by Tomasello by its
total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from loans under Article 23 of
Legislative Decree 38/2000 to be 0.10
percent ad valorem for Tomasello. See
Tomasello Preliminary Calc Memo.
K. Law 289/02, Article 62, Investments
in Disadvantaged Areas
Article 62 of Law 289/02 provides a
credit towards taxes payable. The law
was established to promote investment
in disadvantaged areas by providing
assistance to companies making
investments such as the purchase of
new equipment for existing structures or
building new structures. Pallante
reported receiving benefits under this
program. See Pallante questionnaire
response dated November 3, 2010 at 10
and Exhibit 5; see also Pallante
questionnaire response dated March 31,
2011 at 3.
We have previously determined that
Article 62 of Law 289/02 confers a
countervailable subsidy. See Certain
Pasta from Italy: Preliminary Results of
the Tenth Countervailing Duty
Administrative Review, 72 FR 43616
(August 6, 2007), unchanged in Certain
Pasta From Italy: Final Results of the
Tenth Countervailing Duty
Administrative Review, 73 FR 7251
(February 7, 2008). The credit against
taxes is a financial contribution within
the meaning of section 771(5)(D)(ii) of
the Act because it represents revenue
foregone by the GOI and a benefit is
conferred in the amount of the tax
savings received by the companies per
section 771(5)(E)(iv) of the Act. Also,
the program is specific within the
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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. Id.
In the instant review, neither the GOI
nor the respondent companies have
provided new information which would
warrant reconsideration of our
determination that this program confers
countervailable subsidies. See Live
Swine from Canada, 61 FR at 52420.
In accordance with 19 CFR
351.524(c), we generally consider tax
credits to confer recurring benefits.
However, pursuant to 19 CFR
351.524(c)(2)(iii), when a subsidy is tied
to the capital structure or capital assets
of the firm, the Department treats the
subsidy as non-recurring. Thus, in
accordance with 19 CFR 351.524(b)(2),
we determined that the tax credit
received by Pallante exceeded 0.5
percent of its sales in the year in which
the credit was approved. Therefore, we
used the methodology described in 19
CFR 351.524(d) to allocate the benefit
over time, and we divided the amount
allocated to the POR by Pallante’s total
sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from Law 289/02 Article 62 to be 0.68
percent ad valorem for Pallante. See
Pallante Preliminary Calc Memo.
L. Social Security Reductions and
Exemptions—Sgravi
Italian law allows companies,
particularly those located in the
Mezzogiorno, to use a variety of
exemptions from and reductions of
payroll contributions that employers
make to the Italian social security
system for health care benefits,
pensions, etc. These social security
reductions and exemptions, also known
as 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., Law 1089) are available
only to companies located in the
Mezzogiorno and other disadvantaged
regions. See Pasta Investigation, 61 FR
at 30293. Certain other laws (e.g., Law
407/90) 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. Id. at 30294. Still
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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. See Live Swine
from Canada, 61 FR at 52420. Sgravi
benefits were provided during the POR
under Law 407/90 to Tomasello. See
Tomasello questionnaire response dated
November 3, 2011 at 16.
(1) 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. A 100-percent
exemption is allowed for companies in
the Mezzogiorno, while companies
located in the rest of Italy receive a 50percent reduction.
In the Pasta Investigation, we
determined that Law 407/90 confers a
countervailable subsidy within the
meaning of section 771(5) of the Act.
See Pasta Investigation, 61 FR at 30294.
The reduction or exemption of taxes is
revenue foregone that is otherwise due
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 Mezzogiorno 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.
In accordance with 19 CFR
351.524(c), and consistent with our
methodology in the Pasta Investigation
and in subsequent administrative
reviews, we have treated social security
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reductions and exemptions as recurring
benefits. See, e.g., Pasta Investigation,
61 FR at 30294. To calculate the
countervailable subsidy for Tomasello,
we divided the difference during the
POR between the savings for the
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
Tomasello’s total sales in the POR.
On this basis, we preliminarily
determine the countervailable subsidy
from Law 407/90 to be 0.01 percent ad
valorem for Tomasello. See Tomasello
Preliminary Calc Memo.
II. Programs Preliminarily Determined
To Not Confer any Benefit During the
POR
A. Law 317/91 Benefits for Innovative
Investments
In the Seventh Administrative Review,
the Department found that Law 317/91
allows for a capital contribution or a tax
credit up to a maximum amount of Euro
232,405.60 to small- and medium-sized
industrial, commercial, and service
companies for innovative investments.
However, no respondents in that review
received benefits during the POR and
the program was not analyzed further.
See Seventh Administrative Review, 69
FR at 45684. Fabianelli reported that its
subsidiary FABFIN received a grant
under Law 317/91 in 2002. See
Fabianelli questionnaire response dated
November 3, 2010 at 19.
Pursuant to 19 CFR 351.524(b)(2), the
Department will normally expense
nonrecurring benefits provided under a
particular subsidy program to the year
in which benefits are received if the
total amount approved under the
program is less than 0.5 percent of
relevant sales during the year in which
the subsidy was approved. Because the
GOI approved Fabianelli for an amount
equaling less than 0.5 percent of
Fabianelli’s sales in the year in which
the grant was approved,6 we have
treated this grant as having been
expensed prior to the POR in
accordance with 19 CFR 351.524(b)(2).
Thus, no countervailable benefit was
provided to Fabianelli during the POR
under this program.
In situations where any benefit to the
subject merchandise would be so small
6 Generally, when two companies are crossowned, the Department uses the combined sales of
both companies to calculate the countervailable
subsidy. In this case, benefits received by both
Fabianelli and FABFIN were so small that they
were de minimis based on the total sales of the
recipient company alone. Therefore, we consider it
unnecessary to use the combined sales of both
companies because doing so would have no impact
on Fabianelli’s subsidy rate.
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that there would be no impact on the
overall subsidy rate, regardless of a
determination of countervailability, it
may not be necessary to determine
whether benefits conferred under these
programs to the subject merchandise are
countervailable. See, e.g., Final Negative
Countervailing Duty Determination; Live
Cattle From Canada, 64 FR 57040,
57055 (October 22, 1999) (‘‘Cattle From
Canada Final Determination’’). In this
instance, since any benefit conferred
upon Fabianelli was expensed prior to
the POR, a determination of
countervailability would have no
impact on the overall subsidy rate.
Thus, consistent with our past practice,
we do not consider it necessary to
determine whether benefits conferred
under this provision of Law 341/95 to
the subject merchandise are
countervailable.
B. Industrial Development Grants Under
Law 341/95
Fabianelli informed the Department
that it received a grant in 2004 under
Law 341/95 for the purchase of a
computerized management system. See
Fabianelli questionnaire response dated
November 3, 2011 at 20. It noted that
these funds were received under a
different provision than the one
examined by the Department in the
fourth administrative review. See
Certain Pasta From Italy: Preliminary
Results and Partial Rescission of
Countervailing Duty Administrative
Review, 66 FR 40987, 40991 (August 6,
2001), unchanged in Fourth
Administrative Review Final.
Pursuant to 19 CFR 351.524(b)(2), the
Department will normally expense
nonrecurring benefits provided under a
particular subsidy program to the year
in which benefits are received if the
total amount approved under the
program is less than 0.5 percent of
relevant sales during the year in which
the subsidy was approved. Because the
GOI approved Fabianelli for an amount
equaling less than 0.5 percent of
Fabianelli’s sales in the year in which
the grant was approved, we have treated
this grant as having been expensed prior
to the POR in accordance with 19 CFR
351.524(b)(2).
In situations where any benefit to the
subject merchandise would be so small
that there would be no impact on the
overall subsidy rate, regardless of a
determination of countervailability, it
may not be necessary to determine
whether benefits conferred under these
programs to the subject merchandise are
countervailable. See, e.g., Cattle From
Canada Final Determination, 64 FR at
57055. In this instance, since any
benefit conferred upon Fabianelli was
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expensed prior to the POR, a
determination of countervailability
would have no impact on the overall
subsidy rate. Thus, consistent with our
past practice, we do not consider it
necessary to determine whether benefits
conferred under this provision of Law
341/95 to the subject merchandise are
countervailable.
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III. Programs Preliminarily Determined
To Not Be Used
We examined the following programs
and preliminarily determined that the
producers and/or exporters of the
subject merchandise under review did
not apply for or receive benefits under
these programs during the POR:
A. Industrial Development Loans Under
Law 64/86
B. Grant Received Pursuant to the
Community Initiative Concerning
the Preparation of Enterprises for
the Single Market (‘‘PRISMA’’)
C. European Regional Development
Fund (‘‘ERDF’’) Programma
Operativo Plurifondo (‘‘P.O.P.’’)
Grant
D. European Regional Development
Fund (‘‘ERDF’’) Programma
Operativo Multiregionale
(‘‘P.O.M.’’) Grant
E. Certain Social Security Reductions
and Exemptions—Sgravi (including
Law 223/91, Article 8, Paragraph 4
and Article 25, Paragraph 9; and
Law 196/97)
F. Law 236/93 Training Grants
G. Law 1329/65 Interest Contributions
(‘‘Sabatini Law’’) (Formerly LumpSum Interest Payment Under the
Sabatini Law for Companies in
Southern Italy)
H. Development Grants Under Law 30 of
1984
I. Law 908/55 Fondo di Rotazione
Iniziative Economiche (Revolving
Fund for Economic Initiatives)
Loans
J. Brescia Chamber of Commerce
Training Grants
K. Ministerial Decree 87/02
L. Law 10/91 Grants to Fund Energy
Conservation
M. Export Restitution Payments
N. Export Credits Under Law 227/77
O. Capital Grants Under Law 675/77
P. Retraining Grants Under Law 675/77
Q. Interest Contributions on Bank Loans
Under Law 675/77
R. Preferential Financing for Export
Promotion Under Law 394/81
S. Urban Redevelopment Under Law
181
T. Industrial Development Grants Under
Law 183/76
U. Interest Subsidies Under Law 598/94
V. Duty-Free Import Rights
W. Law 113/86 Training Grants
VerDate Mar<15>2010
18:57 Aug 05, 2011
Jkt 223001
X. European Agricultural Guidance and
Guarantee Fund
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
BB. Law 289/02
(1) Article 63—Increase in
Employment
CC. Law 662/96—Patti Territoriali
DD. Law 662/96—Contratto di
Programma
IV. Previously Terminated Programs
A. Regional Tax Exemptions Under
IRAP
B. VAT Reductions Under Laws 64/86
and 675/55
C. Corporate Income Tax (‘‘IRPEG’’)
Exemptions
D. Remission of Taxes on Export Credit
Insurance Under Article 33 of Law
227/77
E. Export Marketing Grants Under Law
304/90
F. Tremonti Law 383/01
G. Social Security Reductions and
Exemptions—Sgravi
(1) Article 44 of Law 448/01
(2) Law 337/90
(3) Law 863/84
(4) Law 196/97
Preliminary Results of Review
In accordance with 19 CFR
351.221(b)(4)(i), we calculated
individual subsidy rates for the
respondents, De Cecco, Fabianelli,
Pallante and Tomasello.
For the period January 1, 2009,
through December 31, 2009, we
preliminarily find the net subsidy rates
for the producers/exporters under
review to be as follows:
Net subsidy
rate
(percent)
Producer/exporter
48141
31, 2009, without regard to
countervailing duties. For all entries by
Tomasello and Pallante, we will instruct
CBP to assess countervailing duties on
all shipments at the net subsidy rates
listed above.
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, 2009, and December
31, 2009, at the rates in effect at the time
of entry.
The Department intends to issue
appropriate assessment instructions
directly to CBP 15 days after publication
of the final results of this review.
Cash Deposit Instructions
The Department also intends to
instruct CBP to collect cash deposits of
estimated countervailing duties in the
amounts shown above with the
exception of De Cecco and Fabianelli.
For De Cecco and Fabianelli, no cash
deposits of estimated duties will be
required because their rate is de
minimis. 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. These
cash deposit requirements, when
imposed, shall remain in effect until
further notice.
Disclosure and Public Comment
Pursuant to 19 CFR 351.224(b), the
1 0.39
Department will disclose to parties to
0.00 the proceeding any calculations
performed in connection with these
4.79 preliminary results within five days
after the date of the public
1.00
announcement of this notice.
1 (de minimis)
Pursuant to 19 CFR 351.309(c)(ii),
interested parties may submit written
Assessment Rates
arguments in case briefs within 30 days
If these preliminary results are
of the date of publication of this notice.
adopted in our final results of this
Rebuttal briefs, limited to issues raised
review, because the countervailing duty in case briefs, may be filed no later than
rates for De Cecco and Fabianelli are
five days after the date of filing the case
less than 0.5 percent and are, thus, de
briefs, in accordance with 19 CFR
minimis, the Department will instruct
351.309(d). Parties who submit case
U.S. Customs and Border Protection
briefs or rebuttal briefs in this
(‘‘CBP’’) to liquidate shipments of
proceeding are requested to submit with
certain pasta by De Cecco and Fabianelli each argument: (1) A statement of the
from January 1, 2009, through December issue, and (2) a brief summary of the
F.lli De Cecco di Filippo Fara
San Martino S.p.A .............
Pastificio Fabianelli S.p.A .....
Molino e Pastificio Tomasello
S.p.A .................................
Pastificio Antonio Pallante,
S.r.L ...................................
PO 00000
Frm 00025
Fmt 4703
Sfmt 4703
E:\FR\FM\08AUN1.SGM
08AUN1
48142
Federal Register / Vol. 76, No. 152 / Monday, August 8, 2011 / Notices
argument with an electronic version
included. 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).
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: August 1, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–934]
1-Hydroxyethylidene-1, 1Diphosphonic Acid From the People’s
Republic of China: Final Results of
Antidumping Duty Administrative
Review and Final Rescission in Part
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: On April 7, 2011, the
Department of Commerce (the
‘‘Department’’) published in the Federal
Register its preliminary results of the
administrative review of the
antidumping duty order on 1hydroxyethylidene-1, 1-diphosphonic
acid (‘‘HEDP’’) from the People’s
Republic of China (‘‘PRC’’), covering the
period April 23, 2009 through March 31,
2010.1 The Department gave interested
parties an opportunity to comment on
the Preliminary Results. After reviewing
the interested parties’ comments, the
Department has not made changes to the
margin for the final results. The final
dumping margin for this review is listed
in the ‘‘Final Results of Review’’ section
below.
DATES: Effective Date: August 8, 2011.
mstockstill on DSK4VPTVN1PROD with NOTICES
1 See 1-Hydroxyethylidene-1, 1-Diphosphonic
Acid From the People’s Republic of China:
Preliminary Results of Antidumping Duty
Administrative Review and Intent To Rescind
Review in Part, 76 FR 19325 (April 7, 2011)
(‘‘Preliminary Results’’).
VerDate Mar<15>2010
18:57 Aug 05, 2011
Jkt 223001
Shawn Higgins, AD/CVD Operations,
Office 4, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202)
482–0679.
SUPPLEMENTARY INFORMATION:
Background
Compass Chemical LLC (‘‘Petitioner’’)
and Jiangsu Jianghai Chemical Group
Co., Ltd. (‘‘Jiangsu Jianghai’’) submitted
case briefs on May 9, 2011 2 and rebuttal
briefs on May 16, 2011.3 On July 1,
2011, the Department placed additional
information on the record.4 Jiangsu
Jianghai submitted comments on this
information on July 15, 2011.
Analysis of Comments Received
[FR Doc. 2011–20070 Filed 8–5–11; 8:45 am]
AGENCY:
FOR FURTHER INFORMATION CONTACT:
All issues raised by parties in their
case and rebuttal briefs are addressed in
the Memorandum from Christian Marsh,
Deputy Assistant Secretary for
Antidumping and Countervailing Duty
Operations, to Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration, ‘‘Issues and Decision
Memorandum for the Final Results of
the Antidumping Duty Administrative
Review of 1-Hydroxyethylidene-1, 1Diphosphonic Acid from the People’s
Republic of China’’ (August 2, 2011)
(‘‘Issues and Decision Memorandum’’),
which is hereby adopted by this notice.
A list of the issues addressed in the
Issues and Decision Memorandum is
attached to this notice as an appendix.
The Issues and Decision Memorandum
is a public document and is on file in
the Central Records Unit, Main
Commerce Building, Room 7046, and is
accessible on the Web at https://
ia.ita.doc.gov/frn. The paper copy and
electronic version of the memorandum
are identical in content.
2 See Letter from Petitioner to the Secretary of
Commerce, ‘‘1-Hydroxyethylidene-1, 1Diphosphonic Acid from the People’s Republic of
China’’ (May 9, 2011); Letter from Jiangsu Jianghai
to the Secretary of Commerce, ‘‘1Hydroxyethylidene-1, 1-Diphosphonic Acid from
the People’s Republic of China; A–570–934’’ (May
9, 2011).
3 See Letter from Petitioner to the Secretary of
Commerce, ‘‘1-Hydroxyethylidene-1, 1Diphosphonic Acid from the People’s Republic of
China’’ (May 16, 2011); Letter from Jiangsu Jianghai
to the Secretary of Commerce, ‘‘1Hydroxyethylidene-1, 1-Diphosphonic Acid from
the People’s Republic of China; A–570–934’’ (May
16, 2011).
4 See Memorandum from Shawn Higgins,
International Trade Compliance Analyst, AD/CVD
Operations, Office 4, to Interested Parties,
‘‘Administrative Review of the Antidumping Duty
Order on 1-Hydroxyethylidene-1, 1-Diphosphonic
Acid from the People’s Republic of China: Placing
Additional Information on Record’’ (July 1, 2011).
PO 00000
Frm 00026
Fmt 4703
Sfmt 4703
Changes Since the Preliminary Results
Based on an analysis of the comments
received and other information on
record of this review, the Department
has modified its corroboration analysis
since the Preliminary Results.
Specifically, the Department has
supplemented its corroboration analysis
from the Preliminary Results by using a
surrogate value for phosphorus
trichloride on the record of this review
to corroborate both the surrogate value
for phosphorus trichloride used in the
petition and the petition’s normal
value.5
Scope of the Order
The merchandise subject to the order
includes all grades of aqueous, acidic
(non-neutralized) concentrations of 1hydroxyethylidene-1, 1-diphosphonic
acid,6 also referred to as
hydroxethlylidenediphosphonic acid,
hydroxyethanediphosphonic acid,
acetodiphosphonic acid, and etidronic
acid. The CAS (Chemical Abstract
Service) registry number for HEDP is
2809–21–4. The merchandise subject to
the order is currently classified in the
Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’) at subheading
2931.00.9043. It may also enter under
HTSUS subheading 2811.19.6090.
While HTSUS subheadings are provided
for convenience and customs purposes
only, the written description of the
scope of the order is dispositive.
Final Partial Rescission of the
Administrative Review
In the Preliminary Results, the
Department stated that it intended to
rescind this administrative review with
respect to Changzhou Wujin Fine
Chemical Factory Co., Ltd. (‘‘Wujin
Fine’’) in accordance with 19 CFR
351.213(d)(3). No parties commented on
the Department’s intent to rescind.
Because there is no information or
argument on the record of this review
that warrants reconsideration of the
Department’s intent to rescind, the
Department is rescinding this
administrative review with respect to
Wujin Fine.
Separate Rates
In the Preliminary Results, the
Department determined that Jiangsu
Jianghai does not qualify for a separate
rate in this review and should be treated
as part of the PRC-wide entity because
it has failed to demonstrate an absence
of de jure and de facto government
control and did not fully participate in
5 See infra Corroboration section; Issues and
Decision Memorandum at Issue 4.
6 C H O P or C(CH )(OH)(PO H ) .
2 8 7 2
3
3 2 2
E:\FR\FM\08AUN1.SGM
08AUN1
Agencies
[Federal Register Volume 76, Number 152 (Monday, August 8, 2011)]
[Notices]
[Pages 48130-48142]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20070]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-475-819]
Certain Pasta From Italy: Preliminary Results of the 14th (2009)
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, 2009, through December 31, 2009.
We preliminarily find that Molino e Pastificio Tomasello S.p.A.
(``Tomasello'') and Pastificio Antonio Pallante S.r.L. (``Pallante'')
received countervailable subsidies and that F.lli De Cecco di Filippo
Fara San Martino S.p.A. (``De Cecco'') received de minimis
countervailable subsidies. We also find that Pastificio Fabianelli
S.p.A. (``Fabianelli'') received countervailable subsidies that were
expensed prior to 2009 and did not confer any benefit to Fabianelli
during the period of review (``POR''). See the ``Preliminary Results of
Review'' section of this notice below. Interested parties are invited
to comment on these preliminary results. See the ``Disclosure and
Public Comment'' section of this notice below.
DATES: Effective Date: August 8, 2011.
FOR FURTHER INFORMATION CONTACT: Mahnaz Khan or Christopher Siepmann,
AD/CVD Operations, Office 1, Import Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230; telephone: (202) 482-0914 and (202) 482-7958, 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). On July 1, 2010, the Department
published a notice of ``Opportunity to Request Administrative Review''
of this countervailing duty order for the POR corresponding to calendar
year 2009. See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity To Request Administrative Review,
75 FR 38074 (July 1, 2010). On July 29,
[[Page 48131]]
2010, we received such a request from De Cecco. On July 31, 2010, we
received a request from New World Pasta Company, American Italian Pasta
Company, and Dakota Growers Pasta Company (``the petitioners''). In
their request letter, the petitioners requested that the Department
initiate a review on Pallante, Fabianelli, and Tomasello. In accordance
with 19 CFR 351.221(c)(1)(i), we published a notice of initiation of
this review on August 31, 2010. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews and Deferral of Initiation
of Administrative Review, 75 FR 53274 (August 31, 2010).
On September 20, 2010, we issued countervailing duty questionnaires
to the Commission of the European Union (``EU''), the Government of
Italy (``GOI''), De Cecco, Fabianelli, Tomasello, and Pallante. We
received responses to our questionnaires in November 2010. We issued
supplemental questionnaires to De Cecco on February 10, and June 27,
2011, and we received responses to our supplemental questionnaires on
February 18, April 5, and June 30, 2011. We issued supplemental
questionnaires to Fabianelli on March 1, April 15, and May 17, 2011,
and received responses to our supplemental questionnaires on March 30,
May 16, and May 19, 2011. On March 1, and May 25, 2011, the Department
issued supplemental questionnaires to Tomasello, and we received
responses to our supplemental questionnaire on April 13, and June 24,
2011. We issued supplemental questionnaires to Pallante on March 3,
June 27, and June 28, 2011, and received responses to our supplemental
questionnaires on March 31, and June 30, 2011. We issued supplemental
questionnaires to the GOI on March 16, May 12, June 17, June 28, and
July 11, 2011, and received responses on April 15, June 13, July 1, and
July 25, 2011.
Period of Review
The POR for which we are measuring subsidies is January 1, 2009,
through December 31, 2009.
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 the scope of the order 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 Italila, 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 the order. See Memorandum
from Eric B. Greynolds to Melissa G. Skinner, dated August 4, 2004,
which is on file in the Department's CRU. In addition, based on
publicly available information, the Department has determined that, as
of March 13, 2003, imports of organic pasta from Italy that are
accompanied by the appropriate certificate issued by Instituto per la
Certificazione Etica e Ambientale are also excluded from the 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 CRU. Pursuant to the
Department's May 12, 2011 changed circumstances review, effective
January 1, 2009, gluten-free pasta is also excluded from the scope of
the CVD order. See Certain Pasta From Italy: Final Results of
Countervailing Duty Changed Circumstances Review and Revocation, In
Part, 76 FR 27634 (May 12, 2011).
The merchandise subject to review is currently classifiable under
items 1901.90.90.95 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
finding 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 on file in
the CRU.
(3) On May 24, 1999, the Department 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
on file 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 Tariff Act
of 1930, as amended (``the Act''), and 19 CFR 351.225(b). See Certain
Pasta From Italy: Notice of Initiation of Anti-Circumvention Inquiry on
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).
Use of Facts Otherwise Available and Adverse Inferences
Sections 776(a)(1) and (2) of the Act, provide that the Department
shall apply ``facts otherwise available'' if necessary information is
not on the record or an interested party or any other person: (A)
Withholds information that has been requested; (B) fails to provide
information within the deadlines established, or in the form and manner
requested by the Department, subject to subsections (c)(1) and (e) of
section 782 of the Act; (C) significantly impedes a
[[Page 48132]]
proceeding; or (D) provides information that cannot be verified as
provided by section 782(i) of the Act. Section 776(b) of the Act
further provides that the Department may use an adverse inference in
applying the facts otherwise available when a party has failed to
cooperate by not acting to the best of its ability to comply with a
request for information. The Department's practice when selecting an
adverse rate from among the possible sources of information is to
ensure that the result is sufficiently adverse ``as to effectuate the
statutory purposes of the adverse facts available rule to induce
respondents to provide the Department with complete and accurate
information in a timely manner.'' See Notice of Final Determination of
Sales at Less than Fair Value: Static Random Access Memory
Semiconductors From Taiwan, 63 FR 8909, 8932 (February 23, 1998). The
Department's practice also ensures ``that the party does not obtain a
more favorable result by failing to cooperate than if it had cooperated
fully.'' See Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, vol. 1, at 870
(1994).
GOI--Previously Uninvestigated Programs
On April 13, 2011, Tomasello informed the Department that it
received subsidies from the GOI under seven programs that were not
reported in Tomasello's November 3, 2010 questionnaire response. Except
for Law 46/1982,\1\ it appeared that the Department had not previously
investigated the countervailability of these programs in the Pasta
Investigation or in subsequent reviews; therefore, on May 12, 2011, we
asked the GOI to respond to the full questionnaire for all seven
programs. We received its response on June 13, 2011, and discovered
that it contained numerous deficiencies. The GOI failed to respond to
most of our questions for all but one program. It also failed to
provide the related law for four of the programs and did not translate
one of the laws it did provide, despite our request to provide
translated laws for each program. See 19 CFR 351.303(e). In addition,
the GOI failed to identify the industries or enterprises that received
benefits under these programs and the corresponding amounts given to
them (``usage data''). Because the GOI's response did not provide us
with enough information to determine whether any of these seven
programs are countervailable, we requested this information a second
time. This second attempt consisted of two questionnaires issued on
June 17, and June 28, 2011, respectively. The GOI filed a timely
response to the June 17, questionnaire, but failed to respond to many
of the questions in the questionnaire, including questions concerning
usage for three programs. The GOI then failed to provide usage data for
the remaining four programs in its July 25, 2011 questionnaire
response, although it did confirm that two programs (Measure 3.14 and
Regional Law 15/1993) are regionally specific.
---------------------------------------------------------------------------
\1\ The Department determined not to investigate this program in
the countervailing duty investigation of certain pasta from Italy
because it was previously found not countervailable. See Notice of
Initiation of Countervailing Duty Investigations: Certain Pasta
(``Pasta'') From Italy and Turkey, 60 FR 30280, 30281-82 (June 8,
1995) (``Pasta Investigation Initiation''). See also Final
Affirmative Countervailing Duty Determination: Certain Pasta
(``Pasta'') From Italy, 61 FR 30288 (June 14, 1996) (``Pasta
Investigation'') and accompanying Issues and Decision Memorandum at
Comment 28 (summarizing the Department's determination not to
investigate this program). Our rationale for revisiting this
determination can be found in the Law 46/1982 program description,
below.
---------------------------------------------------------------------------
The statute identifies specificity as one of three necessary
elements of a countervailable subsidy. See sections 771(5)(A) and
771(5A) of the Act. We normally rely on information from the government
to determine whether a program is specific. See, e.g., Certain Magnesia
Carbon Bricks From the People's Republic of China: Final Affirmative
Countervailing Duty Determination, 75 FR 45472 (August 2, 2010) and
accompanying Issues and Decision Memorandum at Comment 6. Although it
was given multiple opportunities, the GOI's responses left us without
the necessary information to determine whether many of the programs
reported by Tomasello on April 13, 2011, are countervailable.
We preliminarily determine that the GOI has withheld necessary
information that was requested of it for five of the seven programs.
The GOI also failed to provide information requested by the Department
by the deadline for the submission of the information. Because the
record is incomplete for these programs, the Department must rely on
``facts available.'' See sections 776(a)(1), 776(a)(2)(A) and
776(a)(2)(B) of the Act. Moreover, the GOI has failed to cooperate by
not acting to the best of its ability to comply with our request for
information, so we are applying an adverse inference in our use of
facts available. See section 776(b) of the Act. Due to the GOI's
failure either to provide information necessary for our determination
about these programs, or to provide this information in a timely
manner, we are finding as adverse facts available that benefits from
five of these seven programs are specific.\2\ See section 771(5A) of
the Act. An analysis of these programs is found in the ``Analysis of
Programs'' section below.
---------------------------------------------------------------------------
\2\ For two of the programs, i.e. Measure 3.14 and Regional Law
15/1993, the GOI provided information indicating that the programs
are regionally specific. See discussion, supra. Accordingly, the
Department has made specificity determinations for these two
programs without resorting to facts available.
---------------------------------------------------------------------------
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation or review, it shall, to the extent
practicable, corroborate that information from independent sources that
are reasonably at its disposal. Secondary information is defined as
``information derived from the petition that gave rise to the
investigation or review, the final determination concerning the subject
merchandise, or any previous review under section 751 of the Act
concerning the subject merchandise.''
The facts available decisions described above do not rely on
secondary information. Our determinations regarding the specificity of
these programs are based on the unwillingness of the GOI to provide
necessary information pertaining to the access to, or the distribution
of, the subsidies. The corroboration requirement of section 776(c) of
the Act is, therefore, not applicable to the use of facts available in
this review.
Subsidies Valuation Information
Allocation Period
Pursuant to 19 CFR 351.524(b), benefits from 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 Class Life Asset Depreciation Range System
(``IRS Tables''). See 19 CFR 351.524(d)(2). For pasta, the most recent
IRS Tables prescribe an AUL of 12 years. None of the responding
companies or other interested parties objected to this allocation
period. Therefore, we have used a 12-year allocation period.
Attribution of Subsidies
Pursuant to 19 CFR 351.525(b)(6), the Department will attribute
subsidies received by companies with cross-ownership to the combined
sales of those companies.
[[Page 48133]]
De Cecco: In the instant review, De Cecco has responded on behalf
of itself and three other members of the De Cecco group of companies:
Molino e Pastificio De Decco S.p.A. (``De Cecco Pescara''), Centrale
Elettrica F.lli De Cecco S.r.L. (``Centrale''), and Consorzio Elettrico
Imprese De Cecco (``C.E.I.D.''). See De Cecco questionnaire response
dated November 3, 2010 at 5.
De Cecco manufactures pasta for sale in Italy, to third-country
markets, and to the United States. Id. at 7. De Cecco Pescara
manufactures pasta for sale to De Cecco and to unaffiliated third
parties in Italy. Id. For the reasons explained in the Business
Proprietary Memorandum from Mahnaz Khan to Susan Kuhbach, ``Information
Concerning Respondents' Attribution,'' dated August 1, 2011
(``Respondents' Attribution Memo''), we find that cross ownership
exists between De Cecco Pescara and De Cecco within the meaning of 19
CFR 351.525(b)(6)(vi). Id. at 2. Therefore, in accordance with 19 CFR
351.525(b)(6)(ii), we are attributing subsidies received by De Cecco
and De Cecco Pescara to the combined sales of both, excluding inter-
company sales.
Effective January 1, 1999, Molino F.lli De Cecco di Filippo S.p.A.
(``De Cecco Molino''), another member of the De Cecco group on whose
behalf De Cecco responded in the fourth administrative review, was
merged with De Cecco and ceased to be a separate entity. See Certain
Pasta From Italy: Final Results of the Fourth Countervailing Duty
Administrative Review, 66 FR 64214 (December 12, 2001) (``Fourth
Administrative Review Final'') and accompanying Issues and Decision
Memorandum. The Department will continue to consider countervailable
any benefits received by De Cecco Molino in past administrative review
periods and allocated over a period that extends into or beyond the
current POR as benefits attributable to De Cecco. See Memorandum to the
File, ``2009 Preliminary Results Calculation Memorandum for F.lli De
Cecco di Filippo Fara San Martino S.p.A..,'' dated August 1, 2011 (``De
Cecco Preliminary Calc Memo'').
Finally, De Cecco has reported it purchased electricity from
C.E.I.D. that was produced by Centrale. Centrale is majority owned by
members of the De Cecco family. See De Cecco questionnaire response
dated November 3, 2010 at 6. C.E.I.D. is a consortium consisting of
Centrale and De Cecco. Neither Centrale nor C.E.I.D. received any
subsidies during the POR or AUL period. Id. Therefore, we do not reach
the issue of whether cross-ownership exists or whether subsidies to
Centrale or C.E.I.D. would be attributable to the pasta sold by De
Cecco under 19 CFR 351.525(b)(6).
Fabianelli: FABFIN S.p.A. (``FABFIN'') is a company that actively
produced and sold subject pasta between 2001 and 2006. Although it
stopped all production in 2006, it still exists as a legal entity.
Fabianelli stated in its response that it owned 95 percent of the
shares of FABFIN at the beginning of 2009. On June 19, 2009, Fabianelli
purchased the remaining five percent of FABFIN's shares, making FABFIN
a wholly-owned subsidiary of Fabianelli. See Fabianelli questionnaire
response dated November 3, 2010 at 3. Therefore, we determine that
cross ownership exists between FABFIN and Fabianelli as defined by 19
CFR 351.525(b)(6)(vi).
Based on their questionnaire responses, we preliminarily determine
that Pallante and Tomasello have no affiliates for which cross-
ownership exists. See Pallante questionnaire response dated November 3,
2010 at 3 and Tomasello questionnaire response dated November 3, 2010
at 3; see also Respondents' Attribution Memo. Thus, we are attributing
any subsidies received by Pallante and Tomasello to their respective
sales only.
Changes in Ownership
Fabianelli reported that on March 1, 2001, its subsidiary FABFIN
acquired the assets of Pastificio Maltagliati (``Maltagliati'') in a
bankruptcy trustee sale. See Fabianelli questionnaire response dated
March 30, 2011 at 1. We find that prior to entering bankruptcy,
Maltagliati was granted reductions to its social security payments
under Law 863/84 and received export restitution payments within the
AUL period. We consider both of these programs to confer recurring
benefits, in accordance with 19 CFR 351.524(c) and consistent with our
treatment of these programs in the investigation and previous reviews.
See, e.g., Pasta Investigation, 61 FR at 30294-95. Therefore, subsidies
given to Maltagliati did not confer countervailable benefits upon
Fabianelli because the subsidies received by Maltagliati were expensed
in the years that they were received.
Benchmarks for Long-Term Loans and Discount Rates
Pursuant to 19 CFR 351.505(a), the Department will use the actual
cost of comparable borrowing by a company as a loan benchmark, when
available. According to 19 CFR 351.505(a)(2), a comparable commercial
loan is defined as one that, when compared to the government-provided
loan in question, has similarities in the structure of the loan (e.g.,
fixed interest rate versus variable interest rate), the maturity of the
loan (e.g., short-term versus long-term), and the currency in which the
loan is denominated.
On June 24, 2011, Tomasello informed us that it received several
commercial loans within the AUL period. We issued questionnaires to
both Tomasello and the GOI to determine, based on the criteria found at
19 CFR 351.505(a)(2), whether these loans could be compared to the
loans Tomasello received under programs covered in this review. We
received responses from Tomasello on July 20, 2011, and from the GOI on
July 25, 2011.
One of the loans Tomasello submitted to us was provided by the
Regional Institute for the Financing of Industries in Sicily
(``IRFIS''). Based on information on the record, we preliminarily
determine that IRFIS is a government-owned special purpose bank within
the meaning of 19 CFR 351.505(a)(2)(ii). See Business Proprietary
Memorandum to the File from Christopher Siepmann, ``2009 Preliminary
Results Calculation Memorandum for Molino e Pastificio Tomasello,
S.p.A.,'' (August 1, 2011) (``Tomasello Preliminary Calc Memo''). See
also Memorandum to File from Christopher Siepmann, ``Placement of
Certain Information Related to IRFIS On the Record'' (July 22, 2011),
and GOI fifth supplemental questionnaire response dated July 25, 2011
at 1. Therefore, we have not used this loan to calculate a benchmark.
The remainder of the information we have used in our evaluation of
these loans is business proprietary. See Tomasello Preliminary Calc
Memo. Based on this information, we preliminarily determine that none
of the loans submitted by Tomasello can serve as a loan benchmark
pursuant to 19 CFR 351.505(a)(2) for the loans Tomasello received under
programs covered by this review.
Because Fabianelli, De Cecco, and Pallante did not report the
receipt of any comparable commercial loans in the years in which the
GOI agreed to provide loans under the programs covered in this review,
and because we have not found comparable loans among those submitted by
Tomasello, we used as our benchmark a national average interest rate
for comparable commercial loans, pursuant to 19 CFR 351.505(a)(3)(ii).
Consistent with our 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
[[Page 48134]]
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), unchanged in
Certain Pasta from Italy: Final Results of the Eighth Countervailing
Duty Administrative Review, 70 FR 37084 (June 28, 2005). For benefits
received in 1995-2004, we used the Italian Bankers' Association
(``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. See Certain Pasta from
Italy: Preliminary Results of the 12th (2007) Countervailing Duty
Administrative Review, 74 FR 25489, 25491 (May 28, 2009) (``12th (2007)
Administrative Review Preliminary Results''), unchanged in Certain
Pasta from Italy: Final Results of the 12th (2007) Countervailing Duty
Administrative Review, 74 FR 47204 (September 15, 2009). The Bank of
Italy ceased reporting this rate in 2004. See 12th (2007)
Administrative Review Preliminary Results, 74 FR at 25491. Because the
ABI prime rate was no longer reported after 2004, for 2005-2009, 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 1, 2010, questionnaire response at Exhibits 3, 4, 5 and 6. Id.
We increased this rate by the mark-up and bank charges described above.
Also, none of the companies reported loan interest rates that could
be used as discount rates (see 19 CFR 351.524(d)(3)(A)). Therefore, in
order to allocate non-recurring benefits over time, we calculated
discount rates for these companies by using the national average cost
of long-term, fixed-rate loans pursuant to 19 CFR 351.524(d)(3)(B).
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 section I.B., 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 Cecco and Pallante received grants under Law 64/86
that conferred a benefit during the POR. See De Cecco's questionnaire
response dated November 3, 2010 at Exhibit 9, and Pallante's
questionnaire response dated November 3, 2010 at Exhibit 5.
In the Pasta Investigation, 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) of the Act; 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.
As stated in Live Swine from Canada,\3\ ``it is well-established
that where the Department has determined that a program is (or is not)
countervailable, it is the Department's policy not to re-examine the
issue of that program's countervailability in subsequent reviews unless
new information or evidence of changed circumstances is submitted which
warrants reconsideration.'' Also, this policy is reflected in the
Department's standard questionnaire used in countervailing duty
administrative reviews which states that ``absent new information or
evidence of changed circumstances, we do not intend to reexamine the
countervailability of programs previously found to be
countervailable.'' \4\
---------------------------------------------------------------------------
\3\ See Live Swine from Canada; Final Results of Countervailing
Duty Administrative Reviews, 61 FR 52408, 52420 (October 7, 1996)
(``Live Swine from Canada'').
\4\ See Department's November 10, 2009 letter to the Embassy of
Italy, at enclosure.
---------------------------------------------------------------------------
In this review, neither the GOI nor the respondent companies have
provided new information that 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. Therefore, we have followed the methodology described in 19
CFR 351.524(b), which directs us to allocate over time those non-
recurring grants whose total authorized amount exceeds 0.5 percent of
the recipient's sales in the year of authorization. Where the total
amount authorized is less than 0.5 percent of the recipient's sales in
the year of authorization, the benefit is countervailed in full
(``expensed'') in the year of receipt. We determined that the grants
received by De Cecco and Pallante under Law 64/86 exceeded 0.5 percent
of their sales in the years in which the grants were approved.
Consequently, we used the grant methodology described in 19 CFR
351.524(d) to allocate the benefit from those grants. We divided the
amounts allocated to the POR by the respective total sales of De Cecco
and Pallante.
On this basis, we preliminarily determine the countervailable
subsidy from the Law 64/86 industrial development grants to be 0.19
percent ad valorem for De Cecco and 0.01 percent ad valorem for
Pallante. See De Cecco Preliminary Calc Memo, and Memorandum to the
File, ``2009 Preliminary Results Calculation Memorandum for Pastificio
Antonio Pallante S.r.L.,'' dated August 1, 2011 (``Pallante Preliminary
Calc Memo'').
B. 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 regions and sectors (manufacturing, mining, and certain
business services) could apply for industrial development grants.
Law 488/92 grants are made only after a preliminary examination by
a bank authorized by the Ministry of Industry. On the basis of the
findings of this preliminary examination, the Ministry of Industry
ranks the companies applying for grants. The ranking is based on
indicators such as the amount of capital the company will contribute
from its own funds, the number of jobs created, regional priorities,
etc. Grants are then made based on this ranking. De Cecco, Tomasello
and Pallante received
[[Page 48135]]
grants under Law 488/92 that conferred a benefit during the POR.
In the Second Administrative Review,\5\ the Department determined
that Law 488/92 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) of the Act; 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 the instant review, neither the
GOI nor the respondent companies have provided new information which
would warrant reconsideration of our determination that these grants
are countervailable subsidies. See Live Swine from Canada, 61 FR at
52420.
---------------------------------------------------------------------------
\5\ See Certain Pasta from Italy: Preliminary Results of
Countervailing Duty Administrative Review, 64 FR 17618, 17620 (April
12, 1999) (``Second Administrative Review''), unchanged in Certain
Pasta From Italy: Final Results of the Second Countervailing Duty
Administrative Review, 64 FR 44489 (August 16, 1999).
---------------------------------------------------------------------------
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. Therefore, we have followed the methodology
described in 19 CFR 351.524(b) and because the grants received by De
Cecco, Tomasello and Pallante under Law 488/92 exceeded 0.5 percent of
their sales in the year in which the grants were approved, we allocated
the benefits over time using the grant methodology described in 19 CFR
351.524(d). We divided the amounts allocated to the POR by the
respective total sales of De Cecco, Pallante and Tomasello in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from the Law 488/92 industrial development grants to be 0.15
percent ad valorem for De Cecco, 0.31 percent ad valorem for Pallante,
and 3.34 percent ad valorem for Tomasello. See De Cecco Preliminary
Calc Memo, Pallante Preliminary Calc Memo, and Tomasello Preliminary
Calc Memo.
C. Interest Contributions Under Law 488/92
In the second administrative review of this order, the Department
found that ``loans are not provided under Law 488/92.'' Second
Administrative Review, 64 FR at 17620. However, the GOI later provided
documentation that a May 14, 2005 Law at Article 80 and implementing
decree changed this practice to permit companies to obtain loans, in
addition to grants, for initiatives in the areas eligible for such
assistance under Law 488/92. See Certain Pasta From Italy: Preliminary
Results of the 13th (2008) Countervailing Duty Administrative Review,
75 FR 18806 (April 13, 2010), unchanged in Certain Pasta from Italy:
Final Results of the 13th (2008) Countervailing Duty Administrative
Review, 75 FR 37386 (June 29, 2010). The preliminary examination of
companies' loan applications by an authorized bank, the ranking by the
Ministry of Economic Development, and the award of loans based on the
ranking are similar to the process described for Law 488/92 grants (see
section I.B., above). Id. In addition, the bank is responsible for
assessing the company's credit. Id.
Under this modification to Law 488/92, the loans must have a
duration not exceeding 15 years and not less than six years. Id. The
fixed-interest rates on these long-term loans are set at a rate of 0.50
percent with the GOI covering the difference in interest amount between
that rate and the market rate. Id. De Cecco received interest
contributions under Law 488/92 during the POR. See De Cecco's November
3, 2010 questionnaire response at 14, 23-37.
We preliminarily determine that these interest contributions are
countervailable subsidies 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. See section
751(5)(E)(ii) of the Act. Also, these interest contributions are
regionally specific within the meaning of section 771(5A)(D)(iv) of the
Act because they are limited to companies located within regions which
meet the criteria of Objective 1, Objective 2, and Objective 5(b) areas
determined by the EU.
In accordance with 19 CFR 351.505(c)(2) and 351.508(c)(2), we
calculated the benefit for the POR by computing the difference between
the amount of interest paid during the POR by De Cecco on its Law 488/
92 loan and the amount of interest De Cecco would have paid at the
benchmark interest rate. We divided the benefit received by De Cecco in
the POR by its sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from the Law 488/92 interest contributions to be 0.05 percent
ad valorem for De Cecco. See De Cecco Preliminary Calc Memo.
D. Measure 3.14 of the POR Sicilia 2000/2006
The POR Sicilia 2000/2006 is a regional development program
designed to encourage stable economic growth in southern Italy. See GOI
fifth questionnaire response dated July 25, 2011 at 1. Measure 3.14 of
the POR Sicilia 2000/2006 provides assistance in the form of grants to
companies that undertake approved industrial research projects.
Companies may apply for funding under two provisions. The first
provides support to companies for developing best practices in a number
of fields. Most grants are given under the second provision, which
funds industrial research projects, particularly those that are
undertaken in partnership with other companies or with research
institutions such as universities. See Tomasello questionnaire response
dated April 13, 2011 at Exhibit 3. Tomasello stated that it received
grants under Measure 3.14 in 2008 and 2009. See Tomasello questionnaire
response dated April 13, 2011 at 3; see also Tomasello questionnaire
response dated June 24, 2011 at 4. The GOI also reported that Tomasello
received grants under this program, but the amounts reported by the two
parties differ. See GOI questionnaire response dated July 25, 2011 at
4. We intend to seek clarification of this discrepancy for the final
results. For purposes of these preliminary results, we have used the
amount reported by Tomasello.
Tomasello has argued that subsidies received under Measure 3.14
should not be considered countervailable because the grants are for
precompetitive research and development activities. Section 771(5B) of
the Act describes research and development subsidies as being non-
countervailable; however, in accordance with section 771(5B)(G)(i),
this provision regarding noncountervailability expired in 2000.
Therefore, we do not consider benefits received under Measure 3.14 to
be entitled to treatment as so-called ``green-light,'' or
noncountervailable, subsidies.
We preliminarily determine that grants under Measure 3.14 confer a
countervailable subsidy within the meaning of section 771(5) of the
Act. They provide a direct transfer of funds from the GOI bestowing a
benefit in the amount of the grant. They are also specific within the
meaning of section 771(5A)(D)(iv) of the Act because the GOI limits
benefits under this program to companies in certain regions. See GOI
fourth questionnaire response dated July 25, 2011 at 3.
We also preliminarily determine that Measure 3.14 grants are non-
recurring
[[Page 48136]]
because they are exceptional events. Recipients must file a separate
application for each project they seek funding for and cannot expect
funding on an ongoing basis. See Tomasello questionnaire response dated
April 13, 2011 at 4. Therefore, we have followed the methodology
described in 19 CFR 351.524(b) and because the grants received by
Tomasello under Measure 3.14 exceeded 0.5 percent of its 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 benefit from these
grants. We divided the amount allocated to the POR by Tomasello's total
sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from the Measure 3.14 research grants to be 0.12 percent ad
valorem for Tomasello. See Tomasello Preliminary Calc Memo.
E. European Social Fund
The European Social Fund (``ESF''), one of the Structural Funds
operated by the EU, was established to improve workers' opportunities
through training and to raise workers' standards of living throughout
the European Community by increasing their employability. There are six
different objectives identified by the Structural Funds: Objective 1
covers projects located in underdeveloped regions, Objective 2
addresses areas in industrial decline, Objective 3 relates to the
employment of persons under 25 years of age, Objective 4 funds training
for employees in companies undergoing restructuring, Objective 5
pertains to agricultural areas, and Objective 6 pertains to regions
with very low population (i.e., the far north). Tomasello received ESF
grants in 2008 and 2009 under Objective 1 (through Measure 3.09 of the
POR Sicilia 2000/2006) for the purpose of training its workers in
improved quality control techniques. See Tomasello questionnaire
response dated April 13, 2011 at 5 and Exhibit 4; see also GOI fifth
questionnaire response dated July 25, 2011 at Exhibit 2.
In the Pasta Investigation, the Department determined that ESF
grants confer a countervailable subsidy within the meaning of section
771(5) of the Act. See Pasta Investigation, 61 FR at 30294. We consider
worker training programs to provide a countervailable benefit to a
company when the company is relieved of an obligation it would have
otherwise incurred. Id. Since companies normally incur the costs of
training to enhance the job related skills of their own employees, we
determine that this ESF grant relieves Tomasello of obligations it
would have otherwise incurred. Consequently, the ESF grant is a
financial contribution as described in section 771(5)(D)(i) of the Act
which provides a benefit to the recipient in the amount of the grant.
The ESF grant received by Tomasello provided funding from three
sources: the EU, the GOI, and the Region of Sicily. Consistent with
prior cases, we have examined the specificity of the ESF funding under
Objective 1 separately from any funding under other objectives. See
Final Affirmative Countervailing Duty Determination: Certain Stainless
Steel Wire Rod From Italy, 63 FR 40474, 40487 (July 29, 1998) (``Wire
Rod from Italy''). Moreover, since funding for this Objective 1 grant
was provided through the regional operational program from three
sources, we have examined the specificity of the funding for each
source of funds, consistent with our treatment of the ESF in the Second
Administrative Review. See Second Administrative Review, 64 FR at
44492.
In the Pasta Investigation, the Department determined that the ESF
funds for Objective 1 provided by the EU and the GOI are limited to
underdeveloped regions and, hence, regionally specific within the
meaning of section 771(5A)(D)(iv) of the Act. Regarding funding from
the regional government, we requested usage information from the GOI on
two occasions: first, on May 12, 2011; and second, on June 17, 2011.
The GOI did not provide this information either time.
As explained above under ``Use of Facts Otherwise Available and
Adverse Inferences,'' in cases where there is not enough information on
the record for us to determine whether a program is specific (see
section 776(a)(1) of the Act), and in cases where an interested party
fails to provide information that has been requested by the Department
by the deadline for the submission of that information (see section
776(a)(2)(B) of the Act), we use facts otherwise available. We further
explained that an adverse inference is warranted where a party fails to
cooperate by not acting to the best of its ability to comply with a
request for information from the Department. Therefore, we
preliminarily determine as adverse facts available that the regional
component of Tomasello's ESF grant is also specific.
The Department normally considers the benefits from worker training
programs to be recurring. See CFR 351.524(c)(1). However, consistent
with the Department's determination in Wire Rod From Italy that these
grants relate to specific, individual projects, and based on
information on the record of this review, we have treated these grants
as non-recurring because each required separate government approval.
See Wire Rod From Italy, 63 FR at 40487.
Accordingly, we have followed the methodology described in 19 CFR
351.524(b) and because the grants received by Tomasello under this
program exceeded 0.5 percent of its 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 benefit from these grants. We divided the
amount allocated to the POR by Tomasello's total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from the ESF grants to be 0.10 percent ad valorem for
Tomasello. See Tomasello Preliminary Calc Memo.
F. Tax Credits Under Article 280 of Law 296/2006
Article 280 of Law 296/2006 authorizes a tax credit to companies of
up to ten percent of the costs associated with eligible research
activities, or a tax credit of up to fifteen percent for research
expenses associated with contracts between companies and research
institutions. See Tomasello questionnaire response dated April 13, 2011
at Exhibit 6; see also GOI questionnaire response dated June 13, 2011
at Exhibit 4, and GOI fourth questionnaire response dated July 25, 2011
at 6. Tomasello reported receiving a tax credit under this provision in
2009. It identified the benefits as having been received under
Legislative Decree 76/2008, which contains regulations for the
implementation of the credit. See Tomasello questionnaire response
dated April 13, 2011 at 11; see also GOI fourth questionnaire response
dated July 25, 2011 at 6.
We preliminarily determine that tax credits under Article 280 of
Law 296/2006 confer a countervailable subsidy within the meaning of
section 771(5) of the Act. The credits are a financial contribution in
the form of revenue forgone (see section 771(D)(ii) of the Act) and
they confer a financial contribution within the meaning of section
771(5)(D)(ii) of the Act in the amount of the difference between the
taxes that Tomasello paid in 2009, and the taxes that Tomasello would
have been required to pay if it had not taken advantage of the credit.
In its July 1, and July 25, 2011 submissions, the GOI stated that
this tax credit is available throughout Italy and is not limited by
region or industrial sector. However, the GOI did not respond to either
of our requests for
[[Page 48137]]
program usage information, which we issued on May 12, and June 28,
2011.
As explained above under ``Use of Facts Otherwise Available and
Adverse Inferences,'' in cases where there is not enough information on
the record for us to determine whether a program is specific (see
section 776(a)(1) of the Act), and in cases where an interested party
fails to provide information that has been requested by the Department
by the deadline for the submission of that information (see section
776(a)(2)(B) of the Act), we use facts otherwise available. We further
explained that an adverse inference is warranted where a party fails to
cooperate by not acting to the best of its ability to comply with a
request for information from the Department. Therefore, we
preliminarily determine as adverse facts available that the tax credits
granted under Article 280 of Law 296/2006 are specific.
In accordance with 19 CFR 351.524(c), we generally consider tax
credits to confer recurring benefits. In order to calculate the
countervailable subsidy that Tomasello received, we divided the amount
of the tax credit applied by Tomasello on its 2009 tax return by
Tomasello's total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from Article 280 of Law 296/2006 to be 0.68 percent ad valorem
for Tomasello. See Tomasello Preliminary Calc Memo.
G. Article 14 of Law 46/1982 (Fondo Innovazione Tecnologica)
Article 14 of Law 46/1982 authorized the creation of a revolving
fund for technology innovation, also known as the ``FIT Program.''
Through the fund, the Ministry for Economic Development provides aid
for experimental and industrial research projects in the form of soft
loans, grants against interest, and capital grants. After an
application is submitted to one of the banks approved by the Ministry
to administer the program, the application is evaluated on a number of
scientific, technological and economic criteria. Subject matter experts
in relevant fields may be asked to help evaluate the technical merits
of the proposal. Within 90 days from the submission of an application,
the bank is required to report to the Ministry of Economic Development
whether it believes the project is feasible. Projects that pass this
examination are funded in order of highest to lowest score, until the
all the resources appropriated for the program have been exhausted. See
GOI questionnaire response dated June 13, 2011 at 3; see also GOI
fourth questionnaire response dated July 25, 2011 at 5. Tomasello
reported receiving both a grant and a loan under Article 14 of Law 46/
1982. See Tomasello questionnaire response dated April 13, 2011 at 7.
The GOI also reported that Tomasello received a grant and a loan under
this program, but the grant amounts reported by the two parties differ.
See GOI fourth questionnaire response dated July 25, 2011 at Exhibit 7.
We intend to seek clarification of this discrepancy for the final
results. Because the amounts reported by the GOI are more consistent
with the underlying decree, we have used them for these preliminary
results.
In the Pasta Investigation, the petitioners asked us to investigate
this program as a possible countervailable subsidy. We declined because
we had found Law 46/1982 to be noncountervailable in a previous
investigation. See Pasta Investigation Initiation, 60 FR at 30281-82.
As previously explained, we generally will not re-examine the
countervailability of a program that has been found to be non-
countervailable. See, e.g., Live Swine from Canada, 61 FR at 52420.
However, information Tomasello submitted in its questionnaire response
suggested that although funds are available across Italy, additional
funds are available to companies in specific regions. See Tomasello
questionnaire response dated April 13, 2011, at Exhibit 5. Therefore,
we included Law 46/1982 among the programs for which we asked the GOI
to provide information on May 12, and June 17, 2011.
The GOI failed to provide a timely response to our request for
information. In its July 25, 2011 supplemental questionnaire response,
the GOI provided limited information about this program, but because
the deadline for submission of this information was July 1, 2011, we
are rejecting this information as untimely in accordance with 19 CFR
351.302(d) and 19 CFR 351.104(a)(2)(ii)(A).
As explained above under ``Use of Facts Otherwise Available and
Adverse Inferences,'' in cases where there is not enough information on
the record for us to determine whether a program is specific (see
section 776(a)(1) of the Act), and in cases where an interested party
fails to provide information that has been requested by the Department
by the deadline for the submission of that information (see section
776(a)(2)(B) of the Act), we use facts otherwise available. We further
explained that an adverse inference is warranted where a party fails to
cooperate by not acting to the best of its ability to comply with a
request for information from the Department. Therefore, we
preliminarily determine as adverse facts available that the assistance
received by Tomasello under Article 14 of Law 46/1982 is specific.
We further determine preliminarily that the grants and loans
provided under Article 14 of Law 46/1982 are financial contributions
because they are a direct transfer of funds from the GOI. See section
771(5)(D)(i) of the Act.
In accordance with 19 CFR 351.504(a), the benefit provided by the
grant is the amount of the grant. Moreover, because companies must file
a separate application and receive the government's express
authorization for each grant, we preliminarily determine that these
subsidies are non-recurring. Accordingly, we have followed the
methodology described in 19 CFR 351.524(b) and because the grants
received by Tomasello under this program exceeded 0.5 percent of its
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 benefit from
these grants. We divided the amount allocated to the POR by Tomasello's
total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from the Law 46/1982 research grant to be 0.17 percent ad
valorem for Tomasello. See Tomasello Preliminary Calc Memo.
We also preliminarily determine that loans under Article 14 of Law
46/1982 convey a countervailable subsidy within the meaning of section
771(5) of the Act because they provide a benefit from the GOI in the
amount of the difference between the interest a company paid on the
loan and the interest the company would have paid on a comparable
commercial loan. In accordance with 19 CFR 351.505(c)(2), we calculated
the countervailable benefit Tomasello received from this loan in the
POR by computing the difference between the payments Tomasello made on
the loan during the POR and the payments Tomasello would have made on a
benchmark loan. See the ``Benchmarks for Long-Term Loans and Discount
Rates'' section of this notice above. We divided the benefit received
by Tomasello by its total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from Law 46/1982 research loans to be 0.12 percent ad valorem
for Tomasello. See Tomasello Preliminary Calc Memo.
H. Regional Law 15/1993, as Amended by Regional Law 66/1995
Regional Law 15/1993 authorizes interest contributions for
companies
[[Page 48138]]
that agree to consolidate their short-term debt. These contributions
are equal to 40 percent of the reference interest rate in effect on the
date that the consolidated loan is opened. Participating companies may
receive interest contributions for up to ten years, following a grace
period of one year. See Tomasello questionnaire response dated April
13, 2011 at Exhibit 9. According to the GOI, benefits under this
program are limited to enterprises or industries within certain
regions. See GOI fourth questionnaire response dated July 25, 2011 at
13.
Tomasello has reported conflicting information about the interest
contributions it received under Regional Law 15/1993. See Tomasello
questionnaire response dated April 13, 2011 at 16; see also Tomasello
questionnaire response dated July 20, 2011 at Exhibit 5. In light of
this, and because we received this information just before our
statutory deadline to publish the preliminary results, we have used the
information in Tomasello's earlier (April 13, 2011) questionnaire
response to calculate the benefit it received under Regional Law 15/
1993. We will seek clarification of this discrepancy for the final
results.
Based on information provided by the GOI, we preliminarily
determine that interest contributions under Regional Law 15/1993 are
regionally specific within the meaning of section 771(5A)(D)(iv) of the
Act. See GOI fourth questionnaire response dated July 25, 2011 at 13.
Moreover, we preliminarily determine that these interest contributions
are a financial contribution in the form of a direct transfer of funds
(see section 771(D)(i) of the Act) and they confer a benefit within the
meaning of section 771(5)(E) of the Act in the amount of the
contribution. To calculate the benefit, we divided the amount Tomasello
received in the POR by its total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from interest contributions under Regional Law 15/1993 to be
0.06 percent ad valorem for Tomasello. See Tomasello Preliminary Calc
Memo.
I. Regional Law 34/1988
Under Regional Law 34/1988, the Regional Department of Industry in
Sicily may provide interest contributions to companies that belong to
``Consorzi di Garanzia Fidi,'' which are consortia made up of a number
of companies. The GOI's contributions are made against interest paid by
consortium members on lines of credit taken out through the consortium.
See Tomasello questionnaire response dated April 13, 2011 at 18; see
also GOI questionnaire response dated June 13, 2011 at 2.
Tomasello has reported conflicting information about the interest
contributions it received under Regional Law 34/1988. See Tomasello
questionnaire response dated April 13, 2011 at 18; see also Tomasello
questionnaire response dated July 20, 2011 at Exhibit 6. In light of
this, and because we received this information just before our
statutory deadline to publish the preliminary results, we have used the
information in Tomasello's earlier (April 13, 2011) questionnaire
response to calculate the benefit it received under Regional Law 34/
1998. We intend to seek clarification of this discrepancy for the final
results.
On May 12, 2011, we asked the GOI to provide a full response to the
appropriate questionnaire appendices for this program. In particular,
we asked it to describe whether benefits under this program are limited
to companies in specific sectors or regions, and to provide us with
information regarding how benefits under this program are distributed
across Sicily. Although the GOI provided some information, it did not
answer our questions or provide enough information for us to determine
whether the program is specific. We asked the GOI to answer these
questions a second time on June 28, 2011. Apart from providing a
translation of part of a related law, the GOI did not respond to the
questionnaire appendices altogether in its July 25, 2011 response, nor
did it provide program usage information.
As explained above under ``Use of Facts Otherwise Available and
Adverse Inferences,'' in cases where there is not enough information on
the record for us to determine whether a program is specific (see
section 776(a)(1) of the Act), and in cases where an interested party
fails to provide information that has been requested by the Department
by the deadline for the submission of that information (see section
776(a)(2)(B) of the Act), we use facts otherwise available. We further
explained that an adverse inference is warranted where a party fails to
cooperate by not acting to the best of its ability to comply with a
request for information from the Department. Therefore, we
preliminarily determine as adverse facts available that the interest
contributions received by Tomasello under Law 34/1988 are specific.
On this basis, we preliminarily determine that interest
contributions under Regional Law 34/1988 confer a countervailable
subsidy within the meaning of section 771(5) of the Act. They are a
financial contribution in the form of a direct transfer of funds (see
section 771(5)(D)(i) of the Act) and they confer a benefit within the
meaning of section 771(5)(E) of the Act in the amount of the
contribution. To calculate the benefit, we divided the amount Tomasello
received in the POR by its total sales in the POR.
On this basis, we preliminarily determine the countervailable
subsidy from interest contributions under Regional Law 34/1988 to be
0.10 percent ad valorem for Tomasello. See Tomasello Preliminary Calc
Memo.
J. Article 23 of Legislative Decree 38/2000
Article 23 of Legislative Decree 38/2000 (``LD 38/2000'') helps
certain companies comply with the workplace safety regulations
contained in Legislative Decree 626/94 by providing assistance to those
companies. The program is administered by the National Institute for
Insurance Against Injuries in the Workplace, or INAIL, which is an
agency of the Italian government. In order to be eligible for
assistance, firms must be operating in the agricultural or artisanal
sectors and qualify as small- to medium-sized companies (i.e., they
must have fewer than 250 employees, and their total annual turnover
must be less than 40 million Euros, or they must have total assets of
less than 27 million Euros). See GOI questionnaire response dated June
13, 2011, at 10.
INAIL is authorized to award funds in the form of grants or loans.
It pays all interest and fees on the loans directly to the issuing
bank, effectively making the loans interest-free to the recipient. See
GOI questionnaire response dated June 13, 2011, at 10 and Exhibit 5;
see also Tomasello questionnaire response dated April 13, 2011, at
Exhibit 13, and Tomasello questionnaire response dated June 24, 2011 at
Exhibit 5. Tomasello and Fabianelli both reported receiving assistance
during the POR under LD 38/2000. Tomasello received a loan at zero
percent interest for facility improvements, and Fabianelli received
grants for expenses related to worker training. See Tomasello
questionnaire response dated April 13, 2011 at 21; and Tomasello
questionnaire response dated June 24, 2011 at Exhibit 5; see also
Fabianelli questionnaire response dated November 3, 2010 at 19.
The GOI reported that benefits under LD 38/2000 are limited to
companies in the agricultural and artisanal industries, but did not
provide us with enough information to determine how the companies in
this review can be classified. See GOI questionnaire
[[Page 48139]]
response dated June 13, 2011 at 10. It also did not address our
questions regarding whether benefits are limited by region, nor did it
submit information pertaining to how benefits were distributed across
Italy. We requested this information twice, in supplemental
questionnaires dated May 12, and June 28, 2011. Pursuant to 19 CFR
351.502(d), we do not regard a subsidy as being specific under section
771(5A)(D) of the Act solely because the subsidy is limited to the
agricultural sector. However, because the GOI failed to provide us with
enough information to determine how benefits are limited by region, and
did not provide us with usage information, we are unable to determine
whether benefits under this program are otherwise specific.
As explained above under ``Use of Facts Otherwise Available and
Adverse Inferences,'' in cases where there is not enough information on
the record for us to determine whether a program is specific (see
section 776(a)(1) of the Act), and in cases where an interested party
fails to provide information that has been requested by the Department
by the deadline for the submission of that information (see section
776(a)(2)(B) of the Act), we use facts otherwise available. We further
explained that an adverse inference is warranted where a party fails to
cooperate by not acting to the best of its ability to comply with a
request for information from the Department. Therefore, we
preliminarily determine as adverse facts available that benefits
received by Tomasello and Fabianelli under LD 38/2000 are specific.
We further determine preliminarily that the grants and loans
provided under LD 38/2000 are financial contributions because they are
a direct transfer of f