Pasta Exporter Subject to All Others Rate for Entries Before Found Not Successor-in-Interest, CBP Says

A pasta maker found ineligible for an acquired company’s antidumping duty exemption in a 2014 changed circumstances review cannot use that predecessor’s antidumping and countervailing duty rates for entries before the effective date of the final results of that review, CBP said in a recent ruling. Instead, the pasta maker must file at the all others rate for entries before the changed circumstances review took effect, CBP said in HQ H287183, issued March 26 and posted to CBP’s CROSS database June 3.

Delverde Industrie Alimentari filed the entries in question in 2007. It had bought Delverde S.p.A., which Commerce had previously found exempt from the AD duty order on pasta from Italy because of a zero percent AD duty rate in the original investigation, in 2006 while in bankruptcy. Delverde Industrie did not deposit any AD duties at time of entry, but did pay a CV duty cash deposit of 2.83%, which had been Delverde S.p.A.’s CV duty rate since 2002.

In 2012, Delverde Industrie requested a changed circumstances review to confirm it was Delverde S.p.A.’s successor company. Commerce, noting corporate restructuring as Delverde S.p.A. was brought out of bankruptcy, would find in 2014 it was not. Commerce said its “determination will apply to all entries of the subject merchandise entered or withdrawn from warehouse, for consumption on or after the date of the publication of the [CCR] final results,” which was Sept. 19, 2014. On that date, Delverde Industrie would be subject to a 13.09% AD duty rate, Commerce said. This came despite Delverde Industrie’s participation in the 2011 CV duty administrative review under Delverde S.p.A’s case number, where it received zero CV duty rate.

As it requested the changed circumstances review in 2012, Delverde Industrie also filed a prior disclosure “in an abundance of caution.” It voluntarily tendered duties along with the submission. Then, in October 2014, after Commerce completed its changed circumstances review, CBP hit Delverde Industrie with a duty demand letter upping duties owed to the all others rates for the Italy pasta orders: 15.45% for AD duties, and 3.85% for CV duties. Delverde Industrie filed a protest, and when that was denied, it applied for further review.

From the outset, CBP denied Delverde’s request for a return of the duties voluntarily tendered as part of its prior disclosure. Protestable events include “charges or extractions of whatever character,” but the duties submitted for the prior disclosure were paid voluntarily, without compulsion from CBP. As a result, the issue was not protestable, CBP said.

As for the duties paid to satisfy CBP’s demand, CBP found the issue protestable but did not agree that the duties were improperly assessed. “The CCR final results do not mean that Delverde can benefit from Delverde S.p.A.’s rates as if it had been the successor-in-interest prior to the CCR results,” CBP said. And the 13.09% AD duty rate applied only to entries on or after the results of the CCR took effect in 2014.

“Commerce applies the ‘all others’ rate to entries of merchandise from producers and exporters for which Commerce has not established a company-specific rate,” CBP said. “In 2006, when Delverde purchased the assets of the insolvent Delverde S.p.A., Delverde did not seek a company-specific rate. Accordingly, Commerce did not name Delverde in its instructions to CBP to receive a company-specific rate and thus, the actual loss to the Government was the “all others” rate applicable to Delverde’s entries,” it said.

The same goes for Delverde Industrie’s CV duty rate, even though the company received a zero rate more recently, CBP said. “Delverde was not a company with an enumerated specific rate” at the time the entry was filed, the agency said.