[Federal Register Volume 59, Number 45 (Tuesday, March 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5308]


[[Page Unknown]]

[Federal Register: March 8, 1994]


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DEPARTMENT OF COMMERCE
[C-301-003]

 

Roses and Other Cut Flowers From Colombia; Final Results of 
Countervailing Duty Administrative Review and Determination Not To 
Terminate Suspended Investigation

AGENCY: International Trade Administration/Import Administration, 
Department of Commerce.

ACTION: Notice of final results of countervailing duty administrative 
review.

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SUMMARY: On October 7, 1993, the Department of Commerce (``the 
Department'') published the preliminary results of its administrative 
review and intent not to terminate the suspended countervailing duty 
investigation on roses and other cut flowers from Colombia. The review 
covers the period January 1, 1988 through December 31, 1990 and eight 
programs. On January 31, 1991, the Government of Colombia (``GOC'') 
requested termination of the suspended investigation based on 
abolishment of the programs for a period of at least three consecutive 
years, in accordance with 19 CFR 355.25(a)(1) and 355.25(b)(1). 
Therefore, we examined the programs to determine if each program had 
been abolished for a period of at least three consecutive years. We 
gave interested parties an opportunity to comment on the preliminary 
results. After reviewing all the comments received, we determine that 
the GOC and the producer/exporters of roses and other cut flowers have 
complied with the terms of the suspension agreement. However, we also 
determine that the GOC has not abolished each program for a period of 
at least three consecutive years. Therefore, we determine that the GOC 
has not met all the requirements for termination of the countervailing 
duty suspended investigation on roses and other cut flowers as outlined 
in the Commerce Regulations.
    For the purpose of revoking a countervailing duty order or 
terminating a suspending countervailing duty investigation based on 
three consecutive years of elimination of all subsidies pursuant to 19 
CFR 355.25(a)(1), it is the Department of Commerce's current policy 
that administrative reviews must be requested and conducted for each of 
the three consecutive years. See Memorandum from Joseph A. Spetrini, 
Deputy Assistant Secretary for Compliance, to Alan M. Dunn, Assistant 
Secretary for Import Administration, of December 14, 1992, which fully 
describes this issue. However, the request for termination in this case 
predates the above policy. Therefore, although no review was requested 
for 1989, we nevertheless have examined a three-year period in order to 
determine whether termination is appropriate. We invited interested 
parties to comment on these results.

EFFECTIVE DATE: March 8, 1994.

FOR FURTHER INFORMATION CONTACT: Stephen Jacques or Jeanene Lairo, 
Office of Agreements Compliance, International Trade Administration, 
U.S. Department of Commerce, Washington, DC 20230; telephone: (202) 
482-3434 or (202) 482-2243, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 7, 1993, the Department published in the Federal 
Register the preliminary results of its countervailing duty 
administrative review and intent not to terminate the suspended 
investigation on roses and other cut flowers from Colombia (58 FR 
52272). (See Roses and Other Cut Flowers From Colombia; Suspension of 
Investigation, 48 FR 2158 (January 18, 1983); and Roses and Other Cut 
Flowers From Colombia; Final Results of Countervailing Duty 
Administrative Review and Revised Suspension Agreement, 51 FR 44930 
(December 15, 1986).) We have now completed the administrative review 
in accordance with section 751 of the Tariff Act of 1930, as amended 
(``the Tariff Act'').

Scope and Review

    Imports covered by this review are shipments of roses and other cut 
flowers from Colombia. During the review period, the merchandise 
covered by this suspension agreement is classified under Harmonized 
Tariff Schedule (``HTS'') item numbers 0603.10.60, 0603.10.70, 
0603.10.80, and 0603.90.00. The HTS item numbers are provided for 
convenience and Customs purposes. The written description remains 
dispositive.
    The period of review (``POR'') covers January 1, 1988 through 
December 31, 1990, and eight programs: (1) Tax Reimbursement 
Certificate Program (Certificate Program Certificado de Reembolso 
Tributario (``CERT'' program)); (2) The Fund for the Promotion of 
Export Loans (working and fixed-capital) (``PROEXPO''); (3) Plan 
Vallejo; (4) Air Freight Rates; (5) Free Industrial Zones; (6) Export 
Credit Insurance; (7) Countertrade; and (8) Research and Development.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. Also, at the request of the petitioner, the Floral 
Trade Council (``FTC''), and the GOC, we held a public hearing on 
December 3, 1993. Several issues raised by interested parties in this 
review are not case-specific but pertain both to this administrative 
review and the countervailing duty administrative review and intent not 
to terminate the suspended investigation on miniature carnations from 
Colombia. The comments submitted by interested parties concerning 
issues common to both these reviews of suspended investigations are 
summarized and addressed in the Final Results of Countervailing Duty 
Administrative Review and Intent Not to Terminate Suspended 
Investigation; Miniature Carnations from Colombia which is being 
published concurrently with this notice. The following comment is 
specific only to this administrative review on roses and other cut 
flowers from Colombia.
    Comment: The GOC contends that it was under no obligation to 
abolish the air freight rate ``program'' since the Department never 
found it countervailable and since there was never any subsidy on the 
merchandise conferred by air freight rates. Furthermore, the GOC argues 
that the Department's inclusion of air freight rates in the 1983 roses 
suspension agreement was not carried forward into the 1986 revised 
suspension agreement. Thus, consideration of air freight rates under 
the suspension agreement is no longer in effect. The GOC contends that 
the air freight rate ``program'' is in fact not a program because the 
Departmento Administrativo de la Aeronautica Civil (``DAAC'') only sets 
minimum and maximum permissible air freight rates. The GOC argues that 
the Department has agreed with the respondent that the establishment of 
minimum and maximum rates ``does not confer countervailable benefits.''
    The FTC asserts that the Department has the discretion to consider 
the continued existence of a potentially countervailable program even 
if that program is not specifically found to be countervailable in the 
suspension agreement. The FTC asserts that during the POR, the GOC was 
unable to establish that the actual air freight rates were 
competitively priced. Furthermore, the FTC asserts that the GOC did not 
submit comparative air freight rates or export statistics to third 
countries. Consequently, as best information available, the FTC 
contends that the Department should presume air freight maximums 
limited competitive rates contrary to the terms of the suspension 
agreement.
    Department's Position: While we agree with petitioner that the 
Department has discretion to consider a potentially countervailable 
program, we disagree with the FTC's assertion that the GOC has violated 
the suspension agreement. The DAAC minimum/maximum rates were 
established in 1981, prior to negotiation of the suspension agreement. 
At verification we found that the rates negotiated between the flower 
producers and air freight carriers were between the DAAC minimum/
maximum rates permitted under the suspension agreement. There is no 
evidence that these negotiated rates limited competitive air rates. In 
addition, at verification, we examined documentation and determined the 
rates negotiated were between the minimum/maximum negotiated rates. 
Consequently, we determined that the GOC is not in violation of the 
suspension agreement.
    With regard to abolition of this program, the Department agrees 
with the GOC in part. The Department's regulations at 19 CFR 
355.25(a)(1)(i) require the GOC to abolish all programs for the subject 
merchandise that ``the Secretary has found countervailable.'' Although 
the Department has found the air freight rate program subject to the 
suspension agreement (see Roses and Other Cut Flowers From Colombia; 
Final Results of Countervailing Duty Administrative Review, 55 FR 53584 
(Comment 4) (December 31, 1990)), we have never found the air freight 
rates program to be a countervailable subsidy. Therefore, under the 
conditions set by 19 CFR 355.25(a)(1)(i) the GOC is not required to 
abolish the program in order to meet the requirements for termination 
of the suspension agreement.

Final Results of Review

    After considering all of the comments received, we determine that 
the signatories have complied with the terms of the suspension 
agreement for the period January 1, 1988 through December 31, 1990. 
However, we will not terminate the suspension agreement. In order for 
us to terminate the suspension agreement the GOC must have abolished 
all programs which is not the case with PROEXPO and Plan Vallejo.
    This administrative review and notice are in accordance with 
sections 751(a)(1)(C) of the Tariff Act (19 U.S.C. 1675(a)(1)(C)) and 
19 CFR 355.22 and 355.25.

    Dated: March 1, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-5308 Filed 3-7-94; 8:45 am]
BILLING CODE 3510-05-P