[Federal Register Volume 59, Number 196 (Wednesday, October 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25220]


[[Page Unknown]]

[Federal Register: October 12, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-301-801]

 

Notice of Amended Preliminary Determination of Sales at Less Than 
Fair Value: Fresh Cut Roses From Colombia

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

EFFECTIVE DATE: October 12, 1994.

FOR FURTHER INFORMATION CONTACT: James Maeder or James Terpstra, Office 
of Antidumping Investigations, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, N.W., Washington, 
D.C. 20230; telephone (202) 482-3330 and 482-3965, respectively.

Scope of Investigation

    The products covered by this investigation are fresh cut roses, 
including sweethearts or miniatures, intermediates, and hybrid teas, 
whether imported as individual blooms (stems) or in bouquets or 
bunches. Roses are classifiable under subheadings 0603.10.6010 and 
0603.10.6090 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The HTSUS subheadings are provided for convenience and customs 
purposes. The written description of the scope of this investigation is 
dispositive.

Summary

    The purpose of this notice is to amend our preliminary 
determination (59 FR 48284, September 20, 1994) with regard to 
respondents Grupo Andes and Grupo Benilda, and to the ``all-others'' 
rate.

Case History

    On September 12, 1994, the Department of Commerce (the Department) 
made its affirmative preliminary determination of sales at less than 
fair value (59 FR 48284, September 20, 1994).
    On September 16, 1994, Grupo Andes, Grupo Benilda, Grupo 
Intercontinental, and the Prisma Group alleged that the Department, in 
making its determination, made ministerial errors which led to the 
application of best information available (BIA). They requested that 
the Department correct the ministerial errors, amend its preliminary 
determination, and recalculate the all others rate. In addition, Grupo 
Andes requested that the Department reverse its preliminary decision 
not to verify its information.
    On September 21, 1994, counsel for Grupo Andes, Grupo Benilda, 
Grupo Intercontinental and the Prisma Group met with officials of the 
Department of Commerce (see the September 22, 1994, ex-parte 
memorandum). Also on September 21, 1994, the Caicedo Group alleged that 
the Department made ministerial errors in calculating its dumping 
margin and requested that the Department correct these errors and amend 
the preliminary determination. On September 21, 1994, petitioner 
submitted comments opposing respondents' ministerial error allegations 
and their request to amend the preliminary determination. On September 
22, 1994, counsel for petitioner met with officials of the Department 
of Commerce (see the September 22, 1994, ex-parte memorandum). On 
September 23, 1994, petitioner submitted a written summary of its 
September 22, 1994, meeting comments.
    On September 26, 1994, Grupo Tropicales alleged that the Department 
made ministerial errors in calculating its dumping margin and requested 
that the Department correct these errors and amend the preliminary 
determination.

Amendment of Preliminary Determination

    The Department has determined that the allegations of the Caicedo 
Group, Grupo Intercontinental, Grupo Prisma, and Grupo Tropicales 
involved issues that were other than clerical or ministerial in nature. 
Consequently, we are not amending our preliminary determination with 
respect to these companies. However, we are amending the preliminary 
determination for Grupo Andes and Grupo Benilda. Accordingly, we have 
recalculated the ``all others'' rate. Set forth below is the basis for 
our amended preliminary determination with respect to these companies.
    It is not our normal practice to amend preliminary determinations 
since these determinations only establish estimated margins, which are 
subject to verification and which may change in the final 
determination. However, because of the specific facts pertaining to 
this investigation, the Department has determined to amend its 
preliminary determination to correct for the significant ministerial 
errors involved. See the Department's proposed 19 CFR 353.15(g)(4) (57 
FR 1131, 1132 (January 10, 1992)); Amendment to Preliminary 
Determination of Sales at Less Than Fair Value; Sweaters Wholly or in 
Chief Weight of Man-Made Fiber from Hong Kong, 55 Fed. Reg. 19289-90 
(May 9, 1990).

A. Grupo Andes

    In determining whether Grupo Andes had a viable home market for the 
preliminary determination, the Department relied upon the narrative of 
Grupo Andes's July 22 submission, which indicated that its home market 
was not viable when, in its appendix to this submission, Grupo Andes 
provided data which demonstrated that its home market was viable. Thus, 
although there was data on the record which established that Andes' 
home market was viable, we did not pursue further Grupo Andes home 
market sales data for the preliminary determination. Therefore, the 
Department's initial viability determination for Grupo Andes was 
erroneous, as was the Department's decision not to take additional 
action in regard to Grupo Andes' home market sales. Therefore, the 
Department was left with no option but to preliminarily assign Grupo 
Andes a margin based on BIA. Because the Department considers its 
initial unintentional error to be ministerial, and because correction 
of that error would result in a change of at least 5 absolute 
percentage points in, but not less than 25 percent of, the preliminary 
margin for Grupo Andes, that error constitutes a significant 
ministerial error under proposed 19 CFR 353.15(g)(4) (57 Fed. Reg. 
1131, 1132 (January 10, 1992)), the Department's proposed regulation 
for correcting significant ministerial errors in preliminary 
antidumping and countervailing duty determinations. The Department thus 
has determined to amend its preliminary determination to establish a 
preliminary margin for Grupo Andes based upon its data on the 
administrative record.
    The Department further will (1) require Grupo Andes to submit its 
home market sales listing; (2) investigate, if necessary, whether Grupo 
Andes made home market sales at prices below its cost of production; 
and (3) conduct verification of all information submitted.

B. Grupo Benilda

    Two business days before the Department's preliminary 
determination, Grupo Benilda filed a pre-verification submission which 
appeared to contain such extensive additions and corrections to its 
original response as to constitute an entirely new response. The 
Department thus determined initially that the submission called into 
question the integrity of the response as a whole and preliminarily 
assigned Grupo Benilda a margin based on BIA. Subsequently, the 
Department has determined that Grupo Benilda's September 8 submission, 
rather than representing a new response, in fact contained minor data 
corrections to its response. Because that initial determination in 
regard to the September 8 submission was an unintentional error which 
the Department considers to be ministerial, and because correction of 
that error would lead to a change of at least 5 absolute percentage 
points in, but not less than 25 percent of, the preliminary margin for 
Grupo Benilda, that error constitutes a significant ministerial error 
pursuant to the Department's proposed regulation outlined above. The 
Department thus has determined to amend its preliminary determination 
to establish a preliminary margin for Grupo Benilda based upon its data 
on the administrative record prior to its September 8 submission.

C. All Others Rate

    Because the preliminary dumping margins for Grupo Andes and Grupo 
Benilda have changed, the preliminary weighted-average ``all others'' 
rate has also changed. (See Suspension of Liquidation section of this 
notice, below.)

Use of Third Country Prices/Constructed Value

    For a discussion of the proper basis for Foreign Market Value, see 
the Department's September 12, 1994, preliminary determination (59 FR 
48284, September 20, 1994).

Fair Value Comparisons

    To determine whether sales of fresh cut roses from Colombia to the 
United States were made at less than fair value, we compared the United 
States price (USP) to the foreign market value (FMV), as specified in 
the ``United States Price'' and ``Foreign Market Value'' sections of 
this notice. For all U.S. prices, we used weighted-average monthly U.S. 
prices (see the September 12, 1994, concurrence memorandum).

United States Price

    For sales by both Grupo Andes and Grupo Benilda, we based USP on 
purchase price, in accordance with section 772(b) of the Trade Act of 
1930, as amended (``the Act''), when the subject merchandise was sold 
to unrelated purchasers in the United States prior to importation and 
when exporter's sales price (ESP) methodology was not otherwise 
indicated.
    In addition, where certain sales to the first unrelated purchaser 
took place after importation into the United States, we based USP on 
ESP, in accordance with section 772(c) of the Act.
    We made company-specific adjustments, as follows:

A. Grupo Andes

    For Grupo Andes, we calculated purchase price based on packed, 
f.o.b. prices to unrelated customers in the United States. We made 
deductions, where appropriate, for foreign inland freight.
    We calculated ESP based on packed prices to unrelated customers in 
the United States. We made deductions, where appropriate, for foreign 
inland freight, air freight, U.S. Customs duties, U.S. and Colombian 
indirect selling expenses including inventory carrying costs, and U.S. 
direct selling expenses including credit expenses.
    For roses that were further manufactured into bouquets after 
importation, we adjusted for all value added in the United States, 
including the proportional amount of profit or loss attributable to the 
value added, pursuant to section 772(e)(3) of the Act. We added packing 
to reported U.S. prices. For the cost of merchandise subject to further 
manufacturing, in addition to the adjustments cited in the section on 
FMV, below, for constructed value, we (1) corrected the U.S. general 
expenses to reflect a percentage of cost of goods sold, and (2) 
recalculated interest expense to exclude the CV offset.

B. Grupo Benilda

    For Grupo Benilda, we calculated purchase price based on packed, 
f.o.b. prices to unrelated customers in the United States. We made 
deductions, where appropriate, for foreign inland freight.
    We calculated ESP based on packed prices to unrelated customers in 
the United States. We made deductions, where appropriate, for foreign 
inland freight, air freight, U.S. customs duties, U.S. brokerage and 
handling expenses, credit expenses, Colombian Flower Council expenses, 
the greater of U.S. commissions to the related reseller or U.S. 
indirect selling expenses incurred, Colombian indirect selling 
expenses, including inventory carrying costs and other indirect selling 
expenses. For those ESP sales where Grupo Benilda did not report 
airfreight, U.S. duty, and U.S. brokerage and handling expenses, we 
applied, as BIA, the highest reported value for each such expense (see 
the Department's September 9, 1994, concurrence memorandum.)

Foreign Market Value

    In order to determine whether there were sufficient sales of fresh 
cut roses in the home market to serve as a viable basis for calculating 
FMV, we compared the volume of home market sales of roses to the volume 
of third country sales of roses in accordance with section 773(a)(1)(B) 
of the Act. Based on this comparison, we determined that Grupo Benilda 
had a viable home market with respect to sales of roses during the POI 
and, therefore, we based FMV for Grupo Benilda on home market sales 
where those sales were above the cost of production. For Grupo Andes, 
we based FMV on constructed value (CV).
    We based FMV for Grupo Benilda on two six-month periods. Period one 
is January 1993 through June 1993, and period two is July 1993 through 
December 1993. For a further discussion of these periods, see the 
September 12, 1994, concurrence memorandum.

A. Grupo Andes

    For Grupo Andes, we calculated FMV based on CV, in accordance with 
section 773(e) of the Act. We calculated CV based on Grupo Andes' cost 
of cultivation, plus general expenses, profit and packing in the United 
States. For total general expenses, including selling and financial 
expenses (SG&A), we used the greater of reported general expenses or 
the statutory minimum of ten percent of the cost of cultivation. For CV 
profit, we used the greater of the weighted-average reported profit 
during the POI or statutory minimum of eight percent of the cost of 
cultivation and general expenses, in accordance with 19 CFR 
353.50(a)(2) and section 773(e)(B) of the Act. We adjusted Grupo Andes' 
CV data (1) to correct the export quantity sold to agree to information 
reported in the supplemental section A; and (2) to base selling and 
packing expenses on information provided in the sales response.
    For CV to purchase price comparisons, we made circumstance of sales 
adjustments for direct selling expenses including credit expenses.
    For CV to ESP comparisons, we made deductions, where appropriate, 
for direct selling expenses including credit expenses. We also deducted 
from CV the weighted-average indirect selling expenses, including 
inventory carrying costs up to the amount of indirect selling expenses 
incurred on U.S. sales, in accordance with 19 CFR 353.56(b)(2).

B. Grupo Benilda

    Because we found ``reasonable grounds to believe or suspect'' that 
Grupo Benilda sold roses in Colombia at prices below their COP, we 
initiated a COP investigation to determine whether it had home market 
sales that were made at less than their respective COPs, in accordance 
with section 773(b) of the Act. (See the September 8, 1994, memorandum 
from Richard W. Moreland to Barbara R. Stafford.)
    In accordance with section 773(b) of the Act, we examined whether 
Benilda sold roses below the cost of production in significant 
quantities over an extended period of time. In keeping with our 
practice involving perishable products, if more than 50 percent of 
Grupo Benilda's sales of roses, on a model-specific basis, were at 
prices above the COP, we did not disregard any below-cost sales 
pursuant to section 773(b) of the Act, because we determined that Grupo 
Benilda's below-cost sales were not made in substantial quantities 
within an extended period of time. (See Certain Fresh Winter Vegetables 
From Mexico 45 FR 20512 (1980).) If between 50 and 90 percent of Grupo 
Benilda's sales, on a model-specific basis, were at prices below the 
COP, and the below cost sales were made within an extended period of 
time, we disregarded only the below-cost sales. Where we found that 
more than 90 percent of Grupo Benilda's sales, on a model-specific 
basis, were at prices below the COP, we disregarded all sales and 
calculated FMV based on CV.
    In order to determine whether Grupo Benilda's home market sales 
were above the COP, we calculated COP based on the sum of Grupo 
Benilda's cost of cultivation, general expenses, and packing; we 
calculated CV based on the sum of Grupo Benilda's COP plus profit. For 
total general expenses, including selling and financial expenses, 
(SG&A) we used the greater of reported general expenses or the 
statutory minimum of ten percent of the cost of cultivation. For CV 
profit, we used the greater of the weighted-average reported profit 
during the POI or the statutory minimum of eight percent of the cost of 
cultivation and general expenses, in accordance with 19 CFR 
353.50(a)(2) and section 773(e)(B) of the Act. We adjusted Grupo 
Benilda's COP and CV data to (1) correct an error in the company's 
calculation of average interest expense; (2) include the entire amount 
of the 1993 labor bonus; and (3) disallow the company's exclusion of 
certain G&A expenses.
    In accordance with 19 CFR 353.58, we compared Grupo Benilda's U.S. 
sales to home market sales made at the same level of trade, where 
possible.
    For those home market sales above the cost of production, we based 
FMV on packed, f.o.b. farm prices to unrelated customers.
    For home market price to purchase price comparisons, pursuant to 19 
CFR 353.56(a)(2), we made circumstance-of-sale adjustments, were 
appropriate, for differences in credit expenses.
    For home market price to ESP comparisons, we made deductions for 
the weighted-average home market indirect selling expenses, including, 
where appropriate, inventory carrying costs, up to the amount of the 
greater of either indirect selling expenses incurred on U.S. sales or 
related-party commissions paid on U.S. sales, in accordance with 19 CFR 
353.56(b)(1). We also made deductions, for home market credit expenses. 
For all price-to-price comparisons, we also deducted home market 
packing costs and added U.S. packing costs, in accordance with section 
773(a)(1) of the Act.
    For CV to purchase price comparisons, we made circumstance of sales 
adjustments for credit expenses.
    For CV to ESP comparisons, we made deductions, where appropriate, 
for credit expenses. We also deducted from CV the weighted-average home 
market indirect selling expenses, including inventory carrying costs, 
up to the amount of the greater of either indirect selling expenses 
incurred on U.S. sales or related-party commissions paid on U.S. sales, 
in accordance with 19 CFR 353.56(b)(2).
Currency Conversion
    Because certified exchange rates for Colombia were unavailable from 
the Federal Reserve, we made currency conversions for expenses 
denominated in Colombian pesos based on the official monthly exchange 
rates in effect on the dates of the U.S. sales as certified by the 
International Monetary Fund.
Verification
    As provided in section 776(b) of the Act, we will verify the 
information used in making our final determination.
Suspension of Liquidation
    In accordance with section 733(d)(2) of the Act, the Department 
will direct the U.S. Customs Service to continue to require a cash 
deposit or posting of bond on all entries of subject merchandise from 
Colombia for Grupo Andes, Grupo Benilda and for the all-others rate at 
the newly calculated rate, that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. The suspension of liquidation will 
remain in effect until further notice. The weighted-average dumping 
margins are as follows: 

------------------------------------------------------------------------
                                                                 Margin 
                Manufacturer/Producer/Exporter                   percent
------------------------------------------------------------------------
Grupo Andes...................................................      7.63
Grupo Benilda.................................................      9.89
All Others....................................................     22.73
------------------------------------------------------------------------

ITC Notification
    In accordance with section 733(f) of the Act, we have notified the 
ITC of the amended preliminary determination. If our final 
determination is affirmative, the ITC will determine whether imports of 
the subject merchandise are materially injuring, or threaten material 
injury to, the U.S. industry, before the later of 120 days after the 
date of the original preliminary determination (September 12, 1994) or 
45 days after our final determination.
Public Comment
    As stated in our preliminary determination (59 FR 48284, September 
20, 1994), and pursuant to our notice of postponement of the final 
determination signed September 28, 1994, case briefs or other written 
comments, in at least ten copies, must be submitted to the Assistant 
Secretary for Import Administration no later than December 2, 1994, and 
rebuttal briefs no later than December 9, 1994. In accordance with 19 
CFR 353.38(b), we will hold a public hearing, in accordance with a 
party's request, to give interested parties an opportunity to comment 
on arguments raised in case or rebuttal briefs. Tentatively, the 
hearing will be held on December 13, 1994, at 1:00 p.m. at the U.S. 
Department of Commerce, Room 4830, 14th Street and Constitution Avenue, 
N.W., Washington, D.C. 20230. Parties should confirm by telephone the 
time, date, and place of the hearing 48 hours before the scheduled 
time.
    Interested parties who wish to enter an appearance at the hearing 
must submit a written request to the Assistant Secretary for Import 
Administration, U.S. Department of Commerce, Room B-099, within ten 
days of the publication of this notice in the Federal Register. Request 
should contain: (1) The party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of the issues to be 
discussed. In accordance with 19 CFR 353.38(b), oral presentation will 
be limited to issues raised in the briefs.

    Dated: October 4, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-25220 Filed 10-11-94; 8:45 am]
BILLING CODE 3510-DS-P