[Federal Register Volume 60, Number 186 (Tuesday, September 26, 1995)]
[Notices]
[Pages 49569-49572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23884]



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DEPARTMENT OF COMMERCE
[A-201-601]


Fresh Cut Flowers From Mexico; Final Results of Antidumping Duty 
Administrative Review

agency: Import Administration, International Trade Administration, 
Department of Commerce.

action: Notice of final results of antidumping duty administrative 
review.

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summary: On April 17, 1995, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on certain fresh cut flowers from Mexico. The 
period of review is April 1, 1991 through March 31, 1992.
    We gave interested parties an opportunity to comment on our 
preliminary results. We have not changed our preliminary results of 
review.

effective date: September 26, 1995.

for further information contact: Rebecca Trainor or Maureen Flannery, 
Office of Antidumping Compliance, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

Background

    On April 17, 1995, the Department published in the Federal Register 
(60 FR 19209) the preliminary results of this administrative review of 
the antidumping duty order on certain fresh cut flowers from Mexico (52 
FR 13491, April 23, 1987). The preliminary results indicated the 
existence of dumping margins for three of the respondents in this 
review, Rancho El Aguaje (Aguaje), Rancho Guacatay (Guacatay), and 
Rancho El Toro (Toro), based on the best information available (BIA). 
The fourth respondent, Visaflor S. de P.R. (Visaflor), had no shipments 
to the United States during the period of review.
    Aguaje, Guacatay, Toro, and the petitioner, the Floral Trade 
Council, submitted case and rebuttal briefs. A public hearing was held 
on May 31, 1995. The Department has now completed this administrative 
review in accordance with section 751 of the Tariff Act of 1930, as 
amended (the Act).

Applicable Statutes and Regulations

    Unless otherwise stated, all citations to the statutes and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Scope of the Review

    The products covered by this review are certain fresh cut flowers, 
defined as standard carnations, standard chrysanthemums, and pompon 
chrysanthemums. During the POR, such merchandise was classifiable under 
Harmonized Tariff Schedule of the United States (HTSUS) item numbers 
0603.10.7010 (pompon chrysanthemums), 0603.10.7020 (standard 
chrysanthemums), and 0603.10.7030 (standard carnations). The HTSUS item 
numbers are provided for convenience and Customs purposes only. The 
written description remains dispositive as to the scope of the order.
    This review covers sales of the subject merchandise manufactured by 
Aguaje, Guacatay, Toro, and Visaflor, and entered into the United 
States during 

[[Page 49570]]
the period April 1, 1991, through March 31, 1992.

Best Information Available

    We have determined that Guacatay, Toro and Aguaje are uncooperative 
respondents for the following reasons. In prior administrative reviews, 
the respondents were not required under Mexican law to maintain audited 
financial statements or file tax returns. We accepted their unaudited 
``in-house'' financial statements, because they did not have, and 
therefore could not submit, official corroboration of their internal 
records. See Notice of Final Results of Antidumping Duty Administrative 
Review; Certain Fresh Cut Flowers from Mexico, 56 FR 29621, 59622 (June 
28, 1991). Mexican law governing incme tax reporting changed in 1991, 
however, and the respondents were required to file tax returns covering 
the POR.
    In response to the Department's repeated questions regarding the 
existence of income tax returns covering the POR, the respondents made 
evasive and misleading statements regarding their obligations to file 
tax returns, which significantly impeded this review. Guacatay and Toro 
failed to reconcile their financial statements to their tax returns, 
once submitted, and Aguaje failed to provide sufficient support for its 
claim that it had not filed tax returns covering the POR.

Analysis of the Comments Received

    Comment One: The respondents dispute that their statements 
regarding their obligations to file tax returns were inconsistent, and 
that the data they submitted were unusable. They claim that recent 
changes in Mexican tax law, the unclear wording of the Department's 
supplemental questionnaire, and the Department's misunderstanding of 
their responses were the causes of any seemingly inconsistent 
statements regarding their tax filing obligations.
    Guacatay and Toro claim that they failed to promptly provide the 
reconciliations between tax records and financial statements because 
they misunderstood the Department's usage of the term 
``reconciliation''. They state that, once they properly understood the 
Department's request, they attempted to submit the information, but the 
Department refused to accept it .
    Guacatay and Toro also maintain that the documentation pertaining 
to U.S. sales quantities and values can be independently substantiated 
by growers' reports, which the respondents have placed on the record. 
They suggest that the Department apply partial BIA to production costs, 
the only information, they state, for which there is no independent 
substantiation on the record.
    The petitioner believes that Guacatay and Toro's argument that they 
misunderstood the Department's request for reconciliations is 
disingenuous, since the Department often requires respondents to 
provide such worksheets. The petitioner observes that both respondents 
participated in a prior administrative review, and had retained 
experienced legal counsel throughout this review. Finally, the 
petitioner claims that Guacatay and Toro admitted that their responses 
do not reconcile to their tax documents, and therefore, the submitted 
data are unreliable, and unusable.
    The Department's Position: We disagree with the respondents. The 
supplemental questionnaire was clear, and our request for a 
reconciliation between tax returns and financial statements was not 
unusual. Whenever a respondent does not understand the Department's 
questions or directions, it is the responsibility of the respondent to 
ask the Department for clarification. None of the respondents requested 
such a clarification.
    Guacatay's and Toro's offers to provide the requested 
reconciliations came several months after they had submitted their last 
supplemental questionnaire responses in which they stated that they 
could not perform the reconciliations. Further, the respondents made 
this offer during the verification of the 1992-1993 review period. As 
each administrative review is a separate proceeding, the Department 
could not accept this new factual information while conducting a 
verification associated with a different administrative review.
    We also disagree that the sales volume and value portions of 
Guacatay's and Toro's questionnaire responses can be independently 
substantiated with documents on the record of this review. In prior 
administrative reviews, the Department did not require the level of 
independent substantiation as it does in this review, because none 
existed. In the absence of audited financial statements in this review, 
we required that the respondents submit their tax returns as a way to 
independently substantiate their questionnaire responses. Sales and 
cost information is presented differently in these two documents. Thus, 
an explanation of how the figures on the tax returns reconcile with the 
ranches' financial statements is also required. Without this 
explanation, the Department cannot use the tax returns to independently 
substantiate the reported sales and costs; without such independent 
substantiation, the entire questionnaire responses are unusable.
    Comment Two: Guacatay, Toro and Aguaje claim that the Department 
unfairly characterized them as uncooperative respondents in the 
preliminary results of review. The respondents state that they have 
cooperated fully, submitting multiple questionnaire responses, in spite 
of their limited resources and small size.
    Guacatay and Toro argue that even if BIA were warranted, they 
should not be characterized as uncooperative. They assert that in past 
cases, the Department has limited the designation of uncooperative 
respondents to cases of major non-compliance or where there is evidence 
of systematic misreporting. Further, pursuant to Allied-Signal 
Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 1993), they 
argue, it is improper for the Department to designate as uncooperative 
a respondent who has tried in good faith to comply with the 
Department's requests for information.
    Citing Olympic Adhesives, Inc. v. United States, 899 F.2d 1565 
(Fed. Cir. 1990), Aguaje argues that the Department has no legal 
grounds to use BIA in response to a respondent's inability to provide 
information that does not exist. Further, Aguaje asserts that the 
Department has no authority to penalize a foreign exporter for a 
perceived failure to comply with a foreign law.
    The petitioner believes that the Department was correct in 
rejecting the questionnaire responses, and that the Department is 
compelled to resort to uncooperative BIA. The petitioner argues that 
the respondents' size and resources should not be a consideration, 
since their eventual offers to provide the requested information 
indicate that they were in fact able to provide it in the form 
requested and in a timely manner.
    The petitioner also claims that the respondents substantially 
impeded the review and limited the Department's access to certain data 
by dodging repeated requests for information as to the existence of 
source documents and making inconsistent statements regarding their 
obligation to file tax returns. Finally, the petitioner argues that the 
respondents' contradictory statements undermine the credibility of 
their entire responses, and their evasiveness overshadows all other 
attempts at cooperation.
    The Department's Position: We disagree with the respondents that 
they have fully cooperated with our requests for information in this 
review, and that our use of uncooperative BIA is unjustified. The 
respondents' answers to 

[[Page 49571]]
the Department's supplemental questionnaires were evasive and 
misleading, and significantly impeded the progress of the review.
    As stated above, we disagree that the respondents tried in good 
faith to comply with the Department's requests for information. It was 
not until the Department had issued its third supplemental 
questionnaire addressing this issue, specifically requesting the tax 
returns required under Mexican law, that the respondents revealed their 
true tax status. While Guacatay and Toro finally provided tax returns, 
the documents were illegible, untranslated, and were not accompanied by 
the requested reconciliation worksheets.
    With regard to Aguaje, at issue in this review is whether it had 
provided, within the time limits set out in 19 CFR 353.31(a)(2), 
sufficient evidence demonstrating that it did not file tax returns. The 
correspondence Aguaje finally submitted in response to the Department's 
third supplemental questionnaire concerning this issue, did not support 
the ranch's statement that no tax returns had been filed.
    Therefore, we maintain our position that Guacatay, Toro, and Aguaje 
were uncooperative, and have applied total BIA to their U.S. sales.
    Comment Three: The three respondents argue that the Department 
should take into consideration information on the administrative 
records of the prior and subsequent reviews for the final results of 
this review, because this information will attest to the reliability of 
the data they have submitted for this review. Aguaje states that the 
Department has the authority to review public documents, and documents 
submitted in related proceedings in deciding the issues before it.
    The petitioner disagrees that the Department may incorporate 
documents from other reviews into the record of this review after the 
deadline for the submission of factual information has expired. The 
petitioner also states that the Department's regulations regarding the 
requirements for verification preclude it from relying on past 
verifications to corroborate the reliability of the respondents' data 
in this review.
    The Department's Position: We disagree with the respondents. The 
timeframe for submitting new factual information is clearly stated in 
section 19 C.F.R. 353.31(b)(2) of the Department's regulations. The 
information to which the respondents refer was not placed on the record 
of this review within the prescribed time limits. To accept new 
information at this point in the proceeding would be inconsistent with 
the Department's regulations.
    Comment Four: The petitioner contends that the Department's choice 
of a BIA rate of 39.95 percent was unnecessarily generous. Because 
respondents are presumed to be aware of the highest rate at the time of 
filing, petitioner claims the rate should be 264.43 percent, a rate 
deemed aberrational by the Department in its preliminary results.
    The respondents argue that the highest rate is not probative of 
current market conditions, and reflects business conditions 
uncharacteristic of the companies subject to this review.
    The Department's Position: We agree with the respondents. For the 
final results of the 1989-1990 review, the Department assigned the 
second highest rate in any prior review or the LTFV investigation, 
because we found that the highest rate of 264.43 percent was 
inappropriate to use as BIA,

    Given the enormous disparity between the verified rate for 
Florex in this review and the verified rates for other companies in 
this review, prior reviews, and the original investigation, and 
Florex's extraordinarily high business expenses during this review 
period resulting from investment activities which are 
uncharacteristic of other companies subject to this review * * *''

    Notice of Final Results of Antidumping Duty Administrative Review; 
Certain Fresh Cut Flowers from Mexico, 56 FR 29621, 29623 (June 28, 
1991). Since these conditions are also applicable to this review, the 
rate of 264.43 percent remains aberrational. See Floral Trade Council 
v. United States, 799 F. Supp 116, 119-20 (CIT 1992).
    Comment Five: The petitioner requests that the Department identify 
record evidence leading to its finding that Visaflor made no shipments 
to the United States during the POR. The petitioner argues that, given 
Visaflor's past record of non-coorperation in reviews, the Department 
should not accept Visaflor's certification without verification. 
According to the petitioner, without such verification, the Department 
should assign Visaflor a margin based on best information of 29.40 
percent, the margin calculated for Visaflor in the 1989-1990 review.
    The Department's Position: To determine whether Visaflor made any 
shipments to the United States during the POR, the Department followed 
its standard practice of issuing an electronic mail message to all 
Customs Service field personnel, requesting notification if the subject 
merchandise exported by Visaflor entered the United States during the 
POR. The Department does not require negative responses to these 
messages. Because we received no affirmative responses from Customs 
field personnel, we concluded that Visaflor made no shipments to the 
United States during the POR.

Final Results

    We determine that the following dumping margins exist for the 
period April 1, 1991, through March 31, 1992:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Rancho el Aguaje.............................................      39.95
Rancho Guacatay..............................................      39.95
Rancho el Toro...............................................      39.95
Visaflor.....................................................      (\1\)
------------------------------------------------------------------------
\1\ No shipments during the POR. Rate is from the last review in which  
  Visaflor had shipments.                                               

    The following deposit requirements shall be effective for all 
shipments of the subject merchandise that are entered, or withdrawn 
from warehouse for consumption, on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rates for the reviewed 
companies shall be the above rates; (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 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the original LTFV investigation, but the manufacturer 
is, the cash deposit rate shall be the rate established for the most 
recent period 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, the cash deposit rate will be 18.28 percent, the 
all others rate established in the LTFV investigation.
    These deposit requirements, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a reminder to importers of their 
responsibility under 19 C.F.R 353.26 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 the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their 

[[Page 49572]]
responsibility concerning the disposition of proprietary information 
disclosed under APO in accordance with 19 C.F.R. 353.34(d) or 
355.34(d). Timely written notification of return/destruction of APO 
materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 
of the Department's regulations.

    Dated: September 15, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-23884 Filed 9-25-95; 8:45 am]
BILLING CODE 3510-DS-M