[Federal Register Volume 62, Number 96 (Monday, May 19, 1997)]
[Notices]
[Pages 27219-27221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13058]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-201-601]


Certain 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 January 9, 1997, 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 review covers one manufacturer/exporter and the period 
April 1, 1995 through March 31, 1996.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments received, we 
have not changed the results from those presented in the preliminary 
results of this review.

EFFECTIVE DATE: May 19, 1997.

FOR FURTHER INFORMATION CONTACT: G. Leon McNeill or Maureen Flannery, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-4733.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

SUPPLEMENTARY INFORMATION:

Background

    On January 9, 1997, the Department published in the Federal 
Register (62 FR 1318) the preliminary results of its administrative 
review of the antidumping duty order on fresh cut flowers from Mexico, 
52 FR 13491 (April 23, 1987). The Department has now completed this 
administrative review in accordance with section 751 of the Act.

Scope of Review

    The products covered by this review are certain fresh cut flowers, 
defined as standard carnations, standard chrysanthemums, and pompon 
chrysanthemums. During the period of review, such merchandise was 
classifiable under Harmonized Tariff Schedule of the United States 
(HTSUS) items 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 U.S. Customs 
(Customs) purposes only. The written description of the scope of the 
order remains dispositive.
    This review covers one manufacturer/exporter of fresh cut flowers 
from Mexico, Rancho Del Pacifico (Pacifico), and the period April 1, 
1995 through March 31, 1996.

Duty Absorption

    As part of this review, we are considering, in accordance with 
section 751(a)(4) of the Act, whether Pacifico absorbed antidumping 
duties. See the preliminary results of this review. For these final 
results of review, we determine that there is no dumping margin on any 
of Pacifico's sales during the period of review and, therefore, find 
that antidumping duties have not been absorbed by Pacifico on its U.S. 
sales.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received a case brief from the 
petitioner, The Floral Trade Council.
    Comment 1: Petitioner argues that the Department should revise its 
cash deposit instructions to Customs from those issued in prior 
reviews. Petitioner suggests that, in order to discourage circumvention 
of the antidumping duty

[[Page 27220]]

order, the Department instruct Customs to collect cash deposits at the 
higher of the grower or exporter's rate or, if the exporter has sourced 
through multiple growers, at the highest of the growers' or exporter's 
rate. Where the grower is unknown, petitioner contends, the Department 
should collect cash deposits at the highest rate. In addition, 
petitioner asserts that the Department should publish the exact 
language of its cash deposit instructions in its determinations so that 
interested parties would have an opportunity to comment on those 
instructions.
    Petitioner notes that, for the 1993/1994 administrative review--the 
most recently completed administrative review involving Pacifico--the 
Department issued the following cash deposit instructions to Customs 
that were not included in its published determination:

    If any entries of this merchandise are exported by a firm other 
than the manufacturer then the following instructions apply: (A) If 
the exporter of the subject merchandise has its own rate, use the 
exporter's rate for determining the cash deposit rate; (B) If the 
exporter of the subject merchandise does not have its own rate, but 
the manufacturer has its own rate, the cash deposit rate will be the 
manufacturer's rate; (C) Where neither the exporter nor the 
manufacturer currently has its own rate, or the manufacturer is 
unknown, use the ``all others'' rate for establishing the cash 
deposit rate.

(Petitioner cites to the Cash Deposit Instructions dated September 12, 
1996, and Certain Fresh Cut Flowers from Mexico; Final Results of 
Antidumping Duty Administrative Review, 61 FR 40604 (August 5, 1996).)
    Petitioner contends that part A of the cash deposit instructions 
does not account for the situation in which both producer and exporter 
have their own rates. Petitioner argues that the name of an exporter 
stated in part A could merely be the name of a flower grower subject to 
an antidumping duty rate of zero percent who has exported the flowers 
of another grower that has a much higher rate.
    Petitioner argues that the Department's current cash deposit 
instructions undermine the remedial purpose of the statute, which is to 
remedy dumping through the application of antidumping duties. 
Petitioner contends that, for that reason, the Department has refused 
to allow exporters that are excluded from an antidumping duty order to 
export merchandise produced by companies subject to that order. As 
support for its argument, petitioner cites Jia Farn Manufacturing Co., 
Ltd. v. United States, 817 F. Supp. 969 (CIT 1993), where, petitioner 
asserts, the Department indicated that a company originally excluded 
from an antidumping duty order would immediately be subject to a cash 
deposit if it exports merchandise produced by another company subject 
to the order. Petitioner further cites Certain Fresh Cut Flowers from 
Colombia; Final Results of Administrative Review and Notice of 
Revocation of Order (in Part), 59 FR 15159, 15167 (March 1, 1994), 
where, petitioner notes, the Department states that evidence that 
revoked companies are serving as conduits for other Colombian flower 
growers would call for appropriate action, which could include 
reinstatement of the order and referral to the Customs fraud division.
    Petitioner notes that part C of the cash deposit instructions 
directs Customs to use the ``all others'' rate in cases in which the 
producers or exporters of the merchandise are unknown. Petitioner 
maintains that selection of the ``all others'' rate for unknown 
producers is a clear invitation for a producer with higher dumping 
margins to route merchandise through growers/exporters that do not have 
company-specific rates. Petitioner also maintains that the Department's 
instructions contradict Customs' prior practice of assigning the 
highest rate whenever entry documentation did not provide the name of 
grower. In addition, petitioner asserts that Customs has explained that 
both producer and exporter should be identified on entry documentation, 
filed electronically and physically, in order to properly collect 
estimated antidumping duty deposits.
    Department's Position: We disagree with the petitioner. Part A of 
the Department's standard cash deposit instructions does allow for the 
situation in which both producer and exporter have their own rates; in 
this situation, the exporter's rate is used as the cash deposit rate. 
This is because the exporter, who sets the price for the sale to the 
United States, is the potential price discriminator. The exporter's 
sales--in this case, Pacifico's sales--form the basis of the margin 
calculation; therefore, it is appropriate that cash deposits be 
collected at that margin on an exporter-specific basis. If we receive 
any evidence that Pacifico is serving as a conduit for other Mexican 
flower growers, i.e., that Pacifico is exporting merchandise produced 
and sold for export to the United States on behalf of other growers, we 
will consider this a case of potential evasion of the antidumping duty 
order and will take appropriate action. We will also take appropriate 
action if we receive evidence that an exporter without a company-
specific margin is serving as a conduit for a grower/exporter which has 
a higher, company-specific margin. See, e.g., Sebacic Acid from the 
People's Republic of China; Final Results of Antidumping Duty 
Administrative Review, 62 FR 10532 (March 7, 1997).
    It has been the Department's longstanding practice not to 
incorporate in Federal Register notices a verbatim copy of the cash 
deposit instructions that it transmits to Customs. However, it is our 
practice to include in the Federal Register a summary of our planned 
instructions, as we did in the preliminary results of this review. 
Furthermore, we note that it is evident from this summary that deposits 
are to be collected on the basis of the exporter's rate, rather than 
the producer's rate, when the exporter has a rate. Interested parties 
have an opportunity to comment on that summary of instructions. We find 
no reason to change our current practice.
    Comment 2: Petitioner contends that, for purposes of calculating 
constructed export price profit, the Department should reallocate 
Pacifico's costs on the basis of relative cultivation area rather than 
on bunches of flowers produced per month. Petitioner argues that 
Pacifico's methodology allocates an equal amount of costs on the basis 
of quantity produced without taking into consideration that certain 
flower varieties are more expensive to grow. For example, petitioner 
maintains, Pacifico's methodology would allocate the same costs to both 
what would appear to be field crops and greenhouse crops.
    Petitioner maintains that cultivation area, not bunches produced, 
is the method commonly used to allocate flower costs. As support for 
its argument, petitioner cites Floral Trade Council v. United States, 
822 F. Supp. 766, 772 (Floral Trade); Certain Fresh Cut Flowers from 
Mexico; Final Results of Antidumping Duty Administrative Review, 57 FR 
19597, 19599 (May 7, 1992); and Fresh Cut Roses from Colombia; Final 
Determination of Sales At Less Than Fair Value, and Notice of 
Revocation of Order (in Part), 60 FR 6980, 7010, 7012 (February 6, 
1995) (Colombian Flowers). Petitioner argues that the statute and the 
Statement of Administrative Action (SAA) instruct the Department to 
consider whether a respondent has historically used an allocation 
methodology in determining whether a cost allocation methodology is 
acceptable, citing 19 U.S.C. 1677(F)(1)A and the SAA at 835.
    Petitioner suggests that the Department should require Pacifico to

[[Page 27221]]

explain whether it maintains product-specific cost data such as the 
``rose plant'' cost data already reported in its questionnaire 
response. Petitioner maintains that, unless the respondent uses bunches 
produced in its ordinary books and records to allocate costs, the 
Department should require Pacifico to report its costs based on 
cultivation area.
    Department's Position: We disagree with petitioner that Pacifico's 
costs should be reallocated on the basis of cultivation area. The Court 
of International Trade in Floral Trade states that ``allocation is * * 
* an inexact science, and is simply a way to estimate the costs 
incurred by the firm to manufacture the product, complete the process, 
or deliver the service,'' and that ``allocation methods vary even among 
firms in the same industry.'' Floral Trade Council v. U.S., 822 F.Supp. 
766, 772 (CIT 1993). The final review results for Mexican flowers cited 
by petitioner only indicate that in that instance we found the grower's 
use of cultivation area to be an acceptable allocation basis for 
certain costs (61 FR 40604). This does not stand for the proposition 
that relative area is the correct method of allocating growing costs.
    In the instant proceeding, we find no evidence that Pacifico used 
cultivation area as a basis of allocation in its books and records, or 
that flowers produced by Pacifico are field crops. Furthermore, the 
record does not support petitioner's claim that Pacifico's production 
cost allocation methodology distorts costs. See Colombian Flowers at 
7010, where the Department made a similar determination. Therefore, for 
these final results, we have accepted Pacifico's methodology of 
allocating costs because Pacifico's allocation is reasonable and there 
is no evidence that it distorts Pacifico's costs.

Final Results of review

    As a result of our review, we have determined that the following 
weighted-average margin exists:

------------------------------------------------------------------------
                                                                Margin  
           Manufacturer/exporter            Period of review   (percent)
------------------------------------------------------------------------
Rancho Del Pacifico.......................    4/1/95-3/31/96        0.00
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Upon completion 
of this review, the Department will issue appraisement instructions 
directly to the Customs Service.
    Furthermore, 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 these final results, as provided by section 751(a)(1) of the 
Act: (1) the cash deposit rate for the reviewed company shall be the 
above rate; (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 
less-than-fair-value (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 18.20 percent, the all others 
rate established in the LTFV investigation (52 FR 6361, March 3, 1987).
    These deposit rates shall remain in effect until publication of the 
final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 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.

Notification to Interested Parties

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(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 19 CFR 353.22.

    Dated: May 9, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-13058 Filed 5-16-97; 8:45 am]
BILLING CODE 3510-DS-P