[Federal Register Volume 62, Number 198 (Tuesday, October 14, 1997)]
[Notices]
[Pages 53287-53306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27141]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-301-602]
Certain Fresh Cut Flowers From Colombia; Final Results and
Partial Rescission of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results and partial rescission of antidumping
duty administrative review.
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SUMMARY: On April 8, 1997, the Department of Commerce (the Department)
published the preliminary results of the ninth administrative
[[Page 53288]]
review of the antidumping (AD) duty order on certain fresh cut flowers
from Colombia. This review covers a total of 351 producers and/or
exporters of fresh cut flowers to the United States during the period
March 1, 1995 through February 29, 1996.
We gave interested parties an opportunity to comment on the
preliminary results. Based on our analysis of the comments received, we
have made certain changes for the final results. The review indicates
the existence of dumping margins for certain firms during the review
period.
EFFECTIVE DATE: October 14, 1997.
FOR FURTHER INFORMATION CONTACT: Elizabeth Graham or Roy Malmrose,
Office 1, Group 1, AD/CVD Enforcement, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone
(202) 482-4105 and (202) 482-5414, respectively.
APPLICABLE STATUTE AND REGULATIONS: The Department is conducting this
administrative review in accordance with section 751 of the Tariff Act
of 1930, as amended (the Act). 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 Act
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to those codified at 19 C.F.R. Part 353 (April 1997).
SUPPLEMENTARY INFORMATION:
Background
On April 8, 1997, we published a notice of Preliminary Results and
Partial Rescission of Antidumping Duty Administrative Review
(Preliminary Results), wherein we invited interested parties to
comment. See 62 FR 16772 (April 8, 1997). At the request of interested
parties, we held a public hearing on June 6, 1997.
Scope of Review
Imports covered by these reviews are shipments of certain fresh cut
flowers from Colombia (standard carnations, miniature (spray)
carnations, standard chrysanthemums and pompon chrysanthemums). These
products are currently classifiable under item numbers 0603.10.30.00,
0603.10.70.10, 0603.10.70.20, and 0603.10.70.30 of the Harmonized
Tariff Schedule (HTS). The HTS item numbers are provided for
convenience and Customs purposes. The written description of the scope
of this order remains dispositive.
Rescission
At the time of our Preliminary Results, we had received responses
from 63 firms indicating that they did not ship during the period of
review (POR). As a check on this information, we requested and received
from the U.S. Customs service a listing of all companies which shipped
subject merchandise to the United States during the POR. Customs'
listing confirmed 40 of the companies' claims that they had no
shipments during the POR and the Department verified that one company
did not export subject merchandise. For the remaining 22 that claimed
no shipments, but whose names appeared on Customs' list, we determined
that those companies failed to cooperate to the best of their ability
and assigned them an adverse facts available (AFA) rate.
Subsequent to the Preliminary Results, we received information
about those 22 companies. We examined documentation for each firm and
found that the entries reported by Customs for 21 of these firms
resulted from either a mistaken listing of the respondent firm as the
producer or an incorrect listing of the flower type and HTS number.
Therefore, we have determined that these companies did not ship the
subject merchandise during the POR. For a complete list of these
companies, see section entitled ``Non-Shippers'' in this notice. (The
remaining company is discussed below.)
Consistent with our administrative practice, we have rescinded our
review of the 62 companies with no shipments during the POR. See
Certain Cased Pencils from the People's Republic of China; Preliminary
Results and Partial Rescission of Antidumping Duty Administrative
Review, 62 FR 1734 (January 13,1997) (rescinding review in part with
respect to respondents which, the Department determined, had no
shipments of the subject merchandise during the POR); see also, 19 CFR
351.213(d)(3) (62 FR 27296 (May 19, 1997)) (although this review is not
governed by these new regulations, they do reflect current practice).
Regarding the remaining company, Flores Tiba, Customs' data
indicated five entries of subject merchandise exported by Flores Tiba
during the POR. On June 5 and July 21, 1997, Flores Tiba submitted
information demonstrating that while portions of Customs data were
incorrect, Flores Tiba did have one entry of subject merchandise during
the POR. Flores Tiba explained that the company does not produce or
export subject merchandise in its normal course of business; the sale
in question was a special order of a negligible quantity. For this
reason, the sale had been overlooked.
Flores Tiba's submissions notwithstanding, the Department lacks the
necessary information to calculate a margin for Flores Tiba's entry
during the POR. Therefore, in accordance with section 776(a) of the
Act, the Department has resorted to the use of facts available (FA) for
Flores Tiba. However, upon consideration of Flores Tiba's explanation
for the oversight, we have determined that an adverse inference is not
warranted. Given that Flores Tiba does not normally produce or export
the subject merchandise, it is not unreasonable that a small sale such
as this would be overlooked. Moreover, the error was discovered too
late to allow respondent sufficient time to correct the deficiency
(i.e., to submit the information which would allow us to calculate a
margin). Therefore, as FA, we have assigned Flores Tiba the non-
selected respondent rate of 2.26 percent.
Duty Absorption
On March 29, 1996, petitioner, the Floral Trade Council (FTC),
requested that the Department determine whether AD duties had been
absorbed by respondents during the POR. Section 751(a)(4) of the Act
provides for the Department, if requested, to determine, during an
administrative review initiated two or four years after publication of
the order, whether AD duties have been absorbed by a foreign producer
or exporter subject to the order, if the subject merchandise is sold in
the United States through an importer which is affiliated with such
foreign producer or exporter. The statute requires the Department to
notify the International Trade Commission of its findings regarding
duty absorption for consideration in conducting a five-year ``sunset''
review (to determine whether revocation of the order would be likely to
lead to continuation or recurrence of dumping and of material injury).
Section 751(a)(4) was added to the Act by the URAA. The regulations
governing this review do not address this provision of the Act.
For ``transition orders,'' as defined in section 751(c)(6)(C) of
the Act, i.e., orders in effect as of January 1, 1995, section
351.213(j)(2) of the Department's recently enacted regulations provides
that the Department will make a duty absorption determination, if
requested, for any administrative review initiated in 1996 or 1998. See
62 FR 27296 (May 19, 1997). The preamble issued when these regulations
were proposed in 1996
[[Page 53289]]
explains that reviews initiated in 1996 will be considered initiated in
the second year and reviews initiated in 1998 will be considered
initiated in the fourth year. See 61 FR at 7308, 7317 (February 27,
1996). Although these recently enacted regulations are not binding upon
the Department, they do constitute a public statement of how the
Department expects to proceed in construing section 751(a)(4) of the
amended statute. This approach ensures that interested parties will
have the opportunity to request a duty absorption determination prior
to the time for sunset review of transition orders under section
751(c). Because the order on certain fresh cut flowers from Colombia
has been in effect since 1986, this is a transition order.
Consequently, based on the policy stated above, it is appropriate for
the Department to examine duty absorption in this ninth review, which
was initiated in 1996.
In accordance with the statute, at section 751(a)(4), the
Department must determine whether duty absorption has occurred if the
subject merchandise is sold in the United States through an importer
affiliated with the foreign producer or exporter. Of the selected
respondents, the following have affiliated importers: The Agrodex Group
(Agrodex), the Caicedo Group (Caicedo), the Claveles Colombianos Group
(Clavecol), the Cultivos Miramonte Group (Miramonte), the Floraterra
Group (Floraterra), the Florex Group (Florex), the Guacatay Group
(Guacatay), the HOSA Group (HOSA), the Maxima Farms Group (Maxima), the
Queen's Flowers Group (Queen's) and the Tuchany Group (Tuchany).
Furthermore, we have determined that there are dumping margins for the
following companies with respect to the percentages of their U.S. sales
(by quantity) indicated below:
------------------------------------------------------------------------
Percentage of
U.S.
Name of company affiliated
importer sales
with margins
------------------------------------------------------------------------
Agrodex................................................. 1.11
Caicedo................................................. 100
Clavecol................................................ 9.13
Floraterra.............................................. 33.40
Florex.................................................. 8.85
Guacatay................................................ 15.20
HOSA.................................................... 15.88
Maxima.................................................. 34.98
Miramonte............................................... 17.53
Queens.................................................. 9.90
Tuchany................................................. 22.33
------------------------------------------------------------------------
In the case of Caicedo, we are unable to calculate a margin based
on its response and have, therefore, determined its dumping margin
entirely on the basis of AFA. We also have determined, based on AFA,
that there are margins on all sales. Lacking other information, we find
duty absorption on all sales. See, e.g., Antifriction Bearings (other
than Tapered Roller Bearings) and Parts Thereof from France, Germany,
Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom;
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 62 FR 31566, 31568 (June
10, 1997). With respect to those companies whose margins are not
determined based on FA, we presume that the duties will be absorbed for
those sales which were dumped, unless there is evidence (e.g., an
agreement between the affiliated importer and the unaffiliated
purchaser) that the unaffiliated purchasers in the United States will
pay the full duty ultimately assessed on the subject merchandise.
Although in this case certain companies have provided invoices which
separately list an amount for estimated AD duties which they are
charging their unaffiliated purchasers, this is not evidence of payment
of antidumping duties by the customer, and none of these companies has
presented evidence of agreements with unaffiliated purchasers to pay
ultimately assessed AD duties. Therefore, we find that the AD duties
have been absorbed by the above-listed firms on the percentage of U.S.
sales indicated. See 62 FR 31568.
Analysis of Comments Received
We invited interested parties to comment on our preliminary results
and partial rescission of the order. We received case and rebuttal
briefs from the FTC, the Asociacion Colombiana de Exportadores de
Flores (Asocolflores), an association of Colombian flower producers
representing many of the respondents in this case, and HOSA and
Caicedo.
General Issues
Comment 1: Asocolflores argues that the Department's decision to
limit the review to the largest exporters and then apply to non-
selected respondents the weighted-average margin of these selected
respondents violates due process and the AD statute. Asocolflores
contends that the 13 largest producers are not a statistically valid
sample and thus their average rate is not representative for the non-
selected respondents. It adds that the Department has no right to
disregard questionnaire responses received from non-selected
respondents.
The FTC disagrees contending that the statute gives the Department
exclusive authority to assign margins based on a sample of the largest
exporters. The FTC also notes that the Department disclosed to all
parties the alternatives and considered comments before deciding on
this methodology.
DOC Position: We agree with the FTC. According to the statute and
SAA, the authority to select respondents, whether using samples or
choosing the largest exporters, rests exclusively with the Department.
See section 777A(a-c) of the Act and SAA at 202. Given the large number
of respondents in this case and the new statutory deadlines, the
Department concluded that limiting the number of exporters examined was
administratively necessary. The Department requested comments on two
proposed options for limiting the number of companies to be examined.
After analyzing those comments from the interested parties, we chose to
limit the number of companies examined by reviewing the largest
exporters. See Memorandum for Barbara Stafford from Team dated November
21, 1996. With respect to not examining the responses received from
non-selected respondents, the statute does not require that we look at
every questionnaire response placed on the record. See Notice of Final
Determination of Sales at Less Than Fair Value: Bicycles From the
People's Republic of China, 61 FR 19036 (April 30, 1996).
Finally, with regard to applying the weighted-average margin of
selected respondents to the non-selected respondents, section
777A(c)(2) of the Act provides the Department with the authority to
determine margins by limiting its examination to a statistically valid
sample of exporters or the largest volume of the subject merchandise
that can be reasonably examined. This subparagraph is formulated as an
exception to the general rule that each company for which a review is
requested will be individually examined and receive a calculated
margin. The method for establishing the rate for the non-selected
respondents is left to the agency's discretion. As discussed in comment
2, the weighted-average of the calculated rates is a reasonable method.
Comment 2: Asocolflores states that the Department properly
excluded the one rate based entirely on AFA in calculating the rate
applied to non-selected responding companies. However, citing Serampore
Indus. Pvt. Ltd. v. United States (696 F. Supp. 665, 669 (CIT 1988))
and Romer v. Evans, 116 S. Ct. 1620, 1627 (1996), Asocolflores contends
that there is no legal basis for the Department's exclusion of zero and
de minimis margins from the margin applied to non-selected respondent
companies.
[[Page 53290]]
Asocolflores claims that due process would be violated if only selected
respondents benefitted from zero or de minimis margins. If some of the
respondents selected by the Department show zero or de minimis margins,
Asocolflores states, it is reasonable to assume that some of the non-
selected respondents also would have received the same had they been
individually reviewed. Asocolflores reminds the Department that the
purpose in limiting the review to only 13 selected respondents was to
use their rates to project the rates of the non-selected respondents.
Acknowledging that the AD statute provides for the exclusion of zero
and de minimis margins in calculating the cash deposit rate for non-
examined producers in an investigation, Asocolflores differentiates
this situation from the final results of an administrative review which
give rise to actual duty payments (as opposed to cash deposit rates).
Asocolflores emphasizes that, because the Department decided to limit
the number of respondents, all exporters and importers do not have the
ability to obtain their own assessment rates as they normally would in
an administrative review.
The FTC objects to the position advanced by Asocolflores, stating
that there is no valid basis for excluding margins based on AFA on one
hand while including de minimis margins on the other. On the contrary,
the FTC argues that the Department should include margins based on AFA
in the rate applied to non-selected responding companies since it is
likely that some non-selected respondents would have failed to qualify
for their own calculated rate due to failed verifications, failure to
submit responses, etc. The FTC cites the Court of International Trade
(CIT) in Floral Trade Council v. United States (16 CIT 654, 657, 799 F.
Supp. 116, 119 (1992)) where it said, ``this court has approved `all
other' rates based on an average that includes BIA rates'' and later
where it says ``[n]ot all BIA rates are inappropriate for use in
calculating unified `all other' rates'' (Id. At 658, 799 F. Supp. at
120).
DOC Position: We have continued to calculate the cash deposit rate
for non-selected respondents by excluding both AFA and zero/de minimis
rates. While there may be situations when it would be appropriate to
include AFA or zero/de minimis rates in the rate to be applied to
companies whose entries are not individually examined, there is no
over-arching rule as to their inclusion or exclusion. With respect to
the precedents cited by the FTC and Asocolflores, the situation here
differs in that we have, for the first time, restricted a review to the
largest exporters.
Underlying the arguments of both the FTC and Asocolflores is the
notion that the selected respondents are somehow representative of the
whole group of potential producers/exporters. As in investigations,
where only the largest producers/exporters are selected, those selected
here cannot necessarily be said to be representative of the whole
population. Therefore, we cannot treat the selected companies as a
statistical sample and compute a margin that is based on the results
for all of the selected companies. As for Asocolflores' concerns that
due process would be denied to non-selected respondents should we not
include zero/de minimis margins, we disagree. Once the Department
decides to limit its review to certain producers/exporters, including
zero/de minimis rates while excluding AFA rates would yield an
unbalanced result because, as the FTC points out, some non-selected
firms might also have received AFA.
As stated above, this is the first time in a review of this or any
order that we have examined only the largest producers/exporters. In
deciding how to calculate the rate to apply to non-selected companies
that responded to our questionnaire, we reviewed our past practice and
determined that the most analogous situation we have dealt with in the
past is in non-market economy (NME) investigations where the number of
companies that submit full responses is too large to be investigated.
In those investigations, as in the present case, what we did paralleled
the statutorily mandated formula for calculating the all-others rate,
i.e., the weighted-average rate of investigated companies not including
AFA and zero/de minimis rates.
Comment 3: Asocolflores and other respondents allege that the
Department erred in assigning an ``all others'' rate of 3.53 percent
from the Final Determination of Sales at Less Than Fair Value: Certain
Fresh Cut Flowers from Colombia, 52 FR 6842 (March 5, 1987) (Flowers
(LTFV)) to the companies that were unlocatable in this review rather
than an ``all others'' cash deposit rate of 3.1 percent from the
Amendment to Final Determination of Sales at Less Than Fair Value in
Accordance with Court Decision, 56 FR 12508 (March 26, 1991).
DOC Position: We agree with Asocolflores that the correct ``all
others'' cash deposit rate from Flowers (LTFV) is 3.1 percent and
should be assigned to the unlocatable companies in this review.
Comment 4: Both Asocolflores and the FTC acknowledge that the
Department should develop a mechanism which allows respondents to
preserve their eligibility for revocation. However, the FTC argues that
such eligibility should be limited to those companies that are selected
for review and have two years of no dumping. According to the FTC, this
option comports most closely with the AD law by providing for the
revocation of orders only for companies that have been subjected to
actual reviews. Asocolflores opposes this option because it limits
revocation eligibility to the largest exporters (assuming the
Department continues to review only the largest exporters).
Asocolflores claims there is no basis for denying revocation
eligibility to smaller producers.
Asocolflores favors the approach whereby companies would be allowed
to make a retrospective claim that they have not dumped for the past
three years in the form of a ``changed circumstances'' review in the
eleventh period (i.e., the first review period in which revocations
could be possible under this order). Asocolflores argues that this
approach conserves the administrative resources of the Department,
reduces the verification burden, and is easier to administer. Moreover,
Asocolflores suggests that, under the new regulations, a retrospective
revocation review in the eleventh POR could be limited to an
examination of data for only the ninth and eleventh periods, further
reducing the administrative burden and simplifying verification.
The FTC concedes that the ``changed circumstances'' approach is the
most efficient and states that if the Department chooses not to follow
the FTC's preferred option (eligibility only for companies which have
been reviewed), the ``changed circumstances'' approach should be
adopted, provided the companies are subject to verification for the
entire three-year period. The FTC also expressed its concerns that a
company may be entitled to base revocation on a period for which no
review was requested.
DOC Position: Having reviewed the comments we received on this
issue, we have decided to adopt the following procedure for addressing
requests for revocation by small companies in this proceeding. We
believe this procedure addresses many of the concerns raised by the
parties and, at the same time, meets the resource constraints faced by
the Department.
Under this procedure, companies that were not selected for
examination in
[[Page 53291]]
prior reviews (because of the large number of companies for which a
review was requested) will have a mechanism for obtaining revocation on
the basis of three consecutive years of sales at not less than normal
value. The first opportunity for such a procedure will occur in the
review of the period March 1, 1997 to February 28, 1998 (the eleventh
review period). Companies that request a review for that period may
also request revocation if they meet the following criteria: (1) a
review was requested for the company in each of the two years
immediately preceeding the period of review in which revocation is
requested, but the company was not selected for examination in either
of those two preceding reviews; and 2) with the request for revocation
the company (a) certifies that it sold subject merchandise at not less
than normal value during the period described in 19 C.F.R.
351.213(e)(1) and for two consecutive years immediately preceeding that
period; (b) provides the certifications required under 19 C.F.R.
351.222(e)(ii) and (iii); and (c) submits a statement acknowledging
that its entries are subject to assessment of AD duties at the non-
selected respondent rate in one or both of the two preceding review
periods. If a company meets these criteria, Commerce will examine the
company's sales during the current period of review for purposes of
determining a dumping margin in accordance with section 751(a) of the
Act. In accordance with section 751(a)(2) of the Act, the results of
that analysis will form the basis for any assessment of antidumping
duties on entries during that period and for cash deposits. In
addition, for the purposes of revocation only, Commerce will examine
data for the two prior years to determine whether the company sold
subject merchandise at not less than normal value. If Commerce
determines that the company sold subject merchandise at not less than
normal value in each of the three years examined and the other
conditions of 19 CFR 351.222 are met, it will revoke the order with
respect to that company.
The Use of Facts Available
Comment 5: While Caicedo acknowledges that there were a number of
problems encountered at the Bogota verification, the company argues
that the rate applied in the preliminary results (25.58 percent) is
inappropriate for two reasons. First, Caicedo argues that the rate
chosen as the highest rate ever applied to the Caicedo Group was in
fact never applied to the Caicedo Group. In fact, asserts Caicedo, the
rate was applied in the third review to one of the farms that is now
part of the Caicedo Group, but which, in that review, was treated as an
individual company. The companies which now comprise the Caicedo Group,
asserts Caicedo, were not treated as a group until the fourth review
(citing Certain Fresh Cut Flowers from Colombia; Final Results of
Antidumping Duty Administrative Review, and Notice of Revocation of
Order (in Part), 59 FR 15159 (March 31, 1994) (Flowers (90-91)).
Second, Caicedo argues that a recent decision by the Court of Appeals
for the Federal Circuit (CAFC) (D&L Supply Co. v. United States, 133 F.
3d 1220 Fed Cir. 1997) (D&L Supply) calls for the Department to select
a FA rate that reasonably reflects conditions in the industry. When
compared to the majority of the calculated rates in this and previous
reviews, Caicedo asserts that the 25.58 percent rate has no
relationship to commercial practice in this industry.
Caicedo suggests that it would be more appropriate to use either
the highest rate received by the group during the reviews in which the
companies were treated as a group or by constructing group rates for
the earlier reviews by averaging the rates applied to the individual
members of the group in those reviews. According to Caicedo, these
methods would produce a rate which relates to the past practices of the
Caicedo Group and which reflects conditions in the industry.
Furthermore, Caicedo argues that the Department has the discretion
not to apply the highest available rate and asserts that the facts in
this case do not warrant the highest available rate. Caicedo argues
that one of the stated reasons for applying FA, i.e., the fact that
Caicedo had not adjusted its material and labor costs for inflation, is
inappropriate. Caicedo claims that the Department did not ask for this
information in either the original or supplemental questionnaires,
despite the fact that Caicedo had clearly explained in its
questionnaire response that the inflation adjustment had not been
included. Therefore, claims Caicedo, it cannot be penalized for not
providing this information.
Finally, Caicedo argues that the company's situation during this
review should be taken into consideration. According to Caicedo, the
affiliated Miami importer went through a period of downsizing during
the review period, as a result of which Caicedo was forced to sell
during the review period to approximately 60 unaffiliated U.S.
importers. This disruption in the normal U.S. selling practice made the
preparation of the sales response a particularly arduous task.
Caicedo's task was further complicated by the fact that the Group was
operating with a reduced staff. In light of this situation, Caicedo
argues that mistakes discovered at verification, such as the
misclassification of constructed export price (CEP) versus export price
(EP) sales and the inappropriate use of the date of receipt of payment
as the date of sale, were not that serious and do not warrant the use
of a rate which Caicedo asserts will put the company out of business.
The FTC argues that the Department should apply an AFA rate of
76.60 percent (the highest rate for any company during this and any
prior segment of this proceeding) because Caicedo failed to cooperate
during the review and verification process. The FTC argues that such a
failure to cooperate could have only been willful, given Caicedo's past
experience in this order. The FTC asserts that in order to ensure
cooperation in the future, the Department should apply a rate of 76.60
percent, since it is clear that the application of 25.58 percent to a
member of the Caicedo group during a past review did not affect
Caicedo's behavior during the current review.
Regarding Caicedo's arguments that the 25.58 percent rate should
not apply to the Caicedo Group because that rate was never applied to
the group as defined in any prior administrative review, the FTC argues
that the relevant issue is not the composition of the Caicedo Group
during prior review periods, but the composition during this review
period, when Cauca was in fact one of the members of the Caicedo Group.
Because Cauca is part of the Caicedo Group in this review, it may
fairly be assumed that Caicedo's margin of dumping in this POR ``bears
some relationship'' to the past practices of all of the companies
within the group, including Cauca. Moreover, the Department cannot
calculate an average of the rates applicable to group members in prior
review periods. To accurately calculate a weighted-average, we would
need verified 1995-1996 sales figures.
DOC Position: While we have concluded that the deficiencies in
Caicedo's responses and the problems at verification reflected a
failure on Caicedo's part to cooperate to the best of its ability, we
disagree with the FTC's conclusion that the earlier rate of 25.58
percent is not sufficiently adverse. While we acknowledge that the
problems with the responses and the verification rendered Caicedo's
information unuseable for purposes of calculating a dumping margin, we
found
[[Page 53292]]
that the company made significant efforts to respond to our requests
for information and to undergo verification.
As detailed in the preliminary results, Caicedo misclassified CEP
sales and misreported many dates of sale, using the date that payment
was received rather than invoice date. (Caicedo's comments regarding
inflation adjustments are addressed further below.) We recognize that
the company faced difficult circumstances during the review period, but
we find that a company that has successfully participated in numerous
reviews, as Caicedo has, can reasonably be expected to have done a
better job of responding to our inquires. Consequently, in accordance
with section 776(b) of the Act, we have determined that adverse
inferences are warranted in determining through FA the dumping margin
for this company.
We have examined Caicedo's arguments with respect to applying
Cauca's rate to the Caicedo Group as a whole and agree that we should
only look back to rates that have been applied to the Caicedo Group in
the past or the rates that would have been applied had current members
of the Caicedo Group been analyzed as part of the group in the earlier
reviews. The highest rate calculated in this manner is the average of
the rates received by the individual companies currently comprising the
Caicedo Group in the third administrative review (see Certain Fresh Cut
Flowers from Colombia; Final Results of Antidumping Duty Administrative
Review and Revocation in Part of the Antidumping Duty Order, 56 FR
50554, (October 7, 1991) (Flowers (89-90)), which is 6.46 percent.
However, we have further determined that it would not be
appropriate to apply this rate to Caicedo in the circumstances
presented by this review. Of the companies that were individually
examined in this review, the highest rate is 8.36 percent for
Floraterra. Since Floraterra cooperated fully in the review and its
responses were verified, we have determined that Caicedo should not
receive a lower rate than Floraterra. Therefore, we have assigned the
Caicedo Group a dumping margin of 8.36 percent. Because it is higher
than any historical rate for the Caicedo Group as a whole, it provides
substantial incentive for Caicedo to do a better job of responding to
our inquires in future reviews.
With respect to the FTC's argument that we cannot calculate a
weighted-average rate from a prior review of the individual members of
the Caicedo Group because we lack verified 1995-96 sales figures, we
disagree. The weight-average rate that would have been applied to the
Caicedo group in Flowers (89-90) would have been calculated using sales
figures from that review period, not 1995-96. Therefore, although we
have not used the historical rate, we computed it using the ranged
sales figures in the public versions of the responses filed in Flowers
(89-90).
Regarding Caicedo's argument that one of our bases for AFA was
unsupported, we disagree. In the questionnaire, companies were allowed
to include amortized amounts of preproduction expenses in material and
labor costs but, for the companies that did so, they were directed to
``identify which expenses contain pre-production expenses and fully
describe your amortization methodology.'' (See page D19 and D24 of the
Department's questionnaire.) Caicedo did not identify where it had
included amortized expenses, nor did it provide a description of its
amortization methodology. Without this information, the Department was
unable to identify any problems to be addressed in its supplemental
questionnaires because it was not aware that amortized amounts had even
been included. Also, the questionnaire was clear that reported
depreciation expenses should be adjusted for inflation, and Caicedo
failed to make this type of adjustment. (See page D32 of the
Department's questionnaire.)
Finally, with respect to the CAFC's decision in D&L Supply, we note
that it concerned a segment of a proceeding under the Act prior to
imposition of URAA-related amendments and the facts before the court in
that case differed from the facts here. D&L Supply involved the
Department's use, as best information available (BIA), of information
which had conclusively been determined in the course of litigation to
be inaccurate. In D&L Supply, the court decided that we could not use a
judicially invalidated rate as a BIA rate in subsequent reviews. The
25.88 percent rate we used in our preliminary results has not been
invalidated by subsequent court decisions. Nevertheless, the rate we
have assigned Caicedo in these final results does not conflict with the
CAFC's philosophy in D&L Supply, because it is clearly consistent with
commercial practice in this industry as it was the calculated rate of
another company.
Comment 6: Because all loan documentation was not available at
verification, the FTC requests that the Department apply AFA in
calculating Tuchany's U.S. credit costs. Specifically, the FTC suggests
that the U.S. credit costs for Tuchany should be calculated using the
highest rate for any loan for which documentation was available.
Asocolflores argues that the Department should continue to use the FA
rate of LIBOR plus six percent.
DOC Position: Because certain information concerning Tuchany's
credit costs could not be verified, the Department used an FA rate of
LIBOR plus six percent to calculate Tuchany's U.S. credit costs in the
preliminary results of this review. This represents the average of the
interest rates on the loans for which documentation was available at
verification. We did not apply AFA in selecting this interest rate
because we have not concluded that Tuchany failed to cooperate by not
acting to the best of its ability. (See Section 776(b) of the Act.)
Tuchany complied with all of our requests for information in this
review and, with this one exception, we were able to verify the
information provided. Therefore, for these final results, the
Department has continued to use the non-adverse rate employed in the
preliminary results to calculate U.S. credit costs for Tuchany.
Comment 7: Flores El Lobo requests that the Department reconsider
its preliminary decision to apply AFA to the company and instead to
apply the non-selected company rate to it. The company was not
originally represented by counsel. When the company received the
Department's questionnaire, reports Flores el Lobo, a company official
signed for the questionnaire. However, according to the company,
because the company was in liquidation and had ceased operations, it
did not file a timely response. According to the company, in September
1996, Eden Floral Farms, one of Flores El Lobo's unaffiliated
importers, decided to prepare a response. On behalf of Eden Floral
Farms, Asocolflores contacted the Department and was advised that Eden
should file a response for Flores El Lobo on October 9, 1996. Because
the company was instructed by the Department to file a response and did
so, Asocolflores asserts that Flores El Lobo should not be penalized
with an AFA rate.
The FTC supports the Department's decision to treat Flores El Lobo
as a non-respondent and assign an AFA margin to the company. If, as the
company claims, it was in the process of liquidation at the time it
received the questionnaire, asserts the FTC, it should have at least
reported its status to the Department. Further, argues the FTC, the
Department should not accept the company's untimely response provided
by Flores El Lobo's importer as evidence
[[Page 53293]]
that the company was cooperative or acting to the best of its ability.
According to the petitioner, without the AFA provision of the law,
there would be no incentives for timely, complete reporting in response
to the Department's questionnaire.
DOC Position: We have reconsidered our treatment of Flores El Lobo.
At the time of the preliminary results, we overlooked the fact that
Eden Farms had been advised by the Department to file a late response
on behalf of Flores El Lobo. Given the fact that its importer attempted
to cooperate with the Department by requesting that it respond late on
behalf of its exporter, for these final results, we have not found that
Flores el Lobo failed to act to the best of its ability in responding
to the Department's inquiries. See Section 776(b) of the Act.
Accordingly, it is inappropriate to assign Flores El Lobo an AFA rate.
Furthermore, like other companies in this review, because Flores El
Lobo was not a selected company, its response had no impact on our
analysis. For purposes of the final results of review, we have assigned
Flores El Lobo the non-selected companies' rate, 2.26 percent.
Export Price or Constructed Export Price
Comment 8: Asocolflores maintains that the Department should
compare the annual average CV with the annual average CEP or EP in
light of the extreme seasonality of U.S. demand of the subject
merchandise. The FTC argues that the use of an annual average U.S.
price is unnecessary and will not produce a more representative U.S.
price. Instead, FTC contends, such averaging on the U.S. side will mask
dumping.
DOC Position: As we have stated in prior reviews and the
investigations of Colombian flowers, (see, e.g., Certain Fresh Cut
Flowers from Colombia; Final Results of Antidumping Duty Administrative
Reviews, 61 FR 42833, (August 19, 1996) (Flowers (91-94) ) ), we have
exercised our authority under section 777A of the Act to use averaging
techniques and have computed monthly average U.S. prices. Our use of
monthly averages for the U.S. price has been upheld by the CIT. See,
e.g., Floral Trade Council v. United States, 775 F. Supp. 1492, 1499-
1501 (CIT 1991).
For the current review, we have continued to use monthly average
U.S. prices. By relying on monthly averages, we are able to use the
exporters' actual price information, which is often available only on a
monthly basis. As in prior reviews, we have not adopted Asocolflores'
suggestion that we move to annual averages. In our view, use of an
annual average would allow respondents to dump during periods of low
demand, a result that is not consistent with the statute.
Comment 9: Queen's argues that the Department's logic of treating
the affiliated flowers producers as a single entity for AD duty
calculation purposes should also apply to affiliated importers. Queen's
asserts that the Department collapses companies that are affiliated
when there is a significant potential for price manipulation. Queen's
claims that to the extent there is any potential for price
manipulation, it exists at the importer level rather than the producer
level since the importers generally sell the flowers on a consignment
basis.
The FTC responds that the effect of Queen's proposal would be the
same as averaging sales over a longer period or greater number of
companies, allowing low-priced sales by one importer to offset higher
prices obtained by another. The FTC maintains that such a methodology
would only serve to mask dumping.
DOC Position: In response to Queen's comment, we are combining the
operations of the affiliated importers for purposes of our final
results in this review. For Queen's sales through affiliated importers,
we calculated a single CEP for each flower type based on the sales data
from the affiliated importers. These affiliated resellers would be
treated as a single entity if we were not using monthly average prices.
Thus, notwithstanding the FTC's concerns about the effects of further
averaging, we see no reason to disaggregate these companies' sales.
Comment 10: The Flores Colon Group (Flores Colon) contends that the
Department incorrectly included both the costs incurred by Flores
Colon's affiliated cargo agent and payment from the cargo agent to
Flores Colon in direct selling expenses. In Flores Colon's view, this
amounts to double-counting because certain ``expenses'' incurred by the
cargo agent were payments to Flores Colon. Hence, Flores Colon argues,
these payments are intra-company transfers and should not be deducted
as costs.
DOC Position: We disagree with Flores Colon's claim that we
included the cargo agent's expenses arising from intra-company
transfers in the preliminary results calculations. The only amounts
deducted were payments to outside, i.e., non-affiliated, suppliers of
the cargo agent and the costs incurred by Flores Colon in supporting
the operations of the cargo agent, e.g., wages paid to Flores Colon
workers that staffed the cargo agent's operation.
Comment 11: Maxima argues that so-called ``AD reserve surcharges''
added by an unaffiliated consignment seller to the price charged to the
first unrelated seller in the United States should be included in CEP.
Furthermore, Maxima argues that there is no statutory basis under 19
U.S.C. 1677a(c)(2) and (d) for later deducting these ``AD reserve
surcharges'' from CEP since these surcharges are neither movement
expenses, export taxes, commissions or selling expenses.
DOC Position: We disagree with Maxima. In the situation discussed
by Maxima, the unaffiliated consignment seller is receiving revenue
from two sources--from Maxima in the form of a commission and from the
purchaser in the form of an AD reserve surcharge. Since Maxima and the
consignment seller in this situation are not affiliated, the payment to
the consignment reseller for AD reserve surcharges does not accrue to
Maxima. Therefore, we have taken as our starting price the price
charged by the unaffiliated consignment seller net of the AD reserve
surcharge. This differs from our treatment of AD surcharges paid to
affiliated consignment sellers, where the AD surcharge can be said to
accrue to the affiliated producer/exporter.
Comment 12: Asocolflores asserts that for CEP sales, the Department
incorrectly deducted direct and indirect selling expenses incurred in
Colombia from CEP. Asocolflores cites the Statement of Administrative
Action (SAA) which states that, under section 772(d) of the Act, CEP
should be reduced only by those expenses and profit associated with
economic activity in the United States. Additionally, Asocolflores
cites section 351.402(b) of the recently enacted regulations which
directs the Department to ``make adjustments {to CEP} for expenses
associated with commercial activities that relate to the sale to an
unaffiliated purchaser, no matter where or when paid.'' Citing to
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished from
Japan, 62 11825, 11833-34 (March 13, 1997), and Gray Portland Cement
and Clinker from Mexico, 62 FR 17148, 17167 (April 9, 1997) (Cement
from Mexico), Asocolflores contends that the Department has interpreted
section 772(d) to preclude the deduction of selling expenses incurred
in the exporting country from the U.S. price in other administrative
reviews and should apply the same interpretation in these final results
of review.
For companies that sell outright to their affiliated importers,
Asocolflores contends that the expenses are incurred
[[Page 53294]]
in completing the sale to the importer and, therefore, are not
associated with economic activity in the United States. For the
companies that make consignment sales, all such expenses are incurred
prior to U.S. economic activity and are not assumptions of the
importer's selling costs. Furthermore, asserts Asocolflores, since, for
EP sales, neither the producer nor affiliated importer engages in any
U.S. economic activity and the expenses in question are incurred
equally for both CEP and EP sales, they should not be deducted from
CEP.
Asocolflores further contends that the Department should not apply
its CEP profit ratio to selling expenses incurred in Colombia because
the SAA provides for a deduction from CEP for profit allocable to
selling activities in the United States and, for the reasons cited
above, the export-related activities in Colombia are not selling
activities in the United States.
The FTC states that Asocolflores' arguments overlook the fact that
flowers are grown commercially in Colombia specifically for U.S.
customers and, therefore, all such expenses are associated with
economic activity in export markets, principally the United States.
Citing the Final Determination of Sales at Less than Fair Value:
Certain Pasta from Italy, 61 FR 30326, 30352 (June 14, 1996), the FTC
claims that the Department allows selling expenses incurred in the
exporting country to be deducted from CEP when ``virtually all'' of the
product is sold in the United States. The FTC asserts that ``virtually
all'' of the subject flowers are sold in the United States and that the
Colombian producers target the subject flowers to the U.S. market. In
the alternative, the FTC states that, if such costs are not deducted
from CEP, they should be included in selling, general and
administrative (SG&A) expenses and added to CV.
DOC Position: We agree with Asocolflores that selling expenses
incurred in the home market that are not associated with U.S. economic
activity should neither be deducted from CEP nor included in the basis
for calculating CEP profit. We closely analyzed the expenses reported
by each respondent and have continued to deduct from and include in the
basis for profit certain expenses (e.g., association dues and
advertising expenses) that are associated with U.S. economic activity.
We do not agree with the FTC that respondents sold ``virtually all'' of
the subject flowers in the United States, as many of the respondents
have substantial third country (TC) sales of such flowers.
In addition, we disagree with petitioner that the expenses not
deducted from CEP should be included in CV. In accordance with section
773(e)(2)(B) of the Act, the amount to be included for CV should
reflect SG&A incurred for sales in the exporting country.
Comment 13: Asocolflores states that the Department instructed
respondents not to offset interest expenses with interest income when
calculating indirect selling expenses in the United States. Asserting
that it is the Department's standard practice to allow this offset,
Asocolflores requests that the Department calculate selling expenses,
inclusive of an offset for interest income. If the Department does not
have sufficient data to do so, Asocolflores contends that it should
provide an opportunity for respondents to submit such information
The FTC contends that the Department does not have a standard
practice of allowing interest income to offset U.S. selling expenses
and instructed respondents correctly not to report such income. The FTC
states that any interest income earned with respect to U.S. sales is
either due to intra-company payment terms or earned after the sale by
the importer. The FTC argues that any interest income earned after the
sale is not related to the production or sale of flowers but rather is
income from monetary transactions. Furthermore, the FTC states that
section 772 of the Act provides only for adjustments to CEP for
``expenses,'' and does not allow an offset for interest income earned
on the sale.
DOC Position: In the context of a sales calculation, it is the
Department's standard practice to require respondents to demonstrate a
direct relationship between the interest income and the sales under
review to qualify for an adjustment. See Certain Cold-Rolled Carbon
Steel Flat Products from Germany, 60 FR 65281, Comment 29 (December 19,
1995) (Carbon Steel from Germany). Further, in Carbon Steel from
Germany, the Department denied a request for a similar adjustment
because the respondent did not claim the adjustment until verification,
thus limiting the ability of the Department to investigate the basis of
the claim.
We acknowledge that the questionnaire did not clearly reflect the
Department's practice of allowing interest income offsets in limited
circumstances. However, with the exception of Queen's, none of the
respondents raised this issue with the Department in a timely manner or
provided the information necessary to evaluate and make the claimed
adjustment. Because those respondents did not raise this issue until
their case briefs, we had no opportunity to obtain information and
evaluate their claims. Thus, we have made no adjustment. In contrast,
Queen's did raise the issue in a timely manner, which enabled the
Department to ask supplemental questions and verify the basis for the
claim. Therefore, we have taken Queen's request into consideration, and
have reduced interest expense for Queen's affiliated CEP resellers by
the amount of interest income.
Comment 14: The FTC argues that the Department should not treat
commissions paid to affiliated importers differently than it treats
commissions to unaffiliated importers if it can be shown that the
commissions to affiliated importers are at arm's length. The FTC claims
that section 772(d)(1) of the Act explicitly requires the Department to
first deduct commissions and then any indirect selling expenses in
calculating CEP, without distinguishing between affiliated and
unaffiliated parties. Furthermore, the FTC contends that the statute
recognizes that a CEP reseller, whether or not affiliated, should be
treated as a separate entity according to the FTC. Consequently, since
both transactions are at the same level of trade, the FTC argues that
commissions should be treated the same whether the CEP sale is made
through an affiliated reseller or through an unaffiliated reseller.
Asocolflores claims that by deducting the commission paid by the
exporter to an affiliated importer and then deducting the importer's
selling expenses, the Department would be double-counting selling
expenses. In addition, Asocolflores argues that the deduction of the
commissions may result in a double deduction of profit in calculating
CEP, because section 772(e) of the Act specifically requires a
deduction of CEP profit. Asocolflores asserts that to the extent that
profit is included in the commission, a double deduction would occur.
DOC Position: We agree with Asocolflores that deducting the
commission paid to an affiliated importer and indirect selling expenses
would lead to double-counting. To avoid this, we have deducted actual
selling expenses rather than the commission paid to the affiliated
exporter by the importer. See Flowers (91-94) at 42838. See also, the
newly enacted regulations at 19 CFR 351.402 (a) and (e).
Comment 15: Tuchany and Miramonte allege that the Department erred
when it subtracted CEP profit not only with respect to affiliated
importers
[[Page 53295]]
but also with respect to unaffiliated consignment importers. The FTC
argues that profits should be deducted from all CEP transactions,
whether or not the merchandise is sold on a consignment basis. Under
the FTC's interpretation of affiliation, any consignment sale implies
an affiliation. Therefore, there should be a deduction of CEP profit
from all consignment sales.
DOC Position: We disagree with the FTC that any consignment sale
implies affiliation between the exporter and the consignment importer.
The consignment importer negotiates the price with the U.S. customer
without the involvement of the exporter and the amount of the
commission paid to the consignment importer is negotiated at arm's
length between the exporter and the consignment importer. Therefore,
for sales made through unaffiliated consignment importers we have
deducted the commission paid to those importers. Further, because the
deduction of these commissions results in a price corresponding as
closely as possible to an export price between the unaffiliated
exporter and importer, we have not made an additional deduction of CEP
profit.
Comment 16: Asocolflores argues that the Department erred in its
calculation of CEP profit for respondent companies by including EP and
consignment sales in the calculation. Asocolflores contends that
section 772(f)(2)(C) of the Act indicates that CEP sales to affiliated
parties should be the only U.S. sales included in the calculation of
CEP profit. In further support of this position, Asocolflores cites to
the SAA at 155 which states that ``[i]f there is no profit to be
allocated (because the affiliated entity is operating at a loss in the
United States and foreign markets), [the Department] will make no
adjustment under section 772(d)(3).'' Asocolflores argues that if sales
to unaffiliated importers were profitable, there could still be a
profit to allocate, while the SAA expressly does not consider such a
situation.
The FTC argues that section 772(f)(2)(C) of the Act does not limit
the sales to be considered for purposes of computing CEP profit to
sales through affiliated importers. The FTC argues that the limitations
in sections 772(f)(2)(C)(i), (ii) and (iii) are primarily concerned
with the merchandise included in the calculation, not the category of
the customer. The FTC additionally argues that consignment agents are
affiliated as there exists a control relationship between the
consignment agent and the producer of the subject merchandise.
DOC Position: We disagree with Asocolflores. In Certain Cold-Rolled
Carbon Steel Flat Products From the Netherlands: Final Results of
Antidumping Duty Administrative Review, 62 FR 18478 (April 15, 1997),
the Department addressed the issue of whether EP sales should be
included in calculating a CEP profit rate:
The calculation of total actual profit under section
772(f)(2)(D) includes all revenues and expenses resulting from the
respondent's EP sales, as well as from its CEP and home market
sales. The basis for total actual profit is the same as the basis
for total expenses under section 772(f)(2)(C). The first alternative
under this section states that for purposes of determining profit,
the term ``total expenses'' refers to all expenses incurred with
respect to the subject merchandise, as well as home market expenses.
Where the respondent makes both EP and CEP sales to the United
States, sales of the subject merchandise would encompass all such
transactions.
Further, section 772(f)(2)(B) of the Act defines ``total United
States expenses'' as the total expenses described in subsections (d)(1)
and (2). Section 772(d)(1) encompasses ``the amount of * * * expenses
generally incurred by or for the account of the producer or exporter,
or the affiliated seller in the United States * * *'' Clearly this
would include all consignment and EP sales to unaffiliated parties as
well as sales through affiliated resellers. Accordingly, we have
continued to include all U.S. sales transactions and associated
expenses in our calculation of CEP profit.
Comment 17: Asocolflores argues that, due to the seasonal nature of
the demand for fresh cut flowers in the United States, the Department
should calculate CEP profit on a monthly rather than an annual basis.
Asocolflores argues that the use of an annual profit rate in light of
the highly variable monthly profit rates which result from the
seasonality of demand for fresh cut flowers distorts the Department's
AD calculations. Asocolflores points out that the Act does not specify
the time period over which profits should be calculated, thereby
affording the Department the discretion to use a monthly calculation.
Asocolflores contends that profit rates on sales to EP customers also
vary due to seasonality. In support of its argument, Asocolflores cites
to the SAA at 153 which states, ``The deduction of profit is a new
adjustment in U.S. law, consistent with the language of the Agreement,
which reflects that constructed export price is now calculated to be,
as closely as possible, a price corresponding to an export price
between non-affiliated exporters and importers.''
The FTC responds that sections 772(f)(2)(B) and (C) refer to total
expenses without indication that such expenses are to be compared over
some period that is a subset of the POR.
Accordingly, the FTC argues, the term ``total'' should mean total
for the POR. In support of its position, the FTC cites to Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From
France, Germany, Italy, Japan, Singapore, and the United Kingdom; Final
Results of Antidumping Duty Administrative Reviews, 62 FR 2081, 2125
(January 15, 1997), where the Department indicated a preference for a
single rate for CEP profit:
Indeed, while we cannot at this time rule out the possibility
that the facts of a particular case may require division of CEP
profit, the statute and SAA, by referring to ``the'' profit, ``total
actual profit,'' and ``total expenses'' imply that we should prefer
calculating a single profit figure.
The FTC argues that, while prices may vary, the rate of profit expected
by the importer is best reflected by the use of an annual rate. The FTC
notes that the use of an annual rate still results in a variation in
the amount of profit when prices vary. Use of an annual rate, the FTC
argues, ensures that some profit is assigned to all months, reflecting
the expectations of arm's-length importers.
DOC Position: We have continued to use an annual CEP profit rate
for purposes of these final results. As the FTC has noted, the
Department's historical practice has been to apply a single rate for
CEP profit. Although Asocolflores has argued that profit rates may vary
due to changes in demand conditions, this is true, to some extent, for
many products. Moreover, the CEP profit calculation is not intended to
be based on the profit of particular U.S. sales. Rather, it is normally
based on the overall profit of home market and U.S. sales. Although a
respondent may have few or no home market sales, we nonetheless use an
average profit rate for those U.S. and home market sales that were
made. We have determined that the circumstances surrounding this case
do not compel a departure from our usual practice of using a single
rate for CEP profit.
Normal Value
Comment 18: The FTC disagrees with the Department's decision to
base normal value (NV) on constructed value (CV), arguing instead that
the prices of exports to the United Kingdom (UK) should be used. In
support of its argument, the FTC asserts that data submitted to the
Department show that
[[Page 53296]]
the UK was the largest TC market for Colombian flowers in 1995-96.
However, rather than focusing on prices to the UK, the analysis relied
upon by the Department in rejecting TC prices (the Botero Study)
analyzes Aalsmeer (Holland) auction prices. The FTC further argues that
the quantity variance in the UK was similar to the variance in the U.S.
market, rising and falling in slightly different months. Moreover, the
U.S. and UK markets have very similar holidays and holiday demand
patterns and all flower-buying holidays except Mother's Day occur in
both markets in the same months. Regarding volatility in the markets,
the FTC contends that the Department should reconsider its finding that
differences in volatility are largely attributable to differences in
demand patterns. Volatility can also result anytime there is targeted
or sporadic dumping in one of the two markets. Therefore, according to
the FTC, the Department should look at whether there is a different
demand pattern rather than at volatility.
The FTC comments that the Department has a longstanding preference
for basing NV on prices rather than costs. Moreover, the FTC asserts,
the statute provides a clear preference for using TC prices over CV,
and the regulations state that the Department will normally use TC
sales rather than CV if adequate information is available and can be
verified. Based on this, the FTC contends that there must be
substantial evidence on the record to support the rejection of TC
prices.
In light of this preference, the FTC states that if the Department
continues to find that U.S. and UK prices are not sufficiently
correlated to permit a proper comparison, then the Department should
use annual average prices in the two markets. By using an annual
average, suggests the FTC, peak pricing that occurs periodically in
holiday seasons will be accounted for. The FTC comments that a
comparison of annual averages will capture the complete demand cycle in
both markets.
Asocolflores disputes the FTC's claim that NV should be based on TC
prices. In support of its argument, Asocolflores points out that many
of the companies being reviewed had viable home markets. Although the
Department would not have used these home market sales because it
limited its analysis to export-quality flowers sold, Asocolflores
argues that the statute requires the Department to use CV as the basis
for NV when home market sales are not made above cost or are not in the
ordinary course of trade. Therefore, Asocolflores concludes, for these
companies with viable home markets, there is no basis for the
Department to rely on TC prices.
Asocolflores also contends that, by allowing the Department to
reject home market or TC prices if the ``particular market situation''
in the other country prevents a proper comparison with U.S. prices, the
URAA codified the Department's approach to this case. Asocolflores
points out that, as of the date of the SAA, this case was the only one
in which the Department had rejected TC prices due to demand
differences resulting from holidays. Asocolflores further argues that
the Department has consistently relied on CV rather than TC prices
since the second review of this order, and has been upheld by the CIT
in doing so (Floral Trade Council v. United States, 775 F. Supp. 1492,
1496-98 (1991)) and the CAFC (Floral Trade Council v. United States, 74
F.3d 1200)(1995). Furthermore, Asocolflores asserts, the same market
conditions exist in both the U.S. and UK markets and U.S. and European
markets that existed in the second review. According to Asocolflores,
the seasonal demand and pricing cycles in the U.S. and TC markets
remain fundamentally different, i.e., the U.S. market is much more
volatile than TC markets and flower-giving holidays are still
different. Asocolflores comments that, if the volatility in U.S. prices
compared to TC prices was due to targeted or sporadic dumping, as the
FTC asserts, one would expect low prices and high volumes. However,
Asocolflores emphasizes, U.S. market prices and volumes are positively
correlated.
Regarding the use of Aalsmeer prices, Asocolflores points out that
in both prior reviews and the present one, the FTC has relied on the
Aalsmeer auction data. According to Asocolflores, the only information
the FTC has provided in this review regarding TC prices has been
Aalsmeer data. Asocolflores explains that flowers sold through the
Aalsmeer are sold throughout Europe and, therefore, serve as a
surrogate for European prices generally.
Finally, Asocolflores rejects the FTC's argument that the
Department should have compared annual average U.S. prices to annual
average TC prices. Even in investigations, where the statute directs
the Department to use annual average prices, claims Asocolflores, the
statute still provides that home market and TC prices can be rejected
due to particular market situations. Asocolflores asserts that when
prices in individual months are not comparable because of market
conditions, i.e., demand, seasonality, and volatility, annual averaging
does not eliminate or adjust for these differences. Rather, it states,
averaging masks the differences through the use of a single price. In
addition, Asocolflores asserts that if volumes of peak and off-peak
sales differed in U.S. and TC markets, dumping margins could be found
for reasons having nothing to do with price differences.
DOC Position: Consistent with the approach adopted in prior
reviews, we have continued to base NV on CV rather than home market or
TC prices. We have disregarded home market prices in accordance with
section 773(a)(1)(C)(ii) of the Act because we determined that,
although some companies in this review have viable home markets, the
home market sales of export-quality flowers are not within the ordinary
course of trade. For a further discussion, see Memorandum from Team to
Barbara Stafford, Deputy Assistant Secretary, Import Administration,
dated January 13, 1997. We have also disregarded TC prices in
accordance with section 773(a)(1)(B)(ii) of the Act because we
determined that the particular market situation prevents a proper
comparison between TC and U.S. prices.
The particular market situation that exists here is: (1) prices in
TC markets are not comparable to prices in the U.S. because of the
volatility of prices in the United States and the differing peak price
periods (holidays) in the U.S. and TC markets; and (2) demand patterns
are different between the two markets. These are the types of
conditions identified in the SAA that would lead the Department to
reject TC prices. Specifically, the SAA states ``[i]t also may be the
case that a particular market situation could arise from differing
patterns of demand in the United States and in the foreign market. For
example, if significant price changes are closely correlated with
holidays which occur at different times of the year in the two markets,
the prices in the foreign market may not be suitable for comparison to
prices to the United States.'' See SAA at 152.
We examined the possible use of TC prices in depth in Certain Fresh
Cut Flowers from Colombia; Final Results of Antidumping Duty
Administrative Review, 55 FR 20491 (May 17, 1990) (Flowers (88-89)),
and in Flowers (91-94). A significant factor in our analysis in Flowers
(91-94) was the Botero Study. In this review, respondents have provided
an updated Botero Study that with one exception shows that the
conditions that existed during that review period continue to exist
during the ninth review period. The one change is that the European
Union eliminated
[[Page 53297]]
flower tariffs for Colombia in 1990, which has made it possible for
more companies to sell in Europe. Despite this, we continue to believe
that the volatility of prices, differing peak pricing periods and the
differing demand patterns warrant rejection of TC prices.
We further disagree with the FTC's characterization of the demand
patterns in the U.S. and UK markets. For instance, the FTC states that
it provided information in Flowers (91-94)which proves that holidays in
the United Kingdom and the United States are comparable. However, as we
stated in Flowers (91-94), we are not convinced by this information, as
it compares non-flower-giving holidays which happen to coincide, e.g.,
All Souls' Day and Halloween. Also, as the Botero Study points out,
there are flower-giving holidays such as All Saints Day (celebrated in
Catholic countries) and Mother's Day (celebrated in the United
Kingdom), but these holidays fall at different times of the year than
the major U.S. holidays.
Furthermore, we disagree with the FTC's assertion that we
incorrectly relied on Aalsmeer auction prices for our determination of
the proper basis for NV. We have consistently based our determination
of NV on both the Botero Study and other market-wide studies, which
have shown that the Aalsmeer data is representative of European prices.
We acknowledge that normally the decision to use TC prices or CV is
based on company-specific information. However, in the course of this
proceeding, we have consistently determined, and have been upheld by
both the CIT and CAFC, that information regarding TC markets in general
was adequate evidence for a determination of this issue. Further, with
respect to the FTC's February 10, 1997 submission, we acknowledge that
the submission indicates that the volume of UK imports of Colombian
flowers in 1995-96 is approximately equal to the amount imported by the
rest of the EU during this period. However, we note that the FTC did
not file its data concerning UK prices until February 10, 1997, ten
days after our preliminary results of review were completed and nearly
four months after our determination was made to use CV rather than TC
prices. Despite the assertions to the contrary made by the FTC, given
the timing of the submission, it was not possible to determine whether
a single TC market is a more appropriate basis for comparison than TC
markets in general.
With regard to the Aalsmeer data submitted by the FTC, the
usefulness of this data is unclear. The information provided by the FTC
includes the weekly volume and prices for various flower types
(including pompons, mini carnations, and chrysanthemums) for 1995 of
the Aalsmeer and Bloemisterij. This data provides no reason for us to
depart from our prior determinations that the Aalsmeer is
representative of European prices.
With respect to the FTC's assertion that the volatility of U.S.
prices may be due to targeted or sporadic dumping, we find that the FTC
has not demonstrated this to be true. The pricing patterns in the U.S.
can be ascribed to periods of peak and slack demand, whereas the
relative flatness of prices in European markets is explained by the
fact that Europeans purchase flowers year round.
Finally, we have not adopted the FTC's suggestion to use yearly
averages in our comparisons for the same reasons we rejected
Asocolflores' argument that we should use an average annual U.S. price.
(See DOC Position to Comment 8.) Further, as Asocolflores has pointed
out, if the volumes of peak and off-peak sales differed in U.S. and TC
markets, the use of an annual average might not adjust for these
differences.
Comment 19: Asocolflores and HOSA disagree with the methodology
used by the Department in the Preliminary Results to calculate an
annualized CV. In the Preliminary Results, the Department calculated an
average per-stem CV in pesos, with the result that the CV expressed in
pesos was constant throughout the POR. The Department then converted to
a per-stem CV in dollars using each month's average exchange rate. This
NV was compared to the monthly average CEP or EP. The Department's
methodology, according to Asocolflores, is an unreasonable departure
from the practice that it followed in every prior administrative review
of the present case. In the Certain Fresh Cut Flowers from Colombia;
Final Results of Administrative Review, 56 FR 32169 (July 15, 1991)
(Flowers (87-88)), the first administrative review, the Department
aggregated total costs in pesos over the POR and divided by the period
average exchange rate and net units sold to calculate the per-stem CV
in dollars. In later reviews, the Department totaled peso costs on a
monthly basis, converted to dollars using the monthly exchange rate,
added these dollar costs over the POR and divided by the net units sold
to yield the per-stem CV in dollars.
Asocolflores claims that the methodology used in the Preliminary
Results is inappropriate because it creates a mismatch between the
exchange rate used and the costs at issue. Asocolflores argues that,
due to factors such as the fluctuations in the exchange rates, the
inclusion of monthly inflation adjustments and the devaluation of the
Colombian peso against the U.S. dollar over the POR, the Department's
methodology erroneously results in a declining CV in dollar terms
throughout the POR. Asocolflores contends that no basis for the changed
methodology has been disclosed and ``[f]undamental principles of
fairness require the Department to abide by its prior decisions in this
case,'' given that the facts upon which the Department predicated the
previous methodology have not changed in the present review.
The FTC counters that the Department's underlying rationale for the
methodology used in the past reviews no longer applies in this review.
First, according to the FTC, inflation is not at the same high rate
encountered during Flowers (87-88). Second, the FTC points out that the
Department's new exchange-rate methodology of using a lagged rate where
a sustained change in rates exists over a period of at least eight
weeks automatically accounts for any distortive effects due to
fluctuations in exchange rates. The FTC further argues that the rates
during the POR in any case should be considered ``relatively stable.''
The FTC also notes that, because EP and CEP are averaged monthly,
applying monthly exchange rates to the NV for purposes of comparison is
also appropriate pursuant to section 773A of the Act.
DOC Position: We agree, in part, with respondents. In Flowers (87-
88), we revised our methodology for converting respondents' CV from
pesos to dollars. The revision was deemed appropriate in light of a
combination of factors affecting this case including the high rate of
inflation in Colombia, consequent devaluation of the Colombian
currency, and the nature of calculating the costs to produce
agricultural products. See Flowers (87-88). In Flowers (87-88), we
converted the POR average peso CV to dollars using the corresponding
period-average exchange rate but expressed a preference for the
alternative methodology of converting each month's peso costs into
dollars using that month's exchange rate. See Id. at 32169 (``while we
agree with the respondent that the monthly conversion to dollars of
peso costs is the preferable methodology, in this review we have
converted our period-average peso constructed value to dollars using
the corresponding period average exchange rate''). In subsequent
reviews, we adhered to
[[Page 53298]]
the revised methodology used in Flowers (87-88) until Flowers (91-94),
where we used the preferred alternative methodology of monthly dollar
conversions.
In the present review, we have examined Asocolflores' argument and
have reassessed the methodology we used in the preliminary results. We
determine that the underlying factors that formed the basis of our
rationale for revising the conversion methodology in Flowers (87-
88)(and subsequent reviews) remain largely unchanged. We also recognize
that flower production, like other agricultural production,
necessitates the use of a period-average CV in order to capture the
complete costs, which vary month to month, due to the production cycle
of the product. See Flowers (87-88) at 32169.
In light of the foregoing, for these final results, we have
departed from the methodology we employed in the preliminary results
for converting CV in the present review. Specifically, we converted
each month's cumulated costs in pesos to dollars using the
corresponding month's exchange rate. Next, the monthly costs in dollars
were totaled over the POR and divided by the net units sold to
calculate the per-stem CV in U.S. dollars which was then converted to
pesos using the period-end exchange rate. Furthermore, to correct for
the distortive effects of devaluation of the Colombian peso, we used a
monthly deflator (which was calculated by dividing the period-end
exchange rate over each month's exchange rate) to deflate the per-stem
CV in pesos for each month. The corrected peso CV was then converted to
dollars using each month's exchange rate pursuant to section 773A(a) of
the Act, which requires that foreign currencies be converted into U.S.
dollars using the exchange rate in effect on the date of sale of the
subject merchandise. The effect of this methodology is to create a CV
which, when denominated in pesos, increases over the POR. This result
is consistent with an economy that is experiencing high levels of
inflation.
With respect to the FTC's arguments, we disagree that inflation was
low enough or the exchange rate stable enough that we should continue
with the methodology we followed in the Preliminary Results. Regarding
the use of lagged exchange rates when there is a sustained movement in
the currency, the provision for sustained changes applies only to
investigations and not to reviews.
Comment 20: HOSA and Asocolflores argue that the Department is
statutorily required to allocate costs across all subject flowers,
including ``national quality'' flowers, when calculating CV. Their
argument is largely based on the 1992 opinion of the CAFC in IPSCO,
Inc. v. United States, 965 F.2d 1056 (IPSCO), and on recent Department
case history. First, HOSA and Asocolflores claim that IPSCO is
definitive on how costs are to be allocated: costs must be allocated
across all goods produced, regardless of their respective values. They
interpret IPSCO to mean that no matter how the Department categorizes a
``secondary'' product (i.e., as a co-product or a by-product), if the
production of that product expended the same materials, capital, labor,
and overhead as the production of the ``primary'' product, then both
the primary and secondary products must share the costs equally.
Furthermore, respondents argue that any value-based allocation violates
the AD statute as interpreted by IPSCO. Even if the Department finds
non-export quality flowers to have little, or no, commercial value,
these culls must still carry costs. Second, although respondents argue
that IPSCO has made by-product and co-product distinctions irrelevant,
they say that if the Department insists upon using such
classifications, then second-quality flowers should be co-products to
which costs of production should be allocated. They state that non-
export-quality flowers must be considered co-products because they are
very similar to the primary product, their production expends the same
material, capital, labor, and overhead, and they are produced in the
same manufacturing lot as export-quality flowers.
The FTC states that respondents' arguments regarding national
quality flowers have been raised before and rejected by the Department.
Referring to Fresh Cut Roses from Colombia, 60 FR 6980 (February 6,
1995) (Roses from Colombia) and Flowers (91-94), the FTC says that the
Department should adhere to its precedent of treating national quality
flowers as by-products.
DOC Position: We have continued to treat culls and national quality
flowers as by-products in this review. This practice, at least with
respect to culls, has been followed since Flowers (LTFV) and was upheld
by the CIT in Asociacion Colombiana de Exportadores v. United States,
704 F. Supp. 1114, 1125-26 (CIT 1989). In Flowers (91-94), we examined
HOSA's claim that ``national'' or ``second quality'' flowers should not
be treated as by products. We disagreed with HOSA and treated national
quality flowers as culls.
As explained in Flowers (91-94) (at 42850), our general practice in
cases involving agricultural goods has been to treat ``reject''
products as by-products and to offset the total cost of production with
revenues earned from the sale of any such ``reject'' products. We
continue to believe that this general practice does not conflict with
CAFC's ruling in IPSCO. Clearly, culls are reject products. Moreover,
as the Department stated in Flowers (LTFV), due to the perishability of
agricultural products, the sellers of such merchandise ``may be faced
with the choice of accepting whatever return they can obtain on certain
sales or destroying the merchandise. Unlike non-perishable products,
sellers cannot withhold their flowers from the market until they can
obtain a higher price.'' Similarly, when the product is not of a high
enough quality to be exported, it is a cull that immediately faces
whatever price can be obtained in the home market, or destruction. This
situation does not resemble that in IPSCO.
Comment 21: Asocolflores asserts that, if the Department does not
allocate costs across all export-quality flowers and culls, the
Department should at least offset the cost of production by the revenue
earned on the sale of culls. In particular, Asocolflores wants the
Department to include off-book revenue when making this deduction, not
just the revenue recorded in the books.
The FTC disagrees with Asocolflores because off book revenue is
unproven and inherently suspect. Since off-book revenue can not be
corroborated by an audited financial statement or tax return, the FTC
contends that the Department should not accept this type of
information.
DOC Position: We agree with the FTC. We do not take account of off-
book revenue because it is not reflected in the company's audited
financial statements, our primary tool for determining the accuracy and
completeness of respondents' submitted data. (See Roses from Colombia.)
Absent specific evidence to the contrary, the Department considers a
company's financial statements to reflect the actual expenses/revenues
of its operations. (See Final Determination of Sales at Less Than Fair
Value; Sweaters Wholly or in Chief Weight of Man-Made Fiber From
Taiwan, 55 FR 34585 (August 23, 1990).)
Comment 22: Tuchany notes that the Department discovered at
verification that the company had incorrectly reported depreciation
expense by making the inflation adjustment to the accumulated
depreciation balance instead of the depreciation expense during the
POR. Tuchany argues that this error substantially overstated costs
because the reported amount
[[Page 53299]]
encompasses all historical inflation adjustments to depreciation, not
simply those associated with the POR. Tuchany asks the Department to
rely upon worksheets submitted at verification which, it contends, can
be used to derive the inflation adjustment to depreciation expense.
The FTC contends that the Department should not allow Tuchany to
submit new factual information during verification.
DOC Position: At verification, we discovered that Tuchany had
incorrectly calculated its depreciation expense in its response.
Company officials prepared a worksheet in an effort to provide the
Department with the information necessary to correct this error. This
information had not been reviewed prior to verification and, while we
were able to trace certain information to source documents, we were
unable to thoroughly review the validity of the calculations during
verification due to time constraints. We indicated to company officials
that we would take the information but that we would need to review it
and would not necessarily take it into consideration for purposes of
our final calculations. Upon review of the data in the worksheets, we
discovered that the information was not adequate to correct Tuchany's
reported depreciation expense. See Tuchany Group Verification Report,
May 6, 1997, p. 14. Thus, we were unable to determine the correct
figure although we did conclude that the reported figure for
depreciation expense was in error. Because we were unable to verify the
data in the worksheets we have resorted to FA in accordance with
section 776(a) of the Act. We have continued to use the reported figure
in our final calculations as we consider it the best estimate available
to us of the correct amount for depreciation expense.
Comment 23: Asocolflores and HOSA contend that the Department erred
in not making an adjustment to financial expenses for net ``monetary
correction'' while adjusting respondents' depreciation and amortization
costs to account for the effects of inflation. Asocolflores states that
the adjustment for ``monetary correction,'' which represents the net
gain or loss to the company caused by inflation on its net exposed
monetary assets and liabilities, is required by Colombian law and
generally accepted accounting principles (GAAP) as part of the
inflation adjustment. Moreover, the Department's failure to consider
the adjustment for net monetary correction leads to significant
distortions in the calculation of CV, according to Asocolflores.
Asocolflores argues that financial costs must be adjusted from
nominal pesos to current value pesos because the costs incurred by a
company in the current period but not payable until later periods, such
as accounts payable and peso loan balances, will be paid in the future
when the pesos will be cheaper in current value terms. Asocolflores
claims that the Department's methodology results in a distorted cost
calculation that mixes nominal pesos for some costs with inflation
adjusted, current value pesos for other costs.
According to Asocolflores, section 773(f)(1)(A) of the Act
``requires the Department accept costs as recorded under Colombian GAAP
unless it makes a specific finding that such costs are distortive.''
Asocolflores further refers to the CIT's holding in Laclede Steel v.
United States, 18 CIT 965 (CIT, Oct. 12, 1994), where it was ruled that
``a respondent could not report costs such that one item of costs
(depreciation expenses in that case) was subjected' to accounting
principles different from those applied to other variables such as
financing costs.' '' Asocolflores contends that the Department's
methodology violates the Act and the court's holding in that it
subjects only one cost variable--depreciation and amortization
expense--to adjustment for inflation. Asocolflores argues the
Department must either disregard all inflation adjustments or include
inflation adjustments for monetary correction.
Furthermore, Asocolflores argues that the exclusion of monetary
correction is a departure from the Department's own precedents.
Specifically, Asocolflores cites to Cement from Mexico and Porcelain-
on-Steel Cookware from Mexico, 61 FR 54616 (1996), where, in accordance
with Mexican GAAP principles, the Department allowed the monetary
correction gain as an offset to financial expenses. Asocolflores also
refers to two Brazilian cases, Aimcor, Ala. Silicon, Inc. v. United
States, Slip Op. No. 95-130, 1995 WL 431186 (CIT, July 20, 1995) and
Frozen Concentrated Orange Juice from Brazil, 52 FR 8324 (1987), where
the monetary correction adjustments to financial expenses were made in
accordance with the Department's own hyperinflationary-economy
methodology.
The FTC counters that the Department's rejection of the monetary
correction adjustments is in accordance with past precedents. The FTC
refers to Roses from Colombia at 6993, where the Department
specifically declined to include inflation adjustments resulting from
the annual revaluation of non-monetary assets because the adjustment
``merely reflects an increase to respondent's financial statement
equity due to the restatement of non-monetary assets to account for
inflation.'' The FTC also contends that Cement from Mexico is
distinguishable in that the Mexican inflation adjustment ``pertained
solely to monetary assets and liabilities whereas the Colombian
monetary correction is an adjustment to non-monetary assets.''
Furthermore, the FTC points out that the Mexican adjustment was the sum
of all corrections to financial expenses made throughout the year. In
contrast, the FTC argues, the Colombian monetary correction is simply a
year-end adjustment, thus having no effect on the amounts borrowed or
lending rates of the respondents.
DOC Position: We disagree with Asocolflores. Consistent with our
practice in Flowers (91-94), we have included adjustments for the
effects of inflation in respondents' depreciation and amortization
expense figures in calculating CV. We have continued to exclude the
amount of monetary correction income that respondents claimed as an
offset to costs.
As discussed in the final results of Flowers (91-94), we adjusted
respondents' depreciation expenses in order to permit a more
appropriate matching of costs and prices based on equivalent currency
units. The Department's practice in AD cases involving countries whose
economies are marked by price level changes defined as
``hyperinflationary'' is to adjust all production costs for the effects
of inflation. See, e.g., Flowers (91-94) at 42845. In some instances,
however, the level of inflation during the POR does not reach the
Department's normal hyperinflation threshold. Nonetheless, where an
economy has experienced the compound effects of significant inflation
levels in periods prior to the POR, the costs associated with
respondent's fixed assets, as well as other assets recorded at their
historical purchase, may be materially misstated relative to the
currency levels at which prices and costs are measured during the POR.
In these instances, the Department may adjust the historical basis of
fixed assets such that respondent's depreciation and amortization costs
reflect the currency levels of the POR. See Roses from Colombia.
Unlike in hyperinflationary cases, however, the Department's
practice with respect to inflation and its effects on historical costs
does not specifically adjust for all of the inflationary effects that
occur within the POR. Rather, these effects result from the inflation
experienced within the twelve months
[[Page 53300]]
of the POR and, thus, are considered to have a minimal influence on the
Department's antidumping analysis. To attempt to quantify the effects
of inflation on each measure of cost and price would impose an
unreasonable level of complexity to the Department's antidumping
analysis.
Consequently, we have left financial expenses unadjusted because
these expenses were contained largely within the POR. In contrast, the
expenses for depreciation and amortization are based on the historical
costs of assets which extend beyond each POR. Compounded annually, the
effect of inflation results in a distortion of historical depreciation
and in an understatement of costs.
As to Asocolflores' argument that the inclusion of net monetary
correction is required under the Colombian GAAP and the Act, we note
that there is no statutory requirement that the Department adjust for
all effects of inflation in its analysis nor a requirement to use all
aspects of a country's GAAP. Rather, the statute merely requires that
the Department include in its calculation of CV the cost of
manufacturing ``which would ordinarily permit the production of the
merchandise in the ordinary course of business.'' See section 773(e)(1)
of the Act. Moreover, the CIT has already held that full accounting for
inflation is neither necessary nor possible. (See Budd Co. v. United
States, 773 F. Supp. 1549, 1554 (CIT 1991) (``The glowing deficiency in
Plaintiff's argument is the underlying premise that a full accounting
for inflation is necessary or even possible.'')
We also find that Asocolflores' reliance on the two Mexican cases
is misplaced. There is no evidence on the record indicating that
inflationary accounting under Mexican GAAP is the same as inflationary
accounting in Colombia. Similarly, the two Brazilian cases cited by
Asocolflores are distinguishable in that inflation rates in Brazil
during those periods were at hyperinflationary levels, as defined by
the Department, and therefore the Department relied on a replacement
cost methodology to adjust all costs for the effects of inflation.
Comment 24: Asocolflores contends that the Department erroneously
attributed all net interest expense to production. Asocolflores argues
that, in addition to financing the assets used in production, interest
expense reported by respondent companies also relates to financing
receivables for TC and U.S. sales. Asocolflores contends that the
Department departed from past practice and effectively presumed that
the totality of the producer's borrowing costs were attributable to
production. Asocolflores urges the Department to revert to its prior
practice and include in its calculation of CV only that portion of the
net interest expense allocable to assets other than accounts
receivable.
Asocolflores recognizes that the Department has changed its
practice of adding imputed credit expense to CV to avoid double-
counting. However, Asocolflores argues that interest expenses
associated with sales should not be included in CV at all because such
interest expenses do not relate to production as required by section
773(e)(1). Moreover, Asocolflores asserts, for the Colombian flower
growers in the case the actual interest expense for home market sales
is zero.
The FTC rebuts that section 773(e)(2) requires that SG&A be added
to production expenses when computing CV, so the exercise of
identifying which costs are production-related and which are sales-
related is academic. The FTC further argues that, in calculating CV,
the Department allocates interest expense to all export-quality stems
sold, so any interest expense related to TC sales has effectively been
allocated to such sales. Finally, the FTC argues that respondents have
provided no evidence that some portion of their interest costs relate
to markets other than the U.S. market and no evidence that any portion
of their financing expenses relate to sales rather than to production.
The FTC argues that there is no basis for assuming that the ratio of
accounts receivable to total assets has any relationship to the ratio
of selling interest costs to total interest costs. The FTC contends
that accounts receivable are commonly financed out of cash-flow and
payables rather than through borrowing.
DOC Position: In calculating CV, the Department considers net
interest expense to be a part of SG&A and, in accordance with section
773(e), the Department's practice is to include the actual amount of
net interest expense as part of the cost of the product. The amount of
net interest expense for CV is calculated as a ratio. The numerator in
this ratio is the total actual amount of net interest expense incurred
by respondent and the denominator is the respondent's cost of sales.
The result of this ratio calculation is then applied to the per-unit
cost of manufacture for the merchandise in order to derive the
allocated amount of interest expense associated with the product.
Contrary to respondent's claims in this case, the interest expense
calculation described above does not attribute all net interest expense
to production. Rather, it is the Department's long-standing method of
calculating net interest expense on a per-unit basis for CV. Under the
new statute, however, because interest expense for CV is to be based on
actual and not imputed amounts, it is no longer appropriate to do as
Asocolflores suggests and reduce actual interest expense in order to
replace it with imputed amounts for credit. Any differences in credit
expense between the U.S. and foreign market are taken into account as a
circumstance of sale adjustment, but not as part of the actual
calculation of net interest incurred for the product. See e.g., Notice
of Final Results of Antidumping Duty Administrative Review; Certain
Hot-Rolled Lead and Bismuth Carbon Steel Products from the United
Kingdom, 62 FR 18744, 18746 (April 17, 1997).
Comment 25: HOSA asserts that the Department used the wrong general
and administrative expense (G&A) rate for flowers that a member of the
HOSA Group purchased from other producers and used in its bouquet
operation. HOSA argues that it did not incur any G&A expense associated
with flowers it did not grow. HOSA further states that, if the
Department insists upon calculating G&A for purchased flowers, it
should use the G&A rate for the farm that purchased the flowers and
used them in its bouquet operation. This G&A rate, asserts HOSA, should
be taken from the farm's 1995 audited financial statements, as provided
in the questionnaire response.
The FTC argues that HOSA must incur some G&A expenses in the areas
of marketing and selling bouquets, not to mention the purchase of
flowers and the assembly of bouquets. Moreover, in the FTC's view,
there is no basis to limit the G&A expenses to one single farm. Thus,
the FTC argues that the Department should continue to follow the
approach used in the preliminary results.
DOC Position: We disagree with HOSA. As stated in the Suspension of
Antidumping Duty Investigation: Sodium Azide from Japan, 62 FR 973, 977
(January 7, 1997), ``G&A expenses are those expenses incurred for the
operation of the corporation as a whole and not directly related to the
manufacture of a particular product.'' The Department's practice is to
calculate G&A expenses by finding the ratio of the company's total G&A
expenses relative to the total cost of goods sold by the company. This
ratio is then applied to the cost of manufacture of each product.
Furthermore, this approach is consistent with our approach with respect
to other collapsed companies for which we have
[[Page 53301]]
allocated G&A expenses. In this instance, the products in question are
those flowers (subject merchandise) acquired and used in the production
of bouquets. Although HOSA does not grow these flowers, it does use
them in further processing. There is no evidence that HOSA would
purchase and resell these flowers if they were not used in bouquet
production. Because the production and selling of bouquets generates
G&A expenses, the items making up the bouquets incur G&A expenses.
The HOSA Group's contention that the Department should use only the
G&A expenses generated by the member of the group which purchased the
subject merchandise is not reconcilable with the Department's practice
concerning ``collapsed'' companies. Once the Department has determined
to collapse affiliated producers (i.e., to assign a single AD rate to
the producers because of, inter alia, close interrelationships between
them) the group is treated as one single company with respect to
reporting obligations. We do not allow companies to pick and choose
which G&A expenses and which divisions of the company will be used in
accounting for this expense. The same holds true for the HOSA Group
and, thus, every product produced by HOSA, regardless of which farm
produced it, incurs allocated G&A expenses generated by the entire
group.
Comment 26: The Tinzuque Group (Tinzuque) argues that the
Department erred in disregarding all reported offsets to SG&A. Tinzuque
concedes that certain reported offsets were derived from non-operating
income accounts and are, therefore, not appropriate offsets to cost.
Tinzuque contends, however, that among the reported offsets are
commercial discounts obtained on material purchases, which are
appropriate offsets to cost. Tinzuque points out that sample invoices
and accounting slips submitted in its February 21, 1997 supplemental
response demonstrate the nature of these discounts.
The FTC argues that there is no evidence on the record to
demonstrate that the amount reported for commercial discounts is
related exclusively to material purchases related to subject
merchandise. The FTC further contends that discounts on material inputs
would not normally be accounted for in SG&A accounts, thereby casting
additional doubt on the nature of these discounts.
DOC Position: We agree with Tinzuque. The sample accounting slips
submitted by Tinzuque demonstrate that the commercial discounts in
question were obtained on material purchases. Moreover, there is no
indication that the materials were used as inputs for other than
subject merchandise. Therefore, we have accepted Tinzuque's claim and
have offset its costs accordingly.
Comment 27: Asocolflores argues that the Department's use of the
profit rate of Compania Nacional de Chocolates S.A. (CNC), a Colombian
producer of chocolate and other processed agricultural products, as FA
in the calculation of CV is inconsistent with the Act. Asocolflores
argues that the ``profit cap'' described in section 773(e)(2)(B)(iii)
of the Act contains no exceptions or conditions and its application is
mandatory. Specifically, Asocolflores contends that the Department
should use a profit rate of zero since none of the responding companies
had profits on sales of flowers in the home market. Asocolflores argues
that there is no requirement that only sales made in the ordinary
course of trade or above cost are to be considered when calculating the
profit cap.
Asocolflores contends that the Department misinterpreted language
in the SAA that allows exceptions to the application of the profit cap
``due to the absence of data.'' Here, Asocolflores argues, there is no
absence of data; the data merely indicates that the profit rate is
zero. Asocolflores argues that, in Shop Towels from Bangladesh; Final
Results of Antidumping Duty Administrative Review, 61 FR 55957 (October
30, 1996) (Shop Towels), the Department included zero profit for the
two textile companies that had shown losses in deriving an average of
three profit rates to be used in calculating CV.
Asocolflores further argues that the use of CNC's profit rate is
inconsistent with the purpose of the statute and due process.
Asocolflores argues that the rate used by the Department in its
preliminary results was arbitrary, unpredictable and random.
Asocolflores argues that there is not even a pretense of foreseeability
or predictability, and, accordingly, under such a system, respondents
have no basis on which to price their product to avoid dumping.
The FTC responds that the Department properly concluded that there
was insufficient basis for computing a profit cap in accordance with
section 773(e)(2)(B)(iii). The FTC argues that sales in the home market
of merchandise in the same general category as flowers would
necessarily include sales of culls. Since culls are treated as
byproducts in the Department's calculations and are assigned a cost
basis of zero, the FTC argues that the profit rate on such sales would
be infinite.
The FTC further argues that the Department correctly interpreted
the statute and SAA in determining that profit must be a positive
amount. The FTC agrees with the Department's interpretation of the
wording in the SAA at 169 that CV ``must include an amount * * * for
profit'' as meaning that there must be a positive number. The FTC cites
to the passage in the SAA at 170 indicating that the administration
does not believe the elimination of statutory minimums will diminish
the ability of domestic industries to obtain relief under the AD law.
DOC Position: Contrary to Asocolflores' assertion, we are required
to add a positive amount for profit when calculating CV. Although the
URAA eliminated the use of a minimum profit rate, the presumption of a
profit element in the calculation of CV was not eliminated. The SAA (at
page 169) states: ``Because constructed value serves as a proxy for a
sales price, and because a fair sales price would recover SG&A expenses
and would include an element of profit, constructed value must include
an amount for SG&A expenses and for profit.''
With respect to Asocolflores' argument that a zero rate of profit
would be consistent with Shop Towels, we disagree. An average that
includes some zeroes but still yields a positive number, as was the
case in Shop Towels, is different from using a profit rate of zero.
By providing three alternative methodologies for calculating CV
profit in section 773(e)(2)(b), the statute enables the Department to
use an overall positive profit rate whenever the calculation of CV
profit under 773(e)(2)(A) is not appropriate. In Silicomanganese from
Brazil; Final Results of Antidumping Duty Administrative Review 62 FR
37869, 37877 (July 15, 1997), the Department stated, ``if a company has
no home market profit or has incurred losses in the home market, the
Department is not instructed to ignore the profit element, include a
zero profit or even consider the inclusion of a loss; rather, the
Department is directed to find an alternative home market profit.''
Since there is no information on the record that would enable us to
calculate a home market profit rate on the same general category of
merchandise as flowers, we have continued to use CNC's profit rate, for
reasons detailed in a memorandum from team to Richard Moreland, Acting
Deputy Assistant Secretary, AD-CVD Enforcement 1, dated March 31, 1997
(on file in room B-099 in the Central Records Unit of the Department of
Commerce). We disagree with Asocolflores' assertion that we
[[Page 53302]]
have information on the record to calculate a profit cap. As
Asocolflores has stated, the only information on the record indicates
that sales of flowers in Colombia are not profitable. As discussed
above, a profit rate of zero is not appropriate for use in calculating
CV; therefore, we do not have appropriate information to use as the
basis for a profit cap. Accordingly, we have applied alternative (iii)
on the basis of ``the facts available,'' as instructed by the SAA at
171.
We further disagree with Asocolflores' contention that the
application of a profit rate based on non-adverse FA is contrary to the
intent of the statute and violates respondents' due process. As
detailed above, the application of a zero profit rate would have been
contrary to the intent of the statute. In carrying out the intent of
the statute in a reasonable manner, respondents' due process is being
served. Asocolflores has had the opportunity to comment on the
Department's methodology.
Comment 28: The FTC argues that the Department's use of CNC's
profit rate in the preliminary results was not the best choice among
the alternatives available to the Department. The FTC argues that CNC
is in the processed agricultural goods industry and, as such, does not
face the same perishability risks as a flower producer. The FTC admits
to the paucity of financial information available regarding Colombian
companies but suggests that the Department use the rate of return on
equity of Banco Ganadero, a Colombian bank that makes approximately one
quarter of its loans to the agricultural sector. The FTC suggests that,
while this financial information would be derivative since it is based
on return on equity of a financial institution, it is a better gauge of
Colombian agriculture than a chocolate producer.
Asocolflores responds that the rate of return on equity for a
Colombian bank is not at all analogous to the profit rate of a
Colombian flower exporter. Asocolflores contends that a rate of return
on equity is not a profit margin and that the statute requires the use
of profit, not return on equity. Additionally, Asocolflores argues that
a bank's products are financial instruments, not agricultural products.
DOC Position: We agree with Asocolflores that the rate of return on
equity of a financial institution is not appropriate for this case.
While we were unable to locate a profit rate on home-market sales for a
Colombian producer of merchandise in the general category as flowers,
we determine that the use of the profit rate of CNC, a Colombian
producer of processed agricultural goods is more appropriate than the
rate of return on equity of a Colombian bank. Accordingly, we have
continued to use CNC's profit rate as FA in calculating CV profit.
Comment 29: Asocolflores claims that, where appropriate, the
adjustment from gross units sold to net units sold to account for
returns should be made on an annual basis over all importers purchasing
from the same exporter rather than on a monthly basis by importer.
DOC Position: We agree in part. Returns from a given month often
are not reported and claimed by the importer until the following month.
If a large number of returns from the prior month happened to be
reported and claimed in the current month, the NV for the current month
after adjustment for returns would be overstated. Therefore, for the
final results, we took the total number of returns made during the POR
by a particular importer and allocated this total to each month of the
POR based on the gross number of stems sold in each month.
We disagree, however, with averaging returns over importers. In
calculating net units sold, we have not averaged returns over all the
importers purchasing from a particular exporter. Returns are dependent
on a number of factors including the handling and warehousing practices
of the importer and the distance from the grower to the importer. These
factors are directly related to the particular importer under
consideration and directly affect the returns from that importer. For
this reason, the margin calculations should reflect the actual number
of returns from that importer rather than the average number of returns
over all importers. Thus, for the final results, we used the actual
number of returns by each importer in calculating an adjustment to the
NV for each importer because returns clearly and directly relate to the
operating practices of individual importers.
Assessment
Comment 30: Asocolflores contends that the Department incorrectly
calculated the amount of AD duties to be assessed on individually
reviewed (or ``selected'') companies. In particular, Asocolflores
objects to the Department's reliance on U.S. Customs' posted prices for
the calculation of entered value for carnations. Ascolflores contends
that use of the posted prices will result in a potential overassessment
of AD duties. Asocolflores suggests that the Department recalculate
entered value using the data provided by respondents and, where
necessary, obtain further information from respondents. Alternatively,
Asocolflores suggests calculating specific duties based on the quantity
of flowers shipped during the POR.
The FTC states that the Department properly relied upon Customs'
posted values to calculate AD duty assessments. The FTC argues that,
because Customs will liquidate entries using posted values as the
entered values, the use of entered values reported by respondents would
be incorrect. The FTC further questions the reliability and correctness
of the entered value data supplied by respondents.
DOC Position: For these final results, we have calculated the
amount of duties to be assessed on a per-stem basis. We were unable to
use entered values because respondents reported average monthly prices
and, moreover, the entered values were not associated with particular
importers. Since assessments are made on an importer specific basis,
aggregate entered values could not be used. Although we have calculated
a per-stem rate for assessment purposes, we will apply an ad valorem
rate for duty deposit purposes.
Comment 31: Asocolflores states that the Department incorrectly
used the average cash deposit rate for selected respondents as the
assessment rate for those companies that responded but were not
selected for review (``non-selected respondents''). Asocolflores
contends that the Department should use the weighted-average assessment
rate rather than the average cash deposit rate and that any difference
in methodology between selected and non-selected respondents violates
the equal protection clause of the United States Constitution.
The FTC argues that the Department properly based assessment rates
for non-selected companies on the duty deposit rates. In the FTC's
view, the Department's approach to assessment was reasonable and there
is no reason to prefer the weighted-average assessment rate of selected
respondents to their duty deposit rate.
DOC Position: For these final results, we have calculated an
average per-stem rate to apply to non-selected respondents for
assessment purposes. We have calculated this rate by summing the AD
duties owed by the selected companies and dividing that amount by the
number of stems entered by the selected companies. (As explained below,
in connection with the assessment instructions, we have used stems
entered during the POR rather than stems sold, because of the
perishable nature of the subject merchandise.) Although we disagree
[[Page 53303]]
with Asocolflores that the methodologies for the two groups of
companies must be the same in all respects, for assessment purposes we
believe that this approach yields the most accurate results.
Other
Comment 32: The FTC argues in its rebuttal brief that Tuchany
should not be allowed to rewrite its response during verification.
DOC Position: In the course of verification, certain minor errors
in Tuchany's questionnaire response were discovered. Generally, the
company was able to correct these errors and the Department requested
that these corrections be submitted for the record. The errors were
also identified in our verification report. The errors made by Tuchany
were not of such a magnitude as to warrant the conclusion that Tuchany
had failed verification.
Comment 33: Flores el Talle argues that it is part of the Flores
Colombianas Group, a group for which the AD order has already been
revoked. Therefore, Flores el Talle claims, it should not be subject to
either the assessment or cash deposit rate determined for non-selected
respondents. Instead, asserts Flores el Talle, the Department should
determine that it is part of the Flores Colombianas Group and is
covered by the Flores Colombians Group's revocation.
DOC Position: We have determined that there were no entries of
subject merchandise under the name Flores el Talle during the POR.
Therefore, we have rescinded the review with respect this company (see
the ``Rescission'' section of this notice). In addition, we will
initiate a changed circumstances review in order to determine whether
Flores el Talle is covered under the revocation granted to Flores
Colombianas.
Final Results of Review
Selected Respondents
As a result of our review, we determine the following percentage
weighted-average margins to exist for the March 1, 1995 through
February 29, 1996:
Percent
Agrodex Group.................................................. 1.30
Agricola de las Mercedes
Agricola el Retiro Ltda.
Agrodex Ltda.
Degaflores Ltda.
Flores Camino Real Ltda.
Flores Cuatro Esquinas Ltda.
Flores de la Comuna Ltda.
Flores de las Mercedes
Flores de Los Amigos Ltda.
Flores de los Arrayanes Ltda.
Flores De Mayo Ltda.
Flores del Gallinero Ltda.
Flores del Potrero Ltda.
Flores dos Hectareas Ltda.
Flores de Pueblo Viejo Ltda.
Flores el Trentino Ltda.
Flores la Conejera Ltda.
Flores Manare Ltda.
Florlinda Ltda.
Horticola el Triunfo
Horticola Montecarlo Ltda.
Caicedo Group.................................................. 8.36
Agro Bosque S.A.
Andalucia S.A.
Aranjuez S.A.
Columbiano S.A. ``CAICO''
Caico
Exportaciones Bochica S.A.
Floral Ltda.
Flores del Cauca
Inversiones Targa Ltda.
Productos el Zorro
Via el Rosal
Claveles Colombianos Group..................................... 0.39
Claveles Colombianos Ltda.
Elegant Flowers Ltda.
Fantasia Flowers Ltda.
Splendid Flowers Ltda.
Sun Flowers Ltda.
Cultivos Miramonte Group....................................... 1.05
Cultivos Miramonte S.A.
Flores Mocari S.A.
Floraterra Group............................................... 8.36
Exporosas
Floraterra S.A.
Flores Casablanca S.A.
Flores San Mateo S.A.
Siete Flores S.A.
Flores Colon Ltda.............................................. 2.84
Florex Group................................................... 0.73
Agricola Guacari S.A.
Agricola el Castillo
Flores San Joaquin
Flores Altamira S.A.
Flores de Exportacion S.A.
Guacatay Group................................................. 1.53
Agricola Cunday
Agricola Guacatay S.A.
Jardines Bacata Ltda.
Hosa Group..................................................... 2.07
Horticultura de la Sabana S.A.
HOSA Ltda.
Innovacion Andina S.A.
Minispray S.A.
Prohosa Ltda.
Maxima Farms Group............................................. 3.25
Agricola los Arboles S.A.
Colombian D.C. Flowers
Polo Flowers
Rainbow Flowers
Maxima Farms Inc.
Queens Flowers Group........................................... 1.13
Agroindustrial del Rio Frio
Cultivos General Ltda.
Flora Nova
Flora Atlas Ltda.
Flores Calima S.A.
Flores Canelon Ltda.
Flores de Bojaca
Flores del Cacique
Flores del Hato
Flores el Aljibe Ltda
Flores el Cipres
Flores El Pino Ltda.
Flores El Roble S.A.
Flores el Tandil
Flores la Mana
Flores las Acacias Ltda
Flores la Valvanera Ltda.
Flores Jayvana
Flores Ubate Ltda
Jardines de Chia Ltda.
Jardines Fredonia Ltda.
Jardines Piracanta
M.G. Consultores Ltda.
Mountain Roses
Queens Flowers de Colombia Ltda.
Quality Flowers S.A.
Florval S.A. (Floval)
Jardines des Rosal
Tinzuque Group................................................. 1.05
Tinzuque Ltda.
Catu S.A.
Tuchany Group.................................................. 5.73
Tuchany S.A.
Flores Sibate
Flores Tikaya
Flores Munya
Non-Selected Respondents
The following 147 companies (including 23 groups of companies) were
not selected as respondents and will receive a rate of 2.26 percent:
Aga Group
Agricola la Celestina
Agricola la Maria
Agricola Benilda Ltda.
Agricola Acevedo Ltda.
Agricola Arenales Ltda.
Agricola Bonanza Ltda.
Agricola Circasia Ltda.
Agricola el Cactus S.A.
Agricola el Mortino Ltda.
Agricola el Redil Ltda.
Agricola la Corsaria Ltda.
Agricola Las Cuadras Group
Agricola las Cuadras Ltda.
Flores de Hacaritama
Agricola Megaflor Ltda.
Agroindustrial Don Eusebio Ltda. Group
Agroindustrial Don Eusebio Ltda.
Celia Flowers
Passion Flowers
Primo Flowers
Temptation Flowers
Andes Group
Cultivos Buenavista Ltda.
Flores de los Andes Ltda.
Flores Horizonte Ltda.
Inversiones Penas Blancas Ltda.
Aspen Gardens Ltda.
Astro Ltda.
Cantarrana Group
Cantarrana Ltda.
Agricola los Venados Ltda.
Cigarral Group
Flores Cigarral
Flores Tayrona
Claveles de los Alpes Ltda.
Colibri Flowers Ltda.
Combiflor
Cultiflores Ltda.
Cultivos Medellin Ltda.
[[Page 53304]]
Cultivos Tahami Ltda.
Daflor Ltda.
El Antelio S.A.
Envy Farms Group
Envy Farms
Flores Marandua Ltda.
Falcon Farms de Colombia S.A. (formerly Flores de Cajibio Ltda.)
Farm Fresh Flowers Group
Agricola de la Fontana
Flores de Hunza
Flores Tibati
Inversiones Cubivan
Floralex Group
Floralex Ltda
Flores el Puente Ltda.
Agricola Los Gaques Ltda
Floreales Group
Floreales Ltda.
Kimbaya
Florenal (Flores el Arenal) Ltda.
Flores Agromonte
Flores Ainsuca Ltda.
Flores Aurora Ltda.
Flores Carmel S.A.
Flores Comercial Bellavista Ltda.
Flores de Aposentos Ltda.
Flores de la Hacienda
Flores de la Montana
Flores de la Vega Ltda.
Flores de la Vereda
Flores de Serrezuela S.A.
Flores de Suba Ltda.
Flores del Lago Ltda.
Flores del Rio Group
Agricola Cardenal S.A.
Flores del Rio S.A.
Indigo S.A.
Flores del Salitre Ltda.
Flores de Oriente
Flores el Lobo
Flores el Molino S.A.
Flores el Zorro Ltda.
Flores Fusu
Flores Gioconda
Flores Juanambu Ltda.
Flores la Fragrancia
Flores las Caicas
Flores los Sauces
Flores la Union/Gomez Arango & Cia.
Flores Monserrate Ltda.
Flores Sagaro
Flores San Andres
Flores San Juan S.A.
Flores Santa Fe Ltda.
Flores Silvestres
Flores Tocarinda
Flores Tomine Ltda.
Flores Tropicales (Happy Candy) Group
Flores Tropicales Ltda.
Happy Candy Ltda.
Mercedes Ltda.
Rosas Colombianos Ltda.
Floricola la Gaitana S.A.
Fresh Flowers
Funza Group
Flores Alborada
Flores de Funza S.A.
Flores del Bosque Ltda.
Flexport de Colombia
Grupo el Jardin
Agricola el Jardin Ltda.
La Marotte S.A.
Orquideas Acatayma Ltda.
Industrial Agricola
Ingro Ltda.
Inverpalmas
Inversiones Flores del Alto
Inversiones Morrosquillo
Inversiones Santa Rita Ltda.
Inversiones Santa Rosa ARW Ltda.
Inversiones Supala S.A.
La Plazoleta Ltda.
Las Amalias Group
Las Amalias S.A.
Pompones Ltda.
La Fleurette de Colombia Ltda.
Ramiflora Ltda.
Linda Colombiana Ltda.
Los Geranios Ltda.
Manjui Ltda.
Monteverde Ltda.
Natuflora Ltda./San Martin Bloque B
Papagayo Group
Agricola Papagayo Ltda.
Inversiones Calypso S.A.
Petalos de Colombia Ltda.
Pisochago Ltda.
Rosas Sabanilla Group
Flores la Colmena Ltda.
Rosas Sabanilla Ltda.
Inversiones la Serena
Agricola la Capilla
Sabana Group
Flores de la Sabana S.A.
Roselandia S.A.
Santana Flowers Group
Santana Flowers Ltda.
Hacienda Curibital Ltda.
Inversiones Istra Ltda.
Santa Rosa Group
Flores Santa Rosa Ltda.
Floricola la Ramada Ltda.
Agropecuaria Sierra Loma
Senda Brava Ltda.
Shasta Flowers y Compania Ltda.
Soagro Group
Flores Aguaclara Ltda.
Flores del Monte Ltda.
Flores la Estancia
Jaramillo y Daza
Toto Flowers Group
Flores de Suesca S.A.
Toto Flowers
Uniflor Ltda.
Velez de Monchaux Group
Velez De Monchaux e Hijos y Cia S. en C.
Agroteusa
Flores Suasuque
Victoria Flowers
Vuelven Ltda.
No Shipments
The following 62 companies did not ship subject merchandise during
the POR. Therefore, as described in the ``Rescission'' section above,
we are rescinding the review with respect to the following firms:
Abaco Tulipanex de Colombia
Agrex de Oriente
Agricola Guali S.A.
Agricola Yuldama
Agroindustrial Madonna S.A.
Agrorosas
Agropecuria Cuernavaca Ltda.
Bojaca Group
Agricola Bojaca
Universal Flowers
Flores y Plantas Tropicales
Flores del Neusa Nove Ltda.
Tropiflora
Cienfuegos Group
Cienfuegos Ltda.
Flores la Conchita
De La Pava Guevara E Hijos Ltda.
Disagro
Elite Flowers (The Elite Flower/Rosen Tantau)
Expoflora Ltda.
Flor y Color
Flora Intercontinental
Florandia Herrera Camacho & Cia.
Flores Acuarela S.A.
Flores Aguila
Flores Andinas Ltda.
Flores de Tenjo Ltda.
Flores del Campo Ltda.
Flores el Rosal Ltda.
Flores el Talle Ltda.
Flores Galia Ltda.
Flores Gloria
Flores Juncalito Ltda.
Flores la Lucerna
Flores la Macarena
Flores Ramo Ltda.
Flores Sairam Ltda.
Flores San Carlos
Flores Selectas
Flores Violette
Florexpo
Florimex Colombia Ltda.
Green Flowers
Horticultura el Molino
Inversiones Almer Ltda.
Inversiones Bucarelia
Inversiones Cota
Inversiones el Bambu Ltda.
Inversiones Morcote
Inversiones y Producciones Tecnicas
Iturrama S.A.
Las Flores
Luisa Flowers
Otono (Agroindustrial Otono)
Planatas S.A.
Plantaciones Delta Ltda.
Propagar Plantas S.A.
Rosaflor
Rosex Ltda.
Sansa Flowers
Santa Helena S.A.
S.B. Talee de Colombia
Siempreviva
Tag Ltda
Unlocatable
The following 115 companies (including 2 groups) were unlocatable.
For those unlocatable companies that were examined in a previous
review, we will assess duties based on their company-specific rate from
the most recent review. If we have not previously conducted a review of
an unlocatable company, duties equal to the ``all others'' rate of 3.1
percent from the LTFV investigation will be assessed.
Achalay
Agricola Altiplano
Agricola del Monte
Agricola la Siberia
Agrocaribu Ltda.
Agro de Narino
Agroindustrias de Narino Ltda.
Agropecuaria la Marcela
[[Page 53305]]
Agropecuria Mauricio
Agrotabio Kent
Aguacarga
Alcala
Amoret
A.Q.
Carcol Ltda.
Classic
Coexflor
Color Explosion
Cota
Crest D'or
Crop S.A.
Cypress Valley
Degaflor
Del Monte
Del Tropico Ltda.
Diveragricola
El Milaro
El Timbul Ltda.
Exotic Flowers
Exotico
Ferson Trading
Flamingo Flowers
Flor Colombiana S.A.
Flores Ainsus
Flores Alcala Ltda.
Flores Calichana
Flores Corola
Flores de Iztari
Flores de Memecon/Corinto
Flores del Cielo Ltda.
Flores del Cortijo
Flores Gicro Group
Flores Gicro Ltda.
Flores de Colombia
Flores Hacienda Bejucol
Flores la Cabanuela
Flores la Pampa
Flores las Mesitas
Flores Montecarlo
Flores Palimana
Flores S.A.
Flores Saint Valentine
Flores Santana
Flores Sausalito
Flores Sindamanoi
Flores Tenerife Ltda
Floricola
Florisol
Florpacifico
Four Seasons
Fracolsa
F. Salazar
Garden and Flowers Ltda.
German Ocampo
Granja
Gypso Flowers
Hacienda la Embarrada
Hacienda Matute
Hana/Hisa Group
Flores Hana Ichi de Colombia Ltda.
Flores Tokai Hisa
Hernando Monroy
Horticultura de la Sasan
Industrial Terwengel Ltda.
Inversiones Maya, Ltda.
Inversiones Silma
Inversiones Sima
Jardin de Carolina
Jardines Choconta
Jardines Darpu
Jardines Natalia Ltda.
Jardines Tocarema
J.M. Torres
Kingdom S.A.
La Colina
La Embairada
La Flores Ltda.
La Floresta
L.H.
Loma Linda
Loreana Flowers
Luisiana Farms
M. Alejandra
Mauricio Uribe
Merastec
Morcoto
Nasino
Olga Rincon
Piracania
Prismaflor
Reme Salamanca
Rosa Bella
Rosas y Jardines
Rose
San Valentine
Sarena
Select Pro
Shila
Solor Flores Ltda.
Starlight
Susca
Sweet Farms
The Beall Company
The Rose
Tomino
Villa Diana
Zipa Flowers
Non-Respondents
The following 42 companies (including 2 groups of companies) did
not respond to our questionnaire or responded after the deadline date
without explanation. We will assess duties based on the highest rate
for any company from this or any prior segment of this proceeding. This
rate is 76.60 percent and was determined in Flowers (91-94).
Agricola de Occident
Alstroflores Ltda.
Ancas Ltda.
Arboles Azules Ltda.
Becerra Castellanos y Cia.
Clavelez
Consorcio Agroindustrial
Cultivos Guameru
Dianticola Colombiana Ltda.
Dynasty Roses Ltda.
El Tambo
Euroflora
Exoticas
Exportadora
Flores Abaco S.A.
Flores Bachue Ltda.
Flores Cerezangos
Flores Depina S.A.
Flores de Guasca
Flores de la Cuesta
Flores de la Maria
Flores del Tambo
Flores de la Parcelita
Flores Flamingo Ltda.
Flores Monteverde
Flores Urimaco
Flowers of the World/Rosa
Illusion Flowers
Industria Santa Clara
Inversiones Playa
Inversiones Valley Flowers Ltda.
Jardines de America
Jardines de Timana
Karla Flowers
Laura Flowers
Pinar Guameru
Rosales de Colombia Ltda.
Rosales de Suba Ltda.
San Ernesto
Superflora Ltda.
Tropical Garden
Villa Cultivos Ltda.
Bankrupt Companies
The following group of companies is determined to be bankrupt and
will be assessed at a rate of 8.36 percent.
Oro Verde Group
Inversiones Miraflores S.A.
Inversiones Oro Verde S.A.
Confirmed Shipper
The following company responded that it had no shipments of subject
merchandise during the period of review, although U.S. Customs data
later proved that this company did, in fact, ship subject merchandise
during the POR. This confirmed shipper will be assessed at a rate of
2.26 percent.
Flores Tiba S.A.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated an importer-specific per-stem duty assessment rate based on
the ratio of the total amount of AD duties calculated for the examined
sales made during the POR to the total quantity of subject merchandise
entered during the POR. We have used the number of stems entered during
the POR, rather than the number of stems sold during the POR, because
of the perishable nature of the merchandise. This rate will be assessed
uniformly on all entries of that particular importer made during the
POR. The Department will issue appraisement instructions on each
exporter directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of these final results of administrative review for
all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption, as provided by section 751(a)(1) of the
Act, on or after the publication date of these final results of review:
(1) The cash deposit rate for the individually examined companies will
be the most recent rates as listed above, except that for firms whose
weighted-average margins are less than 0.5 percent and therefore de
minimis, the Department shall require a zero deposit
[[Page 53306]]
of estimated antidumping duties; (2) the cash deposit rate for non-
selected companies will be the weighted-average of the cash deposit
rates for the individually examined companies; (3) 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; (4) 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 will be the rate established for
the most recent period for the manufacturer of the merchandise; and (5)
the cash deposit rate for all other manufacturers or exporters will be
the ``all other'' rate of 3.10 percent. This is the rate established
during the LTFV investigation, as amended in litigation.
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 351.402 (f)(2) to file a certificate
regarding the reimbursement of AD 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 AD duties occurred and the subsequent assessment of
double AD duties.
This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the return or destruction of proprietary information
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to
comply is a violation of the APO.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act.
Dated: October 6, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-27141 Filed 10-10-97; 8:45 am]
BILLING CODE 3510-DS-P