[Federal Register Volume 59, Number 196 (Wednesday, October 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25220]
[[Page Unknown]]
[Federal Register: October 12, 1994]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-301-801]
Notice of Amended Preliminary Determination of Sales at Less Than
Fair Value: Fresh Cut Roses From Colombia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
EFFECTIVE DATE: October 12, 1994.
FOR FURTHER INFORMATION CONTACT: James Maeder or James Terpstra, Office
of Antidumping Investigations, Import Administration, U.S. Department
of Commerce, 14th Street and Constitution Avenue, N.W., Washington,
D.C. 20230; telephone (202) 482-3330 and 482-3965, respectively.
Scope of Investigation
The products covered by this investigation are fresh cut roses,
including sweethearts or miniatures, intermediates, and hybrid teas,
whether imported as individual blooms (stems) or in bouquets or
bunches. Roses are classifiable under subheadings 0603.10.6010 and
0603.10.6090 of the Harmonized Tariff Schedule of the United States
(HTSUS). The HTSUS subheadings are provided for convenience and customs
purposes. The written description of the scope of this investigation is
dispositive.
Summary
The purpose of this notice is to amend our preliminary
determination (59 FR 48284, September 20, 1994) with regard to
respondents Grupo Andes and Grupo Benilda, and to the ``all-others''
rate.
Case History
On September 12, 1994, the Department of Commerce (the Department)
made its affirmative preliminary determination of sales at less than
fair value (59 FR 48284, September 20, 1994).
On September 16, 1994, Grupo Andes, Grupo Benilda, Grupo
Intercontinental, and the Prisma Group alleged that the Department, in
making its determination, made ministerial errors which led to the
application of best information available (BIA). They requested that
the Department correct the ministerial errors, amend its preliminary
determination, and recalculate the all others rate. In addition, Grupo
Andes requested that the Department reverse its preliminary decision
not to verify its information.
On September 21, 1994, counsel for Grupo Andes, Grupo Benilda,
Grupo Intercontinental and the Prisma Group met with officials of the
Department of Commerce (see the September 22, 1994, ex-parte
memorandum). Also on September 21, 1994, the Caicedo Group alleged that
the Department made ministerial errors in calculating its dumping
margin and requested that the Department correct these errors and amend
the preliminary determination. On September 21, 1994, petitioner
submitted comments opposing respondents' ministerial error allegations
and their request to amend the preliminary determination. On September
22, 1994, counsel for petitioner met with officials of the Department
of Commerce (see the September 22, 1994, ex-parte memorandum). On
September 23, 1994, petitioner submitted a written summary of its
September 22, 1994, meeting comments.
On September 26, 1994, Grupo Tropicales alleged that the Department
made ministerial errors in calculating its dumping margin and requested
that the Department correct these errors and amend the preliminary
determination.
Amendment of Preliminary Determination
The Department has determined that the allegations of the Caicedo
Group, Grupo Intercontinental, Grupo Prisma, and Grupo Tropicales
involved issues that were other than clerical or ministerial in nature.
Consequently, we are not amending our preliminary determination with
respect to these companies. However, we are amending the preliminary
determination for Grupo Andes and Grupo Benilda. Accordingly, we have
recalculated the ``all others'' rate. Set forth below is the basis for
our amended preliminary determination with respect to these companies.
It is not our normal practice to amend preliminary determinations
since these determinations only establish estimated margins, which are
subject to verification and which may change in the final
determination. However, because of the specific facts pertaining to
this investigation, the Department has determined to amend its
preliminary determination to correct for the significant ministerial
errors involved. See the Department's proposed 19 CFR 353.15(g)(4) (57
FR 1131, 1132 (January 10, 1992)); Amendment to Preliminary
Determination of Sales at Less Than Fair Value; Sweaters Wholly or in
Chief Weight of Man-Made Fiber from Hong Kong, 55 Fed. Reg. 19289-90
(May 9, 1990).
A. Grupo Andes
In determining whether Grupo Andes had a viable home market for the
preliminary determination, the Department relied upon the narrative of
Grupo Andes's July 22 submission, which indicated that its home market
was not viable when, in its appendix to this submission, Grupo Andes
provided data which demonstrated that its home market was viable. Thus,
although there was data on the record which established that Andes'
home market was viable, we did not pursue further Grupo Andes home
market sales data for the preliminary determination. Therefore, the
Department's initial viability determination for Grupo Andes was
erroneous, as was the Department's decision not to take additional
action in regard to Grupo Andes' home market sales. Therefore, the
Department was left with no option but to preliminarily assign Grupo
Andes a margin based on BIA. Because the Department considers its
initial unintentional error to be ministerial, and because correction
of that error would result in a change of at least 5 absolute
percentage points in, but not less than 25 percent of, the preliminary
margin for Grupo Andes, that error constitutes a significant
ministerial error under proposed 19 CFR 353.15(g)(4) (57 Fed. Reg.
1131, 1132 (January 10, 1992)), the Department's proposed regulation
for correcting significant ministerial errors in preliminary
antidumping and countervailing duty determinations. The Department thus
has determined to amend its preliminary determination to establish a
preliminary margin for Grupo Andes based upon its data on the
administrative record.
The Department further will (1) require Grupo Andes to submit its
home market sales listing; (2) investigate, if necessary, whether Grupo
Andes made home market sales at prices below its cost of production;
and (3) conduct verification of all information submitted.
B. Grupo Benilda
Two business days before the Department's preliminary
determination, Grupo Benilda filed a pre-verification submission which
appeared to contain such extensive additions and corrections to its
original response as to constitute an entirely new response. The
Department thus determined initially that the submission called into
question the integrity of the response as a whole and preliminarily
assigned Grupo Benilda a margin based on BIA. Subsequently, the
Department has determined that Grupo Benilda's September 8 submission,
rather than representing a new response, in fact contained minor data
corrections to its response. Because that initial determination in
regard to the September 8 submission was an unintentional error which
the Department considers to be ministerial, and because correction of
that error would lead to a change of at least 5 absolute percentage
points in, but not less than 25 percent of, the preliminary margin for
Grupo Benilda, that error constitutes a significant ministerial error
pursuant to the Department's proposed regulation outlined above. The
Department thus has determined to amend its preliminary determination
to establish a preliminary margin for Grupo Benilda based upon its data
on the administrative record prior to its September 8 submission.
C. All Others Rate
Because the preliminary dumping margins for Grupo Andes and Grupo
Benilda have changed, the preliminary weighted-average ``all others''
rate has also changed. (See Suspension of Liquidation section of this
notice, below.)
Use of Third Country Prices/Constructed Value
For a discussion of the proper basis for Foreign Market Value, see
the Department's September 12, 1994, preliminary determination (59 FR
48284, September 20, 1994).
Fair Value Comparisons
To determine whether sales of fresh cut roses from Colombia to the
United States were made at less than fair value, we compared the United
States price (USP) to the foreign market value (FMV), as specified in
the ``United States Price'' and ``Foreign Market Value'' sections of
this notice. For all U.S. prices, we used weighted-average monthly U.S.
prices (see the September 12, 1994, concurrence memorandum).
United States Price
For sales by both Grupo Andes and Grupo Benilda, we based USP on
purchase price, in accordance with section 772(b) of the Trade Act of
1930, as amended (``the Act''), when the subject merchandise was sold
to unrelated purchasers in the United States prior to importation and
when exporter's sales price (ESP) methodology was not otherwise
indicated.
In addition, where certain sales to the first unrelated purchaser
took place after importation into the United States, we based USP on
ESP, in accordance with section 772(c) of the Act.
We made company-specific adjustments, as follows:
A. Grupo Andes
For Grupo Andes, we calculated purchase price based on packed,
f.o.b. prices to unrelated customers in the United States. We made
deductions, where appropriate, for foreign inland freight.
We calculated ESP based on packed prices to unrelated customers in
the United States. We made deductions, where appropriate, for foreign
inland freight, air freight, U.S. Customs duties, U.S. and Colombian
indirect selling expenses including inventory carrying costs, and U.S.
direct selling expenses including credit expenses.
For roses that were further manufactured into bouquets after
importation, we adjusted for all value added in the United States,
including the proportional amount of profit or loss attributable to the
value added, pursuant to section 772(e)(3) of the Act. We added packing
to reported U.S. prices. For the cost of merchandise subject to further
manufacturing, in addition to the adjustments cited in the section on
FMV, below, for constructed value, we (1) corrected the U.S. general
expenses to reflect a percentage of cost of goods sold, and (2)
recalculated interest expense to exclude the CV offset.
B. Grupo Benilda
For Grupo Benilda, we calculated purchase price based on packed,
f.o.b. prices to unrelated customers in the United States. We made
deductions, where appropriate, for foreign inland freight.
We calculated ESP based on packed prices to unrelated customers in
the United States. We made deductions, where appropriate, for foreign
inland freight, air freight, U.S. customs duties, U.S. brokerage and
handling expenses, credit expenses, Colombian Flower Council expenses,
the greater of U.S. commissions to the related reseller or U.S.
indirect selling expenses incurred, Colombian indirect selling
expenses, including inventory carrying costs and other indirect selling
expenses. For those ESP sales where Grupo Benilda did not report
airfreight, U.S. duty, and U.S. brokerage and handling expenses, we
applied, as BIA, the highest reported value for each such expense (see
the Department's September 9, 1994, concurrence memorandum.)
Foreign Market Value
In order to determine whether there were sufficient sales of fresh
cut roses in the home market to serve as a viable basis for calculating
FMV, we compared the volume of home market sales of roses to the volume
of third country sales of roses in accordance with section 773(a)(1)(B)
of the Act. Based on this comparison, we determined that Grupo Benilda
had a viable home market with respect to sales of roses during the POI
and, therefore, we based FMV for Grupo Benilda on home market sales
where those sales were above the cost of production. For Grupo Andes,
we based FMV on constructed value (CV).
We based FMV for Grupo Benilda on two six-month periods. Period one
is January 1993 through June 1993, and period two is July 1993 through
December 1993. For a further discussion of these periods, see the
September 12, 1994, concurrence memorandum.
A. Grupo Andes
For Grupo Andes, we calculated FMV based on CV, in accordance with
section 773(e) of the Act. We calculated CV based on Grupo Andes' cost
of cultivation, plus general expenses, profit and packing in the United
States. For total general expenses, including selling and financial
expenses (SG&A), we used the greater of reported general expenses or
the statutory minimum of ten percent of the cost of cultivation. For CV
profit, we used the greater of the weighted-average reported profit
during the POI or statutory minimum of eight percent of the cost of
cultivation and general expenses, in accordance with 19 CFR
353.50(a)(2) and section 773(e)(B) of the Act. We adjusted Grupo Andes'
CV data (1) to correct the export quantity sold to agree to information
reported in the supplemental section A; and (2) to base selling and
packing expenses on information provided in the sales response.
For CV to purchase price comparisons, we made circumstance of sales
adjustments for direct selling expenses including credit expenses.
For CV to ESP comparisons, we made deductions, where appropriate,
for direct selling expenses including credit expenses. We also deducted
from CV the weighted-average indirect selling expenses, including
inventory carrying costs up to the amount of indirect selling expenses
incurred on U.S. sales, in accordance with 19 CFR 353.56(b)(2).
B. Grupo Benilda
Because we found ``reasonable grounds to believe or suspect'' that
Grupo Benilda sold roses in Colombia at prices below their COP, we
initiated a COP investigation to determine whether it had home market
sales that were made at less than their respective COPs, in accordance
with section 773(b) of the Act. (See the September 8, 1994, memorandum
from Richard W. Moreland to Barbara R. Stafford.)
In accordance with section 773(b) of the Act, we examined whether
Benilda sold roses below the cost of production in significant
quantities over an extended period of time. In keeping with our
practice involving perishable products, if more than 50 percent of
Grupo Benilda's sales of roses, on a model-specific basis, were at
prices above the COP, we did not disregard any below-cost sales
pursuant to section 773(b) of the Act, because we determined that Grupo
Benilda's below-cost sales were not made in substantial quantities
within an extended period of time. (See Certain Fresh Winter Vegetables
From Mexico 45 FR 20512 (1980).) If between 50 and 90 percent of Grupo
Benilda's sales, on a model-specific basis, were at prices below the
COP, and the below cost sales were made within an extended period of
time, we disregarded only the below-cost sales. Where we found that
more than 90 percent of Grupo Benilda's sales, on a model-specific
basis, were at prices below the COP, we disregarded all sales and
calculated FMV based on CV.
In order to determine whether Grupo Benilda's home market sales
were above the COP, we calculated COP based on the sum of Grupo
Benilda's cost of cultivation, general expenses, and packing; we
calculated CV based on the sum of Grupo Benilda's COP plus profit. For
total general expenses, including selling and financial expenses,
(SG&A) we used the greater of reported general expenses or the
statutory minimum of ten percent of the cost of cultivation. For CV
profit, we used the greater of the weighted-average reported profit
during the POI or the statutory minimum of eight percent of the cost of
cultivation and general expenses, in accordance with 19 CFR
353.50(a)(2) and section 773(e)(B) of the Act. We adjusted Grupo
Benilda's COP and CV data to (1) correct an error in the company's
calculation of average interest expense; (2) include the entire amount
of the 1993 labor bonus; and (3) disallow the company's exclusion of
certain G&A expenses.
In accordance with 19 CFR 353.58, we compared Grupo Benilda's U.S.
sales to home market sales made at the same level of trade, where
possible.
For those home market sales above the cost of production, we based
FMV on packed, f.o.b. farm prices to unrelated customers.
For home market price to purchase price comparisons, pursuant to 19
CFR 353.56(a)(2), we made circumstance-of-sale adjustments, were
appropriate, for differences in credit expenses.
For home market price to ESP comparisons, we made deductions for
the weighted-average home market indirect selling expenses, including,
where appropriate, inventory carrying costs, up to the amount of the
greater of either indirect selling expenses incurred on U.S. sales or
related-party commissions paid on U.S. sales, in accordance with 19 CFR
353.56(b)(1). We also made deductions, for home market credit expenses.
For all price-to-price comparisons, we also deducted home market
packing costs and added U.S. packing costs, in accordance with section
773(a)(1) of the Act.
For CV to purchase price comparisons, we made circumstance of sales
adjustments for credit expenses.
For CV to ESP comparisons, we made deductions, where appropriate,
for credit expenses. We also deducted from CV the weighted-average home
market indirect selling expenses, including inventory carrying costs,
up to the amount of the greater of either indirect selling expenses
incurred on U.S. sales or related-party commissions paid on U.S. sales,
in accordance with 19 CFR 353.56(b)(2).
Currency Conversion
Because certified exchange rates for Colombia were unavailable from
the Federal Reserve, we made currency conversions for expenses
denominated in Colombian pesos based on the official monthly exchange
rates in effect on the dates of the U.S. sales as certified by the
International Monetary Fund.
Verification
As provided in section 776(b) of the Act, we will verify the
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, the Department
will direct the U.S. Customs Service to continue to require a cash
deposit or posting of bond on all entries of subject merchandise from
Colombia for Grupo Andes, Grupo Benilda and for the all-others rate at
the newly calculated rate, that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. The suspension of liquidation will
remain in effect until further notice. The weighted-average dumping
margins are as follows:
------------------------------------------------------------------------
Margin
Manufacturer/Producer/Exporter percent
------------------------------------------------------------------------
Grupo Andes................................................... 7.63
Grupo Benilda................................................. 9.89
All Others.................................................... 22.73
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of the amended preliminary determination. If our final
determination is affirmative, the ITC will determine whether imports of
the subject merchandise are materially injuring, or threaten material
injury to, the U.S. industry, before the later of 120 days after the
date of the original preliminary determination (September 12, 1994) or
45 days after our final determination.
Public Comment
As stated in our preliminary determination (59 FR 48284, September
20, 1994), and pursuant to our notice of postponement of the final
determination signed September 28, 1994, case briefs or other written
comments, in at least ten copies, must be submitted to the Assistant
Secretary for Import Administration no later than December 2, 1994, and
rebuttal briefs no later than December 9, 1994. In accordance with 19
CFR 353.38(b), we will hold a public hearing, in accordance with a
party's request, to give interested parties an opportunity to comment
on arguments raised in case or rebuttal briefs. Tentatively, the
hearing will be held on December 13, 1994, at 1:00 p.m. at the U.S.
Department of Commerce, Room 4830, 14th Street and Constitution Avenue,
N.W., Washington, D.C. 20230. Parties should confirm by telephone the
time, date, and place of the hearing 48 hours before the scheduled
time.
Interested parties who wish to enter an appearance at the hearing
must submit a written request to the Assistant Secretary for Import
Administration, U.S. Department of Commerce, Room B-099, within ten
days of the publication of this notice in the Federal Register. Request
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. In accordance with 19 CFR 353.38(b), oral presentation will
be limited to issues raised in the briefs.
Dated: October 4, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-25220 Filed 10-11-94; 8:45 am]
BILLING CODE 3510-DS-P
