[Federal Register Volume 60, Number 50 (Wednesday, March 15, 1995)]
[Notices]
[Pages 13958-13961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6403]
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DEPARTMENT OF COMMERCE
[A-301-801 and A-331-801]
Amended Final Determinations of Sales at Less Than Fair Value:
Fresh Cut Roses From Colombia and Ecuador
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 15, 1995.
FOR FURTHER INFORMATION CONTACT: James Maeder or James Terpstra, Office
of Antidumping Investigations, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3330 or (202) 482-3965, respectively.
Amendments to the Final Determinations
We are amending the final determinations of sales at less than fair
value of fresh cut roses from Colombia and Ecuador to reflect the
correction of ministerial errors made in the margin calculations in
these determinations. Because corrections of ministerial errors for one
company in the Colombian investigation results in its exclusion from
any potential antidumping order, we are issuing this notice prior to
the final determination of the U.S. International Trade Commission.
These amendments to the final determinations are being published in
accordance with 19 CFR 353.28(c).
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are in reference to the provisions in effect
on December 31, 1994.
Case History and Amendments of the Final Determinations
In accordance with section 735(d) of the Tariff Act of 1930, as
amended (the Act), on February 6, 1995, the Department of Commerce (the
Department) published its final determinations that fresh cut roses
from Colombia and Ecuador were being sold at less than fair value (60
FR 6980, 7019). Subsequent to the final determinations, we received
timely ministerial error allegations from certain respondents in the
Colombian and Ecuadorian investigations pursuant to 19 CFR 353.28.
Section 751(f) of the Act defines a ``ministerial error'' to be an
error ``in addition, subtraction or other arithmetic function, clerical
error resulting from inaccurate copying, duplication, or the like, and
any other type of unintentional error which the Secretary considers
ministerial.'' Below is a discussion of the alleged errors that we
determined to be ministerial errors as defined by section 751(f) of the
Act. These, and the alleged errors that the Department determined not
to be ministerial in nature, are detailed further in the Decision
Memoranda from Gary Taverman to Barbara R. Stafford, dated March 3,
1995, which is on file in the Import Administration Central Records
Unit, Room B-099 of the Main Commerce Building.
Colombia
On February 7 and 8, respondents Rosex Group, Prisma Group,
Agricola Bojaca, Grupo Sabana, Flores Mocari, Caicedo Group, Grupo
Intercontinental, and Grupo Papagayo, alleged that the Department made
ministerial errors in its final determination and requested that the
Department correct these errors. Petitioner provided comments on these
allegations on February 14, 1995.
Rosex Group
Issue 1: Rosex Group states that the Department made a ministerial
error in the calculation of its per unit credit expense. Rosex Group
stated that it changed its reported interest rate in its December 5,
1994, sales listing from a dollar-denominated rate to a peso-
denominated interest rate. Because Rosex Group calculated its U.S.
imputed credit using a peso-denominated rate, it contends that the
Department should have adjusted this rate instead of a dollar-
denominated rate. Petitioner maintains that the Department's computer
instructions to change the peso-based interest rate to a dollar-based
rate appear to be correct.
We agree with respondent that this error constitutes a ministerial
error as defined by section 751(f) of the Act. It was the Department's
intention to use a U.S. interest rate of 7.575 percent in Rosex Group's
imputed credit calculation. Therefore, we have corrected this
ministerial error.
Prisma
Issue 1: Prisma argues that the computer program used to calculate
its margin contained an error which incorrectly computed the per-unit
commission for all U.S. sales observations. Stating that the Department
intended to calculate a U.S. commission for ten specific U.S. sales
observations, Prisma asserts that the program mistakenly caused every
U.S. sales commission to be recalculated. In addition, Prisma claims
that there is also a typographical error in the calculation of
commissions for one sales observation.
We agree with Prisma that these are ministerial errors, and have
revised the computer program accordingly.
Issue 2: With respect to inventory carrying costs, Prisma notes
that it included the period normally covered by inventory carrying cost
in its imputed credit calculation. As such, Prisma argues that the
Department double-counted this expense by calculating a separate
inventory carrying cost. Petitioner maintains that the Department
imputed inventory carrying cost for seven days as best information
available (BIA) for those respondents that failed to provide the data,
and argues that because Prisma did not submit the data in the requested
form, it cannot now argue double-counting to circumvent the application
of BIA.
We agree with Prisma. We used BIA for inventory carrying cost for
those respondents who had related parties in the United States and did
not report inventory carrying costs on their exporter's sales price
(ESP) sales. However, because Prisma does not have a related party in
the United States, we incorrectly calculated inventory carrying costs.
Therefore, we have adjusted for this ministerial error.
Issue 3: Prisma contends that the Department's inflation adjustment
computation incorrectly assumed that all companies within the Prisma
Group did not include the 1992 inflation adjustment in their submitted
amortization expense. However, respondent notes that the cost
verification report demonstrates that Prisma did include the 1992
inflation adjustment for farm Del Campo in its submitted amortization
expenses.
We agree. The cost verification report at page 9 indicates that one
of the seven Prisma Group farms (Del Campo) did include in its
submitted cost information its inflation adjusted pre-production
material amortization costs for years prior to the period of
investigation (POI). The other six farms that make up the Prisma Group
did not [[Page 13959]] make adjustments for inflation. Because we did
not intend to make an adjustment for Del Campo that had already been
made, we have recalculated the inflation adjustment.
Bojaca
Issue 1: Bojaca contends that it was incorrect for the Department
to use BIA to impute amounts for brokerage and duties whenever the
values for those expenses were reported as zero for U.S. ESP customers.
Bojaca asserts that it was only for customer 4 that there were zero
values for brokerage or duties, and maintains that because it could not
segregate these amounts, it reported the combined amounts under air
freight.
Petitioner argues that Bojaca failed to cite to any questionnaire
response or verification exhibit which informed the Department that
brokerage and duty expenses were consolidated with air freight.
Petitioner asserts that Bojaca did not explain why a reasonable
allocation methodology could not segregate these amounts, and adds that
it is not clear that brokerage and duty expenses were always included
in air freight. Therefore, petitioner asserts that the Department's
choice of BIA to fill Bojaca's reported zero values does not constitute
a ministerial error.
We agree with respondent in part. We verified that Bojaca had
included its duty and brokerage expenses in its air freight expenses
for customer 4. Therefore, we incorrectly applied BIA to customer 4.
However, we found that there are zero values for other ESP customers.
Therefore, we have continued to use BIA for the other ESP customers
that have a zero value reported in these fields.
Issue 2: Bojaca argues that the Department incorrectly calculated
constructed value (CV) packing expense by using total packing expenses
for roses, irrespective of destination, rather than total U.S. packing
expense.
We agree. We intended to use total U.S. packing expenses rather
than total packing expenses in our CV calculation. We have recalculated
CV packing expense to correct this error.
Issue 3: Bojaca argues that the Department erroneously allocated
the entire group-wide interest expense to roses, when it should have
allocated only the proportion of the group-wide interest expense
associated with rose activities. Bojaca argues that the interest
expense associated with the dairy farm and mini-roses should not have
been included in the calculation.
We agree. We intended to exclude from our cost calculations the
portion of interest expense related to the dairy farm. We purposely did
not allocate any interest expense to the mini-roses because: (1)
Respondent indicated that an insignificant portion (less than one
percent) of the total cultivated area of one of the three farms within
the Bojaca Group produced mini-roses; and, (2) because the cost of
production for mini-roses, the basis used to allocate interest expense
to Bojaca's different products, was not provided by the company. We
intended to compute interest expense by excluding only the portion of
interest expense that relates to the dairy farm. We have made this
adjustment, but only as it related to the dairy farm.
Mocari
Issue 1: Mocari argues that the Department mistakenly deducted air
freight expenses which it did not incur on its purchase price (PP)
sales transactions. Mocari points out that these sales were made on an
FOB Bogota basis, and requests that the Department deduct the air
freight expenses from only the ESP sales transactions. The petitioner
argues that Mocari had ample opportunity throughout the investigation
to correct any error in reporting air freight. In addition, the
petitioner maintains that Mocari has not provided a basis which
demonstrates that its proposed correction would be limited only to
removing erroneous expenses.
We agree with respondent. We verified that Mocari did not pay air
freight for PP sales. Therefore, we have corrected the error by
deducting amounts for air freight from ESP sales only.
Issue 2: Mocari claims that the Department mistakenly included it
in the list of companies that had no U.S. borrowings during the POI and
should not have used BIA to calculate imputed credit expenses and
inventory carrying cost. Mocari maintains that the Department should
have used its actual borrowing rate instead of the publicly ranged
interest rate to calculate imputed credit expenses and inventory
carrying costs.
We agree with respondent. We intended to use Mocari's actual
interest rate in our imputed credit expenses and inventory carrying
costs calculations. Mocari's financial statements show that it paid
interest on short-term borrowings during the POI. Accordingly, we have
revised Mocari's imputed credit calculation and inventory carrying cost
to use its short-term dollar-denominated interest rate.
Issue 3: Mocari claims that the Department should not have
subtracted the total number of stems returned from the sales quantity
indicated on the CV tables because the amount reported was already net
of returns. Therefore, Mocari requests that the Department recalculate
its cost of manufacture (COM) using the sales quantity indicated on
line 8 of the CV tables. In addition, Mocari requests that the
Department not subtract additional stems from the amount reported on
line 8 of the CV tables because such action represents an improper
double-counting of returns.
The petitioner states that Mocari should have reported an amount
which was inclusive of returns in line 8 of the CV tables instead of an
amount which was net of returns. The petitioner argues that Mocari
should have notified the Department earlier that the amount reported on
line 8 of the CV table was net of returns. Therefore, petitioner
maintains that clerical error comments are not the forum in which to
determine new factual claims.
We agree with respondent. Sales verification exhibit 19 shows that
the amount Mocari reported on line 8 of the CV tables is net of
returns. Accordingly, we have recalculated the COM, interest, and
general and administrative expenses for Mocari using the quantity
amount on line 8 of the CV tables. Further, because this figure is net
of returns, we did not deduct an additional amount for returns from
this figure; this action would have represented double-counting.
Grupo Intercontinental
Issue 1: Grupo Intercontinental (Intercontinental) alleges that in
its CV calculation, the Department erred in its calculation of a home
market packing cost as BIA. Intercontinental argues that the Department
should have used its U.S. packing cost, as required by section
353.50(a)(3) of the Department's regulations. Intercontinental further
states that instead of using the verified U.S. packing expense in its
CV calculation, the Department used a home market BIA amount that
should have been applied only to home market sales of export quality
roses for which no packing costs were reported. Therefore,
Intercontinental requests that the Department apply the U.S. packing
expense in its CV calculation.
We agree that the Department erred in using the BIA home market
packing expense for CV. While we properly applied the per stem packing
cost for purposes of the cost test, we intended to use the verified
U.S. packing amount for calculating CV. Therefore, we revised our
calculation to correct this clerical error.
Issue 2: Intercontinental states that the Department intended to
correct Colombian Flower Council (CFC) fees for certain customers in
certain months [[Page 13960]] and that, in making the programming
changes necessary to accomplish this task, the Department mistakenly
changed the CFC fees for all customers in all months. We agree, and
have corrected this error.
Caicedo Group
Issue 1: Caicedo states that the Department's inflation adjustment
was intended to be a reasonable estimate of the effects of inflation on
depreciation and amortization expenses denominated in historical pesos.
Caicedo argues, however, that the Department erred in applying its
inflation adjustment to the company's total reported cost of
cultivation, including current cultivation costs, and that this is the
equivalent of punitive ``BIA.'' Caicedo further argues that its record
provides information regarding the company's 1993 depreciation and
amortization of pre-production expenses.
We agree that the Department mistakenly adjusted Caicedo's current
cultivation costs for inflation. Accordingly, we have recalculated the
inflation adjustment by applying the determined inflation rate to non-
current, pre-production amortization and depreciation costs only.
Issue 2: Caicedo argues that the Department should adjust the cull
revenue to recognize the insurance compensation proceeds the company
received for hailstorm damage. Caicedo states that the insurance
proceeds, which were originally reported as an offset to overhead, were
subsequently reclassified by Caicedo and included in the balance for
cull revenue. Caicedo concludes that the Department made a ministerial
error by excluding the reduction in rose production costs resulting
from the insurance proceeds.
We agree. We have reduced Caicedo's total costs by the insurance
proceeds received.
Issue 3: Caicedo contends that the Department made two ministerial
errors in its allocation of interest expenses. First, Caicedo argues
that the Department erred in allocating interest expense over total
export quality rose stems sold during the POI. Because the particular
companies involved produce and sell other types of flowers, Caicedo
maintains that the Department should have allocated interest expense
over total flower stems. Second, Caicedo claims that the Department
failed to allocate any of the combined interest expense to Great
American Bouquet S.A. (GAB), a division of Inverfloral LTDA
(Inverfloral) that does not grow flowers, but, rather, incorporates
numerous flower types, including roses, into bouquets. Caicedo
concludes that the Department's failure to allocate the combined
interest expenses to GAB was inadvertent, and that the Department
intended to allocate the combined interest expenses of the four grower/
exporters over their combined stems sold for all flower types.
We agree. We intended to allocate the combined interest expense of
the four grower/exporters to the rose operations of those companies,
including Inverfloral's GAB division. Therefore, we recalculated
Caicedo's interest expense by first allocating the total combined
interest expenses of the four companies between Inverfloral/GAB (non-
grower) and the other three companies (which all grow flowers) based on
the ratio of Inverfloral/GAB's productive and long-term assets to the
total productive and long-term assets of all four companies. Because
companies generally borrow capital in order to finance the purchase of
such assets, we consider this approach to be the most reasonable
indicator of the borrowing needs of the rose production versus bouquet
assembly sides of Caicedo's operations. For each of the four grower/
exporters, we included in productive assets the year-end 1993 financial
statement balances for inventory, crop investments, crops in
development, and long-term assets, including fixed assets.
In order to allocate the remaining interest expense between rose
and other flower growing operations at the three production companies,
we used the ratio of rose cultivation area to total cultivation area,
for the three companies that grow flowers. This methodology is
consistent with that used for several of the other Colombian rose
growing companies.
Ecuador
On February 8, 1995, Arbusta-Agritab (Arbusta) and Guanguilqui Agro
Industrial S.A. (Guaisa) made timely allegations that the Department
made ministerial errors in its final determination. On February 16,
1995, petitioner provided its comments on the alleged errors.
Arbusta
Issue 1: Arbusta states that the Department incorrectly multiplied
DHL delivery charges by quantity before subtracting this expense from
U.S. price.
We agree. Because we did not intend to multiply the per stem DHL
expense by quantity, we have corrected this error.
Issue 2: Arbusta argues that the Department incorrectly disallowed
the company's capitalization of costs incurred during the vegetative
period.
We agree. Because we inadvertently overlooked the inclusion of the
capitalization and amortization of prior period vegetative period
costs, we have adjusted the CV to allow for the current period
capitalization of vegetative period costs.
Issue 3: Arbusta alleges that the Department mistakenly added
actual historical depreciation expenses to CV instead of only the
revaluation of those expenses. Arbusta contends that this addition
double counts the amount of historical depreciation.
We agree. We inadvertently added historical depreciation to CV.
Therefore, because we unintentionally double-counted this expense, we
have corrected the error.
Issue 4: Arbusta states that in its CV calculation the Department
used an incorrect packing expense. Petitioner also notes that the
packing cost used in the CV calculation for Arbusta conflicts with the
Department's analysis memorandum.
We agree with both petitioner and respondent, and determine this to
be a ministerial error. Accordingly, we have corrected the packing
expenses used in CV.
Guaisa
Guaisa contends that the Department reallocated certain expenses to
roses based on an incorrect rose area percentage for Guaisa farm.
We agree with Guaisa in part. We found a typographical error in our
calculation of the correct roses cultivated area. However, the rose
area calculated by Guaisa that it requested the Department use in its
recalculation is incorrect. Accordingly, we have corrected the
typographical error we found in our original calculation and rejected
the figure calculated by Guaisa.
Scope of Investigation
The products covered by these investigations are fresh cut roses,
including sweethearts or miniatures, intermediates, and hybrid teas,
whether imported as individual blooms (stems) or in bouquets or
bunches. Loose rose foliage (greens), loose rose petals and detached
buds are excluded from these investigations. 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 these investigations is dispositive.
Suspension of Liquidation
In accordance with 19 U.S.C. 1673b, we are directing the U.S.
Customs [[Page 13961]] Service to continue to suspend liquidation of
all entries of fresh cut roses from Colombia and Ecuador, as defined in
the ``Scope of Investigation'' section of this notice, that are
entered, or withdrawn from warehouse, for consumption on or after the
date of publication of this notice in the Federal Register. The Customs
Service shall require a cash deposit or the posting of a bond on all
entries equal to the estimated weighted-average amount by which the
foreign market value of the merchandise subject to this investigation
exceeds United States price as shown in the table below. The following
is a list of all the final margins, including the amended final
margins, in these investigations.
------------------------------------------------------------------------
Margin
Manufacturer/Producer/Exporter percent
------------------------------------------------------------------------
Colombia
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Flores Mocari S.A. (and its related farms Cultivos
Miramonte and Devor Colombia)............................. 2.86
Rosex (and its related farms Rosex Ltda. La Esquina and
Paraiso Farms), Induflora Ltda., and Rosas Sausalito
Ltda.).................................................... 2.44
Grupo Prisma (and its related farms Flores del Campo Ltda.,
Flores Prisma S.A., Flores Acuarela S.A., Flores el Pincel
S.A., Rosas del Colombia Ltda., Agropecuaria Cuernavaca
Ltda.).................................................... 0.00
Grupo Bojaca (and its related farms Agricola Bojaca Ltda.,
Universal Flowers, and Plantas y Flores Tropicales Ltda.
(Tropifora)).............................................. 20.66
Caicedo Group (and its related farms Agrobosque, Productos
el Rosal S.A., Productos el Zorro S.A., Exportaciones
Bochia S.A. - Flora Ltda., Flores del Cauca, Aranjuez
S.A., Andalucia S.A., Inverfloral S.A., and Great America
Bouquet).................................................. 15.07
Grupo Intercontinental (and its related farms Flora
Intercontinental and Flores Aguablanca)................... 3.92
All Others................................................. 5.53
------------------------------------------------------------------------
Ecuador
------------------------------------------------------------------------
Arbusta-Agritab (and its related farms Agrisabe, Agritab,
and Flaris)............................................... 4.01
Guanguilqui Agro Industrial S.A. (and its related farm
Indipasisa)............................................... 14.29
All Others................................................. 5.41
------------------------------------------------------------------------
These amended final determinations are published in accordance with
section 751(f) of the Act and 19 CFR 353.28(c).
Dated: March 3, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-6403 Filed 3-14-95; 8:45 am]
BILLING CODE 3510-DS-P
