[Federal Register Volume 62, Number 96 (Monday, May 19, 1997)]
[Notices]
[Pages 27219-27221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13058]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-601]
Certain Fresh Cut Flowers From Mexico; Final Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review.
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SUMMARY: On January 9, 1997, the Department of Commerce (the
Department) published the preliminary results of its administrative
review of the antidumping duty order on certain fresh cut flowers from
Mexico. The review covers one manufacturer/exporter and the period
April 1, 1995 through March 31, 1996.
We gave interested parties an opportunity to comment on our
preliminary results. Based on our analysis of the comments received, we
have not changed the results from those presented in the preliminary
results of this review.
EFFECTIVE DATE: May 19, 1997.
FOR FURTHER INFORMATION CONTACT: G. Leon McNeill or Maureen Flannery,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-4733.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
On January 9, 1997, the Department published in the Federal
Register (62 FR 1318) the preliminary results of its administrative
review of the antidumping duty order on fresh cut flowers from Mexico,
52 FR 13491 (April 23, 1987). The Department has now completed this
administrative review in accordance with section 751 of the Act.
Scope of Review
The products covered by this review are certain fresh cut flowers,
defined as standard carnations, standard chrysanthemums, and pompon
chrysanthemums. During the period of review, such merchandise was
classifiable under Harmonized Tariff Schedule of the United States
(HTSUS) items 0603.10.7010 (pompon chrysanthemums), 0603.10.7020
(standard chrysanthemums), and 0603.10.7030 (standard carnations). The
HTSUS item numbers are provided for convenience and U.S. Customs
(Customs) purposes only. The written description of the scope of the
order remains dispositive.
This review covers one manufacturer/exporter of fresh cut flowers
from Mexico, Rancho Del Pacifico (Pacifico), and the period April 1,
1995 through March 31, 1996.
Duty Absorption
As part of this review, we are considering, in accordance with
section 751(a)(4) of the Act, whether Pacifico absorbed antidumping
duties. See the preliminary results of this review. For these final
results of review, we determine that there is no dumping margin on any
of Pacifico's sales during the period of review and, therefore, find
that antidumping duties have not been absorbed by Pacifico on its U.S.
sales.
Analysis of the Comments Received
We gave interested parties an opportunity to comment on the
preliminary results of review. We received a case brief from the
petitioner, The Floral Trade Council.
Comment 1: Petitioner argues that the Department should revise its
cash deposit instructions to Customs from those issued in prior
reviews. Petitioner suggests that, in order to discourage circumvention
of the antidumping duty
[[Page 27220]]
order, the Department instruct Customs to collect cash deposits at the
higher of the grower or exporter's rate or, if the exporter has sourced
through multiple growers, at the highest of the growers' or exporter's
rate. Where the grower is unknown, petitioner contends, the Department
should collect cash deposits at the highest rate. In addition,
petitioner asserts that the Department should publish the exact
language of its cash deposit instructions in its determinations so that
interested parties would have an opportunity to comment on those
instructions.
Petitioner notes that, for the 1993/1994 administrative review--the
most recently completed administrative review involving Pacifico--the
Department issued the following cash deposit instructions to Customs
that were not included in its published determination:
If any entries of this merchandise are exported by a firm other
than the manufacturer then the following instructions apply: (A) If
the exporter of the subject merchandise has its own rate, use the
exporter's rate for determining the cash deposit rate; (B) If the
exporter of the subject merchandise does not have its own rate, but
the manufacturer has its own rate, the cash deposit rate will be the
manufacturer's rate; (C) Where neither the exporter nor the
manufacturer currently has its own rate, or the manufacturer is
unknown, use the ``all others'' rate for establishing the cash
deposit rate.
(Petitioner cites to the Cash Deposit Instructions dated September 12,
1996, and Certain Fresh Cut Flowers from Mexico; Final Results of
Antidumping Duty Administrative Review, 61 FR 40604 (August 5, 1996).)
Petitioner contends that part A of the cash deposit instructions
does not account for the situation in which both producer and exporter
have their own rates. Petitioner argues that the name of an exporter
stated in part A could merely be the name of a flower grower subject to
an antidumping duty rate of zero percent who has exported the flowers
of another grower that has a much higher rate.
Petitioner argues that the Department's current cash deposit
instructions undermine the remedial purpose of the statute, which is to
remedy dumping through the application of antidumping duties.
Petitioner contends that, for that reason, the Department has refused
to allow exporters that are excluded from an antidumping duty order to
export merchandise produced by companies subject to that order. As
support for its argument, petitioner cites Jia Farn Manufacturing Co.,
Ltd. v. United States, 817 F. Supp. 969 (CIT 1993), where, petitioner
asserts, the Department indicated that a company originally excluded
from an antidumping duty order would immediately be subject to a cash
deposit if it exports merchandise produced by another company subject
to the order. Petitioner further cites Certain Fresh Cut Flowers from
Colombia; Final Results of Administrative Review and Notice of
Revocation of Order (in Part), 59 FR 15159, 15167 (March 1, 1994),
where, petitioner notes, the Department states that evidence that
revoked companies are serving as conduits for other Colombian flower
growers would call for appropriate action, which could include
reinstatement of the order and referral to the Customs fraud division.
Petitioner notes that part C of the cash deposit instructions
directs Customs to use the ``all others'' rate in cases in which the
producers or exporters of the merchandise are unknown. Petitioner
maintains that selection of the ``all others'' rate for unknown
producers is a clear invitation for a producer with higher dumping
margins to route merchandise through growers/exporters that do not have
company-specific rates. Petitioner also maintains that the Department's
instructions contradict Customs' prior practice of assigning the
highest rate whenever entry documentation did not provide the name of
grower. In addition, petitioner asserts that Customs has explained that
both producer and exporter should be identified on entry documentation,
filed electronically and physically, in order to properly collect
estimated antidumping duty deposits.
Department's Position: We disagree with the petitioner. Part A of
the Department's standard cash deposit instructions does allow for the
situation in which both producer and exporter have their own rates; in
this situation, the exporter's rate is used as the cash deposit rate.
This is because the exporter, who sets the price for the sale to the
United States, is the potential price discriminator. The exporter's
sales--in this case, Pacifico's sales--form the basis of the margin
calculation; therefore, it is appropriate that cash deposits be
collected at that margin on an exporter-specific basis. If we receive
any evidence that Pacifico is serving as a conduit for other Mexican
flower growers, i.e., that Pacifico is exporting merchandise produced
and sold for export to the United States on behalf of other growers, we
will consider this a case of potential evasion of the antidumping duty
order and will take appropriate action. We will also take appropriate
action if we receive evidence that an exporter without a company-
specific margin is serving as a conduit for a grower/exporter which has
a higher, company-specific margin. See, e.g., Sebacic Acid from the
People's Republic of China; Final Results of Antidumping Duty
Administrative Review, 62 FR 10532 (March 7, 1997).
It has been the Department's longstanding practice not to
incorporate in Federal Register notices a verbatim copy of the cash
deposit instructions that it transmits to Customs. However, it is our
practice to include in the Federal Register a summary of our planned
instructions, as we did in the preliminary results of this review.
Furthermore, we note that it is evident from this summary that deposits
are to be collected on the basis of the exporter's rate, rather than
the producer's rate, when the exporter has a rate. Interested parties
have an opportunity to comment on that summary of instructions. We find
no reason to change our current practice.
Comment 2: Petitioner contends that, for purposes of calculating
constructed export price profit, the Department should reallocate
Pacifico's costs on the basis of relative cultivation area rather than
on bunches of flowers produced per month. Petitioner argues that
Pacifico's methodology allocates an equal amount of costs on the basis
of quantity produced without taking into consideration that certain
flower varieties are more expensive to grow. For example, petitioner
maintains, Pacifico's methodology would allocate the same costs to both
what would appear to be field crops and greenhouse crops.
Petitioner maintains that cultivation area, not bunches produced,
is the method commonly used to allocate flower costs. As support for
its argument, petitioner cites Floral Trade Council v. United States,
822 F. Supp. 766, 772 (Floral Trade); Certain Fresh Cut Flowers from
Mexico; Final Results of Antidumping Duty Administrative Review, 57 FR
19597, 19599 (May 7, 1992); and Fresh Cut Roses from Colombia; Final
Determination of Sales At Less Than Fair Value, and Notice of
Revocation of Order (in Part), 60 FR 6980, 7010, 7012 (February 6,
1995) (Colombian Flowers). Petitioner argues that the statute and the
Statement of Administrative Action (SAA) instruct the Department to
consider whether a respondent has historically used an allocation
methodology in determining whether a cost allocation methodology is
acceptable, citing 19 U.S.C. 1677(F)(1)A and the SAA at 835.
Petitioner suggests that the Department should require Pacifico to
[[Page 27221]]
explain whether it maintains product-specific cost data such as the
``rose plant'' cost data already reported in its questionnaire
response. Petitioner maintains that, unless the respondent uses bunches
produced in its ordinary books and records to allocate costs, the
Department should require Pacifico to report its costs based on
cultivation area.
Department's Position: We disagree with petitioner that Pacifico's
costs should be reallocated on the basis of cultivation area. The Court
of International Trade in Floral Trade states that ``allocation is * *
* an inexact science, and is simply a way to estimate the costs
incurred by the firm to manufacture the product, complete the process,
or deliver the service,'' and that ``allocation methods vary even among
firms in the same industry.'' Floral Trade Council v. U.S., 822 F.Supp.
766, 772 (CIT 1993). The final review results for Mexican flowers cited
by petitioner only indicate that in that instance we found the grower's
use of cultivation area to be an acceptable allocation basis for
certain costs (61 FR 40604). This does not stand for the proposition
that relative area is the correct method of allocating growing costs.
In the instant proceeding, we find no evidence that Pacifico used
cultivation area as a basis of allocation in its books and records, or
that flowers produced by Pacifico are field crops. Furthermore, the
record does not support petitioner's claim that Pacifico's production
cost allocation methodology distorts costs. See Colombian Flowers at
7010, where the Department made a similar determination. Therefore, for
these final results, we have accepted Pacifico's methodology of
allocating costs because Pacifico's allocation is reasonable and there
is no evidence that it distorts Pacifico's costs.
Final Results of review
As a result of our review, we have determined that the following
weighted-average margin exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period of review (percent)
------------------------------------------------------------------------
Rancho Del Pacifico....................... 4/1/95-3/31/96 0.00
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The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit requirements shall be effective
for all shipments of the subject merchandise that are entered or
withdrawn from warehouse, for consumption on or after the publication
date of these final results, as provided by section 751(a)(1) of the
Act: (1) the cash deposit rate for the reviewed company shall be the
above rate; (2) for previously reviewed or investigated companies not
listed above, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter
is not a firm covered in this review, a prior review, or the original
less-than-fair-value (LTFV) investigation, but the manufacturer is, the
cash deposit rate shall be the rate established for the most recent
period for the manufacturer of the merchandise; and (4) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
review, the cash deposit rate will be 18.20 percent, the all others
rate established in the LTFV investigation (52 FR 6361, March 3, 1987).
These deposit rates shall remain in effect until publication of the
final results of the next administrative review.
This notice serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
Notification to Interested Parties
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: May 9, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-13058 Filed 5-16-97; 8:45 am]
BILLING CODE 3510-DS-P
