[Federal Register Volume 63, Number 89 (Friday, May 8, 1998)]
[Notices]
[Pages 25447-25449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12205]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-301-602]
Certain Fresh Cut Flowers From Colombia; Preliminary Results of
Antidumping Duty Changed Circumstances Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty changed
circumstances review.
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SUMMARY: In response to a request by Flores El Talle S.A., the
Department of Commerce is conducting a changed circumstances review to
confirm that the revocation granted to the Flores Colombianas Group is
applicable equally to Flores El Talle S.A. The antidumping duty order
was revoked with respect to the Flores Colombianas Group in the fourth
administrative review. In this changed circumstances review, the
Department of Commerce has examined in detail Flores El Talle S.A. and
its relationship with the Flores Colombianas Group. As a result of this
review, the Department of Commerce preliminarily finds that Flores El
Talle S.A. is a member of the Flores Colombianas Group and, as such, is
subject to the revocation which applies to the Flores Colombianas
Group.
EFFECTIVE DATE: May 8, 1998.
FOR FURTHER INFORMATION CONTACT: Roy Malmrose or Stephanie Hoffman, AD/
CVD Enforcement, Office 1, Import Administration, International Trade
Administration, United States Department of Commerce, Washington, DC
20230; telephone: (202) 482-5414 or (202) 482-4198, respectively.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (``the Act''), 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. In addition, unless
otherwise indicated, all citations to section 351 of the regulations of
the Department of Commerce (``the Department'') are to the current
regulations, as published in the Federal Register on May 19, 1997 (62
FR 27296).
SUPPLEMENTARY INFORMATION:
Background
In the final results of the fourth administrative review (see 59 FR
15159; March 31, 1994), the antidumping duty order on certain fresh cut
flowers from Colombia was revoked with respect to the Flores
Colombianas Group, based on three consecutive administrative reviews in
which the Department determined that the Flores Colombianas Group was
not selling the subject merchandise at less than fair value in the
United States.
During the ninth administrative review, Flores El Talle S.A.
(``Flores El Talle'') notified the Department in an August 23, 1996,
letter that the company had been created in the summer of 1991, within
the context of the Flores Colombianas Group and that Flores El Talle
and the Flores Colombianas Group share common ownership and management.
The letter requested that the Department confirm that the revocation of
the antidumping duty order with respect to the Flores Colombianas Group
is applicable equally to Flores El Talle. In the final results of the
ninth review, the Department determined that Flores El Talle had no
entries during the POR, rescinded the review with respect to Flores El
Talle, and stated that it would initiate a changed circumstances review
to examine whether Flores El Talle should be subject to the revocation
which applies to the Flores Colombianas Group (see, Certain Fresh Cut
Flowers from Colombia; Final Results and Partial Rescission of
Antidumping Duty Administrative Review, 62 FR 53287, 53303; October 14,
1997). The Department initiated the changed circumstances review on
October 15, 1997 (62 FR at 53593). The Department is conducting this
changed circumstances review in accordance with section 751(b) of the
Act and 19 CFR 351.216(d) of the Department's regulations.
Scope of Review
The scope of the order under review is 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). Although the HTS numbers are provided for
convenience and customs purposes, the written description of the scope
is dispositive.
Preliminary Analysis
This review covers one producer of the subject merchandise, Flores
El Talle, an entity created within the context of the Flores
Colombianas Group, a group of producers and exporters. The
[[Page 25448]]
Department has revoked the order with respect to that group. The
Department has examined the question of whether Flores El Talle should
be assigned a cash deposit rate equal to the ``all others'' rate, or be
subject to Flores Colombianas Group's revocation. If the Department
determines that Flores El Talle should be collapsed with the other
companies comprising the Flores Colombianas Group and treated as a
single entity in the production and sale of the subject merchandise,
its shipments would not be subject to suspension of liquidation or
antidumping duty deposit requirements under this order because the
revocation applicable to the Flores Colombianas Group would be
applicable equally to Flores El Talle.
As stated above, the antidumping order was revoked with respect to
the Flores Colombianas Group, effective May 31, 1994. During the three
consecutive review periods on which the revocation was based (March 1,
1988 to February 28, 1991) the Flores Colombianas Group was comprised
of four entities: (1) Agrosuba Ltda., (2) Flores Colombianas Ltda., (3)
Jardines de los Andes SA, and (4) Productos El Cartucho SA. On July 18,
1991, Flores El Talle was set up to acquire the assets and liabilities
of Flores El Cielo Ltda., a company that did not produce or export
subject merchandise. Flores El Talle began to produce the subject
merchandise in the second half of 1991.
The question under review is whether, after its inception, Flores
El Talle's affiliation with the Flores Colombianas Group and the manner
in which operations were conducted were such that Flores El Talle
should be collapsed with the other companies already comprising the
Flores Colombianas Group and treated as a single entity and, therefore,
subject to the revocation applicable to the Flores Colombianas Group.
According to section 351.401(f) of the Department's regulations, in
order for the Department to collapse two producers, i.e., treat them as
a single entity, the Department must find that, (1) the producers are
affiliated under section 771(33) of the Act, (2) the producers have
production facilities for similar or identical products that would not
require substantial retooling in order to restructure manufacturing
priorities, and (3) there is a significant potential for the
manipulation of price or production (see also, Notice of Final
Determination of Sales at Less Than Fair Value: Collated Roofing Nails
From Taiwan, 62 FR 51427, 51436 (October 1, 1997), (``Collated Roofing
Nails From Taiwan'') and Grey Portland Cement and Clinker From Mexico:
Final Results of Antidumping Administrative Review, 62 FR 17148, 17155
(April 9, 1997)).
First, we find that because Flores El Talle and the Flores
Colombianas Group are under common ownership and control, these
companies are affiliated under sections 771(33)(E) and (F) of the Act.
(For more information on common ownership, management, and control of
Flores El Talle and other members of the Flores Colombianas Group, see,
Flores El Talle's August 23, 1996, submission.) Second, the evidence on
the record demonstrates that Flores El Talle does have production
facilities for similar or identical products. Although Flores El Talle
is not currently a producer of the subject merchandise (due to soil
infestation with ``fusarium oxysporium,'' Flores El Talle ceased
production of the subject merchandise in December 1995), it still has
the capability of producing the subject merchandise and substantial
work would not be required in order to restructure production
priorities (see, Collated Roofing Nails From Taiwan, 62 FR at 51436).
We also determine that the third criterion of our collapsing
inquiry is met. According to section 351.401(f)(2) of the Department's
regulations, in determining whether there is a significant potential
for manipulation of price or production, the Department may consider
factors such as (1) the level of common ownership; (2) the extent to
which managerial employees or board members of one firm sit on the
board of directors of an affiliated firm; and (3) whether business
operations are intertwined, such as through shared sales information,
involvement in production and pricing decisions, the sharing of
facilities or employees, or significant transactions between the two
enterprises.
As stated previously, Flores El Talle has common ownership,
management, and control with other companies in the Flores Colombianas
Group. Flores El Talle has only existed in the context of the Flores
Colombianas Group, and all five companies of the Flores Colombianas
Group share information, supplement sales efforts, and coordinate
pricing and business strategy with one another. Sales and marketing
personnel for the subject merchandise are shared by all five members of
the Flores Colombianas Group, and Flores El Talle has joint offices
with two other companies in the Flores Colombianas Group, Agrosuba and
Flores Colombianas Ltda., to handle purchasing, accounting and
communication requirements.
Preliminary Results of the Review
Applying the evidence on the record to the collapsing inquiry set
forth above, we find that (1) Flores El Talle and the Flores
Colombianas Group are affiliated under sections 771(33)(E) and (F) of
the Act; (2) the production facilities are essentially similar so that
they would not require substantial work to restructure manufacturing
priorities; and (3) there are intertwined business operations, common
management and board members, and coordination of the production and
sales strategies such that there exists significant potential for price
or production manipulation.
Based on this analysis, we preliminarily determine that it is
appropriate to collapse Flores El Talle into the Flores Colombianas
Group. Therefore, we intend to treat Flores El Talle as part of the
Flores Colombianas Group and apply the revocation from the antidumping
duty order with respect to the Flores Colombianas Group to Flores El
Talle. If this revocation is applied to Flores El Talle, it will apply
to all unliquidated entries of this merchandise produced by Flores El
Talle, exported to the United States and entered, or withdrawn from
warehouse, for consumption, on or after May 31, 1994, which is the
effective date of the revocation from the order for the Flores
Colombianas Group. If the final results of this changed circumstances
review remain unchanged, we will instruct the U.S. Customs Service to
release any cash deposit or bond and liquidate the entries without
regard for antidumping duties (see, 19 CFR 351.222(g)(4)).
Interested parties may request a hearing within ten days of
publication of these preliminary results. If requested, a hearing will
be held the 37th day after publication. Interested parties may submit
case briefs and/or written comments no later than 30 days after the
date of publication. Rebuttal briefs and rebuttals to written comments,
limited to issues raised in such briefs or comments, may be filed no
later than five days after the time limit for filing case briefs. The
case briefs and rebuttal briefs must be served on interested parties in
accordance with 19 CFR 351.303(f)(3)(i). The Department will publish
the final results of this changed circumstances review, which will
include the results of its analysis raised in any such written
comments. This changed circumstances review and notice are in
accordance with 19 CFR 351.216.
[[Page 25449]]
Dated: May 1, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-12205 Filed 5-7-98; 8:45 am]
BILLING CODE 3510-DS-P
