Roses and Other Cut Flowers From Colombia; Final Results of Countervailing Duty Administrative Review and Determination Not To Terminate Suspended Investigation

DEPARTMENT OF COMMERCE

[C-301-003]

Roses and Other Cut Flowers From Colombia; Final Results of

Countervailing Duty Administrative Review and Determination Not To

Terminate Suspended Investigation

AGENCY: International Trade Administration/Import Administration,

Department of Commerce.

ACTION: Notice of final results of countervailing duty administrative

review.

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SUMMARY: On October 7, 1993, the Department of Commerce (``the

Department'') published the preliminary results of its administrative

review and intent not to terminate the suspended countervailing duty

investigation on roses and other cut flowers from Colombia. The review

covers the period January 1, 1988 through December 31, 1990 and eight

programs. On January 31, 1991, the Government of Colombia (``GOC'')

requested termination of the suspended investigation based on

abolishment of the programs for a period of at least three consecutive

years, in accordance with 19 CFR 355.25(a)(1) and 355.25(b)(1).

Therefore, we examined the programs to determine if each program had

been abolished for a period of at least three consecutive years. We

gave interested parties an opportunity to comment on the preliminary

results. After reviewing all the comments received, we determine that

the GOC and the producer/exporters of roses and other cut flowers have

complied with the terms of the suspension agreement. However, we also

determine that the GOC has not abolished each program for a period of

at least three consecutive years. Therefore, we determine that the GOC

has not met all the requirements for termination of the countervailing

duty suspended investigation on roses and other cut flowers as outlined

in the Commerce Regulations.

For the purpose of revoking a countervailing duty order or

terminating a suspending countervailing duty investigation based on

three consecutive years of elimination of all subsidies pursuant to 19

CFR 355.25(a)(1), it is the Department of Commerce's current policy

that administrative reviews must be requested and conducted for each of

the three consecutive years. See Memorandum from Joseph A. Spetrini,

Deputy Assistant Secretary for Compliance, to Alan M. Dunn, Assistant

Secretary for Import Administration, of December 14, 1992, which fully

describes this issue. However, the request for termination in this case

predates the above policy. Therefore, although no review was requested

for 1989, we nevertheless have examined a three-year period in order to

determine whether termination is appropriate. We invited interested

parties to comment on these results.

EFFECTIVE DATE: March 8, 1994.

FOR FURTHER INFORMATION CONTACT: Stephen Jacques or Jeanene Lairo,

Office of Agreements Compliance, International Trade Administration,

U.S. Department of Commerce, Washington, DC 20230; telephone: (202)

482-3434 or (202) 482-2243, respectively.

SUPPLEMENTARY INFORMATION:

Background

On October 7, 1993, the Department published in the Federal

Register the preliminary results of its countervailing duty

administrative review and intent not to terminate the suspended

investigation on roses and other cut flowers from Colombia (58 FR

52272). (See Roses and Other Cut Flowers From Colombia; Suspension of

Investigation, 48 FR 2158 (January 18, 1983); and Roses and Other Cut

Flowers From Colombia; Final Results of Countervailing Duty

Administrative Review and Revised Suspension Agreement, 51 FR 44930

(December 15, 1986).) We have now completed the administrative review

in accordance with section 751 of the Tariff Act of 1930, as amended

(``the Tariff Act'').

Scope and Review

Imports covered by this review are shipments of roses and other cut

flowers from Colombia. During the review period, the merchandise

covered by this suspension agreement is classified under Harmonized

Tariff Schedule (``HTS'') item numbers 0603.10.60, 0603.10.70,

0603.10.80, and 0603.90.00. The HTS item numbers are provided for

convenience and Customs purposes. The written description remains

dispositive.

The period of review (``POR'') covers January 1, 1988 through

December 31, 1990, and eight programs: (1) Tax Reimbursement

Certificate Program (Certificate Program Certificado de Reembolso

Tributario (``CERT'' program)); (2) The Fund for the Promotion of

Export Loans (working and fixed-capital) (``PROEXPO''); (3) Plan

Vallejo; (4) Air Freight Rates; (5) Free Industrial Zones; (6) Export

Credit Insurance; (7) Countertrade; and (8) Research and Development.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. Also, at the request of the petitioner, the Floral

Trade Council (``FTC''), and the GOC, we held a public hearing on

December 3, 1993. Several issues raised by interested parties in this

review are not case-specific but pertain both to this administrative

review and the countervailing duty administrative review and intent not

to terminate the suspended investigation on miniature carnations from

Colombia. The comments submitted by interested parties concerning

issues common to both these reviews of suspended investigations are

summarized and addressed in the Final Results of Countervailing Duty

Administrative Review and Intent Not to Terminate Suspended

Investigation; Miniature Carnations from Colombia which is being

published concurrently with this notice. The following comment is

specific only to this administrative review on roses and other cut

flowers from Colombia.

Comment: The GOC contends that it was under no obligation to

abolish the air freight rate ``program'' since the Department never

found it countervailable and since there was never any subsidy on the

merchandise conferred by air freight rates. Furthermore, the GOC argues

that the Department's inclusion of air freight rates in the 1983 roses

suspension agreement was not carried forward into the 1986 revised

suspension agreement. Thus, consideration of air freight rates under

the suspension agreement is no longer in effect. The GOC contends that

the air freight rate ``program'' is in fact not a program because the

Departmento Administrativo de la Aeronautica Civil (``DAAC'') only sets

minimum and maximum permissible air freight rates. The GOC argues that

the Department has agreed with the respondent that the establishment of

minimum and maximum rates ``does not confer countervailable benefits.''

The FTC asserts that the Department has the discretion to consider

the continued existence of a potentially countervailable program even

if that program is not specifically found to be countervailable in the

suspension agreement. The FTC asserts that during the POR, the GOC was

unable to establish that the actual air freight rates were

competitively priced. Furthermore, the FTC asserts that the GOC did not

submit comparative air freight rates or export statistics to third

countries. Consequently, as best information available, the FTC

contends that the Department should presume air freight maximums

limited competitive rates contrary to the terms of the suspension

agreement.

Department's Position: While we agree with petitioner that the

Department has discretion to consider a potentially countervailable

program, we disagree with the FTC's assertion that the GOC has violated

the suspension agreement. The DAAC minimum/maximum rates were

established in 1981, prior to negotiation of the suspension agreement.

At verification we found that the rates negotiated between the flower

producers and air freight carriers were between the DAAC minimum/

maximum rates permitted under the suspension agreement. There is no

evidence that these negotiated rates limited competitive air rates. In

addition, at verification, we examined documentation and determined the

rates negotiated were between the minimum/maximum negotiated rates.

Consequently, we determined that the GOC is not in violation of the

suspension agreement.

With regard to abolition of this program, the Department agrees

with the GOC in part. The Department's regulations at 19 CFR

355.25(a)(1)(i) require the GOC to abolish all programs for the subject

merchandise that ``the Secretary has found countervailable.'' Although

the Department has found the air freight rate program subject to the

suspension agreement (see Roses and Other Cut Flowers From Colombia;

Final Results of Countervailing Duty Administrative Review, 55 FR 53584

(Comment 4) (December 31, 1990)), we have never found the air freight

rates program to be a countervailable subsidy. Therefore, under the

conditions set by 19 CFR 355.25(a)(1)(i) the GOC is not required to

abolish the program in order to meet the requirements for termination

of the suspension agreement.

Final Results of Review

After considering all of the comments received, we determine that

the signatories have complied with the terms of the suspension

agreement for the period January 1, 1988 through December 31, 1990.

However, we will not terminate the suspension agreement. In order for

us to terminate the suspension agreement the GOC must have abolished

all programs which is not the case with PROEXPO and Plan Vallejo.

This administrative review and notice are in accordance with

sections 751(a)(1)(C) of the Tariff Act (19 U.S.C. 1675(a)(1)(C)) and

19 CFR 355.22 and 355.25.

Dated: March 1, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-5308 Filed 3-7-94; 8:45 am]

BILLING CODE 3510-05-P