Fresh Cut Flowers From Mexico; Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-201-601]

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 April 17, 1995, 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

period of review is April 1, 1991 through March 31, 1992.

We gave interested parties an opportunity to comment on our

preliminary results. We have not changed our preliminary results of

review.

effective date: September 26, 1995.

for further information contact: Rebecca Trainor or Maureen Flannery,

Office of Antidumping Compliance, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-

4733.

SUPPLEMENTARY INFORMATION:

Background

On April 17, 1995, the Department published in the Federal Register

(60 FR 19209) the preliminary results of this administrative review of

the antidumping duty order on certain fresh cut flowers from Mexico (52

FR 13491, April 23, 1987). The preliminary results indicated the

existence of dumping margins for three of the respondents in this

review, Rancho El Aguaje (Aguaje), Rancho Guacatay (Guacatay), and

Rancho El Toro (Toro), based on the best information available (BIA).

The fourth respondent, Visaflor S. de P.R. (Visaflor), had no shipments

to the United States during the period of review.

Aguaje, Guacatay, Toro, and the petitioner, the Floral Trade

Council, submitted case and rebuttal briefs. A public hearing was held

on May 31, 1995. The Department has now completed this administrative

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

amended (the Act).

Applicable Statutes and Regulations

Unless otherwise stated, all citations to the statutes and to the

Department's regulations are references to the provisions as they

existed on December 31, 1994.

Scope of the Review

The products covered by this review are certain fresh cut flowers,

defined as standard carnations, standard chrysanthemums, and pompon

chrysanthemums. During the POR, such merchandise was classifiable under

Harmonized Tariff Schedule of the United States (HTSUS) item numbers

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 Customs purposes only. The

written description remains dispositive as to the scope of the order.

This review covers sales of the subject merchandise manufactured by

Aguaje, Guacatay, Toro, and Visaflor, and entered into the United

States during

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the period April 1, 1991, through March 31, 1992.

Best Information Available

We have determined that Guacatay, Toro and Aguaje are uncooperative

respondents for the following reasons. In prior administrative reviews,

the respondents were not required under Mexican law to maintain audited

financial statements or file tax returns. We accepted their unaudited

``in-house'' financial statements, because they did not have, and

therefore could not submit, official corroboration of their internal

records. See Notice of Final Results of Antidumping Duty Administrative

Review; Certain Fresh Cut Flowers from Mexico, 56 FR 29621, 59622 (June

28, 1991). Mexican law governing incme tax reporting changed in 1991,

however, and the respondents were required to file tax returns covering

the POR.

In response to the Department's repeated questions regarding the

existence of income tax returns covering the POR, the respondents made

evasive and misleading statements regarding their obligations to file

tax returns, which significantly impeded this review. Guacatay and Toro

failed to reconcile their financial statements to their tax returns,

once submitted, and Aguaje failed to provide sufficient support for its

claim that it had not filed tax returns covering the POR.

Analysis of the Comments Received

Comment One: The respondents dispute that their statements

regarding their obligations to file tax returns were inconsistent, and

that the data they submitted were unusable. They claim that recent

changes in Mexican tax law, the unclear wording of the Department's

supplemental questionnaire, and the Department's misunderstanding of

their responses were the causes of any seemingly inconsistent

statements regarding their tax filing obligations.

Guacatay and Toro claim that they failed to promptly provide the

reconciliations between tax records and financial statements because

they misunderstood the Department's usage of the term

``reconciliation''. They state that, once they properly understood the

Department's request, they attempted to submit the information, but the

Department refused to accept it .

Guacatay and Toro also maintain that the documentation pertaining

to U.S. sales quantities and values can be independently substantiated

by growers' reports, which the respondents have placed on the record.

They suggest that the Department apply partial BIA to production costs,

the only information, they state, for which there is no independent

substantiation on the record.

The petitioner believes that Guacatay and Toro's argument that they

misunderstood the Department's request for reconciliations is

disingenuous, since the Department often requires respondents to

provide such worksheets. The petitioner observes that both respondents

participated in a prior administrative review, and had retained

experienced legal counsel throughout this review. Finally, the

petitioner claims that Guacatay and Toro admitted that their responses

do not reconcile to their tax documents, and therefore, the submitted

data are unreliable, and unusable.

The Department's Position: We disagree with the respondents. The

supplemental questionnaire was clear, and our request for a

reconciliation between tax returns and financial statements was not

unusual. Whenever a respondent does not understand the Department's

questions or directions, it is the responsibility of the respondent to

ask the Department for clarification. None of the respondents requested

such a clarification.

Guacatay's and Toro's offers to provide the requested

reconciliations came several months after they had submitted their last

supplemental questionnaire responses in which they stated that they

could not perform the reconciliations. Further, the respondents made

this offer during the verification of the 1992-1993 review period. As

each administrative review is a separate proceeding, the Department

could not accept this new factual information while conducting a

verification associated with a different administrative review.

We also disagree that the sales volume and value portions of

Guacatay's and Toro's questionnaire responses can be independently

substantiated with documents on the record of this review. In prior

administrative reviews, the Department did not require the level of

independent substantiation as it does in this review, because none

existed. In the absence of audited financial statements in this review,

we required that the respondents submit their tax returns as a way to

independently substantiate their questionnaire responses. Sales and

cost information is presented differently in these two documents. Thus,

an explanation of how the figures on the tax returns reconcile with the

ranches' financial statements is also required. Without this

explanation, the Department cannot use the tax returns to independently

substantiate the reported sales and costs; without such independent

substantiation, the entire questionnaire responses are unusable.

Comment Two: Guacatay, Toro and Aguaje claim that the Department

unfairly characterized them as uncooperative respondents in the

preliminary results of review. The respondents state that they have

cooperated fully, submitting multiple questionnaire responses, in spite

of their limited resources and small size.

Guacatay and Toro argue that even if BIA were warranted, they

should not be characterized as uncooperative. They assert that in past

cases, the Department has limited the designation of uncooperative

respondents to cases of major non-compliance or where there is evidence

of systematic misreporting. Further, pursuant to Allied-Signal

Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 1993), they

argue, it is improper for the Department to designate as uncooperative

a respondent who has tried in good faith to comply with the

Department's requests for information.

Citing Olympic Adhesives, Inc. v. United States, 899 F.2d 1565

(Fed. Cir. 1990), Aguaje argues that the Department has no legal

grounds to use BIA in response to a respondent's inability to provide

information that does not exist. Further, Aguaje asserts that the

Department has no authority to penalize a foreign exporter for a

perceived failure to comply with a foreign law.

The petitioner believes that the Department was correct in

rejecting the questionnaire responses, and that the Department is

compelled to resort to uncooperative BIA. The petitioner argues that

the respondents' size and resources should not be a consideration,

since their eventual offers to provide the requested information

indicate that they were in fact able to provide it in the form

requested and in a timely manner.

The petitioner also claims that the respondents substantially

impeded the review and limited the Department's access to certain data

by dodging repeated requests for information as to the existence of

source documents and making inconsistent statements regarding their

obligation to file tax returns. Finally, the petitioner argues that the

respondents' contradictory statements undermine the credibility of

their entire responses, and their evasiveness overshadows all other

attempts at cooperation.

The Department's Position: We disagree with the respondents that

they have fully cooperated with our requests for information in this

review, and that our use of uncooperative BIA is unjustified. The

respondents' answers to

[[Page 49571]]

the Department's supplemental questionnaires were evasive and

misleading, and significantly impeded the progress of the review.

As stated above, we disagree that the respondents tried in good

faith to comply with the Department's requests for information. It was

not until the Department had issued its third supplemental

questionnaire addressing this issue, specifically requesting the tax

returns required under Mexican law, that the respondents revealed their

true tax status. While Guacatay and Toro finally provided tax returns,

the documents were illegible, untranslated, and were not accompanied by

the requested reconciliation worksheets.

With regard to Aguaje, at issue in this review is whether it had

provided, within the time limits set out in 19 CFR 353.31(a)(2),

sufficient evidence demonstrating that it did not file tax returns. The

correspondence Aguaje finally submitted in response to the Department's

third supplemental questionnaire concerning this issue, did not support

the ranch's statement that no tax returns had been filed.

Therefore, we maintain our position that Guacatay, Toro, and Aguaje

were uncooperative, and have applied total BIA to their U.S. sales.

Comment Three: The three respondents argue that the Department

should take into consideration information on the administrative

records of the prior and subsequent reviews for the final results of

this review, because this information will attest to the reliability of

the data they have submitted for this review. Aguaje states that the

Department has the authority to review public documents, and documents

submitted in related proceedings in deciding the issues before it.

The petitioner disagrees that the Department may incorporate

documents from other reviews into the record of this review after the

deadline for the submission of factual information has expired. The

petitioner also states that the Department's regulations regarding the

requirements for verification preclude it from relying on past

verifications to corroborate the reliability of the respondents' data

in this review.

The Department's Position: We disagree with the respondents. The

timeframe for submitting new factual information is clearly stated in

section 19 C.F.R. 353.31(b)(2) of the Department's regulations. The

information to which the respondents refer was not placed on the record

of this review within the prescribed time limits. To accept new

information at this point in the proceeding would be inconsistent with

the Department's regulations.

Comment Four: The petitioner contends that the Department's choice

of a BIA rate of 39.95 percent was unnecessarily generous. Because

respondents are presumed to be aware of the highest rate at the time of

filing, petitioner claims the rate should be 264.43 percent, a rate

deemed aberrational by the Department in its preliminary results.

The respondents argue that the highest rate is not probative of

current market conditions, and reflects business conditions

uncharacteristic of the companies subject to this review.

The Department's Position: We agree with the respondents. For the

final results of the 1989-1990 review, the Department assigned the

second highest rate in any prior review or the LTFV investigation,

because we found that the highest rate of 264.43 percent was

inappropriate to use as BIA,

Given the enormous disparity between the verified rate for

Florex in this review and the verified rates for other companies in

this review, prior reviews, and the original investigation, and

Florex's extraordinarily high business expenses during this review

period resulting from investment activities which are

uncharacteristic of other companies subject to this review * * *''

Notice of Final Results of Antidumping Duty Administrative Review;

Certain Fresh Cut Flowers from Mexico, 56 FR 29621, 29623 (June 28,

1991). Since these conditions are also applicable to this review, the

rate of 264.43 percent remains aberrational. See Floral Trade Council

v. United States, 799 F. Supp 116, 119-20 (CIT 1992).

Comment Five: The petitioner requests that the Department identify

record evidence leading to its finding that Visaflor made no shipments

to the United States during the POR. The petitioner argues that, given

Visaflor's past record of non-coorperation in reviews, the Department

should not accept Visaflor's certification without verification.

According to the petitioner, without such verification, the Department

should assign Visaflor a margin based on best information of 29.40

percent, the margin calculated for Visaflor in the 1989-1990 review.

The Department's Position: To determine whether Visaflor made any

shipments to the United States during the POR, the Department followed

its standard practice of issuing an electronic mail message to all

Customs Service field personnel, requesting notification if the subject

merchandise exported by Visaflor entered the United States during the

POR. The Department does not require negative responses to these

messages. Because we received no affirmative responses from Customs

field personnel, we concluded that Visaflor made no shipments to the

United States during the POR.

Final Results

We determine that the following dumping margins exist for the

period April 1, 1991, through March 31, 1992:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

Rancho el Aguaje............................................. 39.95

Rancho Guacatay.............................................. 39.95

Rancho el Toro............................................... 39.95

Visaflor..................................................... (\1\)

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\1\ No shipments during the POR. Rate is from the last review in which

Visaflor had shipments.

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 the

final results of this administrative review, as provided by section

751(a)(1) of the Act: (1) the cash deposit rates for the reviewed

companies shall be the above rates; (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 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 18.28 percent, the

all others rate established in the LTFV investigation.

These deposit requirements, shall remain in effect until

publication of the final results of the next administrative review.

This notice serves as a reminder to importers of their

responsibility under 19 C.F.R 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.

This notice also serves as a reminder to parties subject to

administrative protective order (APO) of their

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responsibility concerning the disposition of proprietary information

disclosed under APO in accordance with 19 C.F.R. 353.34(d) or

355.34(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 section 353.22

of the Department's regulations.

Dated: September 15, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-23884 Filed 9-25-95; 8:45 am]

BILLING CODE 3510-DS-M