Amended Final Determinations of Sales at Less Than Fair Value: Fresh Cut Roses From Colombia and Ecuador

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

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

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