Fresh Cut Flowers From Mexico; Preliminary Results and Partial Termination of Antidumping Duty Administrative Review, and Intent to Revoke Antidumping Duty Order in Part

DEPARTMENT OF COMMERCE

[A-201-601]

Fresh Cut Flowers From Mexico; Preliminary Results and Partial

Termination of Antidumping Duty Administrative Review, and Intent to

Revoke Antidumping Duty Order in Part

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results and partial termination of

antidumping duty administrative review, and intent to revoke

antidumping duty order in part.

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SUMMARY: The Department of Commerce (the Department) is conducting an

administrative review of the antidumping duty order on certain fresh-

cut flowers from Mexico, in response to a request by a respondent,

Rancho El Aguaje (Aguaje). Although we initiated reviews for two other

producers, Rancho El Toro (Toro) and Rancho Guacatay (Guacatay), we are

terminating these reviews because Toro and Guacatay timely withdrew

their requests for review. We preliminarily intend to revoke the

antidumping duty order with respect to Aguaje, based on our preliminary

determination that Aguaje has had a three-year period of sales at not

less than normal value (NV). This review covers one producer/exporter

and entries of the subject merchandise into the United States during

the period April 1, 1994 through March 31, 1995.

We have preliminarily determined that sales have not been made

below NV. Interested parties are invited to comment on these

preliminary results. Parties who submit comments are requested to

submit with each comment (1) a statement of the issue and (2) a brief

summary of the comment.

EFFECTIVE DATE: June 4, 1996.

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.

Applicable Statutes and Regulations

Unless otherwise states, 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 April 23, 1987, the Department published in the Federal Register

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

FR 13491).

On April 27, 1995, Toro and Guacatay requested that the Department

conduct an administrative review in accordance with 19 CFR

353.22(a)(1). Toro and Guacatay also requested that the Department

revoke the antidumping duty order as it pertains to them upon

completion of the review. On April 28, 1995, Aguaje requested an

administrative review and revocation of the order as it pertains to it

upon completion of the review. We published a notice of initiation on

May 15, 1995 (60 FR 25885), covering Toro, Guacatay, and Aguaje, and

the period April 1, 1994 through March 31, 1995. On August 11, 1995,

Toro and Guacatay timely withdrew their requests for review. Because

there were no other requests for review for these two respondents from

any other interested party, the Department is now terminating this

review for Toro and Guacatay in accordance with section 353.22(a)(5) of

the Department's regulations. We shall instruct the Customs Service to

liquidate Toro's and Guacatay's entries of this period at the rates in

effect at the time of entry. Because they are previously reviewed

companies, the cash deposit rates will continue to be the company-

specific rates currently in effect.

The Department is conducting this review in accordance with section

751 of the Tariff Act of 1930, as amended (the Act).

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 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 Customs purposes

only. The written description remains dispoitive as to the scope of the

order.

This review covers sales of the subject merchandise entered into

the United States during the period April 1, 1994 through March 31,

1995.

Verification

From April 17 through April 19, 1996, the Department conducted

verification of the questionnaire responses submitted by Aguaje, as

provided in section 782(i) of the Act. We used standard verification

procedures, including onsite inspection of the manufacturer's

facilities, the examination of relevant accounting, sales, and other

financial records, and selection of original documentation containing

relevant information. Our verification results are outlined in the

public version of the verification report.

[[Page 28167]]

Intent to Revoke

Aguaje submitted a request, in accordance with 19 CFR 353.25(b),

that the Department revoke the order covering certain fresh cut flowers

from Mexico with respect to its sales of this merchandise.

In accordance with 19 CFR 353.25(b)(1), this request was

accompanied by a certification from Aguaje that it had not sold the

relevant class or kind of merchandise at less then NV for a three year

period including this review period, and would not be so in the future.

Aguaje also agreed to its immediate reinstatement in the relevant

antidumping order, as long as any firm is subject to that order, if the

Department concludes under 19 CFR 353.22(f) that, subsequent to

revocation, it sold the subject merchandise at less than NV.

In the two prior reviews of this order, we determined that Aguaje

sold the subject flowers from Mexico at not less than NV. The

Department conducted a verification of the ranch's response for this

period of review. In this review, we preliminarily determine that

Aguaje has sold flowers at not less than NV, which will satisfy the

three-year period of no sales at less than NV. Therefore, we intend to

revoke the order in part on certain fresh cut flowers from Mexico with

respect to Aguaje, if these preliminary findings are affirmed in our

final results.

United States Price

In calculating United States price, we used constructed export

price (CEP), in accordance with subsections 772(b), (c) and (d) of the

Act, because Aguaje's sales to the first unaffiliated purchaser

occurred after importation into the United States. As in the original

less-than-fair-value (LTFV) investigation and in all prior

administrative reviews, all United States prices were weight-averaged

on a monthly basis to account for perishability of the product. CEP was

based on the packed prices to the first unrelated purchaser in the

United States.

Where appropriate, we made deductions from CEP for Mexican and U.S.

inland freight, Mexican and U.S. brokerage and handling, and those

imputed credit and warranty expenses that were incurred in the United

States. We also deducted those selling expenses that related to

commercial activity in the United States, and added amounts for

revenues earned from box charges and delivery charges. Finally, we made

an adjustment for CEP profit in accordance with section 772(d)(3) of

the Act.

Normal Value

Because Aguaje had no sales of comparable merchandise in the home

market or to third countries, we based NV on constructed value (CV) as

defined in section 773(a) of the Act. CV consists of the cost of

materials and cultivation, general expenses, profit, and U.S. packing

costs. We made a circumstance-of-sale adjustment to CV for the

differences in direct selling expenses between CEP and CV.

Aguaje reported no profit figure to be added to CV because it had

no home market or third country sales of subject merchandise. As there

was no suitable information on the record from which to derive a home

market profit rate, we used facts otherwise available for Aguaje's

profit rate. There was no suitable publicly available information on

the record for Aguaje for any prior review period and no other

respondent in the current review. In addition, there is insufficient

information on the record to calculate Aguaje's profit for the same

general category of product as the subject merchandise. Therefore, we

used the weighted average publicly available profit rate for other

flower producers examined in the 1992-1993 review.

Aguaje's overall corporate G&A figure could not be verified because

Aguaje could not locate all of the G&A support documents at

verification. However, the company was generally cooperative. From the

information in the current review and publicly available information

from prior reviews, we identified three possible alternatives for G&A

in this case: (1) Aguaje's submitted G&A data; (2) Aguaje's publicly

available G&A data from a prior review period; and (3) publicly

available G&A data submitted by other Mexican flower producers for

prior review periods. We chose the alternative that resulted in the

highest G&A percentage. Therefore, we have calculated an amount for G&A

based on Aguaje's publicly available information from the most recently

verified review period as facts otherwise available. For each month, we

used the higher of this amount, or Aguaje's reported G&A costs. Our

calculation of profit and G&A is discussed further in the memo to the

file dated May 23, 1996, on file in Room B-099 of the Commerce

Department.

Use of Facts Otherwise Available

Section 776(b) of the Act authorizes the Department to use as facts

otherwise available information derived from the petition, the final

determination, a previous administrative review, or other information

place on the record. Because information from prior proceedings

constitutes secondary information, section 776(c) provides that the

Department shall, to the extent practicable, corroborate that secondary

information from independent sources reasonably at its disposal. The

Statement of Administrative Action (SAA) provides that ``corroborate''

means simply that the Department will satisfy itself that the secondary

information to be used has probative value.

In this case, we used the weighted-average publicly available

profit rates of different Mexican flower producers, from verified data

they reported for the 1992-1993 review period. We compared the separate

home market profit rates of these companies to each other, and found

them to be comparable. The profit rate we have applied to Aguaje is

reliable and relevant, and therefore has probative value, because it is

representative of the profits found to be earned by other Mexican

flower producers during a recent review period. The G&A percentage we

used also has probative value because it is the company's own verified

rate from a recent review period.

Preliminary Results of Review

As a result of our comparison of CEP and CV, we preliminarily

determine that the following weighted-average dumping margin exists:

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

Margin

Manufacturer/exporter (percent)

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

Rancho El Aguaje........................................... 0.00

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Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held 44 days after the publication of this notice,

or the first workday thereafter. Interested parties may submit case

briefs within 30 days of the date of publication of this notice.

Rebuttal briefs, which must be limited to issues raised in the case

briefs, may be filed no later than 37 days after the date of

publication. Parties who submit comments are requested to submit with

their comments (1) a statement of the issue and (2) a brief summary of

the comment. The Department will publish a notice of final results of

this administrative review, which will include the results of its

analysis of issues raised in any such comments.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate

[[Page 28168]]

entries. Individual differences between CEP and NV may vary from the

percentage stated above. Upon completion of this review, the Department

will issue appraisement instructions directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of the final results of this administrative review for all

shipments of certain fresh cut flowers from Mexico entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751 (a)(2)(c) of the Act: (1) The cash

deposit rate for the reviewed company will be the rate established in

the final results of this review; (2) for merchandise exported by

manufacturers or exporters not covered in these reviews but covered in

the original LTFV investigation or previous review, the cash deposit

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 or a

previous review, or the original LTFV investigation, but the

manufacturer is, the cash deposit rate will be the rate established for

the most recent period for the manufacturer of the merchandise; and (4)

for all other producers and/or exporters of the merchandise, the cash

deposit rate shall be 18.20 percent, the rate established in the LTFV

investigation.

These deposit rates, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This notice also serves as a preliminary 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.

This administrative review and notice are in accordance with

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

CFR 353.22 and 353.25.

Dated: May 23, 1996.

Paul L. Joffe,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-13964 Filed 6-3-96; 8:45 am]

BILLING CODE 3510-DS-P-M