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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[[Page 6813]]

SUMMARY: On September 26, 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, 1992 through March 31, 1993.

We gave interested parties an opportunity to comment on our

preliminary results. We have not changed our preliminary results of

review.

EFFECTIVE DATE: February 22, 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.

SUPPLEMENTARY INFORMATION:

Background

On September 26, 1995, the Department published in the Federal

Register (60 FR 49577) the preliminary results of its administrative

review of the antidumping duty order on certain fresh cut flowers from

Mexico (52 FR 13491 (April 23, 1987)). The preliminary results

indicated that no dumping margins existed for four of the respondents

in this review: Rancho El Aguaje (Aguaje), Rancho Guacatay (Guacatay),

Rancho El Toro (Toro), and Rancho Del Pacifico (Pacifico). We applied

dumping margins based on the best information available (BIA) to

Tzitzic Tareta, Rancho Mision el Descanso, Rancho Alisitos, and Las

Flores de Mexico, because they failed to answer the antidumping

questionnaire. Two producers, Visaflor S. de P.R. (Visaflor) and Rancho

Daisy (Daisy), made no shipments to the United States during the period

of review.

Applicable Statutes and Regulations

The Department has conducted this review in accordance with section

751 of the Tariff Act of 1930, as amended (the Act). 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 period of review (POR), 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 dispositive 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, 1992 through March 31,

1993.

Analysis of the Comments Received

The petitioner, the Floral Trade Council, submitted a case brief on

October 26, 1995. We received no other comments on the preliminary

results. The petitioner combined in one case brief its comments for

this review and the 1993-1994 review. Below, we have addressed only

those comments that appear to be relevant to the 1992-1993 review.

Comment 1: The petitioner claims that the Department overstated

exporter's sales prices (ESP) by failing to deduct commissions paid to

related parties. The petitioner states that the statute and the

Department's regulations require the Department to deduct U.S.

commissions and indirect selling expenses, regardless of whether the

consignment agent is a related party. For this reason, the petitioner

argues, the Department should reconsider its treatment of related party

commissions in this case and as articulated in Fresh Cut Roses from

Colombia and Fresh Cut Roses from Ecuador, 60 FR 6980, 7019 (Feb. 6,

1995) (Roses).

The petitioner argues that, in Roses, the Department erroneously

distinguished between commissions paid to related and unrelated

parties, while the statute, which makes no such distinction, simply

requires that commissions be deducted from ESP. The petitioner states

that the Department's treatment of related party commissions in Roses

is irrational, and it is inconsistent with Timken Co. v. United States,

630 F. Supp. 1327, 1341 (CIT 1986) (Timken). The petitioner asserts

that, in Timken, the Court supported the Department's rationale for not

deducting related party profits because they were not commissions,

while, in Roses, the Department refused to deduct commissions because

they are profits. The petitioner points out that, in the 1989-1990

review of Certain Fresh Cut Flowers from Mexico, the Department

deducted related party commissions found to be at arm's length (57 FR

7732 (March 4, 1992)).

Finally, the petitioner states that, even assuming that commissions

need not always be deducted under section 772(e)(1) of the Act, the

Department must deduct from ESP all direct selling expenses incurred at

arm's length as circumstance-of-sale adjustments.

The Department's Position:

We disagree with the petitioner. Since the Department published its

final results in the 1989-1990 review of this order, we have

established the practice of collapsing exporters and their related

consignment agents in ESP situations. The petitioner's arguments do not

persuade us to deviate from this practice. As fully explained in Roses,

the Department considers commissions paid to related parties to be

intracompany transfers of funds, which are not deductible from ESP. See

also Furfuryl Alcohol From South Africa; Final Determination of Sales

at Less Than Fair Value 60 FR 22551 (May 8, 1995). Further, we do not

consider such a transfer of funds to be a direct selling expense.

Instead of making a deduction for commissions, the Department deducts

the amount of the related importer's U.S. direct and indirect selling

expenses pursuant to section 772(e)(2) of the Act. This methodology

avoids double-counting the direct and indirect selling expense

component of the related party commission, and avoids deducting any of

the related importer's profit, as the Court affirmed in Timken.

Comment 2: The petitioner claims that the Department should confirm

that the respondents' reported credit costs account for the time

between receipt of payment and deposit into the respondents' bank

accounts, as the Department did in the 1989-1990 administrative review.

The Department's Position:

We disagree with the petitioner. For the purposes of calculating

imputed credit costs, it is our practice to calculate the number of

credit days based on the number of days between the date of shipment

and the date of payment. If actual payment dates are not readily

accessible, we normally allow respondents to base the number of credit

days on the average age of accounts receivable. See, e.g., Color

Television Receivers from the Republic of Korea; Final Results of

Antidumping Duty Administrative Review, 56 FR 12701 (Comment 28)(March

27, 1991).

We found during verification that the respondents' methodologies

for calculating the average age of accounts receivable were reasonable.

For further discussion, see the public verification reports for Aguaje

and Pacifico, on file in Room B099 of the Commerce Department.

Comment 3: The petitioner states that the Department should

describe the

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manner in which it confirmed that Visaflor and Daisy made no shipments

of the subject merchandise during the review period.

The Department's Position:

To determine whether Visaflor and Daisy made shipments of the

subject merchandise to the United States during the review period, the

Department followed its standard practice of issuing an electronic mail

message to the Customs Service. The Customs Service then transmitted

this message to field personnel, requesting notification if the subject

merchandise exported by Visaflor or Daisy entered the United States

during the review period. A copy of this message is on file in Room

B099 of the Commerce Department. We received no information from

Customs that Visaflor and Daisy had shipments of the subject

merchandise during the POR.

Comment 4: The petitioner agrees with the Department's decision to

assign non-responding companies a margin based on BIA, however, the

petitioner states that the Department should not have assigned these

companies the second-highest rate found for any respondent. By doing

so, the petitioner argues, the Department unnecessarily and unfairly

departed from its practice of assigning non-responding companies the

highest available margin.

The petitioner states that, although the Department did not use the

highest rate as BIA in prior reviews, the respondents in those reviews

had, at least, submitted partial or complete questionnaire responses.

The petitioner argues that the Department has no evidence that the

highest margin is unrepresentative, since the parties failed to respond

to the questionnaire. Furthermore, the petitioner states, the

respondents are presumed to be aware of the highest possible margin

when they decided not to respond to the antidumping questionnaire,

citing Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed.

Cir. 1990).

The Department's Position:

We disagree with the petitioner. Prior to 1993 and the CIT's

decisions in The Floral Trade Council v. United States, 822 F.Supp. 766

(CIT 1993), and Federal Mogul Corporation and the Torrington Company v.

United States, 839 F.Supp. 864 (CIT 1993), the Department determined an

``all others'' or ``new shippers'' rate during the course of each

administrative review. In the 1989-1990 review of this order, the

Department did not include Florex's rate of 264.43 percent in its

determination of the updated ``all others'' rate. The CIT supported the

Department's position, stating that, ``Florex's accumulated interest

expenses from a separate line of business that never began operations

skewed its cost of production figures and should not have been included

in the review analysis.'' The Floral Trade Council v. the United

States, 799 F. Supp. 116 (CIT 1992).

The Court recognized that Florex's rate was unrepresentative of the

other companies in that review, and by extension, of the entire flower

industry because: (1) it was an out of proportion rate explained by

factors unassociated with the overall industry, and (2) Florex

represented only a small fraction of the industry. The Court concluded

that ``ITA did not err in finding it would be punitive to maintain

Florex's rate as the ``all other'' rate. Id. at 119. Therefore,

although we received no information from the non-responding companies,

we maintain that the Florex rate is unrepresentative of the Mexican

fresh cut flower industry, and unsuitable to be applied to the non-

responding companies as BIA.

Final Results of Review

We determine that the following dumping margins exist for the

period April 1, 1992, through March 31, 1993:

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

Margin

Manufacturer/exporter (percent)

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

Rancho el Aguaje........................................... 0.00

Rancho Guacatay............................................ 0.00

Rancho el Toro............................................. 0.00

Rancho del Pacifico........................................ 0.00

Rancho Daisy............................................... *0.00

Visaflor................................................... *0.00

Tzitzic Tareta............................................. 39.95

Rancho Mision el Descanso.................................. 39.95

Rancho Alisitos............................................ 39.95

Las Flores de Mexico....................................... 39.95

All Others................................................. 18.28

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

* No shipments subject to this review. Rate is from the last relevant

segment of the proceeding in which the firm had shipments.

Because Guacatay received a margin of 39.95 percent for the 1991-

1992 review period, we have determined not to revoke the antidumping

duty order with respect to Guacatay. (See Notice of Final Results of

Antidumping Duty Administrative Review; Certain Fresh Cut Flowers from

Mexico, 60 FR 49569 (September 26, 1995).)

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 these

final results, 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 less-than-fair-

value (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 final 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 notice also serves as a reminder to parties subject to

administrative protective order (APO) of their 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: February 13, 1996.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 96-3899 Filed 2-21-96; 8:45 am]

BILLING CODE 3510-DS-P