Certain Fresh Cut Flowers From Colombia; Final Results and Partial Rescission of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-301-602]

Certain Fresh Cut Flowers From Colombia; Final Results and

Partial Rescission of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results and partial rescission of antidumping

duty administrative review.

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

SUMMARY: On April 8, 1997, the Department of Commerce (the Department)

published the preliminary results of the ninth administrative

[[Page 53288]]

review of the antidumping (AD) duty order on certain fresh cut flowers

from Colombia. This review covers a total of 351 producers and/or

exporters of fresh cut flowers to the United States during the period

March 1, 1995 through February 29, 1996.

We gave interested parties an opportunity to comment on the

preliminary results. Based on our analysis of the comments received, we

have made certain changes for the final results. The review indicates

the existence of dumping margins for certain firms during the review

period.

EFFECTIVE DATE: October 14, 1997.

FOR FURTHER INFORMATION CONTACT: Elizabeth Graham or Roy Malmrose,

Office 1, Group 1, AD/CVD Enforcement, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone

(202) 482-4105 and (202) 482-5414, respectively.

APPLICABLE STATUTE AND REGULATIONS: The Department is conducting this

administrative review in accordance with section 751 of the Tariff Act

of 1930, as amended (the Act). Unless otherwise indicated, all

citations to the statute are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Round Agreements Act (URAA). In addition, unless

otherwise indicated, all citations to the Department's regulations are

to those codified at 19 C.F.R. Part 353 (April 1997).

SUPPLEMENTARY INFORMATION:

Background

On April 8, 1997, we published a notice of Preliminary Results and

Partial Rescission of Antidumping Duty Administrative Review

(Preliminary Results), wherein we invited interested parties to

comment. See 62 FR 16772 (April 8, 1997). At the request of interested

parties, we held a public hearing on June 6, 1997.

Scope of Review

Imports covered by these reviews are shipments of certain fresh cut

flowers from Colombia (standard carnations, miniature (spray)

carnations, standard chrysanthemums and pompon chrysanthemums). These

products are currently classifiable under item numbers 0603.10.30.00,

0603.10.70.10, 0603.10.70.20, and 0603.10.70.30 of the Harmonized

Tariff Schedule (HTS). The HTS item numbers are provided for

convenience and Customs purposes. The written description of the scope

of this order remains dispositive.

Rescission

At the time of our Preliminary Results, we had received responses

from 63 firms indicating that they did not ship during the period of

review (POR). As a check on this information, we requested and received

from the U.S. Customs service a listing of all companies which shipped

subject merchandise to the United States during the POR. Customs'

listing confirmed 40 of the companies' claims that they had no

shipments during the POR and the Department verified that one company

did not export subject merchandise. For the remaining 22 that claimed

no shipments, but whose names appeared on Customs' list, we determined

that those companies failed to cooperate to the best of their ability

and assigned them an adverse facts available (AFA) rate.

Subsequent to the Preliminary Results, we received information

about those 22 companies. We examined documentation for each firm and

found that the entries reported by Customs for 21 of these firms

resulted from either a mistaken listing of the respondent firm as the

producer or an incorrect listing of the flower type and HTS number.

Therefore, we have determined that these companies did not ship the

subject merchandise during the POR. For a complete list of these

companies, see section entitled ``Non-Shippers'' in this notice. (The

remaining company is discussed below.)

Consistent with our administrative practice, we have rescinded our

review of the 62 companies with no shipments during the POR. See

Certain Cased Pencils from the People's Republic of China; Preliminary

Results and Partial Rescission of Antidumping Duty Administrative

Review, 62 FR 1734 (January 13,1997) (rescinding review in part with

respect to respondents which, the Department determined, had no

shipments of the subject merchandise during the POR); see also, 19 CFR

351.213(d)(3) (62 FR 27296 (May 19, 1997)) (although this review is not

governed by these new regulations, they do reflect current practice).

Regarding the remaining company, Flores Tiba, Customs' data

indicated five entries of subject merchandise exported by Flores Tiba

during the POR. On June 5 and July 21, 1997, Flores Tiba submitted

information demonstrating that while portions of Customs data were

incorrect, Flores Tiba did have one entry of subject merchandise during

the POR. Flores Tiba explained that the company does not produce or

export subject merchandise in its normal course of business; the sale

in question was a special order of a negligible quantity. For this

reason, the sale had been overlooked.

Flores Tiba's submissions notwithstanding, the Department lacks the

necessary information to calculate a margin for Flores Tiba's entry

during the POR. Therefore, in accordance with section 776(a) of the

Act, the Department has resorted to the use of facts available (FA) for

Flores Tiba. However, upon consideration of Flores Tiba's explanation

for the oversight, we have determined that an adverse inference is not

warranted. Given that Flores Tiba does not normally produce or export

the subject merchandise, it is not unreasonable that a small sale such

as this would be overlooked. Moreover, the error was discovered too

late to allow respondent sufficient time to correct the deficiency

(i.e., to submit the information which would allow us to calculate a

margin). Therefore, as FA, we have assigned Flores Tiba the non-

selected respondent rate of 2.26 percent.

Duty Absorption

On March 29, 1996, petitioner, the Floral Trade Council (FTC),

requested that the Department determine whether AD duties had been

absorbed by respondents during the POR. Section 751(a)(4) of the Act

provides for the Department, if requested, to determine, during an

administrative review initiated two or four years after publication of

the order, whether AD duties have been absorbed by a foreign producer

or exporter subject to the order, if the subject merchandise is sold in

the United States through an importer which is affiliated with such

foreign producer or exporter. The statute requires the Department to

notify the International Trade Commission of its findings regarding

duty absorption for consideration in conducting a five-year ``sunset''

review (to determine whether revocation of the order would be likely to

lead to continuation or recurrence of dumping and of material injury).

Section 751(a)(4) was added to the Act by the URAA. The regulations

governing this review do not address this provision of the Act.

For ``transition orders,'' as defined in section 751(c)(6)(C) of

the Act, i.e., orders in effect as of January 1, 1995, section

351.213(j)(2) of the Department's recently enacted regulations provides

that the Department will make a duty absorption determination, if

requested, for any administrative review initiated in 1996 or 1998. See

62 FR 27296 (May 19, 1997). The preamble issued when these regulations

were proposed in 1996

[[Page 53289]]

explains that reviews initiated in 1996 will be considered initiated in

the second year and reviews initiated in 1998 will be considered

initiated in the fourth year. See 61 FR at 7308, 7317 (February 27,

1996). Although these recently enacted regulations are not binding upon

the Department, they do constitute a public statement of how the

Department expects to proceed in construing section 751(a)(4) of the

amended statute. This approach ensures that interested parties will

have the opportunity to request a duty absorption determination prior

to the time for sunset review of transition orders under section

751(c). Because the order on certain fresh cut flowers from Colombia

has been in effect since 1986, this is a transition order.

Consequently, based on the policy stated above, it is appropriate for

the Department to examine duty absorption in this ninth review, which

was initiated in 1996.

In accordance with the statute, at section 751(a)(4), the

Department must determine whether duty absorption has occurred if the

subject merchandise is sold in the United States through an importer

affiliated with the foreign producer or exporter. Of the selected

respondents, the following have affiliated importers: The Agrodex Group

(Agrodex), the Caicedo Group (Caicedo), the Claveles Colombianos Group

(Clavecol), the Cultivos Miramonte Group (Miramonte), the Floraterra

Group (Floraterra), the Florex Group (Florex), the Guacatay Group

(Guacatay), the HOSA Group (HOSA), the Maxima Farms Group (Maxima), the

Queen's Flowers Group (Queen's) and the Tuchany Group (Tuchany).

Furthermore, we have determined that there are dumping margins for the

following companies with respect to the percentages of their U.S. sales

(by quantity) indicated below:

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

Percentage of

U.S.

Name of company affiliated

importer sales

with margins

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

Agrodex................................................. 1.11

Caicedo................................................. 100

Clavecol................................................ 9.13

Floraterra.............................................. 33.40

Florex.................................................. 8.85

Guacatay................................................ 15.20

HOSA.................................................... 15.88

Maxima.................................................. 34.98

Miramonte............................................... 17.53

Queens.................................................. 9.90

Tuchany................................................. 22.33

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

In the case of Caicedo, we are unable to calculate a margin based

on its response and have, therefore, determined its dumping margin

entirely on the basis of AFA. We also have determined, based on AFA,

that there are margins on all sales. Lacking other information, we find

duty absorption on all sales. See, e.g., Antifriction Bearings (other

than Tapered Roller Bearings) and Parts Thereof from France, Germany,

Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom;

Preliminary Results of Antidumping Duty Administrative Reviews and

Partial Termination of Administrative Reviews, 62 FR 31566, 31568 (June

10, 1997). With respect to those companies whose margins are not

determined based on FA, we presume that the duties will be absorbed for

those sales which were dumped, unless there is evidence (e.g., an

agreement between the affiliated importer and the unaffiliated

purchaser) that the unaffiliated purchasers in the United States will

pay the full duty ultimately assessed on the subject merchandise.

Although in this case certain companies have provided invoices which

separately list an amount for estimated AD duties which they are

charging their unaffiliated purchasers, this is not evidence of payment

of antidumping duties by the customer, and none of these companies has

presented evidence of agreements with unaffiliated purchasers to pay

ultimately assessed AD duties. Therefore, we find that the AD duties

have been absorbed by the above-listed firms on the percentage of U.S.

sales indicated. See 62 FR 31568.

Analysis of Comments Received

We invited interested parties to comment on our preliminary results

and partial rescission of the order. We received case and rebuttal

briefs from the FTC, the Asociacion Colombiana de Exportadores de

Flores (Asocolflores), an association of Colombian flower producers

representing many of the respondents in this case, and HOSA and

Caicedo.

General Issues

Comment 1: Asocolflores argues that the Department's decision to

limit the review to the largest exporters and then apply to non-

selected respondents the weighted-average margin of these selected

respondents violates due process and the AD statute. Asocolflores

contends that the 13 largest producers are not a statistically valid

sample and thus their average rate is not representative for the non-

selected respondents. It adds that the Department has no right to

disregard questionnaire responses received from non-selected

respondents.

The FTC disagrees contending that the statute gives the Department

exclusive authority to assign margins based on a sample of the largest

exporters. The FTC also notes that the Department disclosed to all

parties the alternatives and considered comments before deciding on

this methodology.

DOC Position: We agree with the FTC. According to the statute and

SAA, the authority to select respondents, whether using samples or

choosing the largest exporters, rests exclusively with the Department.

See section 777A(a-c) of the Act and SAA at 202. Given the large number

of respondents in this case and the new statutory deadlines, the

Department concluded that limiting the number of exporters examined was

administratively necessary. The Department requested comments on two

proposed options for limiting the number of companies to be examined.

After analyzing those comments from the interested parties, we chose to

limit the number of companies examined by reviewing the largest

exporters. See Memorandum for Barbara Stafford from Team dated November

21, 1996. With respect to not examining the responses received from

non-selected respondents, the statute does not require that we look at

every questionnaire response placed on the record. See Notice of Final

Determination of Sales at Less Than Fair Value: Bicycles From the

People's Republic of China, 61 FR 19036 (April 30, 1996).

Finally, with regard to applying the weighted-average margin of

selected respondents to the non-selected respondents, section

777A(c)(2) of the Act provides the Department with the authority to

determine margins by limiting its examination to a statistically valid

sample of exporters or the largest volume of the subject merchandise

that can be reasonably examined. This subparagraph is formulated as an

exception to the general rule that each company for which a review is

requested will be individually examined and receive a calculated

margin. The method for establishing the rate for the non-selected

respondents is left to the agency's discretion. As discussed in comment

2, the weighted-average of the calculated rates is a reasonable method.

Comment 2: Asocolflores states that the Department properly

excluded the one rate based entirely on AFA in calculating the rate

applied to non-selected responding companies. However, citing Serampore

Indus. Pvt. Ltd. v. United States (696 F. Supp. 665, 669 (CIT 1988))

and Romer v. Evans, 116 S. Ct. 1620, 1627 (1996), Asocolflores contends

that there is no legal basis for the Department's exclusion of zero and

de minimis margins from the margin applied to non-selected respondent

companies.

[[Page 53290]]

Asocolflores claims that due process would be violated if only selected

respondents benefitted from zero or de minimis margins. If some of the

respondents selected by the Department show zero or de minimis margins,

Asocolflores states, it is reasonable to assume that some of the non-

selected respondents also would have received the same had they been

individually reviewed. Asocolflores reminds the Department that the

purpose in limiting the review to only 13 selected respondents was to

use their rates to project the rates of the non-selected respondents.

Acknowledging that the AD statute provides for the exclusion of zero

and de minimis margins in calculating the cash deposit rate for non-

examined producers in an investigation, Asocolflores differentiates

this situation from the final results of an administrative review which

give rise to actual duty payments (as opposed to cash deposit rates).

Asocolflores emphasizes that, because the Department decided to limit

the number of respondents, all exporters and importers do not have the

ability to obtain their own assessment rates as they normally would in

an administrative review.

The FTC objects to the position advanced by Asocolflores, stating

that there is no valid basis for excluding margins based on AFA on one

hand while including de minimis margins on the other. On the contrary,

the FTC argues that the Department should include margins based on AFA

in the rate applied to non-selected responding companies since it is

likely that some non-selected respondents would have failed to qualify

for their own calculated rate due to failed verifications, failure to

submit responses, etc. The FTC cites the Court of International Trade

(CIT) in Floral Trade Council v. United States (16 CIT 654, 657, 799 F.

Supp. 116, 119 (1992)) where it said, ``this court has approved `all

other' rates based on an average that includes BIA rates'' and later

where it says ``[n]ot all BIA rates are inappropriate for use in

calculating unified `all other' rates'' (Id. At 658, 799 F. Supp. at

120).

DOC Position: We have continued to calculate the cash deposit rate

for non-selected respondents by excluding both AFA and zero/de minimis

rates. While there may be situations when it would be appropriate to

include AFA or zero/de minimis rates in the rate to be applied to

companies whose entries are not individually examined, there is no

over-arching rule as to their inclusion or exclusion. With respect to

the precedents cited by the FTC and Asocolflores, the situation here

differs in that we have, for the first time, restricted a review to the

largest exporters.

Underlying the arguments of both the FTC and Asocolflores is the

notion that the selected respondents are somehow representative of the

whole group of potential producers/exporters. As in investigations,

where only the largest producers/exporters are selected, those selected

here cannot necessarily be said to be representative of the whole

population. Therefore, we cannot treat the selected companies as a

statistical sample and compute a margin that is based on the results

for all of the selected companies. As for Asocolflores' concerns that

due process would be denied to non-selected respondents should we not

include zero/de minimis margins, we disagree. Once the Department

decides to limit its review to certain producers/exporters, including

zero/de minimis rates while excluding AFA rates would yield an

unbalanced result because, as the FTC points out, some non-selected

firms might also have received AFA.

As stated above, this is the first time in a review of this or any

order that we have examined only the largest producers/exporters. In

deciding how to calculate the rate to apply to non-selected companies

that responded to our questionnaire, we reviewed our past practice and

determined that the most analogous situation we have dealt with in the

past is in non-market economy (NME) investigations where the number of

companies that submit full responses is too large to be investigated.

In those investigations, as in the present case, what we did paralleled

the statutorily mandated formula for calculating the all-others rate,

i.e., the weighted-average rate of investigated companies not including

AFA and zero/de minimis rates.

Comment 3: Asocolflores and other respondents allege that the

Department erred in assigning an ``all others'' rate of 3.53 percent

from the Final Determination of Sales at Less Than Fair Value: Certain

Fresh Cut Flowers from Colombia, 52 FR 6842 (March 5, 1987) (Flowers

(LTFV)) to the companies that were unlocatable in this review rather

than an ``all others'' cash deposit rate of 3.1 percent from the

Amendment to Final Determination of Sales at Less Than Fair Value in

Accordance with Court Decision, 56 FR 12508 (March 26, 1991).

DOC Position: We agree with Asocolflores that the correct ``all

others'' cash deposit rate from Flowers (LTFV) is 3.1 percent and

should be assigned to the unlocatable companies in this review.

Comment 4: Both Asocolflores and the FTC acknowledge that the

Department should develop a mechanism which allows respondents to

preserve their eligibility for revocation. However, the FTC argues that

such eligibility should be limited to those companies that are selected

for review and have two years of no dumping. According to the FTC, this

option comports most closely with the AD law by providing for the

revocation of orders only for companies that have been subjected to

actual reviews. Asocolflores opposes this option because it limits

revocation eligibility to the largest exporters (assuming the

Department continues to review only the largest exporters).

Asocolflores claims there is no basis for denying revocation

eligibility to smaller producers.

Asocolflores favors the approach whereby companies would be allowed

to make a retrospective claim that they have not dumped for the past

three years in the form of a ``changed circumstances'' review in the

eleventh period (i.e., the first review period in which revocations

could be possible under this order). Asocolflores argues that this

approach conserves the administrative resources of the Department,

reduces the verification burden, and is easier to administer. Moreover,

Asocolflores suggests that, under the new regulations, a retrospective

revocation review in the eleventh POR could be limited to an

examination of data for only the ninth and eleventh periods, further

reducing the administrative burden and simplifying verification.

The FTC concedes that the ``changed circumstances'' approach is the

most efficient and states that if the Department chooses not to follow

the FTC's preferred option (eligibility only for companies which have

been reviewed), the ``changed circumstances'' approach should be

adopted, provided the companies are subject to verification for the

entire three-year period. The FTC also expressed its concerns that a

company may be entitled to base revocation on a period for which no

review was requested.

DOC Position: Having reviewed the comments we received on this

issue, we have decided to adopt the following procedure for addressing

requests for revocation by small companies in this proceeding. We

believe this procedure addresses many of the concerns raised by the

parties and, at the same time, meets the resource constraints faced by

the Department.

Under this procedure, companies that were not selected for

examination in

[[Page 53291]]

prior reviews (because of the large number of companies for which a

review was requested) will have a mechanism for obtaining revocation on

the basis of three consecutive years of sales at not less than normal

value. The first opportunity for such a procedure will occur in the

review of the period March 1, 1997 to February 28, 1998 (the eleventh

review period). Companies that request a review for that period may

also request revocation if they meet the following criteria: (1) a

review was requested for the company in each of the two years

immediately preceeding the period of review in which revocation is

requested, but the company was not selected for examination in either

of those two preceding reviews; and 2) with the request for revocation

the company (a) certifies that it sold subject merchandise at not less

than normal value during the period described in 19 C.F.R.

351.213(e)(1) and for two consecutive years immediately preceeding that

period; (b) provides the certifications required under 19 C.F.R.

351.222(e)(ii) and (iii); and (c) submits a statement acknowledging

that its entries are subject to assessment of AD duties at the non-

selected respondent rate in one or both of the two preceding review

periods. If a company meets these criteria, Commerce will examine the

company's sales during the current period of review for purposes of

determining a dumping margin in accordance with section 751(a) of the

Act. In accordance with section 751(a)(2) of the Act, the results of

that analysis will form the basis for any assessment of antidumping

duties on entries during that period and for cash deposits. In

addition, for the purposes of revocation only, Commerce will examine

data for the two prior years to determine whether the company sold

subject merchandise at not less than normal value. If Commerce

determines that the company sold subject merchandise at not less than

normal value in each of the three years examined and the other

conditions of 19 CFR 351.222 are met, it will revoke the order with

respect to that company.

The Use of Facts Available

Comment 5: While Caicedo acknowledges that there were a number of

problems encountered at the Bogota verification, the company argues

that the rate applied in the preliminary results (25.58 percent) is

inappropriate for two reasons. First, Caicedo argues that the rate

chosen as the highest rate ever applied to the Caicedo Group was in

fact never applied to the Caicedo Group. In fact, asserts Caicedo, the

rate was applied in the third review to one of the farms that is now

part of the Caicedo Group, but which, in that review, was treated as an

individual company. The companies which now comprise the Caicedo Group,

asserts Caicedo, were not treated as a group until the fourth review

(citing Certain Fresh Cut Flowers from Colombia; Final Results of

Antidumping Duty Administrative Review, and Notice of Revocation of

Order (in Part), 59 FR 15159 (March 31, 1994) (Flowers (90-91)).

Second, Caicedo argues that a recent decision by the Court of Appeals

for the Federal Circuit (CAFC) (D&L Supply Co. v. United States, 133 F.

3d 1220 Fed Cir. 1997) (D&L Supply) calls for the Department to select

a FA rate that reasonably reflects conditions in the industry. When

compared to the majority of the calculated rates in this and previous

reviews, Caicedo asserts that the 25.58 percent rate has no

relationship to commercial practice in this industry.

Caicedo suggests that it would be more appropriate to use either

the highest rate received by the group during the reviews in which the

companies were treated as a group or by constructing group rates for

the earlier reviews by averaging the rates applied to the individual

members of the group in those reviews. According to Caicedo, these

methods would produce a rate which relates to the past practices of the

Caicedo Group and which reflects conditions in the industry.

Furthermore, Caicedo argues that the Department has the discretion

not to apply the highest available rate and asserts that the facts in

this case do not warrant the highest available rate. Caicedo argues

that one of the stated reasons for applying FA, i.e., the fact that

Caicedo had not adjusted its material and labor costs for inflation, is

inappropriate. Caicedo claims that the Department did not ask for this

information in either the original or supplemental questionnaires,

despite the fact that Caicedo had clearly explained in its

questionnaire response that the inflation adjustment had not been

included. Therefore, claims Caicedo, it cannot be penalized for not

providing this information.

Finally, Caicedo argues that the company's situation during this

review should be taken into consideration. According to Caicedo, the

affiliated Miami importer went through a period of downsizing during

the review period, as a result of which Caicedo was forced to sell

during the review period to approximately 60 unaffiliated U.S.

importers. This disruption in the normal U.S. selling practice made the

preparation of the sales response a particularly arduous task.

Caicedo's task was further complicated by the fact that the Group was

operating with a reduced staff. In light of this situation, Caicedo

argues that mistakes discovered at verification, such as the

misclassification of constructed export price (CEP) versus export price

(EP) sales and the inappropriate use of the date of receipt of payment

as the date of sale, were not that serious and do not warrant the use

of a rate which Caicedo asserts will put the company out of business.

The FTC argues that the Department should apply an AFA rate of

76.60 percent (the highest rate for any company during this and any

prior segment of this proceeding) because Caicedo failed to cooperate

during the review and verification process. The FTC argues that such a

failure to cooperate could have only been willful, given Caicedo's past

experience in this order. The FTC asserts that in order to ensure

cooperation in the future, the Department should apply a rate of 76.60

percent, since it is clear that the application of 25.58 percent to a

member of the Caicedo group during a past review did not affect

Caicedo's behavior during the current review.

Regarding Caicedo's arguments that the 25.58 percent rate should

not apply to the Caicedo Group because that rate was never applied to

the group as defined in any prior administrative review, the FTC argues

that the relevant issue is not the composition of the Caicedo Group

during prior review periods, but the composition during this review

period, when Cauca was in fact one of the members of the Caicedo Group.

Because Cauca is part of the Caicedo Group in this review, it may

fairly be assumed that Caicedo's margin of dumping in this POR ``bears

some relationship'' to the past practices of all of the companies

within the group, including Cauca. Moreover, the Department cannot

calculate an average of the rates applicable to group members in prior

review periods. To accurately calculate a weighted-average, we would

need verified 1995-1996 sales figures.

DOC Position: While we have concluded that the deficiencies in

Caicedo's responses and the problems at verification reflected a

failure on Caicedo's part to cooperate to the best of its ability, we

disagree with the FTC's conclusion that the earlier rate of 25.58

percent is not sufficiently adverse. While we acknowledge that the

problems with the responses and the verification rendered Caicedo's

information unuseable for purposes of calculating a dumping margin, we

found

[[Page 53292]]

that the company made significant efforts to respond to our requests

for information and to undergo verification.

As detailed in the preliminary results, Caicedo misclassified CEP

sales and misreported many dates of sale, using the date that payment

was received rather than invoice date. (Caicedo's comments regarding

inflation adjustments are addressed further below.) We recognize that

the company faced difficult circumstances during the review period, but

we find that a company that has successfully participated in numerous

reviews, as Caicedo has, can reasonably be expected to have done a

better job of responding to our inquires. Consequently, in accordance

with section 776(b) of the Act, we have determined that adverse

inferences are warranted in determining through FA the dumping margin

for this company.

We have examined Caicedo's arguments with respect to applying

Cauca's rate to the Caicedo Group as a whole and agree that we should

only look back to rates that have been applied to the Caicedo Group in

the past or the rates that would have been applied had current members

of the Caicedo Group been analyzed as part of the group in the earlier

reviews. The highest rate calculated in this manner is the average of

the rates received by the individual companies currently comprising the

Caicedo Group in the third administrative review (see Certain Fresh Cut

Flowers from Colombia; Final Results of Antidumping Duty Administrative

Review and Revocation in Part of the Antidumping Duty Order, 56 FR

50554, (October 7, 1991) (Flowers (89-90)), which is 6.46 percent.

However, we have further determined that it would not be

appropriate to apply this rate to Caicedo in the circumstances

presented by this review. Of the companies that were individually

examined in this review, the highest rate is 8.36 percent for

Floraterra. Since Floraterra cooperated fully in the review and its

responses were verified, we have determined that Caicedo should not

receive a lower rate than Floraterra. Therefore, we have assigned the

Caicedo Group a dumping margin of 8.36 percent. Because it is higher

than any historical rate for the Caicedo Group as a whole, it provides

substantial incentive for Caicedo to do a better job of responding to

our inquires in future reviews.

With respect to the FTC's argument that we cannot calculate a

weighted-average rate from a prior review of the individual members of

the Caicedo Group because we lack verified 1995-96 sales figures, we

disagree. The weight-average rate that would have been applied to the

Caicedo group in Flowers (89-90) would have been calculated using sales

figures from that review period, not 1995-96. Therefore, although we

have not used the historical rate, we computed it using the ranged

sales figures in the public versions of the responses filed in Flowers

(89-90).

Regarding Caicedo's argument that one of our bases for AFA was

unsupported, we disagree. In the questionnaire, companies were allowed

to include amortized amounts of preproduction expenses in material and

labor costs but, for the companies that did so, they were directed to

``identify which expenses contain pre-production expenses and fully

describe your amortization methodology.'' (See page D19 and D24 of the

Department's questionnaire.) Caicedo did not identify where it had

included amortized expenses, nor did it provide a description of its

amortization methodology. Without this information, the Department was

unable to identify any problems to be addressed in its supplemental

questionnaires because it was not aware that amortized amounts had even

been included. Also, the questionnaire was clear that reported

depreciation expenses should be adjusted for inflation, and Caicedo

failed to make this type of adjustment. (See page D32 of the

Department's questionnaire.)

Finally, with respect to the CAFC's decision in D&L Supply, we note

that it concerned a segment of a proceeding under the Act prior to

imposition of URAA-related amendments and the facts before the court in

that case differed from the facts here. D&L Supply involved the

Department's use, as best information available (BIA), of information

which had conclusively been determined in the course of litigation to

be inaccurate. In D&L Supply, the court decided that we could not use a

judicially invalidated rate as a BIA rate in subsequent reviews. The

25.88 percent rate we used in our preliminary results has not been

invalidated by subsequent court decisions. Nevertheless, the rate we

have assigned Caicedo in these final results does not conflict with the

CAFC's philosophy in D&L Supply, because it is clearly consistent with

commercial practice in this industry as it was the calculated rate of

another company.

Comment 6: Because all loan documentation was not available at

verification, the FTC requests that the Department apply AFA in

calculating Tuchany's U.S. credit costs. Specifically, the FTC suggests

that the U.S. credit costs for Tuchany should be calculated using the

highest rate for any loan for which documentation was available.

Asocolflores argues that the Department should continue to use the FA

rate of LIBOR plus six percent.

DOC Position: Because certain information concerning Tuchany's

credit costs could not be verified, the Department used an FA rate of

LIBOR plus six percent to calculate Tuchany's U.S. credit costs in the

preliminary results of this review. This represents the average of the

interest rates on the loans for which documentation was available at

verification. We did not apply AFA in selecting this interest rate

because we have not concluded that Tuchany failed to cooperate by not

acting to the best of its ability. (See Section 776(b) of the Act.)

Tuchany complied with all of our requests for information in this

review and, with this one exception, we were able to verify the

information provided. Therefore, for these final results, the

Department has continued to use the non-adverse rate employed in the

preliminary results to calculate U.S. credit costs for Tuchany.

Comment 7: Flores El Lobo requests that the Department reconsider

its preliminary decision to apply AFA to the company and instead to

apply the non-selected company rate to it. The company was not

originally represented by counsel. When the company received the

Department's questionnaire, reports Flores el Lobo, a company official

signed for the questionnaire. However, according to the company,

because the company was in liquidation and had ceased operations, it

did not file a timely response. According to the company, in September

1996, Eden Floral Farms, one of Flores El Lobo's unaffiliated

importers, decided to prepare a response. On behalf of Eden Floral

Farms, Asocolflores contacted the Department and was advised that Eden

should file a response for Flores El Lobo on October 9, 1996. Because

the company was instructed by the Department to file a response and did

so, Asocolflores asserts that Flores El Lobo should not be penalized

with an AFA rate.

The FTC supports the Department's decision to treat Flores El Lobo

as a non-respondent and assign an AFA margin to the company. If, as the

company claims, it was in the process of liquidation at the time it

received the questionnaire, asserts the FTC, it should have at least

reported its status to the Department. Further, argues the FTC, the

Department should not accept the company's untimely response provided

by Flores El Lobo's importer as evidence

[[Page 53293]]

that the company was cooperative or acting to the best of its ability.

According to the petitioner, without the AFA provision of the law,

there would be no incentives for timely, complete reporting in response

to the Department's questionnaire.

DOC Position: We have reconsidered our treatment of Flores El Lobo.

At the time of the preliminary results, we overlooked the fact that

Eden Farms had been advised by the Department to file a late response

on behalf of Flores El Lobo. Given the fact that its importer attempted

to cooperate with the Department by requesting that it respond late on

behalf of its exporter, for these final results, we have not found that

Flores el Lobo failed to act to the best of its ability in responding

to the Department's inquiries. See Section 776(b) of the Act.

Accordingly, it is inappropriate to assign Flores El Lobo an AFA rate.

Furthermore, like other companies in this review, because Flores El

Lobo was not a selected company, its response had no impact on our

analysis. For purposes of the final results of review, we have assigned

Flores El Lobo the non-selected companies' rate, 2.26 percent.

Export Price or Constructed Export Price

Comment 8: Asocolflores maintains that the Department should

compare the annual average CV with the annual average CEP or EP in

light of the extreme seasonality of U.S. demand of the subject

merchandise. The FTC argues that the use of an annual average U.S.

price is unnecessary and will not produce a more representative U.S.

price. Instead, FTC contends, such averaging on the U.S. side will mask

dumping.

DOC Position: As we have stated in prior reviews and the

investigations of Colombian flowers, (see, e.g., Certain Fresh Cut

Flowers from Colombia; Final Results of Antidumping Duty Administrative

Reviews, 61 FR 42833, (August 19, 1996) (Flowers (91-94) ) ), we have

exercised our authority under section 777A of the Act to use averaging

techniques and have computed monthly average U.S. prices. Our use of

monthly averages for the U.S. price has been upheld by the CIT. See,

e.g., Floral Trade Council v. United States, 775 F. Supp. 1492, 1499-

1501 (CIT 1991).

For the current review, we have continued to use monthly average

U.S. prices. By relying on monthly averages, we are able to use the

exporters' actual price information, which is often available only on a

monthly basis. As in prior reviews, we have not adopted Asocolflores'

suggestion that we move to annual averages. In our view, use of an

annual average would allow respondents to dump during periods of low

demand, a result that is not consistent with the statute.

Comment 9: Queen's argues that the Department's logic of treating

the affiliated flowers producers as a single entity for AD duty

calculation purposes should also apply to affiliated importers. Queen's

asserts that the Department collapses companies that are affiliated

when there is a significant potential for price manipulation. Queen's

claims that to the extent there is any potential for price

manipulation, it exists at the importer level rather than the producer

level since the importers generally sell the flowers on a consignment

basis.

The FTC responds that the effect of Queen's proposal would be the

same as averaging sales over a longer period or greater number of

companies, allowing low-priced sales by one importer to offset higher

prices obtained by another. The FTC maintains that such a methodology

would only serve to mask dumping.

DOC Position: In response to Queen's comment, we are combining the

operations of the affiliated importers for purposes of our final

results in this review. For Queen's sales through affiliated importers,

we calculated a single CEP for each flower type based on the sales data

from the affiliated importers. These affiliated resellers would be

treated as a single entity if we were not using monthly average prices.

Thus, notwithstanding the FTC's concerns about the effects of further

averaging, we see no reason to disaggregate these companies' sales.

Comment 10: The Flores Colon Group (Flores Colon) contends that the

Department incorrectly included both the costs incurred by Flores

Colon's affiliated cargo agent and payment from the cargo agent to

Flores Colon in direct selling expenses. In Flores Colon's view, this

amounts to double-counting because certain ``expenses'' incurred by the

cargo agent were payments to Flores Colon. Hence, Flores Colon argues,

these payments are intra-company transfers and should not be deducted

as costs.

DOC Position: We disagree with Flores Colon's claim that we

included the cargo agent's expenses arising from intra-company

transfers in the preliminary results calculations. The only amounts

deducted were payments to outside, i.e., non-affiliated, suppliers of

the cargo agent and the costs incurred by Flores Colon in supporting

the operations of the cargo agent, e.g., wages paid to Flores Colon

workers that staffed the cargo agent's operation.

Comment 11: Maxima argues that so-called ``AD reserve surcharges''

added by an unaffiliated consignment seller to the price charged to the

first unrelated seller in the United States should be included in CEP.

Furthermore, Maxima argues that there is no statutory basis under 19

U.S.C. 1677a(c)(2) and (d) for later deducting these ``AD reserve

surcharges'' from CEP since these surcharges are neither movement

expenses, export taxes, commissions or selling expenses.

DOC Position: We disagree with Maxima. In the situation discussed

by Maxima, the unaffiliated consignment seller is receiving revenue

from two sources--from Maxima in the form of a commission and from the

purchaser in the form of an AD reserve surcharge. Since Maxima and the

consignment seller in this situation are not affiliated, the payment to

the consignment reseller for AD reserve surcharges does not accrue to

Maxima. Therefore, we have taken as our starting price the price

charged by the unaffiliated consignment seller net of the AD reserve

surcharge. This differs from our treatment of AD surcharges paid to

affiliated consignment sellers, where the AD surcharge can be said to

accrue to the affiliated producer/exporter.

Comment 12: Asocolflores asserts that for CEP sales, the Department

incorrectly deducted direct and indirect selling expenses incurred in

Colombia from CEP. Asocolflores cites the Statement of Administrative

Action (SAA) which states that, under section 772(d) of the Act, CEP

should be reduced only by those expenses and profit associated with

economic activity in the United States. Additionally, Asocolflores

cites section 351.402(b) of the recently enacted regulations which

directs the Department to ``make adjustments {to CEP} for expenses

associated with commercial activities that relate to the sale to an

unaffiliated purchaser, no matter where or when paid.'' Citing to

Tapered Roller Bearings and Parts Thereof, Finished and Unfinished from

Japan, 62 11825, 11833-34 (March 13, 1997), and Gray Portland Cement

and Clinker from Mexico, 62 FR 17148, 17167 (April 9, 1997) (Cement

from Mexico), Asocolflores contends that the Department has interpreted

section 772(d) to preclude the deduction of selling expenses incurred

in the exporting country from the U.S. price in other administrative

reviews and should apply the same interpretation in these final results

of review.

For companies that sell outright to their affiliated importers,

Asocolflores contends that the expenses are incurred

[[Page 53294]]

in completing the sale to the importer and, therefore, are not

associated with economic activity in the United States. For the

companies that make consignment sales, all such expenses are incurred

prior to U.S. economic activity and are not assumptions of the

importer's selling costs. Furthermore, asserts Asocolflores, since, for

EP sales, neither the producer nor affiliated importer engages in any

U.S. economic activity and the expenses in question are incurred

equally for both CEP and EP sales, they should not be deducted from

CEP.

Asocolflores further contends that the Department should not apply

its CEP profit ratio to selling expenses incurred in Colombia because

the SAA provides for a deduction from CEP for profit allocable to

selling activities in the United States and, for the reasons cited

above, the export-related activities in Colombia are not selling

activities in the United States.

The FTC states that Asocolflores' arguments overlook the fact that

flowers are grown commercially in Colombia specifically for U.S.

customers and, therefore, all such expenses are associated with

economic activity in export markets, principally the United States.

Citing the Final Determination of Sales at Less than Fair Value:

Certain Pasta from Italy, 61 FR 30326, 30352 (June 14, 1996), the FTC

claims that the Department allows selling expenses incurred in the

exporting country to be deducted from CEP when ``virtually all'' of the

product is sold in the United States. The FTC asserts that ``virtually

all'' of the subject flowers are sold in the United States and that the

Colombian producers target the subject flowers to the U.S. market. In

the alternative, the FTC states that, if such costs are not deducted

from CEP, they should be included in selling, general and

administrative (SG&A) expenses and added to CV.

DOC Position: We agree with Asocolflores that selling expenses

incurred in the home market that are not associated with U.S. economic

activity should neither be deducted from CEP nor included in the basis

for calculating CEP profit. We closely analyzed the expenses reported

by each respondent and have continued to deduct from and include in the

basis for profit certain expenses (e.g., association dues and

advertising expenses) that are associated with U.S. economic activity.

We do not agree with the FTC that respondents sold ``virtually all'' of

the subject flowers in the United States, as many of the respondents

have substantial third country (TC) sales of such flowers.

In addition, we disagree with petitioner that the expenses not

deducted from CEP should be included in CV. In accordance with section

773(e)(2)(B) of the Act, the amount to be included for CV should

reflect SG&A incurred for sales in the exporting country.

Comment 13: Asocolflores states that the Department instructed

respondents not to offset interest expenses with interest income when

calculating indirect selling expenses in the United States. Asserting

that it is the Department's standard practice to allow this offset,

Asocolflores requests that the Department calculate selling expenses,

inclusive of an offset for interest income. If the Department does not

have sufficient data to do so, Asocolflores contends that it should

provide an opportunity for respondents to submit such information

The FTC contends that the Department does not have a standard

practice of allowing interest income to offset U.S. selling expenses

and instructed respondents correctly not to report such income. The FTC

states that any interest income earned with respect to U.S. sales is

either due to intra-company payment terms or earned after the sale by

the importer. The FTC argues that any interest income earned after the

sale is not related to the production or sale of flowers but rather is

income from monetary transactions. Furthermore, the FTC states that

section 772 of the Act provides only for adjustments to CEP for

``expenses,'' and does not allow an offset for interest income earned

on the sale.

DOC Position: In the context of a sales calculation, it is the

Department's standard practice to require respondents to demonstrate a

direct relationship between the interest income and the sales under

review to qualify for an adjustment. See Certain Cold-Rolled Carbon

Steel Flat Products from Germany, 60 FR 65281, Comment 29 (December 19,

1995) (Carbon Steel from Germany). Further, in Carbon Steel from

Germany, the Department denied a request for a similar adjustment

because the respondent did not claim the adjustment until verification,

thus limiting the ability of the Department to investigate the basis of

the claim.

We acknowledge that the questionnaire did not clearly reflect the

Department's practice of allowing interest income offsets in limited

circumstances. However, with the exception of Queen's, none of the

respondents raised this issue with the Department in a timely manner or

provided the information necessary to evaluate and make the claimed

adjustment. Because those respondents did not raise this issue until

their case briefs, we had no opportunity to obtain information and

evaluate their claims. Thus, we have made no adjustment. In contrast,

Queen's did raise the issue in a timely manner, which enabled the

Department to ask supplemental questions and verify the basis for the

claim. Therefore, we have taken Queen's request into consideration, and

have reduced interest expense for Queen's affiliated CEP resellers by

the amount of interest income.

Comment 14: The FTC argues that the Department should not treat

commissions paid to affiliated importers differently than it treats

commissions to unaffiliated importers if it can be shown that the

commissions to affiliated importers are at arm's length. The FTC claims

that section 772(d)(1) of the Act explicitly requires the Department to

first deduct commissions and then any indirect selling expenses in

calculating CEP, without distinguishing between affiliated and

unaffiliated parties. Furthermore, the FTC contends that the statute

recognizes that a CEP reseller, whether or not affiliated, should be

treated as a separate entity according to the FTC. Consequently, since

both transactions are at the same level of trade, the FTC argues that

commissions should be treated the same whether the CEP sale is made

through an affiliated reseller or through an unaffiliated reseller.

Asocolflores claims that by deducting the commission paid by the

exporter to an affiliated importer and then deducting the importer's

selling expenses, the Department would be double-counting selling

expenses. In addition, Asocolflores argues that the deduction of the

commissions may result in a double deduction of profit in calculating

CEP, because section 772(e) of the Act specifically requires a

deduction of CEP profit. Asocolflores asserts that to the extent that

profit is included in the commission, a double deduction would occur.

DOC Position: We agree with Asocolflores that deducting the

commission paid to an affiliated importer and indirect selling expenses

would lead to double-counting. To avoid this, we have deducted actual

selling expenses rather than the commission paid to the affiliated

exporter by the importer. See Flowers (91-94) at 42838. See also, the

newly enacted regulations at 19 CFR 351.402 (a) and (e).

Comment 15: Tuchany and Miramonte allege that the Department erred

when it subtracted CEP profit not only with respect to affiliated

importers

[[Page 53295]]

but also with respect to unaffiliated consignment importers. The FTC

argues that profits should be deducted from all CEP transactions,

whether or not the merchandise is sold on a consignment basis. Under

the FTC's interpretation of affiliation, any consignment sale implies

an affiliation. Therefore, there should be a deduction of CEP profit

from all consignment sales.

DOC Position: We disagree with the FTC that any consignment sale

implies affiliation between the exporter and the consignment importer.

The consignment importer negotiates the price with the U.S. customer

without the involvement of the exporter and the amount of the

commission paid to the consignment importer is negotiated at arm's

length between the exporter and the consignment importer. Therefore,

for sales made through unaffiliated consignment importers we have

deducted the commission paid to those importers. Further, because the

deduction of these commissions results in a price corresponding as

closely as possible to an export price between the unaffiliated

exporter and importer, we have not made an additional deduction of CEP

profit.

Comment 16: Asocolflores argues that the Department erred in its

calculation of CEP profit for respondent companies by including EP and

consignment sales in the calculation. Asocolflores contends that

section 772(f)(2)(C) of the Act indicates that CEP sales to affiliated

parties should be the only U.S. sales included in the calculation of

CEP profit. In further support of this position, Asocolflores cites to

the SAA at 155 which states that ``[i]f there is no profit to be

allocated (because the affiliated entity is operating at a loss in the

United States and foreign markets), [the Department] will make no

adjustment under section 772(d)(3).'' Asocolflores argues that if sales

to unaffiliated importers were profitable, there could still be a

profit to allocate, while the SAA expressly does not consider such a

situation.

The FTC argues that section 772(f)(2)(C) of the Act does not limit

the sales to be considered for purposes of computing CEP profit to

sales through affiliated importers. The FTC argues that the limitations

in sections 772(f)(2)(C)(i), (ii) and (iii) are primarily concerned

with the merchandise included in the calculation, not the category of

the customer. The FTC additionally argues that consignment agents are

affiliated as there exists a control relationship between the

consignment agent and the producer of the subject merchandise.

DOC Position: We disagree with Asocolflores. In Certain Cold-Rolled

Carbon Steel Flat Products From the Netherlands: Final Results of

Antidumping Duty Administrative Review, 62 FR 18478 (April 15, 1997),

the Department addressed the issue of whether EP sales should be

included in calculating a CEP profit rate:

The calculation of total actual profit under section

772(f)(2)(D) includes all revenues and expenses resulting from the

respondent's EP sales, as well as from its CEP and home market

sales. The basis for total actual profit is the same as the basis

for total expenses under section 772(f)(2)(C). The first alternative

under this section states that for purposes of determining profit,

the term ``total expenses'' refers to all expenses incurred with

respect to the subject merchandise, as well as home market expenses.

Where the respondent makes both EP and CEP sales to the United

States, sales of the subject merchandise would encompass all such

transactions.

Further, section 772(f)(2)(B) of the Act defines ``total United

States expenses'' as the total expenses described in subsections (d)(1)

and (2). Section 772(d)(1) encompasses ``the amount of * * * expenses

generally incurred by or for the account of the producer or exporter,

or the affiliated seller in the United States * * *'' Clearly this

would include all consignment and EP sales to unaffiliated parties as

well as sales through affiliated resellers. Accordingly, we have

continued to include all U.S. sales transactions and associated

expenses in our calculation of CEP profit.

Comment 17: Asocolflores argues that, due to the seasonal nature of

the demand for fresh cut flowers in the United States, the Department

should calculate CEP profit on a monthly rather than an annual basis.

Asocolflores argues that the use of an annual profit rate in light of

the highly variable monthly profit rates which result from the

seasonality of demand for fresh cut flowers distorts the Department's

AD calculations. Asocolflores points out that the Act does not specify

the time period over which profits should be calculated, thereby

affording the Department the discretion to use a monthly calculation.

Asocolflores contends that profit rates on sales to EP customers also

vary due to seasonality. In support of its argument, Asocolflores cites

to the SAA at 153 which states, ``The deduction of profit is a new

adjustment in U.S. law, consistent with the language of the Agreement,

which reflects that constructed export price is now calculated to be,

as closely as possible, a price corresponding to an export price

between non-affiliated exporters and importers.''

The FTC responds that sections 772(f)(2)(B) and (C) refer to total

expenses without indication that such expenses are to be compared over

some period that is a subset of the POR.

Accordingly, the FTC argues, the term ``total'' should mean total

for the POR. In support of its position, the FTC cites to Antifriction

Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From

France, Germany, Italy, Japan, Singapore, and the United Kingdom; Final

Results of Antidumping Duty Administrative Reviews, 62 FR 2081, 2125

(January 15, 1997), where the Department indicated a preference for a

single rate for CEP profit:

Indeed, while we cannot at this time rule out the possibility

that the facts of a particular case may require division of CEP

profit, the statute and SAA, by referring to ``the'' profit, ``total

actual profit,'' and ``total expenses'' imply that we should prefer

calculating a single profit figure.

The FTC argues that, while prices may vary, the rate of profit expected

by the importer is best reflected by the use of an annual rate. The FTC

notes that the use of an annual rate still results in a variation in

the amount of profit when prices vary. Use of an annual rate, the FTC

argues, ensures that some profit is assigned to all months, reflecting

the expectations of arm's-length importers.

DOC Position: We have continued to use an annual CEP profit rate

for purposes of these final results. As the FTC has noted, the

Department's historical practice has been to apply a single rate for

CEP profit. Although Asocolflores has argued that profit rates may vary

due to changes in demand conditions, this is true, to some extent, for

many products. Moreover, the CEP profit calculation is not intended to

be based on the profit of particular U.S. sales. Rather, it is normally

based on the overall profit of home market and U.S. sales. Although a

respondent may have few or no home market sales, we nonetheless use an

average profit rate for those U.S. and home market sales that were

made. We have determined that the circumstances surrounding this case

do not compel a departure from our usual practice of using a single

rate for CEP profit.

Normal Value

Comment 18: The FTC disagrees with the Department's decision to

base normal value (NV) on constructed value (CV), arguing instead that

the prices of exports to the United Kingdom (UK) should be used. In

support of its argument, the FTC asserts that data submitted to the

Department show that

[[Page 53296]]

the UK was the largest TC market for Colombian flowers in 1995-96.

However, rather than focusing on prices to the UK, the analysis relied

upon by the Department in rejecting TC prices (the Botero Study)

analyzes Aalsmeer (Holland) auction prices. The FTC further argues that

the quantity variance in the UK was similar to the variance in the U.S.

market, rising and falling in slightly different months. Moreover, the

U.S. and UK markets have very similar holidays and holiday demand

patterns and all flower-buying holidays except Mother's Day occur in

both markets in the same months. Regarding volatility in the markets,

the FTC contends that the Department should reconsider its finding that

differences in volatility are largely attributable to differences in

demand patterns. Volatility can also result anytime there is targeted

or sporadic dumping in one of the two markets. Therefore, according to

the FTC, the Department should look at whether there is a different

demand pattern rather than at volatility.

The FTC comments that the Department has a longstanding preference

for basing NV on prices rather than costs. Moreover, the FTC asserts,

the statute provides a clear preference for using TC prices over CV,

and the regulations state that the Department will normally use TC

sales rather than CV if adequate information is available and can be

verified. Based on this, the FTC contends that there must be

substantial evidence on the record to support the rejection of TC

prices.

In light of this preference, the FTC states that if the Department

continues to find that U.S. and UK prices are not sufficiently

correlated to permit a proper comparison, then the Department should

use annual average prices in the two markets. By using an annual

average, suggests the FTC, peak pricing that occurs periodically in

holiday seasons will be accounted for. The FTC comments that a

comparison of annual averages will capture the complete demand cycle in

both markets.

Asocolflores disputes the FTC's claim that NV should be based on TC

prices. In support of its argument, Asocolflores points out that many

of the companies being reviewed had viable home markets. Although the

Department would not have used these home market sales because it

limited its analysis to export-quality flowers sold, Asocolflores

argues that the statute requires the Department to use CV as the basis

for NV when home market sales are not made above cost or are not in the

ordinary course of trade. Therefore, Asocolflores concludes, for these

companies with viable home markets, there is no basis for the

Department to rely on TC prices.

Asocolflores also contends that, by allowing the Department to

reject home market or TC prices if the ``particular market situation''

in the other country prevents a proper comparison with U.S. prices, the

URAA codified the Department's approach to this case. Asocolflores

points out that, as of the date of the SAA, this case was the only one

in which the Department had rejected TC prices due to demand

differences resulting from holidays. Asocolflores further argues that

the Department has consistently relied on CV rather than TC prices

since the second review of this order, and has been upheld by the CIT

in doing so (Floral Trade Council v. United States, 775 F. Supp. 1492,

1496-98 (1991)) and the CAFC (Floral Trade Council v. United States, 74

F.3d 1200)(1995). Furthermore, Asocolflores asserts, the same market

conditions exist in both the U.S. and UK markets and U.S. and European

markets that existed in the second review. According to Asocolflores,

the seasonal demand and pricing cycles in the U.S. and TC markets

remain fundamentally different, i.e., the U.S. market is much more

volatile than TC markets and flower-giving holidays are still

different. Asocolflores comments that, if the volatility in U.S. prices

compared to TC prices was due to targeted or sporadic dumping, as the

FTC asserts, one would expect low prices and high volumes. However,

Asocolflores emphasizes, U.S. market prices and volumes are positively

correlated.

Regarding the use of Aalsmeer prices, Asocolflores points out that

in both prior reviews and the present one, the FTC has relied on the

Aalsmeer auction data. According to Asocolflores, the only information

the FTC has provided in this review regarding TC prices has been

Aalsmeer data. Asocolflores explains that flowers sold through the

Aalsmeer are sold throughout Europe and, therefore, serve as a

surrogate for European prices generally.

Finally, Asocolflores rejects the FTC's argument that the

Department should have compared annual average U.S. prices to annual

average TC prices. Even in investigations, where the statute directs

the Department to use annual average prices, claims Asocolflores, the

statute still provides that home market and TC prices can be rejected

due to particular market situations. Asocolflores asserts that when

prices in individual months are not comparable because of market

conditions, i.e., demand, seasonality, and volatility, annual averaging

does not eliminate or adjust for these differences. Rather, it states,

averaging masks the differences through the use of a single price. In

addition, Asocolflores asserts that if volumes of peak and off-peak

sales differed in U.S. and TC markets, dumping margins could be found

for reasons having nothing to do with price differences.

DOC Position: Consistent with the approach adopted in prior

reviews, we have continued to base NV on CV rather than home market or

TC prices. We have disregarded home market prices in accordance with

section 773(a)(1)(C)(ii) of the Act because we determined that,

although some companies in this review have viable home markets, the

home market sales of export-quality flowers are not within the ordinary

course of trade. For a further discussion, see Memorandum from Team to

Barbara Stafford, Deputy Assistant Secretary, Import Administration,

dated January 13, 1997. We have also disregarded TC prices in

accordance with section 773(a)(1)(B)(ii) of the Act because we

determined that the particular market situation prevents a proper

comparison between TC and U.S. prices.

The particular market situation that exists here is: (1) prices in

TC markets are not comparable to prices in the U.S. because of the

volatility of prices in the United States and the differing peak price

periods (holidays) in the U.S. and TC markets; and (2) demand patterns

are different between the two markets. These are the types of

conditions identified in the SAA that would lead the Department to

reject TC prices. Specifically, the SAA states ``[i]t also may be the

case that a particular market situation could arise from differing

patterns of demand in the United States and in the foreign market. For

example, if significant price changes are closely correlated with

holidays which occur at different times of the year in the two markets,

the prices in the foreign market may not be suitable for comparison to

prices to the United States.'' See SAA at 152.

We examined the possible use of TC prices in depth in Certain Fresh

Cut Flowers from Colombia; Final Results of Antidumping Duty

Administrative Review, 55 FR 20491 (May 17, 1990) (Flowers (88-89)),

and in Flowers (91-94). A significant factor in our analysis in Flowers

(91-94) was the Botero Study. In this review, respondents have provided

an updated Botero Study that with one exception shows that the

conditions that existed during that review period continue to exist

during the ninth review period. The one change is that the European

Union eliminated

[[Page 53297]]

flower tariffs for Colombia in 1990, which has made it possible for

more companies to sell in Europe. Despite this, we continue to believe

that the volatility of prices, differing peak pricing periods and the

differing demand patterns warrant rejection of TC prices.

We further disagree with the FTC's characterization of the demand

patterns in the U.S. and UK markets. For instance, the FTC states that

it provided information in Flowers (91-94)which proves that holidays in

the United Kingdom and the United States are comparable. However, as we

stated in Flowers (91-94), we are not convinced by this information, as

it compares non-flower-giving holidays which happen to coincide, e.g.,

All Souls' Day and Halloween. Also, as the Botero Study points out,

there are flower-giving holidays such as All Saints Day (celebrated in

Catholic countries) and Mother's Day (celebrated in the United

Kingdom), but these holidays fall at different times of the year than

the major U.S. holidays.

Furthermore, we disagree with the FTC's assertion that we

incorrectly relied on Aalsmeer auction prices for our determination of

the proper basis for NV. We have consistently based our determination

of NV on both the Botero Study and other market-wide studies, which

have shown that the Aalsmeer data is representative of European prices.

We acknowledge that normally the decision to use TC prices or CV is

based on company-specific information. However, in the course of this

proceeding, we have consistently determined, and have been upheld by

both the CIT and CAFC, that information regarding TC markets in general

was adequate evidence for a determination of this issue. Further, with

respect to the FTC's February 10, 1997 submission, we acknowledge that

the submission indicates that the volume of UK imports of Colombian

flowers in 1995-96 is approximately equal to the amount imported by the

rest of the EU during this period. However, we note that the FTC did

not file its data concerning UK prices until February 10, 1997, ten

days after our preliminary results of review were completed and nearly

four months after our determination was made to use CV rather than TC

prices. Despite the assertions to the contrary made by the FTC, given

the timing of the submission, it was not possible to determine whether

a single TC market is a more appropriate basis for comparison than TC

markets in general.

With regard to the Aalsmeer data submitted by the FTC, the

usefulness of this data is unclear. The information provided by the FTC

includes the weekly volume and prices for various flower types

(including pompons, mini carnations, and chrysanthemums) for 1995 of

the Aalsmeer and Bloemisterij. This data provides no reason for us to

depart from our prior determinations that the Aalsmeer is

representative of European prices.

With respect to the FTC's assertion that the volatility of U.S.

prices may be due to targeted or sporadic dumping, we find that the FTC

has not demonstrated this to be true. The pricing patterns in the U.S.

can be ascribed to periods of peak and slack demand, whereas the

relative flatness of prices in European markets is explained by the

fact that Europeans purchase flowers year round.

Finally, we have not adopted the FTC's suggestion to use yearly

averages in our comparisons for the same reasons we rejected

Asocolflores' argument that we should use an average annual U.S. price.

(See DOC Position to Comment 8.) Further, as Asocolflores has pointed

out, if the volumes of peak and off-peak sales differed in U.S. and TC

markets, the use of an annual average might not adjust for these

differences.

Comment 19: Asocolflores and HOSA disagree with the methodology

used by the Department in the Preliminary Results to calculate an

annualized CV. In the Preliminary Results, the Department calculated an

average per-stem CV in pesos, with the result that the CV expressed in

pesos was constant throughout the POR. The Department then converted to

a per-stem CV in dollars using each month's average exchange rate. This

NV was compared to the monthly average CEP or EP. The Department's

methodology, according to Asocolflores, is an unreasonable departure

from the practice that it followed in every prior administrative review

of the present case. In the Certain Fresh Cut Flowers from Colombia;

Final Results of Administrative Review, 56 FR 32169 (July 15, 1991)

(Flowers (87-88)), the first administrative review, the Department

aggregated total costs in pesos over the POR and divided by the period

average exchange rate and net units sold to calculate the per-stem CV

in dollars. In later reviews, the Department totaled peso costs on a

monthly basis, converted to dollars using the monthly exchange rate,

added these dollar costs over the POR and divided by the net units sold

to yield the per-stem CV in dollars.

Asocolflores claims that the methodology used in the Preliminary

Results is inappropriate because it creates a mismatch between the

exchange rate used and the costs at issue. Asocolflores argues that,

due to factors such as the fluctuations in the exchange rates, the

inclusion of monthly inflation adjustments and the devaluation of the

Colombian peso against the U.S. dollar over the POR, the Department's

methodology erroneously results in a declining CV in dollar terms

throughout the POR. Asocolflores contends that no basis for the changed

methodology has been disclosed and ``[f]undamental principles of

fairness require the Department to abide by its prior decisions in this

case,'' given that the facts upon which the Department predicated the

previous methodology have not changed in the present review.

The FTC counters that the Department's underlying rationale for the

methodology used in the past reviews no longer applies in this review.

First, according to the FTC, inflation is not at the same high rate

encountered during Flowers (87-88). Second, the FTC points out that the

Department's new exchange-rate methodology of using a lagged rate where

a sustained change in rates exists over a period of at least eight

weeks automatically accounts for any distortive effects due to

fluctuations in exchange rates. The FTC further argues that the rates

during the POR in any case should be considered ``relatively stable.''

The FTC also notes that, because EP and CEP are averaged monthly,

applying monthly exchange rates to the NV for purposes of comparison is

also appropriate pursuant to section 773A of the Act.

DOC Position: We agree, in part, with respondents. In Flowers (87-

88), we revised our methodology for converting respondents' CV from

pesos to dollars. The revision was deemed appropriate in light of a

combination of factors affecting this case including the high rate of

inflation in Colombia, consequent devaluation of the Colombian

currency, and the nature of calculating the costs to produce

agricultural products. See Flowers (87-88). In Flowers (87-88), we

converted the POR average peso CV to dollars using the corresponding

period-average exchange rate but expressed a preference for the

alternative methodology of converting each month's peso costs into

dollars using that month's exchange rate. See Id. at 32169 (``while we

agree with the respondent that the monthly conversion to dollars of

peso costs is the preferable methodology, in this review we have

converted our period-average peso constructed value to dollars using

the corresponding period average exchange rate''). In subsequent

reviews, we adhered to

[[Page 53298]]

the revised methodology used in Flowers (87-88) until Flowers (91-94),

where we used the preferred alternative methodology of monthly dollar

conversions.

In the present review, we have examined Asocolflores' argument and

have reassessed the methodology we used in the preliminary results. We

determine that the underlying factors that formed the basis of our

rationale for revising the conversion methodology in Flowers (87-

88)(and subsequent reviews) remain largely unchanged. We also recognize

that flower production, like other agricultural production,

necessitates the use of a period-average CV in order to capture the

complete costs, which vary month to month, due to the production cycle

of the product. See Flowers (87-88) at 32169.

In light of the foregoing, for these final results, we have

departed from the methodology we employed in the preliminary results

for converting CV in the present review. Specifically, we converted

each month's cumulated costs in pesos to dollars using the

corresponding month's exchange rate. Next, the monthly costs in dollars

were totaled over the POR and divided by the net units sold to

calculate the per-stem CV in U.S. dollars which was then converted to

pesos using the period-end exchange rate. Furthermore, to correct for

the distortive effects of devaluation of the Colombian peso, we used a

monthly deflator (which was calculated by dividing the period-end

exchange rate over each month's exchange rate) to deflate the per-stem

CV in pesos for each month. The corrected peso CV was then converted to

dollars using each month's exchange rate pursuant to section 773A(a) of

the Act, which requires that foreign currencies be converted into U.S.

dollars using the exchange rate in effect on the date of sale of the

subject merchandise. The effect of this methodology is to create a CV

which, when denominated in pesos, increases over the POR. This result

is consistent with an economy that is experiencing high levels of

inflation.

With respect to the FTC's arguments, we disagree that inflation was

low enough or the exchange rate stable enough that we should continue

with the methodology we followed in the Preliminary Results. Regarding

the use of lagged exchange rates when there is a sustained movement in

the currency, the provision for sustained changes applies only to

investigations and not to reviews.

Comment 20: HOSA and Asocolflores argue that the Department is

statutorily required to allocate costs across all subject flowers,

including ``national quality'' flowers, when calculating CV. Their

argument is largely based on the 1992 opinion of the CAFC in IPSCO,

Inc. v. United States, 965 F.2d 1056 (IPSCO), and on recent Department

case history. First, HOSA and Asocolflores claim that IPSCO is

definitive on how costs are to be allocated: costs must be allocated

across all goods produced, regardless of their respective values. They

interpret IPSCO to mean that no matter how the Department categorizes a

``secondary'' product (i.e., as a co-product or a by-product), if the

production of that product expended the same materials, capital, labor,

and overhead as the production of the ``primary'' product, then both

the primary and secondary products must share the costs equally.

Furthermore, respondents argue that any value-based allocation violates

the AD statute as interpreted by IPSCO. Even if the Department finds

non-export quality flowers to have little, or no, commercial value,

these culls must still carry costs. Second, although respondents argue

that IPSCO has made by-product and co-product distinctions irrelevant,

they say that if the Department insists upon using such

classifications, then second-quality flowers should be co-products to

which costs of production should be allocated. They state that non-

export-quality flowers must be considered co-products because they are

very similar to the primary product, their production expends the same

material, capital, labor, and overhead, and they are produced in the

same manufacturing lot as export-quality flowers.

The FTC states that respondents' arguments regarding national

quality flowers have been raised before and rejected by the Department.

Referring to Fresh Cut Roses from Colombia, 60 FR 6980 (February 6,

1995) (Roses from Colombia) and Flowers (91-94), the FTC says that the

Department should adhere to its precedent of treating national quality

flowers as by-products.

DOC Position: We have continued to treat culls and national quality

flowers as by-products in this review. This practice, at least with

respect to culls, has been followed since Flowers (LTFV) and was upheld

by the CIT in Asociacion Colombiana de Exportadores v. United States,

704 F. Supp. 1114, 1125-26 (CIT 1989). In Flowers (91-94), we examined

HOSA's claim that ``national'' or ``second quality'' flowers should not

be treated as by products. We disagreed with HOSA and treated national

quality flowers as culls.

As explained in Flowers (91-94) (at 42850), our general practice in

cases involving agricultural goods has been to treat ``reject''

products as by-products and to offset the total cost of production with

revenues earned from the sale of any such ``reject'' products. We

continue to believe that this general practice does not conflict with

CAFC's ruling in IPSCO. Clearly, culls are reject products. Moreover,

as the Department stated in Flowers (LTFV), due to the perishability of

agricultural products, the sellers of such merchandise ``may be faced

with the choice of accepting whatever return they can obtain on certain

sales or destroying the merchandise. Unlike non-perishable products,

sellers cannot withhold their flowers from the market until they can

obtain a higher price.'' Similarly, when the product is not of a high

enough quality to be exported, it is a cull that immediately faces

whatever price can be obtained in the home market, or destruction. This

situation does not resemble that in IPSCO.

Comment 21: Asocolflores asserts that, if the Department does not

allocate costs across all export-quality flowers and culls, the

Department should at least offset the cost of production by the revenue

earned on the sale of culls. In particular, Asocolflores wants the

Department to include off-book revenue when making this deduction, not

just the revenue recorded in the books.

The FTC disagrees with Asocolflores because off book revenue is

unproven and inherently suspect. Since off-book revenue can not be

corroborated by an audited financial statement or tax return, the FTC

contends that the Department should not accept this type of

information.

DOC Position: We agree with the FTC. We do not take account of off-

book revenue because it is not reflected in the company's audited

financial statements, our primary tool for determining the accuracy and

completeness of respondents' submitted data. (See Roses from Colombia.)

Absent specific evidence to the contrary, the Department considers a

company's financial statements to reflect the actual expenses/revenues

of its operations. (See Final Determination of Sales at Less Than Fair

Value; Sweaters Wholly or in Chief Weight of Man-Made Fiber From

Taiwan, 55 FR 34585 (August 23, 1990).)

Comment 22: Tuchany notes that the Department discovered at

verification that the company had incorrectly reported depreciation

expense by making the inflation adjustment to the accumulated

depreciation balance instead of the depreciation expense during the

POR. Tuchany argues that this error substantially overstated costs

because the reported amount

[[Page 53299]]

encompasses all historical inflation adjustments to depreciation, not

simply those associated with the POR. Tuchany asks the Department to

rely upon worksheets submitted at verification which, it contends, can

be used to derive the inflation adjustment to depreciation expense.

The FTC contends that the Department should not allow Tuchany to

submit new factual information during verification.

DOC Position: At verification, we discovered that Tuchany had

incorrectly calculated its depreciation expense in its response.

Company officials prepared a worksheet in an effort to provide the

Department with the information necessary to correct this error. This

information had not been reviewed prior to verification and, while we

were able to trace certain information to source documents, we were

unable to thoroughly review the validity of the calculations during

verification due to time constraints. We indicated to company officials

that we would take the information but that we would need to review it

and would not necessarily take it into consideration for purposes of

our final calculations. Upon review of the data in the worksheets, we

discovered that the information was not adequate to correct Tuchany's

reported depreciation expense. See Tuchany Group Verification Report,

May 6, 1997, p. 14. Thus, we were unable to determine the correct

figure although we did conclude that the reported figure for

depreciation expense was in error. Because we were unable to verify the

data in the worksheets we have resorted to FA in accordance with

section 776(a) of the Act. We have continued to use the reported figure

in our final calculations as we consider it the best estimate available

to us of the correct amount for depreciation expense.

Comment 23: Asocolflores and HOSA contend that the Department erred

in not making an adjustment to financial expenses for net ``monetary

correction'' while adjusting respondents' depreciation and amortization

costs to account for the effects of inflation. Asocolflores states that

the adjustment for ``monetary correction,'' which represents the net

gain or loss to the company caused by inflation on its net exposed

monetary assets and liabilities, is required by Colombian law and

generally accepted accounting principles (GAAP) as part of the

inflation adjustment. Moreover, the Department's failure to consider

the adjustment for net monetary correction leads to significant

distortions in the calculation of CV, according to Asocolflores.

Asocolflores argues that financial costs must be adjusted from

nominal pesos to current value pesos because the costs incurred by a

company in the current period but not payable until later periods, such

as accounts payable and peso loan balances, will be paid in the future

when the pesos will be cheaper in current value terms. Asocolflores

claims that the Department's methodology results in a distorted cost

calculation that mixes nominal pesos for some costs with inflation

adjusted, current value pesos for other costs.

According to Asocolflores, section 773(f)(1)(A) of the Act

``requires the Department accept costs as recorded under Colombian GAAP

unless it makes a specific finding that such costs are distortive.''

Asocolflores further refers to the CIT's holding in Laclede Steel v.

United States, 18 CIT 965 (CIT, Oct. 12, 1994), where it was ruled that

``a respondent could not report costs such that one item of costs

(depreciation expenses in that case) was subjected' to accounting

principles different from those applied to other variables such as

financing costs.' '' Asocolflores contends that the Department's

methodology violates the Act and the court's holding in that it

subjects only one cost variable--depreciation and amortization

expense--to adjustment for inflation. Asocolflores argues the

Department must either disregard all inflation adjustments or include

inflation adjustments for monetary correction.

Furthermore, Asocolflores argues that the exclusion of monetary

correction is a departure from the Department's own precedents.

Specifically, Asocolflores cites to Cement from Mexico and Porcelain-

on-Steel Cookware from Mexico, 61 FR 54616 (1996), where, in accordance

with Mexican GAAP principles, the Department allowed the monetary

correction gain as an offset to financial expenses. Asocolflores also

refers to two Brazilian cases, Aimcor, Ala. Silicon, Inc. v. United

States, Slip Op. No. 95-130, 1995 WL 431186 (CIT, July 20, 1995) and

Frozen Concentrated Orange Juice from Brazil, 52 FR 8324 (1987), where

the monetary correction adjustments to financial expenses were made in

accordance with the Department's own hyperinflationary-economy

methodology.

The FTC counters that the Department's rejection of the monetary

correction adjustments is in accordance with past precedents. The FTC

refers to Roses from Colombia at 6993, where the Department

specifically declined to include inflation adjustments resulting from

the annual revaluation of non-monetary assets because the adjustment

``merely reflects an increase to respondent's financial statement

equity due to the restatement of non-monetary assets to account for

inflation.'' The FTC also contends that Cement from Mexico is

distinguishable in that the Mexican inflation adjustment ``pertained

solely to monetary assets and liabilities whereas the Colombian

monetary correction is an adjustment to non-monetary assets.''

Furthermore, the FTC points out that the Mexican adjustment was the sum

of all corrections to financial expenses made throughout the year. In

contrast, the FTC argues, the Colombian monetary correction is simply a

year-end adjustment, thus having no effect on the amounts borrowed or

lending rates of the respondents.

DOC Position: We disagree with Asocolflores. Consistent with our

practice in Flowers (91-94), we have included adjustments for the

effects of inflation in respondents' depreciation and amortization

expense figures in calculating CV. We have continued to exclude the

amount of monetary correction income that respondents claimed as an

offset to costs.

As discussed in the final results of Flowers (91-94), we adjusted

respondents' depreciation expenses in order to permit a more

appropriate matching of costs and prices based on equivalent currency

units. The Department's practice in AD cases involving countries whose

economies are marked by price level changes defined as

``hyperinflationary'' is to adjust all production costs for the effects

of inflation. See, e.g., Flowers (91-94) at 42845. In some instances,

however, the level of inflation during the POR does not reach the

Department's normal hyperinflation threshold. Nonetheless, where an

economy has experienced the compound effects of significant inflation

levels in periods prior to the POR, the costs associated with

respondent's fixed assets, as well as other assets recorded at their

historical purchase, may be materially misstated relative to the

currency levels at which prices and costs are measured during the POR.

In these instances, the Department may adjust the historical basis of

fixed assets such that respondent's depreciation and amortization costs

reflect the currency levels of the POR. See Roses from Colombia.

Unlike in hyperinflationary cases, however, the Department's

practice with respect to inflation and its effects on historical costs

does not specifically adjust for all of the inflationary effects that

occur within the POR. Rather, these effects result from the inflation

experienced within the twelve months

[[Page 53300]]

of the POR and, thus, are considered to have a minimal influence on the

Department's antidumping analysis. To attempt to quantify the effects

of inflation on each measure of cost and price would impose an

unreasonable level of complexity to the Department's antidumping

analysis.

Consequently, we have left financial expenses unadjusted because

these expenses were contained largely within the POR. In contrast, the

expenses for depreciation and amortization are based on the historical

costs of assets which extend beyond each POR. Compounded annually, the

effect of inflation results in a distortion of historical depreciation

and in an understatement of costs.

As to Asocolflores' argument that the inclusion of net monetary

correction is required under the Colombian GAAP and the Act, we note

that there is no statutory requirement that the Department adjust for

all effects of inflation in its analysis nor a requirement to use all

aspects of a country's GAAP. Rather, the statute merely requires that

the Department include in its calculation of CV the cost of

manufacturing ``which would ordinarily permit the production of the

merchandise in the ordinary course of business.'' See section 773(e)(1)

of the Act. Moreover, the CIT has already held that full accounting for

inflation is neither necessary nor possible. (See Budd Co. v. United

States, 773 F. Supp. 1549, 1554 (CIT 1991) (``The glowing deficiency in

Plaintiff's argument is the underlying premise that a full accounting

for inflation is necessary or even possible.'')

We also find that Asocolflores' reliance on the two Mexican cases

is misplaced. There is no evidence on the record indicating that

inflationary accounting under Mexican GAAP is the same as inflationary

accounting in Colombia. Similarly, the two Brazilian cases cited by

Asocolflores are distinguishable in that inflation rates in Brazil

during those periods were at hyperinflationary levels, as defined by

the Department, and therefore the Department relied on a replacement

cost methodology to adjust all costs for the effects of inflation.

Comment 24: Asocolflores contends that the Department erroneously

attributed all net interest expense to production. Asocolflores argues

that, in addition to financing the assets used in production, interest

expense reported by respondent companies also relates to financing

receivables for TC and U.S. sales. Asocolflores contends that the

Department departed from past practice and effectively presumed that

the totality of the producer's borrowing costs were attributable to

production. Asocolflores urges the Department to revert to its prior

practice and include in its calculation of CV only that portion of the

net interest expense allocable to assets other than accounts

receivable.

Asocolflores recognizes that the Department has changed its

practice of adding imputed credit expense to CV to avoid double-

counting. However, Asocolflores argues that interest expenses

associated with sales should not be included in CV at all because such

interest expenses do not relate to production as required by section

773(e)(1). Moreover, Asocolflores asserts, for the Colombian flower

growers in the case the actual interest expense for home market sales

is zero.

The FTC rebuts that section 773(e)(2) requires that SG&A be added

to production expenses when computing CV, so the exercise of

identifying which costs are production-related and which are sales-

related is academic. The FTC further argues that, in calculating CV,

the Department allocates interest expense to all export-quality stems

sold, so any interest expense related to TC sales has effectively been

allocated to such sales. Finally, the FTC argues that respondents have

provided no evidence that some portion of their interest costs relate

to markets other than the U.S. market and no evidence that any portion

of their financing expenses relate to sales rather than to production.

The FTC argues that there is no basis for assuming that the ratio of

accounts receivable to total assets has any relationship to the ratio

of selling interest costs to total interest costs. The FTC contends

that accounts receivable are commonly financed out of cash-flow and

payables rather than through borrowing.

DOC Position: In calculating CV, the Department considers net

interest expense to be a part of SG&A and, in accordance with section

773(e), the Department's practice is to include the actual amount of

net interest expense as part of the cost of the product. The amount of

net interest expense for CV is calculated as a ratio. The numerator in

this ratio is the total actual amount of net interest expense incurred

by respondent and the denominator is the respondent's cost of sales.

The result of this ratio calculation is then applied to the per-unit

cost of manufacture for the merchandise in order to derive the

allocated amount of interest expense associated with the product.

Contrary to respondent's claims in this case, the interest expense

calculation described above does not attribute all net interest expense

to production. Rather, it is the Department's long-standing method of

calculating net interest expense on a per-unit basis for CV. Under the

new statute, however, because interest expense for CV is to be based on

actual and not imputed amounts, it is no longer appropriate to do as

Asocolflores suggests and reduce actual interest expense in order to

replace it with imputed amounts for credit. Any differences in credit

expense between the U.S. and foreign market are taken into account as a

circumstance of sale adjustment, but not as part of the actual

calculation of net interest incurred for the product. See e.g., Notice

of Final Results of Antidumping Duty Administrative Review; Certain

Hot-Rolled Lead and Bismuth Carbon Steel Products from the United

Kingdom, 62 FR 18744, 18746 (April 17, 1997).

Comment 25: HOSA asserts that the Department used the wrong general

and administrative expense (G&A) rate for flowers that a member of the

HOSA Group purchased from other producers and used in its bouquet

operation. HOSA argues that it did not incur any G&A expense associated

with flowers it did not grow. HOSA further states that, if the

Department insists upon calculating G&A for purchased flowers, it

should use the G&A rate for the farm that purchased the flowers and

used them in its bouquet operation. This G&A rate, asserts HOSA, should

be taken from the farm's 1995 audited financial statements, as provided

in the questionnaire response.

The FTC argues that HOSA must incur some G&A expenses in the areas

of marketing and selling bouquets, not to mention the purchase of

flowers and the assembly of bouquets. Moreover, in the FTC's view,

there is no basis to limit the G&A expenses to one single farm. Thus,

the FTC argues that the Department should continue to follow the

approach used in the preliminary results.

DOC Position: We disagree with HOSA. As stated in the Suspension of

Antidumping Duty Investigation: Sodium Azide from Japan, 62 FR 973, 977

(January 7, 1997), ``G&A expenses are those expenses incurred for the

operation of the corporation as a whole and not directly related to the

manufacture of a particular product.'' The Department's practice is to

calculate G&A expenses by finding the ratio of the company's total G&A

expenses relative to the total cost of goods sold by the company. This

ratio is then applied to the cost of manufacture of each product.

Furthermore, this approach is consistent with our approach with respect

to other collapsed companies for which we have

[[Page 53301]]

allocated G&A expenses. In this instance, the products in question are

those flowers (subject merchandise) acquired and used in the production

of bouquets. Although HOSA does not grow these flowers, it does use

them in further processing. There is no evidence that HOSA would

purchase and resell these flowers if they were not used in bouquet

production. Because the production and selling of bouquets generates

G&A expenses, the items making up the bouquets incur G&A expenses.

The HOSA Group's contention that the Department should use only the

G&A expenses generated by the member of the group which purchased the

subject merchandise is not reconcilable with the Department's practice

concerning ``collapsed'' companies. Once the Department has determined

to collapse affiliated producers (i.e., to assign a single AD rate to

the producers because of, inter alia, close interrelationships between

them) the group is treated as one single company with respect to

reporting obligations. We do not allow companies to pick and choose

which G&A expenses and which divisions of the company will be used in

accounting for this expense. The same holds true for the HOSA Group

and, thus, every product produced by HOSA, regardless of which farm

produced it, incurs allocated G&A expenses generated by the entire

group.

Comment 26: The Tinzuque Group (Tinzuque) argues that the

Department erred in disregarding all reported offsets to SG&A. Tinzuque

concedes that certain reported offsets were derived from non-operating

income accounts and are, therefore, not appropriate offsets to cost.

Tinzuque contends, however, that among the reported offsets are

commercial discounts obtained on material purchases, which are

appropriate offsets to cost. Tinzuque points out that sample invoices

and accounting slips submitted in its February 21, 1997 supplemental

response demonstrate the nature of these discounts.

The FTC argues that there is no evidence on the record to

demonstrate that the amount reported for commercial discounts is

related exclusively to material purchases related to subject

merchandise. The FTC further contends that discounts on material inputs

would not normally be accounted for in SG&A accounts, thereby casting

additional doubt on the nature of these discounts.

DOC Position: We agree with Tinzuque. The sample accounting slips

submitted by Tinzuque demonstrate that the commercial discounts in

question were obtained on material purchases. Moreover, there is no

indication that the materials were used as inputs for other than

subject merchandise. Therefore, we have accepted Tinzuque's claim and

have offset its costs accordingly.

Comment 27: Asocolflores argues that the Department's use of the

profit rate of Compania Nacional de Chocolates S.A. (CNC), a Colombian

producer of chocolate and other processed agricultural products, as FA

in the calculation of CV is inconsistent with the Act. Asocolflores

argues that the ``profit cap'' described in section 773(e)(2)(B)(iii)

of the Act contains no exceptions or conditions and its application is

mandatory. Specifically, Asocolflores contends that the Department

should use a profit rate of zero since none of the responding companies

had profits on sales of flowers in the home market. Asocolflores argues

that there is no requirement that only sales made in the ordinary

course of trade or above cost are to be considered when calculating the

profit cap.

Asocolflores contends that the Department misinterpreted language

in the SAA that allows exceptions to the application of the profit cap

``due to the absence of data.'' Here, Asocolflores argues, there is no

absence of data; the data merely indicates that the profit rate is

zero. Asocolflores argues that, in Shop Towels from Bangladesh; Final

Results of Antidumping Duty Administrative Review, 61 FR 55957 (October

30, 1996) (Shop Towels), the Department included zero profit for the

two textile companies that had shown losses in deriving an average of

three profit rates to be used in calculating CV.

Asocolflores further argues that the use of CNC's profit rate is

inconsistent with the purpose of the statute and due process.

Asocolflores argues that the rate used by the Department in its

preliminary results was arbitrary, unpredictable and random.

Asocolflores argues that there is not even a pretense of foreseeability

or predictability, and, accordingly, under such a system, respondents

have no basis on which to price their product to avoid dumping.

The FTC responds that the Department properly concluded that there

was insufficient basis for computing a profit cap in accordance with

section 773(e)(2)(B)(iii). The FTC argues that sales in the home market

of merchandise in the same general category as flowers would

necessarily include sales of culls. Since culls are treated as

byproducts in the Department's calculations and are assigned a cost

basis of zero, the FTC argues that the profit rate on such sales would

be infinite.

The FTC further argues that the Department correctly interpreted

the statute and SAA in determining that profit must be a positive

amount. The FTC agrees with the Department's interpretation of the

wording in the SAA at 169 that CV ``must include an amount * * * for

profit'' as meaning that there must be a positive number. The FTC cites

to the passage in the SAA at 170 indicating that the administration

does not believe the elimination of statutory minimums will diminish

the ability of domestic industries to obtain relief under the AD law.

DOC Position: Contrary to Asocolflores' assertion, we are required

to add a positive amount for profit when calculating CV. Although the

URAA eliminated the use of a minimum profit rate, the presumption of a

profit element in the calculation of CV was not eliminated. The SAA (at

page 169) states: ``Because constructed value serves as a proxy for a

sales price, and because a fair sales price would recover SG&A expenses

and would include an element of profit, constructed value must include

an amount for SG&A expenses and for profit.''

With respect to Asocolflores' argument that a zero rate of profit

would be consistent with Shop Towels, we disagree. An average that

includes some zeroes but still yields a positive number, as was the

case in Shop Towels, is different from using a profit rate of zero.

By providing three alternative methodologies for calculating CV

profit in section 773(e)(2)(b), the statute enables the Department to

use an overall positive profit rate whenever the calculation of CV

profit under 773(e)(2)(A) is not appropriate. In Silicomanganese from

Brazil; Final Results of Antidumping Duty Administrative Review 62 FR

37869, 37877 (July 15, 1997), the Department stated, ``if a company has

no home market profit or has incurred losses in the home market, the

Department is not instructed to ignore the profit element, include a

zero profit or even consider the inclusion of a loss; rather, the

Department is directed to find an alternative home market profit.''

Since there is no information on the record that would enable us to

calculate a home market profit rate on the same general category of

merchandise as flowers, we have continued to use CNC's profit rate, for

reasons detailed in a memorandum from team to Richard Moreland, Acting

Deputy Assistant Secretary, AD-CVD Enforcement 1, dated March 31, 1997

(on file in room B-099 in the Central Records Unit of the Department of

Commerce). We disagree with Asocolflores' assertion that we

[[Page 53302]]

have information on the record to calculate a profit cap. As

Asocolflores has stated, the only information on the record indicates

that sales of flowers in Colombia are not profitable. As discussed

above, a profit rate of zero is not appropriate for use in calculating

CV; therefore, we do not have appropriate information to use as the

basis for a profit cap. Accordingly, we have applied alternative (iii)

on the basis of ``the facts available,'' as instructed by the SAA at

171.

We further disagree with Asocolflores' contention that the

application of a profit rate based on non-adverse FA is contrary to the

intent of the statute and violates respondents' due process. As

detailed above, the application of a zero profit rate would have been

contrary to the intent of the statute. In carrying out the intent of

the statute in a reasonable manner, respondents' due process is being

served. Asocolflores has had the opportunity to comment on the

Department's methodology.

Comment 28: The FTC argues that the Department's use of CNC's

profit rate in the preliminary results was not the best choice among

the alternatives available to the Department. The FTC argues that CNC

is in the processed agricultural goods industry and, as such, does not

face the same perishability risks as a flower producer. The FTC admits

to the paucity of financial information available regarding Colombian

companies but suggests that the Department use the rate of return on

equity of Banco Ganadero, a Colombian bank that makes approximately one

quarter of its loans to the agricultural sector. The FTC suggests that,

while this financial information would be derivative since it is based

on return on equity of a financial institution, it is a better gauge of

Colombian agriculture than a chocolate producer.

Asocolflores responds that the rate of return on equity for a

Colombian bank is not at all analogous to the profit rate of a

Colombian flower exporter. Asocolflores contends that a rate of return

on equity is not a profit margin and that the statute requires the use

of profit, not return on equity. Additionally, Asocolflores argues that

a bank's products are financial instruments, not agricultural products.

DOC Position: We agree with Asocolflores that the rate of return on

equity of a financial institution is not appropriate for this case.

While we were unable to locate a profit rate on home-market sales for a

Colombian producer of merchandise in the general category as flowers,

we determine that the use of the profit rate of CNC, a Colombian

producer of processed agricultural goods is more appropriate than the

rate of return on equity of a Colombian bank. Accordingly, we have

continued to use CNC's profit rate as FA in calculating CV profit.

Comment 29: Asocolflores claims that, where appropriate, the

adjustment from gross units sold to net units sold to account for

returns should be made on an annual basis over all importers purchasing

from the same exporter rather than on a monthly basis by importer.

DOC Position: We agree in part. Returns from a given month often

are not reported and claimed by the importer until the following month.

If a large number of returns from the prior month happened to be

reported and claimed in the current month, the NV for the current month

after adjustment for returns would be overstated. Therefore, for the

final results, we took the total number of returns made during the POR

by a particular importer and allocated this total to each month of the

POR based on the gross number of stems sold in each month.

We disagree, however, with averaging returns over importers. In

calculating net units sold, we have not averaged returns over all the

importers purchasing from a particular exporter. Returns are dependent

on a number of factors including the handling and warehousing practices

of the importer and the distance from the grower to the importer. These

factors are directly related to the particular importer under

consideration and directly affect the returns from that importer. For

this reason, the margin calculations should reflect the actual number

of returns from that importer rather than the average number of returns

over all importers. Thus, for the final results, we used the actual

number of returns by each importer in calculating an adjustment to the

NV for each importer because returns clearly and directly relate to the

operating practices of individual importers.

Assessment

Comment 30: Asocolflores contends that the Department incorrectly

calculated the amount of AD duties to be assessed on individually

reviewed (or ``selected'') companies. In particular, Asocolflores

objects to the Department's reliance on U.S. Customs' posted prices for

the calculation of entered value for carnations. Ascolflores contends

that use of the posted prices will result in a potential overassessment

of AD duties. Asocolflores suggests that the Department recalculate

entered value using the data provided by respondents and, where

necessary, obtain further information from respondents. Alternatively,

Asocolflores suggests calculating specific duties based on the quantity

of flowers shipped during the POR.

The FTC states that the Department properly relied upon Customs'

posted values to calculate AD duty assessments. The FTC argues that,

because Customs will liquidate entries using posted values as the

entered values, the use of entered values reported by respondents would

be incorrect. The FTC further questions the reliability and correctness

of the entered value data supplied by respondents.

DOC Position: For these final results, we have calculated the

amount of duties to be assessed on a per-stem basis. We were unable to

use entered values because respondents reported average monthly prices

and, moreover, the entered values were not associated with particular

importers. Since assessments are made on an importer specific basis,

aggregate entered values could not be used. Although we have calculated

a per-stem rate for assessment purposes, we will apply an ad valorem

rate for duty deposit purposes.

Comment 31: Asocolflores states that the Department incorrectly

used the average cash deposit rate for selected respondents as the

assessment rate for those companies that responded but were not

selected for review (``non-selected respondents''). Asocolflores

contends that the Department should use the weighted-average assessment

rate rather than the average cash deposit rate and that any difference

in methodology between selected and non-selected respondents violates

the equal protection clause of the United States Constitution.

The FTC argues that the Department properly based assessment rates

for non-selected companies on the duty deposit rates. In the FTC's

view, the Department's approach to assessment was reasonable and there

is no reason to prefer the weighted-average assessment rate of selected

respondents to their duty deposit rate.

DOC Position: For these final results, we have calculated an

average per-stem rate to apply to non-selected respondents for

assessment purposes. We have calculated this rate by summing the AD

duties owed by the selected companies and dividing that amount by the

number of stems entered by the selected companies. (As explained below,

in connection with the assessment instructions, we have used stems

entered during the POR rather than stems sold, because of the

perishable nature of the subject merchandise.) Although we disagree

[[Page 53303]]

with Asocolflores that the methodologies for the two groups of

companies must be the same in all respects, for assessment purposes we

believe that this approach yields the most accurate results.

Other

Comment 32: The FTC argues in its rebuttal brief that Tuchany

should not be allowed to rewrite its response during verification.

DOC Position: In the course of verification, certain minor errors

in Tuchany's questionnaire response were discovered. Generally, the

company was able to correct these errors and the Department requested

that these corrections be submitted for the record. The errors were

also identified in our verification report. The errors made by Tuchany

were not of such a magnitude as to warrant the conclusion that Tuchany

had failed verification.

Comment 33: Flores el Talle argues that it is part of the Flores

Colombianas Group, a group for which the AD order has already been

revoked. Therefore, Flores el Talle claims, it should not be subject to

either the assessment or cash deposit rate determined for non-selected

respondents. Instead, asserts Flores el Talle, the Department should

determine that it is part of the Flores Colombianas Group and is

covered by the Flores Colombians Group's revocation.

DOC Position: We have determined that there were no entries of

subject merchandise under the name Flores el Talle during the POR.

Therefore, we have rescinded the review with respect this company (see

the ``Rescission'' section of this notice). In addition, we will

initiate a changed circumstances review in order to determine whether

Flores el Talle is covered under the revocation granted to Flores

Colombianas.

Final Results of Review

Selected Respondents

As a result of our review, we determine the following percentage

weighted-average margins to exist for the March 1, 1995 through

February 29, 1996:

Percent

Agrodex Group.................................................. 1.30

Agricola de las Mercedes

Agricola el Retiro Ltda.

Agrodex Ltda.

Degaflores Ltda.

Flores Camino Real Ltda.

Flores Cuatro Esquinas Ltda.

Flores de la Comuna Ltda.

Flores de las Mercedes

Flores de Los Amigos Ltda.

Flores de los Arrayanes Ltda.

Flores De Mayo Ltda.

Flores del Gallinero Ltda.

Flores del Potrero Ltda.

Flores dos Hectareas Ltda.

Flores de Pueblo Viejo Ltda.

Flores el Trentino Ltda.

Flores la Conejera Ltda.

Flores Manare Ltda.

Florlinda Ltda.

Horticola el Triunfo

Horticola Montecarlo Ltda.

Caicedo Group.................................................. 8.36

Agro Bosque S.A.

Andalucia S.A.

Aranjuez S.A.

Columbiano S.A. ``CAICO''

Caico

Exportaciones Bochica S.A.

Floral Ltda.

Flores del Cauca

Inversiones Targa Ltda.

Productos el Zorro

Via el Rosal

Claveles Colombianos Group..................................... 0.39

Claveles Colombianos Ltda.

Elegant Flowers Ltda.

Fantasia Flowers Ltda.

Splendid Flowers Ltda.

Sun Flowers Ltda.

Cultivos Miramonte Group....................................... 1.05

Cultivos Miramonte S.A.

Flores Mocari S.A.

Floraterra Group............................................... 8.36

Exporosas

Floraterra S.A.

Flores Casablanca S.A.

Flores San Mateo S.A.

Siete Flores S.A.

Flores Colon Ltda.............................................. 2.84

Florex Group................................................... 0.73

Agricola Guacari S.A.

Agricola el Castillo

Flores San Joaquin

Flores Altamira S.A.

Flores de Exportacion S.A.

Guacatay Group................................................. 1.53

Agricola Cunday

Agricola Guacatay S.A.

Jardines Bacata Ltda.

Hosa Group..................................................... 2.07

Horticultura de la Sabana S.A.

HOSA Ltda.

Innovacion Andina S.A.

Minispray S.A.

Prohosa Ltda.

Maxima Farms Group............................................. 3.25

Agricola los Arboles S.A.

Colombian D.C. Flowers

Polo Flowers

Rainbow Flowers

Maxima Farms Inc.

Queens Flowers Group........................................... 1.13

Agroindustrial del Rio Frio

Cultivos General Ltda.

Flora Nova

Flora Atlas Ltda.

Flores Calima S.A.

Flores Canelon Ltda.

Flores de Bojaca

Flores del Cacique

Flores del Hato

Flores el Aljibe Ltda

Flores el Cipres

Flores El Pino Ltda.

Flores El Roble S.A.

Flores el Tandil

Flores la Mana

Flores las Acacias Ltda

Flores la Valvanera Ltda.

Flores Jayvana

Flores Ubate Ltda

Jardines de Chia Ltda.

Jardines Fredonia Ltda.

Jardines Piracanta

M.G. Consultores Ltda.

Mountain Roses

Queens Flowers de Colombia Ltda.

Quality Flowers S.A.

Florval S.A. (Floval)

Jardines des Rosal

Tinzuque Group................................................. 1.05

Tinzuque Ltda.

Catu S.A.

Tuchany Group.................................................. 5.73

Tuchany S.A.

Flores Sibate

Flores Tikaya

Flores Munya

Non-Selected Respondents

The following 147 companies (including 23 groups of companies) were

not selected as respondents and will receive a rate of 2.26 percent:

Aga Group

Agricola la Celestina

Agricola la Maria

Agricola Benilda Ltda.

Agricola Acevedo Ltda.

Agricola Arenales Ltda.

Agricola Bonanza Ltda.

Agricola Circasia Ltda.

Agricola el Cactus S.A.

Agricola el Mortino Ltda.

Agricola el Redil Ltda.

Agricola la Corsaria Ltda.

Agricola Las Cuadras Group

Agricola las Cuadras Ltda.

Flores de Hacaritama

Agricola Megaflor Ltda.

Agroindustrial Don Eusebio Ltda. Group

Agroindustrial Don Eusebio Ltda.

Celia Flowers

Passion Flowers

Primo Flowers

Temptation Flowers

Andes Group

Cultivos Buenavista Ltda.

Flores de los Andes Ltda.

Flores Horizonte Ltda.

Inversiones Penas Blancas Ltda.

Aspen Gardens Ltda.

Astro Ltda.

Cantarrana Group

Cantarrana Ltda.

Agricola los Venados Ltda.

Cigarral Group

Flores Cigarral

Flores Tayrona

Claveles de los Alpes Ltda.

Colibri Flowers Ltda.

Combiflor

Cultiflores Ltda.

Cultivos Medellin Ltda.

[[Page 53304]]

Cultivos Tahami Ltda.

Daflor Ltda.

El Antelio S.A.

Envy Farms Group

Envy Farms

Flores Marandua Ltda.

Falcon Farms de Colombia S.A. (formerly Flores de Cajibio Ltda.)

Farm Fresh Flowers Group

Agricola de la Fontana

Flores de Hunza

Flores Tibati

Inversiones Cubivan

Floralex Group

Floralex Ltda

Flores el Puente Ltda.

Agricola Los Gaques Ltda

Floreales Group

Floreales Ltda.

Kimbaya

Florenal (Flores el Arenal) Ltda.

Flores Agromonte

Flores Ainsuca Ltda.

Flores Aurora Ltda.

Flores Carmel S.A.

Flores Comercial Bellavista Ltda.

Flores de Aposentos Ltda.

Flores de la Hacienda

Flores de la Montana

Flores de la Vega Ltda.

Flores de la Vereda

Flores de Serrezuela S.A.

Flores de Suba Ltda.

Flores del Lago Ltda.

Flores del Rio Group

Agricola Cardenal S.A.

Flores del Rio S.A.

Indigo S.A.

Flores del Salitre Ltda.

Flores de Oriente

Flores el Lobo

Flores el Molino S.A.

Flores el Zorro Ltda.

Flores Fusu

Flores Gioconda

Flores Juanambu Ltda.

Flores la Fragrancia

Flores las Caicas

Flores los Sauces

Flores la Union/Gomez Arango & Cia.

Flores Monserrate Ltda.

Flores Sagaro

Flores San Andres

Flores San Juan S.A.

Flores Santa Fe Ltda.

Flores Silvestres

Flores Tocarinda

Flores Tomine Ltda.

Flores Tropicales (Happy Candy) Group

Flores Tropicales Ltda.

Happy Candy Ltda.

Mercedes Ltda.

Rosas Colombianos Ltda.

Floricola la Gaitana S.A.

Fresh Flowers

Funza Group

Flores Alborada

Flores de Funza S.A.

Flores del Bosque Ltda.

Flexport de Colombia

Grupo el Jardin

Agricola el Jardin Ltda.

La Marotte S.A.

Orquideas Acatayma Ltda.

Industrial Agricola

Ingro Ltda.

Inverpalmas

Inversiones Flores del Alto

Inversiones Morrosquillo

Inversiones Santa Rita Ltda.

Inversiones Santa Rosa ARW Ltda.

Inversiones Supala S.A.

La Plazoleta Ltda.

Las Amalias Group

Las Amalias S.A.

Pompones Ltda.

La Fleurette de Colombia Ltda.

Ramiflora Ltda.

Linda Colombiana Ltda.

Los Geranios Ltda.

Manjui Ltda.

Monteverde Ltda.

Natuflora Ltda./San Martin Bloque B

Papagayo Group

Agricola Papagayo Ltda.

Inversiones Calypso S.A.

Petalos de Colombia Ltda.

Pisochago Ltda.

Rosas Sabanilla Group

Flores la Colmena Ltda.

Rosas Sabanilla Ltda.

Inversiones la Serena

Agricola la Capilla

Sabana Group

Flores de la Sabana S.A.

Roselandia S.A.

Santana Flowers Group

Santana Flowers Ltda.

Hacienda Curibital Ltda.

Inversiones Istra Ltda.

Santa Rosa Group

Flores Santa Rosa Ltda.

Floricola la Ramada Ltda.

Agropecuaria Sierra Loma

Senda Brava Ltda.

Shasta Flowers y Compania Ltda.

Soagro Group

Flores Aguaclara Ltda.

Flores del Monte Ltda.

Flores la Estancia

Jaramillo y Daza

Toto Flowers Group

Flores de Suesca S.A.

Toto Flowers

Uniflor Ltda.

Velez de Monchaux Group

Velez De Monchaux e Hijos y Cia S. en C.

Agroteusa

Flores Suasuque

Victoria Flowers

Vuelven Ltda.

No Shipments

The following 62 companies did not ship subject merchandise during

the POR. Therefore, as described in the ``Rescission'' section above,

we are rescinding the review with respect to the following firms:

Abaco Tulipanex de Colombia

Agrex de Oriente

Agricola Guali S.A.

Agricola Yuldama

Agroindustrial Madonna S.A.

Agrorosas

Agropecuria Cuernavaca Ltda.

Bojaca Group

Agricola Bojaca

Universal Flowers

Flores y Plantas Tropicales

Flores del Neusa Nove Ltda.

Tropiflora

Cienfuegos Group

Cienfuegos Ltda.

Flores la Conchita

De La Pava Guevara E Hijos Ltda.

Disagro

Elite Flowers (The Elite Flower/Rosen Tantau)

Expoflora Ltda.

Flor y Color

Flora Intercontinental

Florandia Herrera Camacho & Cia.

Flores Acuarela S.A.

Flores Aguila

Flores Andinas Ltda.

Flores de Tenjo Ltda.

Flores del Campo Ltda.

Flores el Rosal Ltda.

Flores el Talle Ltda.

Flores Galia Ltda.

Flores Gloria

Flores Juncalito Ltda.

Flores la Lucerna

Flores la Macarena

Flores Ramo Ltda.

Flores Sairam Ltda.

Flores San Carlos

Flores Selectas

Flores Violette

Florexpo

Florimex Colombia Ltda.

Green Flowers

Horticultura el Molino

Inversiones Almer Ltda.

Inversiones Bucarelia

Inversiones Cota

Inversiones el Bambu Ltda.

Inversiones Morcote

Inversiones y Producciones Tecnicas

Iturrama S.A.

Las Flores

Luisa Flowers

Otono (Agroindustrial Otono)

Planatas S.A.

Plantaciones Delta Ltda.

Propagar Plantas S.A.

Rosaflor

Rosex Ltda.

Sansa Flowers

Santa Helena S.A.

S.B. Talee de Colombia

Siempreviva

Tag Ltda

Unlocatable

The following 115 companies (including 2 groups) were unlocatable.

For those unlocatable companies that were examined in a previous

review, we will assess duties based on their company-specific rate from

the most recent review. If we have not previously conducted a review of

an unlocatable company, duties equal to the ``all others'' rate of 3.1

percent from the LTFV investigation will be assessed.

Achalay

Agricola Altiplano

Agricola del Monte

Agricola la Siberia

Agrocaribu Ltda.

Agro de Narino

Agroindustrias de Narino Ltda.

Agropecuaria la Marcela

[[Page 53305]]

Agropecuria Mauricio

Agrotabio Kent

Aguacarga

Alcala

Amoret

A.Q.

Carcol Ltda.

Classic

Coexflor

Color Explosion

Cota

Crest D'or

Crop S.A.

Cypress Valley

Degaflor

Del Monte

Del Tropico Ltda.

Diveragricola

El Milaro

El Timbul Ltda.

Exotic Flowers

Exotico

Ferson Trading

Flamingo Flowers

Flor Colombiana S.A.

Flores Ainsus

Flores Alcala Ltda.

Flores Calichana

Flores Corola

Flores de Iztari

Flores de Memecon/Corinto

Flores del Cielo Ltda.

Flores del Cortijo

Flores Gicro Group

Flores Gicro Ltda.

Flores de Colombia

Flores Hacienda Bejucol

Flores la Cabanuela

Flores la Pampa

Flores las Mesitas

Flores Montecarlo

Flores Palimana

Flores S.A.

Flores Saint Valentine

Flores Santana

Flores Sausalito

Flores Sindamanoi

Flores Tenerife Ltda

Floricola

Florisol

Florpacifico

Four Seasons

Fracolsa

F. Salazar

Garden and Flowers Ltda.

German Ocampo

Granja

Gypso Flowers

Hacienda la Embarrada

Hacienda Matute

Hana/Hisa Group

Flores Hana Ichi de Colombia Ltda.

Flores Tokai Hisa

Hernando Monroy

Horticultura de la Sasan

Industrial Terwengel Ltda.

Inversiones Maya, Ltda.

Inversiones Silma

Inversiones Sima

Jardin de Carolina

Jardines Choconta

Jardines Darpu

Jardines Natalia Ltda.

Jardines Tocarema

J.M. Torres

Kingdom S.A.

La Colina

La Embairada

La Flores Ltda.

La Floresta

L.H.

Loma Linda

Loreana Flowers

Luisiana Farms

M. Alejandra

Mauricio Uribe

Merastec

Morcoto

Nasino

Olga Rincon

Piracania

Prismaflor

Reme Salamanca

Rosa Bella

Rosas y Jardines

Rose

San Valentine

Sarena

Select Pro

Shila

Solor Flores Ltda.

Starlight

Susca

Sweet Farms

The Beall Company

The Rose

Tomino

Villa Diana

Zipa Flowers

Non-Respondents

The following 42 companies (including 2 groups of companies) did

not respond to our questionnaire or responded after the deadline date

without explanation. We will assess duties based on the highest rate

for any company from this or any prior segment of this proceeding. This

rate is 76.60 percent and was determined in Flowers (91-94).

Agricola de Occident

Alstroflores Ltda.

Ancas Ltda.

Arboles Azules Ltda.

Becerra Castellanos y Cia.

Clavelez

Consorcio Agroindustrial

Cultivos Guameru

Dianticola Colombiana Ltda.

Dynasty Roses Ltda.

El Tambo

Euroflora

Exoticas

Exportadora

Flores Abaco S.A.

Flores Bachue Ltda.

Flores Cerezangos

Flores Depina S.A.

Flores de Guasca

Flores de la Cuesta

Flores de la Maria

Flores del Tambo

Flores de la Parcelita

Flores Flamingo Ltda.

Flores Monteverde

Flores Urimaco

Flowers of the World/Rosa

Illusion Flowers

Industria Santa Clara

Inversiones Playa

Inversiones Valley Flowers Ltda.

Jardines de America

Jardines de Timana

Karla Flowers

Laura Flowers

Pinar Guameru

Rosales de Colombia Ltda.

Rosales de Suba Ltda.

San Ernesto

Superflora Ltda.

Tropical Garden

Villa Cultivos Ltda.

Bankrupt Companies

The following group of companies is determined to be bankrupt and

will be assessed at a rate of 8.36 percent.

Oro Verde Group

Inversiones Miraflores S.A.

Inversiones Oro Verde S.A.

Confirmed Shipper

The following company responded that it had no shipments of subject

merchandise during the period of review, although U.S. Customs data

later proved that this company did, in fact, ship subject merchandise

during the POR. This confirmed shipper will be assessed at a rate of

2.26 percent.

Flores Tiba S.A.

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. We have

calculated an importer-specific per-stem duty assessment rate based on

the ratio of the total amount of AD duties calculated for the examined

sales made during the POR to the total quantity of subject merchandise

entered during the POR. We have used the number of stems entered during

the POR, rather than the number of stems sold during the POR, because

of the perishable nature of the merchandise. This rate will be assessed

uniformly on all entries of that particular importer made during the

POR. The Department will issue appraisement instructions on each

exporter directly to the Customs Service.

Furthermore, the following deposit requirements will be effective

upon publication of these final results of administrative review for

all shipments of the subject merchandise entered, or withdrawn from

warehouse, for consumption, as provided by section 751(a)(1) of the

Act, on or after the publication date of these final results of review:

(1) The cash deposit rate for the individually examined companies will

be the most recent rates as listed above, except that for firms whose

weighted-average margins are less than 0.5 percent and therefore de

minimis, the Department shall require a zero deposit

[[Page 53306]]

of estimated antidumping duties; (2) the cash deposit rate for non-

selected companies will be the weighted-average of the cash deposit

rates for the individually examined companies; (3) 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; (4) 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 will be the rate established for

the most recent period for the manufacturer of the merchandise; and (5)

the cash deposit rate for all other manufacturers or exporters will be

the ``all other'' rate of 3.10 percent. This is the rate established

during the LTFV investigation, as amended in litigation.

These deposit requirements shall remain in effect until publication

of the final results of the next administrative review.

This notice also serves as a final reminder to importers of their

responsibility under 19 CFR 351.402 (f)(2) to file a certificate

regarding the reimbursement of AD 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 AD duties occurred and the subsequent assessment of

double AD duties.

This notice also serves as the only reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the return or destruction of proprietary information

disclosed under APO in accordance with 19 CFR 353.34(d). Failure to

comply is a violation of the APO.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act.

Dated: October 6, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 97-27141 Filed 10-10-97; 8:45 am]

BILLING CODE 3510-DS-P