Certain Fresh Cut Flowers From Mexico; Notice of Preliminary Results of Antidumping Duty Administrative Review, and Intent To Revoke the Order in Part

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-601]

Certain Fresh Cut Flowers From Mexico; Notice of Preliminary

Results of Antidumping Duty Administrative Review, and Intent To Revoke

the Order in Part

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

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

administrative review of the antidumping duty order on certain fresh

cut flowers from Mexico in response to a request from Rancho del

Pacifico (Pacifico), respondent. Additionally, the Department

preliminarily intends to revoke the order in part with respect to

Pacifico. This review covers one producer/exporter and entries of the

subject merchandise into the United States during the period April 1,

1996 through March 31, 1997.

We preliminarily determine that sales have not been made below

normal value (NV). If these preliminary results are adopted in our

final results, we will instruct U.S. Customs to liquidate entries

without regard to antidumping duties.

Interested parties are invited to comment on these preliminary

results. Parties who submit argument are requested to submit with each

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

argument.

EFFECTIVE DATE: January 9, 1998.

FOR FURTHER INFORMATION CONTACT: Tamara Underwood or Maureen Flannery,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington D.C. 20230; telephone: (202) 482-4733.

Applicable Statute: 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 Tariff Act of 1930

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

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

to the regulations as codified at 19 CFR Part 353 (1996).

SUPPLEMENTARY INFORMATION:

Background

On April 23, 1987, the Department published in the Federal Register

(52 FR 13491) the antidumping duty order on certain fresh cut flowers

from Mexico. On April 28, 1997, in accordance with 19 CFR 353.22(a),

Pacifico requested that the Department conduct an administrative

review. In accordance with 19 CFR 353.25(b) (1) and (2), Pacifico also

requested a partial revocation of the antidumping duty order as it

pertains to it upon completion of this review. We published a notice of

initiation of review on May 21, 1997 (62 FR 27720). The Department is

conducting this administrative review in accordance with section 751 of

the Act.

Scope of the Review

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

defined as standard carnations, standard chrysanthemums, and pompon

chrysanthemums (pompons). During the period of review (POR), such

merchandise was classifiable under the Harmonized Tariff Schedule of

the United States (HTSUS) items 0603.10.7010 (pompons), 0603.10.7020

(standard chrysanthemums), and 0603.10.7030 (standard carnations). The

HTSUS item numbers are provided for convenience and Customs purposes

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

the order.

This review covers sales of subject merchandise entered into the

United States during the period April 1, 1996 through March 31, 1997.

Verification

As provided in section 776(b) of the Act, we conducted a

verification of the questionnaire responses submitted by Pacifico. We

used standard verification procedures, including on-site inspection of

the manufacturer's facilities, the examination of relevant accounting,

sales, and other financial records, and the selection of original

documentation containing relevant information. Our verification results

are outlined in the public version of the verification report.

Intent To Revoke

On April 28, 1997, Pacifico submitted a request, in accordance with

19 CFR 353.25(b), that the Department revoke the order covering certain

fresh cut flowers from Mexico with respect to its sales of this

merchandise.

In accordance with 19 CFR 353.25(a)(2)(iii), this request was

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

subject merchandise at less than NV for a three-year period, including

this review period, and would not do so in the future. Pacifico also

agreed to its immediate reinstatement in the relevant antidumping

order, as long as any firm is subject to this order, if the Department

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

sold the subject merchandise at less than NV.

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

sold fresh cut flowers from Mexico at not less than NV. The Department

conducted a verification of Pacifico's response for this period of

review. We preliminarily determine that Pacifico sold fresh cut flowers

at not less than NV during this review period. Based on Pacifico's

three consecutive years of zero or de minimis margins and the absence

of evidence to the contrary, we preliminarily determine that it is not

likely that Pacifico will in the future sell subject merchandise at

less than NV. Therefore, if these preliminary findings are affirmed in

our final results, we intend to revoke the order on fresh cut flowers

from Mexico with respect to Pacifico.

United States Price

In calculating United States Price (USP), we used constructed

export price (CEP), in accordance with section 772 (b), (c), and (d) of

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

occurred after importation into the United States. We based CEP on the

packed F.O.B. prices to the first unaffiliated purchaser after

importation into the United States. As in the original less-than-fair-

value (LTFV) investigation and in all prior administrative reviews, all

prices to the United States were weight-averaged on a monthly basis to

account for the perishability of the product. In accordance with the

methodology established in the 1992-1993 review, we also calculated USP

by flower type, without regard to specific grades. (See Final Results

of Antidumping Duty Administrative Review; Certain Fresh Cut Flowers

from Mexico, 56 FR 29621 (June 28, 1991).)

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

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

for credit expenses incurred on sales in the United States. No other

adjustments were claimed or allowed.

Normal Value

In calculating NV, we used home market prices to unaffiliated

purchasers, as defined in section 773 of the Act. In order to determine

whether there was a sufficient volume of sales in the home market to

serve as a viable basis for calculating NV, we compared Pacifico's

volume of home market sales of the subject merchandise to the volume of

U.S. sales of the subject merchandise, in accordance with section

773(a)(1)(C) of

[[Page 1429]]

the Act. Because Pacifico's volume of home market sales of the subject

merchandise was greater than five percent of its volume of U.S. sales

of the subject merchandise, we determined that the home market provides

a viable basis for calculating NV for Pacifico.

Home market price was based on F.O.B. farm gate unit price of

subject merchandise sold to unaffiliated purchasers in the home market.

No adjustments were claimed or allowed.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (LOT) as the export price (EP) or CEP

transaction. The NV LOT is that of the starting-price sales in the

comparison market or, when NV is based on constructed value, that of

the sales from which we derive selling, general and administrative

expenses and profit. For EP, the U.S. LOT is also the level of the

starting-price sale, which is usually from exporter to importer. For

CEP, it is the level of the constructed sale from the exporter to the

importer.

To determine whether NV sales are at a different LOT than EP or

CEP, we examine stages in the marketing process and selling functions

along the chain of distribution between the producer and the

unaffiliated customer. If the comparison-market sales are at a

different LOT, and the difference affects price comparability, as

manifested in a pattern of consistent price differences between the

sales on which NV is based and comparison-market sales at the LOT of

the export transaction, we make an LOT adjustment under section

773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is

more remote from the factory than the CEP level and there is no basis

for determining whether the difference in the levels between NV and CEP

affects price comparability, we adjust NV under section 773(a)(7)(B) of

the Act (the CEP offset provision). See Notice of Final Determination

of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel

Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997).

Pacifico did not claim a LOT adjustment; however, we requested

information concerning Pacifico's distribution system, including

classes of customers, selling functions, and selling expenses to

determine whether such an adjustment was necessary. Pacifico reported

that all sales during the POR, in both the comparison market, the home

market in this instant case, and the United States, were to

wholesalers. We examined information provided by Pacifico concerning

these sales and determined that there was no difference in either

selling functions or selling expenses between sales in the home market

and sales in the United States. Therefore, we preliminarily determine

that sales in the home market and sales in the United States are at the

same LOT and that no adjustment is warranted.

Preliminary Results of Review

We preliminarily determine that the following weighted-average

dumping margin exists:

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

Margin

Manufacturer/exporter Time period (percent)

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

Rancho del Pacifico................ 04/01/96-03/31/97 0.00

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Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice in accordance with 19 CFR

353.28. Any interested party may request a hearing within 10 days of

publication in accordance with 19 CFR 353.38(b). Any hearing, if

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

or the first workday thereafter. Interested parties may submit case

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

accordance with 19 CFR 353.38(c). Rebuttal briefs, which must be

limited to issues raised in the case briefs, may be filed not later

than 37 days after the date of publication. The Department will publish

a notice of final results of this administrative review, which will

include the results of its analysis of issues raised in any such

comments.

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. Upon completion

of this review, the Department will issue appraisement instructions

directly to the U.S. Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of the final results of this administrative review for all

shipments of fresh cut flowers from Mexico entered, or withdrawn from

warehouse, for consumption on or after the publication date, as

provided for by section 751(a)(2)(c) of the Act: (1) 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; (2) if the exporter is not a firm covered in this

review, a prior review, or the original less-than-fair-value

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 (3) for all other producers and/or exporters of

this merchandise, the cash deposit rate shall be the rate established

in the investigation of sales at less than fair value, which is 18.20

percent. See 52 FR 6361 (March 3, 1987).

If our intent to revoke is finalized, the revocation will apply to

all entries of the subject merchandise from Pacifico entered, or

withdrawn from warehouse, for consumption on or after April 1, 1997.

The Department will then order the suspension of liquidation ended for

all such entries and will instruct the Customs Service to release any

cash deposit or bonds. The Department will further instruct Customs to

refund with interest any cash deposits on post-March 31, 1997 entries.

If we do not revoke, the cash deposit rate for Pacifico will be the

rate established in the final results of this review (except that no

deposit will be required if the margin is zero or de minimis, i.e.,

less than 0.5 percent).

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

publication of the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.25(b) to file certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

[[Page 1430]]

Dated: December 29, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-487 Filed 1-8-98; 8:45 am]

BILLING CODE 3510-DS-P