[Federal Register Volume 62, Number 96 (Monday, May 19, 1997)] [Notices] [Pages 27219-27221] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-13058] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-201-601] Certain Fresh Cut Flowers From Mexico; Final Results of Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of final results of antidumping duty administrative review. ----------------------------------------------------------------------- SUMMARY: On January 9, 1997, the Department of Commerce (the Department) published the preliminary results of its administrative review of the antidumping duty order on certain fresh cut flowers from Mexico. The review covers one manufacturer/exporter and the period April 1, 1995 through March 31, 1996. We gave interested parties an opportunity to comment on our preliminary results. Based on our analysis of the comments received, we have not changed the results from those presented in the preliminary results of this review. EFFECTIVE DATE: May 19, 1997. FOR FURTHER INFORMATION CONTACT: G. Leon McNeill 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 (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to the current regulations, as amended by the interim regulations published in the Federal Register on May 11, 1995 (60 FR 25130). SUPPLEMENTARY INFORMATION: Background On January 9, 1997, the Department published in the Federal Register (62 FR 1318) the preliminary results of its administrative review of the antidumping duty order on fresh cut flowers from Mexico, 52 FR 13491 (April 23, 1987). The Department has now completed this administrative review in accordance with section 751 of the Act. Scope of Review The products covered by this review are certain fresh cut flowers, defined as standard carnations, standard chrysanthemums, and pompon chrysanthemums. During the period of review, such merchandise was classifiable under Harmonized Tariff Schedule of the United States (HTSUS) items 0603.10.7010 (pompon chrysanthemums), 0603.10.7020 (standard chrysanthemums), and 0603.10.7030 (standard carnations). The HTSUS item numbers are provided for convenience and U.S. Customs (Customs) purposes only. The written description of the scope of the order remains dispositive. This review covers one manufacturer/exporter of fresh cut flowers from Mexico, Rancho Del Pacifico (Pacifico), and the period April 1, 1995 through March 31, 1996. Duty Absorption As part of this review, we are considering, in accordance with section 751(a)(4) of the Act, whether Pacifico absorbed antidumping duties. See the preliminary results of this review. For these final results of review, we determine that there is no dumping margin on any of Pacifico's sales during the period of review and, therefore, find that antidumping duties have not been absorbed by Pacifico on its U.S. sales. Analysis of the Comments Received We gave interested parties an opportunity to comment on the preliminary results of review. We received a case brief from the petitioner, The Floral Trade Council. Comment 1: Petitioner argues that the Department should revise its cash deposit instructions to Customs from those issued in prior reviews. Petitioner suggests that, in order to discourage circumvention of the antidumping duty [[Page 27220]] order, the Department instruct Customs to collect cash deposits at the higher of the grower or exporter's rate or, if the exporter has sourced through multiple growers, at the highest of the growers' or exporter's rate. Where the grower is unknown, petitioner contends, the Department should collect cash deposits at the highest rate. In addition, petitioner asserts that the Department should publish the exact language of its cash deposit instructions in its determinations so that interested parties would have an opportunity to comment on those instructions. Petitioner notes that, for the 1993/1994 administrative review--the most recently completed administrative review involving Pacifico--the Department issued the following cash deposit instructions to Customs that were not included in its published determination: If any entries of this merchandise are exported by a firm other than the manufacturer then the following instructions apply: (A) If the exporter of the subject merchandise has its own rate, use the exporter's rate for determining the cash deposit rate; (B) If the exporter of the subject merchandise does not have its own rate, but the manufacturer has its own rate, the cash deposit rate will be the manufacturer's rate; (C) Where neither the exporter nor the manufacturer currently has its own rate, or the manufacturer is unknown, use the ``all others'' rate for establishing the cash deposit rate. (Petitioner cites to the Cash Deposit Instructions dated September 12, 1996, and Certain Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 40604 (August 5, 1996).) Petitioner contends that part A of the cash deposit instructions does not account for the situation in which both producer and exporter have their own rates. Petitioner argues that the name of an exporter stated in part A could merely be the name of a flower grower subject to an antidumping duty rate of zero percent who has exported the flowers of another grower that has a much higher rate. Petitioner argues that the Department's current cash deposit instructions undermine the remedial purpose of the statute, which is to remedy dumping through the application of antidumping duties. Petitioner contends that, for that reason, the Department has refused to allow exporters that are excluded from an antidumping duty order to export merchandise produced by companies subject to that order. As support for its argument, petitioner cites Jia Farn Manufacturing Co., Ltd. v. United States, 817 F. Supp. 969 (CIT 1993), where, petitioner asserts, the Department indicated that a company originally excluded from an antidumping duty order would immediately be subject to a cash deposit if it exports merchandise produced by another company subject to the order. Petitioner further cites Certain Fresh Cut Flowers from Colombia; Final Results of Administrative Review and Notice of Revocation of Order (in Part), 59 FR 15159, 15167 (March 1, 1994), where, petitioner notes, the Department states that evidence that revoked companies are serving as conduits for other Colombian flower growers would call for appropriate action, which could include reinstatement of the order and referral to the Customs fraud division. Petitioner notes that part C of the cash deposit instructions directs Customs to use the ``all others'' rate in cases in which the producers or exporters of the merchandise are unknown. Petitioner maintains that selection of the ``all others'' rate for unknown producers is a clear invitation for a producer with higher dumping margins to route merchandise through growers/exporters that do not have company-specific rates. Petitioner also maintains that the Department's instructions contradict Customs' prior practice of assigning the highest rate whenever entry documentation did not provide the name of grower. In addition, petitioner asserts that Customs has explained that both producer and exporter should be identified on entry documentation, filed electronically and physically, in order to properly collect estimated antidumping duty deposits. Department's Position: We disagree with the petitioner. Part A of the Department's standard cash deposit instructions does allow for the situation in which both producer and exporter have their own rates; in this situation, the exporter's rate is used as the cash deposit rate. This is because the exporter, who sets the price for the sale to the United States, is the potential price discriminator. The exporter's sales--in this case, Pacifico's sales--form the basis of the margin calculation; therefore, it is appropriate that cash deposits be collected at that margin on an exporter-specific basis. If we receive any evidence that Pacifico is serving as a conduit for other Mexican flower growers, i.e., that Pacifico is exporting merchandise produced and sold for export to the United States on behalf of other growers, we will consider this a case of potential evasion of the antidumping duty order and will take appropriate action. We will also take appropriate action if we receive evidence that an exporter without a company- specific margin is serving as a conduit for a grower/exporter which has a higher, company-specific margin. See, e.g., Sebacic Acid from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 62 FR 10532 (March 7, 1997). It has been the Department's longstanding practice not to incorporate in Federal Register notices a verbatim copy of the cash deposit instructions that it transmits to Customs. However, it is our practice to include in the Federal Register a summary of our planned instructions, as we did in the preliminary results of this review. Furthermore, we note that it is evident from this summary that deposits are to be collected on the basis of the exporter's rate, rather than the producer's rate, when the exporter has a rate. Interested parties have an opportunity to comment on that summary of instructions. We find no reason to change our current practice. Comment 2: Petitioner contends that, for purposes of calculating constructed export price profit, the Department should reallocate Pacifico's costs on the basis of relative cultivation area rather than on bunches of flowers produced per month. Petitioner argues that Pacifico's methodology allocates an equal amount of costs on the basis of quantity produced without taking into consideration that certain flower varieties are more expensive to grow. For example, petitioner maintains, Pacifico's methodology would allocate the same costs to both what would appear to be field crops and greenhouse crops. Petitioner maintains that cultivation area, not bunches produced, is the method commonly used to allocate flower costs. As support for its argument, petitioner cites Floral Trade Council v. United States, 822 F. Supp. 766, 772 (Floral Trade); Certain Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 57 FR 19597, 19599 (May 7, 1992); and Fresh Cut Roses from Colombia; Final Determination of Sales At Less Than Fair Value, and Notice of Revocation of Order (in Part), 60 FR 6980, 7010, 7012 (February 6, 1995) (Colombian Flowers). Petitioner argues that the statute and the Statement of Administrative Action (SAA) instruct the Department to consider whether a respondent has historically used an allocation methodology in determining whether a cost allocation methodology is acceptable, citing 19 U.S.C. 1677(F)(1)A and the SAA at 835. Petitioner suggests that the Department should require Pacifico to [[Page 27221]] explain whether it maintains product-specific cost data such as the ``rose plant'' cost data already reported in its questionnaire response. Petitioner maintains that, unless the respondent uses bunches produced in its ordinary books and records to allocate costs, the Department should require Pacifico to report its costs based on cultivation area. Department's Position: We disagree with petitioner that Pacifico's costs should be reallocated on the basis of cultivation area. The Court of International Trade in Floral Trade states that ``allocation is * * * an inexact science, and is simply a way to estimate the costs incurred by the firm to manufacture the product, complete the process, or deliver the service,'' and that ``allocation methods vary even among firms in the same industry.'' Floral Trade Council v. U.S., 822 F.Supp. 766, 772 (CIT 1993). The final review results for Mexican flowers cited by petitioner only indicate that in that instance we found the grower's use of cultivation area to be an acceptable allocation basis for certain costs (61 FR 40604). This does not stand for the proposition that relative area is the correct method of allocating growing costs. In the instant proceeding, we find no evidence that Pacifico used cultivation area as a basis of allocation in its books and records, or that flowers produced by Pacifico are field crops. Furthermore, the record does not support petitioner's claim that Pacifico's production cost allocation methodology distorts costs. See Colombian Flowers at 7010, where the Department made a similar determination. Therefore, for these final results, we have accepted Pacifico's methodology of allocating costs because Pacifico's allocation is reasonable and there is no evidence that it distorts Pacifico's costs. Final Results of review As a result of our review, we have determined that the following weighted-average margin exists: ------------------------------------------------------------------------ Margin Manufacturer/exporter Period of review (percent) ------------------------------------------------------------------------ Rancho Del Pacifico....................... 4/1/95-3/31/96 0.00 ------------------------------------------------------------------------ The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. Upon completion of this review, the Department will issue appraisement instructions directly to the Customs Service. Furthermore, the following deposit requirements shall be effective for all shipments of the subject merchandise that are entered or withdrawn from warehouse, for consumption on or after the publication date of these final results, as provided by section 751(a)(1) of the Act: (1) the cash deposit rate for the reviewed company shall be the above rate; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company- specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate shall be the rate established for the most recent period for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous review, the cash deposit rate will be 18.20 percent, the all others rate established in the LTFV investigation (52 FR 6361, March 3, 1987). These deposit rates shall remain in effect until publication of the final results of the next administrative review. This notice serves as a final reminder to importers of their responsibility under 19 CFR 353.26 to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties. Notification to Interested Parties This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 353.34(d). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation. This administrative review and notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22. Dated: May 9, 1997. Robert S. LaRussa, Acting Assistant Secretary for Import Administration. [FR Doc. 97-13058 Filed 5-16-97; 8:45 am] BILLING CODE 3510-DS-P