[Federal Register Volume 62, Number 198 (Tuesday, October 14, 1997)]
[Notices]
[Pages 53287-53306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27141]


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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.

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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