[Federal Register Volume 63, Number 89 (Friday, May 8, 1998)]
[Notices]
[Pages 25447-25449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12205]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-301-602]


Certain Fresh Cut Flowers From Colombia; Preliminary Results of 
Antidumping Duty Changed Circumstances Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty changed 
circumstances review.

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SUMMARY: In response to a request by Flores El Talle S.A., the 
Department of Commerce is conducting a changed circumstances review to 
confirm that the revocation granted to the Flores Colombianas Group is 
applicable equally to Flores El Talle S.A. The antidumping duty order 
was revoked with respect to the Flores Colombianas Group in the fourth 
administrative review. In this changed circumstances review, the 
Department of Commerce has examined in detail Flores El Talle S.A. and 
its relationship with the Flores Colombianas Group. As a result of this 
review, the Department of Commerce preliminarily finds that Flores El 
Talle S.A. is a member of the Flores Colombianas Group and, as such, is 
subject to the revocation which applies to the Flores Colombianas 
Group.

EFFECTIVE DATE: May 8, 1998.

FOR FURTHER INFORMATION CONTACT: Roy Malmrose or Stephanie Hoffman, AD/
CVD Enforcement, Office 1, Import Administration, International Trade 
Administration, United States Department of Commerce, Washington, DC 
20230; telephone: (202) 482-5414 or (202) 482-4198, respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), 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. In addition, unless 
otherwise indicated, all citations to section 351 of the regulations of 
the Department of Commerce (``the Department'') are to the current 
regulations, as published in the Federal Register on May 19, 1997 (62 
FR 27296).

SUPPLEMENTARY INFORMATION:

Background

    In the final results of the fourth administrative review (see 59 FR 
15159; March 31, 1994), the antidumping duty order on certain fresh cut 
flowers from Colombia was revoked with respect to the Flores 
Colombianas Group, based on three consecutive administrative reviews in 
which the Department determined that the Flores Colombianas Group was 
not selling the subject merchandise at less than fair value in the 
United States.
    During the ninth administrative review, Flores El Talle S.A. 
(``Flores El Talle'') notified the Department in an August 23, 1996, 
letter that the company had been created in the summer of 1991, within 
the context of the Flores Colombianas Group and that Flores El Talle 
and the Flores Colombianas Group share common ownership and management. 
The letter requested that the Department confirm that the revocation of 
the antidumping duty order with respect to the Flores Colombianas Group 
is applicable equally to Flores El Talle. In the final results of the 
ninth review, the Department determined that Flores El Talle had no 
entries during the POR, rescinded the review with respect to Flores El 
Talle, and stated that it would initiate a changed circumstances review 
to examine whether Flores El Talle should be subject to the revocation 
which applies to the Flores Colombianas Group (see, Certain Fresh Cut 
Flowers from Colombia; Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 62 FR 53287, 53303; October 14, 
1997). The Department initiated the changed circumstances review on 
October 15, 1997 (62 FR at 53593). The Department is conducting this 
changed circumstances review in accordance with section 751(b) of the 
Act and 19 CFR 351.216(d) of the Department's regulations.

Scope of Review

    The scope of the order under review is 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). Although the HTS numbers are provided for 
convenience and customs purposes, the written description of the scope 
is dispositive.

Preliminary Analysis

    This review covers one producer of the subject merchandise, Flores 
El Talle, an entity created within the context of the Flores 
Colombianas Group, a group of producers and exporters. The

[[Page 25448]]

Department has revoked the order with respect to that group. The 
Department has examined the question of whether Flores El Talle should 
be assigned a cash deposit rate equal to the ``all others'' rate, or be 
subject to Flores Colombianas Group's revocation. If the Department 
determines that Flores El Talle should be collapsed with the other 
companies comprising the Flores Colombianas Group and treated as a 
single entity in the production and sale of the subject merchandise, 
its shipments would not be subject to suspension of liquidation or 
antidumping duty deposit requirements under this order because the 
revocation applicable to the Flores Colombianas Group would be 
applicable equally to Flores El Talle.
    As stated above, the antidumping order was revoked with respect to 
the Flores Colombianas Group, effective May 31, 1994. During the three 
consecutive review periods on which the revocation was based (March 1, 
1988 to February 28, 1991) the Flores Colombianas Group was comprised 
of four entities: (1) Agrosuba Ltda., (2) Flores Colombianas Ltda., (3) 
Jardines de los Andes SA, and (4) Productos El Cartucho SA. On July 18, 
1991, Flores El Talle was set up to acquire the assets and liabilities 
of Flores El Cielo Ltda., a company that did not produce or export 
subject merchandise. Flores El Talle began to produce the subject 
merchandise in the second half of 1991.
    The question under review is whether, after its inception, Flores 
El Talle's affiliation with the Flores Colombianas Group and the manner 
in which operations were conducted were such that Flores El Talle 
should be collapsed with the other companies already comprising the 
Flores Colombianas Group and treated as a single entity and, therefore, 
subject to the revocation applicable to the Flores Colombianas Group.
    According to section 351.401(f) of the Department's regulations, in 
order for the Department to collapse two producers, i.e., treat them as 
a single entity, the Department must find that, (1) the producers are 
affiliated under section 771(33) of the Act, (2) the producers have 
production facilities for similar or identical products that would not 
require substantial retooling in order to restructure manufacturing 
priorities, and (3) there is a significant potential for the 
manipulation of price or production (see also, Notice of Final 
Determination of Sales at Less Than Fair Value: Collated Roofing Nails 
From Taiwan, 62 FR 51427, 51436 (October 1, 1997), (``Collated Roofing 
Nails From Taiwan'') and Grey Portland Cement and Clinker From Mexico: 
Final Results of Antidumping Administrative Review, 62 FR 17148, 17155 
(April 9, 1997)).
    First, we find that because Flores El Talle and the Flores 
Colombianas Group are under common ownership and control, these 
companies are affiliated under sections 771(33)(E) and (F) of the Act. 
(For more information on common ownership, management, and control of 
Flores El Talle and other members of the Flores Colombianas Group, see, 
Flores El Talle's August 23, 1996, submission.) Second, the evidence on 
the record demonstrates that Flores El Talle does have production 
facilities for similar or identical products. Although Flores El Talle 
is not currently a producer of the subject merchandise (due to soil 
infestation with ``fusarium oxysporium,'' Flores El Talle ceased 
production of the subject merchandise in December 1995), it still has 
the capability of producing the subject merchandise and substantial 
work would not be required in order to restructure production 
priorities (see, Collated Roofing Nails From Taiwan, 62 FR at 51436).
    We also determine that the third criterion of our collapsing 
inquiry is met. According to section 351.401(f)(2) of the Department's 
regulations, in determining whether there is a significant potential 
for manipulation of price or production, the Department may consider 
factors such as (1) the level of common ownership; (2) the extent to 
which managerial employees or board members of one firm sit on the 
board of directors of an affiliated firm; and (3) whether business 
operations are intertwined, such as through shared sales information, 
involvement in production and pricing decisions, the sharing of 
facilities or employees, or significant transactions between the two 
enterprises.
    As stated previously, Flores El Talle has common ownership, 
management, and control with other companies in the Flores Colombianas 
Group. Flores El Talle has only existed in the context of the Flores 
Colombianas Group, and all five companies of the Flores Colombianas 
Group share information, supplement sales efforts, and coordinate 
pricing and business strategy with one another. Sales and marketing 
personnel for the subject merchandise are shared by all five members of 
the Flores Colombianas Group, and Flores El Talle has joint offices 
with two other companies in the Flores Colombianas Group, Agrosuba and 
Flores Colombianas Ltda., to handle purchasing, accounting and 
communication requirements.

Preliminary Results of the Review

    Applying the evidence on the record to the collapsing inquiry set 
forth above, we find that (1) Flores El Talle and the Flores 
Colombianas Group are affiliated under sections 771(33)(E) and (F) of 
the Act; (2) the production facilities are essentially similar so that 
they would not require substantial work to restructure manufacturing 
priorities; and (3) there are intertwined business operations, common 
management and board members, and coordination of the production and 
sales strategies such that there exists significant potential for price 
or production manipulation.
    Based on this analysis, we preliminarily determine that it is 
appropriate to collapse Flores El Talle into the Flores Colombianas 
Group. Therefore, we intend to treat Flores El Talle as part of the 
Flores Colombianas Group and apply the revocation from the antidumping 
duty order with respect to the Flores Colombianas Group to Flores El 
Talle. If this revocation is applied to Flores El Talle, it will apply 
to all unliquidated entries of this merchandise produced by Flores El 
Talle, exported to the United States and entered, or withdrawn from 
warehouse, for consumption, on or after May 31, 1994, which is the 
effective date of the revocation from the order for the Flores 
Colombianas Group. If the final results of this changed circumstances 
review remain unchanged, we will instruct the U.S. Customs Service to 
release any cash deposit or bond and liquidate the entries without 
regard for antidumping duties (see, 19 CFR 351.222(g)(4)).
    Interested parties may request a hearing within ten days of 
publication of these preliminary results. If requested, a hearing will 
be held the 37th day after publication. Interested parties may submit 
case briefs and/or written comments no later than 30 days after the 
date of publication. Rebuttal briefs and rebuttals to written comments, 
limited to issues raised in such briefs or comments, may be filed no 
later than five days after the time limit for filing case briefs. The 
case briefs and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f)(3)(i). The Department will publish 
the final results of this changed circumstances review, which will 
include the results of its analysis raised in any such written 
comments. This changed circumstances review and notice are in 
accordance with 19 CFR 351.216.


[[Page 25449]]


    Dated: May 1, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-12205 Filed 5-7-98; 8:45 am]
BILLING CODE 3510-DS-P