[Federal Register Volume 60, Number 50 (Wednesday, March 15, 1995)]
[Notices]
[Pages 13958-13961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6403]



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DEPARTMENT OF COMMERCE
[A-301-801 and A-331-801]


Amended Final Determinations of Sales at Less Than Fair Value: 
Fresh Cut Roses From Colombia and Ecuador

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

EFFECTIVE DATE: March 15, 1995.

FOR FURTHER INFORMATION CONTACT: James Maeder or James Terpstra, Office 
of Antidumping Investigations, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3330 or (202) 482-3965, respectively.

Amendments to the Final Determinations

    We are amending the final determinations of sales at less than fair 
value of fresh cut roses from Colombia and Ecuador to reflect the 
correction of ministerial errors made in the margin calculations in 
these determinations. Because corrections of ministerial errors for one 
company in the Colombian investigation results in its exclusion from 
any potential antidumping order, we are issuing this notice prior to 
the final determination of the U.S. International Trade Commission. 
These amendments to the final determinations are being published in 
accordance with 19 CFR 353.28(c).

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are in reference to the provisions in effect 
on December 31, 1994.

Case History and Amendments of the Final Determinations

    In accordance with section 735(d) of the Tariff Act of 1930, as 
amended (the Act), on February 6, 1995, the Department of Commerce (the 
Department) published its final determinations that fresh cut roses 
from Colombia and Ecuador were being sold at less than fair value (60 
FR 6980, 7019). Subsequent to the final determinations, we received 
timely ministerial error allegations from certain respondents in the 
Colombian and Ecuadorian investigations pursuant to 19 CFR 353.28. 
Section 751(f) of the Act defines a ``ministerial error'' to be an 
error ``in addition, subtraction or other arithmetic function, clerical 
error resulting from inaccurate copying, duplication, or the like, and 
any other type of unintentional error which the Secretary considers 
ministerial.'' Below is a discussion of the alleged errors that we 
determined to be ministerial errors as defined by section 751(f) of the 
Act. These, and the alleged errors that the Department determined not 
to be ministerial in nature, are detailed further in the Decision 
Memoranda from Gary Taverman to Barbara R. Stafford, dated March 3, 
1995, which is on file in the Import Administration Central Records 
Unit, Room B-099 of the Main Commerce Building.

Colombia

    On February 7 and 8, respondents Rosex Group, Prisma Group, 
Agricola Bojaca, Grupo Sabana, Flores Mocari, Caicedo Group, Grupo 
Intercontinental, and Grupo Papagayo, alleged that the Department made 
ministerial errors in its final determination and requested that the 
Department correct these errors. Petitioner provided comments on these 
allegations on February 14, 1995.

Rosex Group

    Issue 1: Rosex Group states that the Department made a ministerial 
error in the calculation of its per unit credit expense. Rosex Group 
stated that it changed its reported interest rate in its December 5, 
1994, sales listing from a dollar-denominated rate to a peso-
denominated interest rate. Because Rosex Group calculated its U.S. 
imputed credit using a peso-denominated rate, it contends that the 
Department should have adjusted this rate instead of a dollar-
denominated rate. Petitioner maintains that the Department's computer 
instructions to change the peso-based interest rate to a dollar-based 
rate appear to be correct.
    We agree with respondent that this error constitutes a ministerial 
error as defined by section 751(f) of the Act. It was the Department's 
intention to use a U.S. interest rate of 7.575 percent in Rosex Group's 
imputed credit calculation. Therefore, we have corrected this 
ministerial error.
Prisma

    Issue 1: Prisma argues that the computer program used to calculate 
its margin contained an error which incorrectly computed the per-unit 
commission for all U.S. sales observations. Stating that the Department 
intended to calculate a U.S. commission for ten specific U.S. sales 
observations, Prisma asserts that the program mistakenly caused every 
U.S. sales commission to be recalculated. In addition, Prisma claims 
that there is also a typographical error in the calculation of 
commissions for one sales observation.
    We agree with Prisma that these are ministerial errors, and have 
revised the computer program accordingly.
    Issue 2: With respect to inventory carrying costs, Prisma notes 
that it included the period normally covered by inventory carrying cost 
in its imputed credit calculation. As such, Prisma argues that the 
Department double-counted this expense by calculating a separate 
inventory carrying cost. Petitioner maintains that the Department 
imputed inventory carrying cost for seven days as best information 
available (BIA) for those respondents that failed to provide the data, 
and argues that because Prisma did not submit the data in the requested 
form, it cannot now argue double-counting to circumvent the application 
of BIA.
    We agree with Prisma. We used BIA for inventory carrying cost for 
those respondents who had related parties in the United States and did 
not report inventory carrying costs on their exporter's sales price 
(ESP) sales. However, because Prisma does not have a related party in 
the United States, we incorrectly calculated inventory carrying costs. 
Therefore, we have adjusted for this ministerial error.
    Issue 3: Prisma contends that the Department's inflation adjustment 
computation incorrectly assumed that all companies within the Prisma 
Group did not include the 1992 inflation adjustment in their submitted 
amortization expense. However, respondent notes that the cost 
verification report demonstrates that Prisma did include the 1992 
inflation adjustment for farm Del Campo in its submitted amortization 
expenses.
    We agree. The cost verification report at page 9 indicates that one 
of the seven Prisma Group farms (Del Campo) did include in its 
submitted cost information its inflation adjusted pre-production 
material amortization costs for years prior to the period of 
investigation (POI). The other six farms that make up the Prisma Group 
did not [[Page 13959]] make adjustments for inflation. Because we did 
not intend to make an adjustment for Del Campo that had already been 
made, we have recalculated the inflation adjustment.

Bojaca

    Issue 1: Bojaca contends that it was incorrect for the Department 
to use BIA to impute amounts for brokerage and duties whenever the 
values for those expenses were reported as zero for U.S. ESP customers. 
Bojaca asserts that it was only for customer 4 that there were zero 
values for brokerage or duties, and maintains that because it could not 
segregate these amounts, it reported the combined amounts under air 
freight.
    Petitioner argues that Bojaca failed to cite to any questionnaire 
response or verification exhibit which informed the Department that 
brokerage and duty expenses were consolidated with air freight. 
Petitioner asserts that Bojaca did not explain why a reasonable 
allocation methodology could not segregate these amounts, and adds that 
it is not clear that brokerage and duty expenses were always included 
in air freight. Therefore, petitioner asserts that the Department's 
choice of BIA to fill Bojaca's reported zero values does not constitute 
a ministerial error.
    We agree with respondent in part. We verified that Bojaca had 
included its duty and brokerage expenses in its air freight expenses 
for customer 4. Therefore, we incorrectly applied BIA to customer 4. 
However, we found that there are zero values for other ESP customers. 
Therefore, we have continued to use BIA for the other ESP customers 
that have a zero value reported in these fields.
    Issue 2: Bojaca argues that the Department incorrectly calculated 
constructed value (CV) packing expense by using total packing expenses 
for roses, irrespective of destination, rather than total U.S. packing 
expense.
    We agree. We intended to use total U.S. packing expenses rather 
than total packing expenses in our CV calculation. We have recalculated 
CV packing expense to correct this error.
    Issue 3: Bojaca argues that the Department erroneously allocated 
the entire group-wide interest expense to roses, when it should have 
allocated only the proportion of the group-wide interest expense 
associated with rose activities. Bojaca argues that the interest 
expense associated with the dairy farm and mini-roses should not have 
been included in the calculation.
    We agree. We intended to exclude from our cost calculations the 
portion of interest expense related to the dairy farm. We purposely did 
not allocate any interest expense to the mini-roses because: (1) 
Respondent indicated that an insignificant portion (less than one 
percent) of the total cultivated area of one of the three farms within 
the Bojaca Group produced mini-roses; and, (2) because the cost of 
production for mini-roses, the basis used to allocate interest expense 
to Bojaca's different products, was not provided by the company. We 
intended to compute interest expense by excluding only the portion of 
interest expense that relates to the dairy farm. We have made this 
adjustment, but only as it related to the dairy farm.
Mocari

    Issue 1: Mocari argues that the Department mistakenly deducted air 
freight expenses which it did not incur on its purchase price (PP) 
sales transactions. Mocari points out that these sales were made on an 
FOB Bogota basis, and requests that the Department deduct the air 
freight expenses from only the ESP sales transactions. The petitioner 
argues that Mocari had ample opportunity throughout the investigation 
to correct any error in reporting air freight. In addition, the 
petitioner maintains that Mocari has not provided a basis which 
demonstrates that its proposed correction would be limited only to 
removing erroneous expenses.
    We agree with respondent. We verified that Mocari did not pay air 
freight for PP sales. Therefore, we have corrected the error by 
deducting amounts for air freight from ESP sales only.
    Issue 2: Mocari claims that the Department mistakenly included it 
in the list of companies that had no U.S. borrowings during the POI and 
should not have used BIA to calculate imputed credit expenses and 
inventory carrying cost. Mocari maintains that the Department should 
have used its actual borrowing rate instead of the publicly ranged 
interest rate to calculate imputed credit expenses and inventory 
carrying costs.
    We agree with respondent. We intended to use Mocari's actual 
interest rate in our imputed credit expenses and inventory carrying 
costs calculations. Mocari's financial statements show that it paid 
interest on short-term borrowings during the POI. Accordingly, we have 
revised Mocari's imputed credit calculation and inventory carrying cost 
to use its short-term dollar-denominated interest rate.
    Issue 3: Mocari claims that the Department should not have 
subtracted the total number of stems returned from the sales quantity 
indicated on the CV tables because the amount reported was already net 
of returns. Therefore, Mocari requests that the Department recalculate 
its cost of manufacture (COM) using the sales quantity indicated on 
line 8 of the CV tables. In addition, Mocari requests that the 
Department not subtract additional stems from the amount reported on 
line 8 of the CV tables because such action represents an improper 
double-counting of returns.
    The petitioner states that Mocari should have reported an amount 
which was inclusive of returns in line 8 of the CV tables instead of an 
amount which was net of returns. The petitioner argues that Mocari 
should have notified the Department earlier that the amount reported on 
line 8 of the CV table was net of returns. Therefore, petitioner 
maintains that clerical error comments are not the forum in which to 
determine new factual claims.
    We agree with respondent. Sales verification exhibit 19 shows that 
the amount Mocari reported on line 8 of the CV tables is net of 
returns. Accordingly, we have recalculated the COM, interest, and 
general and administrative expenses for Mocari using the quantity 
amount on line 8 of the CV tables. Further, because this figure is net 
of returns, we did not deduct an additional amount for returns from 
this figure; this action would have represented double-counting.

Grupo Intercontinental

    Issue 1: Grupo Intercontinental (Intercontinental) alleges that in 
its CV calculation, the Department erred in its calculation of a home 
market packing cost as BIA. Intercontinental argues that the Department 
should have used its U.S. packing cost, as required by section 
353.50(a)(3) of the Department's regulations. Intercontinental further 
states that instead of using the verified U.S. packing expense in its 
CV calculation, the Department used a home market BIA amount that 
should have been applied only to home market sales of export quality 
roses for which no packing costs were reported. Therefore, 
Intercontinental requests that the Department apply the U.S. packing 
expense in its CV calculation.
    We agree that the Department erred in using the BIA home market 
packing expense for CV. While we properly applied the per stem packing 
cost for purposes of the cost test, we intended to use the verified 
U.S. packing amount for calculating CV. Therefore, we revised our 
calculation to correct this clerical error.
    Issue 2: Intercontinental states that the Department intended to 
correct Colombian Flower Council (CFC) fees for certain customers in 
certain months [[Page 13960]] and that, in making the programming 
changes necessary to accomplish this task, the Department mistakenly 
changed the CFC fees for all customers in all months. We agree, and 
have corrected this error.

Caicedo Group

    Issue 1: Caicedo states that the Department's inflation adjustment 
was intended to be a reasonable estimate of the effects of inflation on 
depreciation and amortization expenses denominated in historical pesos. 
Caicedo argues, however, that the Department erred in applying its 
inflation adjustment to the company's total reported cost of 
cultivation, including current cultivation costs, and that this is the 
equivalent of punitive ``BIA.'' Caicedo further argues that its record 
provides information regarding the company's 1993 depreciation and 
amortization of pre-production expenses.
    We agree that the Department mistakenly adjusted Caicedo's current 
cultivation costs for inflation. Accordingly, we have recalculated the 
inflation adjustment by applying the determined inflation rate to non-
current, pre-production amortization and depreciation costs only.
    Issue 2: Caicedo argues that the Department should adjust the cull 
revenue to recognize the insurance compensation proceeds the company 
received for hailstorm damage. Caicedo states that the insurance 
proceeds, which were originally reported as an offset to overhead, were 
subsequently reclassified by Caicedo and included in the balance for 
cull revenue. Caicedo concludes that the Department made a ministerial 
error by excluding the reduction in rose production costs resulting 
from the insurance proceeds.
    We agree. We have reduced Caicedo's total costs by the insurance 
proceeds received.
    Issue 3: Caicedo contends that the Department made two ministerial 
errors in its allocation of interest expenses. First, Caicedo argues 
that the Department erred in allocating interest expense over total 
export quality rose stems sold during the POI. Because the particular 
companies involved produce and sell other types of flowers, Caicedo 
maintains that the Department should have allocated interest expense 
over total flower stems. Second, Caicedo claims that the Department 
failed to allocate any of the combined interest expense to Great 
American Bouquet S.A. (GAB), a division of Inverfloral LTDA 
(Inverfloral) that does not grow flowers, but, rather, incorporates 
numerous flower types, including roses, into bouquets. Caicedo 
concludes that the Department's failure to allocate the combined 
interest expenses to GAB was inadvertent, and that the Department 
intended to allocate the combined interest expenses of the four grower/
exporters over their combined stems sold for all flower types.
    We agree. We intended to allocate the combined interest expense of 
the four grower/exporters to the rose operations of those companies, 
including Inverfloral's GAB division. Therefore, we recalculated 
Caicedo's interest expense by first allocating the total combined 
interest expenses of the four companies between Inverfloral/GAB (non-
grower) and the other three companies (which all grow flowers) based on 
the ratio of Inverfloral/GAB's productive and long-term assets to the 
total productive and long-term assets of all four companies. Because 
companies generally borrow capital in order to finance the purchase of 
such assets, we consider this approach to be the most reasonable 
indicator of the borrowing needs of the rose production versus bouquet 
assembly sides of Caicedo's operations. For each of the four grower/
exporters, we included in productive assets the year-end 1993 financial 
statement balances for inventory, crop investments, crops in 
development, and long-term assets, including fixed assets.
    In order to allocate the remaining interest expense between rose 
and other flower growing operations at the three production companies, 
we used the ratio of rose cultivation area to total cultivation area, 
for the three companies that grow flowers. This methodology is 
consistent with that used for several of the other Colombian rose 
growing companies.

Ecuador

    On February 8, 1995, Arbusta-Agritab (Arbusta) and Guanguilqui Agro 
Industrial S.A. (Guaisa) made timely allegations that the Department 
made ministerial errors in its final determination. On February 16, 
1995, petitioner provided its comments on the alleged errors.

Arbusta

    Issue 1: Arbusta states that the Department incorrectly multiplied 
DHL delivery charges by quantity before subtracting this expense from 
U.S. price.
    We agree. Because we did not intend to multiply the per stem DHL 
expense by quantity, we have corrected this error.
    Issue 2: Arbusta argues that the Department incorrectly disallowed 
the company's capitalization of costs incurred during the vegetative 
period.
    We agree. Because we inadvertently overlooked the inclusion of the 
capitalization and amortization of prior period vegetative period 
costs, we have adjusted the CV to allow for the current period 
capitalization of vegetative period costs.
    Issue 3: Arbusta alleges that the Department mistakenly added 
actual historical depreciation expenses to CV instead of only the 
revaluation of those expenses. Arbusta contends that this addition 
double counts the amount of historical depreciation.
    We agree. We inadvertently added historical depreciation to CV. 
Therefore, because we unintentionally double-counted this expense, we 
have corrected the error.
    Issue 4: Arbusta states that in its CV calculation the Department 
used an incorrect packing expense. Petitioner also notes that the 
packing cost used in the CV calculation for Arbusta conflicts with the 
Department's analysis memorandum.
    We agree with both petitioner and respondent, and determine this to 
be a ministerial error. Accordingly, we have corrected the packing 
expenses used in CV.

Guaisa

    Guaisa contends that the Department reallocated certain expenses to 
roses based on an incorrect rose area percentage for Guaisa farm.
    We agree with Guaisa in part. We found a typographical error in our 
calculation of the correct roses cultivated area. However, the rose 
area calculated by Guaisa that it requested the Department use in its 
recalculation is incorrect. Accordingly, we have corrected the 
typographical error we found in our original calculation and rejected 
the figure calculated by Guaisa.
Scope of Investigation

    The products covered by these investigations are fresh cut roses, 
including sweethearts or miniatures, intermediates, and hybrid teas, 
whether imported as individual blooms (stems) or in bouquets or 
bunches. Loose rose foliage (greens), loose rose petals and detached 
buds are excluded from these investigations. Roses are classifiable 
under subheadings 0603.10.6010 and 0603.10.6090 of the Harmonized 
Tariff Schedule of the United States (HTSUS). The HTSUS subheadings are 
provided for convenience and customs purposes. The written description 
of the scope of these investigations is dispositive.

Suspension of Liquidation

    In accordance with 19 U.S.C. 1673b, we are directing the U.S. 
Customs [[Page 13961]] Service to continue to suspend liquidation of 
all entries of fresh cut roses from Colombia and Ecuador, as defined in 
the ``Scope of Investigation'' section of this notice, that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. The Customs 
Service shall require a cash deposit or the posting of a bond on all 
entries equal to the estimated weighted-average amount by which the 
foreign market value of the merchandise subject to this investigation 
exceeds United States price as shown in the table below. The following 
is a list of all the final margins, including the amended final 
margins, in these investigations.

------------------------------------------------------------------------
                                                                Margin  
               Manufacturer/Producer/Exporter                  percent  
------------------------------------------------------------------------
                                Colombia                                
                                                                        
------------------------------------------------------------------------
Flores Mocari S.A. (and its related farms Cultivos                      
 Miramonte and Devor Colombia).............................         2.86
Rosex (and its related farms Rosex Ltda. La Esquina and                 
 Paraiso Farms), Induflora Ltda., and Rosas Sausalito                   
 Ltda.)....................................................         2.44
Grupo Prisma (and its related farms Flores del Campo Ltda.,             
 Flores Prisma S.A., Flores Acuarela S.A., Flores el Pincel             
 S.A., Rosas del Colombia Ltda., Agropecuaria Cuernavaca                
 Ltda.)....................................................         0.00
Grupo Bojaca (and its related farms Agricola Bojaca Ltda.,              
 Universal Flowers, and Plantas y Flores Tropicales Ltda.               
 (Tropifora))..............................................        20.66
Caicedo Group (and its related farms Agrobosque, Productos              
 el Rosal S.A., Productos el Zorro S.A., Exportaciones                  
 Bochia S.A. - Flora Ltda., Flores del Cauca, Aranjuez                  
 S.A., Andalucia S.A., Inverfloral S.A., and Great America              
 Bouquet)..................................................        15.07
Grupo Intercontinental (and its related farms Flora                     
 Intercontinental and Flores Aguablanca)...................         3.92
All Others.................................................         5.53
                                                                        
------------------------------------------------------------------------
                                Ecuador                                 
                                                                        
------------------------------------------------------------------------
Arbusta-Agritab (and its related farms Agrisabe, Agritab,               
 and Flaris)...............................................         4.01
Guanguilqui Agro Industrial S.A. (and its related farm                  
 Indipasisa)...............................................        14.29
All Others.................................................         5.41
------------------------------------------------------------------------

    These amended final determinations are published in accordance with 
section 751(f) of the Act and 19 CFR 353.28(c).

    Dated: March 3, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-6403 Filed 3-14-95; 8:45 am]
BILLING CODE 3510-DS-P