NOTICES
DEPARTMENT OF COMMERCE
[C-301-003]
Roses and Other Cut Flowers From Colombia; Preliminary Results of
Countervailing Duty Administrative Review
Wednesday, August 15, 1990
AGENCY: International Trade Administration/Import Administration, Department
of Commerce.
ACTION: Notice of peliminary results of countervailing duty administrative review.
SUMMARY: The Department of Commerce has conducted an administrative review of the
agreement suspending the countervailing duty
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investigation on roses and
other cut flowers from Colombia. The review covers the period January 1, 1988 through
December 31, 1988 and eleven programs. We preliminarily determine that Colombian cut
flower exporters have complied with the terms of the suspension agreement. We invite
interested parties to comment on these results.
EFFECTIVE DATES: August 15, 1990.
FOR FURTHER INFORMATION CONTACT:Robert Bolling or Linda Pasden, Office of
Agreements Compliance, International Trade Administration, U.S. Department of
Commerce, Washington, DC 20230; telephone: (202) 377-3793.
SUPPLEMENTARY INFORMATION:
Background
On February 13, 1990, the Department of Commerce ("the Department") published in the
Federal Register (55 FR 5042) the final results of its last administrative review of the
agreement suspending the countervailing duty investigation on roses and other cut
flowers from Colombia (48 FR 2158; January 18, 1983). On January 11, 1989, the
Department published a notice of "Opportunity to Request an Administrative Review" (54
FR 7) for this period. On January 30, 1989, the petitioner, the Floral Trade Council,
requested an administrative review of the suspension agreement. We initiated the review,
covering January 1, 1988 through December 31, 1988, on March 8, 1989 (54 FR 9868).
The Department has now conducted this review in accordance with section 751 of the
Tariff Act of 1930 ("the Tariff Act").
Scope of Review
Imports covered by this review are shipments of roses and other cut flowers from
Colombia. During the period of review, such merchandise was classifiable under items
192.1810 through 192.2192 of the Tariff Schedules of the United States Annotated. This
merchandise is currently classifiable under HTS items 0603.10.60, 0603.10.70,
0603.10.80, and 0603.90.00. The HTS item numbers are provided for convenience and
Customs purposes. The written description remains dispositive.
The review covers the period January 1, 1988 through December 31, 1988 and eleven
programs. The producers and exporters listed in Appendix I, accounting for more than
eighty-five (85) percent of the total exports of roses and other cut flowers (excluding
minature carnations) from Colombia to the United States, are signatories to the
suspension agreement.
Analysis of Programs
(1) Tax Rebate Certificate
On April 1, 1984, the Colombian government pursuant to Law 48/83, established the Tax
Rebate Certificate ("CERT"), which replaced the Tax Reimbursement Certificate Program
("CAT"). According to the Colombian government, the CERT rebated all or part of the
indirect taxes paid by exporters. The CERT is freely negotiable on the stock market and
can be used for paying a variety of taxes.
Before the suspension agreement, the Colombian government provided payment to
exporters of roses and other cut flowers in the form of a CERT. Rebates were calculated as
a percentage of the value of the exported product attributable to the domestic
value-added content.
As a term of the suspension agreement, the Colombian government terminated CERT
payments on exports of roses and other cut flowers to the United States. The response to
the Department's questionnaire stated that none of the signatory producers and exporters
received benefits under this program for shipments of roses and other cut flowers to the
United States during the review period. Therefore, we preliminarily determine that this
program does not provide any countervailable benefits to the roses and cut flower
exporters and that the signatories have complied with the terms of the agreement.
(2) Air Freight Rates
The Civil Aeronautics Board (DAAC), an agency of the Colombian government established
in Resolution 5833 air freight rates for a variety of products, including cut flowers.
Resolution 6333 of September 25, 1981, which updates Resolution 5833, set a minimum
air freight rate of U.S. $0.45 per kilo and a maximum rate of U.S. $0.62 per kilo for
flowers exported to the United States. The rates established under Resolution 6333 were
in effect during the period of review.
Section D(3) of the suspension agreement (48 FR 2158), states that the Department may
consider rescinding the agreeement if the air freight rates paid by cut flower exporters
approach government mandated maximum rates set by the DAAC. If we found such rates,
we might consider them indicative of government control rather than the result of
competitive forces. We found that rates ranged from U.S. $0.57 per kilo to U.S. $0.62 per
kilo, including a U.S. $0.05 charge for handling and cooling services. Handling and
cooling charges are not regulated by DAAC. Also, shipments from Medellin carry an
additional U.S. $0.02 air-freight rate. The questionnaire response indicated that the rates
negotiated between cut flower exporters and air freight companies were competitively
priced. Therefore, we preliminarily determine that this program does not provide any
countervailable benefits to the roses and other cut flower exporters and that the
signatories have complied with the terms of the agreement.
(3) Working Capital Resolutions
Resolution 59
Resolution 59/72 provided working capital financing at preferential rates to firms that
manufacture, store or sell products destined for export. This program was updated by
Resolution 22/84. All industries were eligible, except producers of coffee, petroleum, and
petroleum by-products. Resolution 22/84 loans are administered by the Export
Promotion Fund ("PROEXPO"), an agency of the Colombian government. The loans are for
180 days and the interest is paid quarterly, in advance. In December 1986, the maximum
interest rate was 22.0 percent.
Since we found this program to be countervailable in the agreement suspending the
countervailing duty investigation on certain textile mill products and apparel from
Colombia (50 FR 9863; March 12, 1985), we included it in the December 15, 1986
revised suspension agreement. At that time, we established a short-term benchmark
interest rate of 22.5 percent, which was the average rate of the Fondo Financiero
Agropecuario (FFA) and the Agrarian Fund as of March 31, 1986. The revised suspension
agreement required that the cut flower exporters not apply for, or receive, any
short-term export financing provided by PROEXPO other than that offered at or above the
short-term benchmark interest rate of 22.5 percent.
Resolution 3/87 which is an update to Resolution 22/84, was passed by PROEXPO on
February 26, 1987. Resolution 3/87 changed the short-term interest rate to 22.5
percent. The questionnaire response stated that no exporter of the subject merchandise
applied for, or received, any short-term working capital financing under this products
destined for export. Therefore, we preliminarily determine that the signatories have
complied with the terms of the agreement.
Resolution 11
Resolution 11/87 provides pre-shipment working capital loans. Resolution 11/87
established interest
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rates at either 22.5 percent per year prepaid quarterly or
the certificate of deposit rate (DTF) paid at the end of the quarter, whichever is higher.
The certificates of deposit rate is a market-determined rate. On October 13, 1988,
PROEXPO passed Resolution 009/ 88, which updated Resolution 11/87 and set the
benchmark interest rate at 22.5 percent or the DTF rate, whichever is higher, payable at
the end of each quarter.
During the Department's last final administrative review (55 FR 5042; February 13,
1990), the Department determined the appropriate market rate indicator to be the DTF
interest rate for pre-shipment and post-shipmate financing. The Department determined
that the Colombian government has moved away from the fixed-rate PROEXPO financing
to the DTF rate, which more accurately reflects interest rate fluctuations in the market.
The questionnaire response stated that exporters received pre-shipment working capital
loans under Resolution 11/87. During the review periods, the average DTF rate of 28.4
percent was higher than the benchmark rate of 22.5 percent. The questionnaire response
stated that no exporters of the subject merchandise received any loans at a rate below the
DTF rate. Therefore, we preliminarily determine that the signatories have complied with
the terms of the agreement.
Resolution 14
Resolution 14/87 provides working capital financing to export companies for various
products, including cut flowers. Resolution 14/87 established financing to flower
exporters by setting the base rate at 25.0 percent prepaid quarterly or the DTF rate,
whichever, is higher. The actual rate charged varies depending on the size of the
company. On October 13, 1988, PROEXPO passed Resolution 009/88, which updated
Resolution 14/87 and set the benchmark interest rate at 25.0 percent or the applicable
interest rate according to company size (as defined under Article 8 of Resolution 14),
whichever is higher, payable at the end of each quarter. The questionnaire response
stated that no exporter of the subject merchandise applied for, or received, any working
capital financing under this resolution. Therefore, we preliminarily determine that the
signatories have complied with the terms of the agreement.
(4) Fixed Capital Resolution
Resolution 40
Resolution 40/78 was approved under Decree 2366 of 1974. Decree 2366/74 provides
exporters with fixed asset financing. On February 26, 1987, PROEXPO passed Resolution
4/87, which updated Resolution 40/78 and changed the interest rate to 21.0 percent. On
December 21, 1987, PROEXPO passed Resolution 13/87 which set the benchmark interest
rate at 25.0 percent per year prepaid quarterly or the DTF rate, whichever is higher. The
actual rate charged varies depending on the size of the company. On October 13, 1988,
PROEXPO passed Resolution 009/88, which updated Resolution 13/87 and set the
benchmark interest rate at 25.0 percent or the applicable interest rate according to
company size (as defined under Article 7 of Resolution 13), whichever is higher, payable
at the end of each quarter.
During the Department's last final administrative review (55 FR 5042; February 13,
1990), the Department determined the appropriate market rate indicator to be the DTF
interest rate for pre-shipment and post-shipment financing. The Department determined
that the Colombian government has moved away from the fixed-rate PROEXPO financing,
to the DTF rate which more accurately reflects interest rate fluctuations in the market.
The questionnaire response stated that exporters received fixed asset financing under
this resolution. During the review period, the average DTF rate of 28.4 percent was higher
than the benchmark rate of 25.0 percent. The questionnaire response stated that no
exporter of the subject merchandise received any loans at a rate below the DTF rate.
Therefore, we preliminarily determine that the signatories have complied with the terms
of the agreement.
(5) Duty and Tax Exemptions under Plan Vallejo
Plan Vallejo exempts exporters from import duties on imported raw materials,
intermediate products, and capital goods used to produce exported products. The
exemption of customs duties and indirect taxes on imported inputs physically
incorporated into exports is not countervailable. Exemptions on non-physically
incorporated inputs, such as imported capital goods, are contervailable when the
exemption is conditional upon exportation. Additionally, on July 22, 1988, an
operational modification was established under Resolution 2601/88. The new resolution
provides that a bank guarantee can now be provided at the time the imported goods clear
customs.
On December 15, 1986, we revised the suspension agreement to include renunciation of
duty and tax exemptions for imported capital equipment under Plan Vallejuo. As a term
of the revised suspension agreement, the Colombian government agreed to no longer
provide Plan Vallejo contracts to imported capital goods that are used in the production
of roses and other cut flowers exported to the United States. The questionnaire response
stated that none of the signatory producers and exporters received any Plan Vallejo
benefits for shipments of roses and other cut flowers to the United States during the
review period. Therefore, we preliminarily determine that the signatories have complied
with the terms of the agreement.
(6) Resolution 10
The flower exporters, on a voluntary basis, allowed the Banco de la Republica to withhold
a certain percentage of their CAT/CERT rebates earned on non-U.S. exports. The Banco de
la Republica also held all CAT/CERT rebates that would have been paid on exports of
roses and other cut flowers to the United States from January 1983, the effective date of
the suspension agreement, until November 1985, when the established rebate rate for
roses and cut flowers subject to suspension agreement was reduced to zero. PROEXPO
issued Resolution 10, effective July 23, 1986, to use these funds for the diversification
and development of flowers and vegetables for external markets; transport and control
procedures to prevent drug and narcotic traffic in exports of flowers and vegetables;
development of new markets; and payment of local and technical services required in
Colombia and abroad. The resolution requires that any funds expended under this
program be disbursed in a manner consistent with the suspension agreement.
During the period of review, the questionnaire response stated that two projects were
initiated under this program to research two fungal diseases afflicting carnations. The
research will be conducted by the Universidad Nacional and the Universidad de los Andes
and all findings will be made public. The questionnaire response stated that no exporter of
cut flowers received any expenditures from the fund. Therefore, we preliminarily
determine that exports of roses and other cut flowers to the United States did not receive
a countervailable benefit from this program.
(7) Other Programs
The questionnaire response indicated that exporters of cut flowers did not use
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the following programs during the period of review:
(a) Fund for Agricultural Financing;
(b) Fund for Industrial Financing;
(c) Benefits to Free Industrial zones;
(d) Preferential Export Insurance; and,
(e) Countertrade.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the signatories complied with
the terms of the suspension agreement during the period January 1, 1988 through
December 31, 1988.
The agreement can remain in force only as long as shipments from the signatories account
for at least 85 percent of imports of the subject merchandise into the United States. The
questionnaire response indicated that the signatories accounted for over 90 percent of
imports of this merchandise into the United States during the period of review.
Interested parties may submit written comments on these preliminary results within 30
days of the date of publication of this notice and may request disclosure and/or a hearing
within 10 days of the date of publication. Any hearing, if requested, will be held 44 days
after the date of publication or the first workday thereafter. Rebuttal briefs and rebuttals
to written comments, limited to issues in those comments, must be filed not later than 37
days after the date of publication. Any request for an administrative protective order
must be made no later than five days after the date of publication. The Department will
publish the final results of its analysis of issues raised in any such written comments or at
a hearing.
This administrative review and notice are in accordance with section 751(a)(1) of the
Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.
Dated: April 2, 1990.
Eric I. Garfinkel,
Assistant Secretary for Import Administration.
Appendix I
Company
Abaco Tulipanes de Colombia S.A.
Achalay Ltda.
Agricola Benilda Ltda.
Agricola Bojaca Ltda.
Agricola Bonanza Ltda.
Agricola De La Fontanta Y Cia Ltda.
Agricola De Los Alisos Ltda.
Agricola De Occidente
Agricola Del Monte Ltda.
Agricola El Cactus S.A.
Agricola El Jardin
Agricola El Mortino Ltda.
Agricola El Redil
Agricola Floral Ltda.
Agricola Guaictany
Agricola Guali Ltda.
Agricola La Corsaria Ltda.
Agricola La Floresta Ltda.
Agricola La Maria Ltda.
Agricola Las Cuadras Ltda.
Agricola Los Arboles
Agricola Los Gaques Ltda.
Agricola Malqui Ltda.
Agricola Papagayo Ltda.
Agro Koralia Ltda.
Agrodex Ltda.
Agroinustias De Narion Ltda.
Agromec Ltda Agromonte Ltda.
Agroindustrias De Narino Ltda.
Agromec Ltda.
Agromonte Ltda.
Agronindustrias De Narino Ltda.
Agromec Ltda.
Agromonte Ltda.
Agroindustria Del Rio Frio Ltda.
Agropecuria Cuernavaca
Agrorosas S.A.
Agrosuba Ancas Ltda.
Anna Flowers Ltda.
Arboles Azules Ltda.
Astro Ltda.
Astroflores Ltda.
Azulejos Flowers
Becerra Castellanos Y Cia
Bogota Flowers Ltda.
Canoas Ltda.
Cardinal Flowers Ltda.
Ciatex Ltda.
Cienfuegoa Ltda.
Claveles Comobianos Ltda.
Claveles De Losalpes Ltda.
Claveles De Los Alpes Ltda.
Colings Ltda.
Conbiflor
Conflores Ltda.
Crop S.A.
Cult. Del Caribe Ltda. "Florcaribe"
Cultivos Buenavista Ltda. Cultivos El Lago
Cultivos Medellin Ltda.
Cultivos Miramonte S.A.
Dalflor Ltda.
De La Pava Guevara E Hinos Ltda.
Del Tropico Ltda.
Dianticola Colombiana Ltda.
Edir Ltda.
El Antelio S.A.
El Rancho Ltda.
El Timbul Ltda.
Exportaciones Bochica S.A.
Floming Flowers Ltda.
Flora Bellisma Ltda.
Flora Intercontinental Ltda.
Floral Ltda.
Floralex Ltda.
Floramerica Florandia Herrera Camacho Y Cia
Floreales Ltda.
Florenal Ltda.
Flores Acuarela S.A
Flores Aguaclara Ltda.
Flores Aguila Ltda.
Flores Alborada S.A.
Flores Alcala Ltda.
Flores Alfaya Ltda.
Flores Andinas Ltda.
Flores Aurora Ltda.
Flores Bachue Ltda.
Flores Balu Ltda.
Flores Cajibio
Flores Catalina Ltda.
Flores Cigarral Ltda.
Flores Chibchala Ltda.
Flores Colombianas Ltda.
Flores Colon Ltda.
Flores Condor De Colombia Ltda.
Flores Corinto
Flores De Cota Ltda.
Flores De Funza S.A.
Flores De Guasca S.A.
Flores De Hacaritama
Flores De Hunza Ltda.
Flores De La Pradera Ltda.
Flores De La Sabana
Flores De La Vega Ltda. "Vegaflor"
Flores De Las Mercedes Ltda.
Flores De Los Amigos Ltda.
Flores De Los Andes
Flores De Los Arrayanes Ltda.
Flores De Nemocon Ltda.
Flores De Oriente Ltda.
Flores De Pueblo Viejo
Flores De Serrizuela S.A.
Flores De Suba Ltda.
Flores De Suesca
Flores De Tenjo
Flores De Tenjo (Ciba Geigy)
Flores De Ubate Ltda.
Flores Del Bosque
Flores Del Campo Ltda.
Flores Del Cauca
Flores Del Cielo Ltda.
Flores Del Cortino
Flores Del Gallinero Ltda.
Flores Del Lago Ltda.
Flores Del Monte Ltda.
Flores Del Pinar Ltda.
Flores Del Prado Ltda.
Flores Del Pretrero Ltda.
Flores Del Rio
Flores Del Tambo Ltda.
Flores Del Vino Ltda.
Flores Delray
Flores Depina Ltda.
Flores Dos Hectareas Ltda.
Flores Ebenezer
Flores El Chircal Ltda.
Flores El Danubio Ltda.
Flores El Lobo Ltda.
Flores El Puente Ltda.
Flores El Rosal Ltda.
Flores El Talisman
Flores El Trention Ltda.
Flores Esmeralda S.A.
Flores Estrella Ltda.
Flores Galia Ltda.
Flores Generales Ltda.
Flores Gigro
Flores Guaicata Ltda.
Flores Hana Ichi De Col.
Flores Horizonte (Flores Monte Verde)
Flores Internacionales Ltda.
Flores Juananbu Ltda.
Flores Juncalito Ltda.
Flores La Conchita
Flores La Conejera Ltda.
Flores La Estrancia Ltda.
Flores La Fragancia S.A.
Flores La Macarena
Flores La Maria Ltda.
Flores La Parcelita
Flores La Pampa Ltda.
Flores La Quinta Ltda.
Flores La Union S.A.
Flores La Valvanera Ltda.
Flores Lana Grande Ltda.
Flores Las Palmas Ltda.
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Flores Las Caicas-Davila Arbelaez Cia S.S.
Flores Los Pantamos
Flores Magara (Carlos Cabeza)
Flores Marandua Ltda.
Flores Maria Elisa Ltda.
Flores Monserrate Ltda.
Flores Moungar Ltda.
Flores Palimana
Flores Petaluma Ltda.
Flores Petaluma Ltda.
Flores Ramo Ltda.
Flores Ruizort
Flores San Carlos
Flores San Ernesto Ltda.
Flores Sagaro Ltda.
Flores Santa Fe Ltda.
Flores Santa Roa Ltda.
Flores Sausalito
Flores Selectas
Flores Sindamonoi Vod Ltda.
Flores Tairona Ltda.
Flores Tecnicas
Flores Tejas Verdes Ltda.
Flores Tenerife Ltda.
Flores Tiba Ltda.
Flores Tibati Ltda.
Flores Timana Ltda.
Flores Tocarinda Ltda.
Flores Tokay H.I.S.A.
Flores Tomine Ltda.
Flores Tropicales Ltda.
Floresa
Florex S.A.
Florexpo Ltda.
Floricola La Gaitana
Floricultores Asociados Lorena "Lorena Ltda."
Florinda Ltda.
Frutales Cicilia
Frutas Rico Ltda.
Gabriel Ronderos Duram
Garden and Flowers Ltda.
Fonzalez Quintero Silvano
Groex Ltda.
Gyorfi Istvan
Hacienda Curubital
Hacienda La Embarrada Ltda.
Happy Candy Ltda.
Happy Flowers
Hollan Flowers Ltda.
Horticultura De La Sabana
Hurtado Nejia
Industrial Agricola Ltda.
Ingro Ltda.
Inv. Cubivan Ltda.
Inv. Mejia Landucci Y Cia S.C.
Inv. Rodaz Ltda.
Internacional De Flores Ltda. "Interflores"
Invernavas
Inverpalmas Ltda.
Inverflores Ltda.
Inversiones Agricolas M.T. Ltda.
Inversiones Almer Ltda.
Inversiones Cota Ltda.
Inversiones El Bambu Ltda.
Inversiones Floracol
Inversiones Istra Ltda.
Inversiones Kluar Ltda.
Inversiones Lasser
Inversiones Marcote Ltda.
Inversiones Maria Alejandra
Inversiones Miraflores Ltda.
Inversiones Nativa Ltda.
Inversiones Patxi Ltda.
Inversiones Penas Blancas Ltda.
Inversiones Santa Rosa S.R.W. Ltda.
Inversiones Targa S.A.
Inversiones La Serena
Inversiones Santa Rita Ltda.
Iturrama S.A.
Jaramillo and Daza Ltda.
Jardines Bacata
Jardines Chuntame
Jardines De Chia Ltda.
Jardines De Colombia Ltda.
Jardines De Los Andes
Jardines Del Muna
Jardines Fredonia Ltda.
Jardines La Aurora S.S.
Jardines La Florida Ltda.
Jardines Natalia Ltda.
Jose Visente Celedonio Putman
Kingdom S.A.
La Fleurette De Colombia S.A.
La Nueva Rosa Ltda.
La Plazoleta Ltda.
Las Amalias S.A.
Las Flores Ltda.
Linda Colombia Ltda.
Lopez Cardona LLuis (Colibri Flowers)
Los Geranios Ltda.
Luma Pena Anselmo
Mac Flowers Ltda.
Manrique Fajardo Luciano
Marketing and Trade Company Ltda.
Martinez Zurbachen & Cia
Medellin Ltda.
Mejia Sendoya Y Cia Sen C.
M.G. Consultores Ltda.
Microplantas Ltda.
Monteverde Ltda.
Monte Molino
Multiflores Ltda.
Nahecha Bustos Humberto
Orquideas Acatayma Ltda.
Pelaez Arango Luis E.
Petalos De Colombia Ltda.
Pineros Putman Enrique
Pisochago Ltda.
Plantachiones Delta Ltda.
Plantas Ornamentales De Col.
Plantas S.A.
Pompones Ltda.
Productos El Rosal Ltda.
Proflores
Propagar Plantas S.A.
Puyo Tibaquira Flor H.
Rene Salananca Benavidez
Rocicler Ltda.
Roselandia Ltda.
Rosaflor Ltda.
Rosales De Colombia "Rosalco"
Rosas Colombians Ltda.
Rosas De Colombia Ltda.
Rosas De Exportacion "Rosex"
Rosas Ed Juncal Ltda.
Rosas Sabanilla
Rosas Sausalito Ltda.
Rosas Y Flores Ltda.
Rosas Y Jardines Del Tropico Ltda.
Rosas Tesalia
Royal Carnation
San Flor Y Cia, S En C.
Sanchez Hernandez Gonzalo
Sandra Patricia Rey
Sansa Flowers Ltda.
Santa Helena S.A.
Santana Flowers Ltda.
Sitco Ltda.
Sociedad Arawac S.A.
Spendid Flowers Ltda.
Sua Graciela
Sun Flowers Ltda.
Sunset Farms Ltda.
Super Fosa Ltda.
Taganga Ltda.
Tara Flowers
Tec. Agricola Ganadera Tag Ltda.
Tecniflores Ltda.
Tegeiro Repres. Internales. "Terinter"
The Beall Company
Tropiflora Company
Tuchany S.A.
Uniflor
Universal De Flores Ltda.
Universal Flowers
Velez De Monchaux E Hijos Y Cia S. En C.
Villa Diana Ltda.
[FR Doc. 90-19212 Filed 8-14-90; 8:45 am]
BILLING CODE 3510-DS-M