                              Slip Op. 99-10
               UNITED STATES COURT OF INTERNATIONAL TRADE

FLORAL TRADE COUNCIL,

          Plaintiff,

          v.

UNITED STATES,                           BEFORE: Pogue, Judge

          Defendant,
                                         Consol. Court No. 97-11-01988
          and

ASOCIACION COLOMBIANA de
EXPORTADORES de FLORES, et al.,

          Defendant-Intervenors.




 [Sustained in part; remanded in part.]


                                              Decided: January 27, 1999
 Stewart and Stewart, (Terence P. Stewart, James R. Cannon, Jr., Amy S. Dwyer,
 William A. Fennell, and Mara M. Burr) for Plaintiff.


 Frank W. Hunger, Assistant Attorney General of the United States; David M.
 Cohen, Director, Commercial Litigation Branch, Civil Division, United States
 Department of Justice; Lucius B. Lau, Attorney, Commercial Litigation Branch,
 Civil Division, United States Department of Justice; Of Counsel, Mildred E.
 Steward, Office of the Chief Counsel for Import Administration, United States
 Department of Commerce, for Defendant.

 Arnold & Porter, (Michael T. Shor and Kevin T. Traskos) for Defendant-
 Intervenors.



                                   OPINION
       Pogue, Judge: This matter is before the Court on the separate
 motions of Plaintiff, Floral Trade Council ("FTC"), and Defendant-

 Intervenors, Asociacion Colombiana de Exportadores de Flores, et
Consol. Court No. 97-11-01988                                                  Page 2


al. ("Asocoflores"), for judgment on the agency record pursuant to

U.S. CIT Rule 56.2. The parties filed separate actions challenging

various aspects of the Department of Commerce’s ("Commerce") final

results of the ninth administrative review1 of the antidumping duty

order on certain fresh cut flowers from Colombia.                         See Certain

Fresh     Cut    Flowers     From   Colombia,   62   Fed.    Reg.    53,287    (Dep’t

Commerce, Oct. 14, 1997)(final determination)("Final Results").

The actions were consolidated.

      The       Court   has    jurisdiction      pursuant      to    28     U.S.C.    §

1581(c)(1994) and 19 U.S.C. § 1516a(a)(2)(B)(iii)(1994).

      The       ninth   administrative      review   covers     a    total    of     351

Colombian       producers     and/or     exporters   of     standard      carnations,

miniature (spray) carnations, standard chrysanthemums, and pompon

chrysanthemums during the period March 1, 1995 through February 29,

1996 ("the period of review").             See Final Results at 53,288.          Given

the large number of producers and/or exporters, Commerce narrowed

its examination to the thirteen respondents accounting for the
largest     volume      of     subject     flowers   in      accordance       with     §

777A(c)(2)(B) of the Tariff Act of 1930, as amended, 19 U.S.C. §

1677f-1(c)(2)(B)(1994).2             See   Certain   Fresh     Cut     Flowers     From


      1
      The antidumping statute provides for Commerce to conduct an
administrative review of an antidumping duty order upon the
request of an interested party. See 19 U.S.C. § 1675. As a
result of the administrative proceeding, Commerce determines the
actual antidumping duty rate for the entries covered by that
period of review and establishes the duty deposit rate for future
entries. See id.
      2
     Unless otherwise indicated, all citations to the
antidumping statute are references to the provisions effective
Consol. Court No. 97-11-01988                                          Page 3


Colombia,     62    Fed.   Reg.    16,772    (Dep’t   Commerce,    Apr.    8,

1997)(preliminary results).

      FTC   challenges:      (1)   Commerce’s   decision   not    to   deduct

commissions paid to affiliated consignment agents from constructed

export price and (2) Commerce’s decision not to collect third-

country     sales   prices      from   the   respondents   in    the   review

("respondents") to determine whether third-country prices could be

used as a basis for normal value.3           See Pl.’s Mot. for J. on the

Agency R. at 2.


January 1, 1995, the effective date of the amendments to the
statute by the Uruguay Round Agreements Act ("URAA"). In
addition, unless otherwise indicated, all citations to Commerce’s
regulations are to those codified at 19 C.F.R. § 353 (April
1997).
      3
      This Court sustained Commerce’s decision to resort to
constructive value rather than use third-country prices in the
appeal of the final results for the consolidated fifth, sixth,
and seventh administrative reviews. See Asociacion Colombiana de
Exportadores de Flores, et al. v. United States, 22 CIT     ,     ,
6 F. Supp.2d 865, 901-03 (1998). In its brief, FTC offers no
legal or factual arguments to advance its position that Commerce
should have used third-country sales prices as the basis for
normal value. See Pl.’s Mem. of P. & A. in Supp. of Rule 56.2
Mot. for J. on the Agency R. at 10.    Instead, FTC merely states
that it raises the issue again in the present action to preserve
it pending the appeal of this Court’s decision in Asociacion.
See id.
     Although this Court’s decision in Asociacion applied the
pre-URAA version of the antidumping statute, the current law
codifies Commerce’s prior practice. See 19 U.S.C. §
1677b(a)(1)(B)(ii)(III)(1994)(requiring Commerce to reject third-
country prices as a basis for normal value when "the particular
market situation in such other country prevents a proper
comparison with the export price or constructed export price.").
Moreover, the factual basis supporting Commerce’s decision to
reject third-country sales has not changed since the prior
reviews. See Recommendation Memorandum Regarding Calculation of
Normal Value (Pub. Doc. 309)(Nov. 21, 1996) at 7-8. Therefore,
the Court sustains Commerce’s decision to reject third-country
sales as the basis for normal value.
Consol. Court No. 97-11-01988                                         Page 4


      Asocolfores    challenges:      (1)   Commerce’s   rejection   of    the

constructed value "profit cap" in calculating constructed value,

see Initial Br. of Def.-Intervenors in Supp. of Rule 56.2 Mot. for

J. on the Agency R. ("Asocolfores Br.") at 2; (2) Commerce’s

determination to deduct credit expenses from U.S. price but not

from constructed value, see id. at 3; (3) Commerce’s determination

to exclude antidumping surcharges from constructed export price,

see id. at 4; (4) Commerce’s decision not to include the net

monetary correction in calculating constructed value, see id. at 5;
(5) Commerce’s issuance of erroneous questionnaire instructions and

subsequent penalization of respondents for complying with such

instructions,4    see   id.     at   6;   (6)   Commerce’s   calculation   and


      4
      For purposes of the ninth administrative review, Commerce’s
questionnaire instructed respondents not to offset expenses with
interest income or other revenue in calculating indirect selling
expenses (a component of the constructed export price). Because,
as Asocolfores correctly notes, the antidumping statute and
regulations require compliance with Commerce’s instructions, the
respondents accordingly did not offset indirect selling expenses
with interest income in completing the questionnaire. See
Asocolflores Br. at 41-42 (citing 19 C.F.R. § 353.37 and 19
U.S.C. § 1677e).
     One respondent, however, Queen’s Flowers Group, noted in its
response that it believed Commerce’s instruction to treat
interest expenses as indirect selling expenses while ignoring
interest income was unfair. See id. at 41 (citing Queen’s July
19, 1996 Submission (Pub. Doc. 240) at 56-57). In its final
determination, Commerce "acknowledge[d] that the questionnaire
did not clearly reflect the Department’s practice of allowing
interest income offsets in limited circumstances[,]" but only
allowed Queen’s Flowers Group to make the adjustment, since
Queen’s raised the issue in a "timely manner[.]" Final Results at
53,294.
     Asocolflores argues that Commerce’s determination is
inconsistent with the procedural regulations and deprives
respondents of procedural due process by penalizing them for
complying with Commerce’s own express instructions. See
Asocolflores Br. at 42.
Consol. Court No. 97-11-01988                                         Page 5


application of the constructed export price profit ratio, see id.

at 7; (7) Commerce’s decision to impute a consolidated general and

administrative expense rate for all farms of the HOSA Group in

calculating    the   cost   of   production,   see   id.   at   8;   and   (8)

Commerce’s determination not to allocate any production costs to

second quality subject flowers.5         See id.


                            Standard of Review

      The   Court    will   uphold   a   Commerce    determination    in    an

administrative review unless it is "unsupported by substantial

evidence on the record, or otherwise not in accordance with law[.]"

19 U.S.C. § 1516a(b)(1)(B)(i)(1994).

      The issues presented here primarily require the Court to

determine whether Commerce’s interpretations of the antidumping


     Commerce concedes that this issue should be remanded. See
Def.’s Mem. in Partial Opp’n to Def.-Intervenors’ Mot. for J. on
the Agency R. at 47. Because the antidumping statute and
regulations require compliance with Commerce’s instructions, and
because the instructions issued in this review were inconsistent
with Commerce’s practice, the Court remands the issue directing
Commerce to: (1) reconsider this issue; (2) allow respondents to
submit information concerning the interest income offset to
indirect selling expenses in calculating constructed export
price; and (3) make adjustments, as appropriate, based upon this
information.
      5
     This Court sustained Commerce’s decision not to allocate
any costs of production to "national quality" flowers sold in the
home market for the fifth, sixth, and seventh administrative
reviews. See Asociacion, 22 CIT at     , 6 F. Supp.2d at 880-83.
In its brief, Asocolflores states, "[s]ince we are not making any
new arguments or presenting any new factual evidence to the
Court, we simply identify the issue here to preserve it for any
future appeal." Asocolflores Br. at 54. The Court sustains
Commerce’s treatment of national quality flowers in the ninth
review.
Consol. Court No. 97-11-01988                                                  Page 6


statute    are    permissible.        In   determining         whether     Commerce’s

interpretation and application of the antidumping statute is in

accordance with law, the Court applies the two-step analysis

articulated in Chevron U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 842-43 (1984), as applied and refined

by   the   Court    of     Appeals   for   the   Federal        Circuit    ("Federal

Circuit").

      The first step is to investigate a matter of law--"whether

Congress’s       purpose    and   intent   on    the    question      at    issue    is

judicially ascertainable."           Timex V.I., Inc. v. United States, 157
F.3d 879, 881 (Fed. Cir. 1998)(citing Chevron, 467 U.S. at 842-43

& n.9).    "To ascertain whether Congress had an intention on the

precise question at issue, [the Court] employ[s] the ’traditional

tools of statutory construction.’" Id. at 882 (citing Chevron, 467

U.S. at 843 n.9).          If the statute’s plain language answers the

question, "that is the end of the matter."                   Id. (citing Muwwakkil

v. Office of Personnel Management, 18 F.3d 921, 924 (Fed. Cir.
1994)).      Beyond      the   statute’s   text,       the    tools   of   statutory

construction       include     the   statute’s     legislative        history,      the

statute’s structure, and the canons of statutory construction.6

See id.

      If, after employing the first prong of Chevron, the Court



      6
     Not all rules of statutory construction rise to the level
of a canon, however. See U.S. Steel Group v. United States, 22
CIT     ,    , 998 F. Supp. 1151, 1157-58 (1998)(rejecting the
use of the maxim expressio unius est exclusio alterius to discern
Congress’s intent under Chevron step one).
Consol. Court No. 97-11-01988                                                   Page 7


determines that the statute is silent or ambiguous with respect to

the specific issue, the Court proceeds to the second step.                         See

Chevron, 467 U.S. at 843.          The second step concerns an issue of

policy.     Because Congress intended to delegate policymaking to

Commerce,    the     Court      must   defer        to   Commerce’s     reasonable

interpretation.      See Koyo Seiko Co., Ltd. v. United States, 36 F.3d

1565, 1573 (Fed. Cir. 1994).           "In determining whether Commerce’s

interpretation is reasonable, the Court considers, among other

factors,    the    express    terms    of    the    provisions    at    issue,     the

objectives    of   those     provisions[,]         and   the   objectives    of    the

antidumping scheme as a whole."             Mitsubishi Heavy Industries, Ltd.
v. United States, 22 CIT           ,        , 15 F. Supp.2d 807, 813 (1998).


                                   Discussion

      Commerce calculates an antidumping duty by comparing an

imported product’s price in the United States to its normal value

("NV")(i.e., the price of comparable merchandise in the exporting
country).    The dumping margin is the amount by which the normal

value exceeds the United States price.               See 19 U.S.C. § 1673

(1994).

      The United States price is calculated as either the "export

price" ("EP") or the "constructed export price" ("CEP").                    See 19

U.S.C. § 1677a.      Typically, Commerce uses EP when the foreign

exporter sells directly to an unrelated U.S. purchaser.                     See 19

U.S.C. § 1677a(a).      Commerce uses CEP when the foreign exporter

sells through a related party in the United States.                    See 19
Consol. Court No. 97-11-01988                                          Page 8


U.S.C. § 1677a(b).

      NV is the price of the merchandise in the producer’s home

market or its export price to countries other than the United

States.    See 19 U.S.C. § 1677b(a)(1).           Where Commerce cannot

compute the home market price, Commerce may base NV on a

constructed value ("CV"), see 19 U.S.C. § 1677b(a)(4), which is

calculated pursuant to § 1677b(e).


I.    Commerce’s Decision Not to Deduct Commissions                   Paid to
      Affiliated Consignment Agents from CEP7

      In a consignment arrangement, the exporter (the consignor)

delivers   merchandise     to   an   agent   in    the   United   States   (the

consignee) under agreement that the agent will sell the merchandise

for the account of the exporter.        See EDWARD G. HINKELMAN, DICTIONARY   OF

INTERNATIONAL TRADE 44 (1994).       The consignor retains title to the

goods sold, and the consignee sells the goods for commission,

remitting the net proceeds to the consignor.               See id.; see also

BLACK’S LAW DICTIONARY 307 (6th ed.). Here, certain Colombian exporters

were engaged in consignment arrangements during the period of

review, paying commissions to both affiliated and unaffiliated

consignees.    See Def.’s Mem. in Opp’n to Pl.’s Mot. for J. on the



      7
      This Court previously sustained Commerce’s decision not to
deduct commissions paid to related consignees in the fifth,
sixth, and seventh administrative reviews of Certain Fresh Cut
Flowers from Colombia. See Asociacion, 22 CIT at      , 6 F.
Supp.2d at 898-901. Because the wording of the applicable
statutory provision has since been amended by the URAA, and the
parties make different arguments, the Court revisits the issue
here.
Consol. Court No. 97-11-01988                                          Page 9


Agency R. ("Def.’s Mem. in Opp’n to Pl.") at 11.

      The statute provides for the deduction of certain expenses

from CEP, including commissions:

      [T]he price used to establish constructed export price
      shall also be reduced by--

      (1) the amount of any of the following expenses generally
      incurred by or for the account of the producer or
      exporter, or the affiliated seller in the United States,
      in selling     the  subject    merchandise  (or   subject
      merchandise to which value has been added)--

      (A) commissions for selling the subject merchandise in
      the United States;
      (B) expenses that result from, and bear a direct
      relationship to, the sale, such as credit expenses,
      guarantees and warranties;
      (C) any selling expenses that the seller pays on behalf
      of the purchaser; and
      (D) any selling expenses not deducted under subparagraph
      (A), (B), or (C)[.]

19 U.S.C. § 1677a(d)(1)(1994).

      For   the   unaffiliated     consignees,    Commerce    deducted     the

commissions paid by the exporters from the CEP.         See Def.’s Mem. in
Opp’n to Pl. at 11.          For the affiliated consignees, however,

Commerce explained that it did not deduct commissions paid by
exporters from the CEP because to do so would have led to "double-

counting."    See Final Results at 53,294.       Commerce argues that the

commissions    paid   to    affiliated    consignees   reimburse    them   for

expenses that Commerce already deducts as indirect selling expenses

under § 1677a(d)(1)(D).         See Def.’s Mem. in Opp’n to Pl. at 14.

Therefore,    deducting     both   the   commissions   paid   to   affiliated

consignees and indirect selling expenses would double-count the

expenses.     See id.      In contrast, double-counting does not arise
Consol. Court No. 97-11-01988                                                     Page 10


from the deduction of commissions for the unaffiliated consignees

because     the   statute        does   not   require       the     deduction     of    the

unaffiliated consignees’ U.S. selling expenses from CEP.                          See 19

U.S.C. § 1677a(d)(1).

      FTC   points    out    that       the   plain      language     of   the   amended

provision     does    not    distinguish          between       commissions      paid    to

affiliated and unaffiliated parties.                See Pl.’s Mem. of P. & A. in

Supp. of Rule 56.2 Mot. for J. on the Agency R. ("FTC Br.") at 8.

Although the statute does appear to require the expense represented

by   commissions     to     be    deducted       from    CEP    whether    or    not    the

producer/exporter and U.S. consignee are related, the statute does

not define "commission."                Where, as here, Congress’s intended

definition    of     "commission"        is   not       ascertainable      through      the

traditional tools of statutory construction, the Court will defer

to Commerce’s reasonable interpretation.                   See Koyo Seiko, 36 F.3d
at 1573.

      This Court has sustained Commerce’s practice of treating
commissions paid by the producer/exporter to a related consignee as

an   intracompany     transfer,         rather    than     as   a   true   commission

because they merely serve as reimbursements to related parties.

See Asociacion, 22 CIT at                , 6 F. Supp.2d at 900.8              Commerce’s

decision not to deduct commissions paid to affiliated consignees is

therefore reasonable to the extent that it fulfills the statutory


      8
      Although the Court’s decision in Asociacion involved pre-
URAA law, the amended statute continues not to define
"commission." Therefore, the Court’s analysis in that decision
is still applicable here.
Consol. Court No. 97-11-01988                                                 Page 11


objective of preventing double-counting.             See U.S. Steel Group v.

United   States,    22    CIT        ,        ,    15    F.   Supp.2d    892,       905

(1998)(holding that, "if because of the relatedness of the producer

and U.S. selling agent expenses represented by the commissions are

already accounted for by means of a deduction for selling expenses

nominally made under another provision of 19 U.S.C.A. § 1677a(d) .

. . , no additional commission deduction need be made.").

      FTC, however, does not dispute that the prevention of double-

counting is a reasonable application of the statute.                    See Pl.’s
Reply to Def.-Intervenors’ Rebuttal Br. at 1-2.                 FTC explains that

double-counting of the deduction will not occur because the statute

"instructs [Commerce] to calculate constructed export price first

by deducting commissions and direct selling expenses and then [by]

any selling expenses not already deducted."               FTC Br. at 8 (citing

19 U.S.C. § 1677a(d))(emphasis provided).               "To the extent that the

record demonstrates that the commissions include reimbursement for

expenses incurred by the consignee, such expenses, already adjusted
for   under   subparagraph      A,   would   not    be    adjusted      for     under

subparagraph D."        Pl.’s Reply to Def.-Intervenors’ Rebuttal at 2.

      Instead, FTC argues that Commerce’s application of the statute

violates its plain language because Commerce did not apply the

deductions of 19 U.S.C. § 1677a(d)(1) in proper sequence.                    See id.

at 2.     FTC contends that the statute sets up a hierarchy of

deductions    to   be     followed   sequentially.        See    FTC   Br.     at   8.

According     to   FTC,    "[Commerce]   cannot     properly      implement         the

statutory language unless it performs its adjustments in sequence."
Consol. Court No. 97-11-01988                                        Page 12


Pl.’s Reply to Def.-Intervenors’ Rebuttal Br. at 2.

       Neither the statute nor its legislative history, however,

explicitly requires that the deductions should be made in literal

sequence. Subparagraph (D) requires Commerce to reduce CEP by "any

selling expenses not deducted under subparagraph (A), (B), or

(C)[.]"    19 U.S.C. § 1677a(d)(1)(D).      So long as expenses are not

double-counted under subparagraph (D), Commerce may apply the

deductions in any order reasonable under the circumstances.              Here,

Commerce’s application of the statute would seemingly result in the

exact same calculation for total adjustments to CEP advocated by

FTC.      Because    Commerce’s   application   of   the   statute   neither

violates Congress’s express intent nor is unreasonable, it is in

accordance with law.

       Nevertheless, Commerce’s determination must also be supported

by substantial evidence.          FTC argues that the record does not

demonstrate that commissions paid to affiliated consignees were

reimbursements      (i.e.,   intracompany   transfers)     for   their    U.S.

selling expenses, and therefore, "[Commerce’s] failure to deduct

such commissions is unsupported by substantial evidence[.]"              Pl.’s

Reply to Def.-Intervenors’ Rebuttal Br. at 2-3.                  The record,

however, indicates that commissions paid to related consignees were

intracompany        transfers     by   definition,     since      Commerce’s

questionnaire instructs that "commissions paid to affiliates need

not be reported." See Dep’t of Commerce Questionnaire (Public Doc.

42)(May 16, 1996) at C-16.

       FTC further appears to be concerned that, to the extent that
Consol. Court No. 97-11-01988                                         Page 13


commissions paid to affiliated consignees exceed the consignees’

indirect selling expenses, Commerce fails to deduct the difference

as a commission expense to producers/exporters.           FTC’s concern is

resolved, however, by § 1677a(d)(3), a new provision under the URAA

that requires CEP to also be reduced by "the profit allocated to

the expenses described in paragraphs (1) and (2),"9 which include

indirect    selling    expenses.    19   U.S.C.   §   1677a(d)(3).      While

commissions represent expenses to the paying producers, the amount

by which the commissions exceed the selling expenses incurred by

consignees constitute profit for these consignees. By reducing CEP

by the profit allocated to the indirect selling expenses incurred

by affiliated consignees, the provision assures that CEP will not

be inflated to the extent that the commissions paid to affiliated

consignees    exceed    their   expenses.    In   this   regard,     Congress

instructed Commerce to calculate a "statutory profit" as opposed to

an "accounting profit."         At oral argument on January 12, 1999,

Commerce demonstrated that this adjustment was made for commissions

paid to related consignees that exceeded the consignees’ actual

expenses.    See Commerce Calculation Printout (Prop. Doc. 285)(Oct.

6, 1997) at line 661.

      Therefore, the Court sustains Commerce’s decision not to

deduct commissions paid to related consignees from CEP.


      9
     The expenses in paragraph (1) refer to commissions, direct
selling expenses, selling expenses paid by the seller on behalf
of the purchaser, and indirect selling expenses. See 19 U.S.C. §
1677a(d)(1). Paragraph (2) refers to "the cost of any further
manufacture or assembly" in the United States. 19 U.S.C. §
1677a(d)(2).
Consol. Court No. 97-11-01988                                       Page 14


II.   Commerce’s Rejection of the Constructed Value "Profit Cap"


      A.   Background

      Profit is a component in the calculation of CV.         See 19 U.S.C.

§ 1677b(e)(2)(1994).      Under the current statute, as amended by the

URAA, the preferred method for measuring profit is to add to CV

"the actual amounts incurred and realized by the specific exporter

or producer being examined in the investigation or review . . . for

profits, in connection with the production and sale of a foreign

like product, in the ordinary course of trade, for consumption in

the foreign country[.]"         19 U.S.C. § 1677b(e)(2)(A).

      If data are not available with respect to § 1677e(2)(A), then

Commerce may select one of the following three alternative methods

for calculating profit:

      (i) the actual amounts incurred and realized by the
      specific exporter or producer being examined in the
      investigation or review . . . for profits, in connection
      with the production and sale, for consumption in the
      foreign country, of merchandise that is in the same
      general category of products as the subject merchandise,

      (ii) the weighted average of the actual amounts incurred
      and realized by exporters or producers that are subject
      to the investigation or review (other than the exporter
      or producer described in clause (i)) . . . for profits,
      in connection with the production and sale of a foreign
      like product, in the ordinary course of trade, for
      consumption in the foreign country, or

      (iii) the amounts incurred and realized . . . for
      profits, based on any other reasonable method, except
      that the amount allowed for profit may not exceed the
      amount normally realized by exporters or producers (other
      than the exporter or producer described in clause (i)) in
      connection with the sale, for consumption in the foreign
      country, of merchandise that is in the same general
      category of products as the subject merchandise[.]
Consol. Court No. 97-11-01988                                                    Page 15


19 U.S.C. § 1677b(e)(2)(B)(emphasis provided); see also Statement

of Administrative Action, H.R. Doc. No. 103-316, 103rd Cong., 2nd

Sess. (1994), reprinted in URUGUAY ROUND AGREEMENTS ACT, LEGISLATIVE

HISTORY,    Vol.    VI,    at   840     ("SAA")(stating         that    "new     section

[1677b(e)(2)(B)] does not establish a hierarchy or preference among

these      alternative      methods").10         The    underlined        portion      of

alternative (iii) is known as the "profit cap."                    See SAA at 840.

      Commerce rejected alternative (ii) because there was no data

concerning foreign like product sold in the "ordinary course of

trade" as required by the provision.                  See Def.’s Mem. in Partial
Opp’n to Def.-Intervenors’ Mot. for J. on the Agency R. at 26-27;

see also 19 U.S.C. § 1677b(e)(2)(B)(ii).                 The "ordinary course of

trade" test requires, among other conditions, that the sales are

profitable (i.e., not made at below-cost prices).                      See 19 U.S.C. §

1677(15)(A)(1994); see also SAA at 840.                    Unlike the preferred

methodology and alternative (ii), however, alternatives (i) and

(iii) do not require the amount for profit to be calculated based
on home country sales of a foreign like product in the ordinary

course of trade.           See 19 U.S.C. §§ 1677b(e)(2)(B)(i) & (iii).

Instead,     alternatives       (i)     and   (iii)    simply    require       that    the

calculation        for    profit   be    based   on     home     country       sales   of


      10
      The Statement of Administrative Action represents "an
authoritative expression by the Administration concerning its
views regarding the interpretation and application of the Uruguay
Round agreements . . . ." SAA at 656. "[I]t is the expectation
of the Congress that future Administrations will observe and
apply the interpretations and commitments set out in this
Statement." Id. (quoted in Delverde, SrL v. United States, 21
CIT    ,    , 989 F. Supp. 218, 229-30 n.18 (1997)).
Consol. Court No. 97-11-01988                                           Page 16


"merchandise in the same general category of products as the

subject merchandise."       Id.

       In calculating profit for CV, Commerce selected alternative

(iii) and applied it on the basis of "the facts available."                  See

Final Results at 53,302 (citing SAA at 841).              Commerce explained

that it interprets CV as requiring a positive amount for profit.

See id. at 53,301-302.          Because home market sales of the same

general category of merchandise as flowers were made at below-cost

prices, Commerce reasoned it could not calculate a positive profit

cap.     See id.   Where a positive profit cap cannot be measured,

Commerce     interpreted    the   SAA     as   allowing     it   to   disregard

alternative (i) and the alternative (iii) profit cap and apply

alternative (iii) on the basis of "the facts available."               See id.

at 53,302 (citing SAA at 841).       As "the facts available," Commerce

assigned a profit rate of five percent (of the sum of general

expenses and cost), which it obtained from Compania Nacional de

Chocolates S.A., a Colombian producer of chocolate, coffee, and
dairy products.     See id. at 53,301.

       Asocolflores argues that Commerce’s ruling that the profit cap

contained in alternative (iii) does not apply is contrary to the

statute’s intent, and thus, must be reversed under the first prong

of     Chevron.    See     Asocolflores    Br.   at   17.        According    to

Asocolflores, the profit cap is mandatory, requiring "that the

amount allowed for profit may not exceed the amount normally

realized by exporters or producers . . . in connection with the

sale, for consumption in the foreign country, of merchandise that
Consol. Court No. 97-11-01988                                            Page 17


is   in    the   same   general   category    of   products   as   the   subject

merchandise[.]"         See    id.     at    20    (citing    19    U.S.C.     §

1677b(e)(2)(B)(iii)).

      Asocolflores demonstrates that numerous respondents made sales

in Colombia of "merchandise that is in the same general category of

product as the subject merchandise,"11 and neither Commerce nor FTC

dispute this claim.           Moreover, all such producers indicated in

their questionnaires that the home market sales of other export

quality flowers were made below-cost. See Asocolfores Br. at 18-19
(and citations at n. 18).            Therefore, Asocolflores contends, the

profit amount normally realized by producers for sales in Colombia

of merchandise in the same general category of products as the

subject merchandise is zero.           See id. at 20.
      B.    Analysis

      This Court must determine whether Commerce’s decision to

reject the profit cap during the period of review is in accordance


      11
      The flowers subject to the current review are carnations,
miniature carnations, pompons, and mums. Asocolflores
demonstrates that numerous Colombian producers made sales in
Colombia of export quality flowers other than those subject to
the antidumping order, including roses, alstroemeria, gypsophia,
gerbera, and statice, among others. See Asocolflores Br. at 18-
19 (citing, e.g., Inverpalmas July 11, 1996 Response (Conf. Doc.
60) at 55; Manjui July 11, 1996 Response (Conf. Doc. 68) at 50-
51; Flores de Suba July 12, 1996 Response (Conf. Doc. 99) at D-55
to D-56; Flores de la Sabana July 12, 1996 Response (Conf. Doc.
87) Sec. D at 39; Agricola Bonanza July 11, 1996 Response (Conf.
Doc. 41) at 51-52; Industrial Agricola Aug. 15, 1996 Response
(Conf. Doc. 149) Sec. D, Field 10.0. Because alstroemeria,
gypsophila, and gerbera were within the scope of the original
antidumping order, see Certain Fresh Cut Flowers From Colombia,
52 Fed. Reg. 6,842, 6,843 (Dep’t Commerce Mar. 5, 1987)(final
determination), they are in the "same general category of
products as the subject merchandise" in the ninth review.
Consol. Court No. 97-11-01988                                        Page 18


with law.      The plain language of alternative (iii) indicates that

the profit cap is a mandatory requirement of that provision.

Again, that section states that Commerce will add to CV "the

amounts . . . realized . . . for profits, based on any other

reasonable method, except that the amount allowed for profit may

not exceed the amount normally realized by . . . producers" in

connection with home market sales of "merchandise that is in the

same general category of products as the subject merchandise."              19

U.S.C. § 1677b(e)(2)(B)(iii).         Commerce, however, justified its

rejection of the profit cap by reference to language in the SAA,

which states,

      The Administration also recognizes that where, due to the
      absence of data, Commerce cannot determine amounts for
      profit under alternatives (1) and (2) or a "profit cap"
      under alternative (3), it might have to apply alternative
      (3) on the basis of "the facts available." This ensures
      that Commerce can use alternative (3) when it cannot
      calculate the profit normally realized by other companies
      on sales of the same general category of products.

SAA at 841.

      The question of whether Commerce properly rejected the profit

cap   hinges    on   Commerce’s   determination   that    the    statute    is

ambiguous as to whether it requires a positive amount for profit.

If    the   language   of   §   1677b(e)(2)(B)(iii)--in    light     of    its

legislative history, structure, and the canons of construction--is

ambiguous, Commerce may reasonably interpret it as requiring a

positive profit amount for CV.         Commerce could then permissibly

reject the profit cap and resort to the facts available because it

could not calculate a positive amount for profit.               If, however,
Consol. Court No. 97-11-01988                                            Page 19


Congress intended that alternative (iii) would not require a

positive amount for profit, then Commerce’s rejection of the profit

cap is impermissible.

      The SAA explicitly states that Commerce may resort to "the

facts available" under alternative (iii) "due to the absence of

data."   Id.    If Congress intended that the actual amount of profit

be zero where all sales are made below cost, then this is not a

situation where data is absent because Asocolflores has pointed to

undisputed     record    evidence    indicating      that   numerous   Colombian

producers made home market, below-cost sales of flowers in the same

general category as the subject flowers. Commerce would then apply

the profit cap as demonstrated by Asocolflores, using a profit rate

of zero for the below cost sales of export quality flowers.

      Therefore, the precise question before the Court is whether

Commerce’s determination that alternative (iii) of 19 U.S.C. §

1677b(e)(2)(B) may require a positive amount for profit is in

accordance with law.       In reviewing Commerce’s interpretation, the

Court employs the two-step analysis of Chevron.
      Under the first prong of Chevron, the Court asks whether

Congress’s     purpose    and    intent   on   the    question   at    issue   is

judicially ascertainable.          See Timex, 157 F.3d at 881.         Commerce

based its interpretation of a positive profit amount requirement on

language from the SAA.          Commerce explained,

      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
      839] states: "Because constructed value serves as a proxy
      for a sales price, and because a fair sales price would
Consol. Court No. 97-11-01988                                              Page 20


       recover SG&A expenses and would include an element of
       profit, constructed value must include an amount for SG&A
       expenses and for profit."

Final Results at 53,301 (citing SAA at 839).              Although the above

statement could possibly be interpreted in isolation as requiring

a positive amount for profit, the Court is not persuaded by

Commerce’s reliance on it alone in light of the statute’s language,

legislative history, and structure.              See United States v. Taylor,

487    U.S.   326,     344-46       (1988)(concurring   opinion     of     Justice

Scalia)(stating that reliance upon an isolated excerpt from a

statute’s     legislative        history    is   indeterminate     and     result-

oriented). The Court affords the plain language of the statute the

most weight.        See Timex, 157 F.3d at 882.       If the provision’s text

does not resolve the issue, the Court conducts a more thorough

examination of the statute’s legislative history and structure,

employing     the    canons    of    statutory   construction,    to     determine

whether Congress’s intent is otherwise clearly discernible.                     See

id.
       1.   The Statute’s Language

       Although the text of § 1677b(e)(2)(B)(iii) is not explicit as

to whether it requires a positive amount for profit in CV, its

language impliedly contradicts such a conclusion.             Unlike both the

preferred methodology and alternative (ii), alternative (iii) does

not require that the sales from which profit is calculated be in

"the    ordinary        course       of    trade."      See   19       U.S.C.     §

1677b(e)(2)(B)(iii).          The "ordinary course of trade" test requires

that the sales are profitable (i.e., not made at below cost
Consol. Court No. 97-11-01988                                      Page 21


prices).12    See 19 U.S.C. § 1677(15)(A).     "It is well established

that where Congress has included specific language in one section

of a statute but has omitted it from another, related section of

the same Act, it is generally presumed that Congress intended the

omission."     Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray

Portland Cement v. United States, 13 F.3d 398, 401 (Fed. Cir.

1994).      That Congress specifically required the sales for the

preferred methodology and alternative (ii) to be profitable, but

did   not    require   alternative   (iii)   sales   to   be   profitable,

undermines Commerce’s conclusion that the amount allowed for profit

in alternative (iii) must be positive.

      Statements in the SAA add support to the conclusion that

Congress did not intend to require alternative (iii) sales to be

profitable.     After discussing alternative (iii), the SAA states

that, "the Administration does not intend that Commerce would

engage in an analysis of whether sales in the same general category

are above-cost or otherwise in the ordinary course of trade."          SAA



      12
      Although the ordinary course of trade test requires more
than that the sales be profitable, Congress clearly was cognizant
of this condition when amending the CV profit calculation because
Congress amended the definition of "ordinary course of trade"
under the URAA to specifically exclude below cost sales. See 19
U.S.C. § 1677(15)(1994)(referencing 19 U.S.C. § 1677b(b)(1)
(1994)); see also SAA at 834 ("Section 222(h) of the bill amends
section [1677(15)] to specify additional types of transactions
that Commerce may consider to be outside the ordinary course of
trade, including: (1) sales disregarded as being below-cost[.]").
Moreover, in discussing alternative (ii) of the CV profit
calculation, the SAA states, "although it relies on the sales
experience of other companies, this alternative requires the use
of sales in the ordinary course of trade, i.e., profitable
sales." SAA at 840.
Consol. Court No. 97-11-01988                                                 Page 22


at 841.    Alternative (iii) bases its calculation on "sales in the

same general category;" thus, Congress intentionally permitted

sales serving as alternative (iii)’s basis for calculation to be

below   cost.     Moreover,      the    SAA    discussion      of   §     1677b(e)(2)

indicates that Congress was aware that where sales are below cost,

profit is zero.     See SAA at 839 ("Moreover, Commerce has used an

average profit rate, which includes below-cost sales for which the

profit is zero.")(emphasis provided).                     That Congress did not

require    alternative    (iii)     sales      to    be    profitable      undermines

Commerce’s    conclusion    that       the    amount      allowed   for    profit    in

alternative (iii) must be positive.
      2.   Legislative History

      A further look into the legislative history adds support to

Asocolflores’ position.         The URAA amendments significantly changed

the statute’s calculation of CV.              The previous provision included

a minimum profit amount of eight percent of the sum of the general

expenses and cost.     See 19 U.S.C. § 1677b(e)(1)(B)(ii)(1988).                    The
URAA amendments eliminated the minimum profit amount, introducing

the preferred methodology and the three alternatives as the bases

for profit calculation.         The House Report to the URAA states that

the CV calculation was "amended to reflect more specifically the

obligations of the Agreement[,]" referring to the Agreement on

Implementation of Article VI of the General Agreement on Tariffs

and Trade 1994 (Antidumping)("Agreement"). H. Rep. No. 103-826(I),

103rd Cong., 2nd Sess. at 95 (1994).                Indeed, the language of the

amended provision, § 1677b(e)(2) closely mirrors the language of
Consol. Court No. 97-11-01988                                              Page 23


Article 2.2.2 of the Agreement.13

      During the negotiations that provided the foundation for the

Agreement’s CV calculation, "[t]he focus of the debate was whether

statutory       minimums      for     profit       and   general    selling     and

administrative expenses, such as those employed by the United

States, were consistent with the Agreement or whether perhaps

actual data for expenses and profit should be explicitly required

by the Code provisions."             THE GATT URUGUAY ROUND: A NEGOTIATING HISTORY
Vol. II at 1554 (Terence P. Stewart ed., 1993).               Korea, Hong Kong,

Singapore,       Japan,     and     the   Nordic    countries,     among   others,

"expressed the position that the general expenses and profit used

for   purposes     of     calculating     the   constructed   value    should    be


      13
           Article 2.2.2 of the Agreement provides,

      [T]he amounts for administrative, selling and general
      costs and for profits shall be based on actual data
      pertaining to production and sales in the ordinary
      course of trade of the like product by the exporter or
      producer under investigation. When such amounts cannot
      be determined on this basis, the amounts may be
      determined on the basis of:

      (i) the actual amounts incurred and realized by the
      exporter or producer in question in respect of
      production and sales in the domestic market of the
      country of origin of the same general category of
      products;

      (ii) the weighted average of the actual amounts incurred and
      realized by other exporters or producers subject to
      investigation in respect of production and sales of the like
      product in the domestic market of the country of origin;

      (iii) any other reasonable method, provided that the amount
      for profit so established shall not exceed the profit
      normally realized by other exporters or producers on sales
      of products of the same general category in the domestic
      market of the country of origin.
Consol. Court No. 97-11-01988                                            Page 24


determined on the basis of the company’s actual data in all cases

where it is possible."        Id. at 1557-58.

      The final version of the Agreement did not include a minimum

profit     figure,   and    therefore,        to   specifically   reflect    the

obligations of the Agreement, Congress eliminated the minimum

profit     requirement     from   its   own    statute.    See    19   U.S.C.   §

1677b(e)(2).    Commerce maintains that alternative (iii) requires a

positive profit amount in CV--even where actual data indicate below

cost sales in the home market of merchandise that is in the same

general category of products as the subject merchandise.                        To

require a positive amount for profit, in essence, would still

enforce a minimum.       Commerce’s interpretation, therefore, violates

the spirit of Congress’s intention to eliminate a profit minimum

for CV in favor of actual data to conform with the Agreement.
      3.    The Statute’s Structure

      Finally, the Court examines the statute’s structure.               Again,

alternative (iii) requires that Commerce add to CV "the amounts
incurred and realized for selling, general, and administrative

expenses, and for profits, based on any other reasonable method,

except that the amount allowed for profit may not exceed the amount

normally realized[.]" 19 U.S.C. § 1677b(e)(2)(B)(iii)(emphasis

provided).

      The antidumping statute contains numerous provisions requiring

Commerce to adjust for the "amount" of various expenses.                    See,

e.g., 19 U.S.C. §§ 1677a(c) & (d), 1677b(a)(6) & (7)(B).               When the

"amount" of such expenses is zero or negative, Commerce makes a
Consol. Court No. 97-11-01988                                 Page 25


zero or negative adjustment.14     The Court presumes that the same

words used twice in the same act have the same meaning.      See ICC

Industries, Inc. v. United States, 812 F.2d 694, 700 (Fed. Cir.

1987).     Therefore, the requirement of a positive amount for profit

in § 1677b(e)(2)(B)(iii) is presumptively negated where the record

indicates that profitable sales do not exist.

      Moreover, Commerce’s treatment of profit is inconsistent with

respect to the calculations of CV and CEP.    To calculate the amount

of profit to be deducted from CEP pursuant to § 1677a(d)(3),

Commerce must calculate "total actual profit."       See 19 U.S.C. §
1677a(f)(2)(D).      For the current review, Commerce interpreted

"total actual profit" to include profits on home market sales and

U.S. market sales. See Memorandum: Calculation Methodology for CEP

Profit in the Ninth Antidumping Administrative Review of Certain

Fresh Cut Flowers from Colombia (Pub. Doc. 438)(Mar. 20, 1997) at

1.   In addition, Commerce addressed whether non-profitable home

market sales would be used as the basis for home market profit in
calculating "total actual profit" pursuant to § 1677a(f)(2)(D).

See id. at 2.     Commerce concluded that "there is no provision in

the statute for disregarding sales below cost in this context, and

doing so would conflict with the statutory requirement to use


      14
      For example, the "amount" of credit expenses can be
negative when the customer prepays. Commerce then reduces the
U.S. price by a negative amount, thereby increasing the price.
See 19 U.S.C. § 1677a(d)(1)(B); see also Silicon Metal from
Brazil, 62 Fed. Reg. 1970, 1977-78 (Jan. 14, 1997); Industrial
Nitrocellulose from Brazil, 55 Fed. Reg. 23,120, 23,122 (June 6,
1990)(stating that, where the customer prepays, the "credit
expense result[s] in a negative amount").
Consol. Court No. 97-11-01988                                 Page 26


’actual profit.’" Id.       Thus, for purposes of calculating "total

actual profit," Commerce recognizes that the actual profit of below

cost sales in the home market is zero.

      Commerce’s incongruous treatment of home market profit for CV

and CEP is inconsistent with Congress’s intent. As noted, there is

a presumption that the same words used twice in the same act have

the same meaning.     ICC Industries, 812 F.2d at    .   To interpret

the actual profit incurred for below cost sales in the home market

for purposes of CEP to be zero, while denying that the profit

"amount normally realized" can be zero for purposes of the CV

profit cap in alternative (iii), violates the presumption that home

market profit will have the same meaning for both sections.

      Moreover, § 1677b(a) states that, "[in] determining under this

title whether subject merchandise is being, or is likely to be,

sold at less than fair value, a fair comparison shall be made

between the export price or constructed export price and normal

value."    19 U.S.C. § 1677b(a).   It seems hardly fair for Commerce

to interpret actual profits of below cost sales in the home market

to be zero for purposes of CEP while denying that the same actual

profit may be zero for purposes of CV.        Such an interpretation

appears inconsistent with Congress’s specific intent to make a fair

comparison between the home market price and the export price.
      C.   Conclusion

      Commerce’s determination that 19 U.S.C. § 1677b(e)(2)(B)(iii)

may reasonably be interpreted to require a positive amount for

profit is inconsistent with Congress’s intent, and therefore, not
Consol. Court No. 97-11-01988                                    Page 27


in accordance with law.         The Court recognizes that Commerce is to

be accorded substantial deference in interpreting the antidumping

laws.    See Torrington Co. v. United States, 68 F.3d 1347, 1351

(Fed. Cir. 1995)(citing Daewoo Elecs. Co. v. Int’l Union, 6 F.3d

1511, 1516 (Fed. Cir. 1993), cert. denied, 512 U.S. 1204 (1994)).

Moreover, the Court acknowledges the SAA statement upon which

Commerce relied in interpreting the CV provision as mandating a

positive amount for profit.        See SAA at 839 ("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.").

      Here, however, upon examination of the statute’s language,

legislative history, and structure, it is clear that Congress did

not intend 19 U.S.C. § 1677b(e)(2)(B)(iii) to require a positive

amount for profit where all available data demonstrate that sales

in the same general category were made at below cost.            To the

contrary, the Chevron step one analysis indicates that: 1) Congress
intended to eliminate the profit minimum from the CV calculation in

favor of actual amounts; 2) Congress intended that where sales are

not made in the ordinary course of trade, they are not profitable;

3) Congress understood that where sales are not profitable, the

actual amount of profit is zero; and 4) Congress intended that a

fair comparison be made between the home market and U.S. prices.

While the CV provision may presume a positive amount for profit, it

is clear that new URAA provision 19 U.S.C. § 1677b(e)(2)(B)(iii)
Consol. Court No. 97-11-01988                                                     Page 28


does not mandate the creation of a positive amount where all

available evidence indicate non-profitable sales.

       The record indicates that numerous Colombian producers made

home market sales of the same general category of merchandise at

below cost prices.         Therefore, pursuant to § 1677b(e)(2)(B)(iii),

the profit "normally realized" is zero, and zero is thus the profit

cap.    The Court remands the matter to Commerce for an application

of the statute consistent with this standard.


III. Commerce’s Treatment of Imputed Credit Expense

       Credit expenses are the costs of financing sales accounts

receivables.       Imputed credit expenses, therefore, represent the

amounts Commerce attributes to interest expenses incurred between

shipment date and payment date.                    See Koenig & Bauer-Albert AG v.

United States, 22 CIT                 ,      , 15 F. Supp.2d 834, 841 (1998).

       Asocolflores       argues          that,    because    Commerce   included     all

interest expenses in CV, while subtracting the imputed cost of

credit    from   the   EP       and       CEP,    Commerce    violated   the   statutory

requirement of a fair comparison.                       See Asocolflores Br. at 29
(citing    19    U.S.C.     §    1677b(a)         and   the   Agreement,   Art.    2.4).

Asocolflores maintains that, "unless the statute expressly provides

otherwise, if the export price is adjusted for an item of expense,

normal value must also be adjusted for that item of expense."                         Id.

Therefore, according to Asocolflores,

       To comply with the statute’s requirement of a fair
       comparison, Commerce must either (i) exclude from CV that
       portion of actual financial expenses attributable to
Consol. Court No. 97-11-01988                                Page 29


      sales (by subtracting from net financial expenses an
      amount determined by multiplying net financial expenses
      by the ratio of accounts receivable over total assets, as
      was its practice prior to the URAA), or (ii) subtract an
      amount for imputed credit from CV, as a circumstances of
      sale    adjustment    pursuant    to    19    U.S.C.    §
      1677b(a)(6)(C)(iii), as it has done in more recent cases.

Id. at 32.

      Commerce specifically stated in the Final Results, however,

that "[a]ny differences in credit expense between the U.S. and

foreign market are taken into account as a circumstance of sale

adjustment[.]" Final Results at 53,300. The statute requires that

constructed value be "increased or decreased by the amount of any

difference . . . between the [U.S. Price] and [CV] . . . that is

established to the satisfaction of the administering authority to

be wholly or partly due to . . . differences in the circumstances

of sale."    19 U.S.C. § 1677b(a)(6)(C).   This Court has previously

held that Commerce’s treatment of imputed interest expenses as a

circumstance of sale is in accordance with law.        See Koenig &
Bauer-Albert, 22 CIT at         , 15 F. Supp.2d at 842.   Therefore,
Commerce’s method for accounting for differences in credit expense

treatment between CV and EP (and CEP) is in accordance with the

statute’s fair comparison requirement.      The Court is unable to

discern from the record, however, whether Commerce in fact did

account for differences in credit expenses as a circumstance of

sale.15



      15
      At oral argument on January 12, 1999, counsel for Commerce
cited certain adjustments to EP, but nevertheless was unable to
confirm that the appropriate adjustments were made.
Consol. Court No. 97-11-01988                                 Page 30


      Asocolflores further contends that Commerce failed to exclude

credit expenses associated with sales of subject flowers to the

United States and third countries from CV.    See Reply Br. of Def.-

Intervenors in Supp. of Mot. for J. on the Agency R. ("Asocolflores

Reply Br.") at 10.         Asocolflores points to the questionnaire

Commerce sent to respondents, which requests "total financial

expenses . . . incurred in connection with the production and sale

of all products."     See Asocolflores Br. at 29-30 (citing Dep’t of

Commerce Questionnaire (Pub. Doc. 42)(May 16, 1996) at D-39).     The

statute requires that CV only include those selling, general, and

administrative ("SG&A") expenses incurred "in connection with the

production and sale of a foreign like product . . . for consumption
in the foreign country[.]" 19 U.S.C. § 1677b(e)(2)(A)(emphasis

provided).    Therefore, to the extent that Commerce includes credit

expenses in connection with United States and third market sales in

SG&A, that calculation would not be in accordance with law.

      Commerce counters, however, that it did not include credit
expenses to all markets in the CV calculation, but properly limited

such expenses to home market consumption.       See Def.’s Mem. in

Partial Opp’n to Def.-Intervenors’ Mot. for J. on the Agency R. at

40.   According to Commerce, it treats credit expenses as a type of

"selling expense" for purposes of SG&A.      See id. at 39.   In the

Preliminary Results, Commerce explained that, "[r]egarding selling

expenses, all respondents reporting sales of export quality flowers

in the home market stated they had no selling expenses in that

market.      Therefore, as facts otherwise available, we did not
Consol. Court No. 97-11-01988                                        Page 31


include selling expenses for those respondents that had no home

market sales."      Certain Fresh Cut Flowers From Colombia, 62 Fed.

Reg. 16,772, 16,777 (Dep’t Commerce April 8, 1997)(preliminary

results).     Thus, according to Commerce, because it did not include

selling expenses in the calculation of SG&A, Commerce did not

include credit expenses to all markets in SG&A.        See Def.’s Mem. in

Partial Opp’n to Def.-Intervenors Mot. for J. on the Agency R. at

39-40.

      "The orderly functioning of the process of review[, however,]

requires that the grounds upon which the administrative agency

acted be clearly disclosed and adequately sustained."                SEC v.
Chenery Corp., 318 U.S. 80, 94 (1943).         Commerce does not cite to

record evidence confirming that it indeed accounted for differences

in CV and EP (and CEP) as a circumstance of sale and treated credit

expenses as "selling expenses" for purposes of SG&A.             The Court

requires a more detailed account with citations to record evidence

to sustain Commerce’s arguments.         Therefore, the Court remands the
matter to Commerce to provide a more detailed explanation of (1)

whether it accounted for differences in credit expenses as a

circumstance of sale and (2) its treatment of credit expenses to

United States and third markets for the purpose of CV.


IV.   Commerce’s Decision to Exclude Antidumping Surcharges Paid to
      Unrelated Consignees from CEP

      Colombian producers sell most of their flowers in the United

States   on   a   consignment   basis.     Following   the   entry   of   the
Consol. Court No. 97-11-01988                                              Page 32


antidumping duty order in 1987, numerous consignees of subject

flowers from Colombia began a practice of raising their United

States prices by a surcharge to cover the antidumping duties.

Asocolflores explains that such importers include an additional

line item on their invoices that they refer to as an antidumping

duty surcharge, "so that they can pay to Customs the amounts of

estimated antidumping duty deposits and any actual antidumping duty

assessments."       See Asocolflores Br. at 33 (citing, e.g., Maxima

July 12, 1996 Response (Pub. Doc. 78) at 3, 47).

      During the period of review, Commerce decided to deduct the

antidumping     duty   surcharge   from    the    United    States       price    in

calculating CEP for unaffiliated consignees.           See Final Results at

53,293.        Commerce      explained    that,     where        the    Colombian

producer/exporter and consignee are not related,

      the payment to the consignment reseller for [antidumping]
      reserve    surcharges   does    not   accrue    to   [the
      producer/exporter].    Therefore, we have taken as our
      starting price the price charged by the unaffiliated
      consignment seller net of the [antidumping] reserve
      surcharge.     This differs from our treatment of
      [antidumping] surcharges paid to affiliated consignment
      sellers, where the [antidumping] surcharge can be said to
      accrue to the affiliated producer/exporter.

Id.    Thus,    Commerce     interprets   the    statute    as    requiring      the

inclusion      of    antidumping    surcharges       in     CEP        where     the

producer/exporter      and   consignee    are    unrelated.       In    reviewing

Commerce’s interpretation, the Court employs the two-step analysis

of Chevron.

      The statute provides that,

      The term "constructed export price" means the price at
Consol. Court No. 97-11-01988                                            Page 33


      which the subject merchandise is first sold . . . in the
      United States . . . by or for the account of the producer
      or exporter of such merchandise or by a seller affiliated
      with the producer or exporter, to a purchaser not
      affiliated with the producer or exporter, as adjusted
      under subsections (c) and (d).

19 U.S.C. § 1677a(b).

      Commerce does not argue that antidumping surcharges are a cost

to be adjusted pursuant to either subsection (c) or (d) of § 1677a.

See Def.’s Mem. in Partial Opp’n to Def.-Intervenors’ Mot. for J.

on the Agency R. at 42.         Rather, Commerce argues that it deducts

antidumping surcharges charged by unaffiliated consignees because

such charges are not a component of the "starting price" defined in

§   1677a(b).     See   id.      Commerce    predicates     its   argument    on

Commerce’s finding that, in the case of an unaffiliated consignee,

the   antidumping    surcharge    "does     not   accrue"   to    the   producer

exporter.    See id. at 41 (citing Final Results at 53,293). Because

the producer/exporter "did not receive or control the funds which

comprised the [antidumping] reserve surcharge," Commerce argues,

"it is apparent that the surcharge is not part of ’the price . . .
at which the subject merchandise is first sold . . . by or for the

account of the producer or exporter . . . .’" Id. (citing 19 U.S.C.

§ 1677a(b)).

      The plain language of § 1677a(b) does not expressly require

that the components of the "price at which the subject merchandise

is first sold . . . in the United States" accrue to the producer.

Commerce appears to argue that the "for the account of the producer

or exporter" phrase expresses the requirement.                    See id.     In
Consol. Court No. 97-11-01988                                               Page 34


rebuttal, Asocolflores contends that,

      The condition ’for the account of the producer’ modifies
      the verb ’sold,’ not the noun ’price,’ and the
      unaffiliated consignee plainly sold the flowers ’for the
      account of the producer.’     Indeed, in a consignment
      transaction, the consignee does not ever take title to
      the flowers, and thus has nothing to sell for its own
      account. Rather, the unaffiliated consignee acts as [the
      producer’s] agent.

Asocolflores Reply Br. at 14-15.            In the context of a consignment

arrangement, the "for the account of" language is not so ambiguous

as   to   support       Commerce’s     conclusion   that   it    may   reasonably

interpret the statute as requiring all price components to accrue

to the producer/exporter to be deemed elements of the starting

price.

      Moreover, Commerce’s accrual requirement is inconsistent with

the provision’s language as a whole.                Section 1677a enumerates

numerous expenses, included in the starting price, that do not

accrue    to    the     producer,    including    international    air     freight,

Customs’ clearance fees, selling expenses, and other charges.

Congress specifically required that these expenses be deducted from

CEP in subsections (c)(2) and subsection (d).                   See 19 U.S.C. §
1677a(c)(2)-(d).          Again, as these expenses comprise part of the

starting       price,     they   are   included     in   the    starting     price.

Therefore, if, as Commerce contends, Congress intended to restrict

the CEP starting price to components of that price that actually

accrue to the producer, the adjustments provided for in subsections

(c)(2) and (d) would be superfluous.                 The canons of statutory

construction provide that "[a] statute should be construed so that
Consol. Court No. 97-11-01988                                               Page 35


effect is given to all its provisions, so that no part will be

inoperative or superfluous, void or insignificant[.]" SUTHERLAND STAT

CONST   § 46.06 (5th ed. 1992).           Commerce’s interpretation of the

provision would render its subsections superfluous; therefore, the

Court concludes that Commerce’s interpretation is contrary to

Congress’s intent.

        Finally, the SAA provides that, "constructed export price will

be calculated by reducing the price of the first sale to an

unaffiliated customer in the United States by the amount of the

following expenses[.]" SAA at 823.               The price of the first sale in

the United States includes the antidumping surcharge, and the

surcharge      is   not   listed    as     one    of   the    adjusted    expenses.

Therefore, the legislative history indicates that the CEP should

include the antidumping surcharge.

        The   statute’s   language       and   legislative     history,   examined

according to the accepted canons of construction, indicate that

Congress intended to include antidumping surcharges in the starting

price     whether    or    not     the     consignee     is     related    to   the

producer/exporter.         Therefore,          Commerce’s application of the

provision is not in accordance with law.               The Court remands for a

determination consistent with Congress’s intended meaning.


V.      Commerce’s Decision Not to Employ the Net Monetary Correction
        in Calculating CV

        For the current review, Commerce requested and respondents

provided information regarding the monthly net correction gain or
Consol. Court No. 97-11-01988                                                Page 36


loss reflected in the respondents’ financial statements.                         See

Questionnaire (Pub. Doc. 42)(May 16, 1996) at D-40.                  The monetary

correction "represents the net gain or loss to [a] company caused

by   inflation      on     its    net      exposed     monetary      assets      and

liabilities[.]"16        Final     Results      at   53,299.        According       to

Asocolflores, Colombian law requires companies to use the net

monetary    correction     to    adjust    their     financial    expenses     as    a

generally   accepted     accounting       principle     ("GAAP").      See     Final

Results at 53,299.

      In calculating costs for the purposes of CV, the antidumping

statute provides that,

      Costs shall normally be calculated based on the records
      of the exporter or producer of the merchandise, if such
      records are kept in accordance with the generally
      accepted accounting principles of the exporting country
      (or the producing country, where appropriate) and
      reasonably reflect the costs associated with the
      production and sale of the merchandise.

19 U.S.C. § 1677b(f)(1)(A)(1994).

      In the current review, Commerce applied the Colombian net

monetary    correction       in    calculating        the   depreciation         and

amortization     expense    for    CV,    but   rejected    the   adjustment        in

calculating financial costs.              See Final Results at 53,299-300.

Asocolflores argues that the new statutory provision requires

Commerce to use Colombian GAAP unless it makes a specific finding



      16
      The net monetary correction equals the difference between
monetary assets and liabilities, multiplied by the inflation
rate. Gains result from inflation’s effect on monetary
liabilities, such as accounts payable. Losses are generated as
inflation erodes the value of monetary assets, such as cash.
Consol. Court No. 97-11-01988                                                       Page 37


that    Colombian           GAAP    does    not    "reasonably    reflect     the     costs

associat[ed] with the production and sale of the merchandise." See

Asocolflores Br. at 38-39 (citing 19 U.S.C. § 1677b(f)(1)(A)).

Therefore, Asocolflores contends that, because Commerce did not

make        a    specific     finding       that    the    net   monetary     correction

unreasonably distorted or misstated financial costs for purposes of

the    CV        calculation,        Commerce      was    required    to    adjust      the

respondents’ financial expenses for the inflation correction.                           See
Asocolflores Br. at 39.

       Commerce argues that it recognized the statute’s requirement

that costs normally be calculated in accordance with a company’s

records kept pursuant to the home country’s GAAP, but did not

adjust          for   the   monetary       correction     of   respondents’   financial

expenses because that correction did not pertain to the cost of

flower production.                 See Def.’s Mem. in Partial Opp’n to Def.-

Intervenors’ Mot. for J. on the Agency R. at 45-46.                    Thus, Commerce

interprets § 1677b(f)(1)(A) as being limited to production costs.17
The Court reviews Commerce’s interpretation to determine whether it



       17
      In the Final Results, Commerce explained that "the statute
merely requires that [Commerce] 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.’" Final Results at 53,300. In making this assertion,
however, Commerce only cites 19 U.S.C. § 1677b(e)(1) as
authority. See id. Section 1677b(e)(1) provides that one of the
components of CV is the "cost of materials and fabrication . . .
employed in producing the merchandise[.]" 19 U.S.C. §
1677b(e)(1). Commerce fails in its discussion, however, to
acknowledge § 1677b(e)(2), which provides that selling, general,
and administrative expenses are also included in CV, and §
1677b(f)(1)(A), the relevant section at issue.
Consol. Court No. 97-11-01988                                               Page 38


is in accordance with law.

       For   the   fifth,   sixth,   and   seventh     reviews,      this     Court

sustained Commerce’s rejection of the monetary correction for

Asocolflores’ financial expenses in calculating CV "[b]ecause the

monetary     correction     does   not   relate   to     flower    production."

Asociacion, 22 CIT at           , 6 F. Supp.2d at 876.          That decision,

however, concerned Commerce’s practice under the pre-URAA statute.

Prior to the enactment of the URAA, Commerce’s practice was "to

adhere to an individual firm’s recording of costs in accordance

with GAAP of its home country if . . . satisfied that such

principles reasonably reflect the costs of producing the subject
merchandise."18     Certain Fresh Cut Flowers From Colombia, 61 Fed.

Reg.    42,833,    42,846   (Dep’t   Commerce     Aug.    19,     1996)(emphasis

provided); see also Furfuryl Alcohol From South Africa, 60 Fed.

Reg. 22,550, 22,556 (Dep’t Commerce May 8, 1995); Silicon Metal

From Brazil, 56 Fed. Reg. 26,977, 26,986 (Dep’t Commerce June 12,

1991).
       This court has upheld Commerce’s practice as limited to



       18
      Commerce based its policy on the following excerpt from the
House Report to the Trade Reform Act of 1973:

       [I]n determining whether merchandise has been sold at
       less than cost, [Commerce] will employ accounting
       principles generally accepted in the home market of the
       country of exportation if [Commerce] is satisfied that
       such principles reasonably reflect the variable and
       fixed costs of producing the merchandise.

H. Rep. No. 93-571, 93rd Cong., 1st Sess. at 71 (1973). See
Camargo Correa Metais, S.A. v. United States, 17 CIT 897, 898
(1993).
Consol. Court No. 97-11-01988                                         Page 39


production costs.      See, e.g., Thai Pineapple Public Co., Ltd. v.

United States, 20 CIT           ,   , 946 F. Supp. 11, 18 (1996), appeal

docketed, No. 97-1437 (Fed. Cir. May 15, 1997); Micron Technology,

Inc. v. United States, 19 CIT 829, 833, 893 F. Supp. 21, 28,(1995);

Camargo Correa Metais, S.A. v. United States, 17 CIT 897, 898

(1993).     But cf. Laclede Steel Co. v. United States, 18 CIT 965,

975 (1994)(characterizing Commerce’s practice as used in connection

with the firm’s "financial position or actual costs"); Ipsco, Inc.
v. United States, 22 CIT             ,      , 701 F. Supp. 236, 238, n.3

(1988).

      The current provision, however, is clearly not limited to

production costs.      Nineteen U.S.C. § 1677b(f)(1)(A) adopted and

enhanced Commerce’s pre-URAA practice, clarifying that Commerce

will calculate costs based on the records of the producer where

such records are in accordance with the home country’s GAAP and

"reasonably reflect the costs associated with the production and

sale of the merchandise."           (Emphasis provided.)         Moreover, in
discussing § 1677b(f)(1)(A), the SAA states that "[c]osts shall be

allocated using a method that reasonably reflects and accurately

captures all of the actual costs in producing and selling the

product under . . . review."             SAA at 835 (emphasis provided).

Accordingly, because the statute’s language and legislative history

indicate that Congress did not intend to limit § 1677b(f)(1)(A) to

production costs, Commerce’s interpretation of the provision is not

permissible under the first prong of Chevron.

      The   proper   question,      then,   is   whether   the   respondents’
Consol. Court No. 97-11-01988                                          Page 40


financial costs relate to the production and sale of the subject

flowers.   If so, Commerce would either have to apply the Colombian

monetary correction or explain how it would distort these costs.

See Borden, Inc. v. United States, 22 CIT               ,     , 4 F. Supp.2d

1221, 1234 (1998)(holding that 19 U.S.C. § 1677b(f)(1)(A) "is

conditional,     requiring      Commerce   to    use    the   company’s     own

calculation    only   if   satisfied   with     the   accuracy   of   the   cost

representations they render.").

      The SAA clearly recognizes that financial costs may relate to

production costs in discussing § 1677b(f)(1)(A)’s scope:

      In determining whether to accept the cost allocation
      methods proposed by a specific producer, Commerce will
      consider the production cost information available to the
      producer and whether such information could reasonably be
      used to compute a representative measure of the
      materials, labor and other costs, including financing
      costs, incurred to produce the subject merchandise, or
      the foreign like product. . . . Also, if Commerce
      determines that costs, including financing costs, have
      been shifted away from production of the subject
      merchandise, or the foreign like product, it will adjust
      costs appropriately, to ensure they are not artificially
      reduced.
SAA at 835 (emphasis provided).

      In addition, Commerce itself has recognized that financial

expenses in this review may relate to the production and sale of

the subject flowers.        As noted above, Commerce claims to treat

credit expenses as a type of "selling expense" for purposes of

SG&A.   See supra p.30 (citing Def.’s Mem. in Partial Opp’n to Def.-

Intervenors’ Mot. for J. on the Agency R. at 39).             Credit expenses

are financial expenses.          Therefore, financial expenses may be

characterized as selling expenses.
Consol. Court No. 97-11-01988                                            Page 41


      Moreover,     in    its    questionnaire    to   respondents,    Commerce

specifically       requests      "information    regarding   total    financial

expenses . . . incurred in connection with the production and sale

of all products."             Dep’t of Commerce Questionnaire (Pub. Doc.

42)(May 16, 1996) at D-39.           Therefore, it is clear that Commerce

recognizes that financial expenses may relate to production and

sale.

      Therefore, unless Commerce can demonstrate that respondents’

financial expenses do not relate to the production and sale of the

subject flowers, Commerce must either apply the net monetary

correction to the respondents’ financing costs or explain how the

adjustment distorts such costs.           The Court remands for Commerce to

make a determination consistent with this standard.


VI.   Commerce’s Calculation and Application of the CEP Profit Ratio

      Nineteen U.S.C. § 1677a(d)(3) instructs Commerce to deduct the

profit      allocated    to    various   U.S.   selling   expenses    from   CEP.

Section 1677a(f) provides that "profit" for purposes of subsection

(d)(3) is to be calculated by multiplying "total actual profit" by

the ratio of "total United States expenses" to "total expenses"

(the "CEP profit ratio").          See 19 U.S.C. § 1677a(f).19


      19
           19 U.S.C. § 1677a(f) states,

      (1) In general. For purposes of subsection (d)(3),
      profit shall be an amount determined by multiplying the
      total actual profit by the applicable percentage.

      (2) Definitions.          For purposes of this subsection:
Consol. Court No. 97-11-01988                                 Page 42


      A.    Commerce’s Decision Not to Include U.S. Credit Expenses
            in "Total Expenses"

      In calculating the CEP profit ratio, Commerce did not include

U.S. credit expenses in its calculation of "total expenses," but

did include U.S. credit expenses in "total United States expenses."

See Asocolflores Br. at 45.     Asocolflores argues that by including


      (A) Applicable percentage. The term "applicable
      percentage" means the percentage determined by dividing
      the total United States expenses by the total expenses.

      (B) Total United States expenses. The term "total
      United States expenses" means the total expenses
      described in subsection (d)(1) and (2).

      (C) Total expenses. The term "total expenses" means
      all expenses in the first of the following categories
      which applies and which are incurred by or on behalf of
      the foreign producer and foreign exporter of the
      subject merchandise and by or on behalf of the United
      States seller affiliated with the producer or exporter
      with respect to the production and sale of such
      merchandise:

      (i) The expenses incurred with respect to the subject
      merchandise sold in the United States and the foreign
      like product sold in the exporting country if such
      expenses were requested by the administering authority
      for the purpose of establishing normal value and
      constructed export price.

      (ii) The expenses incurred with respect to the
      narrowest category of merchandise sold in the United
      States and the exporting country which includes the
      subject merchandise.

      (iii) The expenses incurred with respect to the
      narrowest category of merchandise sold in all countries
      which includes the subject merchandise.

      (D) Total actual profit. The term "total actual
      profit" means the total profit earned by the foreign
      producer, exporter, and affiliated parties described in
      subparagraph (C) with respect to the sale of the same
      merchandise for which total expenses are determined
      under such subparagraph.
Consol. Court No. 97-11-01988                                                  Page 43


U.S. credit expenses in "total United States expenses," but not in

"total expenses," Commerce impermissibly over-allocated profit to

"total United States expenses" in violation of the plain language

of 19 U.S.C. § 1677a(f).           See id. at 45-46.

      As Asocolflores correctly demonstrates, credit expenses are

included in "total United States expenses" under § 1677a(f)(2)(B)

because     credit   expenses      are    deducted     from    CEP   pursuant    to    §

1677a(d)(1)(B).       See id. at 45.        According to Asocolflores, credit

expenses     must    also    be   included     in     "total   expenses"      because,

pursuant to § 1677a(f)(2)(C)(i), "[t]he expenses incurred with

respect to the subject merchandise sold in the United States" must

necessarily include U.S. credit expenses.                 See id. at 46.
      Commerce has provided no reasoned basis for its decision not

to include U.S. credit expenses in "total expenses."                     Therefore,

the Court remands to Commerce to reconsider this issue.
      B.     Commerce’s Decision Not to Deduct Credit Expense from
             "Total Actual Profit"

      According to Asocolflores, Commerce did not deduct credit
expense in calculating "total actual profit." See Asocolflores Br.

at   46.     Asocolflores         reasons    that,     since   credit   expense       is

considered a United States expense, it must also be treated as an

expense for purposes of calculating "total actual profit." See id.

"It makes no sense to allocate profit to credit expense while not

considering credit an expense for purposes of calculating that

profit."     Id.

      The   Court    is     unable   to     discern    from    the   record   whether
Consol. Court No. 97-11-01988                                                  Page 44


Commerce in fact did fail to calculate "total actual profit" net of

credit expenses.        Moreover, Commerce has not provided a reasoned

response to Asocolflores’ argument.             Therefore, the Court remands

the matter, instructing Commerce to reconsider and explain its

treatment of credit expenses in calculating "total actual profit."
       C.    Commerce’s Decision to Compute the CEP Profit Ratio on an
             Annual Rather Than on a Monthly Basis

       For   purposes    of    CEP   profit    under    19    U.S.C.   §   1677a(f),

Commerce calculated the rate on an annual, rather than on a

monthly, basis.         See Final Results at 53,295.               As Asocolflores

concedes,     neither    the    provision      nor   its     legislative     history

indicates Congress’s specific intent with regard to the time period

over   which    the     CEP   profit    rate    is     to    be   allocated.       See

Asocolflores Br. at 48.              Therefore, the Court reviews whether

Commerce’s construction is reasonable under the second prong of

Chevron.

       Asocolflores argues that Commerce’s use of an annual rate is

unreasonable "because it does not fulfill the purpose of the
statute of equilibrating constructed export price with export

price."      See Asocolflores Br. at 48-49 (citing SAA at 823 ("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.")).           Asocolflores points out that, due to

specific flower-giving holidays, the demand for fresh cut flowers
Consol. Court No. 97-11-01988                                            Page 45


in    the    United    States--and     consequently    the   profits    arising

therefrom--vary significantly from month-to-month.              See id. at 49.

Therefore, Asocolflores contends, "[t]he resulting constructed

export      price     does    not   resemble    ’as   closely   as     possible’

contemporaneous export prices, because the profit rate on export

prices also vary with flower-giving holidays, and are not constant

year-round."        Id. at 50.

      Asocolflores’ argument is not persuasive.                 First, as FTC

argued before Commerce, an average rate of profit still inherently

accounts for monthly variation.                See Final Results at 53,295.
Second, Asocolflores fails to explain how use of an annual profit

rate for CEP violates the statute’s objective of corresponding CEP

with EP.

       Asocolflores also contends that Commerce failed to provide a

reasoned response for its decision.              See Asocolflores Br. at 51.

The Court disagrees.          In the Final Results, Commerce pointed out

that the CEP profit calculation, as defined by § 1677a(f), "is not
intended to be based on the profit of particular U.S. sales."

Final Results at 53,295. Moreover, based on the provision’s use of

the   term    "total     actual     profit,"    Commerce   explained    that   it

interprets the statute to normally require an overall profit for

home market and United States sales.            See id.    Therefore, Commerce

"use[s] an average profit rate for those U.S. and home market sales

that were made."        Id.

      Nineteen U.S.C. § 1677a(f) explains that CEP profit is to be

calculated by multiplying "total actual profit" by the ratio of
Consol. Court No. 97-11-01988                                                Page 46


"total United States expenses" to "total expenses."                      Both "total

actual profit" and "total expenses" include data for both U.S. and

home    market    sales.       See   19   U.S.C.    §    1677a(f)(2)(C)      &   (D).

Therefore, Congress clearly did not intend for CEP profit to be

based on U.S. sales alone.              Morever, the Court finds Commerce’s

interpretation of "total actual profit" to indicate the presumption

of a single profit rate to be reasonable.                Cf. Toyota Motor Sales,

U.S.A., Inc. v. United States, 22 CIT                ,       , 15 F. Supp.2d 872,

891    (1998)(upholding        Commerce’s    construction      of   19    U.S.C.   §§

1677a(d)(3) and (f) as requiring a single, aggregated CEP profit

even where there are multiple lines of subject merchandise and

foreign like product).            Therefore, based on the terms of the

provision,       the   Court    finds     Commerce’s     interpretation       to   be

reasonable.

       The Court sustains Commerce’s determination to calculate CEP

profit as a single, annual rate.



VII. Commerce’s Decision to Impute a Consolidated General and
     Administrative Expense Rate for All Farms of the HOSA Group in
     Calculating the Cost of Production for CV

       "The   HOSA     Group    consists    of     several    related      companies

dedicated to the production and sale of fresh cut flowers[.]" See

HOSA’s July 12, 1996 Response (Pub. Doc. 75) at A-9.                     Only one of

the HOSA Group companies, Innovacion Andina, S.A., performs bouquet

operations on top of growing flowers subject to the antidumping

duty order.        See id.      To make the bouquets, Innovacion Andina

purchases flowers from non-HOSA Group farms.                 See Asocolflores Br.
Consol. Court No. 97-11-01988                                   Page 47


at 52.   For purposes of the ninth administrative review, Commerce

treated the farms of the HOSA Group as a single entity.       See Final

Results at 53,300-301.          Therefore, in calculating the costs for

computing CV, Commerce applied a consolidated rate of general and

administrative ("G&A") expenses for the entire group, which was the

average of each farm’s separate G&A expense.        See id. at 53,301.

      Asocolflores argues that Commerce’s G&A expense methodology

for the HOSA Group "is unlawful under the second prong of the

Chevron standard because it fails to fulfill the statutory purpose
of calculating dumping margins using the most accurate information

available."    Asocolflores Br. at 53.       According to Asocolflores,

because Innovacion was the only HOSA Group farm to purchase flowers

for bouquet operations, and because its G&A expense rate was

significantly lower than those of the other HOSA Group farms,

Commerce should have used Innovacion Andina’s separate G&A expense

rate, rather than applying the HOSA Group average.       See id. at 52-

53.
      Commerce argues that its use of a single, average G&A expense

rate for the HOSA Group is consistent with the agency’s collapsing

and G&A expense allocation practices, both of which have been

sustained by this Court.

      Adhering to its collapsing practice, Commerce treated the HOSA

Group as one company, since it is composed of several related

companies.    See Def.’s Mem. in Partial Opp’n to Def.-Intervenors’

Mot. for J. on the Agency R. at 52.           This Court has held that

Commerce’s decision to define "company" to include several closely
Consol. Court No. 97-11-01988                                                 Page 48


related companies is a permissible application of the antidumping

statute.         See Queen’s Flowers de Colombia v. United States, 21 CIT

     ,          , 981 F. Supp. 617, 622 (1997).20

         Moreover, in calculating a company’s G&A expenses, Commerce

finds the ratio of the company’s total G&A expenses relative to the

total cost of goods sold by the company and applies this ratio to

the cost of manufacture of each product.                    See Final Results at

53,300.         In other words, Commerce treats G&A expenses as "expenses

incurred for the operation of the corporation as a whole and not

directly related to the manufacture of a particular product."                      Id.
This      Court     has    recognized     that     G&A   expenses   relate    to   the

activities of a company as a whole.                 See U.S. Steel Group, 22 CIT

at            , 998 F. Supp. at 1154.21

         Therefore, Commerce’s calculation of a single G&A expense rate

for      the     HOSA   Group    is   consistent    with   the   agency’s    affirmed

practices of treating related companies as a single entity and

calculating the G&A expenses for a company as a whole.                      Moreover,
Commerce’s calculation of the HOSA Group G&A expense rate is

consistent          with   the   objective    of    promoting    accuracy     in   the

determination of dumping margins.                Commerce explained that it does

"not allow companies to pick and choose which G&A expenses and



         20
      Although the Queen’s Flowers decision involved pre-URAA
law, the amended provision does not mandate a different
conclusion.
         21
      Although the U.S. Steel decision involved the pre-URAA law,
the amended provision does not mandate a different conclusion
because the definition of G&A expenses has not changed.
Consol. Court No. 97-11-01988                                                 Page 49


which divisions of the company will be used in accounting for this

expense." Final Results at 53,301. If Commerce treated Innovacion

Andina’s bouquet operation G&A expenses as distinct from the rest

of the HOSA Group’s G&A expenses, it would improperly overstate the

HOSA Group’s G&A expense rate.               Therefore, Commerce’s calculation

of a consolidated G&A expense rate for the entire HOSA Group is a

reasonable    application        of    the     statute.       The    Court   sustains

Commerce’s practice.


                                      Conclusion

      This case having been duly submitted for decision and the

Court, after due deliberation, having rendered a decision herein;

now in conformity with said decision it is hereby

      ORDERED that the Department of Commerce’s final determination

in Certain Fresh Cut Flowers From Colombia, 62 Fed. Reg. 53,287
(Dep’t Commerce, Oct. 14, 1997) is sustained in part and remanded

in part; and it is further
      ORDERED    that      the    issue       of     Commerce’s      instruction   to

respondents     not   to    offset      expenses       with   interest    income    in

calculating      indirect        selling        expenses        is    remanded     for

reconsideration and to allow respondents to submit information

concerning the interest income offset and for Commerce to make

adjustments to constructed export price, as appropriate, based upon

this information; and it is further

      ORDERED   that    the      issue    of       Commerce’s    rejection    of   the

constructed value "profit cap" in calculating constructed value is
Consol. Court No. 97-11-01988                                           Page 50


remanded for Commerce to apply 19 U.S.C. § 1677b(e)(2)(B)(iii) in

a manner consistent with this Court’s opinion; and it is further

       ORDERED that the issue of Commerce’s decision to deduct

imputed credit expenses from U.S. price but not from constructed

value is remanded for Commerce to reconsider and to provide a more

detailed explanation of whether it accounted for differences in

credit expenses as a circumstance of sale and of its treatment of

credit expenses to U.S. and third markets for the purpose of

constructed value; and it is further

       ORDERED that the issue of Commerce’s decision to exclude

antidumping       surcharges     paid     to   unrelated     consignees      from

constructed export price is remanded for a determination consistent

with this Court’s opinion; and it is further

       ORDERED that the issue of Commerce’s decision not to employ

the Colombian net monetary correction in calculating constructed

value is remanded for Commerce to either apply the net monetary

correction to the respondents’ financing costs or to explain how

the adjustment distorts such costs unless Commerce can demonstrate

that the respondents’ financing expenses do not relate to the

production and sale of the subject flowers; and it is further

       ORDERED that the issue of Commerce’s decision not to include

U.S.     credit    expenses     in   "total    expenses"     is   remanded   for

reconsideration; and it is further

       ORDERED that the issue of Commerce’s decision not to calculate

"total    actual    profit"    net   of   credit   expense   is   remanded   for

reconsideration and for Commerce to explain its treatment of credit
Consol. Court No. 97-11-01988                                Page 51


expenses in calculating "total actual profit;" and it is further

      ORDERED that remand results are due on Monday, March 29, 1999;

comments and responses thereto are due on Wednesday, April 28,

1999; any rebuttal comments are due on Thursday, May 13, 1999; and

it is further

      ORDERED that Commerce’s final determination is sustained in

all other respects.




                                              Donald C. Pogue
                                                   Judge

Dated:      January 27, 1999
            New York, New York
