G/ADP/Q2/UKR/2  
 
16 December 2014  
(14-7286)  Page: 1/4  
Committee on Anti-Dumping Practices  Original: English  
 
ARTICLE 16.4 OF THE AGREEMENT 
SEMI-ANNUAL REPORT OF AN TI-DUMPING DUTY ACTIONS 
 
INTERIM REVIEW BY UKRAINE OF THE ANTI-DUMPING MEASURE ON AMMONIUM 
NITRATE ORIGINATING IN THE RUSSIAN FEDERATION 
REPLIES TO QUESTIONS POSED BY THE RUSSIAN FEDERATION1 
The following communication, dated 9 December 2014,  is being circulated at the request of the 
Delegation of Ukraine.  
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 Question 1 
 
Please indicate legal provisions in the Ukraine law No. 330- ХІУ of 22 December 1998 on 
protection of national producers against du mped imports ("the Ukrainian Anti-Dumping 
Law") or other legal acts which Ukraine cons iders to be relevant to the rejection of 
producers' or exporters' prices and cost data and their replacement with alternative 
data for the purposes of dumping margin calculation.  
Reply 
 
Paragraphs 1, 5, 6, 9, 12 of Article 7 of the Law of Ukraine On Protection of National Producers 
against Dumped Imports  No. 330- ХІV dated of 22 December 1998 (the " Ukrainian  
Anti-dumping Law" ). 
 
Question 2 
 Please confirm that the legal basis to carry out anti-dumping investigations and to apply 
anti-dumping measures in Ukraine is  the Ukrainian Anti-Dumping law. 
 
Reply 
 
In Ukraine, anti-dumping investigations are carried out and anti-dumping measures are applied 
under the Law of Ukraine On Protection of National Producers against Dumped Imports  
No. 330- ХІV dated 22 December 1998 and the Law of Ukraine "On foreign economic activity"  of 
16 April 1991 No. 959-XII (Article 31). 
 Question 3  
Please identify any published or internal wo rking documents that define or explain what 
constitutes "ordinary course of trade".  
Reply 
 
"Ordinary course of trade" is defined and explained in paragraph 22 of Article 1, paragraphs 1 
and 6 of Article 7 of the Ukrainian Anti-Dumping Law . There are no other published or internal 
working documents defining or explaining what constitutes "ordinary course of trade".  
                                               
1 G/ADP/Q2/UKR/1. G/ADP/Q2/UKR/2 
 
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  Question 4 
 Please explain whether Ukraine considers that the fact of regulation by the government 
of prices for certain inputs can lead to a fi nding that sales are not made in the ordinary 
course of trade because of the alleged effect of the regulation on costs and, if so, on 
what grounds?  
Reply 
 
The fact of regulation by the government of prices for certain inputs shall automatically lead to a finding that sales are not made in the ordinary course of trade because of the alleged effect of the 
regulation on costs. However, depending on circ umstances of each particular investigation, the 
effects of such regulation by the government on prices for certain inputs should be carefully scrutinized. 
 
Question 5  
Please specify what kind of costs of producti on should be "adjusted" or "established" in 
accordance with the Ukrainian Anti-Dumping Law, and whether this shall be done only 
when the costs in question constitute an im portant part of the total production costs? 
 
Reply 
 
The Ukrainian Anti-Dumping Law  does not list any specific costs of production to be "adjusted" or 
"established". Paragraph 9 of Article 7 of the Ukrainian Anti-Dumping Law  provides that "costs 
shall be generally calculated on the basis of accounting reports of the party, a subject to an anti-dumping investigation, under condition such accounting report is made according to the principles 
and norms of bookkeeping, generally accepted in the country which is a subject of consideration 
and completely reflects the costs, related to the production and sale of goods subject to 
consideration".  
Question 6 
 Please confirm that Ukraine "adjusted" or "e stablished" costs of production only once 
in 2014 in the specific case of the interi m review of the anti-dumping measure on 
imports of ammonium nitrate originating in the Russian Federation, because the 
Government of the Russian Federation, in the Ukraine's authority view, regulates the 
prices for certain inputs. 
 Reply 
 
The interim review of the anti-dumping measure on imports of ammonium nitrate originating in 
the Russian Federation was the first practice of Ukraine. As for the reasons justifying such an 
approach, see our reply to question 4 above.  
 
Question 7  
Please explain whether Ukraine always examin es the reasonableness or adequacy of the 
cost data that are recorded in accordance with generally accepted accounting principles 
before accepting the recorded cost data as  the basis for the costs and normal value 
determination. What determines the decisi on to examine the reasonableness of the 
recorded costs? Please prov ide references to any published documents explaining the 
approach.  
Reply 
 
In the framework of the interim review of the anti-dumping measure on imports of ammonium 
nitrate originating in the Russian Federation, the domestic industry of Ukraine draw the attention 
of the Investigative Authority and provided reliable and substantiated evidence with regard to the effects of the gas prices regulation in the Russian Federation on the cost records of the Russian AN 
producers which required detailed investigation. Such evidence was carefully investigated and G/ADP/Q2/UKR/2 
 
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  assessed by the Investigative Authority in the framework of the investigation and its findings were 
communicated to interested parties.  
 Question 8 
 
Please clarify the legal basis under the WT O Anti-Dumping Agreement for replacing the 
cost data accurately reflected in the reco rds of the producers or exporters under the 
investigation in accordance with  generally accepted accounting  principles with cost data 
from other sources, including "other produc ers and exporters in the same country" or 
"other representative markets". If this a pproach is provided for in the Ukrainian 
Anti-Dumping Law, please clarify whether th ese provisions are consistent with the WTO 
Anti-Dumping Agreement in light of th e answers for the aforesaid questions. 
 Reply 
 Under Article 2.2.1.1 of the WTO Anti-Dumping Agreement:  
Costs shall normally be calculated on the basis of  records kept by the exporter or producer under 
investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production 
and sale of the product under consideration. 
 
Article 2.2.1.1 therefore contains two requiremen ts for the purposes of determining whether the 
costs reported by the producer or exporter can serve as a basis for calculating normal value. First, 
the costs must be based on records kept by the pr oducer or exporter provided that such records 
comply with the generally accepted account ing principles of the exporting country. Second , such 
records must reasonably reflect the costs associated with the production and sale of the product 
concerned. 
 Therefore, when the costs associated with the production of the product under investigation are not reasonably reflected in the records of producers or exporters, they cannot serve as a reliable 
basis for calculating normal value.  
 The investigating authority may establish in the framework of investigation that the costs 
associated with the production of the product concerned are not reasonably reflected in the 
records of producers or exporters concerned. For instance, where such costs are artificially low due to distortions caused by government regulation of  the prices for input materials, energy, etc. In 
this case such costs may be adjusted, for instance, by replacing them with cost data from other 
sources.  It should be noted that this approach is confirmed by the existing WTO case law. In particular, in 
China — Broilers , the panel found that although Article 2.2.1.1 of the WTO Anti-Dumping 
Agreement sets up a presumption that the books an d records of the respondent shall normally be 
used to calculate the cost of production, the investigating authority retains the right to decline to 
use such books if it determines that they are either (i) inconsistent with GAAP or, (ii) do not 
reasonably reflect the costs associated with the production and sale of the product under consideration.
2 
 
This approach has also been applied in the EU in a number of anti-dumping proceedings 
concerning imports of, inter alia , fertilizers from Russia. Furthermore, in Acron3 case the General 
Court of the EU recently confirmed that regulated en ergy prices lead to distortion of the respective 
market and hence such prices are not reasonable in  the sense of Article 2(5) of the EU Basic Anti-
dumping Regulation.  
                                               
2 Panel Report, China — Anti-Dumping and Countervailing Duty  Measures on Broiler Products from the 
United States  (WT/DS427/R, adopted 25 September 2013), para. 7.164. 
3 Judgment T-235/08 of 7 February 2013 (Acron OAO and Dorogobuzh OAO agai nst the Council). See 
recitals 44-46. G/ADP/Q2/UKR/2 
 
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  In light of the above, Ukraine considers that its legislation, i.e. the Ukrainian Anti-dumping Law 
and its Article 7 in particular as well as its practice with respect to establishing the costs for the purposes of calculating normal value in the framework of anti-dumping investigations carried comply with the WTO rules and its case-law. 
 
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