This document is meant purely as documentation tool and the institutions do not assume any liability for its contents
"B COUNCIL REGULATION (EC) No 969/2000
of 8 May 2000
imposing a definitive anti-dumping duty on imports of potassium chloride originating in Belarus, Russia
and Ukraine
(OJ L 112, 11.5.2000, p. 4)
Corrected by:
"C1 Corrigendum, OJ L 2, 5.1.2001, p. 42 (969/2000)2000R0969 — EN — 12.05.2000 — 000.001 — 1
COUNCIL REGULATION (EC) No 969/2000
of 8 May 2000
imposing a definitive anti-dumping duty on imports of potassium chloride
originating in Belarus, Russia and Ukraine
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 384/96 of 22 December 1995
on protection against dumped imports from countries not members of theEuropean Community (
1) and in particular Articles 9 and 11 thereof,
Having regard to the proposal submitted by the Commission after consulting
the Advisory Committee,
Whereas:
1.PREVIOUS INVESTIGATIONS
(1) By Regulation (EEC) No 3068/92 (2), the Council imposed definitive
anti-dumping duties on imports of potassium chloride (hereinafterreferred to as ‘potash’ or the ‘product concerned’) originating inBelarus, Russia and Ukraine (hereinafter referred to as the ‘countries
concerned’). The duties were equal to the difference between a set
minimum price and the net, free-at-Community-frontier prices beforecustoms clearance.
(2) By Regulation (EC) No 643/94 (
3), the Council amended the
abovementioned duties. Combined measures in the form of a fixed
amount per tonne of potash or the difference between a set minimum
price and the net, free-at-Community-frontier price per tonne beforecustoms clearance, whichever was higher, were imposed. This type ofmeasure was found to be warranted because circumvention of the
original duties had been taking place. It should also be mentioned that
the review carried out in 1994 covered both dumping and injury, aswell as Community interest.
(3) By Regulation (EC) No 449/98 (
4), the Council again amended the
abovementioned measures. This review was initiated following a
request by the International Potash Company (IPC), an exporter of
Russian and Belarusian potash, who claimed, among other issues, thatthe accession of Austria, Finland and Sweden had resulted in a change
in the circumstances on the basis of which the measures in force had
been established. The form of the combined measures was maintainedbut the level of the measures was adapted in accordance with thefindings of that investigation. It should also be mentioned that the
review concluded in 1998 was limited to the examination of dumping
and Community interest.
2.PRESENT INVESTIGATION
(4) Following the publication of a notice of impending expiry of the
anti-dumping measures in force on imports of potash originating in the
countries concerned (
5), the Commission received a request to review
these measures pursuant to Article 11(2) of Regulation (EC) No384/96, hereinafter referred to as the ‘basic Regulation’.
(5) The request was lodged on 23 December 1998 by the European
Association of Potash Producers (hereinafter the ‘applicant’) on behalf
of producers, whose collective output of potash constitutes about 99 %
of the Community production of this product, i.e. a major proportionof the total Community production pursuant to Articles 4(1) and 5(4)
of the basic Regulation.!B
(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 905/98
(OJ L 128, 30.4.1998, p. 18).
(2) OJ L 308, 24.10.1992, p. 41.
(3) OJ L 80, 24.3.1994, p. 1.
(4) OJ L 58, 27.2.1998, p. 15.
(5) OJ C 296, 24.9.1998, p. 3.2000R0969 — EN — 12.05.2000 — 000.001 — 2
(6) The request was based on the grounds that the expiry of the measures
would result in the continuation or recurrence of dumping and injury.Indeed, the applicant alleged that potash from the countries concernedwas still being sold at dumped prices for inward processing, a relief
regime not subject to anti-dumping measures in the Community.
Likewise, the applicant claimed that, in view of the extent of the pastdumping and the fact that the relevant exporters were still selling theproduct concerned at very low prices in countries neighbouring the
Community, it was very likely that dumping would recur if the
anti-dumping measures were removed. This argument was reinforcedby the evidence presented that showed that domestic consumption had
fallen drastically in the countries concerned whilst production had
increased significantly, leaving the exporters with a surplus productthat risked being sold on the Community market at dumped prices.Finally, the applicant submitted that the likely recurrence of dumping
would lead to price erosion and inevitably cause injury to a
Community industry whose profit situation was still somewhatprecarious.
(7) In view of the specific form of the anti-dumping duties imposed on
imports of potassium chloride from the countries concerned, i.e. acombination of a minimum price and a fixed duty, the Commissionalso decided, on its own initiative, to initiate an interim review,
pursuant to Article 11(3) of the basic Regulation, limited to the form of
the measures.
(8) Having determined, after consulting the Advisory Committee, that
sufficient evidence existed, the Commission initiated an expiry review
and an interim review (limited to the form of the duty) through thepublication of a notice (hereinafter referred to as the ‘notice of
initiation’) (
1) pursuant to Articles 11(2) and 11(3) of the basic
Regulation.
2.1. PERIOD OF INVESTIGATION
(9) The investigation on continuation or recurrence of dumping covered
the period from 1 January to 31 December 1998 (hereinafter referred
to as the ‘IP’ or the ‘investigation period’). The examination ofcontinuation or recurrence of injury covered the period from 1 January
1994 up to the end of the IP (hereinafter referred to as the ‘period
considered’). For the purposes of the examination of recurrence ofinjury, forecasts for years 1999 and 2000 were also taken intoconsideration.
2.2. PARTIES CONCERNED BY THE INVESTIGATION
(10) The applicant Community producers, the exporters and producers in
the exporting countries and the importers/users as well as theirrepresentative associations known to be concerned and the represen-
tatives of the exporting countries were officially advised of the
initiation of the review. Questionnaires were sent to all these partiesand to those who made themselves known within the time limit set in
the notice of initiation. In addition, the producers in Canada, which
was chosen as the analogue country, were contacted and receivedquestionnaires. The parties directly concerned were also given theopportunity to make their views known in writing and to request a
hearing.
(11) All applicant Community producers replied to the questionnaire.
Producers in Belarus and Russia, namely, Production Amalgamation
‘Belaruskali’ (Soligorsk, Minsk region, Belarus), JSC ‘Silvinit’
(Solikamsk, Perm region, Russia) and JSC ‘Uralkali’ (Berezniki,Perm region, Russia) cooperated with the investigation via theircommon exporter IPC (Moscow, Russia). Ferchimex (Antwerp,
Belgium) and Belarus (Vienna, Austria), related importers of IPC,
replied as well. No cooperation was received from any Ukrainianexporting producer.
(12) Seven unrelated importers replied to the questionnaire and made their
views known in writing. The importers of potash are in most cases alsousers of the product. No replies were obtained from the non-importing
users of the product.!B
(1) OJ C 80, 23.3.1999, p. 9.2000R0969 — EN — 12.05.2000 — 000.001 — 3
(13) All information deemed necessary to determine whether there was a
likelihood of a continuation or recurrence of dumping and injury andwhether the continued imposition of the measures was in theCommunity interest was sought and verified. Investigations were
carried out at the premises of the following companies:
(a)Applicant Community producers:
Cleveland Potash Limited, Saltburn, United Kingdom,
Comercial de Potasas, SA (
1), Madrid, Spain,
Kali and Salz GmbH, Kassel, Germany,
Société commerciale des potasses et de l’azote SA (2), Mulhouse,
France, hereinafter referred to as ‘SCP A’;
(b)Producers in the analogue country:
Agrium Inc., Calgary,
IMC Global Inc., Regina,
Potash Corporation of Saskatchewan (PCS), Saskatoon;
(c)Unrelated importers into the Community:
Fertiberia SA, Madrid, Spain (also a user of potash).
3.PRODUCT CONCERNED AND LIKE PRODUCT
3.1. DESCRIPTION OF THE PRODUCT CONCERNED
(14) The product concerned is potassium chloride (potash, KC1) and is
generally used as agricultural fertiliser, directly, blended with otherfertilisers or after transformation into a complex fertiliser known asNPK (nitrogen, phosphorus, potassium). The potassium content is
variable and is expressed as a percentage of the weight of potassium
oxide (K
2O) on the dry anhydrous product.
(15) Potash is generally commercialised in either a standard/powder form
(standard potash) or in ‘other than standard’ form that includes but isnot limited to a granular form (granular potash). The product isgenerally classified into three basic categories, based on the K
2O
content, namely:
— potassium content not exceeding 40 % K 2O — falling under CN
code 3104 20 10,
— potassium content exceeding 40 % K 2O but less than or equal to
62 % — falling under CN code 3104 20 50,
— potassium content over 62 % K 2O — falling under CN code
3104 20 90.
(16) Since the anti-dumping measures in force also consist of a variable
duty, the Regulation subject to review specified different levels ofanti-dumping duties for standard potash, on the one hand, and the
remaining forms of potash including granular potash, on the other.
(17) It should be recalled that in the last review investigation, it was found
that imports of certain special mixtures or blends with an unusually
high content of potash, which do not fall under the CN codes forpotash indicated above, should be considered a product concerned.This conclusion was reached as such mixtures and blends shared the
same basic physical and chemical characteristics and have the same
uses as the basic categories mentioned above. As the presentinvestigation has not brought to light any consideration indicatingthat the approach taken should not be continued, and in order to ensure
a consistent application of the anti-dumping measures, as well as to
avoid erroneous classification, it has been considered necessary, in thisRegulation, to clarify the minimum content of K
2O of such mixtures
and blends as being 35 % or more, by weight, of the dry anhydrous
product and falling under the ‘other than standard’ form of potash.!B
(1) Subsidiary and exclusive trader of the production of two Spanish mines: Suria K,
SA (until April 1997) and Potasas de Llobregat, SA.
(2) Subsidiary and exclusive trader of the production of ‘Mines de potasse d’Alsace’.2000R0969 — EN — 12.05.2000 — 000.001 — 4
3.2. LIKE PRODUCT
(18) As in the previous investigations, it was established that, since there
were no differences in the physical and chemical properties of the
different types and qualities of potash, potash produced in Canada,
which was chosen as analogue country (see Chapter 4.2) and sold onthe North American market, is a like product to that exported to theCommunity from the countries concerned, in the sense of Article 1(4)
of the basic Regulation. In addition, potash exported from the
countries concerned and potash produced by the Community producerswere also like products.
(19) IPC requested the exclusion of standard potash with a K
2O content
higher than 62 %, which, it was claimed, was only used in
pharmaceutical applications, had different prices and was deliveredpacked (as opposed to the bulk deliveries of potash used as a fertiliser).However, the product in question had the same basic physical
characteristics and basic chemical composition as the product
concerned. The fact that potassium chloride is generally used as afertiliser does not exclude products destined for industrial or
pharmaceutical use or products packed in a different way, from the
scope of the like product definition. It was therefore decided that thistype of potash is one single product with the other types of potash.
4.LIKELIHOOD OF A CONTINUATION OR RECURRENCE
OF DUMPING
4.1. PRELIMINAR Y REMARKS
(20) In accordance with Article 11(2) of the basic Regulation, the purpose
of this type of review is to determine whether or not the expiry of the
measures would lead to a continuation or recurrence of injuriousdumping.
(21) In this respect, the volumes exported to the Community during the IP
were examined. The volume of imports from Russia represented 4,2 %
of consumption but was largely imported under the inward processingregime. In line with the consistent practice of the institutions theseimports should be taken into account for the purposes of establishing
whether dumping is taking place and thus the Russian import volume
is considered sufficient to provide a representative picture of whetherdumping is taking place at present and whether any such dumping willcontinue should measures be removed. The volume of imports from
Belarus could also be considered representative as they reached 1,2 %
of Community consumption. In these circumstances, it was notnecessary to examine whether there was a likelihood of recurrence ofdumping due to imports originating in these two countries should
measures be removed. As regards Ukraine there were no exports
during the IP and therefore the investigation centred on whether therewas a likelihood of recurrence of dumping should measures be
removed.
4.2. ANALOGUE COUNTR Y
(22) In order to establish whether dumping would continue or recur, normal
value had to be based on information obtained in an appropriatemarket-economy third country in accordance with Article 2(7) of thebasic Regulation. In the notice of initiation, Canada was suggested as
an appropriate analogue country.
(23) No party objected to the use of Canada as an analogue country. Both
IPC and the European Fertiliser Import Association (EFIA) agreed tothe choice of Canada as analogue country provided that the mines
located in the province of Saskatchewan rather than New Brunswick
were used for the determination of normal value. IPC also wanted thePatience Lake mine in Saskatchewan excluded from the normal valuedetermination.
(24) Both parties argued that the mines for which exclusion was requested
differ in terms of size, geological deposit conditions and mining andproduction methods from those prevailing in Belarus, Russia and
Ukraine, which are very similar to the Saskatchewan mines.
Furthermore, it was argued that the New Brunswick mine is situatedmuch closer to its customers than the ports of loading used for potash!B2000R0969 — EN — 12.05.2000 — 000.001 — 5
exports for Belarus and Russia, rendering transport costs, in particular,
incomparable.
(25) The investigation confirmed that Canada should be used as an
analogue country because:
(a) Canada was the main producer and exporter of potash world-wide,
ahead of Belarus, Russia and Ukraine;
(b) the North American domestic market for the product concerned
was subject to normal conditions of competition;
(c) the manufacturing process and access to raw materials were, to a
large extent, similar in Canada and in the countries concerned;
(d) Canada had been used in the previous investigations.
(26) With regard to the arguments made by IPC and EFIA concerning the
exclusion of certain mines the following points can be made:
(a) As potash is effectively a commodity and as the normal value
determination is based on prices from virtually all of the mines
operating on the open and competitive North American market,any difference in mining conditions or any of the other factorscited, in one particular mine or region, does not have any material
affect on the normal value;
(b) The point raised by IPC concerning the differences in the
distances between the New Brunswick mine and its domestic
markets in Canada and the Belarusian and Russian mines and their
export ports is not relevant as normal value and export price arecompared, in accordance with Article 2(10) of the basicRegulation, at the same level, i.e. ex-mine. Moreover, the New
Brunswick mine in question represents only a small proportion of
the sales taken into account for the determination of normal valueso that an effect of distances, if any, would be diluted by thevolume of the total sales taken into consideration (see recital 36).
(27) Consequently, calculations were based on all complete questionnaire
replies received from all three Canadian companies. These data,relating to mines located in New Brunswick and Saskatchewan, were
fully verified at the companies’ premises in Canada.
4.3. RUSSIA AND BELARUS
(28) In examining whether there is a likelihood of continuation of dumping
from Russia and Belarus if measures were removed it is necessary toverify whether dumping existed during the IP and whether any such
dumping is likely to continue.
4.3.1. Normal value
(29) Normal value was calculated on the basis of the data of all the
cooperating Canadian companies. In this respect, the total sales ofpotash of the cooperating companies on the Canadian market were
considered to be representative.
(30) It was finally examined whether the relevant sales could be considered
as having been made in the ordinary course of trade by looking at the
proportion of profitable sales of the grade in question.
(31) As the volume of standard potash sold at a net sales price equal to or
above the cost of production (profitable sales) represented more than80 % of the total sales volume of that grade and since the weighted
average price was higher than the weighted average cost of production,
normal value was based on the actual price on the North Americanmarket for Russia, calculated as a weighted average of the prices of allsales of standard potash made by each company during the
investigation period, whether profitable or not.
4.3.2. Export price
(32) IPC was the only exporter that cooperated with the investigation.
Export volumes reported by IPC do virtually correspond to the
Eurostat figures, complemented as explained under point 6.2.1.
Therefore, for both Belarus and Russia, export prices were assessedon the basis of the information provided by IPC.!B2000R0969 — EN — 12.05.2000 — 000.001 — 6
(33) IPC sold to the Community market partly via two related importers,
Ferchimex, based in Belgium and Belarus, based in Austria, and partlydirectly to independent customers.
(34) In all cases where exports of potash were made to independent
customers in the Community, the export price was established in
accordance with Article 2(8) of the basic Regulation, i.e. on the basisof export prices actually paid or payable. In cases where export saleswere made to a related party, the export price was constructed pursuant
to Article 2(9) of the basic Regulation, i.e. on the basis of the price at
which the imported products were first resold to an independent buyer.In such cases, adjustments were made for all costs incurred between
importation and resale and for profits accruing, in order to establish a
reliable export price at the Community frontier level. The profitmargin of 5 % applied in the previous investigation was, in the absenceof any other information, considered reasonable given the functions
performed by the related importers.
(35) During the investigation period, virtually all of the potash exported to
the Community by IPC entered the Community market in theframework of the inward processing relief (IPR) regime, where it
competed with potash produced by the Community industry.
4.3.3. Comparison
(36) As potash is a bulk product with transport costs representing a large
proportion of the selling price, and in view of the significant distancebetween the Belarusian and Russian mines and the nearest port or
frontier, it was decided that the comparison should be carried out on an
ex-mine basis, as in the previous investigation.
(37) For the purpose of ensuring a fair comparison between the normal
value and the export price, due allowance, in the form of adjustments,
was made for differences affecting price comparability, in accordance
with Article 2(10) of the basic Regulation.
(i) Adjustments to normal value
(38) IPC made a number of comments regarding differences in quality and
mining conditions between Belarus and Russia and the Community
and Canada. However, no claims for adjustment were made and none
of the alleged differences was quantified. Furthermore, most of theelements mentioned were already treated in the previous investigation,where it was concluded that any adjustment for natural comparative
advantages would have been to the disadvantage of the Belarusian and
Russian mines. As the essential circumstances have not materiallychanged since the previous investigation, and for the abovementioned
reasons, there was no need for adjustments to normal value for
physical differences or natural comparative advantages. An adjustmentfor differences in credit costs has been granted where warranted.
(ii) Adjustments to the export price
(39) An adjustment to the export price was made for transport costs. The
methodology used to determine the amount of the adjustment was the
same as in the previous investigation, i.e. for transport within Belarus
and Russia data relating to transport costs in Canada were taken, whiletransport costs from the border of the producing country to the
Community border, where applicable, were determined on the basis of
the costs reported by IPC.
(40) IPC argued that the amounts for transport costs reported in its reply to
the questionnaire were wrongly deducted. There was some contra-
diction between the delivery terms and the transport costs as reported
by IPC. However, in the absence of any evidence provided by IPC, itwas impossible to find out whether the delivery terms or the transportexpenses were correctly reported. In any event, even if the most
favourable approach for IPC was taken, this would not have altered the
findings concerning the existence of dumping. Furthermore, it shouldbe recalled that in an expiry review it is not necessary to calculate a
precise dumping margin.
(41) An adjustment was also made for credit costs on the basis of the
information reported by IPC.!B2000R0969 — EN — 12.05.2000 — 000.001 — 7
4.3.4. Dumping margin
(42) A dumping margin was determined respectively for Belarus, Russia
and Ukraine. The weighted average normal value was compared to the
weighted average export price to the Community.
(i) Belarus
(43) Expressed as a percentage of the price ‘cif-Community-border’, there
was still significant dumping with regard to imports originating fromBelarus, although at a somewhat lower level than found in the previousinvestigation.
(ii) Russia
(44) Expressed as a percentage of the price ‘cif-Community-border’, the
dumping margin found is significantly higher than the one found in theprevious investigation.
4.3.5. Conclusion
(45) With regard to imports from Belarus and Russia, it can therefore be
concluded that there has been a continuation of significant dumping.
No reasons have been found as to why dumping would stop should the
anti-dumping measures be repealed.
4.4. UKRAINE
(46) As in the previous investigation, no cooperation was received from
Ukraine. Eurostat figures did not show any imports from this country
during the investigation period, although there had been imports in
preceding years. On this basis, it was necessary to examine whetherdumping would recur should measures be repealed. No cooperationwas received from any Ukrainian producer. Therefore, and in
accordance with Article 18 of the basic Regulation, findings had to
be based on facts available. In this context, it should be noted thatevidence suggests that potash mines are operated in Ukraine. Thisevidence suggests that they have a significantly lower capacity than the
ones in Russia and Belarus. However, when comparing the capacity of
these Ukrainian mines with Community consumption the potential forexports is still important. As to the level of prices of possible
Ukrainian imports, it should be noted that there is no shortage of
supply of potash on the Community market. Thus, if a new playerwishes to enter the Community market it can only do so at price levelsundercutting those charged by the operators currently active on this
market, which means that they would be dumped. It should also be
noted that in the past imports from the Ukraine have been at pricessimilar to those then charged by Russia and Belarus.
4.4.1. Conclusion
(47) In view of the foregoing, and in the absence of any other evidence to
the contrary, for exemple information on capacity utilisation, volumes
and prices of exports to other third countries, it was concluded that
there is a likelihood of a recurrence of dumped imports originating inthe Ukraine should measures be repealed.
5.DEFINITION OF THE COMMUNITY INDUSTRY
(48) The investigation confirmed that the applicant Community producers
represented 99 % of the Community production of potash and
therefore constitute the Community industry within the meaning ofArticle 4(1) and Article 5(4) of the basic Regulation.
6.ANAL YSIS OF THE SITUATION OF THE COMMUNITY
INDUSTRY AND OF THE COMMUNITY POTASH MAR-KET
(49) Firstly, it should be noted that the data relating to profitability and
investments during the period considered were calculated on the basisof the data of three Community producers: Cleveland Potash Limited,
Comercial de Potasas, SA and Kali und Salz GmbH. The fourth
Community producer, SCPA, was partly excluded due to theexceptional condition of its mining subsidiary ‘Mines de potasse!B2000R0969 — EN — 12.05.2000 — 000.001 — 8
d’Alsace’. The mine will be closed in a few years due to exhaustion of
potash reserves, and it is no longer investing. Also the accountingsystem of the mine has been simplified in such a way that it is nolonger possible to calculate either the production cost or the
profitability of potash in a manner allowing for the aggregation of
the data with other Community producers. However, on the basis of theinformation available, had SCPA been taken into account theprofitability of the Community industry would have been notably
lower and the investments would have shown an even more drastic
downward trend.
(50) Secondly, it should be noted that during the most recent years imports
from the countries concerned were almost exclusively under the IPR
regime. In line with the consistent practice of the Community
institutions, it was considered that these imports compete with theproduct concerned of the Community industry as they are processed in
the Community by fertiliser manufacturers who buy some of the raw
materials used in the production of complex fertilisers, which are alsodestined for export, from the Community industry. These imports weretherefore taken into account in establishing Community consumption,
market shares of the countries concerned and in the analysis of prices
of potash sold by the exporters concerned.
6.1. CONSUMPTION ON THE COMMUNITY MARKET
(51) The total consumption of potash was calculated on the basis of the
combined totals of:
(a) the sales volume of own-produced potash of the Community
industry on the Community market;
(b) the sales volume of non-applicant Community producers on the
Community market;
(c) imports into the Community of potash from the countries
concerned;
(d) imports into the Community of potash from all other third
countries.
(52) On this basis, consumption decreased from around 7 460 000 tonnes in
1994 to around 7 290 000 tonnes in the IP; i.e., a decrease ofapproximately 2,3 %. However, during the period considered the level
of consumption fluctuated as shown in the table below:
(in thousand tonnes)
1994 1995 1996 1997 IP
Community consumption 7 460 7 340 7 090 7 600 7 290
Source: Questionnaire replies of the Community industry, Eurostat, National Statistical Offices in Finland, Denmark and Belgium.
6.2. IMPORTS FROM THE COUNTRIES CONCERNED
6.2.1. Import volume
(53) The volume of imports of potash originating in Russia decreased from
397 000 tonnes in 1994 to 305 000 tonnes during the IP , equivalent to a
decrease of about 23 %. The volume of imports originating in Belarus
decreased from 137 000 tonnes in 1994 to 91 000 tonnes in the IP ,equivalent to a decrease of about 34 %. Ukraine exported only duringthe years 1994, 1995 and 1997, with a sharply declining trend. The
overall imports from the countries concerned decreased by around 32 %
during the period considered. The decrease was, however, not constant:total imports from the countries concerned decreased until 1996,
reaching a low of 132 000 tonnes, after which they started soaring
again, increasing by threefold up to the IP .
(54) The investigation has shown that the volume of imports as reported by
IPC is higher than the data contained in Eurostat, as several MemberStates that have only one major importer did not report complete data
for confidentiality reasons. Complementary information from those
Member States was requested and received. On this basis it was found!B2000R0969 — EN — 12.05.2000 — 000.001 — 9
that the imports reported by IPC are not significantly different from the
complete Eurostat data.
(in thousand tonnes)
Imports 1994 1995 1996 1997 IP
Russia total 397 175 122 190 305
Belarus total 137 113 11 51 91
Ukraine 49 15 0 1 0
Total 583 303 132 243 396
Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.
The tonnage imported under the IPR regime and their percentage of
total Community imports of potash for each country were:
(in thousand tonnes)
Imports 1994 1995 1996 1997 1998
Russia 61 159 115 178 284
% of imports 15 91 94 93 93
Belarus 34 52 11 51 91
% of imports 25 46 100 100 100Ukraine 35 15 0 1 0
% of imports 72 100 N/A 100 N/A
Totals 131 226 126 230 375% of imports 22 75 95 95 95
(55) The above tables illustrate developments during the imposition of
anti-dumping measures. While the share of imports under the IPR
regime was only minor in 1994, during the IP practically all theimports occurred under the said regime. Imports under the IPR regimeare controlled by the Member States’ customs authorities as provided
for in Council Regulation (EEC) No 2913/92 of 12 October 1992
establishing the Community Customs Code (
1). The present investi-
gation has not brought to light any facts that would suggest that theregime could have been used to circumvent the measures. It should
also be noted that goods imported under this regime are not liable to
the anti-dumping duties under review, a factor explaining the increaseoccurring towards the end of the period considered.
6.2.2. Market share
(56) The market share of the imports from the countries concerned on the
Community market decreased by 2,4 percentage points during the
period considered. However, the decrease has not been constant. Themarket share decreased from its highest level of 7,8 % in 1994 to reach!B
(1) OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Regulation (EC) No
955/1999 of the European Parliament and of the Council (OJ L 119, 7.5.1999, p.
1).2000R0969 — EN — 12.05.2000 — 000.001 — 10
its lowest level in 1996, i.e. 1,9 %. After 1996 there was a constant
increase, up to 5,4 % in the IP .
Market share of the
imports concerned in %1994 1995 1996 1997 IP
Belarus 1,8 1,5 0,2 0,7 1,2
Russia 5,3 2,4 1,7 2,5 4,2Ukraine 0,7 0,2 0 0 0
Total 7,8 4,1 1,9 3,2 5,4
Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.
6.2.3. Price evolution and price behaviour
6.2.3.1. Price evolution of the imports concerned
(57) As to the evolution of prices of the imports subject to investigation
over the period considered, trends were established using Eurostatfigures as determined in recital 54.
The cif average sales prices from the countries concerned on the
Community market developed in detail as follows:
(in ECU/tonne)
Average cif prices of potash with
40 %5K2O462 %1994 1995 1996 1997 IP
Belarus 67,5 86,5 88,3 94,1 100,1
Russia 83,1 71,7 74,4 79,4 85,8Ukraine 83,6 89,9 — 88,0 —
Average 79,2 76,8 75,7 83,3 90,8
Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.
(in ECU/tonne)
Average cif prices of potash with
K2O462 %1994 1995 1996 1997 IP
Russia — 89,9 93,8 96,7 101,5
Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.
(58) The average increase in the price of potash with 40 % 5K2O462 %
from the countries concerned amounts to 14,6 % during the period
considered. Whereas the Belarusian prices have increased signifi-cantly, overtaking the price of potash of Russian origin, the Russianprices have remained relatively low. No potash originating in Ukraine
was imported in the IP .
(59) Potash with K
2O462 % was only imported from Russia. The average
price increased by 12,9 % from 89,9 ECU/tonne in 1995 to
101,5 ECU/tonne in the IP .
6.2.3.2. Price behaviour
(60) Anti-dumping duties have been in force for three years. During this
time very few imports originating in the countries concerned were
made for release into free circulation. Imports have mostly beenlimited to the IPR regime. IPC representatives claimed that they had tooffer their product at lower prices than those of the Community
industry due to the very nature of the IPR regime. This argument was
studied but no clear evidence was found to support it.!B2000R0969 — EN — 12.05.2000 — 000.001 — 11
(61) In the examination of price behaviour, prices declared by the exporters
for each sale to independent customers and for each resale throughtheir related importer were averaged during the IP for the two maingrades of potash according to their origin: Belarus and Russia. These
prices were net invoice prices, duty unpaid and equivalent to delivered
prices because of the proximity of the clients to the ports of delivery.They were compared to the weighted averages of all Communityproducers’ invoiced prices at Community level for the said two grades
of potash.
(62) It was thus established that IPC’ s prices were lower than those of the
Community industry by more than 10 % on average. More specifically,potash prices of Russian origin were lower by about 20 % and of
Belarusian origin by 5 %.
6.3. ECONOMIC SITUATION OF THE COMMUNITY INDUS-
TRY
(63) It should be noted that forecasts given by the Community industry for
1999 and 2000 were based on the assumption that the measures will be
maintained.
6.3.1. Production
(64) The production of potash in the Community declined throughout the
period considered with the exception of 1996 when a minor increaseoccurred. Production decreased from around 7 779 000 tonnes toaround 7 026 000 tonnes for the following reasons: (1) the gradual
exhaustion of ore in the French mine; (2) the closing down of some
unprofitable mines in Germany and Spain; and (3) geologicalanomalies in the mine of one Community producer in 1997 and
during the IP . For 1999 and 2000, the Community industry forecast an
increase in production reaching the level of 1997 in 2000.
Figures for Community production of potash were as follows:
(in thousand tonnes)
1994 1995 1996 1997 IP
Production 7 779 7 428 7 541 7 368 7 026
Source: Questionnaire replies of the Community industry.
6.3.2. Production capacity
(65) The production capacity of the Community industry decreased from
around 10 000 000 tonnes in 1994 to around 9 300 000 tonnes in theIP . Only in 1996 was there a minor increase in production capacity
compared to the previous year. In 1999 and 2000 the Community
industry is expected to reduce its capacity even further to a level ofaround 8 500 000 tonnes in 2000 due to progressive exhaustion of orein the French mine.
Figures for total production capacity of potash were as follows:
(in thousand tonnes)
1994 1995 1996 1997 IP
Capacity 9 996 9 414 9 472 9 403 9 293
Source: Questionnaire replies of the Community industry.
6.3.3. Capacity utilisation
(66) The Community industry’ s capacity utilisation increased from 1994 to
1996 but began to decrease in 1997, primarily because the French
producer was no longer able to produce potash up to its maximumore-processing machine capacity as a result of decreasing oreresources. However, for 1999 and 2000 the Community industry
expects to improve its capacity utilisation rate up to a level of 86 % in
year 2000 along with the write-off of capacity in France.!B2000R0969 — EN — 12.05.2000 — 000.001 — 12
In particular, the Community industry’ s capacity utilisation for potash
developed as follows:
(%)
1994 1995 1996 1997 IP
Capacity utilisation 77,8 78,9 79,6 78,4 75,6
Source: Questionnaire replies of the Community industry.
6.3.4. Sales volume
The Community industry’ s sales volume of own-produced potash to
unrelated customers decreased from around 5 530 000 tonnes in 1994to around 5 260 000 tonnes during the IP . The sales volume increased
considerably between 1996 and 1997, but decreased again during the
IP . However, by the end of 2000 the Community is expected to increaseits sales volume to the 1997 level. In particular, the Communityindustry’ s sales volume on the Community market developed as
follows:
(in thousand tonnes)
1994 1995 1996 1997 IP
Sales volume of the Community
industry5 530 5 452 5 415 5 750 5 261
Source: Questionnaire replies of the Community industry.
6.3.5. Market share
(67) The Community industry’ s market share decreased from 74,1 % in
1994 to 72,2 % in the IP: a drop of about 2 percentage points. During
this period its market share increased until 1996, after which it began
to decrease to reach the level of the IP .
Specifically, the Community industry’ s market share developed as
follows:
(%)
1994 1995 1996 1997 IP
Community industry’ s market
share74,1 74,3 76,4 75,6 72,2
Source: Questionnaire replies of the Community industry, Eurostat and National Statistical Offices in Finland, Denmark and Belgium.
6.3.6. Price development
(68) The investigation showed that the Community producers’ average
selling price of the most-sold grade of standard potash(40 % 5K
2O462 %) rose from 90,1 ECU/tonne in 1994 to
104,2 ECU/tonne in the IP . This amounts to a rise of 15,6 %. However,
the prices of potash with K 2O462 % dropped from 137,7 ECU/tonne
in 1994 to 122,0 ECU/tonne in the IP . This amounts to a decrease of
11,4 %. The decrease in price coincides with significant increase in
sales volumes for the grade by the Community industry during theperiod considered. Larger orders brought economies of scale andtherefore customers benefited from lower average prices.
(69) While there was a general upward trend in selling prices of standard
potash with 40 % 5K
2O462 % between 1994 and the IP , prices
temporarily dropped in 1997 and then increased by 7,9 % in the IP . As
for 1999 and 2000 the Community industry believes the positive trend
in sales prices for potash with 40 % 5K2O462 % will continue and
that there will be a small decrease in price for potash with K 2O462 %.!B2000R0969 — EN — 12.05.2000 — 000.001 — 13
The Community industry’ s average sales price for potash on the
Community market developed as follows:
(in ECU/tonne)
Average sales price 1994 1995 1996 1997 IP
Standard potash with
40 %5K2O462 %90,1 96,8 101,6 96,6 104,2
Standard potash with K 2O462 % 137,7 138,7 134,8 123,2 122,0
Source: Questionnaire replies of the Community industry.
6.3.7. Profitability
(70) For the purpose of the profitability analysis of the Community industry
and following an established practice, the revenues from sales of
certain by-products of potash production were also taken into account.
It should also be recalled that the French producer, SCPA, wasexcluded from the Community industry’ s profitability calculation forthe reasons set out in recital 49.
(71) The Community industry’ s profitability, expressed as a percentage of
net sales, increased during the period considered from a weighted
average loss of 1,0 % in 1994 to a profit of 3,3 % in the IP . It should be
noted that profitability has improved steadily with the exception of1997 when the profits declined to close to zero. During 1999 and 2000the Community industry’ s profit level is expected to continue to fall
short of a profit, which is considered normal for a risk-intensive
mining business such as potash. The Community industry’ s profit-ability on the Community market for potash developed as follows:
(%)
1994 1995 1996 1997 IP
Profit rate − 1,0 − 0,5 1,5 0,1 3,3
Source: Questionnaire replies of the Community industry.
6.3.8. Employment
(72) Employment in the Community industry declined from 8 460
employees in 1994 to 6 936 employees in the IP , a drop of 18,0 %.The number of employees is forecast to drop even more during 1999
and 2000 due to the approaching closure of the French mine. The
Community industry’ s employment situation developed as follows:
Personnel employed in the produc-
tion of potash1994 1995 1996 1997 IP
Employees 8 460 7 919 7 296 7 213 6 936
Source: Questionnaire replies of the Community industry.
6.3.9. Stocks
(73) The closing stocks of the Community producers for potash decreased
from 560 000 tonnes in 1994 to 469 000 tonnes in the IP , a decrease of
about 16 %. Closing stocks increased continuously from 1994 to 1996,
but dropped significantly in 1997 to moderately increase again duringthe IP .!B2000R0969 — EN — 12.05.2000 — 000.001 — 14
The closing stocks of the Community industry of potash developed as
follows:
(in thousand tonnes)
1994 1995 1996 1997 IP
Closing stocks 560 614 903 415 469
Source: Questionnaire replies of the Community industry.
6.3.10. Investments
(74) The Community industry’ s total investments decreased from around
ECU 87,7 million in 1994 to around ECU 52,9 million in the IP , adecrease of about 40 %. Between 1994 and 1995 the investments
increased due to a modernisation process of the mines of one major
Community producer. In 1999 and 2000 the Community industry plansto start investing more again and the forecast level of investments in
2000 would exceed the 1996 figure. It should also be recalled that the
French producer, SCPA, was excluded from the Community industry’ sassessment of investments for the reasons set out in recital 49. TheCommunity industry’ s investments developed as follows:
(in thousand ECU)
1994 1995 1996 1997 IP
Investments 87 722 113 809 84 201 63 908 52 882
Source: Questionnaire replies of the Community industry.
6.4. IMPORT VOLUMES AND IMPORT PRICES FROM OTHER
THIRD COUNTRIES
(75) The import volume of potash from other third countries increased
during the period considered from about 1 348 000 tonnes in 1994 toabout 1 566 000 tonnes in the IP . This is equivalent to an increase ofabout 16,2 %. The major part of the increase is attributable to imports
from Israel.
(in thousand tonnes)
1994 1995 1996 1997 IP
Imports from other third countries 1 348 1 552 1 495 1 555 1 566
Source: Eurostat.
(76) The market share of imports from other third countries grew from
17,9 % in 1994 to 21,0 % in 1995 and remained relatively stablethereafter ending up with 21,4 % at the end of the IP .
(77) The average sales price for imports from other third countries has been
included to show the price trend during the period considered.According to Eurostat, the average sales price for these importsincreased steadily from 96,5 ECU/tonne in 1994 to 120,5 ECU/tonne
in 1997. The price then dropped to 112,3 ECU/tonne in the IP . This
corresponds to an increase of 16,4 % in the period considered.
In detail, the development was as follows:
(in ECU/tonne)
1994 1995 1996 1997 IP
Average import prices from other
third countries96,5 101,8 104,3 120,5 112,3
Source: Eurostat.!B2000R0969 — EN — 12.05.2000 — 000.001 — 15
6.5. EXPORT ACTIVITY OF THE COMMUNITY INDUSTR Y
(78) In view of the fact that the production set out in point 6.3.1 is destined
for sales both inside and outside the Community, the Communityindustry’ s exports of potash to third countries was also analysed. This
analysis showed that exports amounted to 2 314 000 tonnes in 1994
compared to 1 658 000 tonnes in the IP . These exports had adownward trend except for 1997 when exports increased compared
to the previous year. The overall decrease in exports amounts to 28,3 %
in the period considered. In 1999 and 2000 the Community industryexpects to export somewhat less than in the IP . This downward trend islikely to be explained by the fact that, as explained later in point 7.3,
the countries concerned have significantly increased their marketing
efforts in other third markets than the Community after theanti-dumping measures concerning imports of potash originating inthe countries concerned came into force in the Community. Faced with
fierce price competition, the Community industry has not been able to
deliver the same quantities of potash in the third-country markets asbefore.
In detail, the development during the period considered was as
follows:
(in thousand tonnes)
1994 1995 1996 1997 IP
Export sales volumes of the
Community industry2 314 1 815 1 671 1 947 1 658
Source: Questionnaire replies of the Community industry.
6.6. CONCLUSION
(79) The evolution of various economic indicators of the Community
industry during the period considered was mixed. After the imposition
of combined measures (fixed duty and a minimum price) in 1994, thesituation of the Community industry has improved. Economic factors
such as average sales prices per tonne for the most-sold grade, volume
of stocks and profitability showed a positive development.
(80) Indeed, average sales prices for standard grade potash with
40 %5K
2O462 % rose by 15,6 % during the period considered.
Secondly, the volume of stocks has decreased since 1996: an indication
of improving demand on the market. Thirdly, after two years of losses,
the Community industry’ s sales have been profitable again since 1996.It is clear that this is due to increased sales prices, which were made
possible by the introduction of more effective anti-dumping measures
in 1994.
(81) Nevertheless, the analysis also shows that these positive developments
do not cover all indicators and that, in particular from 1996 onwards,there has been a downward trend. Specifically, production volume,
capacity, capacity utilisation, market share, sales volume, employment
and investments did not develop favourably.
(82) The Community industry’ s sales volume decreased by 4,9 % during the
period considered. Its production volume and capacity declined by9,7 % and 7,0 % respectively, leading to a decrease of 2,2 percentage
points in its capacity utilisation. Furthermore, the Community
industry’ s investments plummeted by 39,7 % at the same time as ithad to reduce its workforce by 18,0 %.
(83) As mentioned earlier, the Community consumption of potash
decreased by about 2,3 %, reaching its lowest level in 1996. The
Community industry lost 1,9 % of the Community market; thecountries concerned lost 2,4 %, while other third countries, notablyIsrael, gained 3,4 %. Since 1996, however, the Community industry
has lost more than 4 % of the Community market; the countries
concerned gained 3,5 % while for the other third countries the shareremained practically unchanged. It can be concluded, therefore, thatimports from other third countries have had no significant impact on
the economic situation of the Community industry between 1996 and
the end of the IP .!B2000R0969 — EN — 12.05.2000 — 000.001 — 16
(84) The average prices of the Community industry and of the countries
concerned increased in a similar manner (except for standard potashwith K
2O462 %) as shown in recitals 57 and 69. The same applies
for other third countries. However, prices from the countries concerned
continued to be the lowest, especially for potash of Russian origin,
negatively influencing sales volumes, market share and profitability ofthe Community industry, in spite of the restricted imports originatingin the said three countries.
(85) Finally, the impact of declining export sales was considered. Export
sales, which represented 24 % of the total sales of the Communityindustry during the IP , had decreased by 28,3 % during the period
considered because of fierce competition on the third-country markets.
Although this development may explain part of the negativedevelopment of the production of the Community industry in
particular, it is not sufficient to explain this negative trend overall.
In conclusion, the investigation established that, although the situation
of the Community industry has somewhat improved, several economic
factors did not develop so favourably and that the Community industry
continues to be vulnerable to a possible recurrence of injuriousdumping if the measures were allowed to lapse.
7.LIKELIHOOD OF RECURRENCE OF INJURY
7.1. DOMESTIC MARKETS IN THE COUNTRIES CONCERNED
(86) The countries concerned possess huge raw material reserves of potash.
Y et domestic consumption of potash in Belarus and Russia collapsed inthe first half of the 1990s and remained at a low level during the period
considered. Domestic sales in these two countries increased by about
6 % in the IP compared to 1994. They still represented less than aquarter of the corresponding potash production. There is no reason tobelieve that demand on the domestic market would have developed
differently in Ukraine.
7.2. EXPORTS UNDER THE IPR REGIME
(87) An analysis of the sales prices for imports under the IPR regime was
made in order to assess at which prices imports could be made in case
anti-dumping measures were allowed to lapse. As can be seen in recital
62, IPC’ s prices in the Community, quoted almost exclusively underthe IPR regime, undercut the Community industry’ s sales prices by
significantly more than 10 % on average.
7.3. EXPORTS TO THIRD COUNTRIES BY THE COUNTRIES
CONCERNED
(88) The development of exports of the countries concerned to the
Community and of their Community market share is described in
point 6.2.
(89) The development of the export volumes of Belarus and Russia to major
markets other than the Community was also analysed on the basis of
the questionnaire reply and subsequent submission of IPC. Ukrainianproduction is not sold through IPC and no information on Ukrainianexport sales to third countries was made available as the Ukrainian
exporting producers did not cooperate in the investigation. During the
IP the main export market of Belarus and Russia was China, whereimports increased by around 87 % during the period considered. Thesecond largest market was Brazil, which in the IP imported about 34
times more potash from Belarus and Russia than in 1994. The United
States of America and Norway were the third and fourth biggestmarkets with impressive increases in import volumes, as can be seen
from the table below. Japan and other smaller markets in total
somewhat decreased their imports from the two countries during theperiod considered.
(90) Norway, which has a significant user interest but no producers of
potash, imported hardly any quantities from Belarus and Russia in1994. Since the effective, combined anti-dumping measures againstpotash from the countries concerned were imposed by the Community,
the exports of Belarus and Russia have been redirected into Norway to!B2000R0969 — EN — 12.05.2000 — 000.001 — 17
such an extent that the market share of the countries concerned in
Norway reached 71,3 % (1) in the IP and the sales volumes of Belarus
and Russia into this country exceeded total sales into the Communityas early as 1995 (
2).
(91) The table below, indexed for confidentiality reasons, shows in detail
the development of the export sales of Belarus and Russia to markets
other than the Community during the period considered.
(Index)
Exports of the countries concerned to
markets other than the Community1994 1995 1996 1997 IP
China 100 167 127 183 187
Brazil 100 414 2 535 4 062 3 438
USA 100 104 103 157 157
Norway 100 3 833 5 750 5 383 4 933Japan 100 94 78 79 84Others 100 74 74 90 96
Total 100 130 137 188 186
Source: IPC questionnaire reply.
(92) In order to be able to assess the importance of these exports it should
be noted that the exports of the countries concerned to the Communityduring the IP roughly correspond to their exports to Norway.Furthermore, the total exports of the countries concerned to third-
country markets other than the Community roughly correspond to the
Community industry’ s total sales on the Community market.
(93) A price comparison for all types of potash on a delivered basis shows
that sales prices to Norway, Brazil and Japan during the IP were at ahigher level than prices to the Community. The price level in Chinawas lower in previous years but reached the level of Community prices
during the IP . Export prices to the United States of America have
remained systematically lower than prices to the Community duringthe period considered.
7.4. PRODUCTION, CAPACITY , CAPACITY UTILISATION,
STOCKS AND INVESTMENTS
(94) Information was received concerning the above indicators from the two
cooperating companies in Russia and from one in Belarus. AsUkrainian companies did not cooperate no information was availableexcept for capacity (277 000 tonnes per annum) published in a recent
report by the International Fertiliser Industry Association.
(95) As can be seen from the table below, production capacity in Belarus
and Russia remained steady during the period considered, totalling
19 844 000 tonnes of potash, which is about 33 % of world capacityand almost three times the volume of Community consumption.
(in thousand tonnes)
Production capacity 1994 1995 1996 1997 IP
Belarus 9 077 9 077 9 077 9 077 9 077
Russia 10 767 10 767 10 767 10 767 10 767
Total 19 844 19 844 19 844 19 844 19 844
Source: International Fertiliser Industry Association.
(96) Belarus and Russia managed to increase their production by 39 %
during the period considered. As the table below (indexed for!B
(1)Source: International Fertiliser Industry Association.
(2)Source: IPC questionnaire response.2000R0969 — EN — 12.05.2000 — 000.001 — 18
confidentiality reasons) shows production volumes have increased
relatively steadily, with only one small downward correction in 1996.
(Index)
Actual production 1994 1995 1996 1997 IP
Belarus 100 111 108 129 138
Russia 100 113 106 137 140
Total 100 112 107 133 139
Source: Questionnaire reply of IPC.
(97) Along with the increasing production, the capacity utilisation of the
producers in Belarus and Russia has improved but remains still at an
exceptionally low level leaving a considerable amount of idle capacity.The table below (indexed for confidentiality reasons) demonstratesthat the capacity utilisation rate of the producers improved by 38 %
during the period considered.
(Index)
Capacity utilisation 1994 1995 1996 1997 IP
Belarus 100 111 109 130 137
Russia 100 116 108 139 142
Total 100 112 107 133 138
Source: Questionnaire reply of IPC
(98) No clear trend was established for stocks. In general the level of stocks
varied significantly during the period considered. Stocks of the three
producers were at a relatively low level at the end of the IP .
(99) Investments by Belarus and Russia in their potash mines and factories
increased by around 172 % during the period considered. The growth
trend was only interrupted once in 1996 when the level of investmentsdropped, but the following year investments again reached a level 3,5times higher than in 1996. Since capacity has not been increased, it is
probable that the investment was used to modernise the existing
production facilities.
7.5. CONCLUSION ON THE LIKELIHOOD OF THE RECUR-
RENCE OF INJURIOUS DUMPING
(100) The information available has shown that, although Belarus and Russia
have managed to redirect part of their sales from the Community
market to other markets such as China and Brazil and to obtain
relatively favourable prices on some of these markets, the productioncapacity and capacity-utilisation rates of the producers in Belarus and
Russia continue to be exceptionally low.
(101) Domestic consumption is significantly reduced and a change in this
situation is not expected in the foreseeable future. Moreover, possible
earnings on the Community market are much more attractive than
those which can be achieved on the domestic market. These elementsindicate that Belarusian and Russian export prices could be muchlower than they were in the IP and still be attractive to the exporters
concerned.
(102) The alternative markets in faraway countries are bound to be less
profitable than the Community market, which, being close, is
cost-efficient to reach by boat or by rail. In addition, customers inthe Community traditionally pay for the goods in hard currency andwith shorter payment terms. It should be noted that although the price
level on some markets, like Brazil, is higher than in the Community,
freight costs from the countries concerned to these destinations aremuch higher than to the Community. Sales to the Community market
are even more attractive when compared to sales to the United States
of America and China, which, on a delivered basis, yield lower pricesthan those to the Community. Norway serves as an example of a!B2000R0969 — EN — 12.05.2000 — 000.001 — 19
Western European country situated in the proximity of the countries
concerned and having no duties on imported potash. Norway is nowalmost completely dominated by imports from the countries con-cerned. These imports occur at a somewhat higher price than imports
under the IPR regime into the Community but still clearly below those
of the Community producers.
(103) Therefore, the huge raw material reserves, the low capacity utilisation,
the disadvantageous domestic situation in terms of consumption, the
higher freight cost to alternative markets, the need for hard currency
and the current market situation in Norway demonstrate that the exportpotential of the countries concerned to the Community at low prices is
very high and that, in the absence of measures, there is the likelihood
of the recurrence of injurious dumping.
(104) As far as Ukraine is concerned no information was made available due
to that country’s non-cooperation. In accordance with Article 18 of the
basic Regulation, the facts available had to be used in these
circumstances. In this respect it was found that the Ukrainian potashindustry has close economic links to the Belarusian and Russianindustry. It has already been demonstrated in point 4.4. that there is a
likelihood of recurrence of dumping in significant volumes. It is
beyond any reasonable doubt that such imports, which would be indirect competition with those from Belarus and Russia, would have aninjurious impact on the Community industry. It was therefore
concluded that, with respect to imports originating in Ukraine, there
is a likelihood of recurrence of injurious dumping should the measureslapse.
(105) It is therefore concluded that, in the absence of measures, there is a
likelihood of a recurrence of injurious dumping and that anti-dumpingmeasures should therefore be maintained.
8.COMMUNITY INTEREST
8.1. INTRODUCTION
(106) In accordance with Article 21 of the basic Regulation, it was examined
whether a prolongation of the existing anti-dumping measures would
be against the interest of the Community as a whole. The
determination of the Community interest was based on an appreciationof all the various interests, such as those of the Community industry,the importers and users of the product concerned. In order to assess the
likely impact of a continuation of the measures, information was
requested from all the interested parties mentioned above.
(107) It should be recalled that, in the previous investigations, the adoption
and maintenance of measures was considered not to be against the
interest of the Community. Furthermore, it should be noted that thepresent investigation is a review, thus analysing a situation in whichanti-dumping measures have already been in place. Consequently, the
timing and nature of the present investigation allows the assessment of
any negative, undue impact of the anti-dumping measures imposed onthe parties concerned.
(108) Questionnaires were sent to 17 importers/users, of which seven
unrelated and two related importers/users replied. The importers and
users received the same questionnaire as many of them act in the tworoles. Furthermore, questionnaires were sent to three importer/userorganisations: European Fertiliser Import Association (EFIA), Euro-
pean Fertiliser Manufacturers Association (EFMA) and COPA/Cosega.
However, only EFIA replied to the questionnaire.
(109) On this basis it was examined whether, despite the findings on
dumping, injury and continuation or recurrence of injurious dumping,
compelling reasons existed which would lead to the conclusion that itis not in the Community interest to maintain measures in this particularcase.
8.2. INTERESTS OF THE COMMUNITY INDUSTR Y
(110) As set out above, it is considered that, if the anti-dumping measures
were allowed to lapse, the dumped imports destined for free circulation
on the Community market would be likely to recur and that the!B2000R0969 — EN — 12.05.2000 — 000.001 — 20
situation of the Community industry would start deteriorating again
from its currently moderately profitable status.
(111) This could entail a severe reduction in the numbers of employees in
addition to the reductions that will occur as a result of the future
closure of the French Community producer.
(112) Furthermore, although potash production in France will cease, the
ongoing restructuring efforts and plans show that the Communityindustry is not ready to abandon this segment of production.Maintaining antidumping measures is therefore of prime interest to
the Community industry.
8.3. INTERESTS OF IMPORTERS/TRADERS
(113) Two of the seven companies that replied to the importers/users
questionnaire are purely traders of the product. The remaining five arealso users of it. Main arguments from the traders’ position wereprovided in EFIA’ s questionnaire reply.
(114) The importers of potash are against the prol ongation of the
anti-dumping measures. They argue that the combination of a fixed
duty and a minimum price has completely excluded the producers of
the countries concerned from the Community market, thus reducingcompetition within the Community to a minimum. As a result, theyclaim, the price of potash on the Community market has become
artificially high and access to imported potash difficult especially to
small traders.
(115) While it is true that, apart from imports under the IPR regime, potash
from the countries concerned has practically been excluded from theCommunity market, imports from Canada, Israel, Jordan and fromsome smaller exporting countries, together with the existence of a
number of Community producers, have guaranteed competition on the
Community market. No representative evidence was found on thealleged difficult access for traders to imported potash. In any event the
proposed measures will take a different form to those presently
reviewed and are aimed at an increased access to the Communitymarket for the imports from the countries concerned.
(116) It is thus concluded that the profitability of those importers who are
purely traders of potash has not been negatively influenced by theimposition of the anti-dumping measures. It is also likely that a
continuation of the measures in a different form will not lead to a
future deterioration in their profitability.
8.4. INTERESTS OF USERS
(117) The direct users of potash as a fertiliser (farmers) did not express their
position, although their representative organisation received thequestionnaire. Therefore, it is to be concluded that the continuationof anti-dumping duties will not make a major difference for farmers.
(118) The five users who did reply to the questionnaire are all fertiliser
manufacturers who buy potash from the Community industry and also
import it from third countries. For them potash is a raw material for
producing compound fertilisers that typically consist of three differentnutrients: nitrogen, phosphorus and potassium (NPK-fertilisers).
(119) Most of the users, being also importers, argued in the same manner
against the continuation of the measures as explained above in point8.3 ‘Interests of importers/traders’. However, one importing user stated
that the anti-dumping measures had created a certain price stability on
the Community market for potash, which was beneficial for itsactivity.
(120) Users have little flexibility concerning their product mix whenever an
anti-dumping duty for one of the fertiliser components is applied. Asthe competing fertiliser producers in third countries do not pay duty on
their potash, the Community fertiliser manufacturers claim that they
are unable to compete with the prices of the final product offered bytheir foreign competitors. On the export market the situation iscompletely different: there the Community fertiliser manufacturers can
be competitive due to the possibility of importing under the IPR
regime.!B2000R0969 — EN — 12.05.2000 — 000.001 — 21
(121) In reply to these allegations the investigation showed that potash
represents around 15 % to 30 % of the total cost of the compoundfertiliser. The production costs of fertilisers increased during the periodconsidered not only because of potash but for several reasons. It was
established that the price levels of other fertiliser components,
especially that of nitrogen, varied significantly during the periodconsidered. In a particular example, the share of potash in the totalprice increase of the final product was calculated to be around 20 %
during the period considered.
(122) Although it must be recognised that the cost situation of Community
users of potash on the Community market has deteriorated since the
measures were imposed, the effect of the potash prices on their total
production costs is not likely to be such as to jeopardise theirexistence. Since the measures have been in place for seven years now,
it can be concluded that their continuation will not imply a further
deterioration in the situation of the users.
8.5. CONSEQUENCES FOR COMPETITION ON THE COMMU-
NITY MARKET
(123) As mentioned earlier, the measures in their current form have
practically excluded potash from the countries concerned, apart from
imports under the IPR regime. Even in this time period, it should berecalled that the importers and users have always enjoyed the presence
of a number of competitors — Community and third country-based —
on the market. However, it has been argued that, despite such apresence, the current form of measures, in particular the minimumprice element, has affected the market in a way that has impeded
competition. While no indications in this respect have been made
available in the course of the investigation, it was found that, throughthe imposition of measures in the present form, major sources ofsupply have been practically excluded from the Community market. It
is recalled that such de facto exclusion was not the purpose of the
combined measures (a minimum price and a specific duty), whosepurpose was simply to prevent circumvention and absorption of the
original duties.
8.6. CONCLUSION ON COMMUNITY INTEREST
(124) Having analysed all the various interests involved, it is considered that,
on the one hand, a continuation of the anti-dumping measures is likely
to result in a stable price for potash on the Community market,
entailing some negative effects on the economic situation of users ofpotash. On the other hand, leaving the Community industry withoutadequate protection against the dumped imports would most probably
wipe out its already small profitability and lead to more serious
problems than the user industry could possibly suffer. Therefore, theprice disadvantage that will result for the users from the continuationof the anti-dumping measures is overridden by the benefits to the
Community resulting from the prevention of the recurrence of the
injurious dumping.
(125) However, since the current form of anti-dumping measures has had the
effect of practically excluding imports of the product concerned, other
than those destined for inward processing, and consequently ofeliminating a significant source of supply on this market, it isconcluded that there are no compelling reasons against the
prolongation of the existing anti-dumping measures, but that it is in
the interest of the Community to change the form of measures asexplained below.
9.DEFINITIVE ANTI-DUMPING MEASURES
(126) It follows from the above that, as provided for by Article 11(2) of the
basic Regulation (governing the request for a review lodged by theCommunity industry) and Article 11(3) (applicable to the interim
review initiated by the Commission on its own initiative but limited to
the form of the measures), the measures on imports of potassiumchloride originating in Belarus, Russia and Ukraine imposed byRegulation (EEC) No 3068/92 should be maintained.
(127) It will be recalled that the current form of measures, i.e. a combination
of a minimum price and a specific duty, was introduced by Regulation!B2000R0969 — EN — 12.05.2000 — 000.001 — 22
(EC) No 643/94. This form of measure was chosen in view of the
particular situation which prevailed at that time. Indeed there werestrong indications of circumvention of the type of anti-dumping dutyinitially imposed, i.e. a variable duty based on a minimum price. The
current investigation has shown that this particular form of measures is
no longer warranted as it is considered unlikely that the countriesconcerned would lower their export prices and thus absorb the fixedduty. The investigation has further shown, as explained in point 8.6,
that, in order to allow potential sources of supply to operate on the
Community market, it is not in the interest of the Community tomaintain the measures in their current form. It is therefore considered
appropriate to amend the form of the measures by eliminating the
minimum-price component while retaining the fixed duty element.
(128) Finally, it should be noted that the Commission also received proposals
for an undertaking from IPC, in accordance with Article 8 of the basicRegulation. These proposals were carefully examined and it wasconcluded that, in the absence of sufficient guarantees by the exporter
and the Russian government, they could not be effectively monitored
or enforced and that furthermore the risk of compensatory pricing ofthe product concerned imported into the Community under the IPRregime could not be excluded. The Commission was, therefore, not
satisfied that the offers of price undertakings would guarantee the
prevention of the injurious effects of dumping. The offers weretherefore rejected,
HAS ADOPTED THIS REGULATION:
Article 1
Article 1 of Regulation (EEC) No 3068/92 is hereby replaced by the
following:
‘Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of
potassium chloride falling within CN codes 3104 20 10, 3104 20 50,3104 20 90 and on special mixtures falling within CN codes
ex 3105 20 90, ex 3105 20 90, ex 3105 60 90, ex 3105 90 91,
ex 3105 90 99 originating in Belarus, Russia and Ukraine.
2. For the purpose of paragraph 1 of this Article potassium chloride will
be either potassium chloride not containing any additional fertilisingelements or potassium chloride containing additional fertilising elements
in special mixtures. For the purpose of the application of the anti-dump-
ing duty, special mixture is defined as a blend of two or more fertilisingelements.
"C1Such a mixture is subject to an anti-dumping duty if the
K2O content of the mixture or blend is equal to or exceeds 35 %, up to a
content of 62 %, by weight, of the dry anhydrous product. 3
"C1 3
3. The amount of duty shall be equal to the fixed amount in euro per
tonne of KCl shown below per category and grade (standard potash is tobe understood as potash in powder form):!B2000R0969 — EN — 12.05.2000 — 000.001 — 23
Belarus
Potassium chloride not containing any additional fertilising elements:
Category: With a potassium content evaluated as
K2O, by weight, not exceeding 40 % on
the dry anhydrous productWith a potassium content evaluated as
K2O, by weight, exceeding 40 % but not
exceeding 62 % on the dry anhydrous
productWith a potassium
content evaluatedas K
2O, by weight,
exceeding 62 % on
the dry anhydrousproduct
Grade Standard Other than stan-
dard
(including granu-
lar)Standard Other than stan-
dard
(including granu-
lar)
TARIC code 3104 20 10 10 3104 20 10 90 3104 20 50 10 3104 20 50 90 3104 20 90 00Fixed amount
(EUR/tonne)19,51 30,84 29,51 46,65 48,19
Potassium chloride containing additional fertilising elements in special mixtures:
With a potassium content evaluated as K 2O,
by weight, equal to or exceeding 35 % but
not exceeding 40 % on the dry anhydrous
productWith a potassium content evaluated as K 2O,
by weight, exceeding 40 % but equal to or
not exceeding 62 % on the dry anhydrous
product
TARIC Code 3105 20 10 10, 3105 20 90 10,
3105 60 90 10, 3105 90 91 10,
3105 90 99 103105 20 10 20, 3105 20 90 20,
3105 60 90 20, 3105 90 91 20,
3105 90 99 20
Fixed amount
(EUR/tonne)30,84 (*) 46,65 (*)
(*) The fixed amounts shall remain unchanged in each table.
Russia
Potassium chloride not containing any additional fertilising elements:
Category: With a potassium content evaluated as
K2O, by weight, not exceeding 40 % on
the dry anhydrous productWith a potassium content evaluated as
K2O, by weight, exceeding 40 % but not
exceeding 62 % on the dry anhydrousproductWith a potassium
content evaluatedas K
2O, by weight,
exceeding 62 % on
the dry anhydrous
product
Grade Standard Other than stan-
dard
(including granu-
lar)Standard Other than stan-
dard
(including granu-
lar)
TARIC code 3104 20 10 10 3104 20 10 90 3104 20 50 10 3104 20 50 90 3104 20 90 00Fixed amount
(EUR/tonne)19,61 26,01 29,65 39,33 40,63!
B
!C1
!B2000R0969 — EN — 12.05.2000 — 000.001 — 24
Potassium chloride containing additional fertilising elements in special mixtures:
With a potassium content evaluated as K 2O,
by weight, equal to or exceeding 35 % but
not exceeding 40 % on the dry anhydrous
productWith a potassium content evaluated as K 2O,
by weight, exceeding 40 % but equal to or
not exceeding 62 % on the dry anhydrous
product
TARIC Code 3105 20 10 10, 3105 20 90 10,
3105 60 90 10, 3105 90 91 10,
3105 90 99 103105 20 10 20, 3105 20 90 20,
3105 60 90 20, 3105 90 91 20,
3105 90 99 20
Fixed amount
(EUR/tonne)26,01 (*) 39,33 (*)
(*) The fixed amounts shall remain unchanged in each table.
Ukraine
Potassium chloride not containing any additional fertilising elements:
Category: With a potassium content evaluated as
K2O, by weight, not exceeding 40 % on
the dry anhydrous productWith a potassium content evaluated as
K2O, by weight, exceeding 40 % but not
exceeding 62 % on the dry anhydrousproductWith a potassium
content evaluatedas K
2O, by weight,
exceeding 62 % onthe dry anhydrousproduct
Grade Standard Other than stan-
dard
(including granu-
lar)Standard Other than stan-
dard
(including granu-
lar)
TARIC code 3104 20 10 10 3104 20 10 90 3104 20 50 10 3104 20 50 90 3104 20 90 00Fixed amount
(EUR/tonne)19,61 30,84 29,65 46,65 48,19
Potassium chloride containing additional fertilising elements in special mixtures:
With a potassium content evaluated as K 2O,
by weight, equal to or exceeding 35 % but
not exceeding 40 % on the dry anhydrous
productWith a potassium content evaluated as K 2O,
by weight, exceeding 40 % but equal to or
not exceeding 62 % on the dry anhydrous
product
TARIC Code 3105 20 10 10, 3105 20 90 10,
3105 60 90 10, 3105 90 91 10,
3105 90 99 103105 20 10 20, 3105 20 90 20,
3105 60 90 20, 3105 90 91 20,
3105 90 99 20
Fixed amount
(EUR/tonne)30,84 (*) 46,65 (*)
(*) The fixed amounts shall remain unchanged in each table.
4. In cases where goods have been damaged before entry into free
circulation and, therefore, the price actually paid or payable is
apportioned for the determination of the customs value pursuant to
Article 145 of Commission Regulation (EEC) No 2454/93, the amount ofanti-dumping duty, calculated on the basis of the fixed amounts set outabove, shall be reduced by a percentage which corresponds to the
apportioning of the price actually paid or payable.
5. The provisions in force with regard to customs duties shall apply.’
Article 2
This Regulation shall enter into force on the day following its publication in
theOfficial Journal of the European Communities .!B
!C1
!B
!C1
!B2000R0969 — EN — 12.05.2000 — 000.001 — 25
This Regulation shall be binding in its entirety and directly applicable in all
Member States.!B2000R0969 — EN — 12.05.2000 — 000.001 — 26