COMVIISSION OF THE EUROPEAN COMMUNITIES 
C0M(94) 45 final 
Brussels, 17.02.1994 
Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (BEC) No 3068/92 in respect of definitive 
anti-dumping duties on imports of potassium chloride 
originating in Belarus, Russia and Ukraine 
(presented by the Commission) 
COUNCIL REGULATION (EC) No 
Of 
amending Regulation (EEC) No 3068/92 in respect of definitive 
anti-dumping duties 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 (EEC) No 2423/88 of 11 July 1988 on 
protection against dumped or subsidized imports from countries not 
members of the European Community (hereafter referred to as the basic 
Regulation) ^', and in particular Article 14 thereof, 
Having regard to the proposal submitted by the Commission after 
consultation within the Advisory Committee as provided for under the 
above-mentioned Regulation, 
Whereas : 
I. PREVIOUS PROCEDURE 
(1) By Regulation (EEC) No 3068(92) <2>, the Council imposed a 
definitive anti-dumping duty on imports of potassium chloride 
originating in Belarus, Russia and Ukraine, falling within CN Codes 
3104 20 10, 3104 20 50 and 3104 2090 and consisting of the 
difference between a set minimum price and the net price free-at-
Community-frontier of the product concerned. 
(1) OJ No L 209, 2.8.1988, p.l. 
(2) OJ No L 308, 24.10.1992, p.41 
II. REVIEW 
(2) By a notice published on 26 June 1993^3^, the Commission, after 
consultation with the Advisory Committee and in accordance with 
Article 14 of the Basic Regulation, initiated a review of 
Regulation (EEC) No 3068/92 (hereafter the Regulation subject to 
review). Information made available to the Commission indicated 
that, since the imposition of definitive measures in this case, 
important developments have taken place in Belarus, the Russian 
Federation and Ukraine, following decentralisation from the former 
Soviet Union. These developments had apparently led, inter alia, 
to the introduction of autonomous marketing arrangements for 
potash, and the establishment of new export channels. 
At the same time, the Commission had in its possession, conflicting 
data on the appropriateness of anti-dumping measures in the form of 
a variable duty. 
(3) The Commission officially advised the producers, exporters and 
importers known to be concerned, the representatives of the 
exporting countries, and the complainants, and gave the parties 
directly concerned the opportunity to make their views known in 
writing and to request a hearing. The representatives of the 
exporting countries, the Community industry and two importers in 
the Community made their views known. All parties who so requested 
were granted a hearing. 
The representative of Ukraine submitted that there was no 
production of potash in Ukraine and that the anti-dumping duty 
imposed should be repealed in respect of imports of potash 
originating in Ukraine. However, .. ,. . . 
based on the customs declarations at the Community frontier, showed 
that, in the period of investigation, a substantial quantity of 
potash originating in Ukraine was imported in the Community. In 
(3) OJ No C 175, 26.6.1993, p. 10 
these circumstances and in order to avoid any potential 
discrimination or circumvention, imports of potash originating in 
Ukraine should not be excluded from the scope of the present view. 
(4) The Commission sent questionnaires to parties known to be concerned 
and received detailed information only from the Community industry 
and a number of importers in the Community. It should be noted 
that none of the producers or exporters in the countries concerned 
cooperated in the Commission's investigation and that a related 
importer, Ferchimex, and an exporter and several producers in 
Russia and Belarus, informed the Commission that they would not 
participate in the Commission's investigation. 
(5) The Commission sought and verified all information it considered 
necessary for the determination of dumping and injury. It 
inspected the information submitted in the premises of the 
following companies: 
i. Community producers 
- Société Commerciale des Potasses et de l'Azote (SCPA) , France 
- Mines des Potasses d'Alsace (MDPA), France 
- Kali und Salz4), Germany 
- Mitteldeutsche Kali4), Germany 
- Comercial de Potasas (Coposa), Spain 
- Potasas del Llobregat, Spain 
- Suria K, Spain 
- Potasas de Subiza, Spain 
- Cleveland Potash Limited, United Kingdom 
ii. Importers and traders 
Unrelated importers 
FES A, Spain 
Related importers 
4) The Commission notes that these companies merged after the 
investigation period and now trade as Kali und Salz GmbH, Germany, 
Soquimes, Spain 
Traders 
Potash Limited, United Kingdom 
Potash Continental, United Kingdom 
Ameropa, France 
(6) Upon request, parties were informed in writing of the essential 
facts and considerations on the basis of which it was intended to 
recommend the imposition of definitive duties and the definitive 
collection of amounts secured by way of provisional duty. They 
were also granted a reasonable period within which to make 
representations subsequent to the disclosure. 
The oral and written comments presented by the parties were 
considered and, where appropriate, the Commission's findings were 
modified to take account of them. 
(7) The investigation of dumping covered the period 1 June 1992 to 31 
May 1993 (investigation period). 
III. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT AND COMMUNITY INDUSTRY 
a) Product description 
(8) The product under consideration is the same as that described in 
the Regulation subject to review. 
The product is potassium chloride (hereafter potash) and is 
generally used as an agricultural fertiliser. The potassium 
content is variable and is expressed as the percentage of the 
weight of the dry anhydrous product represented by K20. There are 
three basic specifications: 
potash with a K20 content of 40% or less, falling within CN Code 
3104 20 10; 
- potash with a K20 content of over 40% K20 but less than or equal to 
62%, falling within CN Code 3104 20 50; 
- potash with a K20 content of over 62% falling within CN code 
3104 20 90. 
The above specifications cover three grades of a single product 
which is available either as a powder or in a granulated form, with 
no significant difference in basic physical characteristics, 
application or use. 
b) Like product 
(9) The Commission found that the conclusions of the Regulation subject 
to review are still valid and that potash produced in the Community 
and Canada is a like product to that exported from Belarus, Russia 
and Ukraine to the Community. 
IV. DUMPING 
a) Normal value 
1. Analogue country 
(10) Since Belarus, Russia and Ukraine are non-market economy countries, 
normal value had to be determined on the basis of information 
obtained in a market economy third country, i.e. an analogue 
country, in accordance with Article 2 (5) of the basic Regulation. 
For this purpose, the complaining Community industry suggested 
establishing normal value on the basis of information obtained in 
Canada. 
(11) After examination of the suggestion made by the complainant, the 
Commission concluded that Canada was an appropriate and reasonable 
choice for the following reasons: 
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Canada is known to be the largest producer world-wide of this 
product and there is, to a large extent, similarity of the 
manufacturing process and access to raw materials between Canada 
and the non-market economy countries considered. 
Domestic prices in Canada are governed by normal market forces 
given the level of demand in the market and the number of producers 
in competition. 
A comparison between the volumes exported to the Community by 
Canada and the volume on which normal value was based showed that 
potash was sold in sufficient quantities on the domestic market to 
allow an adequate calculation of normal value. 
2. Normal value 
(12) Only one producer finally agreed to cooperate, the Toronto-based 
Potash Company of Canada Limited. The Commission carried out 
checks on the data supplied by this producer and its mining 
subsidiary. 
(13) In order to determine whether normal value could be based, in 
accordance with Article 2.5(a)(i) of the Basic Regulation, on the 
prices at which potash was sold for consumption in Canada, the 
Commission compared them with production costs to ensure that these 
prices generated a reasonable profit in normal trading. When 
examining the costs of production of the producer concerned, the 
Commission found that they were increased by notional amounts 
corresponding to exceptional depreciation resulting from its recent 
change of ownership and financial expenses which should have been 
borne by this producer. However, since these additional costs were 
not incurred in the ordinary course of trade, it was concluded that 
it would not be appropriate to make the Belarus, Russian and 
Ukraine producers bear the burden of such exceptional costs without 
any adjustment being made and that they should be deducted to 
establish the actual costs of production of Canadian potash sold on 
the domestic market. After such deduction it was found that prices 
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practised by this producer for sales on the domestic market in the 
ordinary course of trade permitted the recovery of all costs 
reasonably allocated in the ordinary course of trade and the 
generation of a normal profit margin. 
(14) In these circumstances, normal value was established on the basis 
of the net weighted average price for the like product sold for 
consumption in Canada since, for the types considered, domestic 
sales were made in sufficient quantities as compared with export 
sales to be considered representative. 
b) Export price 
(15) In spite of the Commission's attempts to obtain information, the 
exporters thought to be concerned in Belarus, Russia and Ukraine 
refused to cooperate in the investigation. Further, the 
information received from importers was inadequate to establish a 
reliable export price since, either the quantities invoiced were 
too small to be regarded as representative, or the product was 
purchased through traders who failed to cooperate, or the importer 
was related to a non-cooperating producer in the countries 
concerned. 
In addition, when seeking the information necessary to establish 
the export price, the Commission received strong indications from 
several sources that discrepancies existed between the prices 
practised on the Community market and the minimum price imposed by 
the Regulation subject to review. The possibility of circumvention 
of the minimum prices could not be overlooked. For these reasons, 
the Commission could not rely on the statistical information 
available on either the values or the quantities of imports of the 
product concerned. 
(16) However, in view of the nature of this review, which is, inter 
alia, to examine the appropriateness of the level and type of anti­
dumping duty for the purpose of preventing dumped imports from 
causing injury, and the fact that the duty which applies at present 
8 -
is a minimum price duty, it was not necessary to establish the 
current level of export prices. It was merely necessary to 
estimate what the level of export prices would be if there were no 
protective duties. For this purpose, it was considered in the 
absence of cooperation on the part of producers in the exporting 
countries concerned, that export prices would bear the same 
relationship to other prices on the Community market as found 
during the original investigation. Since prices on the Community 
market would not be lower in the absence of the measures now in 
force, this method cannot lead to an underestimate of the export 
prices which would prevail in the absence of duties. It has to be 
noted that, since the information available did not allow a 
differentiation of the export price according to the countries 
concerned, the export price has been established on the same basis, 
at the ex-national frontier level for Belarus, Russia and Ukraine. 
c. Comparison 
(17) Normal value was compared with export prices at the ex-national 
frontier stage, transaction by transaction. For the purpose of 
ensuring a fair comparison, due allowances in the form of 
adjustments were made for the differences affecting price 
comparability, such as differences in selling expenses, in 
particular in respect of credit terms, transport, insurance and 
handling costs and packing. 
d. Dumping margin 
(18) The comparison showed the existence of dumping, the dumping margins 
being equal to the amount by which the normal value, as established 
above, exceeded the price for export to the Community. For the 
reasons stated in recitals 10 and 16, the information available to 
the Commission to establish the export price did not allow a 
differentiation according to the countries concerned. Therefore, a 
single dumping margin was established for each of the three 
countries in question. 
The weighted average dumping margin for the countries concerned 
expressed as a percentage of the CIF-Community-frontier prices, 
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customs duty unpaid is 46%. The Council confirms this conclusion 
and the findings of the Commission underlying the establishment of 
this dumping margin. 
V. INJURY 
(19) In accordance with Article 14 of the Basic Regulation, the 
investigation sought to determine the extent of any changes in the 
circumstances established by the Regulation subject to review 
(1986-1990) with regard to the behaviour of the exporters on the 
Community market or the situation of the Community industry during 
the subsequent period, independently of the anti-dumping measures 
in force. 
a) Community industry 
(20) In examining whether the complainant Community producers 
constituted a major proportion of the total Community production of 
the like product, the Commission noted that a German producer 
located in the eastern part of Germany has become a party to the 
complaint following the unification of Germany. As a result, the 
complaining Community producers represent the totality of the 
Community production of the like product. 
(21) It was also found that two of the Community producers had, through 
affiliated companies, imported the dumped product. The Commission 
had, therefore, to decide whether these producers should be 
excluded form the term Community industry, as provided for in 
Article 4 (5) of Regulation (EEC) No 2423/88. 
(22) In this respect, the consistent practice of the Community 
Institutions has been that the exclusion of such producers must be 
decided on a case-by-case basis, on reasonable and equitable 
grounds and by taking into consideration all the legal and economic 
aspects involved. The Institutions have, on several occasions, 
concluded that an exclusion is justified where the producers in the 
10 
Community either participated in the dumping practices, are 
shielded from their effects, or where they benefit unduly from 
them. 
(23) In the present case, the Commission considered that, since these 
importing producers were independent of the exporters concerned, 
they did not participate in the dumping practices. Moreover, the 
level of imports in the investigation period by these producers did 
not, on an individual basis, represent a significant part of their 
total sales in the Community in the same period. Such a low level 
of imports cannot, therefore, have shielded the producers concerned 
from the effects of dumping nor have substantially benefited them. 
Indeed, the small advantages which these producers may have 
obtained from these imports are by far offset by the disadvantages 
from the dumping. 
(24) In the light of the above circumstances, it is considered that 
there are no reasons for the exclusion of any of the complainant 
producers from the definition of the Community industry. 
b) Cumulation 
(25) To measure the impact of dumped imports on the Community industry, 
it must first be ascertained whether the approach adopted in 
determining the measures under review, namely cumulation of all 
imports originating in the countries covered by the investigation 
should be continued. 
In analysing whether cumulation of the imports from the three 
countries concerned is appropriate, it was found that potassium 
chloride imported from each of them was alike in all respects, and 
interchangeable. These imports compete with each other and with 
the like product manufactured by the Community industry. In 
addition, the pricing in the Community of the products from each of 
11 
the countries concerned could not be distinguished and the volume 
of the dumped imports from each of them could not be considered 
negligible. 
It is thus considered that there are sufficient grounds to cumulate 
the dumped imports from the countries concerned. 
c. Injury 
(26) The Commission's findings, based on an examination of the facts 
between 1990, which is the latest year taken into account in the 
Regulation subject to review and May 1993, are as follows: 
1. Community consumption, volume and price of the dumped imports. 
(27) Community consumption declined from 4.5 million tonnes to 3.9 
million tonnes, i.e. by 14%, and the dumped imports showed a 
similar decrease, thus maintaining their market share at almost the 
same level, i.e. approximately 12%. 
(28) In the absence of any cooperation on the part of the exporters and, 
given the inadequate and non-representative information provided by 
importers, the Commission was unable to make an appropriate price 
undercutting determination. However, it received strong 
indications from several reliable sources that the selling prices 
of the dumped imports in the Community were significantly below the 
prices of potash sold by the Community industry, and actually far 
below the minimum price set by the Regulation subject to review. 
2. Situation of the Community industry 
(i) Production, capacity, utilization rate 
(29) Community production fell from 5.5 million tonnes to 4.5 million 
tonnes, i.e. a decrease of 18%. Production capacity remained 
almost stable at approximately 6.5 million tonnes, the utilization 
rate therefore decreased from 84% to 70%. 
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(ii) Sales and market share 
(30) The quantity of potash sold in the Community by the Community 
industry fell from 3.4 million tonnes to 2.8 million tonnes, i.e. a 
decrease of 18%, while its market share declined from 74.9% to 
73.5%. 
(iii) Prices 
(31) The Community industry has been unable to raise its prices, even 
after the imposition of protective measures by the Regulation 
subject to review, and has sustained, on the contrary, a further 
decline of its selling prices. 
(iv.) Profitability 
(32) The Community industry could not recover from the losses it 
incurred previously. These losses, which are clearly related to 
the above decline of its selling price and the negative impact of 
the decreasing utilization rate on the allocation of fixed costs, 
remained at a high level and attained 26% at the end of the period 
examined. 
(v.) Employment 
(33) It should be noted that the potash industry involved underground 
mining and is thus labour intensive. A sharp and steady 
curtailment of the workforce has been observed over the period 
examined. 
3. Conclusion 
(34) In the light of the above, it is apparent that, while material 
injury has been established by the Regulation subject to review for 
the period 1986 to 1990, the examination of the facts demonstrates 
that material injury has persisted in the subsequent period from 
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1990 to May 1993. In fact, the situation of the Community industry 
has further deteriorated in spite of the imposition of the 
protective measures in 1992. This is indicated in particular by 
the further decrease of its prices and recent aggravation of its 
losses. 
The Council confirms these views and concludes that the level of 
injury established by the Regulation subject to review has not been 
removed but merely been aggravated. 
e. Causality 
(35) When determining whether any changes had occurred in the causal 
link established by the Regulation subject to review between the 
dumped imports from Belarus, Russia and Ukraine and the material 
injury, the Commission has examined the developments since the 
prior period of investigation which ended in 1990. Since the 
latter year, the situation has remained the same as that described 
in the Regulation subject to review, insofar as the poor 
performance of the Community industry has continued to coincide 
with the dumped imports maintaining the same level of market share 
and the persistence of price undercutting behaviour on their part. 
f. Effect of other factors 
(36) It has also been examined whether the existence and subsequent 
aggravation of the material injury could be attributed to the 
effect of other factors, such as the effect of other imports, 
contraction in demand or internal management problems in the 
Community industry. 
As to the effect of other imports, it was found that their market 
share remained relatively stable over the period examined, while no 
conclusion could be drawn from the information available to the 
Commission about the level of their prices. Concerning contraction 
in demand, and the management of the Community industry, the 
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Commission found no evidence to suggest that the material injury 
suffered by the Community industry could be attributed to any of 
these factors. 
The Commission therefore concludes that, although it cannot be 
ruled out that some of the above factors might have had an adverse 
effect on the situation of the Community industry, the dumped 
imports from Belarus, Russia and Ukraine have, taken in isolation, 
caused material injury to the Community industry. 
(37) The Council confirms this conclusion. 
VI. COMMUNITY INTEREST 
(38) The Commission found that the conclusion on Community interest set 
out in the Regulation subject to review should remain unchanged, 
since the development of the facts underlying these conclusions in 
the subsequent period have only strengthened the case for the 
imposition of protective measures. 
(39) Indeed, not only it is in the fundamental interest of the Community 
to put an end to distortions of commercial practices, but, in this 
specific case, the endangering of thousands of jobs in an ailing 
sector and the precarity of the financial situation of the 
Community industry have recently become even more acute. 
(40) In these circumstances, it is in the Community interest that 
protective measures are maintained and adapted to the findings made 
in the present review. Since these findings show increased dumping 
and a further aggravation of injury, the Community interest calls 
for an amendment of the measures in force. 
VII. DUTY 
(41) In order to adapt the existing measures to the changed 
circumstances and to prevent the recurrence of further injury, the 
Commission took account of the fact that injury consisted, in 
15 
particular, of price depression and suppression, lack of 
profitability and losses. The removal of such injury requires 
therefore that the industry should be put in the position where 
prices can be increased to profitable levels without loss of sales 
volume. In order to calculate the necessary price increase, the 
Commission considered that the prices of the dumped imports, as 
determined in recital 16, should be compared to the selling prices 
that reflect the costs of production of the Community industry plus 
a reasonable amount of profit. 
To this end, the Commission has used the actual average cost of 
production of the Community industry and a profit margin of 9% 
necessary to ensure the viability of this industry. 
The difference between these two prices expressed on a weighted 
average basis and as a percentage of the free-at-Community-frontier 
price represent the injury threshold, which was found to exceed the 
margin of dumping established. In these circumstances, the duty to 
be imposed should be limited to the margin of dumping. 
42. In view of the strong indications that circumvention of the previous minimum price duty occurred 
and the potential which exists for compensatory arrangements in this sector, it is necessary to 
impose a duty in the form of a fixed amount per ton of imported potash corresponding to the 
dumping margin calculated as described above. Further, it is considered that in view, on the one 
hand, of high overcapacity for the production of potash in the exporting countries concerned, the 
lack of domestic purchasers and the corresponding availability of large quantities for export and, on 
the other hand, the relative attractiveness of the Community market compared with other export 
markets due to the high level of prices and spending power of users, its proximity and the 
availability of a high developed transport infrastructure, there is a possibility that the exporters will 
respond to the imposition of this duty by further lowering their export prices. This danger is further 
exaceibated by the fact that exports could be made available at very low prices due to currency 
problems in the exporting countries concerned and the fact that the prevalence of long term supply 
contracts in the Community can make the offering of potash to users in the Community at very low 
prices attractive to exporters. To guard against such an increase in dumping, it is considered 
necessary to also provide that if the price of the imported product should fall below a minimum price 
established on the basis of the normal value, the duty to be imposed should be the difference between 
the import price and the minimum price. Such a system is justified in view of the clear risk of an 
increase in the dumping margin. 
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HAS ADOPTED THIS REGULATION:: 
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 (KCl) falling within CN Codes 3104 20 10, 3104 20 50, 
3104 20 90, originating in Belarus, Russia and Ukraine. 
2. The amount of duty shall be equal to the fixed amount per tonne of 
KCL shown below per type and grade, or the difference between the prices 
shown below and the net, free-at-Community-frontier paid price per tonne 
KCL before customs clearance for the corresponding type and grade, 
whichever is the higher: 
Potassium 
chloride with a 
K20 content of Fixed amount 
of duty per 
tonne KCl Price 
CIF Community 
border Taric code 
40% or less 
standard grade 
granular grade 24.19 ECU 
27.37 ECU 76.79 ECU 
86.91 ECU 3104 2010'10 
3104 2010'20 
Over 40% but 
less than or 
equal to 62% 
standard grade 
granular grade 36.28 ECU 
41.06 ECU 115.19 ECU 
130.36 ECU 3104 2050*10 
3104 2050'20 
over 62% 
standard grade 44.13 ECU 137.28 ECU 
17 
3. 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 the Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable 
in all Member States. 
Done at Brussels, For the Council 
•n ISSN 0254-1475 
COM (94) 45 final 
EN 11 02 
Catalogue number : CB-CO-94-052-EN-C 
ISBN 92-77-65425-2 
Office for Official Publications of the European Communities 
L-2985 Luxembourg