UNITED STATES - ANTI-DUMPING MEASURES ON IMPORTS OF SOLID UREA FROM THE FORMER GERMAN DEMOCRATIC REPUBLIC
Document: Request for Consultations by the European Community
Date: 9 December 1996
Document codes: WT/DS63/1; G/ADP/D4/1
Complainant: EU
Respondent: U.S.
Dispute stage: Consultation
Agreements cited: Art. 9, 11  Anti-dumping

UNITED STATES - ANTI-DUMPING MEASURES ON IMPORTS OF SOLID UREA
FROM THE FORMER GERMAN DEMOCRATIC REPUBLIC
Request for Consultations by the European Community
The following communication received on 28 November 1996, from the Permanent Delegation
of the European Commission to the Permanent Mission of the United States, is circulated in accordance
with Article 4.4 of the DSU.
In accordance with Article 17.3 of the Agreement on Implementation of Article VI of the
GATT 1994 and with Article 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes, the European Community requests consultations with the United States of America
concerning the following matter:
Anti-dumping duties imposed on exports of solid urea from the former
German Democratic Republic; termination of changed circumstance review and continuation as anti-
dumping duty administrative review.
1. On 1 May 1995, the US Department of Commerce (DoC) published the provisional results
of a changed circumstance review, initiated in February 1992 and carried out to assess the impact of
the reunification of Germany on the anti-dumping duty order covering solid urea from the former GDR
which had been imposed in 1987. Although the DoC decided not to confirm the extension of the duties
to shipments from the whole reunified Germany it maintained the order on the five "Länder" which
formerly constituted the territory of the GDR (the "five States"). The DoC simultaneously opened
achanged circumstancesadministrativereviewonshipmentsfrom thesefiveStatessolelyforthe purpose
of assessing a new cash deposit rate using a market economy analysis for the determination of normal
value. This review was terminated in March 1996 because there were no shipments of solid urea from
the territory of the former GDR.
2. On 30 May 1996, the DoC initiated another changed circumstances review in order to investigate
shipments made after 1 May 1995 and before 31 May 1996. During this period one shipment from
the sole producer of solid urea in the "five States" took place. Subsequently questionnaires were issued
and the exporter, SKW, fully cooperated in the proceedings.
However, on 20 September 1996, the DoC terminated this changed circumstances review without
a final decision. At the same time the DoC proceeded with an administrative review which had been
initiated on request of petitioners on 15 August 1996. DoC justifies these decisions on the basis that
both reviews substantially overlap and that in both reviews essentially the same analysis would have

to be conducted. It is important to note, however, that under US law the DoC does not appear to have
the authority to revoke an anti-dumping order on the basis of one administrative review only: three
successive such reviews, confirming the absence of dumping, appear to be necessary instead for such
a revocation to take place.
3. The European Community is very concerned about this course of action. The above-mentioned
decisions prove that the United States is not prepared to take into account the radical changes which
came about with the reunification of Germany.
By maintaining the order against the five States of the former GDR the DoC has ignored de
jure and de facto the full integration of the new States into the reunified Federal Republic of Germany,
and thus the economic integration of the companies in the new States into the German market economy.
The decision not to take into account the complete conversion of a territory from a non-market
economy into a market economy and the full privatization of the exporting enterprises is a violation
of the United States' obligation under Article 11 of the Agreement. The administrative review can
only result in the recalculation of the deposit rate and not, as would be warranted, the kind of review
which should lead to a complete revocation of the order, if no dumping is found. It follows that the
DoC isdenying the exporter concerned the right todemonstrate that,because of a change in its economic
structure and environment, its export sales are not (or no longer) made at dumping prices and that
this demonstration should therefore lead to a revocation of the anti-dumping order.
Instead the DoC is only prepared to calculate a new dumping rate, which, even if it were zero,
would not lead to a revocation of the anti-dumping order, which would be maintained as if the
circumstances had not changed significantly. This in spite of the fact that the footnote to Article 11.2
indicates in a clear manner that the mere recalculation of a margin within an administrative review
does not by itself constitute a review within the meaning of Article 11.
4. In any event, the division of the territory of a signatory of the Agreement is in contradiction
with its Article 9.2 which provides that, when anti-dumping measures are imposed, the investigating
authorities must name the supplier concerned and/or the country concerned. It must be concluded
from this requirement, that duties are applicable to imports from countries and not regions or other
parts of a country.
5. Moreover, it appears that US customs, since the provisional decision of 1 May 1995 continues
to suspend liquidation on entries of the product concerned from all exporters situated in the territory
of the former Federal Republic of Germany. The suspension of liquidation has to be regarded as a
provisional measure and the Community would like to request explanation from the United States on
what legal basis such measures are imposed.
6. Since the unification of Germany and the privatization of the exporter concerned, more than
five years have lapsed during which the United States has consistently denied the right to have changed
circumstances taken into account in a proper changed circumstances review. This is why the
European Community is requesting consultations on this matter.
The European Community reserves its rights to raise to raise any other issue concerning this
case during the coming consultations.
The Community considers this to be a matter of urgency and would, therefore, request
consultations to take place at the earliest opportunity.