PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING A DEFINITIVE ANTI-DUMPING DUTY FOLLOWING A PARTIAL REVIEW OF ANTI-DUMPING MEASURES CONCERNING IMPORTS OF UREA ORIGINATING IN VENEZUELA AND TERMINATING THE REVIEW OF ANTI-DUMPING MEASURES CONCERNING IMPORTS OF UREA ORIGINATING IN TRINIDAD AND TOBAGO
Date: 1991-08-07
Institutions: European Commission
Subjects: dumping, fertiliser, third country

COMVIISSION OF THE EUROPEAN COMVIUNITIES 

C0MC91) 312 final 

Brussels, 7  August 1991 

Proposal  for a 

COUNCIL REGULATION (EEC) 

ameMing a definitive anti-dumping duty following a partial review 

of anti-dumpiig measures oorrerning inports of urea originating 

in Venezuela and terminatir^ the review of anti-dumping measures 

ooirerniig imports of urea originating in Trinidad and Tobago 

(presented by the Commission) 

l- SjtjMig & '•'-i-L.'-^.l.^. xi2i 

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EXPLANATORY MEMORANDUM 

concerning the Council Regulation amending a definitive anti-dumping duty 

following a partial review of anti-dumping measures concerning imports of 

urea originating in Venezuela and terminating the review of anti-dumping 

measures concerning imports of urea originating in Trinidad and Tobago. 

I. 

PROCEEDING 

In a notice published in the Official Journal of the European 
Communities,1 the Commission announced the opening of an 

investigation to review anti-dumping measures imposed on imports of 

urea originating in Trinidad and Tobago and Venezuela by Council 
Regulation (EEC) No 450/892 and Commission Decision 
NO 89/143/EEC.3 

The requests for a review were based on Article 14 of Regulation 

(EEC) No 2423/88 concerning changes of circumstances. As regards 

Trinidad and Tobago, the alleged change of circumstances concerned 

a fall in production costs and a substantial increase in the price 

of exports to the Community, which, it was claimed, had put an end 

to dumping.  The change of circumstances alleged by Venezuela 

concerned a change in the official exchange rate used by the 

Commission in the previous proceeding to establish the dumping 

margin. 

1  OJ No C 55, 2.3.1991, p. 4. 
2  OJ No L 52, 24.2.1989, p. 1. 
3  OJ No L 52, 24.2.1989, p. 37 

- 2 -

11 • 

TRINIDAD AND TOBAGO 

a) 

Dumping 

A transaction-by-transaction comparison of the constructed normal 

value and export prices to the Community led to the conclusion that 

dumping had ceased. 

b) 

Injury 

In the absence of dumping, the Commission did not consider it 

worthwhile to review the question of injury. 

c) 

Conclusion 

Given the absence of a duming margin and the honesty of the 

exporter involved, the Trinidad and Tobago Urea Company Ltd (TTUC), 

the Commission is of the opinion that the anti-dumping measures 

currently imposed on this country should be abolished. 

III. 

VENEZUELA 

a) 

Dumping 

As there had been no exports to the Community, the new exchange 

rate cited as a change of circmustances had not been applied, and 

it was therefore not possible to make a comparison with the new 

normal value established in the course of the investigation. 

b) 

Injury 

As regains the injury, the Venezuelan exporters' arguments that 

since there had been no exports to the Community, the injury to 

Community producers had been eliminated and that Community 

producers had substantially increased their prices were not 

considered sufficiently relevant by the Commission. 

- 3 -

The Commission considers that the suspension of exports can be 

interpreted neither as an indication of the elimination of the 

injury nor as a change of circumstances justifying a review of the 

injury. The alleged increase in Community producers' prices is held 

to be a normal consequence of the imposition of anti-dumping 

measures. 

o) 

Conclusion 

Given the above, the Commission considered that in the absence of 

exports to the Community, it was unable to gauge the accuracy of 

the argument put forward by the Venezuelan exporters concerning the 

elimination of dumping as a result of the application of the new 

exchange rate. Consequently, the Commission felt that the fairest 

solution for the exporters involved, Nitroven and Pequiven, would 

be to abolish the current ad valorem anti-dumping duty of 21.5%, 

replacing it with a variable duty based on the exporters' new 

normal value, as established during the course of this proceeding. 

Consequently, the Commission submits a proposal for a Council 

Regulation: 

- terminating the review of the anti-dumping measures imposed on 

imports of urea originating in Trinidad and Tobago and cancelling 

the undertaking imposed by Council Regulation (EEC) No 3339/87 and 

confirmed by Commission Decision No 89/143/EEC of 21 February 1989; 

- Imposing a variable definitive anti-dumping duty on imports of 

urea originating in Venezuela exported by Nitroven and Pequiven, 

and retaining the ad valorem anti-dumping duty on other imports of 

urea originating in Venezuela. 

COUNCIL KBGOLATTCN (EEC) No 

Of 

amending a definitive anti-dumping duty following a partial review 

of anti-dumping measures concerning imports of urea originating 

in Venezuela and terminating the review of anti-dumping measures 

concerning Imports of urea originating in Trinidad and Tobago 

THE COUNCIL OF THE EUROPEAN COMMUNITIES 

Having regard to the Treaty establishing the European Economic 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 Economic Ccaranunity,1 and in particular Articles 9, 12 and 

14 thereof, 

Having regard to the proposal from the Commission, submitted after 

consultations within the Advisory Committee as provided for by the above 

Regulation, 

Whereas: 

A. PROCEDURE 

(1) 

In November 1990, pursuant to Article 14 of Council Regulation 

(EEC) No 2423/88, the Commission received a request for a review of 

the anti-dumping measures imposed on imports of urea originating in 

Trinidad and Tobago and Venezuela by Council Regulation (EEC) 
No 450/892 and Commission Decision No 89/143/EEC.3 

1  OJ No L 209, 2.8.1988, p. 1. 
2  OJ No L 52, 24.2.1989, p. 1. 
3  OJ No L 52, 24.2.1989, p. 37. 

(2) 

With regard to Trinidad and Tobago, this request was made by the 

Trinidad and Tobago Urea Company Ltd, the successor to the National 

Energy Corporation of Trinidad and Tobago Ltd, which had offered an 

undertaking in connection with the abovementionned Decision which 

had been accepted. The review was requested on the ground of a 

change in circumstances, resulting from the fact that a fall in 

production costs and a substantial increase in the prices of 

exports to the Community had put an end to any dumping. 

(3) 

With regard to Venezuela, the request made by Venezolana del 

Nitrogeno CA (Nitroven) and Petroquimica de Venezuela SA (Pequiven) 

for a review of the definitive anti-dumping duty of 21.5% Imposed 

by Council Regulation (EEC) No 450/89 was based on the change in 

circumstances brought about by an adjustment on 14 March 1989 of 

the official rate of exchange which had been used by the Commission 

to compare the normal value and the export price in order to 

calculate the dumping margin. According to these companies, the 

application of the new exchange rate would show that there was no 

dumping. 

SUBSEQUENT PROCESSING 

(4) 

Having concluded that the requests contained sufficient evidence of 

a change in circumstances, the Commission announced its decision to 

open an investigation in a Notice of review of anti-dumping 

measures concerning Imports of urea originating in Trinidad and 

Tobago or in Venezuela published in the Official Journal of the 
European Communities.4 

(5) 

The Commission officially notified the producers/exporters directly 

involved and the representatives of the exporting countries. 

4  OJ No C 55, 2.3.1991, p. 4. 

- 3 -

(6) 

The Commission collected and verified all information it deemed 

necessary to enable it to establish the facts and carried out 

checks at the premises of the exporting companies involved, namely: 

- Trinidad  & Tobago Urea Co Ltd (TTUC), Port of Spain, Trinidad 

- Petroqubnica de Venezuela SA (Pequiven), Caracas, Venezuela 

- Venezolana del Nitrogeno CA (Nitroven), Caracas, Venezuela 

- Palmaven SA, Caracas, Venezuela 

(7) 

The investigation of dumping as provided for in Article 7 paragraph 

1 point c) of Council Regulation (EEC) No 2423/88 covered the 

period from 1 January 1990 to 31 December 1990. 

C. PRODUCT 

(8) 

The product in question is a nitrogen compound whose chemical 

formula is 00 (NH2)2. It is produced synthetically from a 
reaction between ammonia and carbonic acid and comprises 

approxijnately 45% nitrogen. Urea is sold in prilled form (Trinidad 

and Tobago), granular form (Venezuela) or liquid form. It is mainly 

used as fertilizer. 

Urea falls within CN codes 3102 10 10 and 3102 10 99. 

- 4 -

D. DUMPING REVIEW 

I. TRINIDAD AND TOBAGO 

a) Normal value 

(9) 

As TTUC's average urea sales price on its domestic market was lower 

than the production cost during the period of the investigation, 

the constructed normal value was used, in accordance with 

Article 2(3)(b)(ii) of Council Regulation (EEC) No 2423/88. 

(10) 

The constructed normal value was calculated by adding a profit 

margin of 7% to the cost of production. This margin was held to be 

reasonable, given that in the current economic climate, it 

represents the minimum necessary to allow urea producers to run 

their plants under normal operating conditions while producing an 

acceptable return on capital employed and securing the investment 

financing required to continue operating at a profit. 

b) Export prices 

(11) 

Export prices were established on the basis of the prices actually 

paid or payable for the product sold for export to the Community, 

in accordance with Article 2(8) (a) of Regulation (EBC) No 2423/88. 

c) Comparison 

(12) 

The constructed normal value was compared, transaction by 

transaction, with export prices at the ex-factory stage. 

In accordance with Article 2(10) of Regulation (EEC) No 2423/88, 

the Commission made due allowance in the form of adjustments for 

differences affecting price comparability, such as transport, 

insurance and handling charges, credit terms, commissions and 

ancillary costs. 

5 -

d) Anti-dumping margin 

(13) 

An examination of the above facts showed that no dumping was taking 

place. 

II- VENEZUELA 

a) Normal value 

(14) 

As urea is sold on the domestic Venezuelan market at prices fixed 

by government decree that are lower than the cost of production, 

the constructed normal value was used, in accordance with 

Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88. 

(15) 

The constructed normal value was calculated by adding a profit 

margin of 7% to the cost of production. This margin was held to be 

reasonable, given that in the current economic climate, it 

represents the minimum necessary to allow urea producers to run 

their plants under normal operating conditions while producing an 

acceptable return on capital employed and securing the investment 

financing required to continue operating at a profit. 

k) Export prices 

(16) 

No urea originating in Venezuela was exported to the Community 

during the investigation period. 

c) Comparison 

(17) 

Under these circumstances, it was not possible to compare the 

normal value and the export price. 

- 6 -

E. CONCLUSION 

I.  TERMINATION OF THE REVIEW AS REGARDS TRINIDAD AND T0BM3O 

(18) 

Given that there is no evidence of dumping and in view of the 

behaviour of the exporter involved, which has generally respected 

its undertaking and has also substantially increased the prices of 

its exports to the Community, the Council is of the opinion that 

the anti-dumping measures currently Ijonposed on this country should 

be lifted. 

(19) 

Under these circumstances, the Council considers that the review of 

the anti-dumping measures concerning iirports of urea originating in 

Trinidad and Tobago should be terminated. 

(20) 

This conclusion has not met with any objections from the anti 

dumping committee. 

H. AMENDMENT OF THE DEFINITIVE DUTIES AS REGARDS VBJKZUKLA 

(21) 

As regards Venezuela, in the absence of any exports to the 

Ccramunity it is not possible to verify the accuracy of the argument 

put forward by the exporters claiming that the application of the 

new official exchange rate has put an end to dumping. Consequently, 

the fairest solution would appear to be to abolish the ad valorem 

duty of 21.5% currently in force, replacing it with a variable duty 

based on the new normal value for the exporters, as established in 

the course of the present procceeding. 

(22) 

As regards the injury, in their request the exporters argued that 

the injury had been eliminated as a result of the fact that there 

had been no exports to the Community, and that the prices of 

Oammunity producers had risen steadily since the imposition of the 

anti-dumping duty. 

- 7-

The Council observes that as a result of the previous anti-dumping 

proceeding, the exporters decided to suspend all exports to the 

Community. The Council is of the opinion that this suspension can 

be interpreted neither as an indication that the injury has been 

eliminated, nor as a change of circumstances justifying a review of 

the injury. 

Furthermore, as regards the claim that Community producers have 

raised their prices, even should this claim be substantiated, these 

price increases would be a normal consequence of the existence of 

anti-dumping measures. 

Consequently, the Council does not consider the arguments advanced 

concerning injury to be relevant. 

(23) 

However, as noted above, the Council considers that a fair response 

to the exporters' request would be to take account of the results 

of this proceeding and to base the variable anti-dumping duty on 

the exporters' new normal value. 

This variable anti-dumping duty is established in the form of a 

minimum price, free at Community frontier, calculated on the basis 

of the cost of producing the urea as established in the course of 

the investigation period, plus a reasonable profit margin plus the 

ancillary costs incurred up to the Community frontier. On this 

basis, the minimum price free at Community frontier is ECU ... per 
tonne.5 It should be noted that this minimum price is lower than 

the price used as a basis for calculating the ad valorem duty 

established in the previous proceeding. 

(24) 

The ad valorem duty of 21.5% is retained for imports of urea 

originating in Venezuela, with the exception of urea exported by 

Pequiven and Nitroven. 

(25) 

These conclusions have not met with any objections from the anti 

dumping committee. 

5  In accordance with the provisions of Article 5 of Regulation (EEC) 
No 2423/88 concerning the non-disclosure of business secrets, this 
figure has been deliberately omitted from the published version of this 
regulation. 

8 -

(26) 

All the producers/exporters involved in this proceeding and the 

representatives of the Community producers were informed of the 

main facts and considerations on the basis of which it was proposed 

to recommend the termination of the review as regards Trinidad and 

Tobago and the amendment of the definitive measures as regards 

Venezuela. They were also granted a period of time in which to make 

their comments known following notification. The Commission noted 

their remarks and took due account of them. 

HAS ADOPTED TEES REGULATION: 

Article 1 

1. 

The review of anti-dumping measures concerning iinports of urea 

originating in Trinidad and Tobago is hereby terminated. 

2. 

The undertaking made by the National Energy Corporation of Trinidad 

and Tobago Ltd, and taken up by the Trinidad and Tobago Urea 

Company Ltd, which had been accepted by Council Regulation (EEC) No 

3339/87 and confirmed by Commission Decision No 89/143/EEC, is 

hereby cancelled. 

Article 2 

The anti-dumping duty of 21.5% (additional code 8550) imposed by 

Regulation (EEC) No 450/89 on imports of urea originating in 

Venezuela and falling within CN codes 3102 10 10 and 3102 10 99 

shall be retained for iinports of urea originating in Venezuela, 

with the exception of urea produced and exported to the Community 

by Venezolana del Nitrogeno CA (Nitroven) and Petroquimioa de 

Venezuela SA (Pequiven) (additional code 8549), for which the 

anti-dumping duty shall be the difference between the net price per 

tonne free at Community frontier, not cleared through customs, and 

the sum of ECU 110.5 per tonne. 

- 9 -

Article 3 

The provisions in force concerning customs duties shall apply. 

Article 4 

This Regulation shall enter into force on the day following that of 
its publication in the Official Journal of the European 
Communities. 

This Regultion shall be binding in its entirety and directly 

applicable in all Member States. 

Done at Brussels, 

For the Council, 

ISSN 0254-1475 

COM(91)312final 

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