Council Regulation (EC) No 663/98 of 23 March 1998 amending Regulation (EC) No 2022/95 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia
Date: 1998-03-23
Institutions: Council of the European Union
Subjects: Russia, anti-dumping duty, chemical salt, dumping, import, originating product

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 663/98

of 23 March 1998

amending Regulation (EC) No 2022/95 imposing a definitive anti-dumping duty
on imports of ammonium nitrate originating in Russia

THE COUNCIL OF THE EUROPEAN UNION,

(2)

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
the European Com-
munity (1), and in particular Article 12 thereof,

Having regard to the proposal submitted by the Commis-
sion after consulting the Advisory Committee,

In June 1994, a Community-wide anti-dumping
investigation concerning imports of ammonium
nitrate originating in Lithuania and Russia was
initiated (3) subsequent to a complaint lodged by
the European Fertiliser Manufacturers Association
(EFMA).

In August 1995, the Council, by Regulation (EC)
No 2022/95 (4), imposed a definitive anti-dumping
duty, in the form of a variable duty, on imports of
ammonium nitrate originating in Russia. The
amount of duty was set at the difference between a
minimum import price of ECU 102,9 per tonne
net of product and the net cif price, Community
frontier before customs clearance, where the latter
was lower. The Commission simultaneously ter-
minated the regional anti-dumping proceeding in
respect of imports of ammonium nitrate origin-
ating in Russia by Decision 95/345/EC (5).

A. PROCEDURE

1. Previous measures

(1)

1994,

anti-dumping measures

by Commission Decision
In May
94/293/EC (2),
were
adopted with regard to imports of ammonium
nitrate originating in Lithuania and Russia,
fol-
lowing a regional anti-dumping proceeding con-
cerning
the United Kingdom.
Measures were in the form of the acceptance of
undertakings which were intended to limit exports
from each country to the United Kingdom to
100 000 tonnes per
annum. The undertaking
accepted from the Russian authorities was, however,
breached within the first year of its operation.

imports

into

terminated

proceeding was

the Com-
For imports originating in Lithuania,
by
munity-wide
95/344/EC (6) without
Commission Decision
measures in view of the findings of the investiga-
tion concerning the causation of injury. However,
the undertaking concerning imports
into the
United Kingdom originating in Lithuania, accepted
in the framework of
the regional anti-dumping
proceeding, remained in place.

The investigation that led to the imposition of the
Community-wide measures is hereinafter referred
to as ‘the original investigation’. The investigation
period of
from
1 April 1993 to 31 March 1994.

investigation was

the original

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Council
Regulation (EC) No 2331/96 (OJ L 317, 6. 12. 1996, p. 1).

(2) OJ L 129, 21. 5. 1994, p. 24.

(3) OJ C 158, 9. 6. 1994, p. 3.
(4) OJ L 198, 23. 8. 1995, p. 1.
(5) OJ L 198, 23. 8. 1995, p. 29.
(6) OJ L 198, 23. 8. 1995, p. 27.

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(3)

(4)

(5)

2. Request for a reopening of the investiga-

tion

In April 1997, EFMA lodged a request pursuant to
Article 12 of Council Regulation (EC) No 384/96
(hereinafter referred to as ‘the basic Regulation’) to
reopen the investigation into imports of ammo-
nium nitrate originating in Russia with a view to
examining whether the measures had had an effect
on resale prices or subsequent selling prices.

The request was lodged on behalf of Community
producers whose collective output of ammonium
nitrate constitutes a major proportion, as defined by
Article 5(4) of the basic Regulation, of the total
Community production of the product concerned,
that is, by the Community industry in the pro-
ceeding.

in the Community. The

It was alleged that the imposition of anti-dumping
duties on imports of ammonium nitrate originating
in Russia had led to no movement, or insufficient
movement, in resale prices or subsequent selling
information
prices
submitted by the Community industry contained
prima facie evidence to justify the reopening of the
investigation consisting of a comparison of
the
resale price per tonne which should have been
expected following the imposition of measures
(calculated by adding to the minimum import price
set by Council Regulation (EC) No 2022/95 all
costs incurred between import and resale) with
actual resale prices per tonne in two Member States
(France and the United Kingdom), which were
alleged to account for 82 % of the consumption of
ammonium nitrate in the Community.

3. Reopening of the investigation

The evidence submitted in the request was con-
sidered sufficient. On 29 May 1997, therefore, the
Commission announced by a notice published in
the Official Jounal of the European Commun-
ities (1) the reopening of the investigation, pursuant
to Article 12 of the basic Regulation, concerning
the anti-dumping measures applicable to imports
of ammonium nitrate originating in Russia and
commenced the reinvestigation.

(6)

The Commission officially advised the producers/
exporters and importers/traders/distributors known
the ex-
to be concerned,

the representatives of

the investigation.

porting country and the Community producers of
the reopening of
Interested
parties were given the opportunity to make their
views known in writing and to request a hearing.
All parties who so requested were granted hearings.
Written and oral submissions were also received
from certain importers/traders/distributors
and
from EFMA and certain of its constituent members.
Questionnaires were sent by the Commission
directly to all producers/exporters and importers/
traders/distributors known to be concerned.

(a) Producers/exporters in the country of origin

and their related companies

No replies
to the questionnaire were received
within the time limit set. One producer/exporter
replied after the expiry of the time limit, but in a
manner which could only be considered insuffi-
cient. This company was then given the oppor-
tunity to rectify the deficiencies in its response,
which it failed to do. The company was therefore
informed that it would be considered as non-co-
operating and was given the opportunity to
in accordance with
comment on this Decision,
Article 18(4) of the basic Regulation. The company
replied, outside the deadline, that it had supplied
non-confidential information which should be used
by the Commission. The non-confidential informa-
tion already supplied was, however, clearly insuffi-
cient for the purposes of the reinvestigation.

(b) Importers/traders/distributors

in the Com-

munity

Nine unrelated importers/traders/distributors made
the Commission and
themselves
known to
responded to the questionnaire. Of
two
subsequently did not cooperate and were therefore
excluded from the reinvestigation conducted. Both
this Decision and
companies were informed of
were given an opportunity to comment,
in ac-
cordance with Article 18(4) of the basic Regulation.

these,

The Commission carried out investigation visits at
the premises of the following companies:

— Unifert France, SA, France,

— SHM Trading Ltd, United Kingdom,

— ConAgra Resources Europe

Ltd, United

Kingdom,

(1) OJ C 162, 29. 5. 1997, p. 5.

— Common Market Fertilisers, SA, Belgium.

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three

remaining

importers/
The
traders/distributors were not
the
Commission but appropriate account was taken of
the information provided in their replies.

cooperating

visited

by

(7)

(8)

(9)

The
reinvestigation covered the period from
1 April 1996 to 31 March 1997 (hereinafter referred
to as ‘the period of reinvestigation’).

The investigation exceeded the normal time period
of six months provided for in Article 12(4) of the
basic Regulation owing to the Commission being
hampered in its efforts to gather information by the
marked lack of cooperation.

B. PRODUCT UNDER CONSIDERATION

The product reinvestigated is the same product,
originating in Russia, as that concerned by the
original investigation: i.e. ammonium nitrate, which
is a fertiliser produced in prill or granular form,
currently classifiable within CN codes 3102 30 90
(ammonium nitrate, other than in aqueous solu-
tion) and 3102 40 90 (mixtures of ammonium
nitrate with calcium carbonate or other inorganic
non-fertilisers substances with a nitrogen content
exceeding 28 % by weight).

C. THE REINVESTIGATION

period of reinvestigation was accounted for by the
purchases of cooperating companies. Furthermore,
a number of cooperating companies were related to
non-cooperators also involved in the trade of
ammonium nitrate orignating in Russia. Despite
the fact that this meant the Commission could not
be wholly confident as to the completeness of the
information supplied, it was nonetheless not dis-
regarded, where relevant, as it was considered that
the deficiencies were not such as to cause undue
difficulty in arriving at a reasonably accurate
finding,
in accordance with Article 18(3) of the
basic Regulation. In this respect, costs between
import and resale verified on-the-spot at co-
operating companies considered to have provided
the most detailed information were used to calcu-
late the resale price level which could reasonably
have been expected for the product concerned after
the adoption of measures.

2. Movement of resale prices in the Com-

munity

(12)

Pursuant to Article 12(1) and (2) of the basic Regu-
lation,
it was determined whether, following the
imposition of definitive anti-dumping duties in
1995, the expected movement in resale prices in
the Community had occurred. In particular, the
resale price to the first independent buyer which
should have been expected during the period of
reinvestigation (the ‘benchmark resale price’) was
compared with the resale price actually found for
the same period (the ‘actual resale price’).

1. Cooperation

(a) Calculation of the benchmark resale price

(10) No

of

producer/exporter

ammonium nitrate
located in Russia — or related importer/trader/
located within or outside the Com-
distributor
munity — cooperated with the reinvestigation. In
addition, as indicated in Recital (11) below, little
cooperation was received from unrelated importers/
traders/distributors located within or outside the
Community.

Recourse was therefore made to facts available in
accordance with Article 18 of the basic Regulation.
Information received from customs authorities in
the United Kingdom, from published trade jour-
nals,
importers/traders/
distributors and from the Community industry was
used, where appropriate.

cooperating

from

(11) Only 20 % of

imports into the Community of
ammonium nitrate originating in Russia during the

(13)

In order to calculate the benchmark resale price it
was considered appropriate to add to the minimum
import price established pursuant to the original
investigation all costs incurred between import and
resale plus an amount for profit.

However,
in the absence of any more suitable
information, a distinction was made between costs
associated with imports accounted for by co-
operating
importers/traders/distributors — for
which the costs incurred between import and resale
were verified on-the-spot — and those associated
with imports accounted for by non-cooperators —
whose costs were estabished on the basis of the
facts available, in accordance with Article 18 of the
basic Regulation.

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(14)

In order to calculate the costs incurred between
import
and resale for cooperating companies,
appropriate amounts for customs duty, handling
and ancillary costs, selling, general and adminis-
trative expenses (including credit costs) and profit
were taken into consideration, as verified on-the-
spot.

price for imports accounted for by cooperating
importers/traders/distributors and that calculated
for imports accounted for by non-cooperators.

(18)

For imports accounted for by cooperating compa-
nies, the actual resale price was calculated on the
basis of information verified on-the-spot.

argued,

after disclosure of

One importer
the
findings of the reinvestigation, that the profitability
used did not reflect actual profitability verified
on-the-spot. The rate of profitability used was re-
viewed and, after consideration, an appropriate
adjustment was made.

(15)

amounts

appropriate

For non-cooperators,
for
customs duty, handling and ancillary costs, product
losses, selling, general and administrative expenses
(including credit costs) and profit were taken into
consideration, taking the highest costs found, by
Member State,
for cooperating companies. Due
account was taken of the fact that imports made
into the United Kingdom accounted for by non-
cooperating companies were primarily made in
bulk, as indicated by evidence provided by customs
authorities. In this respect, the costs of bags and
bagging were also included in the calculation of
costs
incurred between import and resale for
imports accounted for by non-cooperating compa-
nies made into the United Kingdom. The amount
for profit was determined on the basis of informa-
tion contained in the request for a reinvestigation.

(16) Weighted average costs incurred between import
and resale and profit were added to the minimum
import price established pursuant to the original
investigation (established on a cif Community fron-
in order to establish the
tier basis duty unpaid)
Community benchmark resale price, denominated
in ecu, for the period of reinvestigation.

(b) Actual resale price after the imposition of the

measures

(17)

for all

imports

The actual resale price to the first independent
into the Community of
buyer
ammonium nitrate originating in Russia during the
period of reinvestigation was then established. A
distinction was made between the actual resale

(19)

For imports accounted for by non-cooperators, the
actual resale price was calculated, on the basis of
the facts available, in accordance with Article 18 of
the basic Regulation, on a monthly basis for the
period of reinvestigation, by reference to market
prices published in trade journals, on a Member
State by Member State basis. In the absence of any
more suitable information, in order not to reward
non-cooperation and in view of the fact that the
market prices
all
imported ammonium nitrate whilst, according to
information received during the course of the rein-
vestigation, Russian ammonium nitrate trades at a
lower price
imported ammonium
nitrate, the lowest market price published therein
was taken.

referred to were those for

than other

(20)

Finally, a single weighted average actual
resale
price, denominated in ecu, was calculated for all
imports of the product concerned (both made in
bulk and bagged) for the period of reinvestigation.

(c) Insufficient movement of resale prices

(21)

(22)

The difference between the actual resale price and
the benchmark resale price was then calculated in
order to determine whether or not there had been
sufficient movement in resale prices following the
imposition of anti-dumping measures.

It was found that the imposition of anti-dumping
in
measures had led to insufficient movement
resale prices in the Community. The actual resale
price remained below the benchmark resale price
on a weighted average basis. This shortfall in price
movement is expressed below as a percentage of
the weighted average actual resale price: 9,0 %.

In view of the significant shortfall in the move-
ment of resale prices, it was not considered neces-
sary to investigate any further whether the subse-
quent selling prices in the Community had moved
sufficiently.

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(d) Other factors affecting the average resale price
of the product after imposition of the anti-
dumping duty

(29)

(23) No other arguments were brought forward by in-
terested parties, nor were any other factors found
during the reinvestigation, explaining why resale
prices as indicated above did not move to the
extent that could reasonably be expected after the
imposition of the anti-dumping duty.

Certain importers argued that
low resale prices
for
reflected the poor condition of
the market
ammonium nitrate. Such a situation does not,
however, address
the issue under consideration
which is that, for the period of reinvestigation (i.e.
one year), resale prices did not sufficiently reflect
costs
realised, had the
minimum import price been respected.

incurred and profit

(e) Conclusion

(24)

The Council concludes that for ammonium nitrate
originating in Russia, the anti-dumping measures
have not led to sufficient movement in resale prices
in the Community within the meaning of Article
12(2) of the basic Regulation.

3. Recalculation of the dumping margin

(25)

In accordance with Article 2 of the basic Regula-
tion, a new dumping margin was established, as
required by Article 12(2) of that Regulation.

(a) Normal value

(26) As no producer/exporter claimed a change in
normal value had occurred, as provided for by
Article 12(5) of the basic Regulation, the normal
value as established in the original investigation for
the analogue country, Poland, was used for the
recalculation of the dumping margin.

(b) Reassessed export price

(27) One export price was calculated for all ammonium
nitrate originating in Russia imported into the
Community during the period of reinvestigation.

for

In the absence of export prices
imports
accounted for by non-cooperators it was decided to
construct such prices in accordance with Article
2(9) of the basic Regulation. In this regard, Eurostat
import statistics were not considered a reliable basis
for establishing such prices in view of the apparent
existence of an association or compensatory ar-
rangement. This
consideration concurs with
evidence provided by customs authorities in the
United Kingdom indicating widespread overstate-
ment of export prices by certain non-cooperators.
This is also the conclusion drawn from information
concerning resale invoices in the hands of
the
Commission which indicates a price for resale far
below that which would allow an importer to carry
on normal business, were the minimum import
price being respected; in other words, if all costs
incurred between import and resale were deducted
inde-
from the resale invoice price to the first
pendent buyer,
reached,
Community frontier before customs clearance,
which is lower than the minimum import price.

an import price

is

Reliable export prices at the Community frontier
were therefore constructed on the basis of the price
at which the imported product was first resold to
an independent buyer, established on the basis of
facts available in accordance with Article 18 of the
basic Regulation, i.e. the information referred to in
Recital (19) above, with adjustments made for all
incurred between importation and resale,
costs
including the anti-dumping duty payable, plus a
reasonable amount for profit. The amount for profit
was determined on the basis of
information
contained in the request for a reopening of the
reinvestigation, which has been corroborated by
other sources.

(30) A weighted average Community frontier export
price was then calculated for all imports of ammo-
nium nitrate originating in Russia.

(c) Comparison

(31) A fair comparison was made between the normal
value as established in the original
investigation
and the weighted average export price as es-
tablished above, in accordance with Article 2(10) of
the basic Regulation.

(d) Dumping margin

(28)

For
imports accounted for by cooperating im-
prices were
porters/traders/distributors,
calculated, using information verified on-the-spot,
on the basis of the price paid or payable by these
operators.

export

(32)

The comparison of normal value with reassessed
weighted
the
existence of a higher dumping margin as compared

export prices

showed

average

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with that found in the original investigation. The
recalculated weighted average dumping margin,
expressed as a percentage of the cif price free at the
Community frontier, is: 41,9 %.

(e) Conclusion

(33) As the reinvestigation has shown that the measures
in force have led to insufficient movement in resale
in the Community and that dumping
prices
margins have increased,
the measures in force
should be amended, in line with the findings on
export prices, in accordance with Article 12(3) of
the basic Regulation.

4. Proposed change of

the measures ap-

plicable

(34)

The measures previously applicable did not have
their
intended effect upon the resale price of
ammonium nitrate originating in Russia, due to
absorption of the anti-dumping measures in force.
Actual resale prices for the period of reinvestigation
did not reflect the costs incurred between the levels
of import and resale.

During the course of
the reinvestigation it was
considered whether it would be appropriate simply
to increase the minimum import price to reflect
the increased dumping margin.

The very fact, however, that absorption of anti-
dumping duties in the form of a minimum import
price has taken place also means that any increase
in the level of the minimum import price might be
equally ineffective in revising resale prices or
subsequent selling prices in the Community.

From the foregoing, it can be seen that the flexib-
ility permitted to the Russian producers/exporters
by the variable anti-dumping duty hitherto ap-
plicable has failed to revise prices for ammonium
nitrate originating in Russia to the extent that the
injurious effect of
the dumping has not been
removed.

(35)

It is concluded from the finding of the reinvestiga-
tion — and taking into account the past history of
anti-dumping measures concerning imports of
ammonium nitrate originating in Russia, which
involved the breach of an undertaking in the first
year following its acceptance by the Commission
(see Recital (1) above) — that it is also prudent to
alter the form of measures in force. In view of the
possibility of absorption of an ad valorem duty for

seasonal

and price-sensitive product,

this
the
Council considers it appropriate to amend the def-
initive anti-dumping duty imposed on imports of
ammonium nitrate originating in Russia from the
minimum import price currently in force to a
specific duty per tonne. This form of anti-dumping
measure would be more effective in revising resale
prices and thus remedying the injurious effect of
the dumping.

One importer argued that the problem of absorp-
tion of
the anti-dumping duty in force was
confined to imports made in bulk and that, there-
fore, while the specific duty was appropriate for
imports made in bulk, the minimum import price
should remain in force for imports made in bags.
After consideration of the merits of this argument
it was not accepted for the reason that the findings
of the reinvestigation indicated that absorption of
the duties was not confined to those imports made
in bulk.

One producer located in Russia, which had at no
time prior to disclosure of the findings of the rein-
vestigation made itself known, proposed an under-
taking. After consideration,
this proposal was
judged to be unacceptable due to the total lack of
cooperation from all Russian producers/exporters.

(36)

The new level of anti-dumping duty was deter-
mined by adding to the previous level of the duty
(minimum import price less export price at the
Community frontier in the original
investigation
period) the difference between the export prices in
the original investigation and those of the current
reinvestigation. The amended duty, to be levied on
a per tonne net basis at the Community frontier, is
ECU 26,3 per tonne,

HAS ADOPTED THIS REGULATION:

Article 1

Article 1(2) of Regulation (EC) No 2022/95 is hereby
replaced by the following:

The rate of the anti-dumping duty applicable

‘2.
shall be ECU 26,3 per tonne.’

Article 2

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

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This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 23 March 1998.

For the Council

The President

M. MEACHER