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
Date: 2000-05-08
Institutions: Council of the European Union
Subjects: Belarus, USSR, Ukraine, anti-dumping duty, chemical salt, originating product

L 112/4

EN

Official Journal of the European Communities

11.5.2000

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 the European 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)

(2)

(3)

1. PREVIOUS INVESTIGATIONS

the Council
By Regulation (EEC) No 3068/92 (2),
imposed definitive anti-dumping duties on imports of
potassium chloride (hereinafter referred to as ‘potash’ or
the ‘product concerned’) originating in Belarus, Russia
and Ukraine (hereinafter referred to as the ‘countries
to the difference
concerned’). The duties were equal
between a set minimum price and the net,
free-at-
Community-frontier prices before customs clearance.

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 before
customs clearance, whichever was higher, were imposed.
This type of measure was found to be warranted because
circumvention of the original duties had been taking
place.
the review
carried out in 1994 covered both dumping and injury,
as well as Community interest.

It should also be mentioned that

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,
that the 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 maintained but the
level of the measures was adapted in accordance with
that
the findings of
It should also be
the review concluded in 1998 was
mentioned that

investigation.

(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.

limited to the examination of dumping and Community
interest.

(4)

(5)

(6)

2. PRESENT INVESTIGATION

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) No 384/96,
hereinafter referred to as the ‘basic Regulation’.

The request was lodged on 23 December 1998 by the
European Association of Potash Producers (hereinafter
the ‘applicant’) on behalf of producers, whose collective
the
output of potash constitutes
Community production of this product,
i.e. a major
proportion of the total Community production pursuant
to Articles 4(1) and 5(4) of the basic Regulation.

about 99 % of

Indeed,

The request was based on the grounds that the expiry of
the measures would result in the continuation or recur-
rence of dumping and injury.
the applicant
alleged that potash from the countries concerned was
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 past dumping and the fact that
the relevant exporters were still selling the product
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 reinforced by the evidence presented that
showed that domestic consumption had fallen drastically
in the countries concerned whilst production had
leaving the exporters with a
increased significantly,
surplus product
sold on the
risked being
that
Community market at dumped prices. Finally, the appli-
cant 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
somewhat precarious.

(7)

In view of the specific form of the anti-dumping duties
imposed on imports of potassium chloride from the
countries concerned, i.e. a combination of a minimum
price and a fixed duty, the Commission also 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.

(5) OJ C 296, 24.9.1998, p. 3.

11.5.2000

EN

Official Journal of the European Communities

L 112/5

(8)

(9)

(10)

after

consulting the Advisory
Having determined,
Committee, that sufficient evidence existed, the Commis-
sion initiated an expiry review and an interim review
(limited to the form of the duty) through the publication
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

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 of continuation
injury covered the period from 1
or recurrence of
January 1994 up to the end of
the IP (hereinafter
referred to as the ‘period considered’). For the purposes
of the examination of recurrence of injury, forecasts for
years 1999 and 2000 were also taken into consider-
ation.

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 (2), Madrid, Spain,
Kali and Salz GmbH, Kassel, Germany,
Société commerciale des potasses et de l'azote SA (3),
Mulhouse, France, hereinafter referred to as ‘SCPA’;

(b) Producers in the analogue country:

Agrium Inc., Calgary,
IMC Global Inc., Regina,
Potash
of
Saskatoon;

Corporation

Saskatchewan

(PCS),

(c) Unrelated importers into the Community:

Fertiberia SA, Madrid, Spain (also a user of potash).

2.2. PARTIES CONCERNED BY THE INVESTIGATION

3. PRODUCT CONCERNED AND LIKE PRODUCT

The applicant Community producers, the exporters and
producers in the exporting countries and the importers/
users as well as their representative associations known
to be concerned and the representatives of the exporting
countries were officially advised of the initiation of the
review. Questionnaires were sent to all these parties and
to those who made themselves known within the time
limit set in the notice of
In addition, the
producers in Canada, which was chosen as the analogue
country, were contacted and received questionnaires.
The parties directly concerned were also given the
opportunity to make their views known in writing and
to request a hearing.

initiation.

(11) All applicant Community producers replied to the ques-
tionnaire. 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 their common
exporter IPC (Moscow, Russia). Ferchimex (Antwerp,
Belgium) and Belarus (Vienna, Austria), related importers
of IPC, replied as well. No cooperation was received
from any Ukrainian exporting producer.

(12)

Seven unrelated importers replied to the questionnaire
and made their views known in writing. The importers
of potash are in most cases also users of the product. No
replies were obtained from the non-importing users of
the product.

(13) All information deemed necessary to determine whether
there was a likelihood of a continuation or recurrence of
dumping and injury and whether the continued impos-
ition of the measures was in the Community interest

(1) OJ C 80, 23.3.1999, p. 9.

(14)

(15)

3.1. DESCRIPTION OF THE PRODUCT CONCERNED

The product concerned is potassium chloride (potash,
fertiliser,
KC1) and is generally used as agricultural
directly, blended with other fertilisers or after transfor-
mation into a complex fertiliser known as NPK
(nitrogen, phosphorus, potassium). The potassium
content is variable and is expressed as a percentage of
the weight of potassium oxide (K
O) on the dry an-
2
hydrous product.

Potash is generally commercialised in either a standard/
powder form (standard potash) or in ‘other than stan-
dard’ form that includes but is not limited to a granular
form (granular potash). The product is generally classi-
O
fied into three basic categories, based on the K
2
content, namely:

— potassium content not exceeding 40 % K2O —

falling under CN code 3104 20 10,

— potassium content exceeding 40 % K2O but less than
to 62 % — falling under CN code

or equal
3104 20 50,

— potassium content over 62 % K2O — 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 speci-
fied different levels of anti-dumping duties for standard
potash, on the one hand, and the remaining forms of
potash including granular potash, on the other.

(2) Subsidiary and exclusive trader of the production of two Spanish
mines: Suria K, SA (until April 1997) and Potasas de Llobregat, SA.
‘Mines de

(3) Subsidiary and exclusive trader of

the production of

potasse d'Alsace’.

L 112/6

EN

Official Journal of the European Communities

11.5.2000

(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 for potash indicated
above, should be considered a product concerned. This
conclusion was reached as such mixtures and blends
shared the same basic physical and chemical characteris-
tics and have the same uses as the basic categories
mentioned above. As the present investigation has not
brought to light any consideration indicating that 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
in this Regulation, to
has been considered necessary,
O of such mixtures
clarify the minimum content of K
2
and blends as being 35 % or more, by weight, of the dry
anhydrous product and falling under the ‘other than
standard’ form of potash.

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 on the
to that
North American market,
exported to the Community
countries
concerned,
in the sense of Article 1(4) of the basic
Regulation. In addition, potash exported from the coun-
tries concerned and potash produced by the Community
producers were also like products.

is a like product

from the

(19)

IPC requested the exclusion of standard potash with a
K2O content higher than 62 %, which, it was claimed,
was only used in pharmaceutical applications, had
different prices and was delivered packed (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 a fertiliser 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
this type of potash is one single product with the other
types of potash.

4. LIKELIHOOD OF A CONTINUATION OR RECUR-

RENCE OF DUMPING

4.1. PRELIMINARY 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 injurious dumping.

(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 processing regime. In
line with the consistent practice of the institutions these
imports 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 whether dumping
is
taking place at present and whether any such
dumping will continue should measures be removed.
imports from Belarus could also be
The volume of
considered representative as
they reached 1,2 % of
Community consumption. In these circumstances, it was
not necessary to examine whether there was a likelihood
of recurrence of dumping 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 there was
a likelihood of recurrence of dumping should measures
be removed.

4.2. ANALOGUE COUNTRY

(22)

In order to establish whether dumping would continue
or recur, normal value had to be based on information
obtained in an appropriate market-economy third
country in accordance with Article 2(7) of the basic
Regulation.
initiation, Canada was
suggested as an appropriate analogue country.

In the notice of

(23) No party objected to the use of Canada as an analogue
country. Both IPC and the European Fertiliser Import
Association (EFIA) agreed to the 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 the Patience Lake mine in Saskatchewan
excluded from the normal value determination.

(24)

Both parties argued that the mines for which exclusion
was requested differ in terms of size, geological deposit
conditions and mining and production methods from
those prevailing in Belarus, Russia and Ukraine, which
are very similar to the Saskatchewan mines. Further-
more, it was argued that the New Brunswick mine is
situated much closer to its customers than the ports of
loading used for potash exports for Belarus and Russia,
incomparable.
rendering transport costs,

in particular,

(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

the
product concerned was subject to normal conditions
of competition;

for

11.5.2000

EN

Official Journal of the European Communities

L 112/7

(c) the manufacturing process and access to raw mate-
rials were, to a large extent, similar in Canada and in
the countries concerned;

(d) Canada had been used in the previous investigations.

production, normal value was based on the actual price
on the North American market for Russia, calculated as
a weighted average of the prices of all sales of standard
potash made by each company during the investigation
period, whether profitable or not.

(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 factors
cited,
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 are
compared, in accordance with Article 2(10) of the
i.e. ex-mine.
basic Regulation, at
Moreover,
the New Brunswick mine in question
represents only a small proportion of the sales taken
into account for the determination of normal value
if any, would be
so that an effect of distances,
diluted by the volume of the total sales taken into
consideration (see recital 36).

the same level,

(32)

(33)

(34)

(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 continua-
tion of dumping from Russia and Belarus if measures
were removed it is necessary to verify 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 of potash of the cooperating companies
on the Canadian market were considered to be repres-
entative.

(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 profit-
able sales of the grade in question.

4.3.2. Export price

IPC was the only exporter that cooperated with the
investigation. Export volumes reported by IPC do virtu-
ally correspond to the Eurostat figures, complemented as
explained under point 6.2.1. Therefore, for both Belarus
and Russia, export prices were assessed on the basis of
the information provided by IPC.

IPC sold to the Community market partly via two
related importers, Ferchimex, based in Belgium and
Belarus, based in Austria, and partly directly to indepen-
dent customers.

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 basis of export prices
actually paid or payable. In cases where export sales
were made to a related party, the export price was
constructed pursuant to Article 2(9) of the basic Regula-
tion, 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 profit margin of 5 %
applied in the previous investigation was, in the absence
of 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 the framework 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 repre-
senting a large proportion of the selling price, and in
view of the significant distance between 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.

(31) As the volume of standard potash sold at a net sales
price equal to or above the cost of production (profit-
able sales) represented more than 80 % of the total sales
volume of that grade and since the weighted average
price was higher than the weighted average cost of

(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.

L 112/8

EN

Official Journal of the European Communities

11.5.2000

(i) Adjustments to normal value

(ii) Russia

(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
the
claims for adjustment were made and none of
alleged differences was quantified. Furthermore, most of
the elements 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
materially changed 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 adjustment
for
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 trans-
port 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, while transport 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 contradiction between the delivery
terms and the transport costs as reported by IPC.
However, in the absence of any evidence provided by
IPC, it was impossible to find out whether the delivery
terms or the transport expenses were correctly reported.
In any event, even if the most favourable approach for
IPC was taken, this would not have altered the findings
it
concerning the existence of dumping. Furthermore,
should be 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.

(44)

Expressed as a percentage of the price ‘cif-Community-
border’,
the dumping margin found is significantly
higher than the one found in the previous investigation.

4.3.5. Conclusion

(45) With regard to imports from Belarus and Russia, it can
therefore be concluded that there has been a continua-
tion 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
whether dumping would recur should measures be
repealed. No cooperation was
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 that evidence suggests that potash mines are oper-
ated in Ukraine. This evidence 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 for exports 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 player wishes to
enter the Community market it can only do so at price
levels undercutting 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 prices
similar to those then charged by Russia and Belarus.

4.3.4. Dumping margin

(47)

(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.

4.4.1. Conclusion

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 origin-
ating in the Ukraine should measures be repealed.

(i) Belarus

5. DEFINITION OF THE COMMUNITY INDUSTRY

(43)

Expressed as a percentage of the price ‘cif-Community-
border’, there was still significant dumping with regard
to imports originating from Belarus, although at a some-
what lower level than found in the previous invest-
igation.

(48)

producers

confirmed

investigation

applicant
The
Community
the
Community production of potash and therefore consti-
tute the Community industry within the meaning of
Article 4(1) and Article 5(4) of the basic Regulation.

that
represented

the
99 % of

11.5.2000

EN

Official Journal of the European Communities

L 112/9

6. ANALYSIS OF THE SITUATION OF THE COMMUNITY
INDUSTRY AND OF THE COMMUNITY POTASH
MARKET

processed in the Community by fertiliser manufacturers
who buy some of the raw materials used in the produc-
tion of complex fertilisers, which are also destined for
export, from the Community industry. These imports
were therefore taken into account
in establishing
Community consumption, market shares of the coun-
tries concerned and in the analysis of prices of potash
sold by the exporters concerned.

(49)

the data of

Firstly, it should be noted that the data relating to profit-
ability and investments during the period considered
three
were calculated on the basis of
Community producers: Cleveland
Potash Limited,
Comercial de Potasas, SA and Kali und Salz GmbH. The
fourth Community producer, SCPA, was partly excluded
due to the exceptional condition of its mining subsidiary
‘Mines de potasse 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 accounting system of the
mine has been simplified in such a way that it is no
longer 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 produ-
cers. However, on the basis of the information available,
had SCPA been taken into account the profitability of
the Community industry would have been notably lower
and the investments would have shown an even more
drastic downward trend.

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.

(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 consis-
it was
tent practice of
considered that these imports compete with the product
the Community industry as they are
concerned of

the Community institutions,

(52) On this basis, consumption decreased from around
7 460 000 tonnes in 1994 to around 7 290 000 tonnes
i.e., a decrease of approximately 2,3 %.
in the IP;
However, during the period considered the level of
consumption fluctuated as shown in the table below:

1994

1995

1996

1997

IP

(in thousand tonnes)

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 during the 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.

L 112/10

EN

Official Journal of the European Communities

11.5.2000

(54)

The investigation has shown that the volume of imports as reported by IPC is higher than the data
contained in Eurostat, as several Member States 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 that the imports reported by IPC are not
significantly different from the complete Eurostat data.

(in thousand tonnes)

Imports

1994

1995

Russia total

Belarus total

Ukraine

397

137

49

583

175

113

15

303

Total

1996

122

11

0

132

1997

190

51

1

243

IP

305

91

0

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:

Imports

1994

Russia

% of imports

Belarus

% of imports

Ukraine

% of imports

Totals

% of imports

61

15

34

25

35

72

131

22

1995

159

91

52

46

15

100

226

75

1996

115

94

11

100

0

N/A

126

95

(in thousand tonnes)

1997

178

93

51

100

1

100

230

95

1998

284

93

91

100

0

N/A

375

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 the
imports occurred under the said regime. Imports under the IPR regime are 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 investigation has not brought to
light any facts that would suggest that the regime 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 increase occurring 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.
The market share decreased from its highest level of 7,8 % in 1994 to reach its lowest level in 1996,
i.e. 1,9 %. After 1996 there was a constant increase, up to 5,4 % in the IP.

(1) OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Regulation (EC) No 955/1999 of the European Parlia-

ment and of the Council (OJ L 119, 7.5.1999, p. 1).

11.5.2000

EN

Official Journal of the European Communities

L 112/11

Market share of the imports
concerned in %

1994

1995

1996

1997

Belarus

Russia

Ukraine

Total

1,8

5,3

0,7

7,8

1,5

2,4

0,2

4,1

0,2

1,7

0

1,9

0,7

2,5

0

3,2

IP

1,2

4,2

0

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 Eurostat figures as determined in recital 54.

The cif average sales prices from the countries concerned on the Community market developed in
detail as follows:

Average cif prices of potash with

40 % < K

O ≤ 62 %
2

1994

1995

1996

1997

IP

(in ECU/tonne)

Belarus

Russia

Ukraine

Average

67,5

83,1

83,6

79,2

86,5

71,7

89,9

76,8

88,3

74,4

—

75,7

94,1

79,4

88,0

83,3

100,1

85,8

—

90,8

Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.

Average cif prices of potash with
O > 62 %
2

K

1994

1995

1996

1997

IP

Russia

—

89,9

93,8

96,7

101,5

(in ECU/tonne)

Source: Eurostat and National Statistical Offices in Finland, Denmark and Belgium.

(58)

The average increase in the price of potash with 40 % < K
O ≤ 62 % from the countries concerned
2
amounts to 14,6 % during the period considered. Whereas the Belarusian prices have increased
significantly, overtaking the price of potash of Russian origin, the Russian prices have remained
relatively low. No potash originating in Ukraine was imported in the IP.

(59)

Potash with K
from 89,9 ECU/tonne in 1995 to 101,5 ECU/tonne in the IP.

O > 62 % was only imported from Russia. The average price increased by 12,9 %
2

L 112/12

EN

Official Journal of the European Communities

11.5.2000

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 been limited to the IPR regime. IPC representatives claimed that they had to offer 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.

(61)

In the examination of price behaviour, prices declared by the exporters for each sale to independent
customers and for each resale through their related importer were averaged during the IP for the two
main grades 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 Community producers'
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 INDUSTRY

(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 increase occurred. Production decreased from around 7 779 000
tonnes to around 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)
geological anomalies 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:

1994

1995

1996

1997

IP

(in thousand tonnes)

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 the IP. 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 of around 8 500 000 tonnes in 2000 due to progressive
exhaustion of ore in the French mine.

Figures for total production capacity of potash were as follows:

1994

1995

1996

1997

IP

(in thousand tonnes)

Capacity

9 996

9 414

9 472

9 403

9 293

Source: Questionnaire replies of the Community industry.

11.5.2000

EN

Official Journal of the European Communities

L 112/13

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
maximum ore-processing machine capacity as a result of decreasing ore resources. 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.

In particular, the Community industry's capacity utilisation for potash developed as follows:

Capacity utilisation

1994

77,8

1995

78,9

1996

79,6

1997

78,4

(%)

IP

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 1994 to 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 increase its sales volume to the 1997 level. In
particular, the Community industry's sales volume on the Community market developed as follows:

1994

1995

1996

1997

IP

(in thousand tonnes)

Sales volume of the
Community industry

5 530

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

74,1

1995

74,3

1996

76,4

1997

75,6

(%)

IP

72,2

Community industry's market
share

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 % < K2O ≤ 62 %) rose from 90,1 ECU/tonne in 1994 to 104,2 ECU/
O > 62 %
tonne in the IP. This amounts to a rise of 15,6 %. However, the prices of potash with K2
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 the period considered. Larger orders brought economies of scale and
therefore customers benefited from lower average prices.

L 112/14

EN

Official Journal of the European Communities

11.5.2000

(69) While

there was

a general upward trend in selling prices of

standard potash with
O ≤ 62 % between 1994 and the IP, prices temporarily dropped in 1997 and then
40 % < K 2
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 % < K
O ≤ 62 % will continue and that there will be a small
2
decrease in price for potash with K

O > 62 %.

2

The Community industry's average sales price for potash on the Community market developed as
follows:

Average sales price

1994

1995

1996

1997

IP

(in ECU/tonne)

Standard potash with
40 % < K

2O ≤ 62 %

Standard potash with
K

O > 62 %
2

90,1

96,8

101,6

96,6

104,2

137,7

138,7

134,8

123,2

122,0

Source: Questionnaire replies of the Community industry.

6.3.7. Profitability

(70)

(71)

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.
the French producer, SCPA, was excluded from the
Community industry's profitability calculation for the reasons set out in recital 49.

It should also be recalled that

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 of 1997 when the profits
declined to close to zero. During 1999 and 2000 the 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 profitability on the Community market for potash
developed as follows:

Profit rate

1994

– 1,0

1995

– 0,5

1996

1,5

1997

0,1

(%)

IP

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
production of potash

1994

1995

1996

1997

IP

Employees

8 460

7 919

7 296

7 213

6 936

Source: Questionnaire replies of the Community industry.

11.5.2000

EN

Official Journal of the European Communities

L 112/15

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 during the IP.

The closing stocks of the Community industry of potash developed as follows:

Closing stocks

1994

560

1995

614

1996

903

1997

415

IP

469

(in thousand tonnes)

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, a decrease 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 plans to 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's assessment of investments
for the reasons set out in recital 49. The Community industry's investments developed as follows:

1994

1995

1996

1997

IP

(in thousand ECU)

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 to about 1 566 000 tonnes in the IP. This is equivalent to an
increase of about 16,2 %. The major part of the increase is attributable to imports from Israel.

1994

1995

1996

1997

IP

1 348

1 552

1 495

1 555

1 566

(in thousand tonnes)

Imports from other third
countries

Source: Eurostat.

(76)

(77)

The market share of imports from other third countries grew from 17,9 % in 1994 to 21,0 % in
1995 and remained relatively stable thereafter ending up with 21,4 % at the end of the IP.

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 imports
increased 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.

L 112/16

EN

Official Journal of the European Communities

11.5.2000

In detail, the development was as follows:

1994

96,5

1995

1996

1997

IP

101,8

104,3

120,5

112,3

(in ECU/tonne)

Average import prices from
other third countries

Source: Eurostat.

6.5. EXPORT ACTIVITY OF THE COMMUNITY INDUSTRY

(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 Community industry'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 a downward 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 industry expects to export somewhat less than
in the IP. This downward trend is likely 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 the anti-dumping measures concerning imports of potash
originating in the 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 as before.

In detail, the development during the period considered was as follows:

1994

1995

1996

1997

IP

(in thousand tonnes)

Export sales volumes of the
Community industry

2 314

1 815

1 671

1 947

1 658

Source: Questionnaire replies of the Community industry.

6.6. CONCLUSION

(79)

(80)

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, the situation 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.

Indeed, average sales prices for standard grade potash with 40 % < K
O ≤ 62 % rose by 15,6 %
2
during the period considered. Secondly, the volume of stocks has decreased since 1996: an indica-
tion 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.

11.5.2000

EN

Official Journal of the European Communities

L 112/17

(82)

Its
The Community industry's sales volume decreased by 4,9 % during the period considered.
production volume and capacity declined by 9,7 % 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 it had 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; the countries
concerned lost 2,4 %, while other third countries, notably Israel, 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 share remained practically unchanged. It can be
concluded, therefore, that imports 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.

(84)

(85)

The average prices of the Community industry and of the countries concerned increased in a similar
O > 62 %) as shown in recitals 57 and 69. The same
manner (except for standard potash with K2
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 of the Community industry, in spite of the restricted imports originating in the said
three countries.

Finally, the impact of declining export sales was considered. Export sales, which represented 24 % of
the total sales of the Community industry 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 negative development 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 injurious dumping 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. Yet domestic consumption of
potash in Belarus and Russia collapsed in the 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 a quarter of the corresponding potash produc-
tion. There is no reason to believe 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 under the 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.

L 112/18

EN

Official Journal of the European Communities

11.5.2000

(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. Ukrainian production is not sold through IPC and no information on Ukrainian export 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, where imports
increased by around 87 % during the period considered. The second 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 biggest markets 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 the period considered.

(90) Norway, which has a significant user interest but no producers of potash, imported hardly any
quantities from Belarus and Russia in 1994. Since the effective, combined anti-dumping measures
against potash from the countries concerned were imposed by the Community, the exports of
Belarus and Russia have been redirected into Norway to 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 Community as 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.

Exports of the countries
concerned to markets other than
the Community

1994

1995

1996

1997

IP

(Index)

China

Brazil

USA

100

167

127

183

187

100

414

2 535

4 062

3 438

100

104

103

157

157

Norway

100

3 833

5 750

5 383

4 933

Japan

Others

100

100

94

74

78

74

79

90

84

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 Community during 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.

(1) Source: International Fertiliser Industry Association.
(2) Source: IPC questionnaire response.

11.5.2000

EN

Official Journal of the European Communities

L 112/19

(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 a higher level than prices to the Community. The price level in
China was 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 during the 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. As Ukrainian companies did not cooperate no information was
available except 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
capacity and almost three times the volume of Community consumption.

Production capacity

1994

1995

1996

1997

IP

(in thousand tonnes)

Belarus

Russia

9 077

9 077

9 077

9 077

9 077

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 confidentiality reasons) shows production volumes have increased
relatively steadily, with only one small downward correction in 1996.

Actual production

Belarus

Russia

1994

100

100

Total

100

1995

111

113

112

1996

108

106

107

1997

129

137

133

(Index)

IP

138

140

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) demonstrates that the capacity
utilisation rate of the producers improved by 38 % during the period considered.

L 112/20

EN

Official Journal of the European Communities

11.5.2000

Capacity utilisation

1994

1995

1996

1997

Belarus

Russia

100

100

100

111

116

112

109

108

107

130

139

133

Total

(Index)

IP

137

142

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
investments dropped, but the following year investments again reached a level 3,5 times 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 RECURRENCE 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 production capacity 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 elements indicate that Belarusian
and Russian export prices could be much lower 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 in the
Community traditionally pay for the goods in hard currency and with 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 are much 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 prices than those
to the Community. Norway serves as an example of a Western European country situated in the
proximity of the countries concerned and having no duties on imported potash. Norway is now
almost completely dominated by imports from the countries concerned. 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 export potential 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.

11.5.2000

EN

Official Journal of the European Communities

L 112/21

(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 potash industry has close
economic links to the Belarusian and Russian industry. 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 in direct competition with those from Belarus
and Russia, would have an injurious 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 measures lapse.

(105)

It is therefore concluded that, in the absence of measures, there is a likelihood of a recurrence of
injurious dumping and that anti-dumping measures should therefore be maintained.

8. COMMUNITY INTEREST

8.1. INTRODUCTION

(106)

(107)

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 appreciation of 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.

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 the present investigation is a review, thus analysing a situation in which anti-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 on the 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
two roles. Furthermore, questionnaires were sent to three importer/user organisations: European
Fertiliser Import Association (EFIA), European 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 it is not in the Community interest to maintain measures in this particular case.

8.2. INTERESTS OF THE COMMUNITY INDUSTRY

(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 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 Community industry 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 are also users of it. Main arguments from the traders' position were
provided in EFIA's questionnaire reply.

L 112/22

EN

Official Journal of the European Communities

11.5.2000

(114) The importers of potash are against the prolongation 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 reducing competition within the Community
to a minimum. As a result, they claim, 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 the Community market, imports from Canada, Israel, Jordan and
from some 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 the alleged 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 Community market 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 the imposition 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
it is to be concluded that the

representative organisation received the questionnaire. Therefore,
continuation of 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
three different nutrients:
nitrogen, phosphorus and potassium (NPK-fertilisers).

for producing compound fertilisers that

typically consist of

(119) Most of the users, being also importers, argued in the same manner against the continuation of the
measures as explained above in point 8.3 ‘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 its activity.

(120) Users have little flexibility concerning their product mix whenever an anti-dumping duty for one of
the fertiliser components is applied. As the 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 by their foreign competitors. On the export
market the situation is completely different: there the Community fertiliser manufacturers can be
competitive due to the possibility of importing under the IPR regime.

(121)

In reply to these allegations the investigation showed that potash represents around 15 % to 30 % of
the total cost of the compound fertiliser. The production costs of fertilisers increased during the
period considered 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 period
considered. In a particular example, the share of potash in the total price 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 their existence. 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.

11.5.2000

EN

Official Journal of the European Communities

L 112/23

8.5. CONSEQUENCES FOR COMPETITION ON THE COMMUNITY 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 be
recalled 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 a presence, the current form of measures, in particular the minimum price 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, through the imposition of
measures in the present form, major sources of supply 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), whose purpose was simply to prevent circumven-
tion 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 of potash. On
the other hand, leaving the Community industry without adequate 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, the price disadvantage that will
result for the users from the continuation of 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 conse-
quently of eliminating a significant source of supply on this market, it is concluded 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 as explained below.

9. DEFINITIVE ANTI-DUMPING MEASURES

(126)

(127)

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 the Community 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 potassium chloride originating in Belarus, Russia and Ukraine
imposed by Regulation (EEC) No 3068/92 should be maintained.

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 (EC) No 643/94. This form of measure was chosen in
view of the particular situation which prevailed at that time. Indeed there were strong indications of
circumvention of the type of anti-dumping duty initially 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 countries concerned would lower their export
prices and thus absorb the fixed duty. 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 to maintain 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 basic Regulation. These proposals were carefully examined and it
in the absence of sufficient guarantees by the exporter and the Russian
was concluded that,
government, they could not be effectively monitored or enforced and that furthermore the risk of
compensatory pricing of the product concerned imported into the Community under the IPR regime
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 were
therefore rejected,

L 112/24

EN

Official Journal of the European Communities

11.5.2000

HAS ADOPTED THIS REGULATION:

Article 1 of Regulation (EEC) No 3068/92 is hereby replaced by the following:

‘Article 1

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 10, ex 3105 20 90, ex 3105 60 90, ex 3105 90 91, ex 3105 90 99 originating in
Belarus, Russia and Ukraine.

For the purpose of paragraph 1 of this Article potassium chloride will be either potassium
2.
chloride not containing any additional fertilising elements or potassium chloride containing additional
fertilising elements in special mixtures. For the purpose of the application of the anti-dumping duty,
special mixture is defined as a blend of two or more fertilising elements. Such a mixture is subject to an
anti-dumping duty if the K
O content of the mixture or blend is 35 % or more, by weight, of the dry
2
anhydrous product. Such product will fall under ‘other than standard’ grade.

The amount of duty shall be equal to the fixed amount in euro per tonne of KCl shown below per

3.
category and grade (standard potash is to be understood as potash in powder form):

Belarus

Potassium chloride not containing any additional fertilising elements:

Category:

With a potassium content evalu-
ated as K
2O, by weight, not
exceeding 40 % on the dry anhy-
drous product

With a potassium content evalu-
ated as K
2O, by weight, exceeding
40 % but not exceeding 62 % on
the dry anhydrous product

With a potassium
content evaluated
as
K
by
O,
2
weight, exceeding
62 % on the dry
anhydrous
product

Grade

Standard

Other than
standard
(including granu-
lar)

Standard

Other than
standard
(including granu-
lar)

TARIC code

3104 20 10 10

3104 20 10 90

3104 20 50 10

3104 20 50 90

3104 20 90 00

Fixed amount
(EUR/tonne)

19,51

30,84

29,51

46,65

48,19

Potassium chloride containing additional fertilising elements in special mixtures:

O,
With a potassium content evaluated as K
2
by weight, equal or exceeding 35 % but not
exceeding 40 % on the dry anhydrous
product

O,
With a potassium content evaluated as K
2
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 10

Fixed amount
(EUR/tonne)

30,84

46,65

11.5.2000

EN

Official Journal of the European Communities

L 112/25

Russia

Potassium chloride not containing any additional fertilising elements:

Category:

With a potassium content evalu-
ated as K
O, by weight, not
2
exceeding 40 % on the dry anhy-
drous product

With a potassium content evalu-
ated as K
O, by weight, exceeding
2
40 % but not exceeding 62 % on
the dry anhydrous product

With a potassium
content evaluated
as
K
by
O,
2
weight, exceeding
62 % on the dry
anhydrous
product

Grade

Standard

Other than
standard
(including granu-
lar)

Standard

Other than
standard
(including granu-
lar)

TARIC code

3104 20 10 10

3104 20 10 90

3104 20 50 10

3104 20 50 90

3104 20 90 00

Fixed amount
(EUR/tonne)

19,61

26,01

29,65

39,33

40,63

Potassium chloride containing additional fertilising elements in special mixtures:

With a potassium content evaluated as K2O,
by weight, equal or exceeding 35 % but not
exceeding 40 % on the dry anhydrous
product

With a potassium content evaluated as K2O,
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 10

26,01

39,33

Fixed amount
(EUR/tonne)

Ukraine

Potassium chloride not containing any additional fertilising elements:

Category:

With a potassium content evalu-
ated as K
O, by weight, not
2
exceeding 40 % on the dry anhy-
drous product

With a potassium content evalu-
ated as K
O, by weight, exceeding
2
40 % but not exceeding 62 % on
the dry anhydrous product

With a potassium
content evaluated
as
K
by
2O,
weight, exceeding
62 % on the dry
anhydrous
product

Grade

Standard

Other than
standard
(including granu-
lar)

Standard

Other than
standard
(including granu-
lar)

TARIC code

3104 20 10 10

3104 20 10 90

3104 20 50 10

3104 20 50 90

3104 20 90 00

Fixed amount
(EUR/tonne)

19,61

30,84

29,65

46,65

48,19

L 112/26

EN

Official Journal of the European Communities

11.5.2000

Potassium chloride containing additional fertilising elements in special mixtures:

With a potassium content evaluated as K
O,
2
by weight, equal or exceeding 35 % but not
exceeding 40 % on the dry anhydrous
product

With a potassium content evaluated as K
O,
2
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 10

Fixed amount
(EUR/tonne)

30,84

46,65

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 of anti-dumping duty, calculated
on the basis of the fixed amounts set out above, 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.’

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

Article 2

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

Done at Brussels, 8 May 2000.

For the Council

The President

J. PINA MOURA