Commission Regulation (EC) No 1497/2001 of 20 July 2001 imposing provisional anti-dumping duties on imports of urea originating in Belarus, Bulgaria, Croatia, Estonia, Libya, Lithuania, Romania and the Ukraine, accepting an undertaking offered by the exporting producer in Bulgaria and terminating the proceeding as regards imports of urea originating from Egypt and Poland
Date: 2001-07-20
Institutions: European Commission
Subjects: anti-dumping duty, chemical product, import, third country

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COMMISSION REGULATION (EC) No 1497/2001

of 20 July 2001

imposing provisional anti-dumping duties on imports of urea originating in Belarus, Bulgaria,
Croatia, Estonia, Libya, Lithuania, Romania and the Ukraine, accepting an undertaking offered by
the exporting producer in Bulgaria and terminating the proceeding as regards imports of urea
originating from Egypt and Poland

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Investigation

Having regard to the Treaty establishing the European
Community,

(4)

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), as last
amended by Regulation (EC) No 2238/2000 (2), and in partic-
ular Article 7 thereof,

The Commission officially advised the exporting produ-
cers, the importers and the users known to be concerned
as well as the representatives of the exporting countries
concerned and the complainant Community producers
about the initiation of the proceeding. Interested parties
were given the opportunity to make their views known
in writing and to request a hearing within the time limit
set out in the notice of initiation.

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(1)

(2)

(3)

1. Investigations concerning other countries

In March 2000, the Commission initiated a review (3) of
the definitive anti-dumping duties imposed by Council
Regulation (EC) No 477/95 (4) on imports of urea
originating in the Russian Federation (‘Russia’), pursuant
to Article 11(2) of Regulation (EC) No 384/96 (‘the basic
Regulation’). As a result of this review, the Council, by
Regulation (EC) No 901/2001 (5), imposed a definitive
anti-dumping duty on imports of urea originating in
Russia.

2. Present investigation

Initiation

On 6 September 2000 a complaint was lodged by the
European Fertiliser Manufacturers Association (EFMA),
on behalf of producers representing a major proportion,
in this case more than 80 % of the Community produc-
tion of urea. The complaint contained evidence of
dumping of the said product and of material
injury
resulting therefrom, which was considered sufficient to
justify the initiation of a proceeding.

Consequently, on 21 October 2000, the Commission
announced by a notice (‘notice of initiation’) published
in the Official Journal of the European Communities (6) the
initiation of an anti-dumping proceeding with regard to
imports into the Community of urea originating in
Belarus, Bulgaria, Croatia, Egypt, Estonia, Libya, Lithu-
ania, Poland, Romania and the Ukraine.

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ C 62, 4.3.2000, p. 19.
(4) OJ L 49, 4.3.1995, p. 1.
(5) OJ L 127, 9.5.2001, p. 11.
(6) OJ C 301, 21.10.2000, p. 2.

(5)

The Commission sent questionnaires to 13 Community
producers, all exporters/producers, all importers as well
as all users known to be concerned as well as to all
parties which made themselves known within the dead-
line set out in the notice of Initiation. Replies to these
questionnaires were received from nine Community
producers, 17 exporting producers, 10 importers, and
seven users of urea.

The Commission sought and verified all the information
deemed necessary for the purpose of a provisional deter-
mination of dumping, injury and Community interest.
Verification visits were carried out at the premises of the
following companies:

Community producers

— Agrolinz Melamin GmbH, Linz
— Grande Paroisse SA, Paris
— Hydro Agri Brunsbüttel, Brunsbüttel
— Hydro Agri Sluiskil BV, Sluiskil
— Hydro Agri Italia, Milan
— SKW Stickstoffwerke Piesteritz BV, Wittenberg

Unrelated importers in the Community

— Helm Dungemittel GmbH, Hamburg
— Unifert France, Sête
— Usborne Fertiliser Ltd, Southampton

Users in the Community

— National Farmers' Union of England and Wales,

London

— Framlingham Farmers Ltd, Framlingham
— Neste Chemicals — Sadepan Chimica srl, Helsinki

Exporting producers

B u l g a r i a

— Chimco AD, Vratza, and its related company Chimco

Trade, Varna

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C r o a t i a

— Petrokemija d.d., Kutina

E g y p t

— El-Delta Company for Fertilisers and Chemical Indus-

tries (Asmeda), El Mansura

— Abu Qir Fertilisers and Chemical Industries, Alexan-

dria

E s t o n i a

— JSC Nitrofert, Kothla Jarve

L i t h u a n i a

(8)

These submissions had to be rejected. When selecting
the IP, the Commission, in line with Article 6(1) of the
basic Regulation, had to ensure that the data of the
period leading to the most representative results should
be taken into account. In this regard, it was found that
the ‘agricultural season’ in the Community rather than
another period would be the most appropriate choice
due to the fact that it conditions the sales of urea in the
Community and a number of internal reporting systems
are adapted to this period. It was therefore concluded
that an IP based on the ‘agricultural season’ would allow
for the most reliable and meaningful findings as to the
existence of injurious dumping and Community interest.

— Joint Stock Company Achema, Jonava and its related
company Joint Stock Company Agrochema, Jonava

3. Product concerned and like product

L i b y a

— National Oil Corporation and its related company
Sirte Oil Company, Tripoli and Marsa-el-Brega

Product concerned

P o l a n d

— Zaklady Chemiczne ‘Police’, Police

R o m a n i a

— S.C. Amonil SA, Slobozia

— Petrom SA Sucursala Doljchim Craiova, Craiova

— Sofert SA, Bacau

U k r a i n e

— Open Joint Stock Company Concern Stirol, Gorlovka

— Open Joint Stock Company Cherkassy Azot, Cher-

kassy

— Joint Stock Company DniproAzot, Dniprodzerz-

hinsk (1)

Related importers

— Chempetrol Overseas Ltd, Malta

Producers in the analogue country (USA)

— Terra Industries Inc., Sioux City.

(6)

(7)

The investigation of dumping and injury covered the
period from 1 July 1999 to 30 June 2000 (‘the invest-
igation period’ or ‘IP’). As for the trends relevant for the
assessment of
the Commission analysed the
period from 1996 to the end of the investigation period
(‘the period considered’).

injury,

Several parties objected to the choice of the dates deter-
mining the IP. Some of these claimed that the export
prices increased shortly after the end of the IP selected
by the Commission and thus that
the 12-month IP
should end in September 2000. Other parties suggested
that an 18-month period starting in January 1999
would allow a more representative analysis of the situa-
tion.

(1) Verification of the market economy claim form only.

(9)

(10)

The product concerned by this proceeding, urea,
is
manufactured essentially by combining ammonia and
carbon dioxide. The normal raw material for producing
both ammonia and carbon dioxide is natural gas.
However,
they can also be obtained from so-called
cracked oil, a by-product from the manufacture of petro-
leum. Urea may take the form of a liquid or a solid.

Solid urea itself can be subdivided into a prilled and a
granular form. Both are pellets, with the granular form
being normally larger and harder than the prilled form.
Solid urea has both agricultural and industrial applica-
tions. Agricultural grade urea can be used either as a
fertiliser, which is spread onto the soil, or as an animal
feed additive. Industrial grade urea is a raw material for
certain glues and resins. Liquid urea can be used both as
a fertiliser and for industrial purposes.

(11) All grades of urea have the same basic physical, and
chemical characteristics, with only the final stage of
manufacture determining whether prills, granules, or
solution are produced. Also, it was found that the form
of the urea does not necessarily determine the use to
which it is put. Therefore, they may be regarded for the
purposes of this investigation as a single product. The
product
the CN codes
concerned
3102 10 10 and 3102 10 90.

falls within

Like product

(12)

countries

It is provisionally determined that the product produced
in the
concerned and exported to the
Community is alike in all respects to the product sold on
the domestic markets of the exporting countries as well
as to the product produced by Community producers
and sold on the Community market. The same is true
with regard to the product produced and sold in the
USA which served as a market economy third country
for Belarus and Ukraine. All these products were there-
fore considered to be alike within the meaning of Article
1(4) of the basic Regulation.

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B. DUMPING

(13)

Eight countries subject to the present proceeding are
market economy countries, i.e. Bulgaria, Croatia, Egypt,
Estonia, Libya, Lithuania, Poland and Romania. Out of
the two remaining two countries, Belarus is considered
as a non-market economy country while with regard to
Ukraine normal value will be established in the same
way as in market economy countries provided that the
conditions set out in Article 2(7)(b) and (c) of the basic
Regulation are met. For this reason, market economy
countries, on the one hand, and Belarus and Ukraine, on
the other are considered separately.

MARKET ECONOMY COUNTRIES

1. General methodology

(14)

The general methodology set out hereinafter has been
applied for all exporting market economy countries
concerned and for those exporting producers in the
Ukraine which qualified for market economy status
(‘MES’). The presentation of the findings on dumping for
each of the countries concerned therefore only describes
what is specific for each exporting country.

Normal value

(15) As

far as

the determination of normal value

is
concerned, the Commission first established, for each
exporting producer, whether its total domestic sales of
urea were representative in comparison with its total
export sales to the Community.
In accordance with
Article 2(2) of the basic Regulation, domestic sales were
considered representative when the total domestic sales
volume of each exporting producer was at least 5 % of
its total export sales volume to the Community.

(16)

(17)

The Commission subsequently identified those grades of
urea, sold domestically by the companies having repres-
entative domestic sales, that were identical or directly
comparable to the types
to the
Community.

sold for export

For each grade sold by the exporting producers on their
domestic markets and found to be directly comparable
to the grade sold for export to the Community, it was
established whether domestic sales were sufficiently
representative for the purposes of Article 2(2) of the
basic Regulation. Domestic sales of a particular grade of
urea were considered sufficiently representative when
the total domestic sales volume of that grade during the
IP represented 5 % or more of the total sales volume of
the
exported to the
grade of urea
Community.

comparable

(18) An examination was also made as to whether the
domestic sales of each grade could be regarded as having
been made in the ordinary course of trade, by estab-
lishing the proportion of profitable sales to independent
customers of the grade in question. In cases where the
sales volume of urea, sold at a net sales price equal to or
above the calculated cost of production, represented

80 % or more of the total sales volume and where the
weighted average price of that grade was equal to or
above the cost of production, normal value was based
on the actual domestic price, calculated as a weighted
average of the prices of all domestic sales made during
the IP, irrespective of whether these sales were profitable
or not. In cases where the volume of profitable sales of
urea represented less than 80 % but 10 % or more of the
total sales volume, normal value was based on the actual
domestic price, calculated as a weighted average of prof-
itable sales only.

(19)

In cases where the volume of profitable sales of any
grade of urea represented less than 10 % of the total
sales volume, it was considered that this particular grade
was sold in insufficient quantities for the domestic price
to provide an appropriate basis for the establishment of
the normal value.

(20) Wherever domestic prices of a particular grade sold by
an exporting producer could not be used in order to
establish normal value, another method had to be
applied. In this regard, the Commission used the prices
of
the product concerned charged on the domestic
market by another producer. In all cases where this was
not possible, and in absence of any other reasonable
method, constructed normal value was used.

(21)

In all cases where constructed normal value was used
and in accordance with Article 2(3) of the basic Regula-
tion, normal value was constructed by adding to the
manufacturing costs of
the exported types, adjusted
where necessary, a reasonable percentage for selling,
general and administrative expenses (‘SG & A’) and a
reasonable margin of profit. To this end, the Commis-
sion examined whether the SG & A incurred and the
profit
the producing exporters
concerned on the domestic market constituted reliable
data.

realised by each of

(22) Actual domestic SG & A expenses were considered reli-
able where the domestic sales volume of the company
concerned could be regarded as representative. The
domestic profit margin was determined on the basis of
domestic sales made in the ordinary course of trade. In
all cases where these conditions were not met
the
Commission used the SG & A expenses and profit of
other producers in the domestic market of the exporting
country according to Article 2(6)(a) of the basic Regula-
tion. In cases where this was not possible or appropriate,
the amount applicable for the same general category of
products was taken as a basis for the construction of the
normal value in accordance with Article 2(6)(b) of the
basic Regulation. Finally, in all other cases, SG & A and
profit margin were provisionally based on the weighted
average of the other cooperating exporting producers
concerned,
the
basic Regulation.

in accordance with Article 2(6)(c) of

(23) As regards the determination of the profit margin and
the level of SG & A on the basis of Article 2(6)(c) of the
basic Regulation,
interested parties are hereby specifi-
cally invited to comment on this issue.

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Export price

(24)

In all cases where urea was exported to independent
customers in the Community,
the export price was
established in accordance with Article 2(8) of the basic
Regulation, namely on the basis of export prices actually
paid or payable.

(25) Where the export sale was made via a related importer,
the export price was constructed pursuant to Article 2(9)
of the basic Regulation, namely 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. As far as the profit margin is
concerned, the latter was provisionally established on
the basis of the information available from cooperating
unrelated exporters.

Comparison

(26)

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. Appropriate adjustments
were granted in all cases where they were found to be
reasonable, accurate and supported by verified evidence.

bonus for non-cooperation and in view of the fact that
there were no indications that a non-cooperating party
had dumped at a lower level.

2. Bulgaria

(31)

The sole known exporting producer replied to the ques-
tionnaire. This reply included data on domestic sales
made by a related domestic sales company. A further
reply was received from another related company which
was acting as a seller of the product concerned on the
domestic and export market during two months of the
IP. The latter company purchased the main production
input (gas) and sold the finished product (urea), after
having paid a processing fee to the producer. A
company in the Community related to the exporting
producer replied to the annex of
the questionnaire,
intended for related companies.

Normal value

(32) Normal value was constructed in accordance with
Article 2(3) of the basic Regulation for the grade of the
product concerned sold to the Community.

Dumping margin for the companies investigated

(33)

(27) According to Article 2(11) of the basic Regulation, for
each exporting producer the weighted average normal
value by grade was compared with the weighted average
export price. However,
in cases where there was a
pattern of significant price variations between regions,
customers or time periods, and where the method
comparing weighted
value with
weighted average export price did not reflect the full
degree of dumping, the weighted average normal value
was compared to the individual export transactions.

average normal

Residual dumping margin

(28)

(29)

(30)

For non-cooperating companies, a ‘residual’ dumping
margin was determined in accordance with Article 18 of
the basic Regulation, on the basis of the facts available.

For those countries with a level of cooperation close to
the information provided by Eurostat, i.e. where there
was no reason to believe that any exporting producer
abstained from cooperating, it was decided to set the
residual dumping margin at the level of the cooperating
company with the highest dumping margin in order to
ensure the effectiveness of any measures.

For those countries where the level of cooperation was
low, the residual dumping margin was determined on
the basis of the highest dumped export sales to the
Community of representative quantities. This approach
was also considered necessary in order to avoid giving a

the gas

The exporting producer claimed that a number of inter-
ruptions of
supply, and consequently the
production of urea, during the IP caused important fluc-
tuations of the costs of production. These fluctuations
prevent the Commission from reasonably determining
the sales made in the ordinary course of trade. Conse-
quently, the determination of the sales made in the
ordinary course of trade should be made on a monthly
basis.

(34)

Fluctuations in costs and prices are almost inevitable in
any business. To take account of these for the purpose
of establishing which sales were made in the ordinary
course of trade, the Commission has consistently applied
the methodology of comparing individual domestic
prices with the weighted average cost of production for
the IP. It is considered that the particular situation of the
company that made the request does not justify the
deviation from the methodology used for all companies
concerned by the present proceeding,
insofar as the
supply problem of the raw material during part of the IP
was entirely attributable to the company. It was there-
fore considered that any effect on the cost should be
reflected in the calculation of the normal value.

(35)

It is recalled that the exporting producer sold on the
Bulgarian domestic market via two sales companies.
functions between the
Given the distribution of
exporting producer and the sales companies,
it was
considered necessary to establish the normal value on
the basis of prices paid in the ordinary course of trade
by independent customers in Bulgaria.

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(36) However,

in the absence of profitable sales on the
domestic market, normal value was constructed in
accordance with Article 2(3) of the basic Regulation on
the basis of the cost of manufacturing and the SG & A
expenses incurred on domestic sales as reported by the
companies concerned. In the absence of any other basis,
the profit margin was provisionally determined on the
basis of the weighted average profits realised by the
other
this
proceeding in accordance with Article 2(6)(c) of the
basic Regulation (see recitals 21 and 22).

cooperating

producers

exporting

in

Export price

(37)

Export sales made directly to an independent customer
in the Community were established pursuant to Article
2(8) of the basic Regulation whereas export prices of
sales via the related importer of the exporting producer,
i.e. 80 % of all export sales to the Community, were
constructed according to Article 2(9) of the basic Regu-
lation.

Comparison

(44) Adjustments were made for differences in inland trans-
port, handling, loading and ancillary costs, packing and
credit costs.

Dumping margin

(45)

The comparison between the normal value and the
export price showed the existence of dumping in respect
to the cooperating exporting producer. The provisional
dumping margin expressed as a percentage of the cif
import price at the Community border is

Petrokemija d.d.:

72,9 %

(46)

The level of cooperation for Croatia was high and the
residual provisional dumping margin was set at the same
level as for the cooperating company,

i.e. 72,9 %.

Comparison

4. Egypt

(38) Adjustments were made for inland transport, forwarding

(47)

Two exporting producers replied to the questionnaire.

charges, packing and credit costs.

Dumping margin

The comparison between the normal value and the
export price showed the existence of dumping in respect
to the cooperating exporting producer. The provisional
dumping margin expressed as a percentage of the cif
import price at the Community border is

Normal value

(48) Normal value was established on the basis of domestic

sales prices.

Export price

Chimco AD:

131,3 %

(49)

It was found that the level of cooperation for Bulgaria
was high and the residual provisional dumping margin
the cooperating
was set at
company,

the same level as for

i.e. 131,3 %.

Since all export sales were made directly to independent
customers in the Community, export prices were estab-
lished on the basis of the prices paid or payable in
accordance with Article 2(8) of the basic Regulation.

(39)

(40)

3. Croatia

(41)

The sole known exporting producer replied to the ques-
tionnaire. Two companies in the Community related to
the exporting producer replied to the annex of the ques-
intended for related companies.
tionnaire,

Comparison

(50) Adjustments were made for differences in bank charges,
discounts, packing, handling, loading, transport, insur-
ance and credit costs.

(51) One company claimed an adjustment for a deferred
discount. This adjustment could not be granted due to a
lack of evidence of actual application of this discount.

Normal value

(42) Normal value was established on the basis of domestic
the product concerned

sales prices for the grade of
exported to the Community.

(52)

Export price

(43)

Since, during the IP, all export sales to the Community
were channelled via two related importers located in the
Community, the export price was constructed according
to Article 2(9) of the basic Regulation.

Dumping margin

The comparison between the normal value and the
export price showed the existence of dumping in respect
of both cooperating exporting producers. The provi-
sional dumping margins expressed as a percentage of the
cif import price at the Community border are:

El-Delta Company for Fertilisers and
Chemical Industries (Asmeda):

Abu Qir Fertilisers and Chemical Industries:

26,4 %

21,6 %

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(53)

The level of cooperation for Egypt was high and the
residual provisional dumping margin was set at the same
level as for the cooperating company with the highest
dumping margin,

i.e. 26,4 %.

(60)

(54)

(55)

(56)

5. Estonia

The sole known exporting producer in Estonia replied to
the questionnaire. However, a comparison of
the
reported sales to unrelated parties in the Community
with Eurostat data showed an extremely low level of
cooperation, i.e. 2,7 %. This is found to be caused by the
fact that the Estonian company did not report export
sales of urea channelled via independent traders.

Normal value

The exporting producer's domestic sales of urea were
not representative compared to its exports of urea to the
Community, and domestic prices could therefore not
serve as a basis for normal value. Given the fact that
there were no other producers of urea in Estonia,
normal value could not be based on prices of other
sellers or producers.

the basic Regulation,

Consequently, normal value was constructed. In accord-
ance with Article 2(6) of
the
company's own SG & A expenses were used. In accord-
ance with Article 2(6)(b) of the basic Regulation, and in
the absence of any other reasonable basis, the SG & A
expenses and profits used were those applicable to
production and sales of the same general category of
products,
i.e. fertilisers, for the exporting producer in
question in Estonia (see recitals 22 and 23).

Export price

(57)

Since the export sales to the Community as reported by
the company, were made to independent customers in
the Community, they were established on the basis of
the price paid or payable according to Article 2(8) of the
basic Regulation.

(58) As already mentioned in recital 54, the company claims
to be the sole producer of urea in Estonia. Therefore, the
Commission has provisionally decided to apply Article
18 of the basic Regulation to the unreported export
sales, which according to Eurostat represented 97,3 % of
the total exports. The export price of this unreported
quantity was determined on the basis of the price of the
highest dumped export sales to the Community made in
representative quantities of the reported export sales by
the company.

Comparison

(59) Adjustments were made for differences in bank charges,
handling, loading, transport, insurance and credit costs.

Dumping margin

The export price pattern for Estonia showed significant
variations between regions. In this regard, the invest-
igation revealed that dumped prices in certain Member
States were offset by higher export prices for other
Member States. Consequently, it was considered that the
comparison of the weighted average normal value with
the weighted average export price did not show the full
the weighted average
degree of dumping. Therefore,
normal value was compared to the individual export
transactions.

(61)

The comparison between the normal value and the
export price showed the existence of dumping in respect
to the cooperating exporting producer. The provisional
dumping margin expressed as a percentage of the cif
import price at the Community border is:

JSC Nitrofert:

34,3 %

(62)

The residual provisional dumping margin was set at the
i.e. 34,3 %.
same level as for the exporting producer,

6. Libya

(63) Although initially the sole exporting producer agreed to
cooperate,
it refused subsequently access to part of
substantial information essential for the verification of
the reply, in particular as regards domestic sales prices
and cost of production of the product concerned. There-
fore, the Commission, in order to calculate the provi-
sional dumping margin had to make use of best facts
available in accordance with Article 18 of the basic
Regulation.

Normal value

(64)

(65)

(66)

The reported domestic sales figures for the IP could not
be reconciled with audited accounts or other accounting
documents, due to the fact that the company was not
willing to provide these documents during the on-spot
and
investigation. Consequently,
the
the domestic sales
completeness of
product concerned could not be reliably established and
the data reported could not be used as a basis for the
determination of the normal value.

correctness

listings of

the

Likewise, as regards the cost of production of urea sold
on the domestic market, the Commission was denied
access to essential accounting documents and thus the
correctness and completeness of the cost of production
could not be reliably established. This concerned in
particular the costs for the raw material and the SG & A
expenses of the company.

In order to determine the normal value, therefore, the
Commission relied on best facts available in accordance
with Article 18 of the basic Regulation as mentioned
above. In this regard and in the absence of any other
information available for the country, the Commission
considered it appropriate to base its calculations on the
information submitted in the complaint.

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Export price

National Oil Corporation:

21.7.2001

51,4 %

(67) As regards the determination of the export price, the
company submitted information which could satisfac-
torily be verified. For the purpose of the calculation of
the dumping margin, the Commission was thus able to
use the company's own export prices.

(76)

the

export

volume

covered by

The
cooperating
exporting producer was compared to the export data
from Eurostat and found to reach the same level. Since
the Libyan exporting producer accounted for all export
sales
the residual provisional
dumping margin was set at the same level as for the
cooperating company,

reported by Eurostat

i.e. 51,4 %.

(68) Approximately half of

the export sales were made
directly to independent customers in the Community,
and therefore the export price for these transactions was
established on the basis of the prices paid or payable in
accordance with Article 2(8) of the basic Regulation.

(69)

The remaining export sales to the Community went via
a related company and the export prices for these sales
had thus to be constructed in accordance with Article
2(9) of the basic Regulation.

(70) A small part of the sales via the related company were
subsequently channelled via another related company in
the Community. These sales constituted only a marginal
part of the Libyan company's total export volume to the
Community, however, and their inclusion would not
have changed the overall result of the calculations. They
were thus disregarded.

(71)

Furthermore, sales of non-Libyan origin made by the
related company to the first independent customer in
the Community and incorrectly reported by the
company had to be excluded from the calculations.

(72) As regards the reported SG & A costs of the related
company, certain items had to be corrected on the basis
of the results of the verification visit.

Comparison

(73) Adjustments were made for differences in packing,
insurance and

handling and loading, ocean freight,
inspection costs and credit costs.

(74)

The company claimed that certain credit costs were also
incurred on the domestic market, but provided contra-
dictory information in this regard. The investigation has
shown that payment terms were not agreed with the
domestic customer prior to the sale being made and
consequently no adjustment has been made in this
respect.

Dumping margin

7. Lithuania

(77) One company replied to the questionnaire for exporting
producers. This reply included data on domestic sales
made by a related domestic sales company. A company
in the Community related to the exporting producer also
replied to the questionnaire intended for related compa-
nies.

Normal value

(78)

(79)

The exporting producer's domestic sales of urea were
not representative compared to its exports of urea to the
Community and domestic prices could therefore not
serve as a basis for normal value. Given the fact that
there were no other producers of urea in Lithuania,
normal value could not be based on prices of other
sellers or producers.

Consequently, normal value was constructed. In accord-
ance with Article 2(6)(b) of the basic Regulation, and in
the absence of any other reasonable basis, the SG & A
expenses and profits used were those applicable to
production and sales of the same general category of
products, i.e. other fertilisers, for the exporting producer
in question in Lithuania.

Export price

(80) Almost all export sales were made directly to indepen-
dent customers in the Community. The export price for
sales made via a related company represented less than
5 % of the total export sales of the exporting producer.
The export price for the latter had to be constructed in
accordance with Article 2(9) of the basic Regulation.

Comparison

(81) Adjustments for differences in packing, transport, insur-
loading and ancillary costs have been

ance, handling,
granted.

(75)

The comparison between the weighted average normal
value and the weighted average export price showed the
existence of dumping in respect of
the cooperating
exporting producer. The provisional dumping margin
expressed as a percentage of the cif import price at the
Community border is:

(82) Allowances on the normal value were claimed on the
basis of the sales of urea, which were not representative.
The information provided for domestic sales of the same
general category of products, of which the SG & A
expenses and profit were used to construct normal
value, did not indicate that allowances were justified.

21.7.2001

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Dumping margin

9. Romania

(83)

The comparison between the weighted average normal
value and the weighted average export price showed the
existence of dumping in respect of
the cooperating
exporting producer. The provisional dumping margin
expressed as a percentage of the cif import price at the
Community border is:

Joint Stock Company Achema, Jonava:

9,4 %

(84) As the level of cooperation for Lithuania was high the
residual provisional dumping margin was set at the same
level as for the cooperating company,

i.e. 9,4 %.

(91)

Three companies
replied to the questionnaire for
exporting producers. One Romania company related to
one of the exporting producers replied to the Commis-
sion's questionnaire and provided information about
sales on the domestic and Community market. Another
two companies in the Community related to one of the
exporting, producers also replied to the questionnaire
intended for related importers.

Normal value

8. Poland

(85) One exporting producer replied to the questionnaire.

(92) Normal value was established on the basis of the prices
in the ordinary course of trade, by
paid or payable,
in
independent customers on the domestic market
accordance with Article 2(1) of the basic Regulation.

Normal value

(86) Normal value was constructed in accordance with
Article 2(3) of the basic Regulation Pursuant to Article
2(6) of the basic Regulation, the company's own SG & A
expenses were used. As regards the profit margin and in
the absence of any other reasonable basis, the profit
applicable to production and sales of the same general
category of products,
the
exporting producer in question was used in accordance
with Article 2(6)(b) of the basic Regulation.

i.e. other

fertilisers,

for

Export price

(87) All export sales to the Community were made directly to
the independent customers and thus the export price
paid or payable was used in accordance with Article 2(8)
of the basic Regulation.

Comparison

(88) Adjustments were made for differences on inland trans-
insurance, handling,
costs,
credit

port, ocean freight, EC freight,
loading and ancillary costs, packing,
commission an other factors.

Dumping margin

(89)

The comparison between the weighted average normal
value and the weighted average export price showed the
existence of dumping in respect of
the cooperating
exporting, producer. The provisional dumping margin
expressed as a percentage of the cif import price at the
Community border is:

Zaklady Chemiczne ‘Police’:

31,0 %

(90)

The level of cooperation for Poland was high and the
residual provisional dumping margin was set at the same
level as for the cooperating company,

i.e. 31,0 %.

Export price

(93)

For export sales made directly to unrelated customers in
the export price was established
the Community,
according to Article 2(8) of the basic Regulation by
reference to the prices actually paid or payable. Some
25 % of all export sales to the Community were sold via
related importers located in the Community. Conse-
quently, the export price for these sales was constructed
according to Article 2(9) of the basic Regulation.

Comparison

(94) Adjustments were made for differences in inland freight,
loading and ancillary costs, credit

packing, handling,
costs and commissions.

Dumping margin

(95)

The comparison between the normal value and the
export price showed the existence of dumping in respect
of each of the three cooperating exporting producers.
The provisional dumping margins
expressed as a
percentage of the cif import price at the Community
border are:

S.C. Amonil SA, Slobozia:

28,3 %

Petrom SA Sucursala Doljchim Craiova, Craiova: 47,0 %

Sofert SA, Bacau:

32,6 %

(96)

Since the level of cooperation was high, the residual
provisional dumping margin was set at the same level as
for the cooperating company with the highest dumping
margin,

i.e. 47,0 %.

L 197/12

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BELARUS AND UKRAINE

1. Analogue country

(104) Considering the above, it was concluded that the USA
was the most appropriate analogue country and that
under these circumstances the selection of
the USA
seemed reasonable and justified in accordance with
Article 2(7) of the basic Regulation.

(97) According to Article 2(7) of the basic Regulation, for
non-market economy countries and for companies to
which MES could not be granted, normal value has to be
established on the basis of the price or constructed value
in a market economy third country (‘analogue country’).

(105) The Commission subsequently sent a more detailed
questionnaire to the producer in the USA requesting
information on domestic sales prices and cost of
production of the product concerned. The reply of the
producer was verified on the spot.

(98)

(99)

initiation of

In the notice of
the
Commission indicated its intention to use Slovakia as an
appropriate analogue country for the purpose of estab-
lishing normal value for Belarus and Ukraine.

this proceeding,

The exporting producers in Belarus and Ukraine, the
mission of Belarus to the European Union, and an
importers association (EFIA) raised objections to this
proposal. The main arguments against Slovakia were
differences in access to raw materials, differences in the
production process and a different scale of production
countries
compared to the non-market
involved in this proceeding, influence of domestic sales
prices by barter trade and cash problems, and the
protection of the Slovakian market by import duties.
The interested parties in question suggested instead
Lithuania as an appropriate analogue country.

economy

(100) The investigation revealed that Lithuania did not have a
sufficiently competitive domestic market of the product
concerned. In fact, there was only one producer and the
market was furthermore protected by import duties
against Russian imports.

(101) As regards Slovakia, the Commission acknowledges that
it has been considered as the most appropriate analogue
country in a previous review concerning definitive anti-
dumping measures imposed on imports of urea origin-
ating in Russia. In absence of any other alternative it was
it
consequently used as an analogue country. Thus,
would constitute a reasonable choice for an analogue
country in the present proceeding.

(102) Nevertheless, in the present proceeding the Commission
decided to investigate in further detail all possible alter-
natives and for this purpose sent a request for informa-
tion on sales and market conditions to producers of the
product concerned in the eight market economy coun-
tries involved in this proceeding and to known produ-
cers in other market economy countries. Replies were
received from producers in all eight market economy
countries subject to the proceeding, from one producer
in Australia and from one producer in the USA.

(106) The Commission examined whether sales of the product
concerned in the USA were made in the ordinary course
of trade by reason of price.

(107) As regards the cost of production, the verification has
shown that during the second half of the IP, the price for
natural gas on the US market was at an unusually high
level which could be explained by a situation of over-
demand. An adjustment was therefore made to the cost
of natural gas as paid by the US producer.

(108) Taking into account the above correction, domestic sales
of the US producer concerned were made in the ordi-
nary course of trade.

(109) As a result, normal value was established as

the
weighted average domestic sales price of the product
concerned to unrelated customers by the cooperating US
producer.

2. Belarus

(110) Although the sole exporting producer in Belarus initially
intended to cooperate in this proceeding, the reply to
the Commission's questionnaire showed significant defi-
ciencies. Furthermore, a number of written requests for
clarification and for additional
information did not
receive a reply from the company. Therefore, in order to
calculate the provisional dumping margin, the Commis-
sion had to make use of best facts available in accord-
ance with Article 18 of the basic Regulation.

Normal value

(111) Pursuant

to Article 2(7)(a) of

the basic Regulation,
normal value was established as described in recital 106
to 109.

Export price

(103) The analysis of all these replies showed that the USA
seemed to be the most appropriate analogue country.
The USA had a highly competitive market
for the
product concerned, with more than ten producers, a
high number of end-users and significant imports from
third countries. Although anti-dumping duties were
imposed on imports of the product concerned from the
former Soviet Union, there were still substantial imports
of urea from other countries.

(112) The quantity and value of the reported export sales
could not be reconciled with Eurostat data since the
volume and value of the export sales reported were
from Eurostat. The
substantially below the data
company did not provide any reasonable explanation
concerning these discrepancies nor did it provide any
documents supporting the reported export sales to the
Community, despite specific requests thereof by the
Commission.

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Official Journal of the European Communities

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(113) Therefore the Commission had no other choice than to
disregard the data provided by the company and use
best facts available, in accordance with Article 18 of the
basic Regulation. In the absence of any other reasonable
basis, the export price for Belarus was thus established
on the basis of Eurostat data. Since the facts available
indicated that all sales were made via traders, an appro-
priate adjustment for commissions was made.

Comparison

(114) Adjustments were made for differences in commissions,
transport, handling, loading and ancillary costs, where
they were found to be reasonable and accurate.

(115) The adjustment for inland transport was based on tariffs
found in the analogue country, taking into account the
distances between the factory of the exporting producer
and the port of loading.

Dumping margin

(116)

In accordance with Article 2(11) of the basic Regulation,
the weighted average normal value was compared with
the weighted average export price. This comparison
showed the existence of dumping. The countrywide
single weighted average provisional dumping margin,
expressed as a percentage of the cif value was 75,7 %.

3. Ukraine

(117) Four

companies

for
exporting
companies
requested MES pursuant to Article 2(7)(c) of the basic
Regulation.

replied to the questionnaire
of

producers. Three

these

Analysis of market economy status

(118) The Commission sought all information deemed neces-
sary and verified on the spot all information submitted
in the MES applications, at the premises of the compa-
nies in question. All three claims were analysed on the
basis of the five criteria set out in Article 2(7)(c) of the
basic Regulation.

(119) For two companies, it was established that, their deci-
sions regarding prices and costs were made without
significant state interference within the meaning of
Article 2(7)(c) and substantially reflected market values.
Both companies had accounts independently audited in
line with international
and
production cost and the financial situation were not
subject to significant distortions. Although one of the
companies was involved in barter trade, this was only
marginal and furthermore did not relate to the product

accounting standards,

concerned. Finally, bankruptcy and property laws were
applicable to the companies concerned and exchange
rate conversions were carried out at the market rate.

(120) Consequently,

the above two
it was concluded that
companies fulfilled the conditions set by Article 2(7)(c)
of the basic Regulation. These companies are:

— Cherkassy Azot, Cherkassy,

— Concern Stirol, Gorlovka.

(121) For the third company, it was found that it was signifi-
cantly involved in barter trade, including certain transac-
tions for the product concerned. Furthermore, the State
Property Fund held shares allowing it to block a number
of decisions, such as amendments to the company's
articles of association and therefore has the possibility to
exercise significant interference.

(122) Consequently, this company did not fulfil the conditions
set by Article 2(7)(c) of the basic Regulation.

(123) The companies concerned and the Community industry
were given an opportunity to comment on the above
findings.

(124) The exporting producer who was not granted MES
contested the Commission's findings, namely regarding
the actual state interference and the volume of barter
trade. However, no new arguments were brought
forward in order to alter the determination made in view
of the MES.

(125) The Community industry opposed the fact that MES was
granted to two Ukrainian companies. It argued that the
Ukrainian companies were operating in a macroeco-
nomic environment where state intervention is the
predominant factor, that the state fixes the price of gas,
which is the main raw material
in the production of
urea, that barter trade is widespread and that companies
do not apply all of the key international accounting
principles.

(126) The Commission observes that state intervention is still
a predominant factor in the economy of Ukraine. In a
MES analysis individual companies have to show that
market economy conditions prevail for their individual
companies in respect to the manufacture and sale of the
like product. No traces of the alleged widespread barter
trade other than the ones already mentioned in the
above recitals were found for the companies under
consideration. The
accounts were
audited in line with international accounting standards.
The Commission did not find any indication of state
intervention in the trade of gas other than the one
mentioned recitals 128 and 129.

two companies'

L 197/14

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Official Journal of the European Communities

21.7.2001

(127)

It was therefore decided to grant MES to two companies
and to reject the MES claim for the third. The Advisory
Committee was consulted and did not object to the
Commission's conclusions.

(128) Further verification in the Ukraine has also shown that
the company which was not granted MES had supplied
incorrect information as to its role in state programmes,
whereby cheap raw materials were provided to produ-
cers of fertilisers in order to support the local agricul-
tural sector, and more specifically to this company in
order to manufacture the product concerned.

(129) The two companies which were granted MES were also
involved in such programmes, but
the investigation
revealed that this was only marginal and furthermore for
upstream products. Any impact on the cost of ammonia,
which is produced from natural gas and used both to
produce the product concerned and other fertilisers, has
been corrected by making an adjustment to the compa-
nies' costs.

(130)

It was therefore considered that the determination to
grant MES to two companies and to reject the MES
claim for the third should be maintained.

Individual treatment

(131) Unless an exporting producer can demonstrate that
market economy conditions prevail for him, a country-
wide duty has to be calculated for non-market economy
countries and for countries falling under Article 2(7)(b)
and (c) of the basic Regulation, except in those cases
where companies can demonstrate that
their export
activities are free from State interference and that there
is a degree of legal or factual independence from the
State so that the risk of circumvention of the country-
wide margin is removed.

(132) The Ukrainian company to which MES was not granted
requested individual treatment. The Commission sought
and verified all
information deemed necessary for the
purpose to determine whether the company concerned
qualified for individual treatment. In this regard, it was
found that as far as the export activities of the company
were concerned the State could not interfere in these
activities as to permit circumvention of the measures if
that exporter was granted an individual dumping
margin. It was therefore considered justified to grant
individual treatment to the company concerned, namely
to Joint Stock Company DniproAzot, Dniprodzerzhinsk.

Tolling

(133) The investigation revealed that a number of companies
in the Ukraine made part or all of their domestic and/or
export sales under tolling agreements.

(134) Under these agreements, one company supplies raw
materials (natural gas, and in some cases also electricity)
to a second company, which returns
the finished
product to either the first company supplying the raw
material or
to a third party. The company which
processes the raw material does not receive any invoice
for the raw material supplied nor does it issue any
invoices
finished product delivered. This
company only receives a fee for the transformation of
the raw material
into the product concerned. Under
Ukrainian law, the provider of the raw materials, in this
case the first company, remains the owner of
the
finished product.

the

for

(135)

It is clear from the above that under tolling agreements,
the price paid or payable for the like product could not
be established, let alone verified, at the premises of the
cooperating companies. Therefore, and in the absence of
cooperation of any of the other companies involved in
the tolling agreements,
the Commission disregarded
provisionally all sales made under these tolling agree-
ments.

Normal value for companies granted MES

(136) The companies which were granted MES were subse-
quently requested to submit a full questionnaire reply
including domestic sales information and information
on cost of production of the product concerned. These
replies have been verified on the Spot at the premises of
the companies concerned.

(137) For one of these companies it was found that a consider-
able part of its domestic sales was made under tolling
agreements. For the reasons outlined above in recitals
134 and 135, domestic sales made under tolling agree-
ments had provisionally to be disregarded.

(138) For one exporting producer,

the domestic sales not
made under tolling agreements were still representative.
The SG & A expenses
exporting
producer had to be corrected. The Commission will
further examine whether adjustments to other cost
factors such as depreciation incurred by this Ukrainian
exporting producer are necessary.

reported by this

(139) For the same exporting producer, it was found that it
had sufficient sales made in the ordinary course of trade.
Normal value could therefore be established on the basis
of domestic sales prices.

(140) For the second company, it was found that it did not
have representative domestic sales of the like product.
Therefore, normal value was established on the basis of
the domestic prices of the exporting producer having
representative sales made in the ordinary course of trade.

21.7.2001

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Official Journal of the European Communities

L 197/15

Normal value for companies not granted MES

US market. Further adjustments to this normal value
were made for transport costs and for credit.

(141) Pursuant

to Article 2(7)(a) of

the basic Regulation,
normal value for the exporting producers that were not
granted MES was established on the basis of verified
information received from the producer in the analogue
country, i.e. on the basis of the prices paid or payable on
the domestic market of the analogue country for prod-
ucts comparable to those sold by the Ukrainian
exporting producers to the Community (see recitals 106
to 109).

Export price

(142) The investigation revealed that all export sales to the
Community reported by one of the companies were on
the basis of tolling agreements. The same applied to part
of the export sales reported by the other company.
Moreover, a third company which requested neither
market economy status nor individual treatment made
all export sales to the Community under tolling agree-
ments.

(143) For the reasons outlined above in recitals 134 and 135,
export sales made under tolling agreements had to be
provisionally disregarded.

(144) As a consequence, only the company which was granted
treatment had verifiable export prices and
individual
only one of the two companies which were granted MES
still had sufficiently representative verifiable export
prices after the elimination of the exports under tolling
agreements.

(145) Since all sales not made under tolling agreements were
directly to independent customers in the Community,
the export prices were established on the basis of the
prices paid or payable in accordance with Article 2(8) of
the basic Regulation.

Comparison

(146) 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. In this respect, adjust-
ments were made for differences in transport, handling,
loading and ancillary costs and physical differences.

(147) An adjustment for physical differences was made to the
normal value based on domestic sales in the analogue
market economy country. This adjustment was neces-
sary because the like product sold in the USA was
granular urea while the product exported by the
Ukrainian exporting producers was prilled urea. The
adjustment was based on the difference in market value
between granular and prilled urea during the IP on the

(148) An adjustment for inland transport costs was made to
the normal value. This applied to both, companies that
obtained MES and the normal value established in the
analogue country.

in Ukraine, and for handling,

(149) Adjustments to the export price were made for inland
transport
loading and
ancillary costs. The adjustment for inland transport was
based on tariffs found in the analogue market economy
country, taking into account the distances between the
factories of the exporting producers and the port of
loading in Ukraine.

Dumping margin

(150) For the company which was granted MES and for which
the export prices paid or payable could be verified, the
weighted average normal value of the type exported to
the Community was compared to the weighted average
export price of the corresponding type of the product
concerned, as provided for under Article 2(11) of the
basic Regulation.

(151) For the company which was granted individual treat-
ment and for which the export prices paid or payable
could be verified, the weighted average normal value for
the type exported to the Community established for the
analogue country was compared to the weighted average
export price of
type exported to the
Community, as provided for under Article 2(11) of the
basic Regulation.

the product

(152) The provisional dumping margins

expressed as a
percentage of the cif import price at the Community
border are:

— Cherkassy Azot, Cherkassy:

— DniproAzot, Dniprodzerzhinsk:

22,8 %

68,0 %

(153) Since there was at least one company which did not
cooperate in this proceeding, since the export prices
paid or payable for considerable quantities exported
under tolling agreements were not verifiable, the residual
provisional dumping margin was set by comparing the
weighted average normal value established in the
analogue
exported to the
the
Community to the weighted average export price of
transactions with the lowest export prices, representing
at the same time a considerable quantity of the exports
type
with verifiable export prices, of
exported to Community. On this basis,
the residual
provisional dumping margin, expressed as a percentage
of the cif import price at the Community border,
is
83,9 %.

country for

the product

type

L 197/16

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21.7.2001

C. INJURY

3. Imports from the countries concerned

1. Definition of the Community industry

(154) Of

the ten complainant Community producers, one
(Kemira Agro Rozenburg BV) did not cooperate with the
Commission, and was, therefore, not regarded as being
part of the Community industry. Another Community
producer (Irish Fertiliser Industries Ltd) did not provide
the information requested in the format required and is
considered not to have cooperated with the Commis-
sion, thus likewise not forming part of the Community
industry.

(155) A number of exporting producers claimed that, as some
Community producers also purchased and imported
these producers
urea from the countries concerned,
should be
the
Community industry.

excluded from the definition of

(156) The investigation established that some of the complai-
nant Community producers purchased the product
concerned from sources both inside and outside the
Community,
including from the countries concerned.
However, in the most part these purchases were small in
volume, and were made to cover shortfalls in supply due
to maintenance. One company did make more substan-
tial purchases during the IP, equivalent to 20 % of its
production. These purchases were made to supplement
their own product range, were not sufficient to consider
the company as anything other than a Community
producer of urea. For these reasons, it is provisionally
determined that all eight companies can be included in
the Community production.

(157) As these eight complainant cooperating Community
producers represent more than 76 % of the Community
production of urea they constitute the Community
industry within the meaning of Article 4(1) and Article
5(4) of the basic Regulation.

2. Community consumption

(158) Community consumption was established by combining
the volumes of sales of the Community industry on the
Community market, production of the remaining produ-
cers on the Community market as contained in the
complaint, together with information provided by the
cooperating exporting producers,
supplemented by
Eurostat figures, to arrive at the volume of imports.

(159) From this data,

it was established that Community
consumption increased each year, and by a total 28,5 %,
between 1996 and the IP.

Preliminary remarks

(160) As outlined in recital 228,

the countrywide injury
margins for Egypt and Poland are both de minimis.
Accordingly, imports of urea from these two countries
have not been included as imports from the countries
concerned for the purposes of the injury assessment.

Cumulative assessment of the effects of the imports concerned

(161) The Commission considered whether imports from the
countries concerned (1) should be assessed cumulatively
on the basis of the criteria set out in Article 3(4) of the
basic Regulation.

(162) The dumping margins found are more than de minimis,
the volumes of imports from each country concerned
were substantial and well above the levels set out in
Article 5(7) of the basic Regulation, and a cumulative
assessment was considered appropriate in view of the
conditions of competition both between imports from
these countries and between these imports and the like
Community product. Prices have fallen significantly over
the period considered. All exporting producers, addition-
the Community
the sales prices of
ally, undercut
industry, whilst using the same or similar channels of
trade. For these reasons,
it is provisionally concluded
that imports originating in Belarus, Bulgaria, Croatia,
Estonia, Lithuania, Libya, Romania, and Ukraine should
be assessed cumulatively.

Volume and market share of the imports concerned

(163)

Imports of urea from the countries concerned into the
Community increased in volume by 95,2 % from
911 000 tonnes in 1996 to 1 778 000 tonnes during
the IP. This compares to the increase of 28,5 % in
Community consumption over the same period. As a
result, the market share of the countries concerned rose
from 20,8 % to 31,5 % over the same period as shown
in the following table.

Market share of
Imports

1996

1997

1998

1999

IP

Countries concerned 20,8 % 20,6 % 19,4 % 25,0 % 31,5 %

Index

100

99

93

120

152

Prices of dumped imports

(164) The weighted average price of imports originating in the
countries concerned fell
from EUR 158 in 1996 to
EUR 97 during the IP i.e. by 38,7 %. The fall was even
greater between 1996 and 1999, when prices fell almost
50 % to EUR 79.

(1) All references to ‘the countries concerned’ relate solely to the eight
countries covered by this proceeding, excluding Egypt and Poland.

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Official Journal of the European Communities

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Undercutting

Sales on the Community market

the countries concerned undercut

(165) The Commission has examined whether the exporting
producers of
the
prices of the Community industry during the IP. For the
purposes of this analysis, the cif prices of the exporting
producers have been adjusted to a Community frontier,
ex quay, custom duty paid level
(DEQ). These prices
have then been compared to Community producers'
verified ex-works prices.

(166) Some exporting producers claimed price adjustments
based on quality differences and deterioration during
transport. However, the Commission found that there
were no quality problems experienced by users of urea.
This was further re-enforced by one exporter of urea
who stated there was no difference between their
product and Community produced product. Therefore,
these claims are provisionally rejected.

(167) The price comparisons have been made at a prilled to
prilled, granular to granular, bulk to bulk, and bagged to
bagged level. The undercutting margins found on this
the
basis, by country, expressed as a percentage of
Community producers' prices, are as follows:

(170) Between 1996 and 1999 the Community industry
recorded single digit percentage rises in sales volumes.
Between 1999 and the IP this trend was reversed and
sales volumes fell by more than 5 %. Overall sales
volumes rose by 7,5 % between 1996 and the IP.

Stocks

(171)

It has been found that the Community industry does not
necessarily distinguish between stocks for sale on the
open market and those destined for internal consump-
tion. Also as sales to agricultural customers are season-
able in nature, the stock levels will vary greatly over the
course of a year. Finally, as urea is also stockpiled by
it was found that no mean-
co-operatives of farmers,
ingful measurement of stock levels could be made.

(172) For these reasons, the Commission considers that stock
levels are not a relevant injury factor in this invest-
igation.

Country

Price undercutting margin

Market share

(%)

Belarus

Bulgaria

Croatia

Estonia

Libya

Lithuania

Romania

Ukraine

(173)

2,25

9,56

5,19

10,53

3,69

2,88

2,23

5,61

industry. However,

the Community industry lost 10,3 % of

In all,
the
Community market over the period considered. Between
1996 and 1999 increasing Community consumption
for
was accompanied by rising sales volumes
the
Community
former
the
outstripped the latter, the Community industry still lost
5,2 % of the market over this four-year period. During
the IP the Community industry suffered a much more
pronounced
share. Consumption
increased by 5,2 % whilst sales volume fell by 5,4 %
resulting in a loss of 5,1 % of
for the
Community industry in that year alone.

loss of market

the market

as

4. Situation of the Community industry

Prices

Production

(168) Community

industry

production

from
3 489 000 tonnes in 1996 to 3 232 000 tonnes in the
IP, i.e. a fall of 7,4 %. The main year on year decreases
were between 1996 and 1997 (–4,0 %) and between
1998 and 1999 (–3,9 %), whilst there was a slight year
on year increase between 1999 and the IP (+0,7 %).

shrank

Capacity and capacity utilisation rates

(169) The

total production capacity of

the Community
industry remained largely stable over the period consid-
ered at around 4 500 tonnes per annum, resulting in
capacity utilisation falling from 74,9 % to 70,9 %.

(174) The Community producers' average net sales price fell
substantially by EUR 48,7, or 31,4 %, over the period
considered. There was a 15 % price increase from
Eur 92,2 to EUR 106,3 during the IP, but this was still
not sufficient to bring prices back to the 1998 level, let
alone any earlier period.

Profitability

(175) The weighted average profitability of the Community
industry deteriorated from a profit of 27,2 % in 1996 to
a loss of 4,3 % during the IP. Within this trend, some
recovery was seen between 1999 and the IP when losses
were reduced from 14,4 % to 4,3 %, mainly as a result of
the recovery of sales prices. This compares with a profit
of 2,3 % during 1998.

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Employment, productivity and wages

(176) Employment in the Community industry fell each year
In total 264 jobs, or

during the period considered.
nearly 18,5 % of the workforce, were lost.

(177) As reductions in the workforce outstripped reductions in
production, productivity was correspondingly improved
over the period. This was particularly marked during the
IP when production increased whilst the workforce still
fell.

(178) Average wages rose over the period considered, but
there is no indication that this was anything more than a
cost of living increase.

Investment and return on investments

(185) Although the Community industry increased its sales
volume (+ 7,5 %) and improved its productivity, it was
unable to materially benefit from the expanding demand
for urea in the Community, which increased by 28,5 %
over
the period considered, whereas, as mentioned
previously in recital 173, the Community industry lost
market share.

(186) There was some recovery for the Community industry
between 1999 and the IP. Based on the 1999 figures,
production rose by 0,7 %, and prices increased by an
average EUR 14,1 per tonne. Consequently, profitability
improved by 10,1 percentage points, but still remained
below zero. Obviously, these improvements were not
sufficient to return any of the indicators even to their
1998 level, which could be considered as satisfactory, let
alone any earlier period.

(179)

Investments by the Community industry were reduced
by 32,4 % between 1996 and the IP.

D. CAUSATION OF INJURY

(180) The return on investments followed a similar downward

trend as that seen for profitability.

1. Introduction

Cash flow

(181) Cash flow from the operation fell by 111,6 % over the
period considered from EUR + 141 million in 1996, to
EUR – 16 million during the IP.

(187)

In accordance with Article 3(6) and (7) of the basic
Regulation, the Commission has examined whether the
dumped imports of urea originating in the country
concerned have caused injury to the Community
industry to a degree that enables it to be classified as
material. Known factors other than the dumped imports,
injuring the
same
which could at
Community industry, were also examined to ensure that
possible injury caused by these other factors was not
attributed to the dumped imports.

time be

the

Ability to raise capital

(182) All of the cooperating Community producers are part of
larger groups. Therefore, whilst none of the companies
reported any difficulties in raising capital during the
period considered, this indicator is not considered to be
a good reflection of the situation of the Community
industry.

Magnitude of the dumping margin

(183) As concerns the impact on the Community industry of
the magnitude of the actual margins of dumping, given
the volume and the prices of the imports from the
countries concerned, this impact cannot be considered
to be negligible.

5. Conclusion on injury

2. Effect of the dumped imports

Indeed,

(188) Urea is a basic chemical product and it is the price of
urea which drives the market.
there are no
perceived quality differences between the imported and
the Community produced product (see recital 12) and
both products are completely interchangeable. This
finding is not invalidated by the fact that there is a
preference in the agricultural sector for granular over
prilled urea, a preference which has been accounted for
in the Commission's price undercutting analysis.

(189) The price of the imports from the countries concerned
fell by 38,7 % over the period considered. At the same
time these imports increased by 95,2 % in absolute
terms and by 10,7 percentage points in terms of share
of the market.

(184) The situation of the Community industry deteriorated
significantly between 1996 and the IP. Production
share
(–7,4 %), capacity utilisation (–4,0 %), market
(–10,3 %), prices (–31,4 % or EUR –48,7 per tonne),
profits (down 31,5 percentage points), and employment
(–264) all fell during this time. The Community industry
also reduced its investments and saw its cash flow turn
from positive to negative.

(190) Faced with these market conditions, the Community
industry had the choice of maintaining prices and losing
market share or cutting prices with the consequential
effect on profitability. Ultimately, both situations came
about. The Community industry's prices fell by 31,4 %,
its market share still fell by 10,3 %, and its profitability
deteriorated from a profit of 27,2 % to a loss of 4,3 %,
over the period considered.

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3. Effect of other factors

Imports from other third countries

(191) As the countrywide injury margin for imports origin-
ating in Egypt and Poland were found to be de minimis,
these imports were considered as ‘imports from other
third countries’. Accordingly, the import volume of urea
increased from about
from other
327 000 tonnes in 1996 to around 558 000 tonnes in
the IP, i.e. by 70,6 %. This resulted in the market share
of the imports from these countries increasing from
7,4 % in 1996 to 9,9 % in the IP. At the same time the
weighted average price of these imports fell by 26,0 %
from EUR 152,1 to EUR 120,7 per tonne.

third countries

(192) The most important suppliers in this group of countries
during the IP were Egypt and Poland. Indeed these two
countries accounted for more than half of all imports
from other third countries during the IP. Egypt and
Poland also more than account
for the increase in
market share of other third country imports over the
period considered. Without Egypt and Poland the
remaining countries actually lost market share as shown
in the following table.

Other third country
Imports

1996

1997

1998

1999

IP

urea at various points around the world. These prices
have shown quite wide price variations from place to
place over the period considered. For example at the end
of 1999 i.e. midway through the IP, there was a 40 %
difference between the highest (Caribbean) and lowest
(Antwerp) spot price. This is a greater difference than
can be explained by product differences alone. Further-
more the prices of sales by individual exporting produ-
cers on the Community market, their sales on their own
domestic markets
the
Community industry, and imports from other third
countries, varied widely. Given this finding, that different
prices are payable on different markets, it is provision-
ally determined that there is no world price for urea.
Therefore, this is not a factor which could have had any
influence on the situation of the Community industry.

found),

(where

sales

by

(196) Concerning the effect of developments of other markets,
it has been confirmed that China banned imports of urea
in 1997. Prior to this China had been a large net
importer of the product. Undoubtedly, this closure of a
sales channel will have had some consequences on the
market. However, as found in previous fertiliser cases, it
should be noted that the existence or not of a situation
of oversupply, whatever
importance, does not
provide a justification for dumped imports causing
injury to the Community industry.

its

Import volumes in
thousand tonnes

Of which Poland
and Egypt

327

489

601

547

558

4. Conclusion on causation

114

227

314

258

319

(197)

Market shares

7,4 % 10,2 % 11,7 % 10,2 % 9,9 %

Of which Poland
and Egypt

2,6 %

4,7 % 6,1 % 4,8 % 5,7 %

(193) Considering the conclusions on imports from Egypt and
Poland, that the remaining imports have a small and
declining share of the Community market, and that the
average price of these imports was much higher, during
the IP, than those from the countries concerned; it is
concluded that these imports cannot have contributed to
the material injury suffered by the Community industry.

Effect of world demand on the Community industry

(194) Certain interested parties

is

claimed that urea

a
commodity with a world market price, and that any
injury suffered by the Community industry should be
directly attributed to the fall in this price, and not to the
effect of dumped imports. A number of exporting
producers, as well as other interested parties, have
pointed to the closure of the Chinese market in 1997 as
the alleged root of the problems for the Community
industry.

(195) Firstly, it should be noted that the existence of a world
market price,
is not an excuse to engage in
injurious dumping. Secondly, as to the question of a
world price, it has been determined that there are inde-
pendent trade journals, which publish spot prices for

if any,

It is provisionally concluded that the dumped imports
originating in Belarus, Bulgaria, Croatia, Estonia, Libya,
Lithuania, Romania and the Ukraine have caused the
material
injury suffered by the Community industry
given the coincidence in time between the price
decreases, the undercutting, and the increased market
share of
from the countries
concerned compared with the decline in sales prices and
profitability suffered by the Community industry.

the dumped imports

(198) No other factors have been found that might explain
such deterioration in the situation of the Community
industry. Accordingly,
it is concluded that there is a
causal link between the dumped imports from the coun-
tries concerned and the material injury suffered by the
Community industry.

E. COMMUNITY INTEREST

1. Preliminary remark

(199)

In accordance with Article 21 of the basic Regulation,
the Commission considered whether the imposition of
anti-dumping measures would be against the interest of
the Community as a whole. The determination of the
Community interest was based on an examination of all
the
the
Community industry, the importers and traders, and the
users of the product concerned.

involved i.e.

those of

interests

various

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(200)

In order to assess the likely impact of the imposition or
non-imposition of measures, the Commission requested
information from all interested parties which were either
known to be concerned or which made themselves
known. On this basis, the Commission sent question-
naires to the Community industry, five other producers
in the Community, 54 importers/traders (six of who
were related to exporters in the countries concerned),
the product
and 11 users/users
concerned. Ten importers/traders
(including the six
related importers) as well as seven users/users associa-
tions replied.

associations of

(201) On this basis it was examined, whether, despite the
the
conclusions on dumping, on the situation of
Community industry, and on causation, compelling
reasons exist which would lead to the conclusion that it
is not in the Community interest to impose measures in
this particular case.

2. Interest of the Community industry

it

i.e.

that

forces,

(202) Although the Community industry has suffered material
injury in the IP, there are clear indications that it is able
to respond market
is viable and
competitive. Between 1999 and the IP Community
industry prices rose (up EUR 14,1 per tonne) and losses
reduced (from –14,4 % to –4,3 %). This is in parallel to
an increase in the price of imports from the countries
concerned (up EUR 18,0 per tonne), over the same
period. Therefore, even operating in a market where
significant dumping took place, the Community industry
has shown itself able to take advantage of any realistic
opportunities.

(203) Were measures to be imposed, and with the ensuing
return to fair market conditions,
the Commission
concludes that the Community industry would be able
to restore and maintain its activities in the Community.

3. Interest of importers/traders

(204) Questionnaire responses and information were received
from the European Fertiliser Import Association (EFIA)
and five unrelated importers of urea. Verification visits
were carried out at the premises of three of the parties.

(205) With the falling price of urea over the period considered,
importers have also felt the effects of reduced margins.
Nevertheless, all the unrelated cooperating importers,
which account for approximately 10 % of imports of
urea from the countries concerned during the IP, are
opposed to the imposition of measures.

(206) The likely impact for importers of the imposition of
measures was
full
capacity, the Community industry is unable to supply all
of Community demand for urea. Accordingly, there will
be a continuing requirement for significant quantities of

considered. Even operating at

imported urea. It is, therefore, concluded that imports of
urea will continue, albeit at non-injurious prices. It may
be that a return to normal market conditions will have a
beneficial effect on importers, although it is accepted
that some importers may face adverse consequences
after the imposition of anti-dumping measures.

4. Interest of users

(207) Users of the product concerned fall

into two distinct
there are farmers who use urea
categories. Firstly,
predominantly as a fertiliser. Farmers account
for
approximately 58 % of Community consumption of
urea. For them, price is the key determining factor.

(208) Secondly, there are the industrial users, for which urea is
a raw material in the manufacture of glues and resins.
Whilst price is clearly important,
industrial users are
more concerned with continuity of supply and the
absence of contaminants in the urea.

(209)

It is considered appropriate to look at the interest of
these two different groups separately.

Farmers

(210) Five associations representing farmers submitted ques-
tionnaire responses or information to the Commission.
Verification visits were carried out to two of the parties.
A separate analysis was also carried out by the Commis-
sion on the contribution that fertilisers have to farmers'
final costs.

is provisionally concluded that

(211) The Commission is mindful of the difficult situation
currently faced by farmers. From the information avail-
able it
fertilisers in
general, and by extension urea, account for between
3,0 % and 10,0 % of farmers' total costs depending on
the specific activity, with 6,0 % being a reasonable
average. The weighted average proposed duty is 10,6 %.
In a worst case scenario, for farmers using urea as their
only fertiliser, this will result in an average increase of
0,6 % in costs, assuming that current application
patterns continue. This also assumes that
importers/
traders pass on duties in full, and that farmers continued
to source their urea only from the countries concerned.

(212) However, it is highly unlikely that farmers will actually
feel this full impact. It is more probable that importers/
traders will not pass the duties on in full, and also that
farmers will increasingly source their urea either from
other countries not subject to measures or form the
Community industry. For these reasons it is provision-
ally concluded that
the measures on
farmers will be negligible.

the impact of

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Industrial users

6. Conclusion on Community interest

(213) Three industrial users submitted questionnaire responses,
of which two were visited on spot. It is provisionally
concluded that, for industrial users, urea represents a
larger part of production costs than it does for farmers.
Typically urea accounts for 30,0 % to 40,0 % of their
total costs. The effect of the proposed duties would
therefore be to increase their costs by, on average, 3,2 %
to 4,2 %, again assuming that industrial users exclusively
process urea from the countries concerned and that
importers/traders pass on the duties in full. For the
reasons explained in recital 212, this is not very likely.
Moreover, the profit margins are greater for industrial
users than for farmers and there appears to be greater
scope for passing on any increases to their customers.

5. Competition and trade distorting effects

(214) The countries concerned, not

including Egypt and
imports of urea
Poland, accounted for 76,1 % of all
during the IP. Russian urea, which is currently subject to
anti-dumping duties (1), accounted for a further 2,3 % of
imports. A number of interested parties have claimed
that, with such a high level of imports covered by the
proceeding, the imposition of duties would lead to the
disappearance of a number of the exporting producers
from the Community market, thus considerably weak-
ening competition, and leading to an excessive increase
in the price for urea.

(215) Whilst some exporting producers may withdraw from
the Community market, it is reasonable to assume that
most of them will continue to supply urea at a non-
injurious price. Also, the non-imposition of measures on
imports originating in Egypt and Poland has reduced the
proportion of imports that would be subject to anti-
dumping duties.

(216) Nor should it be overlooked that the absence of injur-
ious dumping from the eight countries concerned will
make the Community market more attractive to other
sources of supply. Evidence has been submitted that new
production plants elsewhere in the world have and will
come on-stream in the near future. These companies will
also be looking for outlets for their available urea.

(217) The continuing need for imports will ensure that a
number of competitors to the Community producers
remain on or enter the market. Together with the
Community producers,
they will ensure that users
continue to have the choice of different and competing
suppliers of the product concerned.

(218) For these reasons, it is provisionally concluded that there
are no reasons why the imposition of the proposed
anti-dumping duties will have a significant impact on
competition. On the contrary,
it would eliminate the
trade-distorting effects of dumping.

(219) Taking account of all of the above factors, it is provi-
sionally concluded that there are no compelling reasons
not to impose anti-dumping measures.

F. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury elimination level

(220)

the conclusions reached with regard to
In view of
dumping,
injury, causation, and Community interest,
provisional anti-dumping measures should be taken in
order to prevent
further injury being caused to the
Community industry by the dumped imports. To estab-
lish the level of duty, account has been taken of the
dumping margins found and of the amount of duty
necessary to eliminate the injury suffered by the
Community industry.

(221) To establish the level of duty needed to remove the
injury margins have been
injury caused by dumping,
calculated. The necessary price increase was determined
on the basis of a comparison of the weighted average
import price, with the non-injurious price of urea sold
by the Community industry on the Community market.

(222) The non-injurious price has been obtained by taking the
actual, verified sales prices of the Community industry,
adjusting these to a break even point, and then finally
adding a profit margin that may reasonably have been
achieved in the absence of injurious dumping. As in the
undercutting calculation the calculation was made at a
prilled to prilled, granular to granular, bulk to bulk, and
bagging-type to bagging-type level. The profit margin
used for this calculation is 8 % of turnover.

(223) The complainant submitted that a profit margin of 15 %
return on capital employed (ROLE) would be appro-
priate. It argued that this level of return was necessary to
re-invest for the long term and to achieve an adequate
return on equity for shareholder. Given the level at
which the Commission compared the prices of imported
and Community produced urea, the Commission provi-
sionally concludes that profitability could not be deter-
mined on the basis of ROLE but must be directly linked
to turnover of the product concerned.

(224) The Court of First Instance has ruled that ‘[...] the profit
margin [...] must be limited to the profit margin which
the Community industry could reasonably count on
under normal conditions of competition, in the absence
of dumped imports’ (2). Accordingly, it was within these
parameters that the Commission considered the question
of profitability.

(1) See Regulation (EC) No 477/95.

(2) Case T-210/95 ruling dated 28 October 1999, recital 60.

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(225)

In 1996, and 1997, the years after imposition of anti-dumping duties on urea from Russia but prior
to the closure of the Chinese market to imports, the Community industry had averaged profits on
turnover of 27,2 %, and 11,3 % respectively. This indicates that the Community industry is able to
make good returns when fair market conditions operate. Nevertheless the market conditions in 1996
and 1997 are not necessarily representative of the market conditions during the IP. An examination
of any underlying changes in the market between the beginning and the end of the period considered
was also made.

(226) As outlined above the main users of urea are farmers. From the submissions made in this case, it is
clear that the ability of farmers to pass on any price rises has reduced over the period considered. For
this reason farmers are now much more price conscious than they were even a few years ago. In
order to preserve their profits or to reduce their losses, they will be resistant to any increases in their
own costs, including those of fertilisers. At the same time raw material prices for urea manufacturers
have risen. In these circumstances, it is provisionally concluded that there was no likelihood of the
Community industry achieving double figure profitability during the IP. Taking all circumstances into
account, 8 % seems to be a reasonable profit that the Community industry could have achieved
during the IP in the absence of dumped imports.

(227) The difference resulting from the comparison between the weighted average import price and the
non-injurious price of the Community industry was then expressed as a percentage of the total cif
import value.

(228) The results of these calculations identified de minimis countrywide underselling margins for both

Egypt and Poland.

2. Provisional measures

(229)

In view of the results of the investigation concerning Egypt and Poland, and specifically that the
country wide injury margins are de minimis, provisional measures should be imposed and the
proceeding should be terminated in respect of exporting producers in these countries.

(230)

In the light of the foregoing, it is considered that, in accordance with Article 7(2) of the basic
Regulation, a provisional anti-dumping duty should be imposed in respect of Belarus, Bulgaria,
Croatia, Estonia, Lithuania, Libya, Romania, and the Ukraine at the level of the injury margins found
since,

in all cases, these are lower than the dumping margins.

(231)

In order to ensure the efficiency of the measures and to discourage the price manipulation which has
been observed in some previous proceedings involving the same general category of product, i.e.
it is proposed that provisional duties take the form of a specific amount per tonne.
fertilisers,

(232) On the basis of the above, the provisional duty amounts are as follows:

Country

Company

Belarus

Single country-wide margin

Bulgaria

Chimco AD

Others

Croatia

Petrokemija d.d.

Others

Estonia

JSC Nitrofert

Others

Basis for anti-
dumping duty
(%)

Provisional duty
(EUR/tonne)

5,6

21,0

21,0

13,1

13,1

18,0

18,0

5,46

18,80

18,80

12,18

12,18

17,67

17,67

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Country

Company

Libya

National Oil Corporation

Others

Lithuania

Joint Stock Company Achema

Others

Romania

S.C. Amonil SA, Slobozia

Petrom SA Sucursala Doljchim Craiova, Craiova

Sofert SA, Bacau

Others

Basis for anti-
dumping duty
(%)

Provisional duty
(EUR/tonne)

9,6

9,6

6,5

6,5

4,6

3,8

8,0

8,0

8,87

8,87

6,89

6,89

4,94

4,12

8,42

8,42

Ukraine

Open Joint Stock Company Cherkassy Azot,
Cherkassy

15,3

13,30

Joint Stock Company DniproAzot, Dniprodzer-
zinsk

6,5

6,25

Others

16,1

13,90

(233) The individual company anti-dumping duty rates specified in this Regulation were established on the
basis of findings of the present investigation. Therefore, they reflect the situation found during that
investigation with respect to these companies. These duty rates (as opposed to the country-wide duty
applicable to ‘all other companies’) are thus exclusively applicable to imports of product originating
in the country concerned and produced by the companies and thus by the specific legal entities
mentioned. Imported product produced by any other company not specifically mentioned in the
operative part of this Regulation with its name and address,
including entities related to those
specifically mentioned, cannot benefit from these rates and shall be subject to the duty rate
applicable to ‘all other companies’.

(234) Any claim requesting the application of these individual company anti-dumping duty rates (e.g.
following a change in the name of the entity or following the setting up of new production or sales
in
entities) should be addressed to the Commission (1) forthwith with all relevant information,
particular any modification in the company's activities linked to production, domestic and export
sales associated with e.g. that name change or that change in the production and sales entities. The
Commission, if appropriate, will, after consultation of the Advisory Committee, amend the Regula-
tion accordingly by updating the list of companies benefiting from individual duty rates.

3. Termination with regard to Egypt and Poland

(235)

In view of the results of the investigation concerning Egypt and Poland, and specifically that the
countrywide injury margins are de minimis, the proceeding should be terminated in respect of these
countries. The complainant, having been given an opportunity to comment on this course of action,
formally objected to the termination of the proceeding both against Egypt and against Poland.
However, no substantive arguments were raised by the complainant that were sufficient to cause the
Commission to change its determination.

(1) European Commission

Trade Directorate-General
TERV 00/13
Rue de la Loi/Wetstraat 200
B-1049 Brussels.

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4. Undertakings

(236) Companies in Bulgaria, Estonia, Lithuania and Romania have offered price undertakings in accord-
ance with Article 8(1) of the basic Regulation. The Commission considers that the undertaking
offered by the exporting producer in Bulgaria, Chimco AD, Shose za Mesdra, B-3037 Vratza can be
accepted since it eliminates the injurious effect of dumping. Furthermore, the regular and detailed
reports which the company undertook to provide to the Commission will allow for effective
monitoring. In addition, the company is exclusively producing and selling the product concerned
and, as such, the risk of it circumvention the undertaking is limited.

(237) As regards the undertaking offered by the exporting producer in Lithuania,

the Commission
considered that due to the company being an integrated producer of fertilisers with, therefore, a wide
range of marketing options open to it when faced with measures on urea, the monitoring of the
undertaking would have proved impractical. In the case of the Estonian company, the accuracy and
reliability of the data provided regarding export sales was poor. The offers were not therefore
considered acceptable.

(238) As regards the undertaking offered by the company in Romania, the investigation revealed that this
company did not export the product concerned during the IP. The offer of this company could
therefore not be accepted.

(239)

In order to ensure the effective respect and monitoring of the undertaking, when the request for
release for free circulation pursuant
to the undertaking is presented to the relevant customs
authority, exemption from the duty should be conditional upon presentation of a commercial
invoice containing the information listed in the Annex to this Regulation which is necessary for
customs to ascertain that shipments correspond to the commercial documents at the required level
of detail. Where no such invoice is presented, or when it does not correspond to the product
concerned presented to customs, the appropriate amount of anti-dumping duty should instead be
payable.

(240)

In the event of suspected breach, breach or withdrawal of the undertaking an anti-dumping duty
may be imposed, pursuant to Article 8(9) and (10) of the basic Regulation.

G. FINAL PROVISION

(241)

In the interest of a sound administration, a period should be fixed within which the interested parties
which made themselves known within the time limit specified in the notice of initiation may make
their views known in writing and request a hearing. Furthermore, it should be stated that the findings
concerning the imposition of duties made for the purposes of this Regulation are provisional and
may have to be reconsidered for the purpose of any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of urea, whether or not in aqueous
1.
solution, falling within CN codes 3102 10 10 and 3102 10 90 originating in Belarus, Bulgaria, Croatia,
Estonia, Libya, Lithuania, Romania and the Ukraine.

The amount of the provisional anti-dumping duty per tonne, applicable to the product described in

2.
paragraph 1 above, shall be as follows:

Country

Company

Belarus

All companies

Bulgaria

All companies

Croatia

Estonia

All companies

All companies

Provisional anti-
dumping duty
(EUR/tonne)

TARIC additional
code

5,46

18,80

12,18

17,67

—

A999

—

—

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Country

Company

Provisional anti-
dumping duty
(EUR/tonne)

TARIC additional
code

Libya

All companies

Lithuania

All companies

Romania

S.C. Amonil SA, Slobozia

Petrom SA Sucursala Doljchim Craiova, Craiova

Sofert SA, Bacau

All other companies

8,87

6,89

4,94

4,12

8,42

8,42

Ukraine

Open Joint Stock Company Cherkassy Azot, Cherkassy

13,30

Joint Stock Company DniproAzot, Dniprodzerzinsk

All other companies

6,25

13,90

—

—

A264

A265

A266

A999

A268

A269

A999

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

3.
subject to the provision of a security, equivalent to the amount of the provisional duty.

In cases where goods have been damaged before entry into free circulation and, therefore, the price
4.
actually paid or payable is apportioned for the determination of the customs value pursuant to Article 145
of Commission Regulation (EEC) No 2454/93 (1), the amount of anti-dumping duty, calculated on the basis
of paragraph 2 above, shall be reduced by a percentage which corresponds to the apportioning of the price
actually paid or payable.

5.

Unless otherwise specified, the provisions in force concerning customs duty shall apply.

The proceeding concerning imports of the product described in Article 1(1) and originating in Egypt and
Poland is herewith terminated.

Article 2

Article 3

1.
The undertaking offered by the company named below in connection with the present anti-dumping
proceeding is hereby accepted. Imports under the following TARIC additional code which are produced and
directly exported (i.e. shipped and invoiced) by that company to a company in the Community acting as an
importer shall be exempt from the anti-dumping duties imposed by Article 1 provided that they are
imported in conformity with paragraph 2.

Country

Company

Bulgaria

Chimco AD, Shose az Mezdra, 3037 Vratza

TARIC additional
code

A272

2.

Imports mentioned in paragraph 1 shall be exempt from the duty on condition that:

(a) a commercial invoice containing at least the elements listed in the Annex is presented to Member States
customs authorities upon presentation of the declaration for release into free circulation; and

(b) the goods declared and presented to customs correspond precisely to the description on the commercial

invoice.

(1) OJ L 253, 11.10.1993, p. 1.

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Official Journal of the European Communities

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Article 4

1. Without prejudice to Article 20(1) of Regulation (EC) No 384/96, interested parties may request
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted,
present their views in writing and request a hearing from the Commission within one month of the date of
the entry into force of this Regulation.

2.
Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may request a hearing
concerning the analyses of the Community interest and may comment on the application of this Regulation
within one month of the date of entry into force of this Regulation.

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

Article 1 of this Regulation shall apply for a period of six months.

Article 5

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

Done at Brussels, 20 July 2001.

For the Commission

Pascal LAMY

Member of the Commission

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ANNEX

The following elements shall be indicated in the commercial invoice accompanying the company's sales of urea to the
Community which are subject to the undertaking:

1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’.

2. The name of the company mentioned in Article 3(1) issuing the commercial

invoice.

3. The commercial

invoice number.

4. The date of issue of the commercial

invoice.

5. The TARIC additional code under which the goods on the invoice are to be customs cleared at the Community

frontier.

including:

6. The exact description of the goods,
— Product Code Number (PCN),
— description of the goods corresponding to the PCN (i.e ‘PCN 1 urea in bulk’,
— company product code number (CPC) (if applicable),
— CN code,
— quantity (to be given in tonnes).

7. The description of the terms of sale,

including:

‘PCN 2 urea, bagged’),

— price per tonne,
— applicable payment terms,
— applicable delivery terms,
— total discounts and rebates.

8. Name of the company acting as an importer to which the invoice is issued directly by the company.

9. The name of the official of the company that has issued the commercial invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export by [company name] to the European Community of the goods
covered by this invoice is being made within the scope and under the terms of the undertaking offered by [company
name], and accepted by the European Commission through Regulation (EC) No 1497/2001. I declare that the
information provided in this invoice is complete and correct.’