Proposal for a Council Regulation amending Regulation (EC) No 1995/2000 imposing, inter alia, a definitive anti-dumping duty on imports of solutions of urea and ammonium nitrate originating in Algeria, Belarus, Lithuania, Russia and Ukraine
Date: 2003-08-27
Institutions: European Commission
Subjects: Algeria, Belarus, Lithuania, Russia, Ukraine, anti-dumping duty, chemical fertiliser, import, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.8.2003
COM(2003) 521 final

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1995/2000 imposing, inter alia, a definitive anti-
dumping duty on imports of solutions of urea and ammonium nitrate originating
in Algeria, Belarus, Lithuania, Russia and Ukraine

(presented by the Commission)

1.

2.

3.

4.

5.

6.

7.

EXPLANATORY MEMORANDUM

Attached  is  a  proposal  for  a  Council  Regulation  amending  the  applicable
anti-dumping  duty  on  imports  of  solutions  of  urea  and  ammonium  nitrate
(“UAN”) originating in Lithuania.

By  Council  Regulation  1995/2000,  a  definitive  anti-dumping  duty  was
imposed to imports of UAN originating, inter alia, in  Lithuania in the form
of a specific duty of EUR 3,98 per tonne.

On 17 December 2002, a partial interim review of the anti-dumping measures
applicable to UAN originating, inter  alia, in  Lithuania, was initiated by the
Commission  following  a  request  lodged  by  SC  Achema,  an  exporting
producer in Lithuania.

The review investigation was limited in scope to the examination of the form
of the measure and, in particular, to the examination of the acceptability of an
undertaking offered by the applicant company.

The  proposal  to  amend  the  form  of  the  definitive  anti-dumping  duty  and
accept  the  undertaking  offer  is  based  on  the  findings  of  the  investigation.
These  showed  that  the  undertaking  offer  eliminates  the  injurious  effects  of
dumping found in the original investigation and its terms allow an effective
monitoring  limiting  thus  the  risk  of  circumvention  via  cross-compensation
arrangements.

Interested parties were informed of the essential facts and considerations on
the  basis of which the Commission intended  to recommend the  amendment
of the form of the definitive anti-dumping duty in force.

In the light of the above the Commission therefore proposes that the Council
approve the amendment in the form of the anti-dumping measures applicable
to imports of UAN exported by the Lithuanian producer SC Achema.

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Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1995/2000 imposing, inter alia, a definitive anti-
dumping duty on imports of solutions of urea and ammonium nitrate originating
in Algeria, Belarus, Lithuania, Russia and Ukraine

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on
protection  against  dumped  imports  from  countries  not  members  of  the  European
Community1  (the  basic  Regulation),  and  in  particular  Article  8  and  Article  11(3)
thereof,

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consulting  the
Advisory Committee,

Whereas:

(1) 

(2) 

(3) 

A.

EXISTING MEASURES

By  Regulation  (EC)  No  1995/20002,  the  Council  imposed  a  definitive  anti-
dumping duty on imports of solutions of urea and ammonium nitrate (“UAN”)
originating,  inter  alia,  in  Lithuania.  The  form  of  the  duty  set  out  in  that
Regulation  was  a  specific  duty  of  EUR  3,98  per  tonne  for  all  Lithuanian
exporting producers.

B.

REQUEST FOR A REVIEW

In  September 2002, a  request  for a partial interim  review  pursuant  to  Article
11(3)  of  the  basic  Regulation  was  lodged  by  SC  Achema  (the  applicant),  an
exporting  producer  in  Lithuania.  The  request  was  limited  in  scope  to  the
examination of the form of the measure and, in particular, to the examination
of the acceptability of an undertaking offered by the applicant.

The request was based on the grounds that the applicant committed itself to a
price  discipline  in  respect  of  UAN  within  the  framework  of  another  anti-
dumping proceeding concerning Urea and presented evidence that it was ready
to provide, also in the framework of the UAN proceeding, an undertaking of a
similar  nature,  which  would  remove  the  injurious  effects  of  dumping  and
could be monitored.

1

2

OJ L 56, 6. 3. 1996, p. 1. Regulation as last amended by Regulation (EC) No 1972/2002 (OJ L
305, 7.11.2002, p.1).
OJ L 238, 22.9.2000, p.15.

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(4) 

(5) 

(6) 

(7) 

Having  determined,  after  consulting  the  Advisory  Committee,  that  sufficient
evidence existed for the initiation of a partial interim review, the Commission
published a notice in the Official Journal of the European Communities3 and
commenced an investigation.

C.

PROCEDURE

The Commission officially advised the authorities of the exporting country of
the initiation of the interim review and gave all parties directly concerned the
opportunity  to  make  their  views  known  in  writing  and  to  request  a  hearing.
The European Fertilizer Manufacturers Association, on behalf of the European
complainant  producers  of  the  original  investigation  (Community  industry),
requested,  within  the  time  limits,  to  take  part  in  this  investigation  as  an
interested party.

The applicant made the Commission a formal offer of price undertaking.

The  Commission  further  sought  and  verified  all  the  information  it  deemed
necessary for the purpose of examining the acceptance of this undertaking and
all the aspects relating to the monitoring of it. A verification visit was carried
out at the premises of the applicant.

(8) 

The  applicant  and  the  Community  industry  were  informed  of  the  facts  and
considerations of the investigation and were given an opportunity to comment.

D.

INVESTIGATION

(9) 

The  applicant  exports  three  kinds  of  nitrogen  fertilisers  to  the  EU:  Urea,
ammonium nitrate (“AN”) and UAN. Urea and UAN originating in Lithuania
are subject to  anti-dumping measures in the form  of  specific duties, imposed
by  Council  Regulations  (EC)  No  92/2002  and  (EC)  No  1995/2000
respectively.

(10)  By  Commission  Decision  2002/498/EC4,  an  undertaking  offered  by  the
applicant  concerning  imports  of  Urea  was  accepted.  By  this  undertaking,  the
applicant accepted, in order to avoid cross-compensation via exports of other
fertilisers,  to  respect  a  pricing  discipline  and  to  report  exports  to  the
Community for its other two fertilisers, i.e. the Ammonium Nitrate and UAN
as well. Consequently, the applicant’s exports of UAN were as a result found
to  be  subject  to  both  a  minimum  import  price  and  an  anti-dumping  duty  (by
nature of Regulation No 1995/2000).

(11)  The  undertaking  offered  by  the  applicant  in  the  framework  of  the  current
investigation  enables  its  exports  of  UAN  to  be  subject  to  a  sole  minimum
import price (MIP). The MIP is at a level that eliminates the injurious effects
of dumping  found in  the original  investigation.  The  reporting  obligations  are
as strict as for Urea, allowing thus an efficient monitoring in conjunction with
the undertaking on urea. In addition, a clause on the breach of the relationship

3

4

OJ C 314, 17.12.2002, p.2.
OJ L 168, 27.6.2002, p.5.

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of trust between the Commission and the applicant guarantees the efficiency of
both undertakings for urea and UAN.

(12)  The  Community  industry  opposed  to  the  acceptance  of  an  undertaking.  It
alleged  that  the  actual  quantities  of  UAN  exported  by  the  applicant  for  the
period 2002 could not be supplied by its effective production capability. The
Commission  sought  from  the  applicant,  and  the  latter  provided,  detailed
information  concerning  production  capacity,  sales  and  purchases  of  the  three
nitrogen fertilisers, i.e. Urea, AN and UAN, for the last three calendar  years.
All  of this information  was  verified  on  spot and no irregularity  of  the  nature
alleged  by  the  Community  Industry  was  found.  Thus,  the  allegations  of  the
Community industry were considered to be unfounded.

(13)  The  same  party  further  claimed  that,  in  line  with  the  principle  of  non-
discrimination,  the  applicant  should  not  be  given  more  favourable  treatment
than other countries found to be dumping, since in the great majority of recent
anti-dumping  cases  concerning  nitrogen  fertilisers,  the  European  Community
has  consistently  argued  that  for  reasons  of  efficiency  and  to  avoid
manipulation  and  malpractice,  specific  anti-dumping  duties  are  the  most
appropriate measures to be applied. Regarding the discriminatory treatment, it
should  be  noted  that  each  undertaking  offer  has  to  be  examined  on  its  own
merits  on  the  basis  of  the  criteria  laid  down  in  Article  8  of  the  basic
Regulation. Thus, undertaking offers can only be accepted in cases where they
have  the  effect  of  eliminating  the  injurious  dumping  and  allow  effective
monitoring.  In  this  respect,  it  is  noted  that  the  main  problem  for  accepting
undertakings from other countries was the risk of circumvention in the form of
cross-compensation  with  other  products.  However,  in  this  case  this  risk  is
seriously limited, since the applicant has offered and has been respecting MIPs
for  the  other  fertilisers  that  it  exports  to  the  Community  with  which  cross-
compensation  could  arguably  take  place.  Regarding  efficiency  and  effective
monitoring of undertakings in respect of similar cases, the experience already
obtained  from  two  undertakings  concerning  Urea  (one  from  a  Bulgarian
exporting  producer  and  one  from  the  applicant)  and  one  concerning  UAN
(from  an  Algerian  exporting  producer),  which  have  been  in  place  for  certain
time, did not indicate that they had been inefficient. In this respect, it should
be noted that the Commission, during the on-spot visit at the premises of the
applicant,  verified  all  the  reports  submitted  by  it  in  the  framework  of  its
undertaking  for  Urea  and  did  not  find  any  irregularity,  manipulation  or
malpractice. Therefore, this claim were rejected.

(14)  Finally,  the  Community  industry  claimed  that  any  price  undertaking  should
stipulate  both  an  ex-works  and  a  CIF  frontier  level  in  order  that  all  normal
costs  between  ex-works  and  cif  frontier  are  accounted  for.  Regarding  this
claim, it is noted that the MIP offered by the applicant is based on an ex-works
level and that the applicant is obliged to report detailed  costs associated with
its exports when made at a different level (i.e. CIF, FOB, etc.). This means that
indeed  all  costs  between  ex-works  and  cif  level  will  be  accounted  for  when
sales  are  made  at  CIF  level.  Therefore,  the  claim  made  by  the  Community
industry had to be rejected.

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E.

UNDERTAKING

(15) 

(16) 

In  view  of  the  foregoing,  the  offer  of  an  undertaking  was  accepted  by  the
Commission in Decision No 2003/XXX/EC5,

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  Regulation  (EC)  No  617/20006,  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 rate of anti-dumping duty should instead
be payable.

(17) 

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

(18) 

In  view  of  the  acceptance  of  the  undertaking  offer  it  is  necessary  to  amend
Regulation (EC) No 1995/2000 accordingly.

F.

MODIFICATION OF NAME AND ADDRESS

(19) 

In the course of this investigation, the company informed the Commission that
it had changed its name and address. The name change was due to the fact that
the previous form of the company, i.e. Joint Stock Company, no longer exists
in Lithuania. The new name of the company is Stock Company Achema. The
change of its address was due to the change in the Lithuanian postal system.

(20)  The Commission has examined this information,  which  demonstrated  that  all
the  company’s  activities  linked  to  the  manufacturing,  sales  and  exports  of
fertilisers (AN, UAN and urea) are unaffected by these changes,

HAS ADOPTED THIS REGULATION:

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6

OJ L……
OJ L 75, 24.3.2000, p.3.

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Article 1

Regulation (EC) No 1995/2000 is hereby amended as follows:

1. In Article 1(2), the row concerning Lithuania shall be replaced by the following:

Country of origin

Company

Amount  of  duty
(per tonne)

TARIC  additional
code

‘Lithuania

All companies

EUR 3,98

A999

2. Article 2(1), shall be replaced by the following:

“Imports  declared  for  release  into  free  circulation  under  the  following  TARIC
additional codes which are produced and directly exported (i.e. shipped and invoiced)
by  a  company  named  below  to  a  company  in  the  Community  acting  as  an  importer
shall be exempt from the anti-dumping duty imposed by Article 1 provided that such
imports are imported in conformity with paragraph 2 of this Article.

Country

Algeria

Lithuania

additional

TARIC 
code

A107

A375

Company

Industries 

Fertalge 
spa
12,  Chemin  AEK  Gadouche
Hydra, Alger

Stock Company Achema
Jonalaukio k.,Ruklos sen.,
Jonavos r. LT-5005

Article 2

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

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

Done at Brussels,

For the Council
The President

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