Proposal for a Council Regulation amending Regulation (EEC) No 3068/92 imposing a definitive anti-dumping duty on imports of potassium chloride originating in Belarus, Russia or Ukraine
Date: 2004-04-19
Institutions: European Commission
Subjects: Belarus, Russia, Ukraine, anti-dumping duty, chemical product, import, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.04.2004 
COM(2004)281 final 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EEC) No 3068/92 imposing a definitive anti-dumping duty on 
imports of potassium chloride originating in Belarus, Russia or Ukraine  

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

On 20 March 2004, the Commission initiated a review investigation with regard to, inter alia, 
imports of potassium chloride originating in Belarus, Russia or Ukraine. The purpose of this 
review  was  to  examine  whether  these  measures  should  be  amended  to  take  account  of  the 
enlargement of the Community. 

The  examination  showed  that  it  was  in  the  interests  of  the  Community  to  provide  for  the 
temporary  adaptation  of  the  measures  in  force  to  avoid  an  excessive  negative  impact  on 
importers and users in EU10. 

It is therefore proposed to accept temporary undertakings from the exporters concerned with 
elements  for  minimum  prices  and  quantitative  ceilings  corresponding  to  their  traditional 
export volumes to EU10.  

Member States were consulted and did not oppose the proposal. 

It is proposed that the Council adopt the attached proposal for a Regulation which should be 
published in the Official Journal no later than 20 May 2004. 

2 

 
 
  
 
Proposal for a 

COUNCIL REGULATION 

amending Regulation (EEC) No 3068/92 imposing a definitive anti-dumping duty on 
imports of potassium chloride originating in Belarus, Russia or 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,  as  last 
amended  by  Regulation  (EC)  No  461/20042  (“the  basic  Regulation”),  and  in  particular 
Articles 8, 11(3), 21 and 22 (c) thereof, 

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

Whereas: 

A. PROCEDURE 

1. Measures in force 

(1) 

By  Regulation  (EC)  No  969/20003  the  Council  amended  and  extended  the  measures 
imposed  by  Regulation  (EC)  No  3068/924,  as  amended  by  Regulations  (EC)  No 
643/945 and (EC) 449/986, on imports into the Community of potassium chloride (“the 
product  concerned”)  originating  in  the  Republic  of  Belarus  (“Belarus”),  the  Russian 
Federation (“Russia”) and Ukraine. 

1 
2 
3 
4 
5 
6 

OJ L 56, 6.3.1996, p. 1. 
OJ L 77, 13.3.2004, p. 12. 
OJ L112, 11.5.2000, p. 4. 
OJ L 308, 24.10.1992, p. 41. 
OJ L 80, 24.3.1994, p. 1. 
OJ L 58, 27.2.1998, p. 15. 

3 

 
 
  
 
                                                 
 (2) 

The  measures  are fixed duty amounts,  established by category and grade of product, 
ranging from EUR/tonne 19.51 to EUR/tonne 48.19 in the case of Belarus, EUR/tonne 
19.61 to EUR/tonne 40.63 in the case of Russia and EUR/tonne 19.61 to EUR/tonne 
48.19 in the case of Ukraine. 

2. Investigation 

(3) 

(4) 

(5) 

On 20 March 2004 the Commission announced through the publication of a notice in 
the Official Journal of the European Union7 the initiation of a partial interim review of 
the  measures  in  force  (“the  measures”)  pursuant  to  Articles  11(3)  and  22  (c)  of  the 
basic Regulation.  

The  review  was  launched  at  the  initiative  of  the  Commission  in  order  to  examine 
whether, as a consequence of the enlargement of the European Union on 1 May 2004 
(“Enlargement”)  and,  bearing  in  mind  the  aspect  of  Community  interest,  there  is  a 
need to adapt the measures in order to avoid a sudden and excessively negative effect 
on all interested parties including users, distributors and consumers.  

3. Parties concerned by the investigation 

All  interested  parties  known  to  the  Commission,  including  the  Community  industry, 
associations  of  producers  or  users  in  the  Community,  exporters/producers  in  the 
countries  concerned,  importers  and  their  associations  and  the  relevant  authorities  of 
the  countries  concerned  as  well  as  interested  parties  in  the  ten  new  Member  States 
which acceded to the European Union on 1 May 2004 (“the EU10”) were advised of 
the initiation of the investigation and were given the opportunity to make their views 
known in writing, to submit information and to provide supporting evidence within the 
time limit set out in the notice of initiation. All interested parties who so requested and 
showed that there were reasons why they should be heard were granted a hearing. 

(6) 

In this regard, the following interested parties made their views known: 

(a) Community producers Association: European Association of Potash Producers  

(b) Exporting producers:  

Production Amalgamation Belaruskali, Soligorsk, Belarus 

JSC Silvinit, Solikamsk, Russia 

JSC Uralkali, Berezniki, Russia 

(c) Exporter: 

IPC,  Moscow,  Russia  (related  to  JSC  Silvinit  and  Production  Amalgamation 

Belaruskali). 

7 

OJ C 70, 20.3.2004, p.15. 

4 

 
 
  
 
                                                 
(7) 

(8) 

(9) 

B. PRODUCT UNDER CONSIDERATION 

The  product  concerned  is  potassium  chloride  (potash,  KCl)  and  is  generally  used  as 
agricultural  fertiliser,  directly,  blended  with  other  fertilisers  or  after  transformation 
into  a  complex  fertiliser  known  as  NPK  (nitrogen,  phosphorus,  potassium).  The 
potassium  content  is  variable  and  is  expressed  as  a  percentage  of  the  weight  of 
potassium oxide (K2O) on the dry anhydrous product. It is also used as a raw material 
in the manufacture of certain industrial and pharmaceutical products. 

Potash is generally commercialised in either a standard/powder form (standard potash) 
or  in  other  than  standard’  form  that  includes  but  is  not  limited  to  a  granular  form 
(granular potash). The product is generally classified into three basic categories, based 
on the K2O content, namely: 

– 

– 

– 

potassium content not exceeding 40 % K2O–falling under CN code 3104 20 10, 

potassium content exceeding 40 % K2O but less than or equal to 62 % - falling 
under CN code 3104 20 50, 

potassium content over 62 % K2O – falling under CN code 3104 20 90. 

The anti-dumping measures in force specify different levels of anti-dumping duties for 
standard  potash,  on  the  one  hand,  and  the  remaining  forms  of  potash,  including 
granular potash on the other. In this regard it should be recalled that in the last review 
investigation in 2000, it was found that imports of certain special mixtures or blends 
with  an  unusually  high  content  of  potash,  which  do  not  fall  under  of  the  CN  codes 
indicated for potash indicated above, should be considered a product concerned. This 
conclusion  was  reached  as  such  mixtures  and  blends  shared  the  same  basic  physical 
and chemical characteristics and have the same uses as the basic categories mentioned 
above. As the present investigation has also not brought to light any consideration that 
the approach taken previously should not be continued, and accordingly and in order 
to  ensure  a  consistent  application  of  the  anti-dumping  measures,  as  well  as  to  avoid 
erroneous  classification,  it  has  been  considered  necessary,  in  this  Regulation,  to 
confirm  the  finding  of  the  previous  review  investigation  that  the  content  of  K2O  of 
such mixtures and blends as being equal to or exceeding 35%, up to a content of 62% 
by weight, of the dry anhydrous product.  

C. RESULTS OF THE INVESTIGATION 

1. Submissions of interested parties in exporting countries 

(10)  Two  Russian  and  one  Belarusian  exporting  producers,  one  Russian  exporter  and  the 
Russian authorities claimed that due to the high level of the anti-dumping duties and as 
a  consequence  of  the  extension  of  the  measures  to  the  EU10,  their  traditional  trade 
flows to the EU10 would be significantly disrupted.  

(11) 

In particular, they claimed that the sudden sharp price increases triggered by the fixed 
price  anti-dumping  duties  rendered 
the  product  prohibitively  expensive  for 
agricultural, industrial and pharmaceutical end users in the EU10.  

(12) 

It should be noted that neither any exporting producer/exporter from Ukraine, nor the 
Ukrainian authorities came forward. 

5 

 
 
  
 
2. Comments received from the Community Industry  

(13)  The  Community  Industry  stated  that  although  average  prices  in  the  EU10  were  over 
30%  lower  than  those  in  the  European  Union  as  constituted  immediately  prior  to  1 
May 2004 (“the EU15”), it would not oppose any proposals for intermediate measures 
to  be  taken  over  a  transitional  period  which  do  not  adversely  affect  its  present  trade 
patterns in the EU15.  

3. Comments received from Member States 

(14)  The authorities of certain Member States of the EU10 including the Czech Republic, 
Hungary,  Lithuania  and  the  Slovak  Republic  considered  that  special  transitional 
arrangements  should  apply  to  imports  of  the  product  concerned  from  Belarus  and 
Russia following Enlargement.  

(15) 

(16) 

In this regard, it was argued that the product concerned is of strategic importance for 
industrial and agricultural users in the EU10 since it is not produced in these countries, 
nor  can  it  easily  be  substituted  by  another  product.  It  was  also  submitted  that 
producers of the product concerned in the EU15 would not have the capacity to satisfy 
the demands of users in the EU10.  

It was further considered that a sharp and sudden increase in potash fertiliser prices for 
farmers  in  the  EU10  should  be  prevented,  as  they  would  otherwise  face  additional 
hardship  in  adjusting  to  the  new  competition  of  agricultural  producers  in  the  EU15. 
The  importance  of  this  issue  was  further  underlined  by  the  significant  value  of  the 
exports  (around  87  million  Euro  per  annum)  from  Belarus  and  Russia  to  the  EU10 
compared  to  exports  to  the  EU15  of  around  45  million  Euro  per  annum  from  these 
countries.  

(17) 

It was therefore argued that import supply into the EU10 of the product concerned at 
prices which do not suddenly and sharply increase is therefore of utmost importance to 
these end users in the EU10.  

(18)  Accordingly,  these  authorities  took  the  view  that  imports  of  the  product  concerned 
originating in Belarus and Russia into the EU10 should receive special treatment with 
regard to the anti-dumping measures.  

4. Assessment  

(19)  On  the  basis  of  the  available  data  and  information,  an  analysis  was  made  which 
confirmed  that  a  marked  difference  of  around  32%  did  exist  between  the  prevailing 
prices for the same grades of the product concerned in the EU10 and the EU15 (e.g. 
standard  grade  of  potash  in  the  EU10  in  2003  was  around  €79  per  tone,  whilst  the 
same grade in the EU15 in 2003 was, on average, approximately €117 per tone).  

(20)  The analysis also showed the import volumes coming into the EU10 from Belarus and 
Russia  were  significant 
therefore 
approximately  14%  of  total  estimated  consumption  of  the  EU10  and  the  EU15 
together).  

in  2003  (around  1.1  million 

tonnes  and 

(21) 

It was also found that there is no production of the product concerned in the EU10 and 
that there is currently insufficient spare capacity amongst producers in the EU15 to be 

6 

 
 
  
 
able to supply customers in the EU10. Moreover, given the nature of the product, it is 
considered that it would be difficult for buyers in the EU10 to suddenly change from 
their traditional sources of supply.  

5. Conclusion  

(22)  All these various aspects and interests have been taken into account and considered as 
a whole. It emerges from this that the EU10 importers’ and users’ interests would be 
substantially negatively affected by the sudden application of the existing measures if 
they were not to be temporarily adapted.  

(23)  However, by contrast, as the interest of the Community Industry itself confirmed it, its 
interests  would  not  be  unduly  negatively  affected  if  the  measures  were  to  be 
temporarily adapted as under its present trade patterns in the EU15 it cannot currently 
fully satisfy the demands of customers in the EU10.  

(24) 

In such circumstances, it can reasonably be concluded in view of the specific situation 
of Enlargement, that it is not in the Community interest to apply the existing measures 
without temporary adaptation. However, such adaptation with regard to imports of the 
product concerned into the EU10 should not be such as to significantly undermine the 
desired level of trade defence.  

(25)  To  this  end,  different  ways  were  examined  on  how  to  best  protect  the  Community 
Industry  from  injurious  dumping  whilst,  at  the  same  time,  take  into  account  the 
Community  interest  aspects  by  lessening  the  economic  shock  of  the  anti-dumping 
duties to traditional buyers in the new Member States during the period of economic 
adjustment following Enlargement.  

(26) 

It  was  considered  that  this  could  be  best  achieved  by  allowing  the  traditional  export 
volumes from Belarus and Russia to the EU10 be imported free of anti-dumping duties 
for a transitional period, provided that, in lieu of levying anti-dumping duties, export 
prices to these Member States would be increased, by way of minimum import prices 
(“MIP”),  to  levels  which  significantly  contribute  to  the  removal  of  injury.  In  this 
context,  any  exports  to  the  EU10  above  these  traditional  export  volumes  would  be 
subject to the normal anti-dumping duties, as would exports to the EU15.  

6. Undertakings 

(27)  Having  assessed  the  different  options  on  how  best  to  allow  these  traditional  export 
flows to the EU10 to continue, and ensure the significant contribution to the removal 
of  injury,  it  was  considered  that  the  most  appropriate  means  would  be  through  the 
acceptance  of  voluntary  undertakings  from  the  cooperating  parties  with  elements  for 
minimum  import  prices  and  quantitative  ceilings.  Therefore,  in  accordance  with 
Article  8(2)  of  the  basic  Regulation,  undertakings  may  be  suggested  by  the 
Commission to the exporting producers concerned. 

(28) 

In this context, it should be noted that, in accordance with Article 22(c) of the basic 
Regulation, the special circumstances of Enlargement may be taken into account when 
the terms of the undertakings are established. They will constitute a special measure in 
that  they  provide  a  temporary  way  of  adapting  existing  measures  for  the  enlarged 
Community of twenty five Member States.  

7 

 
 
  
 
(29) 

(30) 

It should also be noted that the undertakings will not be directly equivalent to an anti-
dumping duty since the minimum import prices established may at lower levels than 
would  usually  be  the  case.  To  do  otherwise  would,  as  mentioned  above,  render  the 
price of the product concerned prohibitively expensive to end users in the EU10 and, 
therefore,  not  be  in  the  Community  interest.  Nevertheless,  the  exporting  producers 
should  undertake  to  raise  their  prices  to  levels  which  significantly  contribute  to  the 
elimination of injury.  

Import  volumes  (“ceilings”)  should  therefore  be  established  for  the  exporting 
producers Belarus and Russia, using as a basis their traditional export volumes to the 
EU10 in 2001, 2002 and 2003. It should be noted, however, that abnormal increases in 
export  volumes  to  the  EU10  observed  in  the  last  few  months  of  2003  and  the  first 
months of 2004 should be deducted from the traditional volumes used for determining 
the ceilings. 

(31)  When  selling  to  the  EU10  under  the  terms  of  their  undertakings,  the  exporting 
producers concerned should agree to broadly respect their traditional selling patterns to 
individual  customers  in  the  EU10.  The  exporting  producers  should  therefore  aware 
that  any  undertaking  offer  can  only  be  considered  as  practicable,  and  therefore 
acceptable if, for sales covered by the undertakings, they would broadly maintain such 
traditional patterns of trade with their customers in the EU10.  

(32)  The  exporting  producers  should  also  be  aware  that,  under  the  terms  of  the 
undertakings,  if  it  is  found  that  these  sales  patterns  change  significantly,  or  that  the 
undertakings become in any way difficult or impossible to monitor, the Commission is 
entitled  to  withdraw  acceptance  of  the  company’s  undertaking  resulting  in  definitive 
anti-dumping  duties  being  imposed  in  its  place  at  the  level  specified  in  Regulation 
(EC) No 3068/92 or it may adjust the level of the ceiling, or it may take other remedial 
action.  

(33)  Accordingly, any undertaking offers respecting the above conditions may be accepted 

by the Commission by Commission Regulation. 

D. AMENDMENT OF REGULATION (EC) NO 3068/92 

(34) 

In  view  of  the  above,  it  is  necessary  to  provide,  in  the  event  of  undertakings  being 
accepted  by  the  Commission  in  a  subsequent  Commission  Regulation,  for  the 
possibility  to  exempt  imports  to  the  Community  made  under  the  terms  of  such 
undertakings from the anti-dumping duty imposed by Regulation (EC) No 3068/92 by 
amending that Regulation.  

HAS ADOPTED THIS REGULATION:  

Article 1 

Article  2  of  Regulation  (EEC)  No  3068/92,  as  last  amended  by  Regulation  (EC)  No 

1. 
969/2000, is hereby replaced by the following: 

‘Article 2 

1. 

Imports  declared  for  release  into  free  circulation  shall  be  exempt  from  the  anti-
dumping duties imposed by Article 1, provided that they are produced by companies 

8 

 
 
  
 
from  which  undertakings  are  accepted  by  the  Commission  and  whose  names  are 
listed  in  the  relevant  Commission  Regulation,  as  from  time  to  time  amended,  and 
have  been  imported  in  conformity  with  the  provisions  of  the  same  Commission 
Regulation. 

2. 

The imports mentioned in paragraph 1 shall be exempt from the anti-dumping duty 
on condition that:  

(a) 

(b) 

the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 
product described in Article 1, 

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 

(c) 

the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 
description on the commercial invoice.’  

3. 

4. 

Article  2  of  Regulation  (EC)  No  3068/92,  as  last  amended  by  Regulation  (EC)  No 
969/2000, is hereby renumbered Article 3.  

Article  3  of  Regulation  (EC)  No  3068/92,  as  last  amended  by  Regulation  (EC)  No 
969/2000, is hereby renumbered Article 4.  

Article 2 

This Regulation shall enter into force 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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ANNEX  

The  following  elements  shall  be  indicated  on  the  commercial  invoice  accompanying  the 
company's  sales  of  potassium  chloride  to  the  Community  which  are  subject  to  any 
Undertaking: 

1. 

2. 

3. 

4. 

5. 

6. 

The  heading  "COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT 
TO AN UNDERTAKING". 

The  name  of  the  company  mentioned  in  Article  1  of  Commission  Regulation 
[INSERT NUMBER] issuing the commercial invoice. 

The commercial invoice number. 

The date of issue of the commercial invoice. 

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

The exact description of the goods, including: 

– 

– 

– 

– 

– 

Product Code Number (PCN) used for the purposes of the investigation and the 
undertaking (e.g. PCN I, PCN 2 etc), 

plain language description of the goods corresponding to the PCN concerned,  

company product code number (CPC) (if applicable),  

CN code, 

quantity (to be given in tonnes). 

7. 

The description of the terms of the sale, including: 

– 

– 

– 

– 

price per tonne, 

the applicable payment terms, 

the applicable delivery terms, 

total discounts and rebates. 

8. 

9. 

Name  of  the  company  acting  as  an  importer  in  the  Community  to  which  the 
commercial invoice accompanying goods subject to an undertaking is issued directly 
by the company. 

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

“I, the undersigned, certify that the sale for direct export 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],  and  accepted  by  the  European  Commission  through 

10 

 
 
  
 
Regulation  [INSERT  NUMBER].  I  declare  that  the  information  provided  in  this  invoice  is 
complete and correct.” 

11