Council Regulation (EC) No 992/2004 of 17 May 2004 amending Regulation (EEC) No 3068/92 imposing a definitive anti-dumping duty on imports of potassium chloride originating in Belarus, Russia or Ukraine
Date: 2004-05-17
Institutions: Council of the European Union
Subjects: Belarus, Russia, Ukraine, anti-dumping duty, chemical salt, import, originating product

19.5.2004

EN

Official Journal of the European Union

L 182/23

COUNCIL REGULATION (EC) No 992/2004

of 17 May 2004

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,

3. Parties concerned by the investigation

Having regard to the Treaty
Community,

establishing the European

(5)

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), (‘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:

in the Community,

interested parties known to the Commission,
All
associations of
including the Community industry,
exporters/
producers or users
importers and
producers in the countries concerned,
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 oppor-
tunity 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.

(1)

(2)

(3)

(4)

A. PROCEDURE

1. Measures in force

By Regulation (EC) No 969/2000 (2)
the Council
amended and extended the measures imposed by Regu-
lation (EC) No 3068/92 (3), on imports
into the
(‘the
Community
product
potassium chloride
concerned’) originating in the Republic of Belarus
(‘Belarus’), the Russian Federation (‘Russia’) and Ukraine.

of

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

On 20 March 2004 the Commission announced through
the publication of a notice in the Official Journal of the
European Union (4)
interim
(‘the measures’)
review of
pursuant to Articles 11(3) and 22(c) of the basic Regu-
lation.

the initiation of a partial
in force

the measures

the

review was

initiative of

launched at

The
the
Commission in order to examine whether, as a conse-
quence 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.

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 461/2004 (OJ L 77, 13.3.2004, p. 12).

(2) OJ L 112, 11.5.2000, p. 4.
(3) OJ L 308, 24.10.1992, p. 41. Regulation as last amended by Regu-

lation (EC) No 969/2000.
(4) OJ C 70, 20.3.2004, p. 15.

(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,
Belarus

Soligorsk,

JSC Silvinit, Solikamsk, Russia

JSC Uralkali, Berezniki, Russia

(c) Exporter:

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

B. PRODUCT UNDER CONSIDERATION

(7)

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

L 182/24

EN

Official Journal of the European Union

19.5.2004

(8)

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
to 62 % — falling under CN code

or
equal
3104 20 50,

— potassium content over 62 % K2O — falling under

CN code 3104 20 90.

(9)

above,

fall under of

for potash indicated

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
the CN codes
potash, which do not
indicated
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
the approach taken previously
any consideration that
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,
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.

in this Regulation,

C. RESULTS OF THE INVESTIGATION

(10)

(11)

1. Submissions of

interested parties in exporting

countries

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.

In particular, they claimed that the sudden sharp price
increases triggered by the fixed price anti-dumping duties
rendered the product prohibitively expensive for agri-
cultural, 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.

(13)

(14)

(15)

(16)

2. Comments received from the Community Industry

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

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 Enlar-
gement.

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 compe-
tition of agricultural producers
in the EU15. The
importance of this issue was further underlined by the
significant value of the exports (around EUR 87 million
from Belarus and Russia to the EU10
per annum)
compared to exports to the EU15 of around EUR 45
million 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
around 32 % did exist between the
difference of
the product
prevailing prices for the same grades of
concerned in the EU10 and the EU15 (e.g. standard
grade of potash in the EU10 in 2003 was around EUR
79 per tonne, whilst the same grade in the EU15 in
2003 was, on average, approximately EUR 117 per
tonne).

19.5.2004

EN

Official Journal of the European Union

L 182/25

(20)

(21)

The analysis also showed the import volumes coming
into the EU10 from Belarus and Russia were significant
in 2003 (around 1,1 million tonnes and therefore
approximately 14 % of total estimated consumption of
the EU10 and the EU15 together).

It was also found that there is no production of the
there is
product concerned in the EU10 and that
currently insufficient spare capacity amongst producers
in the EU15 to be 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 appli-
cation of the existing measures if they were not to be
temporarily adapted.

(23) However, by contrast, as the Community industry itself
confirmed, 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)

(25)

in the Community interest

In such circumstances, it can reasonably be concluded in
view of the specific situation of enlargement, that it is
not
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.

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
the
economic shock of the anti-dumping duties to traditional
buyers in the new Member States during the period of
economic adjustment following the enlargement.

aspects by

lessening

interest

(26)

It was considered that this could be best achieved by
allowing the traditional export volumes from Belarus
and Russia to the EU10 to 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 signifi-
cantly contribute to the removal of
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.

injury.

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 appro-
priate means would be through the acceptance of
voluntary undertakings
from the cooperating parties
with elements for minimum import prices and quanti-
tative ceilings. Therefore, in accordance with Article 8(2)
of the basic Regulation, undertakings may be suggested
by
exporting producers
concerned.

the Commission to the

(28)

(29)

(30)

In this context,
in accordance
it should be noted that,
with Article 22(c) of the basic Regulation, the special
the enlargement may be taken into
circumstances of
account when the terms of the undertakings are estab-
lished. They will constitute a special measure in that they
provide a temporary way of adapting existing measures
for the EU25.

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 be 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 signifi-
cantly contribute to the elimination of injury.

Import volumes (‘ceilings’) should therefore be estab-
lished 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.

L 182/26

EN

Official Journal of the European Union

19.5.2004

(31) When selling to the EU10 under the terms of

their
undertakings, the exporting producers concerned should
agree broadly to respect their traditional selling patterns
to individual customers in the EU10. The exporting
producers should therefore be aware that any under-
taking offer can only be considered as practicable, and
therefore acceptable if, for sales covered by the under-
takings,
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
the
these sales patterns change significantly, or
undertakings become in any way difficult or impossible
the Commission is entitled to withdraw
to monitor,
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.

that

(33) Accordingly, any undertaking offers respecting the above
conditions may be accepted by the Commission by
Commission Regulation.

HAS ADOPTED THIS REGULATION:

Article 1

In Regulation (EEC) No 3068/92, the following Article shall be
inserted:

‘Article 1 a

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

The imports mentioned in paragraph 1 shall be exempt

2.
from the anti-dumping duty on condition that:

(a)

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

(b) a commercial invoice containing at least the elements listed
in the Annex is presented to Member States' customs autho-
rities 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.’;

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

Article 2

(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 possi-
bility 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,

The text as set out in the Annex to this Regulation shall be
added to Regulation (EC) No 3068/92.

Article 3

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, 17 May 2004.

For the Council
The President

B. COWEN

19.5.2004

EN

Official Journal of the European Union

L 182/27

ANNEX
‘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. The heading “COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING”.

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

6. 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. 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.

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