Council Regulation (EC) No 1050/2006 of  11 July 2006  imposing a definitive anti-dumping duty on imports of potassium chloride originating in Belarus and Russia
Date: 2006-07-11
Institutions: Council of the European Union
Subjects: Belarus, Russia, anti-dumping duty, chemical salt, dumping, import, originating product

12.7.2006

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1050/2006

of 11 July 2006

imposing a definitive anti-dumping duty on imports of potassium chloride originating in
Belarus and Russia

THE COUNCIL OF THE EUROPEAN UNION,

(3)

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports from
countries not members of the European Community (1) (the basic
Regulation) and in particular Article 11(2) and 11(3) thereof,

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

Whereas:

A. PROCEDURE

1. Measures in force

(1)

(2)

The Council, by Regulation (EEC) No 3068/92 (2) (the ori-
ginal Regulation), imposed definitive anti-dumping duties
on imports of potassium chloride (potash or the product
concerned) originating, inter alia, in Belarus and Russia (the
countries concerned).

Following an expiry review pursuant to Article 11(2) and
an interim review pursuant to Article 11(3) of the basic
Regulation (the previous investigation) the Council, by
Regulation No 969/2000 (3), decided that the abovemen-
tioned measures should be maintained and amended the
form of the measures. The measures were imposed in the
form of a fixed amount in euro per tonne for the various
categories and grades of potash.

By Regulation (EC) No 992/2004 (4), the Council provi-
ded for the exemption from the anti-dumping duties of
imports into the new Member States that acceded to the
European Union on 1 May 2004 (the EU-10) made under
the terms of special undertaking offers (enlargement
undertakings), and authorised the Commission to accept
those enlargement undertakings. On this basis, the Com-
mission, by Regulation (EC) No 1002/2004 (5), accepted
enlargement undertakings from (i) an exporting producer
in Belarus jointly with companies situated in Austria,
Lithuania and Russia, (ii) an exporting producer in Russia
jointly with companies situated in Russia and Austria,
and (iii) an exporting producer in Russia jointly with a
company situated at the time of acceptance in Cyprus.

(4)

(5)

By Regulation (EC) No 858/2005 (6), the Commission
accepted new undertakings from the exporting producers
mentioned above until 13 April 2006.

Following two separate partial interim review investiga-
tions pursuant to Article 11(3) of the basic Regulation,
requested by the Russian exporting producers JSC Silvinit
and JSC Uralkali,
the Council, by Regulation (EC)
1891/2005 (7), amended Regulation (EEC) No 3068/92
replacing the fixed amounts of duties with individual
ad valorem duties for all potash types manufactured by
these Russian companies. By Commission Decision
No 2005/802/EC (8), undertakings were accepted from the
two applicant companies.

(6)

Following the publication of a notice of impending expiry
of the anti-dumping measures in force (9), the measures
on imports originating in Ukraine expired on 12 May
2005 since no request for an expiry review was lodged.

(4) OJ L 182, 19.5.2004, p. 23.
(5) OJ L 183, 20.5.2004, p. 16. Regulation as amended by Regula-

tion (EC) No 588/2005 (OJ L 98, 16.4.2005, p. 11).

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

tion (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(2) OJ L 308, 24.10.1992, p. 41.
(3) OJ L 112, 11.5.2000, p. 4, as corrected by OJ L 2, 5.1.2001, p. 42.

(6) OJ L 143, 7.6.2005, p. 11.
(7) OJ L 302, 19.11.2005, p. 14.
(8) OJ L 302, 19.11.2005, p. 79.
(9) OJ C 249, 8.10.2004, p. 3.

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2. Requests for review

2.1. Request for an expiry review

the level of the current measures. Therefore, the continued
imposition of the measures at the existing level, which is
based on the dumping previously established, would no
longer be necessary to offset dumping.

(7)

(8)

(9)

Following the publication of the abovementioned notice
of impending expiry, the Commission received a request
to review these measures with regard to Russia and Bela-
rus pursuant to Article 11(2) of the basic Regulation.

The request was lodged on 10 February 2005 by the Euro-
pean Potash Producers Association (the applicant) on
behalf of producers, whose collective output constitutes
about 99 % of the Community production of potash, i.e.
a major proportion of the total Community production.

The request was based on the grounds that the expiry of
the measures would be likely to result in the continuation
or recurrence of dumping and injury to the Community
industry. Indeed, the applicant alleged that potash from
the countries concerned is still being sold at dumped pri-
ces in the Community. The applicant also claimed that
imports of the product concerned from Belarus and Rus-
sia have increased and the volumes and the prices of the
imported product have continued to have a negative
impact on the market share held, the quantities sold and
the level of prices charged by the Community industry,
resulting in substantial adverse effects on the overall per-
formance and financial situation of the Community indus-
try. Finally, the applicant alleged the likelihood of further
injurious dumping and presented evidence that if measu-
res were allowed to lapse the fragile situation of the Com-
munity industry would further deteriorate.

(10) Having determined, after consulting the Advisory Com-
mittee, that sufficient evidence existed for the initiation of
an expiry review, the Commission initiated an investiga-
tion through the publication of a notice of initiation (1)
pursuant to Article 11(2) of the basic Regulation.

2.2. Request for a partial interim review

(11) A partial interim review limited to dumping was reques-
ted by the sole exporting producer in Belarus, Republican
Unitary Enterprise Production Amalgamation Belaruskali
(Belaruskali).

Belaruskali provided evidence that, as far it is concerned,
the circumstances on the basis of which measures were
established have changed and that these changes are of a
lasting nature.

(12)

(13)

(14) Having determined, after consulting the Advisory Com-
mittee, that sufficient evidence existed for the initiation of
this partial interim review, the Commission initiated an
investigation through the publication of a notice of initia-
tion (2) pursuant to Article 11(3) of the basic Regulation.

3. The investigation

3.1. Period of investigation

(15)

The investigation of the likelihood of a continuation or
recurrence of dumping for the expiry review pursuant to
Article 11(2) of the basic Regulation concerning Belarus
and Russia covered the period from 1 January to
31 December 2004 (IP or the investigation period). The
examination of trends relevant for the assessment of the
likelihood of a continuation or recurrence of injury cove-
red the period from 1 January 2001 up to the end of the
IP (the period considered).

(16)

The investigation period for the partial interim review pur-
suant to Article 11(3) of the basic Regulation concerning
Belarus is the same as the one of the expiry review.

3.2. Parties concerned by the investigation

(17)

The Commission officially advised the Community produ-
cers, the exporters and producers in the exporting coun-
tries and the importers/users as well as their representative
associations known to be concerned and the representati-
ves of the exporting countries of the initiation of the two
reviews. The Commission sent questionnaires to all these
parties and to those who made themselves known within
the time limit set in the notices of initiation. In addition,
the known producers in Canada, which was selected as
the potential analogue country, were contacted and recei-
ved questionnaires. The Commission also gave the parties
directly concerned the opportunity to make their views
known in writing and to request a hearing.

Belaruskali demonstrated that a comparison of normal
value in an appropriate market economy third country
and its export prices to the EU over an extended period
would lead to a reduction of dumping significantly below

(18)

The three Community producers replied to the question-
naire. Fourteen unrelated importers and/or users also sup-
plied full questionnaire replies and made their views
known in writing.

(1) OJ C 89, 13.4.2005, p. 3.

(2) OJ C 89, 13.4.2005, p. 7.

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(19)

Replies to the questionnaires were received from three
exporting producers in the countries concerned, as well
as from five importers in the Community and one expor-
ting trader in Russia which were related to the exporting
producers.

(20) One producer in the analogue country provided a com-
plete questionnaire response and another producer in the
analogue country provided detailed information concer-
ning its cost of production of the like product.

(g) Unrelated users in the Community

— Zaklady Chemiczne ‘Police’ SA, Police, Poland,

— Fosfan S.A., Szczecin, Poland,

— Tessenderlo Chemie NV/SA, Brussels, Belgium,

3.3. Interested Parties and verification visits

— Yara SA, Brussels, Belgium.

(21)

The Commission sought and verified all
information
deemed necessary to determine whether or not there is a
likelihood of a continuation or recurrence of dumping
and injury and whether the continued imposition of the
measures is in the Community interest or not. The Com-
mission also sought and verified all information deemed
necessary to determine the level of dumping for the sole
exporting producer in Belarus. Investigations were carried
out at the premises of the following companies:

(a) Community producers

— Cleveland Potash Limited, Saltburn, United

Kingdom,

— Iberpotash, S.A., Suria (Barcelona), Spain,

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. The product concerned

(22)

The product concerned is the same as in the previous
investigation, i.e. potassium chloride (potash). It is gene-
rally used as agricultural fertiliser, directly, blended with
other fertilisers or after transformation into a complex fer-
tiliser known as NPK (nitrogen, phosphor, potash). The
potassium content is variable and is expressed as a percen-
tage of the weight of potassium oxide (K2O) on the dry
anhydrous product.

— K+S Kali GmbH, Kassel, Germany;

(23)

(b) Exporting producers in Russia

— JSC Silvinit (Silvinit), Solikamsk, Perm Region,

Russia,

— JSC Uralkali (Uralkali), Berezniki, Perm Region,

Russia;

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

— potassium content not exceeding 40 % K2O – falling

under CN code 3104 20 10,

(c) Related exporter to JSC Silvinit and Belaruskali

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

— International Potash Company (IPC), Moscow,

Russia;

(d) Related importer of JSC Silvinit and Belaruskali

— Belurs GmbH (Belurs), Vienna, Austria;

(e) Producers in the analogue country

— Agrium, Inc. (Agrium), Calgary, Alberta, Canada,

— PCS Potash Corp, Inc (PCS), Saskatoon, Saskat-

chewan, Canada;

(f) Unrelated importers in the Community

— AUREPIO SP, Warsaw, Poland;

— potassium content over 62 % K2O – falling under CN

code 3104 20 90

and certain special mixtures or blends with a high content
of potash, namely:

— potassium content equal to or exceeding 35 % K2O
but not exceeding 40 % – falling under CN codes
ex 3105 20 10,
ex 3105 60 90,
ex 3105 20 90,
ex 3105 90 91 and ex 3105 90 99,

— potassium content

exceeding 40 % K2O but
not exceeding 62 % – falling under CN codes
ex 3105 60 90,
ex 3105 20 90,
ex 3105 20 10,
ex 3105 90 91 and ex 3105 90 99.

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As in the previous investigations, it was established that
the different types and qualities of potash all share the
same basic physical and chemical characteristics and
essentially the same basic use. Therefore, they are to be
considered as one single product.

(27) All interested parties were given the opportunity to com-

ment on the choice of the analogue country.

2. Like product

(24)

The investigation confirmed that the product concerned
and the potash produced and sold by the Community pro-
ducers on the Community market, as well as the potash
produced and sold on the domestic market of the coun-
tries concerned and that produced and sold by Canadian
producers on the Canadian market have the same basic
physical and chemical properties and the same uses. They
are therefore considered to be a like product within the
meaning of Article 1(4) of the basic Regulation.

(25) One exporter in Russia requested the exclusion of stan-
dard potash with a K2O content higher than 62 %, which,
it was claimed, is only used in pharmaceutical applica-
tions, has different prices and is delivered as packed (as
opposed to the bulk deliveries of potash used as a fertili-
ser). However, as explained above, the product concerned
shares the same basic physical characteristics and basic
chemical composition of potash of other grades. Regar-
ding the alleged price differences, the investigation has
shown that this product is frequently sold at prices com-
parable to potash with a K2O content of 60-62 %. Fur-
thermore, neither the fact that it has a slightly higher K2O
content nor the way it is packed prevents it from being
used as a fertiliser. Therefore, this claim had to be rejected.

C. DUMPING

1. Dumping of imports during the investigation

period

1.1. Belarus

1 . 1 . 1 . A n a l o g u e C o u n t r y

(26)

Since Belarus is considered a non-market economy
country, the Commission had to determine the normal
value in this case on the basis of data obtained from pro-
ducers in a market economy third country, in accordance
with Article 2(7) of the basic Regulation. In the notice of
initiation, Canada was envisaged as an appropriate analo-
gue country. Canada was also the analogue country used
in all previous investigations in this proceeding.

(28)

(29)

(30)

(31)

The Belarusian authorities argued that Russia would be a
more suitable analogue country than Canada because, after
the previous investigation, Russia has been acknowledged
as a market economy country by the Community. Fur-
thermore, it was alleged that the Canadian domestic mar-
ket is not more competitive than that of Russia. Finally,
they alleged that one of the major Canadian producers is
related through a third company to some producers in the
Community and, therefore, it would not be appropriate
to calculate the normal value for Belarus on the basis of
information provided by Canadian companies.

Furthermore the Belarusian authorities suggested that Rus-
sia should be selected as the analogue country because (i)
the Belarusian and Russian potash producers used to be
part of one industry in the USSR period, (ii) the Russian
potash industry has a level of development which is most
comparable to that of Belarus, and (iii) the production
volume in Russia is more comparable to Belarus than that
of Canada. Moreover, Russia would be a more suitable
choice as an analogue country because access to raw mate-
rials and labour costs in Russia are comparable to these
conditions in Belarus. Finally, it was claimed that Russia
should be selected since the Russian exporting producers
are taking part in the expiry review and the risk of non-
cooperation by the Russian companies is negligible.

Belaruskali alleged that comparability between the access
to raw materials and production process in Canada and
Belarus was not sufficiently substantiated. Moreover, it
alleged that the fact that Canada is the largest producer of
potash is of no direct relevance to the selection of the ana-
logue country and that selection of Russia for this purpose
would be more suitable.

The Community industry claimed that the Belarusian and
the Canadian mines are comparable in respect of cost
structure and efficiency and that the access to raw mate-
rials is largely similar in both countries. Furthermore, it
claimed that the potash prices in Canada are governed by
normal market forces and are not distorted by market iso-
lation or by other factors. Moreover, the Community
industry alleged that there are clear indications that some
cost factors in Russia do not represent correctly the real
cost situation and would need to be adjusted in any event.
Finally, it was submitted that there is a close relationship
between at least one of the Russian producers of potash
and the Belarusian producer via a joint sales company
and, therefore, this company would have an interest to
demonstrate a low normal value on the Russian market.

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(32) As regards the claims made concerning the suitability of
Canada to be used as an analogue country, it has to be
recalled that the normal values for Belarus have been esta-
blished by using Canada as a suitable analogue country in
the previous investigations in the same proceeding and
that there is no evidence indicating that this choice would
no longer be appropriate. Furthermore, it is recalled that
Canada is the main producer and exporter of potash
world-wide, ahead of Belarus and Russia. With regard to
the competition on the Canadian market and the Russian
market, it was found that both in terms of production and
of the number of operators the Canadian market is at least
as competitive as the Russian market. Furthermore, the
investigation showed that no duties or other limitations
apply to the imports of potash into Canada. With regard
to the manufacturing process and access to raw materials,
it is to be recalled that the previous investigations have
already established that the manufacturing process and
access to raw materials are, to a large extent, similar in
Canada and in Belarus and no evidence has been put
forward indicating that this would have changed.

(33) As regards the appropriateness of Russia to be used as the
analogue country, it was concluded that no compelling
reasons were presented by the parties why the informa-
tion obtained from the Russian market instead of that of
the Canadian market should be used as a better basis for
establishing the normal value of potash in Belarus. In this
regard, it has to be recalled that certain cost elements in
Russia were not reasonably reflected in the cost of pro-
duction of the Russian producers and that these cost ele-
ments had to be adjusted in significant amounts as
explained in recital 54. However, it was considered that
the relationship of one Russian producer with the Belaru-
sian producer would not necessarily have been preclusive
to the possible selection of Russia as the analogue country.
The claim that the Russian company would have an inte-
rest in demonstrating a low normal value ignores the fact
that data used in, inter alia, analogue countries is subject
to strict scrutiny before it can be used.

(34)

The institutions took note of the allegations presented by
the Belarusian authorities concerning the relationship
between at least one producer in the analogue country
and the Community producers. Consequently, it was exa-
mined if such relationship existed between the companies
providing the information in Canada and the Community
producers. In this regard, the investigation showed that
one Canadian producer providing the necessary informa-
tion was indirectly related to some producers in the Com-
munity. The information submitted by this company was
verified at the premises of the company and it was found
to be accurate and reliable and to thereby be a sound basis
for establishing normal value. It was concluded that the
relationship of one company in the analogue country with
some of the Community producers was not preclusive to
selecting Canada as the analogue country. Moreover, it was
considered that the Belarusian and Russian producers
being part of one industry during the USSR period did not
make Russia a more suitable analogue country than
Canada, as it was not substantiated how this fact would
have contributed to Russia being a more suitable analo-
gue country. With regard to the production volume in
Canada, it has to be recalled that Canada is the biggest

producer of potash world-wide, selling potash in substan-
tial quantities both domestically and for export. The indi-
vidual Canadian producers, however, differ from each
other in terms of production and sales quantities. This
contributes to that the information available concerning
the Canadian market is balanced and objective. It should
also be recalled that the size of the market is not decisive
for the selection of the analogue country and that based
on economies of scale the bigger market could only
contribute to the benefit of the Belarusian producer. The-
refore also this claim was rejected. Finally, as the claim
concerning the level of development was not substantia-
ted, it had also to be rejected.

(35)

Therefore, the investigation confirmed that Canada should
be used as an appropriate analogue country.

(36)

Consequently, calculations were based on the verified
information from the two Canadian producers.

1 . 1 . 2 . N o r m a l v a l u e

(37)

The domestic sales of the Canadian producer (who provi-
ded a complete questionnaire response) of the like pro-
duct were found to be representative as they represented
a major percentage in relation to the product concerned
exported to the Community by the exporting producer in
Belarus.

(38) An examination was also made as to whether the domes-
tic sales of each product type, sold domestically in repre-
sentative quantities, could be regarded as having been
made in the ordinary course of trade, by establishing the
proportion of profitable sales to independent customers
of the product type in question. In cases where the sales
volume of a product type, sold at a net sales price equal
to or above the calculated cost of production, represented
more than 80 % of the total sales volume of that type, and
where the weighted average price of that type was equal
to or above the cost of production, normal value was
based on the actual domestic price, calculated as a weigh-
ted average of the prices of all domestic sales of that type
made during the IP, irrespective of whether these sales
were profitable or not. This was found to be the case
for one product type of Agrium which was sold on the
Canadian market and exported to the Community by
Belaruskali.

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(39)

For three product types which were not sold on the
domestic market in representative quantities, constructed
normal value was used in accordance with Article 2(3) of
the basic Regulation. Normal value was constructed by
adding to the manufacturing costs of the exported types a
reasonable percentage for selling, general and administra-
tive expenses (SG&A) and a reasonable margin of profit.
In this regard and in accordance with Article 2(6) of the
basic Regulation, the amounts for SG&A and profits were
based on actual data pertaining to the production and sale,
in the ordinary course of trade, of the like product on the
domestic market. The information regarding the cost of
production was based on the responses received from the
two cooperating Canadian producers.

1 . 1 . 3 . E x p o r t p r i c e

(40) Given that the export sales of the cooperating exporter
represented the totality of the imports into the Commu-
nity of the product concerned originating in Belarus
during the IP, the determination of the export price was
based on the information provided by the cooperating
exporting producer in Belarus. It was found that potash
sales of Belaruskali to the Community during the investi-
gation period were made (1) directly to independent cus-
tomers in the Community, (2) through related importers
in the Community or (3) through a related trader located
in Russia (IPC). The related trader in Russia sold the pro-
duct either to unrelated customers in the Community or
to related importers in the Community.

(41) With regard to the sales made directly to independent cus-
tomers in the Community, the prices actually paid or
payable to Belaruskali or to IPC by these customers were
taken as the basis for calculating the export price.

(42) With regard to the sales to related importers in the Com-
munity by Belaruskali or IPC, the export price was cons-
tructed on the basis of the price at which the imported
products were first resold to an independent buyer.
Adjustments were made for all costs incurred between
including
importation and resale by those importers,
SG&A and duties and assuming a reasonable profit mar-
gin. A profit margin of 7,9 % was considered to be reaso-
nable for this type of market and was also found in line
with the profit of unrelated importers.

1 . 1 . 4 . C o m p a r i s o n

(43)

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 affec-
ting price comparability in accordance with Article 2(10)
of the basic Regulation. On this basis, adjustments were
made where appropriate with regard to transport (inclu-
ding handling costs), ocean freight and insurance costs,
packing and credit costs. The adjustments in the export
price in respect of inland freight in the exporting country
and credit costs were made based on the costs established

(44)

(45)

(46)

(47)

in the analogue country. For the export sales made via the
related trader in Russia, an adjustment was also made to
the export price, pursuant to Article 2(10)(i) of the basic
Regulation. The adjustment pursuant to this Article was
made at the level of 3 % since this level was considered
reasonable to reflect commissions paid to independent
agents involved in the trade of the product concerned.

1 . 1 . 5 . D u m p i n g M a r g i n

In accordance with Article 2(11) of the basic Regulation,
the dumping margin was established on the basis of a
comparison of the weighted average normal value with
the weighted average export price per product type. A
comparison of the normal value and the export price of
Belaruskali showed a dumping margin of 27,5 % during
the IP.

The comparison of the data concerning exports to the
Community provided by Belaruskali and the total volume
of imports as derived from the Eurostat import statistics
indicated that the level of cooperation was high, since as
mentioned above, Belaruskali’s exports represented the
totality of all Community imports from Belarus during
the IP.

1.2. Russia

1 . 2 . 1 . N o r m a l v a l u e

It was first established for each of the two cooperating
exporting producers whether its total domestic sales of the
like product were representative, i.e. whether the total
volume of such sales represented at least 5 % of its total
export sales volume to the Community, in accordance
with Article 2(2) of the basic Regulation. This was found
to be the case for both exporting producers.

Subsequently, by defining the product types in accordance
with the TARIC codes under which the product is classi-
fied (i.e. by standard grade or other than standard grade,
including granular) and by the packing or form in which
it is shipped (i.e. in bulk, in bags or in containers), an ana-
lysis was made as to whether the domestic sales of each
product
type were sufficiently representative for the
purposes of Article 2(2) of the basic Regulation. Domes-
tic sales of a particular product type were considered suf-
ficiently representative when the total domestic sales
volume of that type during the IP represented 5 % or more
of the total sales volume of the comparable product type
exported to the Community. This was the case for three
out of four product types exported to the Community by
Uralkali and for two out of three product types exported
to the Community by Silvinit.

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(48) An examination was also made as to whether the domes-
tic sales of each product type, sold domestically in repre-
sentative quantities, could be regarded as having been
made in the ordinary course of trade, by establishing the
proportion of profitable sales to independent customers
of the product type in question. In cases where the sales
volume of a product type, sold at a net sales price equal
to or above the adjusted unit cost, represented more than
80 % of the total sales volume of that type, and where the
weighted average price of that type was equal to or above
the adjusted unit cost, normal value was based on the
actual domestic price, calculated as a weighted average of
the prices of all domestic sales of that type made during
the IP, irrespective of whether these sales were profitable
or not. This was found to be the case for all those pro-
duct types of Silvinit and Uralkali which were both sold
domestically and exported to the Community.

(49) Wherever domestic prices of a particular product type sold
by an exporting producer could not be used in order to
establish normal value because they had not been sold on
the domestic market in representative quantities, another
method had to be applied. In the absence of any other
reasonable method, constructed normal value was used.

(50)

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, a reasonable
percentage for selling, general and administrative expen-
ses (SG&A) and a reasonable margin of profit. In this
regard and in accordance with Article 2(6) of the basic
Regulation, the amounts for SG&A and profits were based
on actual data pertaining to the production and sale, in
the ordinary course of trade, of the like product on the
domestic market.

(52)

The data provided showed that the energy requirements
of the two Canadian producers were similar to those of
the Russian producers and that electricity and gas pur-
chased by these companies was derived from domestic
hydroelectric power and major gas fields, as is the electri-
city and gas used by the Russian companies. The compa-
rison showed that the cost per unit for electricity paid by
the Canadian producers was similar to that paid by the
Russian producers.

(53) As concerns gas supplies, it was established on the basis
of data found in the published annual report for 2004 of
the Russian gas provider OAO Gazprom (whose regional
distributor was the supplier to the exporting producers in
question) that the domestic price of gas paid by the two
Russian producers was around one fifth of the export price
of natural gas from Russia. The same report says that
‘OAO Gazprom together with the Government of the Rus-
sian Federation carry out a lot of work to optimise the
regulated gas wholesale prices.’ According to the analysis
presented in the said report, there is ‘a risk of low prices
for the natural gas sold in the domestic market’ and ‘Gaz-
prom Group is required to supply natural gas to Russian
consumers at prices regulated by the Federal Tariff Ser-
vice. As of now, these prices are considerably lower than
the international prices for natural gas.’ Moreover, as it
was found in the previous review investigation concluded
in November 2005 by Regulation (EC) No 1891/2005,
the annual report of 2003 stated that ‘OAO Gazprom did
not make any profit in the domestic market’. In this regard,
as the gas prices paid by the companies did not increase,
there is no indication that this situation would have chan-
ged in the IP. Therefore, all available data strongly suggest
that the gas prices charged to domestic customers were
made at regulated prices far from cost recovery levels.
Moreover, the investigation showed that the price of gas
paid by the two Russian producers was significantly lower
than the gas price paid by the two Canadian producers.

(51) As concerns energy costs, such as electricity and gas used
in the mining and production processes of the product
concerned, the investigation established that these costs
form a significant proportion of the total cost of manu-
facturing of potash producers, not only in Russia but in
other producing countries as well.
It was considered
appropriate in the present case to also compare the Rus-
sian producers’ energy purchase costs per unit to those of
other major potash producers with similar production
methods, output levels and similar natural advantages in
order to determine whether the prices paid were not
abnormally low and reasonably reflecting the normal
costs. As there are no other producers of potash in Rus-
sia, this information was sought and obtained from two
Canadian producers.

(54)

In view of the above, it was therefore considered that the
prices charged by the regional Russian gas provider to the
Russian potash producers in the investigation period could
not reasonably reflect the costs associated with the pro-
duction of gas when compared to the exported price of
gas from Russia and the price of a Canadian gas provider
to major industrial users in Canada. Therefore, in accor-
dance with Article 2(5) of the basic Regulation, an adjust-
ment to the cost of production for each of the Russian
companies was made. In the absence of any other reaso-
nable basis, such an adjustment was made using informa-
tion concerning the price of gas for export, net of
transport costs, value added tax and excise duty. This
adjustment was made in accordance with the methodo-
logy used in the previous review investigation concluded
in November 2005 by Regulation (EC) No 1891/2005.

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Official Journal of the European Union

12.7.2006

(55) As regards the adjustment concerning the prices of natu-
ral gas, the Russian authorities put forward that natural
comparative or competitive advantages must be properly
taken into account in anti-dumping proceedings. Moreo-
ver, the Russian authorities alleged that the methodology
used for determining profit while constructing the nor-
mal value was illegal and unacceptable. To this end, it has
to be recalled that no adjustment was effected concerning
any referred comparative or competitive advantages.
However, an adjustment was made concerning the costs
of gas associated with the production of potassium chlo-
ride pursuant to Article 2(5) of the basic Regulation as
explained in recitals 51 to 54 above as these costs were
not reasonably reflected in the records of the parties
concerned. With regard to the construction of the normal
value, this was done in accordance with Article 2(6) of the
basic Regulation as explained in recital 50 above. Conse-
quently, these arguments were rejected.

(60)

In all cases where exports of potash were made to inde-
pendent customers in the Community, the export price
was established in accordance with Article 2(8) of the basic
Regulation, i.e. on the basis of export prices actually paid
or payable. With regard to the sales to related importers
in the Community by the related trader, the export price
was constructed on the basis of the price at which the
imported products were first resold to an independent
buyer. Adjustments were made for all costs incurred
between importation and resale by those importers, inclu-
ding SG&A and duties and assuming a reasonable pro-
fit margin, in accordance with Article 2(9) of the basic
Regulation. A profit margin of 7,9 % was considered to
be reasonable for this type of market and was also found
in line with the profit of unrelated importers.

(56) As also concerns cost of production, it was claimed by the
Community industry that depreciation based conventio-
nally on the acquisition (historical) value of the capital
assets would not, in accordance with Article 2(5) of the
basic Regulation, reasonably reflect the costs associated
with the production of the product concerned. It was sub-
mitted, therefore, that an upward adjustment to the Rus-
sian producers’ costs was required.

(61)

(57)

In this regard, the on-the-spot verification visits to the Rus-
sian producers showed that the original value of their
assets had been determined on the basis of valuations car-
ried out during the privatisation process which took place
in 1993. These asset values were subsequently revised
between 1993 and 1997 as a result of the application of
‘revaluation coefficients’ issued by the Russian Govern-
ment to deal with hyperinflation. At the end of 1997, fol-
lowing a Decree of the Russian Government, independent
valuations of assets were carried out by independent eva-
luators. Three basic criteria were adopted in establishing
these asset values, one of which was the replacement value
of the asset. The result of these independent assessments
are reflected in the opening balance sheet of the compa-
nies in 1998.

(58)

Therefore,
in the absence of any substantive evidence
showing that depreciation had not been correctly reflec-
ted in the accounts of the exporting producers, it is not
considered warranted at present time to make any adjust-
ment to depreciation costs in the cost of production data
used for establishing the normal value of the companies.

1 . 2 . 2 . E x p o r t p r i c e

(59) With regard to Silvinit, it was found that the company’s
sales of potash to the Community during the investiga-
tion period were made (1) directly to independent custo-
mers in the Community, (2) through related importers in
the Community or (3) through an unrelated trader loca-
ted in Switzerland. In the case of Uralkali all sales of
potash to the Community were made through unrelated
traders located in Cyprus and in Switzerland.

1 . 2 . 3 . C o m p a r i s o n

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 affec-
ting price comparability in accordance with Article 2(10)
of the basic Regulation. On this basis, adjustments were
made, where appropriate, with regard to indirect taxes,
transport (including handling costs), ocean freight and
insurance costs, packing and credit costs. Adjustments
were also made where the export sales were made via a
related company located in a country outside the Commu-
nity, pursuant to Article 2(10)(i) of the basic Regulation.
The adjustment pursuant to this Article was made at the
level of 3 % since this level was considered reasonable to
reflect commissions paid to independent agents involved
in the trade of the product concerned.

1 . 2 . 4 . D u m p i n g m a r g i n

(62)

(63)

In accordance with Article 2(11) of the basic Regulation,
the dumping margin was established on the basis of a
comparison of the weighted average normal value with
the weighted average export prices per product type. This
comparison showed the existence of significant dumping
of imports of the product concerned by the cooperating
exporters at the level of more than 8 % for Uralkali and
more than 14 % for Silvinit.

The comparison of the data concerning exports to the
Community provided by the exporting producers and the
total volume of imports as derived from the Eurostat
import statistics indicated that the level of cooperation
was high, since, the cooperating exporting producers
represented the totality of all Community imports from
Russia during the IP.

12.7.2006

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Official Journal of the European Union

L 191/9

2. Likelihood of continuation of dumping

2.1. General

(64)

The three cooperating producers represent the totality of
imports from the countries concerned. The examination
of whether it would be likely that dumping continues
should measures be repealed was therefore based to a large
extent on the information provided by these cooperating
exporting producers.

(65)

(66)

2 . 1 . 1 . C u r r e n t D u m p i n g

In order to determine whether there was a likelihood of
continuation of dumping, the Commission investigated
the existence of current dumping on exports from the
countries concerned to the Community on the grounds
that if dumping was taking place, then it was reasonable,
in the absence of any information to the contrary,
to consider that it would be likely to continue in the
future. In this regard, it is recalled that the level of dum-
ping for potash originating in both of the countries
concerned continued to be significant (see recitals 26
to 62).

2 . 1 . 2 . R e l a t i o n s h i p b e t w e e n e x p o r t p r i c e s
s a l e s

a n d t h e

t o t h i r d c o u n t r i e s
p r i c e i n t h e C o m m u n i t y

It is also noted that export prices to third countries by all
the producers concerned were found to be on average
below the sales prices of the Community industry in the
Community. This means that the prevailing price level for
the product concerned in the Community market makes
the Community market a very attractive one for the expor-
ters in the countries concerned. On this basis, it was consi-
dered that there is indeed an economic incentive to shift
exports from non-EU countries to the more profitable
Community market in case of repeal of the measures in
force.

2.2. Belarus

2 . 2 . 1 . P r o d u c t i o n ,

p r o d u c t i o n

c a p a c i t y

a n d i n v e s t m e n t

i n B e l a r u s

(68) During the period considered, Belaruskali has increased its
production capacity by 3 %. A further growth of 12 per-
centage points in production capacity was foreseen by
2006. In addition, it is noted that whilst Belaruskali was
producing potash close to full capacity levels during the
IP, it declared a significant further increase in its capacity
and total investment in 2005 and 2006. The reported pro-
duction capacity and investment translated in euros in an
indexed form is as follows:

2001 2002

2003

2004
(IP)

2005
(*)

Production capacity

100

100

100

103

114

Investment

100

132

111

128

175

(*) Based on Belaruskali’s estimate.

2006
(*)

115

175

(69)

Based on the above, it can be concluded that Belaruskali
has potential capacity to increase its exports to the Com-
munity market should the measures be repealed as Bela-
ruskali declared a further increase of
its production
capacity and significant growth in its investment activity.

2 . 2 . 2 . D o m e s t i c m a r k e t

i n B e l a r u s

(70)

The domestic sales of potash in Belarus remained at a low
level during the period considered, representing less than
10 % of the total sales of Belaruskali. In fact, the domestic
sales volume in Belarus decreased by 3 % between 2001
and the IP. As the domestic market was slightly shrinking
it could not absorb the increase of the production. This is
not likely to change in the future. Therefore, the company
has to export an essential part of its production.

2 . 2 . 3 . B e l a r u s i a n e x p o r t

s a l e s

t o o t h e r

c o u n t r i e s

(67)

Belaruskali has managed to increase its production by
25 % during the period considered. As the table shows,
the production volumes have mainly increased in 2003
and the IP.

(71)

Actual production in Belarus

100

102

114

125

2001

2002

2003

IP

Information provided by the sole exporting producer in
Belarus showed that sales to non-EU countries were made
in significant quantities, accounting for 82 % of total
exports (the main export markets being the People’s Repu-
blic of China, Brazil and India). Furthermore, export volu-
mes to third countries increased by 25 % between 2001
and the IP. Therefore, the investigation confirmed that
most of the potash production in Belarus was directed to
export markets in increasing quantities.

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Official Journal of the European Union

12.7.2006

(72)

The prices of the types of potash sold to the Community
by Belaruskali were, on average, found slightly higher than
the prices of corresponding types of potash sold to third
markets. Since, as concluded in recital 44, export sales
from Belarus to the Community were made at dumped
levels, this indicated that exports to third markets were
also dumped at slightly higher levels than the export sales
to the Community. Moreover, the Community market is
more attractive to exports of potash at dumped prices
from the company concerned due to its slightly higher
price level, its proximity, reduced payment risks due to
the solvency of customers, and due to favourable payment
terms.

2.3. Russia

2 . 3 . 1 . P r o d u c t i o n ,

p r o d u c t i o n

c a p a c i t y

a n d i n v e s t m e n t s i n R u s s i a

(73)

The Russian producers have managed to increase their
production by 29 % during the period considered. As
the table shows, the production volumes have mainly
increased during the IP.

Actual production in Russia

100

104

112

129

2001

2002

2003

IP

(74) Whilst the production capacity of the two Russian com-
panies had remained stable during the period considered,
the companies indicated an increase of 6 % by 2006. Fur-
thermore, according to the information submitted by the
Russian producers,
they still had available capacity
to increase production of potash.

2001

2002

2003

2004
(IP)

2005
(*)

2006
(*)

100

100

100

100

102

106

Production
capacity in
Russia

(*) Based on the Russian producers’ estimates.

(76)

Based on the above, it can be concluded that the expor-
ting producers in Russia have available capacity to increase
their exports to the Community market should the measu-
res be repealed. Moreover, both companies declared signi-
ficant growth in their investments suggesting a potential
further increase in their production capacity.

2 . 3 . 2 . D o m e s t i c m a r k e t

i n R u s s i a

(77)

The domestic sales of potash in Russia remained at a low
level during the period considered, representing, on an
average, less than 15 % of the total sales of the two com-
panies. The volume of domestic sales in Russia increased
by 5 % between 2001 and the IP. The growth of the
domestic market could not absorb the increase of the pro-
duction (29 %) and therefore the two companies have to
export an essential part of their production.

2 . 3 . 3 . R u s s i a n

e x p o r t

s a l e s

t o

o t h e r

c o u n t r i e s

(78)

(79)

Information provided by the exporting producers showed
that sales to non-EU countries were made in significant
quantities, accounting for 95 % of total exports (the main
export markets being the People’s Republic of China
and Brazil). Furthermore, the Russian exports to third
countries grew by 46 % between 2001 and the IP. There-
fore, the investigation confirmed that most of the potash
production in Russia was directed to export markets in
increasing quantities.

The prices of the types of potash sold to the Community
by the companies concerned were found to be lower than
the prices of corresponding types of potash sold to third
markets. However, the Community market is still attrac-
tive to exports of potash at dumped prices from the com-
panies concerned due to its proximity, reduced payment
risks due to the solvency of customers and due to favou-
rable payment terms.

(75)

In addition, they reported significant growth in their
investment in 2005 and 2006. The reported investment
translated into euro in an indexed form is as follows:

2.4. Conclusion on the likelihood of continuation of dumping

2001 2002

2003

2004
(IP)

2005
(*)

2006
(*)

Investment in Russia

100

64

71

84

103

261

(*) Based on the Russian companies’ estimates.

(80)

The fact that the generally prevailing price level of the
Community producers in the Community is higher than
the average export price level of the Belarusian and
Russian exporting producers to third markets must be
considered as an incentive for increasing exports to the
Community at dumped prices.

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Official Journal of the European Union

L 191/11

(81)

Since the exporting producers in both Belarus and Russia
have unused production capacity and taken that all com-
panies concerned showed significant increase in their total
investment and production capacity, it can be concluded
that, should the measures be repealed, additional produc-
tion would be exported to the Community, or sales cur-
rently exported to countries outside the Community
would be redirected towards the Community market in
significant quantities.

(87) As the Community industry is comprised of only two
groups of manufacturers, information regarding the Com-
munity industry can only be given in indexed form, for
confidentiality reasons. For the purposes of the injury ana-
lysis, only potash produced by the Community industry
was taken into consideration, while resales of purchased
potash (mainly potash produced by the ICL Group in
Israel) were excluded.

(82) Moreover, the investigation showed that the potash mar-
ket outside the Community was characterised, during the
IP, by certain volatility, in the form of considerable fluc-
tuations of export prices. This volatility is deemed to be
the result of an exceptional situation caused by the strong
increase in the demand in some emerging markets, such
as those of Asia and South America. Under these circums-
tances, it is likely that significant quantities of potash from
Belarus and Russia would be redirected to the rather sta-
ble Community market, should the growth in these export
markets reach saturation and the increase in demand
consequently stop or turn into a decrease. In this respect,
it should also be noted that the overseas markets are sub-
ject to much higher transportation costs than the Com-
munity market, which, being close, is more cost-efficient
to reach by boat or rail.

(83) As regards prices, the investigation showed that imports
into the Community originating in Belarus and Russia are
still made at dumped prices. Therefore, it is to assume, in
the absence of any indication to the contrary, that dum-
ping would likely continue in the future.

(84)

For these reasons, it is concluded that there is a likelihood
of continuation of dumped imports from the countries
concerned and that the dumped imports would increase
considerably should measures be repealed.

D. LIKELIHOOD OF CONTINUATION OR
RECURRENCE OF INJURY

1. Definition of the Community industry

The investigation confirmed that the three complainant
Community producers represented 99 % of the Commu-
nity production of potash. They therefore constitute the
Community industry within the meaning of Article 4(1)
of the basic Regulation.

(85)

(86)

(88)

The analysis of injury indicators has been carried out on
the basis of Eurostat data and of the information submit-
ted in the questionnaire responses by the cooperating
exporting producers and by the Community industry.

2. Analysis of the situation of the Community
industry and of the Community market for potash

2.1. Community consumption

(89)

The total consumption of potash in the Community was
calculated by adding to the sales of the Community indus-
try on the Community market the imports into the Com-
munity of potash originating in the countries concerned
and from all other third countries.

(90) On this basis, Community consumption increased from
7 231 000 tonnes in 2001 to around 8 030 000 tonnes
in the IP, i.e. an increase of approximately 11 %.

Community
consumption in
1 000 tonnes

2001

2002

2003

2004
(IP)

EU-10

Index

EU-15

Index

EU-25

Index

1 053

1 055

1 154

1 381

100

100

110

131

6 177

6 206

6 568

6 649

100

100

106

108

7 231

7 262

7 722

8 030

100

100

107

111

Since two Community producers are related companies
(Cleveland Potash Ltd. and Iberpotash S.A. both belong to
the ICL Group, Israel Chemicals Ltd, Tel-Aviv), the Com-
munity industry is comprised of only two independent
groups of manufacturers, the ICL Group and K+S Kali
GmbH.

(91) During the period considered, virtually all imports from
Belarus and Russia into the EU-15 were made under the
inward processing relief mechanism (IPR), while IPR was
not used for the imports into the EU-10. Imports under
IPR enter into competition with the like product manufac-
tured by the Community industry, as they are processed

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Official Journal of the European Union

12.7.2006

in the Communityby fertiliser manufacturers who buy part
of their raw materials used in the production of complex
fertilisers, which are also destined for export, from the
Community industry. Imports under IPR therefore were
taken into account in line with the consistent practice of
the Community institutions, in establishing the Commu-
nity consumption and the analysis of imports from the
countries concerned.

Market share of the
countries concerned

2001

2002

2003

IP

Belarus EU-15

Belarus EU-10

Belarus EU-25

Russia EU-15

Russia EU-10

Russia EU-25

100

100

100

100

100

100

100

57

105

94

88

100

112

95

98

116

114

90

90

89

108

143

107

129

97

107

100

123

2.2. Imports from the countries concerned

Countries concerned EU-25

2 . 2 . 1 . V o l u m e o f

i m p o r t s

2 . 2 . 3 . P r i c e e v o l u t i o n a n d p r i c e b e h a v i o u r

2 . 2 . 3 . 1 . P r i c e e v o l u t i o n o f

t h e i m p o r t s

c o n c e r n e d

(92) During the IP, the exporting producers in the countries
concerned sold potash on the EU-10 market under the
terms of special enlargement undertakings referred to
above in recital 3. The quantities sold under the terms of
the undertaking have been taken into account to reflect
the presence of the countries concerned on the EU market.

(95)

The prices of the imports subject to investigation over the
period considered followed a downward trend as the table
below shows. There has been a moderate price increase
during the IP following an increase in demand in other
third countries, mainly in China. This increase was, howe-
ver, significantly smaller than the price decreases in the
previous years.

(93)

The volume of imports of potash originating in Russia
into the EU-25 increased by 19 % during the period consi-
dered. The volume of imports originating in Belarus
increased, during the same period, by 44 %. The overall
imports from the countries concerned, calculated on an
EU-25 basis, increased by 37 % during the period consi-
dered. After a slight decrease in 2002 due to a decrease in
sales from Belarus mainly to Spain, sales from the coun-
tries concerned significantly increased in 2003 and 2004
by around 20 % in both years.

Import quantity

2001

2002

2003

Belarus EU-15

Belarus EU-10

Belarus EU-25

Russia EU-15

Russia EU-10

Russia EU-25

Countries concerned EU-25

100

100

100

100

100

100

100

58

105

94

88

112

101

96

104

127

122

95

98

97

115

2004
(IP)

154

140

144

105

131

119

137

Average prices of potash
in EUR/tonne (EU-25)

2001

2002

2003

Belarus (Index)

Russia (Index)

Total (Index)

100

100

100

95

97

95

82

78

82

IP

95

84

93

(96)

The average decrease in the price of potash from the
countries concerned amounts to 7 % during the period
considered.

2 . 2 . 3 . 2 . P r i c e B e h a v i o u r

(97)

to establish price undercutting, prices of
In order
exports of potash originating in Belarus and Russia for
sale to independent customers were compared to invoi-
ced prices made by the Community industry for its sales
on the Community market. It was thus established that
the undercutting margin for potash of Belarusian origin
was 18 %, while the undercutting margin for potash
originating in Russia was between 17-23 %.

2 . 2 . 2 . M a r k e t s h a r e

2.3. Economic situation of the Community industry

(94)

The market share of the imports from the countries
concerned into the Community market increased by 23 %
during the period considered. However, the increase has
not been constant: the market share remained almost sta-
ble until 2003 and then suddenly increased in 2004.

(98) During the period considered, the total production of
potash in the Community has slightly grown with the
exception of 2002, when the production slightly decreased

2 . 3 . 1 . P r o d u c t i o n

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Official Journal of the European Union

L 191/13

dueto a shortage of hoisted mineral from the mines for
one Community producer. Figures for the total Commu-
nity production of potash were as follows:

2 . 3 . 6 . G r o w t h

Production

Index

2001

100

2002

95

2003

102

IP

104

(103) Although the Community potash market increased by
11 % during the period considered, the Community indus-
try was not in a position to benefit from this. They were
only able to increase their EU sales volume by 1 %, which
is significantly less than the market growth.

2 . 3 . 2 . P r o d u c t i o n c a p a c i t y

2 . 3 . 7 . P r i c e d e v e l o p m e n t

(99)

Production capacity of the Community industry was sta-
ble throughout the period considered. Figures of total pro-
duction capacity of potash were as follows:

Capacity

Index

2001

100

2002

100

2003

100

IP

100

2 . 3 . 3 . C a p a c i t y u t i l i s a t i o n

(100) Capacity utilisation of the Community industry decreased
in 2002 but began to increase in 2003. Over the period
considered the capacity utilisation of the Community
industry for potash increased by 3 %.

(104) The investigation showed that the Community producers’
average selling price rose in the course of the period consi-
dered by 6 %. It first remained rather stable between 2001
and 2003, but then increased by 6 % between 2003 and
the IP. The increase in price coincides with a significant
increase in demand in other third countries, mainly in the
People’s Republic of China. This shows that prices on the
Community potash market are influenced by the demand
prevailing on other markets. The average sales price of the
Community industry for potash on the Community mar-
ket developed as follows:

Average sales price
in EUR/tonne

2001

2002

2003

IP

Index

100

99

100

106

Capacity utilisation

2001

2002

Index

100

96

2003

102

IP

103

2 . 3 . 8 . P r o f i t a b i l i t y

2 . 3 . 4 . E U S a l e s v o l u m e

(101) The total sales volume of the Community industry to unre-
lated customers in the EU slightly increased by 1 % during
the period considered as shown below:

EU sales volume

2001

2002

Index

100

98

2003

102

IP

101

(105) The profitability of domestic sales of the Community
industry, expressed as a percentage of net sales, increased
during the period considered. While the Community
industry suffered losses in 2001 and 2002, they regained
profitability in 2003 and 2004. The profitability of the
Community industry on the Community market
for
potash developed as follows:

Profit rate

2001

2002

2003

Index

– 100

– 497

51

IP

412

2 . 3 . 5 . M a r k e t s h a r e

2 . 3 . 9 . E m p l o y m e n t ,
w a g e s

p r o d u c t i v i t y

a n d

(102) The Community industry’s market share continually
decreased during the period considered as shown below:

(106) Employment in the Community industry remained essen-

tially stable:

EU market share

2001

2002

2003

Index

100

97

95

IP

91

Personnel employed in the
production of potash

2001

2002

2003

IP

Index

100

100

101

100

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2 . 3 . 1 0 . S t o c k s

Cash flow

Index

2001

100

2002

56

2003

127

IP

164

(107) The closing stocks of the Community producers for
potash constantly decreased by about 27 % during the
period considered. Closing stocks of the Community
industry have been, on a medium-term average, around
500 000 tonnes. Closing stocks at the end of the IP have
been below average due to increased sales, in particular
because of increased exports, and for logistical reasons.
The closing stocks of the Community industry of potash
developed as follows:

Closing stocks

Index

2001

100

2002

2003

93

84

IP

73

2 . 3 . 1 1 .

I n v e s t m e n t s

(108) Total investments of the Community industry initially
significantly increased between 2001 and 2002, but sub-
sequently decreased to a level 22 % below the 2001 figu-
res mainly due to a planned reduction on replacement
investments for one Community producer. The invest-
ments of the Community industry developed as follows:

Investments

Index

2001

100

2002

147

2003

98

IP

78

2 . 3 . 1 2 . R e t u r n o n i n v e s t m e n t s

(109) As the net book value of assets used for the production
of the like product has changed very little during the
period considered, return on investment has developed in
parallel with profitability.

Return on investments

2001

2002

2003

Index

– 100

– 477

48

IP

412

2 . 3 . 1 3 . C a s h f l o w a n d
c a p i t a l

a b i l i t y

t o r a i s e

(110) Total cash flow of the Community industry first decreased
considerably between 2001 and 2002, but thereafter
increased in 2003 and the IP. During the period conside-
red cash flow increased by 64 %.

(111) All the Community producers are part of large corporate
groups listed on the stock exchange, which allows them
to raise capital within the group.

2 . 3 . 1 4 . M a g n i t u d e

o f
r e c o v e r y f r o m p a s t d u m p i n g

d u m p i n g

a n d

(112) As concerns the impact on the Community industry of
the magnitude of the actual margin of dumping found in
the IP, given the volume and prices of imports from these
two countries, this impact cannot be considered to be
negligible. However, it should be noted that the margin
for Belarus is lower than the one that was found in the
previous investigation. It should also be noted that the
volume of dumped imports from Belarus and Russia has
increased since the previous investigation.

2 . 3 . 1 5 . C o n c l u s i o n o n t h e s i t u a t i o n o f t h e

C o m m u n i t y i n d u s t r y

(113) The Community industry is still in a process of recovery
from the past dumping. During the period considered this
recovery materialised to a certain extent in the increase of
sales prices and a positive development of indicators such
as production, capacity utilisation, sales volumes and
stocks. These positive developments resulted in a profita-
ble situation for the Community industry during the IP.
However, the market share showed a negative trend and
as said above the Community industry had to cut down
investments. Moreover, the profit level achieved is still
substantially below the profit which was considered as a
level that the Community industry could expect to achieve
in the absence of dumped imports, i.e. 9 %. Therefore, it
can be concluded that the Community industry has par-
tially recovered from the injurious dumping, but is still in
a fragile situation.

(114) Subsequent to disclosure of the findings, one exporter and
an interested party claimed that the negative development
of some injury indicators was influenced by the fact that
one Community producer located in France had ceased its
potash production in the course of the period of analysis.
In this respect, it should be noted that, since this French
producer had ceased its potash production during the year
2001 and its inclusion in the injury analysis for that year
only would have distorted the comparability of data, infor-
mation relating to that Community producer was never
included in the injury indicators.

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2.4. Import volumes and import prices from other third countries

2.5. Export activity of the Community industry

(115) The import volume of potash from other third countries
increased during the period considered from about
1 016 000 tonnes in 2001 to 1 255 000 tonnes during
the IP. This corresponds to an increase of 24 %. The major
part of the increase is attributable to imports from Israel
and Jordan. It should be noted that imports from Israel
were predominantly made by companies related to the
Community industry.

Imports from other
third countries in
thousand tonnes

Israel

Jordan

Canada

Other countries

2001

2002

2003

IP

552

140

225

91

745

180

184

96

740

210

174

95

643

278

203

128

Change
2001-IP

+ 17 %

+ 99 %

– 10 %

– 55 %

Total

1 016

1 209

1 223

1 255

+ 24 %

(116) The market share of imports from other third countries
increased slightly from 14 % in 2001 to 15 % in 2004.
Imports from those countries were predominantly made
into the EU-15.

(117) According to Eurostat, the average sales price for these
imports decreased from EUR 134,94 per tonne in 2001
to EUR 127,24 per tonne during the IP, but nevertheless
always exceeded the prices of the Community industry and
were significantly higher than prices of potash originating
in Russia and Belarus. In detail, the development was as
follows:

Average import
prices from other
third countries
(EUR/tonne)

2001

2002

2003

IP

Change
2001-IP

Israel

Jordan

Canada

119,80 126,25 127,17 125,16

+ 4 %

170,55 145,41 123,69 117,02

– 31 %

139,83 137,12 120,46 127,51

– 9 %

Other countries 159,95 142,94 158,24 157,76

– 1 %

Total

134,94 132,10 128,03 127,24

– 6 %

(118)

It follows from the above that, in particular in view of
their higher price levels and their rather stable market
share, imports from third countries did not affect the
current situation of the Community industry.

(119) The Community industry’s exports of potash to third
countries had a positive trend. The overall increase in
exports amounts to 23 % in the period considered. Exports
had therefore no negative effect on the situation of the
Community industry. In detail, the development during
the period considered was as follows:

Export sales volumes of the
Community industry

2001

2002

2003

IP

Index

100

107

127

123

3. Conclusion on continuation or recurrence
of injury

3.1. Current situation of the Community industry

(120) As mentioned in recital 90, the Community consumption
of potash increased by about 11 % during the period
considered, reaching its highest level in 2004.

(121) While the market share of the Community industry decli-
ned by 9 %, the market share of the countries concerned
increased by 23 % during the period considered.

(122) The market share of other third countries increased by 1
percentage point to a level of 15 % at prices not undercu-
tting the sales prices of the Community industry. There-
fore, it is considered that the imports from other third
countries have not had any significant impact on the eco-
nomic situation of the Community industry during the IP.

(123) At the same time the evolution of the economic situation
of the Community industry has been mixed, a number of
injury indicators such as market share and investments
have developed negatively, while others, such as produc-
tion, sales volume, sales prices and profitability have
improved.

(124) The investigation showed the existence of abnormally
low import prices which continue to be dumped and had
a negative effect on the sales volumes, market share
and consequently on the profitability of the Community
industry. The negative effect on the sales volume is shown
by the fact that the increase in sales volume of the Com-
munity industry was very small (+ 1 %), when compared
to the increase in consumption in the Community mar-
ket over the period considered (+ 11 %). Only during the
last six months of the IP, the situation as to import prices
concerned improved somewhat because these prices were
raised due to the undertakings in force.

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(125) Overall, the Community industry therefore would remain
vulnerable to continuation of injurious dumping, if measu-
res were allowed to lapse.

(126) On the basis of the elements above, it was found that
no clear finding of continuation of injury could be esta-
blished. It was therefore examined whether there is a like-
lihood of recurrence of injury.

3.2. Likelihood of recurrence of injury

(127)

It was concluded above (see recital 84) that dumped
imports from the countries concerned would increase
significantly if measures were to be repealed. Indeed, the
Community market is an attractive one because of the
geographical proximity compared to the other main
export markets (Brazil, China and India) and more favou-
rable payment terms. Furthermore, the domestic markets
of the exporting producers only absorb limited parts of
their production.

(128) Production capacity in Belarus and Russia has remained
rather stable during the period considered totalling 20 mil-
lion tonnes of potash, which is about 33 % of the world-
wide capacity and about 250 % of
the Community
consumption. Important further investments to increase
production capacity are planned. Moreover, there is spare
production capacity in Russia.

(129)

In addition, the partial recovery of the Community indus-
try described in recital 113 is to a large extent due to the
existence of the anti-dumping measures. This recovery
would be in danger should measures be repealed. Repea-
ling the measures would lead to the sale of increasing
quantities of potash from the countries concerned on the
Community potash market. Such an increase in sales can
only be accomplished by undercutting existing price levels.
Such undercutting of price levels will inevitably cause an
erosion of sales prices and a decrease of the profitability
of the Community industry, leading to injury.

3.3. Conclusion on recurrence of injury

(130) As shown above, the situation of the Community indus-
try remains vulnerable and fragile. In recital 81 it was
concluded that additional production is likely to be expor-
ted to the Community from Belarus and Russia if measu-
res would expire. Since these exports are likely to be made
at dumped prices, this would result in a deterioration of
the sales of the Community industry, its market shares,
sales prices as well as the consequent deterioration of its
financial situation. On this basis, it is therefore concluded
that the expiry of the measures would in all likelihood
result in a worsening of the still fragile situation of the
Community industry and a recurrence of injury. Conse-
it is proposed that the current anti-dumping
quently,
measures should be maintained.

E. COMMUNITY INTEREST

1.

Introduction

(131) Pursuant to Article 21 of the basic Regulation, it was
examined whether a prolongation of the existing anti-
dumping measures would be against the interest of the
Community as a whole or not. The determination of the
Community interest was based on an appreciation of all
the various interests, such as the Community industry, the
importers and users of the product concerned. In order to
assess the likely impact of a continuation of the measu-
res, the Commission services requested information from
all interested parties mentioned above.

(132)

It should be recalled that in the previous investigation the
adoption and maintenance of measures was considered
not to be against the interest of the Community.

(133) Due to the large number of importers, it was decided to
apply sampling. Sampling questionnaires were sent to 21
importers/users and replies from all were received. The
sample taken included five Community importers. In
accordance with Article 17 of the basic Regulation, this
sample covered more than 80 % of the total imports and
was the largest representative volume of imports which
could reasonably be investigated within the time availa-
ble. Each of the five importers included in the sample sub-
mitted a full questionnaire reply.

(134) Altogether, 23 questionnaires were sent out to users of
which seven submitted questionnaire replies. Furthermore,
questionnaires were sent to importer/user organisations.
The European Fertiliser Import Association (EFIA) replied
to the questionnaire as well as a number of user associa-
tions in different Member States.

(135) On this basis,

it was examined whether, despite the
findings on continuation of dumping and recurrence of
injury, compelling reasons existed which would lead to
the conclusion that it is not in the Community interest to
maintain measures in this particular case.

2.

Interests of the Community industry

(136)

In the course of this investigation it has been established
that the Community industry is viable and competitive,
but continues to be in a fragile situation. This is partly due
to its shrinking market share in the Community, and also
to its unsatisfactory profit situation which has still not
recovered to a normal and stable level, supporting the high
investment necessary to bring the industry back to a long
term sound perspective.

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(137) The trade union association of miners in the Community
and the General Workers Union of the United Kingdom
came forward arguing that the Community industry pro-
vided for an important number of jobs in the Commu-
nity which would be put at risk if measures would lapse.

(138)

In view of the economic difficulties experienced by the
Community industry in the past and the still volatile situa-
tion of the market as experienced during the IP, it is consi-
dered that if the measures were allowed to lapse the
situation of the Community industry would be put at risk.
This carries a high likelihood that the situation of the
Community industry would deteriorate again from its cur-
rently moderately profitable status. This could entail a
severe reduction in investments and in the numbers of
employees.

(139)

If, however, measures are maintained, this will allow the
Community industry to further recover and in particular
gain a perspective which allows the investments neces-
sary to ensure the long-term viability and competitiveness
of the industry. Therefore, the continuation of measures
is in the interests of the Community industry.

3.

Interests of importers (traders)

(140) The cooperating importers of potash were generally
against the prolongation of the anti-dumping measures.
They argued that the continuation of measures would have
a negative influence by cutting the links to their traditio-
nal suppliers, in particular if undertakings would not be
continued. They also argued that the Community produ-
cers could, if duties are prolonged, develop a dominant
position on the Community market, thus reducing free
competition within the Community to a minimum which
would drive up prices in the Community further. One
importer, however, argued that the present situation with
measures in force guarantees a correct development of the
market. Consequently, this importer requested that the
anti-dumping measures are maintained.

(141) Whereas in the EU-15 most of the potash from the coun-
tries concerned was imported under the IPR, enlargement
undertakings allowed duty-free imports from the coun-
tries concerned under certain conditions. Moreover,
imports from other third countries remained at a rather
stable level, at 15 % of market share. There was thus subs-
tantial competition on the Community market and there
is no reason to expect that this would change. The argu-
ment concerning the alleged dominant position of the
Community industry has therefore to be rejected.

(142) Subsequent to disclosure of the findings, a number of inte-
rested parties insisted that the continuation of the measu-
res would create an anti-competitive situation, whereby
the Community industry would enjoy a dominant posi-
tion. In this respect, it is to be noted that no indication
was found during the investigation that the existence of
the measures, apart from reducing the effects of injurious
dumping, has significantly modified the competitive situa-
tion in favour of
the Community industry. On the
contrary, imports from the countries concerned have even
increased and imports from other third countries conti-
nue to represent a substantial share of the Community
market. Therefore, no element seems to indicate that a
continuation of the measures could cause a deterioration
of the competitive situation in the Community market.

(143) As regards the alleged difficult access for traders to impor-
ted potash, this claim was not substantiated. Thus, this
claim had to be rejected.

(144)

It should also be noted that importers (traders) of potash
often also import other products. Although some impor-
ters focus their business on potash, for other importers
the potash business accounts for as little as 10 % of their
business. In addition,
importers currently focusing on
potash have indicated that they could switch their focus
to other products demanded by their customer base,
primarily other fertilisers. Subsequent to disclosure of the
findings, however, one importer and one importers’ asso-
ciation claimed that certain importers are heavily depen-
ding on imports of potash from Belarus and would hardly
be able to switch to other sources of supply in case the
measures were maintained. It was found, however, that a
shift to other sources of supply, e.g. the Community indus-
try or imports from countries other than Belarus, is indeed
a possibility available to importers. Although this shift
may have some impact on the economic and financial
results of these importers, it is considered that their level
of profitability would not be affected so substantially as
to undermine their long term viability. In view of all argu-
ments brought forward by importers, it is concluded that
the effects of the anti-dumping measures on the financial
situation of importers are relatively limited. Indeed, on the
basis of the verified questionnaire replies, it was found that
the profitability of the importers has not been negatively
influenced by the existing anti-dumping measures so far.
There are no reasons to believe that this situation would
substantially change if measures are maintained.

(145)

It is therefore concluded that a continuation of the measu-
res would not have a substantial impact on the situation
of importers (traders).

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4.

Interests of users

4.1. Farmers

(146) No cooperation was obtained from the direct users of
potash as a fertiliser (farmers), although their representa-
tive organisation received a questionnaire. One farmer’s
association of a Member State, however, argued that anti-
dumping duties would harm the position of the farmers
in a competitive market where import prices of inputs like
fertilisers are regulated while prices of imported foods-
tuffs are not.

(147) This argument has to be rejected because anti-dumping
measures do not deal with overall questions concerning
agricultural policy. Anti-dumping investigations only aim
at re-establishing a situation of fair trade following an act
of injurious dumping. In the absence of any other subs-
tantial argument and of any indication that the existing
anti-dumping measures would have had a negative effect
on farmers, it is to be concluded that the continuation of
anti-dumping duties will not have a major negative impact
for farmers.

4.2. Fertiliser manufacturers

(148) The users submitting questionnaire replies were all fertili-
ser manufacturers who buy potash from the Community
industry and also import it from the countries concerned
or from third countries. For them, potash is a raw mate-
rial for producing fertilisers that often consist of three dif-
ferent nutrients: nitrogen, phosphate and potash (NPK-
fertilisers or compound fertiliser). This means that potash
is one of the cost elements for their final products, repre-
senting between 15 and 30 % of the production cost.
During the period considered the production costs of fer-
tilisers containing potash significantly decreased in 2002
and 2003, followed by a moderate increase during the IP,
without reaching the levels prevailing in 2001. It can the-
refore be concluded that the anti-dumping measures on
potash did not have a significant impact on the cost struc-
ture of the fertiliser manufacturers.

(149) Most of these users argued in the same manner against
the continuation of measures as the importers. However,
one fertiliser producer pointed out that it would be in its
interest to have potash producers both inside and outside
the Community also in the future.

fertiliser manufacturers have the possibility to import
under IPR,
i.e. without paying anti-dumping duties.
Furthermore, it is recalled that other sources of supply
exist, both in third countries not subject to anti-dumping
measures, and in the Community. Moreover, the investi-
these users were unable
gation has not shown that
to compete with imported compound fertilisers on the
Community market.

(151) On the basis of the above, it is concluded that measures
have not had a significant negative impact on the situa-
tion of users. Indeed, the impact of the measures on the
profitability of the fertiliser manufacturers during the
period considered was minimal and no elements have
been put forward indicating that this would change if
measures were maintained. It is therefore concluded that
the interests of users are not such as to prohibit the conti-
nuation of measures.

5. Consequences for competition on the
Community market

(152) The measures in their current form clearly have had a sta-
bilising effect on the Community industry which was able
to exit the loss making period and regain a moderately
profitable situation. This development would not have
been possible without measures. However, this could not
prevent a further concentration of the market as eviden-
ced by the take-over of two Community producers by the
ICL Group from Israel. Moreover, there was a close-down
of the French potash industry in 2001 because the mines
were exhausted. It was argued by importers and users that
this development led practically to a duopoly on the EU
market, holding a combined market share in excess of
70 %, in the EU-15 even in excess of 80 %. Therefore, it
was argued that the current measures have affected the
market in a way that has impeded competition.

(153) This argument has to be rejected, as the current measures
have allowed the Community industry to maintain its ope-
rations and partially recover from the effects of injurious
dumping. In absence of measures, it is likely that compe-
tition would have been reduced even more since the Com-
munity producers would have been forced to close down
potash production. Therefore, the continuation of measu-
res prevents a further reduction of competition by
allowing the Community industry to survive and remain
competitive.

(150) As the competing fertiliser producers in third countries do
not pay anti-dumping duties on their purchases of potash,
the Community fertiliser manufacturers also claimed that
they are unable to compete with the prices of the final
product offered by their foreign competitors. In this res-
pect, it should be noted, however, that the Community

(154) Moreover, it is also recalled that the presence of a num-
ber of other competitors on the Community market from
third countries, as well as from the countries concerned
has ensured competition on the Community market and
there is no reason to presume that this would change if
measures are maintained.

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6. Conclusion on Community interest

(155) Having analysed the various interests involved, it is conclu-
ded that, on the one hand, a continuation of the anti-
dumping measures is likely to result in a stable and
predictable development for the Community potash mar-
ket, which will allow the Community industry to further
recover and remain competitive under fair conditions of
competition. On the other hand, leaving the Community
industry without adequate protection against the dumped
imports would most probably wipe out its small profita-
bility gained in recent years and lead to a serious deterio-
ration of its situation. In fact, should the measures lapse,
the Community industry would in all likelihood be forced
to abandon the market step by step and a larger part of
the market would be taken over by the Belarusian and
Russian exporters, leaving an ever limited choice of sour-
ces of potash for importers, farmers and users in the Com-
munity. Therefore, the price advantage for importers,
which would result
from allowing the anti-dumping
measures to lapse, is by far outweighed by the benefits to
the Community industry resulting from the continuation
of measures against the injurious dumping.

(156) The disadvantage for users and end-users when measures
are maintained is considered to be very limited compared
to the outlook to gain a stable and viable Community
industry. In fact, the prolongation of measures does not
change any of the present market conditions, under which
the users are not substantially affected. The likely nega-
tive effects on the situation of the Community industry
are outweighing the possible burden for users and end-
users, which will not be different from the situation exis-
ting at present. It is therefore concluded that there are
no compelling reasons against the prolongation of the
existing anti-dumping measures.

F. LASTING NATURE OF CHANGED CIRCUMSTANCES

(157)

In the framework of
the interim review concerning
imports of potash originating in Belarus, it was also exa-
mined whether the changed circumstances with respect to
the original investigation regarding dumping could reaso-
nably be considered to be of a lasting nature in accor-
dance with Article 11(3) of the basic Regulation.

(158) By comparing the normal values and export prices found
between the previous and the current investigation it has
been established that, account being taken of comparable
product types, normal value has considerably increased,
but the average export price has increased even more, lea-
ding to decreased levels of dumping. As for the Belaru-
sian export prices to other markets, they have been found

to generally be in line with export prices to the EU mar-
ket. No evidence was found that exports from Belarus
would not continue to be made at dumped prices, yet at
a lower level than in the past. Given the above, it is reaso-
nably safe to conclude that the new lower level of dum-
ping is of a lasting nature.

(159)

In view of all these factors, it is considered appropriate to
amend the existing measures regarding Belarus, by lowe-
ring the dumping margin to that established in the pre-
sent investigation.

(160) According to Article 9(4) of the basic Regulation, the
amount of the anti-dumping duty should not exceed the
margin of dumping established, but it should be less than
that margin if such lesser duty would be adequate to
remove the injury of the Community industry. As the exis-
ting duties for Belarus had been calculated on the basis of
the dumping margin, and as the new dumping margin is
lower than the one previously calculated, the duty should
be adjusted to the lower dumping margin found in this
investigation, namely 27,5 %.

G. UNDERTAKING

(161) Following the disclosure of the definitive findings, the
exporting producer in Belarus offered a price undertaking.

(162)

It is the normal practice of the Commission not to accept
undertakings from companies not fulfilling the criteria for
market economy treatment or individual treatment as
undertakings from such companies is considered imprac-
tical. This notwithstanding, under particular circumstan-
ces, undertakings may be accepted from such companies.
These circumstances would require, in particular, involve-
ment from the State authorities in the exporting country
in assuring that the conditions of the undertaking are
respected.

(163) A crucial factor in accepting any undertaking is that it
trust between the
has to satisfy the relationship of
In
Community and the parties to the undertaking.
this regard,
the Council
it should be recalled that
has imposed certain restrictive measures against President
Lukashenko and certain officials of Belarus by Common
Position 2006/276/CFSP (1) and Council Regulation (EC)
No 765/2006 (2). It should also be recalled that Belarus-
kali is a fully State owned company and therefore the cur-
rent authorities have a direct and decisive influence over
the operations of the company. Therefore, as the Commis-
sion was not able to satisfy itself that there existed a rela-
tionship of trust between the Community and all the
it was concluded that the
parties to the undertaking,
undertaking offer by Belaruskali was impracticable. Conse-
quently, the offer was rejected.

(1) OJ L 101, 11.4.2006, p. 5.
(2) OJ L 134, 20.5.2006, p. 1.

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H. PROPOSED DUTIES

(169)

(164)

In view of the conclusions reached with regard to conti-
nuation of dumping, likelihood of recurrence of injury
and Community interest, measures on imports from Bela-
rus and Russia should be imposed in order to prevent a
recurrence of injury being caused to the Community
industry by the dumped imports.

1. Russia

(165)

In view of the findings above and pursuant to Arti-
cle 11(2) of the basic Regulation, the measures on imports
of potassium chloride originating in Russia imposed by
Regulation (EEC) No 3068/92, as last amended by Regu-
lation (EC) No 1891/2005, should be maintained.

(166) Undertakings offered by the two Russian producers were
accepted in the framework of the partial interim reviews
that were concluded by Regulation (EC) No 1891/2005.

2. Belarus

CN

codes

(TARIC

3104 20 50

In view of the special market conditions prevailing on
the potash market, namely the increase of export prices
of the product concerned between 2003 and the IP, which
actually continued in 2005 and 2006, it was considered
appropriate to impose measures in the form of a mini-
mum import price (MIP) (i) based on the findings esta-
blished for the investigation period, removing the effects
of injurious dumping found for product types falling
under
codes
3104 20 50 10 and 3104 20 50 90) and 3104 20 90
(TARIC code 3104 20 90 00) imported into the Commu-
nity during the IP, which represented the most volumi-
nous product types that are the likely to be imported into
the Community also during the period covered by the
extended measures, and (ii) in view of the risk of circu-
mvention of the measure linked to the particular circums-
tances described in recital 163, up to a quantitative ceiling
beyond which an ad valorem duty of 27,5 % should apply.
The same ad valorem duty should also apply to imports
falling within the quantitative ceiling if the minimum
import price is not respected or when the imports of the
product subject to measures presented for release into free
circulation fall under those CN codes, for which no mini-
mum import price is applicable (i.e. CN codes 3104 20 10,
ex 3105 20 10 (TARIC codes 3105 20 10 10 and
3105 20 10 20),
codes
ex 3105 20 90
3105 20 90 10 and 3105 20 90 20),
ex 3105 60 90
(TARIC codes 3105 60 90 10 and 3105 60 90 20),
ex 3105 90 91 (TARIC codes 3105 90 91 10 and
3105 90 91 20),
codes
ex 3105 90 99
3105 90 99 10 and 3105 90 99 20).) Consequently, a
quantitative ceiling should be established by reference to
the recent export performance during 2005 of the Belaru-
sian exporter to the Community, as this is an export quan-
tity that may be attainable by the exporter without having
recourse to circumvention of the MIP. On this basis, a
quantitative ceiling for the minimum import price should
be established at 700 000 tonnes per year of goods
released for free circulation.

(TARIC

(TARIC

(167)

In view of the findings above and pursuant to Arti-
cle 11(3) of the basic Regulation, the measures on imports
of potassium chloride originating in Belarus should be
modified. The existing measures for Belarus comprise
fixed amounts
ranging from EUR 19,51/tonne to
EUR 48,19/tonne, depending on the product type. During
the current investigation period, however, it was found
that all the exports to the Community by Belaruskali were
limited to product types falling under two CN codes.
Accordingly, in view of information on the other product
types, and as the particular types of potash concerned
appear to be the most commercialised, the most reasona-
ble approach for implementing the amended duties is
considered to be the replacement of all fixed amounts with
an ad valorem duty or a minimum import price, based on
the market conditions prevailing on the potash market
during the IP.

(168) Since the dumping level found is lower than the injury
margin established in the previous investigation, the ad
valorem duty rate should be set at the dumping level which
is 27,5 %.

(170)

In order to take into account the fact that the products
are delivered on both DAF and CIF (Community port)
terms (as defined in Incoterms 2000) and that the trans-
portation, handling and loading costs included in the
invoiced prices have significant differences depending on
whether the transportation takes place by ground trans-
portation to a land frontier of the Community (on DAF
terms) or by maritime transport via seaports in third coun-
tries to a Community port (CIF (Community port) terms),
the MIPs referring to these two delivery terms should be
differentiated.

(171) The Council acknowledges that the introduction of a quan-
titative ceiling requires a management system which can-
not be put in place prior to the entry into force of this
Regulation. In view of the complexity of this matter, the
Council considers that it is appropriate for the Commis-
sion to set out by Regulation the modalities for imple-
the quantitative
menting the management system of
ceiling as soon as it is technically possible.

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(172) The Council further acknowledges that in view of the fact
that the Regulation changing the current form and level
of the measure only enters into force in the second half
of 2006, and that significantly increasing exports of the
product concerned in the short term poses logistical diffi-
culties, the risk of circumvention referred to in recital 169
in the short term is limited. Therefore, taken into account
the technical difficulties referred to in recital 171 and in
view of the limited risk of circumvention, it is considered
appropriate not to impose a quantitative ceiling at this
stage. Therefore, the MIPs and the ad valorem duty as
explained in recital 169 above should apply from the date
of entry into force of this Regulation.

(173) However, should the quantity released into free circula-
tion, as established by the Commission on the basis of
data collected pursuant to Article 14(6) of the basic Regu-
lation, in any given calendar year, or for the remaining
part of the year 2006 on a pro rata temporis basis, signifi-
cantly exceed the 700 000 tonnes reflecting the traditio-
nal quantities as established in recital 169, and for the
reasons referred to in that recital and with reference to the
particular circumstances described in recital 163, the Com-
mission should submit a proposal to the Council for the
imposition of the ad valorem duty concerning all products
falling under the product definition of this investigation.

(174) To ensure the effective respect of the MIP,

(i)

the net,

importers
should be made aware that when it is found following a
post-importation verification that
free-at-
Community-frontier price (i.e. net of customs duties and
any post-importation costs, such as handling, loading and
transportation costs) actually paid by the first indepen-
dent customer in the Community (post-importation price)
is below the net, free-at-Community-frontier price, before
duty, as resulted from the customs declaration; and (ii) the
post-importation price is lower than the MIP, the ad valo-
rem duty shall apply retrospectively for the relevant tran-
sactions. Customs
inform the
authorities
Commission immediately whenever indications of a mis-
declaration are found.

should

(175)

In this context, reference is made to Council Regula-
tion (EEC) No 2913/92 of 12 October 1992 establishing
the Community Customs Code (1), inter alia, to Article 78,
according to which the customs authorities may inspect
the commercial documents and data relating to the import
or export operations in respect of the goods concerned
or to subsequent commercial operations involving those
goods. Such inspections may be carried out at the premi-
ses of the declarant, of any other person directly or indi-
rectly involved in the said operations in a business capacity
or of any other person in possession of the said docu-
ment and data for business purposes,

(1) OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Regula-
tion (EC) No 648/2005 of the European Parliament and of the Council
(OJ L 117, 4.5.2005, p. 13).

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on imports of
potassium chloride falling within CN codes 3104 20 10,
3104 20 50, 3104 20 90 and on special mixtures (i.e. potassium
chloride containing additional fertilising elements, with a potas-
sium content evaluated as K2O, by weight, equal to or exceeding
35 % but not exceeding 62 % on the dry anhydrous product)
falling within CN codes
ex 3105 20 10 (TARIC codes
3105 20 10 10 and 3105 20 10 20), ex 3105 20 90 (TARIC
codes 3105 20 90 10 and 3105 20 90 20), ex 3105 60 90
3105 60 90 20),
(TARIC
ex 3105 90 91
and
3105 90 91 20), ex 3105 90 99 (TARIC codes 3105 90 99 10
and 3105 90 99 20), originating in Belarus and Russia.

and
3105 90 91 10

3105 60 90 10
codes

(TARIC

codes

Article 2

1.
The rate of the anti-dumping duty applicable to the net,
free-at-Community-frontier price, before duty, of the product des-
cribed in Article 1 and originating in Belarus shall be 27,5 %. It
shall be applied under the conditions set out below:

(a)

the duty shall be levied on products falling under CN codes
3104 20 50 and 3104 20 90 (TARIC additional code A999)
except when

— the net, free-at-Community-frontier price, before duty,
of the product is at or above the appropriate minimum
import price set out in Annex I,

and

— the total imported quantity of the products specified in
Annex I and released into free circulation has not cumu-
latively reached 700 000 tonnes per calendar year.

The Commission shall establish the modalities for implementing
the management system of this quantitative ceiling by Regula-
tion as soon as possible.

3105 20 10 20),
and

(b) The duty shall be levied on products falling under CN codes
3104 20 10, ex 3105 20 10 (TARIC codes 3105 20 10 10
(TARIC codes
and
3105 20 90 10
ex 3105 60 90
(TARIC codes 3105 60 90 10 and 3105 60 90 20),
and
ex 3105 90 91
codes
ex 3105 90 99
3105 90 91 20),
3105 90 99 10 and 3105 90 99 20).

ex 3105 20 90
3105 20 90 20),

3105 90 91 10
(TARIC

(TARIC

codes

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By derogation to Article 2(1), until the entry into force of
2.
the Commission Regulation cited in paragraph 1, the duty shall
apply as follows:

(a)

(b)

the duty shall be levied on products falling under CN codes
3104 20 50 and 3104 20 90 (TARIC additional code A999)
except when the net,
free-at-Community-frontier price,
before duty, of the product is at or above the appropriate
minimum import price set out in Annex I;

3105 20 10 20),
and

the duty shall be levied on products falling under CN codes
3104 20 10, ex 3105 20 10 (TARIC codes 3105 20 10 10
(TARIC codes
and
3105 20 90 10
ex 3105 60 90
(TARIC codes 3105 60 90 10 and 3105 60 90 20),
and
ex 3105 90 91
codes
ex 3105 90 99
3105 90 91 20),
3105 90 99 10 and 3105 90 99 20).

ex 3105 20 90
3105 20 90 20),

3105 90 91 10
(TARIC

(TARIC

codes

Unless otherwise specified, the provisions in force concer-

3.
ning customs duties shall apply.

Article 3

1.
The rate of the definitive anti-dumping duty applicable to
the net, free-at-Community-frontier price, before duty, of the pro-
duct described in Article 1, originating in the Russian Federation
and manufactured by the companies listed below, shall be as
follows:

Country

Company

Duty rate

TARIC additional
code

Russia

JSC Silvinit,
Solikamsk

JSC Uralkali,
Berezniki

23,0 %

12,3 %

A665

A666

2.
The rate of the anti-dumping duty applicable to the net,
free-at-Community-frontier price, before duty, of the product des-
cribed in Article 1, originating in the Russian Federation and
manufactured by all other companies than those mentioned in
paragraph 1 (TARIC additional code A999) shall be equal to the
fixed amount in euro per tonne of KCl shown below per cate-
gory and grade (standard potash is to be understood as potash
in powder form):

Potassium chloride not containing any additional fertilising elements

Category:

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

With a potassium content evaluated as
K2O, by weight, exceeding 40 % but not
exceeding 62 % on the dry anhydrous
product

With a potassium
content evaluated as
K2O, by weight,
exceeding 62 % on
the dry anhydrous
product

Grade

Standard

Other than standard
(including granular)

Standard

Other than standard
(including granular)

TARIC code

3104 20 10 10

3104 20 10 90

3104 20 50 10

3104 20 50 90

3104 20 90 00

Fixed amount
(EUR/tonne)

19,61

26,01

29,65

39,33

40,63

Potassium chloride containing additional fertilising elements in special mixtures

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

With a potassium content evaluated as K2O,
by weight, exceeding 40 % but equal to or not
exceeding 62 % on the dry anhydrous product

TARIC code

3105 20 10 10, 3105 20 90 10,
3105 60 90 10, 3105 90 91 10,
3105 90 99 10

3105 20 10 20, 3105 20 90 20,
3105 60 90 20, 3105 90 91 20,
3105 90 99 20

Fixed amount (EUR/tonne)

26,01

39,33

Notwithstanding Article 1 above,

3.
the definitive anti-
dumping duty shall not apply to imports released for free circu-
lation in accordance with Article 4.

Unless otherwise specified, the provisions in force concer-

4.
ning customs duties shall apply.

Article 4

Imports declared for release into free circulation shall be
1.
exempt from the anti-dumping duties imposed by Article 1, pro-
vided that they are produced by companies from which underta-
kings are accepted by the Commission and whose names are
listed in Decision 2005/802/EC, as from time to time amended,
and have been imported in conformity with the provisions of the
same Decision.

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The imports mentioned in paragraph 1 shall be exempt

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

and

(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 Annex II is presented to Member States’ customs authori-
ties upon presentation of the declaration for release into free
circulation;

(c)

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

Article 5

This Regulation shall enter into force on the day following 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, 11 July 2006.

For the Council
The President
E. HEINÄLUOMA

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ANNEX I

TARIC code

Minimum import price (MIP) in euro per tonne,
CIF (Community port) (*), net,
free-at-Community frontier, before duty, for
goods delivered by maritime transportation via
third country sea ports

Minimum import price (MIP) in euro per tonne,
DAF (*), net, free-at-Community frontier,
before duty, for goods delivered by ground
transportation

3104 20 50 10

3104 20 50 90

3104 20 90 00

114.3 (TARIC additional code A747)

102.4 (TARIC additional code A748)

125.8 (TARIC additional code A749)

113.0 (TARIC additional code A750)

124.1 (TARIC additional code A751)

110.3 (TARIC additional code A752)

(*) As defined in Incoterms 2000.

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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 an undertaking:

ANNEX II

1.

2.

3.

4.

5.

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

The name of the company mentioned in Article 1 of Decision 2005/802/EC 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.

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 1, 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 Decision 2005/802/EC. I declare that the informa-
tion provided in this invoice is complete and correct.’.