Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Ukraine following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96
Date: 2007-03-27
Institutions: European Commission
Subjects: Ukraine, anti-dumping duty, anti-dumping legislation, fertiliser, import

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.3.2007 
COM(2007) 156 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in 
Ukraine following an expiry review pursuant to Article 11(2) 
of Council Regulation (EC) No 384/96 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of 
22 December 1995 on protection against dumped imports from countries not members 
of  the  European  Community,  as  last  amended  by  Council  Regulation  (EC)  No 
2117/2005 of 21.12.2005 (‘the basic Regulation’) in the proceeding concerning imports 
of ammonium nitrate originating in Ukraine. 

•  General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out in the basic Regulation. 

•  Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  132/2001  imposing  a  definitive  anti-dumping  duty  of 
EUR 33,25 per tonne on imports of ammonium nitrate falling within CN codes 3102 30 
90 and 3102 40 90 originating in Ukraine. 

Council Regulation (EC) No 945/2005, by which, following an interim review limited 
in scope to the definition of the product concerned, the wording ‘ammonium nitrate’ in 
the  original  Regulation  was  replaced  by  ‘solid  fertilizers  with  an  ammonium  nitrate 
content exceeding 80% by weight’. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  had  the  possibility  to 
defend their interests during the investigation, in line with the provisions of the basic 
Regulation. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

EN 

2 

   EN 

 
 
 
 
 
 
 
 
 
 
3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

On  25  January  2006,  the  Commission  initiated  an  expiry  review  of  the  anti-dumping 
measures in force in respect of imports of ammonium nitrate originating in Ukraine. 

The  purpose  of  this  investigation  was  to  examine  whether  there  is  continuation  or 
recurrence  of  dumping  regarding  imports  of  AN  originating  in  Ukraine,  thereby 
causing a continuation or recurrence of injury to the Community industry. 

The investigation showed that imports of AN originating in Ukraine were dumped, and 
a likelihood of continuation of dumping as well as a likelihood of recurrence of injury 
were  established.  It  is  therefore  concluded  that  anti-dumping  measures  have  to  be 
maintained on imports from Ukraine. However, in view of the fact that the Ukrainian 
export prices may be affected by the production cost increases caused by the evolution 
of the domestic gas prices in Ukraine, it is considered prudent to limit the maintenance 
of the measures to two years.  

It is therefore proposed that the Council adopts the attached proposal for a Regulation 
which  should  be  published  in  the  Official  Journal  of  the  European  Union  by 
24 April 2007 at the latest. 

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 2117/2005.  

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

The form of action is described in the above-mentioned basic Regulation and leaves no 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

•  Choice of instruments 

Proposed instruments: regulation. 

Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not  foresee 
alternative options. 

EN 

3 

   EN 

 
 
 
 
 
 
 
 
 
 
4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

EN 

4 

   EN 

 
 
 
Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in 
Ukraine following an expiry review pursuant to Article 11(2) 
of Council Regulation (EC) No 384/96 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’) and in particular Article 11(2) thereof, 

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

Whereas: 

A. 

PROCEDURE 

1.  Measures in force 

(1) 

(2) 

On  25  January  2001  the  Council  imposed,  by  Regulation  (EC)  No  132/20012,  a 
definitive  anti-dumping  duty  ('the  existing  measures')  of  EUR  33,25  per  tonne  on 
imports of ammonium nitrate ('AN') falling within CN codes 3102 30 90 and 3102 40 
90 and originating, inter alia, in Ukraine. The investigation that led to these measures 
will be referred to as ‘the original investigation’. 

On  17  May  2004,  following  a  partial  interim  review,  by  Regulation  (EC)  No 
993/20043  the  Council  exempted  from  the  anti-dumping  duties  imposed  by  Council 
Regulation  (EC)  No  132/2001  imports  to  the  Community  of  the  product  concerned 
produced  by  companies  from  which  undertakings  would  be  accepted  by  the 
Commission.  By  Commission  Regulation  (EC)  No  1001/20044,  as  last  amended  by 
Commission Regulation (EC) No 1996/20045, undertakings were accepted for a period 
until 20 May 2005. The purpose of these undertakings was to take account of certain 
consequences of the enlargement of the European Union to 25 Member States. 

1 

2 
3 
4 
5 

OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p. 17). 
OJ L 23, 25.1.2001, p.1. 
OJ L 182, 19.5.2004, p.28. 
OJ L 183, 20.5.2004, p.13. 
OJ L 344, 20.11.2004, p.24. 

EN 

5 

   EN 

 
                                                 
(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

By Regulation (EC) No 945/20056, following an interim review limited in scope to the 
definition  of  the  product  concerned,  the  Council  decided  that  the  definition  of  the 
product concerned should be clarified and that the measures in force should apply to 
the  product  concerned  when  incorporated  in  other  fertilizers,  in  proportion  to  their 
content of ammonium nitrate, together with other marginal substances and nutrients.  

2.  Request for a review 

On 25 October 2005, a request for an expiry review pursuant to Article 11(2) of  the 
basic Regulation was lodged following the publication of a notice of impending expiry 
on  5  May  20057.  This  request  was  lodged  by  the  European  Fertilizer  Manufacturers 
Association  (EFMA)  (‘the  applicant’)  on  behalf  of  producers  representing  a  major 
proportion, in this case more than 50 % of the total Community production of AN. 

The  applicant  alleged  and  provided  sufficient  prima  facie  evidence  that  there  is  a 
likelihood of recurrence of dumping and injury to the Community industry with regard 
to imports of AN originating in Ukraine ('the country concerned'). 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed  for  the  initiation  of  an  expiry  review,  the  Commission  announced  on 
25 January  2006,  by  a  notice  of  initiation  published  in  the  Official  Journal  of  the 
European  Union8,  the  initiation  of  an  expiry  review  pursuant  to  Article  11(2)  of  the 
basic Regulation. 

3. 

Investigation 

3.1.  Investigation period 

The  investigation  of  continuation  or  recurrence  of  dumping  covered  the  period  from 
1 January  to  31  December  2005  ('review  investigation  period'  or  ‘RIP’).  The 
examination of the trends relevant for the assessment of a likelihood of a continuation 
or  recurrence  of  injury  covered  the  period  from  2002  to  the  end  of  the  review 
investigation period ('period considered'). 

3.2.  Parties concerned by the investigation 

The  Commission  officially  advised  the  exporting  producers,  importers  and  users 
known  to  be  concerned  and  their  associations,  the  representatives  of  the  exporting 
country,  the  applicant  and  the  Community  producers  of  the  initiation  of  the  expiry 
review.  Interested  parties  were  given  the  opportunity  to  make  their  views  known  in 
writing and to request a hearing within the time limit set out in the notice of initiation. 

(9) 

All interested parties, who so requested and showed that there were particular reasons 
why they should be heard, were granted a hearing. 

(10) 

In  view  of  the  large  number  of  Community  producers  and  of  importers  in  the 
Community, it was considered appropriate, in conformity with Article 17 of the basic 

6 
7 
8 

OJ L 160, 23.6.2005, p.1. 
OJ C 110, 5.5.2005, p.15. 
OJ C 18, 25.1.2006, p.2. 

EN 

6 

   EN 

 
                                                 
Regulation,  to  examine  whether  sampling  should  be  used.  In  order  to  enable  the 
Commission  to  decide  whether  sampling  would  indeed  be  necessary  and,  if  so,  to 
select  a  sample,  the  above  parties  were  requested,  pursuant  to  Article  17(2)  of  the 
basic  Regulation,  to  make  themselves  known  within  15  days  of  the  initiation  of  the 
investigation  and  to  provide  the  Commission  with  the  information  requested  in  the 
notice of initiation. 

(11)  After  examination  of  the  information  submitted,  and  given  that  ten  Community 
producers  indicated  their  willingness  to  cooperate,  it  was  decided  that  sampling  was 
necessary  with  regard  to  Community  producers.  Only  one  importer  provided  the 
information requested in the notice of initiation and expressed its willingness to further 
co-operate with the Commission services. However, this importer was located outside 
the  Community  and  had  no  imports  of  the  product  concerned  in  the  Community 
market during the RIP. It was therefore decided that sampling was not necessary with 
regard to importers. 

(12)  Ten Community producers properly completed the sampling form within the deadline 
and formally agreed to co-operate further in the investigation. With regard to those ten 
Community producers, the Commission selected in accordance with Article 17 of the 
basic  Regulation,  a  sample  based  on  the largest  representative  volume  of  production 
and  sales  of  AN  in  the  Community  which  can  reasonably  be  investigated  within  the 
time available. The four sampled Community producers accounted for 76% of the total 
production  of  the  Community  industry,  as  defined  in  recital  (51)  below,  during  the 
RIP,  whilst  the  above  ten  Community  producers  accounted  for  70%  of  the  total 
Community production during the RIP. 

(13) 

In accordance with Article 17(2) of the basic Regulation, the parties concerned were 
consulted on the sample chosen and raised no objection thereto.  

(14)  Questionnaires were sent to the four sampled Community producers and to all known 

exporting producers.  

(15)  Replies  to  the  questionnaires  were  received  from  the  four  sampled  Community 
producers  and  three  producers,  thereof  two  exporting  producers,  in  the  country 
concerned, as well as from one related trader. 

(16)  Moreover,  one  producer  in  the  analogue  country  provided  a  complete  questionnaire 

reply. 

(17)  The  Commission  sought  and  verified  all  the  information  it  deemed  necessary  for  a 
determination  of  the  likely  recurrence  of  dumping  and  resulting  injury  and  of  the 
Community  interest.  Verification  visits  were  carried  out  at  the  premises  of  the 
following companies: 

(a)  Related trader to the Ukrainian producer Stirol  

– 

IBE Trading, New York, New York, USA; 

(b)  Producer in the analogue country 

– 

Terra Industries, Sioux City, Iowa, USA; 

EN 

7 

   EN 

 
(c)  Sampled Community producers 

– 

– 

– 

– 

Terra Nitrogen Limited, Stockton, UK, 

Grande Paroisse SA, Paris, France, 

Zaklady Azotowe Anwil SA, Poland, 

Yara  SA,  Brussels,  Belgium  and  its  related  producer  Yara  Sluiskil  BV, 
Sluiskil, The Netherlands. 

B. 

PRODUCT CONCERNED AND LIKE PRODUCT 

1. 

Product concerned 

(18)  The product concerned is solid fertilizers with an ammonium nitrate content exceeding 
80% by weight originating in Ukraine, falling within CN codes 3102 30 90, 3102 40 
90, ex 3102 29 00, ex 3102 60 00, ex 3102 90 00, ex 3105 10 00, ex 3105 20 10, ex 
3105  51  00,  ex  3105  59  00  and  ex  3105  90  91.  Ammonium  nitrate  ('AN')  is  a  solid 
nitrogen fertiliser commonly used in agriculture. It is manufactured from ammonia and 
nitric  acid,  and  its  nitrogen  content  exceeds  28  %  by  weight  in  prilled  or  granular 
form. 

(19) 

It should be noted that the scope of the product concerned was clarified in Regulation 
(EC) No 945/2005.  

2. 

Like product 

(20)  As  established  in  the  original  investigation,  this  review  investigation  confirmed  that 
AN is a pure commodity product, and its quality and basic physical characteristics are 
identical  whatever  the  country  of  origin.  The  product  concerned  and  the  products 
manufactured  and  sold  by  the  exporting  producers  on  their  domestic  market  and  to 
third countries, as well as those manufactured and sold by the Community producers 
on  the  Community  market  and  by  the  producer  in  the  analogue  country  on  the 
domestic market of the analogue country have thus been found to have the same basic 
physical and chemical characteristics and essentially the same uses and are therefore 
considered  to  be  like  products  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation. 

C. 

LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING 

1.  General 

(21)  Three Ukrainian producers of the product concerned co-operated in the investigation. 
Two  of  the  co-operating  producers  exported  the  product  concerned  during  the  RIP. 
There  is  at  least  one  known  non-cooperating  producer  of  the  product  concerned  in 
Ukraine. 

(22)  The  comparison  of  the  data  concerning  exports  to  the  Community  provided  by  the 
exporting producers and the total volume of imports as reported by Eurostat indicated 
that the two exporting producers accounted for around 60% of all Community imports 
from Ukraine during the RIP. It could, however, be established that the vast majority 

EN 

8 

   EN 

 
of the remaining 40% of imports of the product concerned was invoiced in December 
2004  (and  therefore  not  reported  by  the  co-operating  producers),  but  entered  the 
Community  during  the  RIP  (and  was  therefore  included  in  the  import  statistics). 
Exports invoiced in December 2005 and entering the Community in January 2006, on 
the  other  hand,  were  insignificant.  On  the  basis  of  this,  it  was  concluded  that  85%-
90% of all Community imports from Ukraine during the RIP have been made by co-
operating producers. The level of co-operation is therefore high.  

(23)  Total  imports  of  the  product  concerned  from  Ukraine  were  small,  i.e.  less  than  1% 

when compared to the Community market as a whole. 

2.  Dumping of imports during the investigation period 

2.1.  Analogue country 

(24)  Since  Ukraine  was  not  yet  considered  a  market  economy  country  at  the  time  of  the 
lodging of the request for the expiry review9, the normal value had to be determined 
on the basis of data obtained from a producer in a market economy third country, in 
accordance  with  Article  2(7)  of  the  basic  Regulation.  In  the  notice  of  initiation,  the 
USA  and  Romania  were  envisaged  as  appropriate  analogue  countries.  It  should  be 
recalled  that  in  the  original  investigation,  Poland  was  selected  as  analogue  country. 
Since  Poland  entered  the  European  Union  in  May  2004,  it  is  no  longer  a  possible 
choice. All interested parties were given the opportunity to comment on the choice of 
the USA and Romania as analogue countries.  

(25)  However,  the  analysis  carried  out  subsequent  to  the  publication  of  the  notice  of 
initiation showed that the Romanian market for AN was  dominated by imports from 
Ukraine  and  Russia,  while  Romanian  producers  were  very  export  oriented,  selling 
only  insignificant  quantities  on  their  domestic  market.  On  the  basis  of  this,  it  was 
concluded  that,  because  of  the  above  mentioned  structure  of  its  domestic  market, 
Romania cannot be considered the most appropriate choice for the analogue country. 

(26)  Only  one  co-operating  producer  submitted  comments.  This  co-operating  producer 
proposed Algeria as a better option, given their access to the main raw material, gas. In 
this  respect,  it  should  be  pointed  out  that  whether  a  country  has  extraction  sites  of 
natural gas or not, is not a key element to the choice of the analogue country. The main 
issue is whether gas prices reflect market value. The existence of dual gas pricing in 
Algeria  is  a  clear  indication  that  this  is  not  the  case  and  thus  makes  Algeria  a  less 
suitable  choice  for  an  analogue  country.  It  is  further  noted  that  both  the  USA  and 
Ukraine are producers and net importers of natural gas, while Algeria is a net exporter 
of natural gas. In this respect, the USA is more similar to Ukraine than Algeria. 

(27) 

It  was  furthermore  claimed  that  the  USA  would  not  be  an  appropriate  analogue 
country, as they faced excessive domestic gas prices during the RIP. In this respect, it 
has to be said that although there were very high gas prices in the 4th quarter of the 
RIP  due  to  natural  disasters,  this  is  a  situation  which  can  be  easily  adjusted  for  as 
described in recital (35) below. 

9 

Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17), Article 2 

EN 

9 

   EN 

 
                                                 
(28)  The choice of the USA was also contested in respect of the production process. It was 
alleged  that  the  Algerian  production  process  is  more  similar  to  the  one  in  Ukraine. 
However, the producer failed to substantiate the claim. 

(29) 

In  addition,  it  was  claimed  that  Algeria  has  a  more  similar  level  of  production, 
consumption  and  consumer  demand  to  Ukraine.  According  to  available  information, 
both  the  Algerian  production10  and  domestic  consumption11  are  insignificant.  On  the 
other  hand,  both  Ukraine  and  the  USA  have  a  significant  production  and  large 
domestic markets. 

(30)  As  regards  the  USA,  despite  the  fact  that  there  were  anti-dumping  measures  on 
imports of AN originating in the country concerned in force, it was found that it is an 
open  competitive  market,  where  a  significant  number  of  domestic  producers  face  a 
considerable  level  of  competition  from  foreign  imports  originating  from  other  third 
countries. Furthermore, USA producers have representative domestic sales, and have a 
similar access to raw materials as Ukrainian producers. 

(31)  Therefore, the investigation established that the USA should be used as an appropriate 
analogue country. Consequently,  calculations  were  based on the verified information 
from  the  sole  USA  cooperating  producer,  which  provided  a  complete  questionnaire 
reply. 

2.2.  Normal value  

(32)  Since  Ukraine  was  not  yet  considered  a  market  economy  country  at  the  time  of  the 
lodging of the request for the expiry review, the normal value for Ukraine had to be 
determined on the basis of data obtained from a producer in the USA, as explained at 
recital (31) above. 

(33)  The  representativity  of  domestic  sales  by  the  sole  co-operating  producer  of  the  like 
product in the analogue country was assessed on the basis of the exports of the two co-
operating exporting producers to the Community. It should be noted that only one type 
of product was exported to the Community. No analysis by product type was therefore 
carried out. 

(34)  The domestic sales of the sole cooperating producer of the like product in the analogue 
country were found to be representative, as they significantly exceeded the volumes of 
AN  exported  to  the  Community  by  the  two  Ukrainian  co-operating  exporting 
producers. 

(35) 

In  order  to  establish  whether  domestic  sales  of  the  USA  producer  were  made  in  the 
ordinary course of trade, domestic sales prices were compared with cost of production. 
When assessing the cost of production of the USA producer, it was found that it was 
affected in the fourth quarter by natural disasters. According to information published 
by this same producer, "hurricanes in the U.S. Gulf during the third quarter wreaked 
havoc  with  natural  gas  markets  and  negatively  affected  our  fourth  quarter  and  full 

10 
11 

Excluding AN production further processed within vertically integrated producers 
Source: IFADATA statistics online, international fertilizer industry association 

EN 

10 

   EN 

 
                                                 
year  results12."  Indeed,  quoted  US  gas  prices13  doubled  between  August14  and 
October15,  while  in-between  Hurricanes  Katrina  (23-31  August  2005)  and  Rita 
(17-26 September  2005)  hit  the  US  Gulf  coast.  As  natural  gas  is  the  main  costing 
element  for  producing  AN,  the  effect  was  significant  and  would  have  led  to  an 
artificially  high  constructed  normal  value.  It  was  therefore  decided,  to  establish  the 
cost  of  production  for  the  fourth  quarter 2005 on the basis  of the average  of the  gas 
prices paid by the producer during the first three quarters of 2005. 

(36)  On  the  basis  of  the  above,  the  vast  majority  of  domestic  sales  were  found  to  be 
profitable, and consequently normal value was established on domestic sales prices to 
the  first  independent  domestic  customer.  As  the  Ukrainian  exporting  producers  only 
exported one product type to the Community during the RIP, the analysis was limited 
to this product type. 

2.3.  Export price 

(37) 

In  accordance  with  Article  2(8)  of  the  basic  Regulation,  the  export  price  was 
established by reference to the price actually paid or payable for the product concerned 
when  sold  for  export  to  the  Community.  All  sales  from  the  co-operating  exporting 
producers were made directly to independent customers in the Community. 

2.4.  Comparison 

(38)  The  normal  value  and  export  price  were  compared  on  an  ex-works  basis.  For  the 
purpose of ensuring a fair comparison, due allowance in the form of adjustments was 
made for differences affecting price comparability in accordance with Article 2(10) of 
the basic Regulation. Accordingly, adjustments were made for differences in transport, 
handling,  loading  and  ancillary  costs,  credit  and  commissions,  where  applicable  and 
supported by verified evidence. 

2.5.  Dumping margin 

(39)  As Ukraine is not considered a market economy for the purpose of this investigation, a 
country-wide  dumping  margin  was  established  on  the  basis  of  a  comparison  of  a 
weighted  average  normal  value  with  a  weighted  average  export  price,  in  accordance 
with Article 2(11) and (12) of the basic Regulation. As stated in recital (22) above, co-
operation was high. 

(40)  The above comparison showed that dumping (around 30-40%) took place during the 
RIP  at  a  slightly  lower  level  than  in  the  original  investigation.  However,  given  the 
limited  Ukrainian  exports  to  the  Community  during  the  RIP  the  main  focus  of  the 
analysis was concentrated on the likelihood of continuation or recurrence of dumping. 

12 
13 
14 
15 

Terra Industries 2005 Annual Report – From 10-K, page 6 
Nymex Gas Futures as quoted by Heren EGM 
August futures quoted on 30 June 2005, Nymex Gas Futures, Heren EGM 
October futures quoted on 29 September 2005, Nymex Gas Futures, Heren EGM 

EN 

11 

   EN 

 
                                                 
3.  Development of imports should measures be repealed 

3.1.  Spare capacity 

(41)  The three cooperating producers kept production stable during the period considered. 
Production capacity during the same period remained stable as well. They have a spare 
capacity of around 600 000–700 000 tonnes (8%-10% of Community consumption) to 
increase exports to the Community market in considerable volumes should measures 
be repealed. In addition, there is at least one other known Ukrainian producer of the 
product concerned who did not co-operate with the investigation. Although the spare 
capacity of this non-cooperating producer is unknown, it cannot be excluded that this 
also  is  considerable,  as  the  three  co-operating  producers  had,  on  average,  a  spare 
capacity of 30%. 

(42)  Domestic  sales  of  the  three  co-operating  producers,  during  the  period  considered, 
represented  on  average  30%-40%  of  production  capacity.  It,  therefore,  appears 
difficult that the Ukrainian domestic market can absorb most of this spare production 
capacity and therefore any increase in production is likely to be exported. 

(43)  Therefore, in the absence of anti-dumping measures, a considerable part of that spare 

capacity could be exported to the Community. 

3.2.  Relationship  between  Ukrainian  sales  prices  on  other  markets  and  the  sales 

price in the Community 

(44)  An analysis of export sales of the co-operating Ukrainian producers to third countries 
showed, when compared at a DAF/FOB Ukrainian border level, that such sales have, 
on average, been made at prices 20%-30% lower than sales prices to the Community 
during the RIP. In addition, domestic sales have been made at prices 20%-30% lower 
than  sales  prices  to  the  Community  as  well.  From  information  relating  to  the  RIP  it 
would therefore appear that there would be an incentive for exports to third countries 
to be re-directed to the Community, should measures be repealed, in order to benefit 
from higher prices and better margins. 

(45) 

It  is,  however,  noted  that  Ukrainian  import  prices  for  natural  gas  have  significantly 
increased since the RIP. As natural gas is the main costing element for producing AN, 
it cannot be excluded that Ukrainian producers will have to increase their export prices 
to third countries, thereby significantly reducing the price difference between sales to 
third  countries  and  sales  to  the  Community  mentioned  in  recital  (44)  above. 
Preliminary evidence16 points indeed to the narrowing of this gap. 

4.  Conclusion on the likelihood of Continuation or recurrence of dumping 

(46)  The  investigation  has  shown  that  two  of  the  co-operating  producers  continued  their 
dumping  practices  despite  the  measures  in  force.  In  addition,  the  re-direction  of 
quantities currently sold to third countries to the Community cannot be excluded. 

(47)  Furthermore,  the  weighted  average  export  prices  of  the  cooperating  exporting 
producers  to  third  country  markets  are  also  considerably  lower  than  the  prevailing 

16 

Ukrainian export statistics, 2005 and 1st semester 2006 

EN 

12 

   EN 

 
                                                 
price level in the Community. Taken together with the significant spare capacity, there 
is  therefore  an  incentive  for  Ukrainian  exporting  producers  to  shift  AN  to  the 
Community market at likely dumped prices should measures be repealed.  

D. 

DEFINITION OF THE COMMUNITY INDUSTRY 

(48)  Within  the  Community,  the  like  product  is  manufactured  by  14  producers  whose 
output  constitutes  the  total  Community  production  of  the  like  product  within  the 
meaning of Article 4(1) of the basic Regulation.  

(49) 

It  should  be  noted  that  as  compared  to  the  original  investigation,  the  “Hydro  Agri” 
companies have been renamed “Yara”. Five of the fourteen companies became part of 
the Community industry due to the enlargement of the European Union in 2004. 

(50)  Out  of 

the  14  Community  producers, 

the 
investigation,  all  of  them  mentioned  in  the  review  request.  The  remaining  four 
producers  ('other  Community  producers')  made  themselves  known  within  the  time 
limits and sent the information requested for the purpose of sampling. However, they 
did  not  offer  any  further  co-operation.  Accordingly,  the  following  ten  producers 
agreed to co-operate:  

ten  companies  co-operated  with 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Achema AB (Lithuania), 

Zaklady Azotowe Anwil SA, (Poland), 

BASF AG (Germany), 

DSM Agro (The Netherlands), 

Fertiberia SA (Spain), 

Grande Paroisse SA (France), 

Nitrogénművek Rt (Hungary), 

Terra Nitrogen Limited (UK), 

Yara (Germany, Italy, the Netherlands and the United Kingdom), 

Zaklady Azotowe Tarnowie (Poland). 

(51)  As  these  ten  Community  producers  accounted  for  70%  of  the  total  Community 
production  during  the  RIP,  it  is  therefore  considered  that  the  above  ten  Community 
producers  account  for  a  major  proportion  of  the  total  Community  production  of  the 
like product. They are therefore deemed to constitute the Community industry within 
the  meaning  of  Article  4(1)  and  Article  5(4)  of  the  basic  Regulation  and  will 
hereinafter be referred to as the ‘Community industry’. 

(52)  As indicated under recitals (11) and (14) above, a sample consisting of four companies 
was  selected.  All  sampled  Community  producers  cooperated  and  sent  questionnaire 
replies within the deadlines. In addition, the remaining six co-operating producers duly 
provided certain general data for the injury analysis. 

EN 

13 

   EN 

 
E. 

SITUATION ON THE COMMUNITY MARKET 

1.  Consumption in the Community market 

(53)  The  apparent  Community  consumption  was  established  on  the  basis  of  the  sales 
volumes of the Community industry on the Community market, the sales volumes of 
the other Community  producers  on the  Community market, and Eurostat data for  all 
EU  imports.  Given  the  enlargement  of  the  European  Union  in  2004,  for  the  sake  of 
clarity and consistency of the analysis, the consumption was established on the basis 
of the EU-25 market throughout the period considered. 

(54)  Between 2002 and the RIP, Community consumption decreased slightly by  1%. The 
4% increase recorded in 2003 settled down in 2004 indicating a stabilisation, whereas 
the further decrease (-1%) recorded in the RIP points to a slightly downward trend.  

2002 

2003 

2004 

RIP 

Total EC consumption in tonnes 

7 757 697 

8 099 827 

7 775 470 

7 641 817 

Index (2002=100) 

100 

104 

100 

99 

2.  Volume, market share and prices of imports from Ukraine 

(55)  The volumes, market shares and average prices of the imports from Ukraine developed 
as set out below. The following quantity and price trends are based on Eurostat. 

Volume of imports (tonnes) 

Market share 

Prices of imports (EUR/tonne) 

Index (2002=100) 

2002 

2003 

2004 

RIP 

212 827 

123 477 

51 031 

62 077 

2,7% 

1,5% 

0,7% 

0,8% 

88 

100 

83 

94 

112 

122 

127 

139 

(56)  The  volume  of  imports  from  Ukraine  decreased  consistently  throughout  the  period 
considered. Their market share also dropped from 2,7% in 2002 to 0,8% in the RIP. 
The prices evolved positively from 88 to 122 EUR/tonne during the period considered. 
This evolution reflects the favourable market conditions described also in recital (73) 
below.  

(57)  For  the  purpose  of  calculating  the  level  of  price  undercutting  during  the  RIP, 
Community  industry’s  ex-works  prices  to  unrelated  customers  have  been  compared 
with  the  CIF  Community  frontier  import  prices,  of  co-operating  exporting  producers 
of  the  country  concerned,  duly  adjusted  in  order  to  reflect  a  landed  price.  The 
comparison  showed  that  imports  from  Ukraine  were  undercutting  the  prices  of  the 
Community industry by 10 to 15%. 

EN 

14 

   EN 

 
 
 
3. 

Imports from other countries  

(58)  The  volume  of  imports  from  other  third  countries  during  the  period  considered  are 
shown in the  table below.  The  following quantity and price trends are also based on 
Eurostat. 

2002 

2003 

2004 

RIP 

Volume of imports from Russia (tonnes) 

690 233 

528 609 

504 026 

257 921 

Market share 

8,9% 

6,5% 

6,5% 

3,4% 

Prices of imports from Russia (EUR/tonne) 

79 

77 

106 

123 

Volume of imports from Georgia (tonnes) 

86 517 

100 025 

132 457 

153 844 

Market share 

Prices 
of 
(EUR/tonne) 

1,1% 

1,2% 

1,7% 

2,0% 

imports 

from  Georgia 

103 

113 

137 

164 

Volume of imports from Romania (tonnes) 

186 834 

14 114 

107 585 

111 126 

Market share 

Prices 
of 
(EUR/tonne) 

2,4% 

0,2% 

1,4% 

1,5% 

imports 

from  Romania 

117 

113 

126 

144 

Volume of imports from Bulgaria (tonnes) 

160 423 

140 677 

79 716 

73 441 

Market share 

of 
Prices 
(EUR/tonne) 

2,1% 

1,7% 

1,0% 

1,0% 

imports 

from  Bulgaria 

133 

139 

157 

176 

Volume of imports from Egypt (tonnes) 

63 368 

133 427 

16 508 

46 249 

Market share 

0,8% 

1,6% 

0,2% 

0,6% 

Prices of imports from Egypt (EUR/tonne) 

148 

142 

193 

199 

Volume of imports from all other countries 
(tonnes) 

Market share 

94 915 

128 213 

54 510 

17 752 

1,2% 

1,6% 

0,7% 

0,2% 

Prices  of  imports  from  all  other  countries 
(EUR/tonne) 

124 

124 

141 

169 

EN 

15 

   EN 

 
 
(59)  Firstly, it should be noted that all the countries above decreased their export volumes 
from 2002 to the RIP with the exception of Georgia, which increased moderately its 
Community  market  share  from  1,1%  in  2002  to  2%  in  the  RIP.  As  for  the  export 
prices, all the above countries have exported to the Community at prices higher than 
the  Community  industry  prices  in  the  RIP  and  in  some  cases  throughout  the  period 
considered,  with  the  exception  of  Russia  and  Romania.  In  the  case  of  imports  from 
Russia, since April 2002, by Council Regulation (EC) No 658/200217, they are subject 
to  an  anti-dumping  duty  of  EUR  47,07  per  tonne.  In  this  respect,  it  should  be  noted 
that the import prices were consistently lower than those from Ukraine, throughout the 
period considered with the exception of the RIP. As to the Romanian prices, they were 
lower  than  the  Community  industry's  prices,  but  the  export  volumes  decreased  from 
187  thousand  tonnes  in  2002  to  111  thousand  tonnes  in  the  RIP,  representing  a 
decrease from a low market share of 2,4% in 2002 to 1,5% in the RIP. 

4. 

Economic situation of the Community industry  

(60)  Pursuant  to  Article  3(5)  of  the  basic  Regulation,  the  Commission  examined  all 
relevant economic factors and indices having a bearing on the state of the Community 
industry.  

4.1.  Preliminary remarks 

(61)  Three  of  the  co-operating  Community  industry  producers  were  found  to  use  the  like 
product  for  further  processing  to  blended  or  synthetic  fertiliser  products  which  are 
further  downstream  nitrogenous  fertilisers  containing  in  addition  to  the  nitrogen, 
water-soluble  phosphorus,  or/and  water-soluble  potassium,  which  are  the  other 
primary fertiliser nutrients. These products, with ammonium nitrate content less than 
80% by weight, do not compete on the market with the like product. 

(62)  Such internal captive transfers of AN production do not enter the open market and thus 
are not in direct competition with imports of the product concerned. It was therefore 
examined whether and to what extent the subsequent use of the Community industry's 
production  of  the  like  product  had  to  be  taken  into  account  in  the  analysis.  As  the 
investigation  showed  that  the  captive  use  represents  an  insignificant  fraction  of  the 
Community  industry's  production,  i.e.  up  to  2%,  it  was  not  considered  necessary  to 
distinguish the free and the captive market. For the sake of clarity and transparency, 
however, the volumes of AN produced by the Community industry and used as captive 
transfers are mentioned in recital (64) below. 

(63)  Where recourse is made to sampling, in accordance with established practice, certain 
injury indicators (production, production capacity, stocks, sales, market share, growth 
and  employment)  are  analysed  for  the  Community  industry  as  a  whole  (‘C.I:.  in  the 
enclosed  tables),  while  those  injury  indicators  relating  to  the  performances  of 
individual  companies, 
i.e.  prices,  costs  of  production,  profitability,  wages, 
investments, return on investment, cash flow, ability to raise capital are examined on 
the  basis  of  information  collected  at  the  level  of  the  sampled  Community  producers 
(S.P. in the enclosed tables). 

17 

OJ  L  102,  18.4.2002,  p.  1.  Regulation  as  amended  by  Regulation  (EC)  No  945/2005  (OJ  L  160, 
23.6.2005, p. 28). 

EN 

16 

   EN 

 
                                                 
4.2.  Data relating to the Community industry as a whole 

(a) Production 

(64)  The Community industry’s production increased by 7% between 2002 and the RIP, i.e. 
from  a  level  of  around  5,1  million  tonnes  in  2002  to  a  level  of  around  5,4  million 
tonnes  in  the  RIP.  As  for  the  production  used  for  captive  transfers,  it  remains 
practically stable and very low throughout the period considered, showing thus that it 
can not affect the injury picture of the Community industry. 

C.I. Production (tonnes) 

Index (2002 = 100) 

2002 

2003 

2004 

RIP 

5 075 456

5 424 732

5 358 283  5 446 307

100 

107 

106 

107 

C.I. production used for captive transfers  83 506 

83 911 

93 187 

107 461 

As % of total production 

1,6% 

1,5% 

1,7% 

2,0% 

Source: Complainants, sampling questionnaire replies and verified questionnaire replies 

(b) Capacity and capacity utilisation rates 

(65)  Production  capacity  remained  practically  stable  throughout  the  period  considered.  In 
view of the growth in production, the resulting capacity  utilisation increased, from  a 
level  of  52%  in  2002  to  a  level  of  56%  in  the  RIP.  As  already  noted  in  the  original 
investigation,  capacity  utilisation  for  this  type  of  production  and  industry  can  be 
affected  by  the  production  of  other  products  which  can  be  produced  on  the  same 
production equipment and is therefore less meaningful as an injury indicator. 

2002 

2003 

2004 

RIP 

Production 

C.I. 
(tonnes) 

capacity 

C.I. Capacity utilisation 

(c) Stocks  

9 813 156 

9 843 266 

9 681 968 

9 718 866 

52% 

55% 

55% 

56% 

(66)  The  level  of  closing  stocks  of  the  Community  industry  decreased  by  ten  percentage 
points from 2002 to the RIP. A sharp decrease registered in 2003 and 2004 was due to 
an  increase  in  sales,  in  particular  the  exports  of  the  Community  industry  (see  recital 
below), rather than in production volumes. 

2002 

2003 

2004 

RIP 

C.I. Closing stocks (tonnes) 

312 832 

216 857 

163 824 

282 942 

Index (2002 = 100) 

100 

69 

52 

90 

EN 

17 

   EN 

 
 
 
 
(d) Sales volume  

(67)  Sales  by  the  Community  industry  on  the  Community  market  increased  by  13% 
between 2002 and the RIP. This development has to be seen against the background of 
a slightly shrinking consumption on the Community market.  

2002 

2003 

2004 

RIP 

C.I. EC sales volume (tonnes)  

4 499 898 

5 045 582 

4 975 864 

5 074 188 

Index (2002 = 100) 

100 

112 

111 

113 

sales  volume 

S.P. 
countries (tonnes) 

to 

third 

420 588 

528 437 

522 349 

373 106 

Index (2002 = 100) 

100 

126 

124 

89 

(e) Market share 

(68)  The  market  share  held  by  the  Community  industry  increased  between  2002  and  the 
RIP.  Specifically,  the  Community  industry  gained  more  than  8  percentage  points  of 
market share during the period considered. 

2002 

2003 

2004 

RIP 

Market 
industry 

share  of  Community 

58,0% 

62,3% 

64,0% 

66,4% 

Index (2002 = 100) 

100 

107 

110 

114 

(f) Growth  

(69)  The Community industry gained market share in a slightly shrinking market over the 

period considered.  

(g) Employment 

(70)  The level of employment of the Community industry decreased by 5% between 2002 
and the RIP, while production increased, reflecting thus the concern of the industry to 
continuously increase its productivity and competitiveness. 

2002 

2003 

2004 

RIP 

C.I. Employment product concerned 

1 653 

1 613 

1 593 

1 572 

Index (2002 = 100) 

100 

98 

96 

95 

EN 

18 

   EN 

 
 
 
 
(h) Productivity  

(71)  The  output  per  person  employed  by  the  Community  industry  per  year  increased 
substantially between 2002 and the RIP, showing thus the combined positive impact of 
reduced employment and increase in production of the Community industry.  

2002 

2003 

2004 

RIP 

C.I. Productivity (tonnes per employee) 

3 071 

3 362 

3 364 

3 464 

Index (2002 = 100) 

100 

109 

110 

113 

(i) Magnitude of dumping margin  

(72)  As  concerns  the  impact  on  the  Community  industry  of  the  magnitude  of  the  actual 
margin  of  dumping,  given  the  currently  small  volume  of  imports  from  Ukraine,  this 
impact is considered not to be significant and the indicator not meaningful. 

4.3.  Data relating to the sampled Community producers 

(a) Sales prices and factors affecting domestic prices 

(73)  The  sampled  Community  industry  producers'  average  net  sales  price  increased 
substantially  in  2004  and  the  RIP  reflecting  the  prevailing  favourable  international 
market conditions of AN during the same period. 

S.P. Unit price EC market (EUR/tonne) 

Index (2002 = 100) 

(b) Wages  

2002 

2003 

2004 

RIP 

132 

100 

133 

101 

146 

111 

167 

127 

(74)  Between 2002 and the RIP, the average wage per employee increased by 9%, as the 
table  below  shows.  In  the  light  of  the  inflation  rate  and  the  overall  reduced 
employment, this increase of wages is considered to be moderate. 

2002 

2003 

2004 

RIP 

S.P. Annual labour cost per employee (000 EUR) 

46,5 

46,8 

46,7 

50,5 

Index (2002 = 100) 

100 

101 

100 

109 

(c) Investments  

(75)  Annual investments in the like product made by the four sampled producers developed 
positively  during  the  period  considered,  i.e.  increased  by  69  %,  although  it  showed 
some  fluctuations.  These  investments  related  mainly  to  modernisation  of  machinery. 
This  shows  the  efforts  of  the  Community  industry  to  continuously  improve  its 
productivity  and  competitiveness.  The  results  are  apparent  in  the  evolution  of 

EN 

19 

   EN 

 
 
 
 
productivity  which  increased  substantially  (see  recital  (71)  above)  during  the  same 
period. 

2002 

2003 

2004 

RIP 

S.P. Net investments (000 EUR) 

21 079  16 751  22 287  35 546 

Index (2002 = 100) 

100 

79 

106 

169 

(d) Profitability and return on investments 

(76)  Profitability  of  the  sampled  producers  shows  a  gradual  improvement  notably  since 
2003 and reached the level of 8,2% during the RIP. In this respect, it is noted that in 
the original investigation, a profit margin of 8% that may be reached in the absence of 
injurious dumping had been established. The return on investments (ROI), expressed 
as  the  profit  in  percent  of  the  net  book  value  of  investments,  broadly  followed  the 
profitability trend over the whole period considered. 

2002 

2003 

2004 

RIP 

S.P.  Profitability  of  EC  sales 
customers (% of net sales) 

to  unrelated 

3,9% 

5,5% 

7,6% 

8,2% 

Index (2002 = 100) 

100 

139 

194 

209 

S.P.  ROI  (profit  in  %  of  net  book  value  of 
investment) 

10,1% 

14,0% 

20,0% 

25,5% 

Index (2002 = 100) 

100 

139 

197 

252 

(e) Cash flow and ability to raise capital  

(77)  Cash-flow  has  increased  by  13  percentage  points  during  the  period  considered.  This 
development  is  in  line  with  the  development  of  the  overall  profitability  during  the 
period considered. 

2002 

2003 

2004 

RIP 

S.P. Cash flow (000 EUR) 

59 631 

61 446 

69 848 

67 216 

Index (2002 = 100) 

100 

103 

117 

113 

(78)  The  investigation  did  not  reveal  any  difficulties  encountered  by  the  sampled 
Community  producers  in  raising  capital.  In  this  respect,  it  should  be  noted  that  as 
several of these companies are part of large groups, they finance their activities within 
the group to which they belong either through cash-pooling schemes or through intra-
group loans granted by the mother companies.  

EN 

20 

   EN 

 
 
 
 
5.  Conclusion 

(79)  Between  2002  and  the  RIP,  all  injury  indicators  developed  positively:  production 
volume of the Community industry increased, unit sales prices and  sales  volumes of 
the Community industry increased and profitability improved substantially and in line 
with the prices. Return on investment and cash-flow evolved positively as well. Wages 
developed moderately and the Community industry continued to invest. 

(80)  Moreover,  the  Community  market  share  increased  by  9%  in  a  slightly  shrinking 
market. The productivity increased also substantially reflecting the positive evolution 
of  production  and  the  efforts  of  the  Community  industry  to  improve  it  through 
investments.  

(81)  Overall,  the  situation  of  the  Community  industry  has  improved  significantly  as 
compared  to  its  situation  prior  to  the  imposition  of  the  anti-dumping  measures  on 
imports  of  AN  from  the  country  concerned  in  2001.  The  measures  had  therefore  a 
clear positive impact on the economic situation of the Community industry.  

(82) 

It  is  therefore  concluded  that  the  situation  of  the  Community  industry  has  improved 
gradually  during  the  period  considered,  as  compared  to  the  period  preceding  the 
imposition of measures. 

F. 

LIKELIHOOD OF RECURRENCE OF INJURY 

1.  General 

(83)  Since there is no continuation of material injury caused by imports from the country 
concerned,  the  analysis  focused  on  the  likelihood  of  recurrence  of  injury.  In  this 
respect, two main parameters were analyzed: (i) possible export volumes and prices of 
the country concerned and (ii) the effect of those projected volumes and prices from 
the country concerned on the Community industry.  

2. 

Possible export volumes and prices of the country concerned 

(84)  As  it  is  shown  in  recital  (41),  there  is  a  known  spare  capacity  of  around  600-700 
thousand  tonnes  of  the  cooperating  Ukrainian  producers,  representing  8-10%  of  the 
Community market. This surplus capacity indicates that Ukrainian producers have the 
possibility to increase their current production and thus also their exports of AN.  

(85)  Moreover, given the relative small domestic market, Ukrainian producers are heavily 
depending on exports to third countries. As demonstrated in the table below, Ukrainian 
exports  to  third  countries  in  2005  were  about  847  thousand  tonnes  in  total, 
representing about 11% of the Community market.  

EN 

21 

   EN 

 
Ukrainian  exports 
to third countries:  

2004 

2005 

Turkey 

Egypt 

Morocco 

India 

Syria 

Brazil 

Malaysia 

Argentina 

Volume in tonnes 

295 436 

292 943 

Price in EUR/tonne* 

98 

98 

Volume in tonnes 

81 522 

183 248 

Price in EUR/tonne* 

95 

Volume in tonnes 

92 541 

Price in EUR/tonne* 

96 

Volume in tonnes 

42 456 

Price in EUR/tonne* 

77 

Volume in tonnes 

Price in EUR/tonne* 

Volume in tonnes 

Price in EUR/tonne* 

Volume in tonnes 

Price in EUR/tonne* 

50 851 

100 

8 000 

74 

- 

Volume in tonnes 

28 790 

Price in EUR/tonne* 

99 

97 

62 879 

94 

48 256 

106 

41 143 

110 

38 870 

91 

35 913 

101 

28 815 

97 

Other countries 

Total exports to 3rd 
countries 

Volume in tonnes 

140 225 

114 783 

Price in EUR/tonne* 

90 

106 

Volume in tonnes 

739 821 

846 849 

Price in EUR/tonne* 

95 

99 

Source: Ukrainian statistics,  

*: The unit price is based on the customs value of the product at the Ukrainian border. This 
value can be considered comparable to the value of imports into the Community originating 
in Ukraine based on Eurostat  

(86)  As can be seen from the table, Ukraine increased its exported volume of AN to third 
countries  from  2004  to  2005.  These  exports  were  made  at  prices  substantially  lower 
than the exports to the Community. 

EN 

22 

   EN 

 
 
 
(87) 

In  the  above  context,  the  Community  market  would  appear  to  be  attractive  for  the 
Ukrainian  exporting  producers  in  terms  of  prices  as  compared  to  all  other  export 
markets.  On  this  basis,  it  is  reasonably  expected  that  a  considerable  part  of  the 
volumes  exported  to  third  countries  would  be  very  likely  directed  toward  the 
Community  market,  should  the  measures  be  allowed  to  lapse,  despite  the  early 
indications of the narrowing of the gap of the price difference between sales to third 
countries  and  sales  to  the  Community  mentioned  in  recital  (45)  above.  The  relative 
proximity of the Community market, as compared to other export markets, would also 
render  the  Community  market  more  attractive  and  would  therefore  lead  to  the  re-
direction of current exports by Ukrainian producers to third countries. 

(88)  Given  the  currently  weak  market  position  of  Ukrainian  products  in  the  EC,  the 
Ukrainian exporters would however need to regain lost market share or broaden their 
customer base and are likely to do so at dumped prices as established during the RIP.  

(89)  The applicant argued that the Community industry's profit was actually very poor over 
the period considered and that only during the RIP, it reached the rate of 8%. It further 
argued  that  a  capital  intensive  industry  such  as  the  fertilizers  industry  could  not 
survive over the long-term, i.e. maintain and replace capital and all operations on such 
profit rate. In this respect, it should be noted that the non-injurious profit rate of 8%, 
established in the original investigation was considered to be a normal profit that this 
kind of industry should expect to reach in the absence of injurious dumping. However, 
also during that original investigation, it was established that due to injurious dumping 
from inter alia the Ukraine, profitability had deteriorated to -12,4%. Therefore, should 
measures  be  repealed,  there  is  a  serious  risk  that  profitability  be  reduced  to  a 
percentage considerably below the non-injurious rate. ).  

(90) 

It is to be noted that around 80% of total Ukrainian exports to the Community market 
during the RIP were made under a price undertaking. Nevertheless, the prices were 20-
25%  above  the  minimum  import  price  of  this  undertaking.  It  should,  however,  be 
noted  that  the  undertaking  was  subject  to  a  quantitative  ceiling  and  that  therefore,  it 
was  not  possible  to  draw  a  general  conclusion  what  would  have  been  the  price 
behaviour of the exporters in the absence of such quantitative ceiling.  

(91)  On the basis of the above, it would therefore be likely that significant volumes of AN 
produced in Ukraine would be redirected to the Community market at dumped prices 
which substantially undercut Community industry’s prices, if measure are allowed to 
lapse. 

3. 

Impact  on  the  Community  industry  of  the  projected  export  volumes  and 
price effects in case of repeal of measures  

(92) 

In view of the above established likelihood of significant increase of export volumes 
from  Ukraine  into  the  Community  market  at  dumped  and  undercutting  prices,  the 
Community industry would have to significantly decrease its sales prices to maintain 
its customers. This is particularly true, as AN is a volatile commodity for which prices 
can be significantly affected by an import volume at dumped prices undercutting the 
Community industry's prices. Therefore, profits would strongly decrease as the current 
improvement  of  the  Community  industry's  performance  is  due  to  sales  prices 
reflecting mainly the favourable market conditions prevailing in particular during 2004 
and the RIP. 

EN 

23 

   EN 

 
(93)  With regard to the favourable market conditions during the last two years of the period 
considered, it should be noted that they played an important role in keeping the prices 
at  a  high  level,  in  addition  to  the  applicable  anti-dumping  measures.  Indeed,  during 
that  period,  a  tight  worldwide  supply  demand  balance  resulted  in  high  prices  for  all 
nitrogen  fertilisers.  AN  is  alike  the  other  nitrogen  fertilisers  a  commodity  whose 
pricing is  influenced by  numerous factors  going from the volatile gas price having a 
considerable impact on the supply as being the most important costing element, to the 
weather  conditions,  crops  and  grain  stock  levels  resulting  in  reduced  or  increased 
demand.  With  particular  regard  to  the  Community  market,  the  demand  of  nitrogen 
fertilisers is expected to slightly decrease in the forthcoming years18. The maintenance 
of  such  high  prices  depends  therefore  on  a  tight  supply,  which  is  nevertheless  very 
unlikely,  as  the  investigation  showed,  given  the  spare  export  capacity  of  the  country 
concerned and the likelihood that part of its exports to third countries during the RIP 
would  be  redirected  to  the  Community,  should  the  measures  lapse.  Given  that  the 
prices  practices  by  the  Ukrainians  were  significantly  undercutting  the  prices  of  the 
Community  industry,  the  likely  increase  in  import  volumes  from  Ukraine  will  force 
the Community industry either to lower significantly its prices, thereby its profits, or 
to lose significant market share and thus revenue, or both. The successful restructuring 
process of the Community industry could probably only partially counterbalance such 
a  likely  price  depression  and  the  whole  recovery  process  would  be  put  in  danger. 
Therefore, a deterioration of the Community industry's overall performance is likely to 
result from the repeal of the measures. 

4.  Conclusion on likelihood of recurrence of injury 

(94)  The  above  leads  to  the  conclusion  that  should  measures  lapse,  exports  from  the 
country  concerned  would  very  likely  occur  in  significant  volumes  and  at  dumped 
prices  that  would  undercut  the  Community  industry’s  prices.  This  would  in  all 
likelihood have the effect of introducing a price-depressive trend on the market, with 
an  expected  negative  impact  on  the  economic  situation  of  the  Community  industry. 
This would, in particular, impede the financial recovery that was achieved in 2004 and 
the RIP, leading to a likely recurrence of injury. 

G. 

COMMUNITY INTEREST 

1. 

Introduction 

(95)  According to Article 21 of the basic Regulation, it was examined whether maintenance 
of the existing anti-dumping measures would be against the interest of the Community 
as a whole. The determination of the Community interest was based on an appreciation 
of all various interests involved. 

(96) 

It should be recalled that, in the original investigation, the adoption of measures was 
considered not to be contrary to the interest of the Community. Furthermore, the fact 
that  the  present  investigation  is  a  review,  thus  analysing  a  situation  in  which  anti-
dumping  measures  have  already  been  in  place,  allows  the  assessment  of  any  undue 
negative impact on the parties concerned by the current antidumping measures. 

18 

Source: "Global fertilisers and raw materials supply and supply/demand balances:2005-2009", A05/71b, 
June 2005, International Fertiliser Industry Association 'IFA'. 

EN 

24 

   EN 

 
                                                 
(97)  On  this  basis,  it  was  examined  whether, despite  the conclusions  on the likelihood of 
recurrence of injurious dumping, 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. 

Interest of the Community industry 

(98)  The  Community  industry  has  proven  to  be  a  structurally  viable  industry.  This  was 
confirmed  by  the  positive  development  of  its  economic  situation  observed  after  the 
imposition of anti-dumping measures in 2001. In particular, the Community industry 
improved  its  profit  situation  between  2002  and  the  RIP  and  restructured  itself 
successfully. 

(99) 

It  can  thus  reasonably  be  expected  that  the  Community  industry  will  continue  to 
benefit from the measures currently imposed and further recover by maintaining and 
stabilising  its  profitability.  Should  the  measures  not  be  maintained,  it  is  likely  that 
increased  imports  at  dumped  prices  from  the  country  concerned  will  occur,  thereby 
causing  injury  to  the  Community  industry  by  exerting  a  downward  pressure  on  the 
sales prices which will endanger its currently positive financial situation. 

3. 

Interest of importers  

(100)  As mentioned in recital (11) above, only one importer indicated its willingness to be 
included  in  the  sample  and  provided  the  basic  information  required  in  the  sampling 
form. However, the said importer did not have any import activity during the RIP.  

(101)  It  is  recalled  that  in  the  original  investigation  it  was  found  that  the  impact  of  the 
imposition  of  measures  would  not  be  significant  to  the  extent  that  imports  would 
continue to take place albeit at non-injurious prices and that as a rule, importers do not 
only  deal  in  AN  but  also,  to  a  significant  extent,  in  other  fertilisers.  The  downward 
trend in imports from the country concerned during the period considered leads to the 
conclusion that some importers may indeed have had negative consequences from the 
imposition  of  measures,  as  indicated  in  recital  (52)  of  Commission  Regulation  (EC) 
No 1629/2000. However, in the absence of co-operation of importers and thus of any 
conclusive evidence allowing to assess any significant negative consequences, it was 
concluded  that  the  imposition  of  measures  appears  to  have  had  an  overall  limited 
impact on the majority of importers/traders. 

(102)  There  is  no  reliable  information  available  indicating  that  the  maintenance  of  the 

measures will have a significant negative effect on importers or traders. 

4. 

Interest of users 

(103)  Users  of  AN  are  farmers  in  the  Community.  In  the  original  investigation,  it  was 
concluded  that  given  the  small  incidence  of  the  cost  of  AN  on  the  farmers,  any 
increase in these costs was unlikely to have a significant adverse effect on them. The 
fact that no users or user association provided any information contradicting the above 
finding in the framework of the current review investigation seems to confirm that: (i) 
AN  represents  a  very  small  part  of  total  production  costs  for  the  farmers;  (ii)  the 
measures  currently  in  force  did  not  have  any  substantial  negative  effect  on  their 

EN 

25 

   EN 

 
economic situation; and (iii) the continuation of measures would not adversely affect 
the financial interests of the farmers. 

5.  Conclusion on Community interest 

(104)  Given  the  above,  it  is  concluded  that  there  are  no  compelling  reasons  against  the 

maintenance of the current anti-dumping measures. 

H. 

ANTI-DUMPING MEASURES 

(105)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which  it  is  intended  to  recommend  that  the  existing  measures  be  maintained.  They 
were also granted a period to make representations subsequent to this disclosure.  

(106)  It  follows  from  the  above  that,  as  provided  for  by  Article  11(2)  of  the  basic 
Regulation,  the  anti-dumping  measures  applicable  to  imports  of  AN  originating  in 
Ukraine  should  be  maintained.  It  is  recalled  that  these  measures  consist  of  specific 
duties.  

(107)  As  indicated  in  recital  (45),  the  Ukrainian  import  prices  for  natural  gas  have 
significantly  increased  since  the  RIP  and  they  are  likely  to  progressively  converge 
with international prices in the coming years. Moreover, as explained in recital (32), 
the dumping findings were based on a normal  value determined on the basis of  data 
obtained  from  a  producer  in  a  market  economy  third  country.  Subsequent  to  the 
lodging of the request for the expiry review, Ukraine obtained Market Economy status. 
Given  this  and  that  natural  gas  is  the  main  cost  element  for  producing  AN,  it  is 
possible that, should dumping be revised at a later stage on the basis of normal value 
data of the Ukrainian exporters the findings would differ from those established in the 
current  review.  Likewise,  the  potentially  injurious  effects  of  that  revised  dumping 
would also be affected by the impact on export prices of the production costs increases 
caused by the evolution of domestic gas prices. Therefore, it is considered prudent to 
limit  the  maintenance  of  the  measures  to  two  years,  without  prejudice  to  the  other 
provisions of Article 11 of the basic Regulation. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 
A definitive anti-dumping duty is hereby imposed on imports of solid fertilisers with 
an ammonium nitrate content exceeding 80% by weight, falling within CN codes 3102 30 90, 
3102 40 90, ex 3102 29 00, ex 3102 60 00, ex 3102 90 00, ex 3105 10 00, ex 3105 20 10, ex 
3105 51 00, ex 3105 59 00 and ex 3105 90 91, and originating in Ukraine. 

The  rate  of  anti-dumping  duty  shall  be  a  fixed  amount  of  euro  per  tonne  as  shown 

2. 
below: 

EN 

26 

   EN 

 
Product description 

CN code 

TARIC 
code 

Amount of 
duty (Euro 
per tonne) 

Ammonium nitrate other than in aqueous solutions 

3102 30 90 

- 

Mixtures  of  ammonium  nitrate  with  calcium 
carbonate  or  other 
inorganic  non-fertilising 
substances,  with  a  nitrogen  content  exceeding  28% 
by weight 

3102 40 90 

33,25 

33,25 

Double  Salts  and  mixtures  of  ammonium  sulphate 
and  ammonium  nitrate  -  Solid  fertilisers  with  an 
ammonium  nitrate  content  exceeding  80%  by 
weight 

Double  salts  and  mixtures  of  calcium  nitrate  and 
ammonium  nitrate  -  Solid  fertilisers  with  an 
ammonium  nitrate  content  exceeding  80%  by 
weight 

3102 29 00 

10 

33,25 

3102 60 00 

10 

33,25 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding 80% by weight 

3102 90 00 

10 

33,25 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding 80% by weight, with no phosphorus and 
no potassium content 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  and/or  a  potassium 
content evaluated as K2O of less than 3% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  and/or  a  potassium 
content evaluated as K2O of 3% by weight or more 
but less than 6% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  and/or  a  potassium 
content evaluated as K2O of 6% by weight or more 
but less than 9% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  and/or  a  potassium 
content evaluated as K2O of 9% by weight or more 
but not exceeding 12% by weight 

3105 10 00 

10 

33,25 

3105 10 00 

10 

33,25 

3105 10 00 

30 

31,25 

3105 10 00 

40 

30,26 

3105 10 00 

50 

29,26 

EN 

27 

   EN 

 
 
Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 and a potassium content 
evaluated as K2O of less than 3% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 and a potassium content 
evaluated as K2O of 3% by weight or more but less 
than 6% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 and a potassium content 
evaluated as K2O of 6% by weight or more but less 
than 9% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 and a potassium content 
evaluated as K2O of 9% by weight or more but not 
exceeding 12% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  of  less  than  3%  by 
weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 of 3% by weight or more 
but less than 6% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80  %  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  of  6  %  by  weight  or 
more but less than 9% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 of 9% by weight or more 
but not exceeding 10,40% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content  evaluated  as  P2O5  of  less  than  3%  by 
weight 

3105 20 10 

30 

32,25 

3105 20 10 

40 

31,25 

3105 20 10 

50 

30,26 

3105 20 10 

60 

29,26 

3105 51 00 

10 

32,25 

3105 51 00 

20 

31,25 

3105 51 00 

30 

30,26 

3105 51 00 

40 

29,79 

3105 59 00 

10 

32,25 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 

3105 59 00 

20 

31,25 

EN 

28 

   EN 

 
content evaluated as P2O5 of 3% by weight or more 
but less than 6% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 of 6% by weight or more 
but less than 9% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding  80%  by  weight,  and  a  phosphorus 
content evaluated as P2O5 of 9% by weight or more 
but not exceeding 10,40% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding 80% by weight, and a potassium content 
evaluated as K2O of less than 3% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding 80% by weight, and a potassium content 
evaluated as K2O of 3% by weight or more but less 
than 6% by weight 

Solid  fertilisers  with  an  ammonium  nitrate  content 
exceeding 80% by weight, and a potassium content 
evaluated as K2O of 6% by weight or more but less 
than 9% by weight 

Solid  fertilisers  with  an ammonium  nitrate content 
exceeding 80% by weight, and a potassium content 
evaluated as K2O of 9% by weight or more but not 
exceeding 12% by weight 

3105 59 00 

30 

30,26 

3105 59 00 

40 

29,79 

3105 90 91 

30 

32,25 

3105 90 91 

40 

31,25 

3105 90 91 

50 

30,26 

3105 90 91 

60 

29,26 

3. 
In  cases  where  goods  have  been  damaged  before  entry  into  free  circulation  and, 
therefore,  the  price  actually  paid  or  payable  is  apportioned  for  the  determination  of  the 
customs  value  pursuant  to  Article  145  of  Commission  Regulation  (EEC)  No  2454/9319,  the 
amount  of  anti-dumping  duty,  calculated  on  the  amounts  set  above,  shall  be  reduced  by  a 
percentage which corresponds to the apportioning of the price actually paid or payable.  

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties  shall 

4. 
apply. 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. It shall be in force for a period of 2 years. 

Article 2 

19 

OJ L 253, 11.10.1993, p. 40. 

EN 

29 

   EN 

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

Done at Brussels,  

For the Council 
The President 

EN 

30 

   EN