Proposal for a Council Regulation of amending Regulation (EC) No 1911/2006 imposing a definitive anti-dumping duty on imports of solutions of urea and ammonium nitrate originating, inter alia, in Russia
Date: 2009-11-23
Institutions: European Commission
Subjects: Russia, anti-dumping duty, anti-dumping legislation, chemical fertiliser, import, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.11.2009 
COM(2009)637 final 

Proposal for a 

COUNCIL REGULATION 

of 

amending Regulation (EC) No 1911/2006 imposing a definitive anti-dumping duty on 
imports of solutions of urea and ammonium nitrate originating, inter alia, in Russia

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EXPLANATORY MEMORANDUM 

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  December  2005  ('the  basic  Regulation')  in  the  proceeding 
concerning imports of solutions of urea and ammonium nitrate originating, inter alia, in 
Russia. 

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 

The  measures  currently  in  force  were  imposed  by  Council  Regulation  (EC)  No 
1911/2006 imposing a definitive anti-dumping duty on imports of solutions of urea and 
ammonium nitrate originating, inter alia, in Russia. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

Interested parties concerned by the proceeding have 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. 

Legal elements of the proposal 

Summary of the proposed action 

On 21 March 2009, the Commission initiated a new exporter review of the measures in 

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force  in  respect  of  imports  of  mixtures  of  urea  and  ammonium  nitrate  in  aqueous  or 
ammoniacal  solution  ('UAN')  originating  in  Russia  further  to  a  request  made  by  an 
exporting producer in Russia, Joint Stock Company "Acron" (the 'applicant') .  

The request was based on prima facie evidence that the applicant did not export UAN 
to  the  Community  during  the  period  of  investigation  on  which  the  anti-dumping 
measures  were  based  and  that  it  is  not  related  to  any  of  the  exporting  producers  of 
UAN which are subject to the above-mentioned anti-dumping measures. The applicant 
further  alleged  that  it  began  exporting  UAN  to  the  Community  after  the  end  of  the 
original investigation period. 

The  attached  proposal  for  a  Council  Regulation  is  based  on  the  findings  of  the 
investigation  carried  out  which  is  limited  in  scope  to  the  examination  of  the  'new 
exporter' qualification and dumping as far as the applicant is concerned. 

The investigation confirmed that the applicant should be considered a 'new exporter' in 
accordance  with  Article  11(4)  of  the  basic  Regulation.  It  also  showed  that  dumping 
took place during the investigation period. The level of the dumping found was higher 
than the injury elimination level in the original investigation.  

It  is  therefore  proposed  to  impose  anti-dumping  measures  at  the  level  of  the  injury 
margin  found  in  the  original  investigation.  This  margin  corresponds  to  the  country-
wide  duty  on  imports  of  UAN  from  Russia.  It  is  appropriate  to  impose  duties  in  the 
form  of  a  specific  amount  per  tonne  as  already  imposed  by  Regulation  (EC)  No 
1995/2000 for the other exporters. The duty shall be levied retroactively from the date 
of initiation of the review. 

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 of 21 December 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 

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Proposed instruments: Amending Regulation. 

Other  means  would  not  be  adequate  for  the  following  reason:  The  above-mentioned 
basic Regulation does not foresee alternative options. 

Budgetary implication 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

of 

amending Regulation (EC) No 1911/2006 imposing a definitive anti-dumping duty on 
imports of solutions of urea and ammonium nitrate originating, inter alia, in Russia 

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 9(4) and 11(3) thereof, 

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

Whereas: 

A. PREVIOUS PROCEDURE 

(1) 

(2) 

By  Regulation  (EC)  No  1995/20002,  the  Council  imposed  a  definitive  anti-dumping 
duty on imports of solutions of urea and ammonium nitrate ('UAN') originating, inter 
alia,  in  Russia.  This  regulation  will  hereinafter  be  referred  to  as  'the  original 
Regulation'  and  the  investigation  that  led  to  the  measures  imposed  by  the  original 
Regulation will be hereinafter referred to as 'the original investigation'.  

Following  an  expiry  review  initiated  in  September  2005  ('the  expiry  review'),  the 
Council, by Regulation (EC) No 1911/20063, renewed for five years these measures at 
their current level. The measures consist of specific duties. 

B. PRESENT PROCEDURE 

1. REQUEST FOR A REVIEW  

(3) 

A request for a new exporter review ('the present review') pursuant to Article 11(4) of 
the basic Regulation was  lodged by  Joint  Stock Company Acron ('the applicant'), an 

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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 238, 22.9.2000, p. 15. 
OJ L 365, 21.12.2006, p. 26. 

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exporting producer in Russia. The request was limited in scope to dumping as far as 
the applicant is concerned. 

(4) 

The applicant alleged that it did not export UAN to the Community during the period 
of  investigation  on  which  the  anti-dumping  measures  were  based,  that  is,  the  period 
from 1 June 1998 to 31 May 1999 ('the original investigation period') and that it is not 
related  to  any  of  the  exporting  producers  of  UAN  which  are  subject  to  the  above-
mentioned  anti-dumping  measures.  The  applicant  further  alleged  that  it  began 
exporting UAN to the Community after the end of the original investigation period. 

2. INITIATION OF A 'NEW EXPORTER' REVIEW 

(5) 

(6) 

The  Commission  examined  the  prima  facie  evidence  submitted  by  the  applicant  and 
considered it sufficient to justify the initiation of a review pursuant to Article 11(4) of 
the  basic  Regulation.  After  consulting  the  Advisory  Committee  and  after  the 
Community  industry  concerned  had  been  given  the  opportunity  to  comment,  the 
Commission initiated by Regulation (EC) No 241/20094, a review of Regulation (EC) 
No 1911/2006 ('measures in force') with regard to the applicant. 

Pursuant to Article 2 of Commission Regulation (EC) No 241/2009, the anti-dumping 
duty  of  20,11  EUR/tonne  imposed  by  Regulation  (EC)  No  1911/2006  on  imports  of 
UAN produced and sold for export to the Community by the applicant was repealed. 
Simultaneously, pursuant to Article 14(5) of the basic Regulation, customs authorities 
were directed to take appropriate steps to register these imports. 

3. PRODUCT CONCERNED  

(7) 

The  product  concerned  by  the  current  review  is  the  same  as  in  the  original 
investigation,  i.e.  a  solution  of  urea  and  ammonium  nitrate,  a  liquid  fertiliser 
commonly  used  in  agriculture,  originating  in  Russia  ('the  product  concerned');  It 
consists of a mixture of urea, ammonium nitrate and water. The product concerned is 
currently falling within CN code 3102 80 00.  

4. PARTIES CONCERNED 

(8) 

(9) 

The Commission officially informed the applicant, the representatives of the exporting 
country and the association of Community producers about the initiation of the review. 
Interested  parties  were  given  the  opportunity  to  make  their  views  known  in  writing 
and  to  request  a  hearing  within  the  time  limit  set  in  the  notice  of  initiation.  All 
interested parties, who so requested and showed that there were particular reasons why 
they should be heard, were granted a hearing. 

The  Commission  sent  questionnaires  to  the  applicant  and  its  related  companies  and 
received replies within the deadlines set for that purpose. The Commission sought and 
verified  all  information  deemed  necessary  for  the  determination  of  dumping.  The 
Commission  carried  out  verification  visits  at  the  premises  of  the  applicant  and  its 
related company: 

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OJ L 75, 21.03.2009, p. 5. 

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–  JSC Acron, Novgorod, Russia; 

–  Agronova International Inc., Hallandale, USA ('Agronova'). 

5. REVIEW INVETIGATION PERIOD 

(10)  The 'new exporter' review investigation period covered the period from 1 January 2008 

to 31 December 2008 ('RIP'). 

C. RESULTS OF THE INVESTIGATION  

1. 'NEW EXPORTER' QUALIFICATION 

(11)  The investigation confirmed that the applicant had not exported the product concerned 
during  the  original  investigation  period  and  that  it  had  begun  exporting  to  the 
Community after this period.  

(12)  Furthermore, the applicant was able to demonstrate that it was not related to any of the 
exporters  or  producers  in  Russia  which  are  subject  to  the  anti-dumping  measures  in 
force on imports of the product concerned originating in Russia. 

(13) 

In this context, it is confirmed that the applicant should be considered a 'new exporter' 
in accordance with Article 11(4) of the basic Regulation. 

2. DUMPING 

2.1 Determination of normal value 

(14)  The  applicant  had  no  domestic  sales  in  Russia  of  the  product  concerned.  Whenever 
domestic prices cannot be used in order to establish normal value, another method has 
to be applied. In accordance with Article 2(3) of the basic Regulation the Commission 
instead calculated a constructed normal value, as follows. 

(15)  Normal value was constructed on the basis of the manufacturing costs incurred by the 
applicant  plus  a  reasonable  amount  for  selling,  general  and  administrative  costs 
('SG&A  costs')  and  for  profits,  in  accordance  with  Article  2(3)  and  (6)  of  the  basic 
Regulation. 

2.1.1. Adjustment of natural gas costs on the domestic Russian market  

(16)  Regarding  the  cost  of  manufacturing,  it  should  be  noted  that  gas  costs  represent  a 
major  proportion  of  the  manufacturing  cost  and  a  significant  proportion  of  the  total 
cost  of  production.  In  accordance  with  Article  2(5)  of  the  basic  Regulation,  it  was 
examined  whether  the  costs  associated  with  the  production  and  sales  of  the  product 
concerned were reasonably reflected in the records of the applicant. 

(17) 

It was established that the domestic gas prices paid by the applicant were abnormally 
low. By way of illustration, they amounted to between one forth and one fifth of the 
export price of natural gas from Russia. In this regard, all available data indicates that 
domestic gas prices in Russia were regulated prices, which are far below market prices 
paid  in  unregulated  markets  for  natural  gas.  Since  gas  costs  were  not  reasonably 
reflected in the applicant’s records, they had to be adjusted accordingly. In the absence 

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of  any  undistorted  gas  prices  relating  to  the  Russian  domestic  market,  and  in 
accordance with Article 2(5) of the basic Regulation, gas prices had to be established 
on  "any  other  reasonable  basis,  including  information  from  other  representative 
markets". 

(18)  The adjusted price was based on the average price of Russian gas when sold for export 
at the German/Czech border (Waidhaus), net of transport costs and adjusted to reflect 
local distribution cost. Waidhaus, being the main hub for Russian gas sales to the EU, 
which is both the largest market for Russian gas and has prices reasonably reflecting 
costs, can be considered a representative market within the meaning of Article 2(5) of 
the basic Regulation. 

(19)  Following  disclosure,  the  applicant  submitted  several  claims  linked  to  the  (i)  legal 
basis of the gas adjustment made on the one hand and (ii) to the methodologies applied 
for the gas adjustment on the other hand.  

2.1.1.1. Legal basis of the gas adjustment 

(20)  The  applicant  claimed  that  any  adjustment  of  the  gas  price  paid  on  the  Russian 
domestic market would be unwarranted because its accounting records fully reflected 
the  costs  associated  with  the  production  of  the  product  concerned  in  Russia.  The 
applicant  further  argued  that  in  accordance  with  Article  1  of  the  basic  Regulation, 
normal value must always be established with regard to the exporting country and that 
consequently  it  was  contrary  to  that  article  to  base  findings  on  information  from 
producers in other third countries.  

(21)  As  to  the  applicant's  argument  about  the  alleged  breach  of  Article  1  of  the  basic 
Regulation  it  should  be  noted  that  Article  1  only  describes  the  general  concept  of 
dumping but the detailed rules on establishing dumping are set out in Article 2 of the 
basic  Regulation.  Article  2(5)  of  the  basic  Regulation  provides  for  the  possibility  to 
use data from other representative markets including a third country if costs associated 
with  the  production  and  sale  of  the  product  under  investigation  are  not  reasonably 
reflected in the records of the party concerned. The applicant's argument in this respect 
had therefore to be rejected. 

(22)  The applicant also invoked the existence of natural competitive advantages in Russia 
such as the large availability of natural gas and favourable conditions of supply which 
would explain the price difference between the natural gas sold domestically and the 
one  exported.  The  applicant  also  alleged  that  Russian  domestic  gas  prices  would  be 
cost covering. 

(23)  With  regard  to  the  existence  of  natural  advantages  the  applicant  did  not  address  the 
fact  that  domestic  prices  for  natural  gas  were  regulated  in  Russia  and  could  not 
therefore be considered to reasonably reflect  a price normally payable in  undistorted 
markets.  The  applicant  did  also  not  submit  any  evidence  in  support  of  these  claims. 
Furthermore, as regards costs, even if gas prices paid by the applicant covered the unit 
cost of production and sales of gas incurred by its provider, this argument is irrelevant 
since the market price of gas is not necessarily linked to the costs of its production and 
sales. These claims had therefore to be rejected.  

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(24)  The applicant claimed further that an investigation under the basic Regulation should 
not cover the case of subsidisation of up-stream products. It is noted that Article 2(5) 
of the basic Regulation aims to determine whether costs associated with the production 
and  sale  of  the  like  product  are  reasonably  reflected  in  the  records  of  the  party 
concerned. This was found not to be the case for the reasons set out above in recital 
(17). This is different from the determination of the existence of subsidies which was 
not subject to the present investigation. The applicant's argument therefore had to be 
rejected. 

(25) 

In this context, the applicant also argued that even if particular market situations exist 
within the meaning of Article 2(3) of the basic Regulation, these would only refer to 
the market of the product concerned, i.e. UAN as such which  cannot  be extended to 
the market conditions of the up-stream product. However, as it results from recital (24) 
above, the adjustment for natural gas prices was done on the basis of Article 2(5) of 
the basic  Regulation  which, as mentioned above in  recital (21) explicitly  entitles the 
Institutions to use the cost of production coming from other representative market. The 
applicant's argument therefore had to be rejected.  

(26)  The applicant finally argued that Article 2(5) of the basic Regulation is limited to the 
examination of the compliance of the company's records with the generally accepted 
accounting principles of the third country concerned and does not require that costs are 
in line with costs in unregulated markets.  

(27) 

It  should  be  noted  that  in  accordance  with  Article  2(5)  of  the  basic  Regulation  two 
requirements need to be met in order for the costs to be calculated on the basis of the 
records kept by the exporter: (i) records must be kept in accordance with the generally 
accepted  accounting  principles  (“GAAP”)  of  the  country  concerned  and  (ii)  records 
must  reasonably  reflect  the  costs  associated  with  the  production  and  sale  of  the 
product  concerned.  If,  as  in  the  present  case,  the  second  requirement  is  not  met 
because  the  costs  are  not  reflected  in  the  records,  the  costs  must  be  adjusted.  The 
applicant's argument therefore had to be rejected. 

2.1.1.2 Methodology applied for the gas adjustment 

(28)  The  applicant  claimed  that  during  the  RIP  of  the  current  investigation  gas  prices 
fluctuated significantly and that normal value should be established on a monthly (or 
at least quarterly) basis rather than on a yearly basis.  

(29) 

It should be noted that although gas prices fluctuated during the RIP, these fluctuations 
were  not  considered  exceptional  or  particularly  significant.  Indeed,  the  market  for 
natural  gas  is  generally  characterised  by  rather  important  price  fluctuations.  The 
applicant could not show that there were any specific circumstances and that the price 
fluctuations  during  the  RIP  were  significantly  beyond  usual  fluctuations.  Therefore 
there was no reason to deviate from the methodology used in the investigation leading 
to  the  measures  in  force.  Secondly,  information  on  which  basis-  according  to  the 
applicant  -  normal  values  should  have  been  established  was  only  partly  available, 
since  the  necessary  information  from  the  US  companies,  i.e.  SG&A  and  profit  was 
only available  on  a  yearly  basis.  Therefore, even if one would follow the applicant's 
argument,  no  meaningful  calculation  of  a  monthly  or  quarterly  values  would  have 
been possible. The applicant's argument therefore had to be rejected. 

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(30)  The applicant also claimed that Waidhaus is not an appropriate reference market given 
the  allegedly  non  competitive  pricing  on  gas  in  Germany  and  relationships  between 
parties  which  factor  is  linked  to  the  price  formulae  in  the  gas  export  contracts  from 
Russia.  

(31) 

It should be noted that the alleged non-competitive domestic gas pricing in Germany 
was  in  any  event  considered  irrelevant  because  it  would  only  concern  the  prices  at 
which German gas distributors sell the gas on the domestic market, and therefore, this 
is not linked at all to the price at which Russian exported gas is sold at Waidhaus. The 
applicant's argument that the German incumbents do not have an incentive to negotiate 
low prices for Russian imported gas at Waidhaus is a mere presumption without any 
factual background and evidence. Consequently, these arguments were rejected. 

(32)  The applicant argued further that if the export price at Waidhaus was to be used, the 
Russian  export  duty  payable  for  all  exports  should  have  been  deducted  from  the 
Waidhaus price because it was not incurred domestically.  

(33) 

Indeed, the market price at Waidhaus, which was considered as representative market 
within  the  meaning  of  Article  2(5)  of  the  basic  Regulation,  is  the  price  after  export 
taxes and not the prices before these taxes. From the perspective of the buyer it is the 
price  it  has  to  pay  at  Waidhaus  which  is  relevant,  and  in  this  regard  it  is  irrelevant 
what percentage of that price constitutes an export tax and what percentage is paid to 
the gas supplier. The latter, on the other hand will always try to maximise its price and 
therefore charge the highest price its customers are willing to pay. Given that this price 
is  always  well  above  its  costs  of  production,  allowing  the  gas  supplier  to  make  high 
profits, the market price is not primarily influenced by the amount of the export tax but 
by  the  price  the  market  is  willing  to  pay.  It  was  therefore  concluded  that  the  price 
including  the  export  tax,  and  not  the  price  before  that  tax,  is  the  undistorted  market 
driven price. Consequently, the arguments of the applicant in this regard were rejected. 

(34) 

In  this  context,  the  applicant  also  claimed  that  the  mark-up  of  the  local  distributor 
should not be added to the export price at Waidhaus, without however explaining or 
demonstrating  why  it  considered  that  the  adjustment  for  the  local  distributor  would 
have  been  inappropriate.  It  was  considered  that  since  domestic  customers  were 
purchasing the gas from local suppliers, it had to be assumed that they would have to 
pay local distribution costs which are not as such included in the unadjusted Waidhaus 
price.  Therefore  it  was  considered  that  this  adjustment  was  indeed  warranted  and 
consequently the applicant's claim was rejected.  

2.1.2 Selling, General and Administrative costs (“SG&A costs”) 

(35)  SG&A costs and profit could not be established on the basis of the chapeau of Article 
2(6),  first  sentence,  of  the  basic  Regulation  because  the  applicant  had  no  domestic 
sales in Russia of the like product. Article 2(6)(a) of the basic Regulation could not be 
applied, since only the applicant is subject to the investigation. Article 2(6)(b) was not 
applicable either, since for products belonging to the same general category of goods 
natural  gas  is  likewise  by  far  the  most  important  raw  material  and  therefore 
manufacturing  costs  would  very  likely  also  need  to  be  adjusted,  for  the  reasons 
indicated  in  recital  (17)  above.  In  the  framework  of  this  review,  no  information  was 
available  to  properly  quantify  such  adjustment  and  to  establish  SG&A  costs  and  the 
relevant profit margins when selling these products after such adjustment. Therefore, 

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SG&A  costs  and  profit  were  established  pursuant  to  Article  2(6)(c)  of  the  basic 
Regulation on the basis of a reasonable method. 

(36)  As the Russian domestic market of products of the same general category is extremely 
small,  information  had  to  be  obtained  from  other  representative  markets.  In  this 
respect,  consideration  was  given  to  publicly  available  information  relating  to  major 
companies  operating  in  the  nitrogen  fertilisers  business  sector.  It  was  found  that  the 
corresponding data from North American (namely USA) producers would be the most 
appropriate for the purpose of the investigation, given the large availability of reliable 
and complete public financial information from listed companies in this region of the 
world.  Moreover,  the  North  American  market  showed  a  significant  volume  of 
domestic sales and a considerable level of competition from both domestic and foreign 
companies.  Therefore,  SG&A  costs  and  profit  were  established  on  the  basis  of  the 
weighted  average  of  SG&A  costs  and  profit  from  three  North  American  producers, 
which were found to be amongst the largest companies in the fertilisers’ sector, with 
regard  to  their  North  American  sales  of  the  same  general  category  of  products 
(nitrogen fertilisers). These three producers were considered to be representative of the 
nitrogen fertilisers’ business and their SG&A costs and profit as representative of the 
same  type  of  costs  normally  incurred  by  companies  operating  successfully  in  that 
business segment. Furthermore, there is no indication suggesting that the amount for 
profit  so  established  exceeds  the  profit  normally  realised  by  Russian  producers  on 
sales of products of the same general category on their domestic market. 

(37)  Following  disclosure  the  applicant  contested  the  above  described  methodology 
claiming that the profit margin used is unreasonable and excessively high, especially 
in  comparison  to  the  profit  margin  used  in  previous  anti-dumping  investigations 
concerning the same product. The applicant claimed that the year 2008 on which basis 
SG&A  and  profits  were  established  was  exceptional  in  the  US  market  as  gas  prices 
were  fluctuating  considerably  and  fertiliser  prices  were  exceptionally  high  which 
yielded exceptionally high profit rates for US producers.  

(38) 

In general, the present review confirmed that there were no changed circumstances, in 
the sense of Article 11(9) of the basic Regulation, that would justify a deviation from 
the methodology used in the investigation leading to the measures in force. First of all, 
it was found that profit margins achieved by the same US producers before 2008 were 
similar  to  profit  margins  realised  in  2008.  Secondly,  even  if  profit  levels  in  2008 
differed  from  those  in  prior  years,  this  is  normal  in  a  market  economy  where  costs, 
prices  and  profits  move  over  time.  Thirdly,  the  market  for  natural  gas  is  generally 
characterised as volatile. A comparison of the gas price levels on US markets and at 
Waidhaus  in  2008  and  previous  years  did  not  show  any  diverging  trend  that  would 
have  given  grounds  for  abnormally  high  profits  on  the  US  market.  In  light  of  the 
above,  it  is  considered  that  there  were  no  grounds  to  deviate  from  the  methodology 
described above in recital (36)Error! Reference source not found.. 

(39)  Furthermore, the applicant alleged that the test of Article 2(6)(c) on the reasonableness 
of  the  profit  margin  used  was  not  applied  since  the  profit  margin  exceeds  the  profit 
normally  realised  by  other  exporters  or  producers  on  products  of  the  same  general 
category in the domestic market of the country of origin within the meaning of Article 
2(6)(c ) of the basic Regulation.  

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(40)  The applicant did not submit any evidence in support of this claim. Since the present 
review was limited to the determination of dumping with  regard  to the applicant,  no 
information was available concerning other producers in Russia. While noting that gas 
costs incurred by the applicant have had to be rejected for the reasons outlined above, 
the  applicant's  own  reported  profitability  rate  at  company  level  for  products  sold  on 
the domestic market, after corrections for extraordinary gains and losses from financial 
activities,  is  in  the  same  order  of  magnitude  as  the  profitability  rate  of  the  US 
producers.  In  these  circumstances,  there  are  no  grounds  to  consider  that  the  profit 
margin used would exceed the profit normally realised by other exporters or producers 
on  products  of  the  same  general  category  in  the  domestic  market  of  the  country  of 
origin within the meaning of Article 2(6)(c ) of the basic Regulation. 

(41)  The  Community  industry  objected  to  the  above  approach  with  regard  to  the 
determination  of  SG&A  and  profits  and  claimed  the  applicant's  own  SG&A  should 
have  been  used.  However,  Article  2(6)  of  the  basic  Regulation  sets  out  that  the 
amounts  for  SG&A  and  profits  shall  only  be  based  on  actual  data  pertaining  to  the 
production and sale of the exporting producer concerned, when these sales were made 
in the ordinary course of trade. As outlined above in recitals (35) and (36), this was not 
the  case  because  the  applicant  had  no  domestic  sales  in  Russia  of  the  like  product. 
Therefore this argument had to be rejected.  

2.2 Export price 

(42)  The  export  price  was  established  in  accordance  with  Article  2(8)  of  the  basic 
Regulation, i.e. on the basis of the price actually paid or payable for the product when 
sold for export from the exporting country to the Community.  

2.3 Comparison 

(43)  The  normal  value  and  export  price  were  compared  on  an  ex-works  basis.  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 affecting price and 
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  and  indirect  taxes  where  applicable  and  supported  by  verified 
evidence. 

(44)  Export  sales  of  the  applicant  during  the  RIP  were  made  via  Agronova,  the  related 
trader  located  in  the  USA.  The  investigation  has  shown  that  the  functions  of  the 
related  company  are  solely  restricted  to  finding  customers  and  negotiating  sales 
contracts. The verification revealed that Agronova's accounts did not fully reflect the 
totality of its operations and there were indications that although no transaction-linked 
commissions were  paid to the company, compensation for its activities was given in 
other forms. For these reasons Agronova's functions were considered to be similar to 
those  of  an  agent  working  on  a  commission  basis.  The  export  price  was  therefore 
adjusted  by  a  notional  commission  corresponding  to  a  trader's  usual  mark-up  in 
accordance with Article 2(10)(i) of the basic Regulation.  

(45)  The  applicant  claimed  that  the  export  price  should  not  have  been  adjusted  by  a 
notional  commission  in  accordance  with  Article  2(10)(i)  of  the  basic  Regulation  for 
sales made via its related company in the US since this company allegedly performed 

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functions  identical  to  those  of  a  fully  integrated  export  sales  department  and  should 
therefore not be treated as an agent working on commission basis.  

(46)  This  could  not  be  confirmed  by  the  present  investigation  which  revealed  that 
concerning  the  functions  and  the  way  the  related  company  is  compensated  for  its 
activities by the applicant, the related company should rather be considered as an agent 
working on commission basis.  

2.4 Dumping margin 

(47)  The  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) of the basic Regulation. 

(48)  This  comparison  showed  a  dumping  margin  of  22.9%,  expressed  as  a  percentage  of 

the CIF frontier price, duty unpaid. 

D. ANTI-DUMPING MEASURES 

(49) 

It  is  reminded  that,  in  accordance  with  Article  9(4)  of  the  basic  Regulation  and  as 
outlined in recital (49) of Council Regulation (EC) No 1995/2000, the definitive duty 
in  the  original  investigation  was  established  at  the  level  of  the  injury  margin  found, 
which was lower than the dumping margin because it was found that such lesser duty 
would be adequate to remove the injury to the Community industry. In the light of the 
foregoing,  the  duty  established  in  this  review  should  not  be  higher  than  the  injury 
margin.  

(50)  No individual injury margin can be established in this partial interim review, since it is 
limited to the examination of dumping as far as the applicant is concerned. Therefore, 
the  dumping  margin  established  in  the  present  review  was  compared  to  the  injury 
margin as established in the original investigation. Since the latter was lower than the 
dumping  margin  found  in  the  present  investigation,  a  definitive  anti-dumping  duty 
should  be  imposed  for  the  applicant  at  the  level  of  the  injury  margin  found  in  the 
original investigation. 

(51)  Regarding the form of the measure, it was considered that the amended anti-dumping 
duty  should  take  the  same  form  as  the  duties  imposed  by  Regulation  (EC)  No 
1995/2000. To ensure efficiency of the measures and to discourage price manipulation 
it was appropriate to impose duties in the form of a specific amount per tonne. As a 
result,  the  anti-dumping  duty  to  be  imposed  on  imports  of  the  product  concerned 
produced  and  sold  for  export  to  the  Community  by  the  applicant,  calculated  on  the 
basis  of  the  injury  margin  as  established  in  the  original  investigation  expressed  as  a 
specific amount per tonne, should be EUR 20,11 per tonne. 

E. RETROACTIVE LEVYING OF THE ANTI-DUMPING DUTY 

(52) 

In  the  light  of  the  above  findings,  the  anti-dumping  duty  applicable  to  the  applicant 
shall be levied retroactively from the date of initiation of the review on imports of the 
product concerned which have been made subject to registration pursuant to Article 3 
of Commission Regulation (EC) No 241/2009. 

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F. DISCLOSURE AND DURATION OF THE MEASURES 

(53)  The applicant and other parties were informed of the essential facts and considerations 
on  the  basis  of  which  it  was  intended  to  re-impose  a  definitive  anti-dumping  duty  on 
imports of UAN originating, inter alia, in Russia and produced and sold for export to 
the Community by the applicant and to levy this duty retroactively on imports made 
subject to registration. All parties were given an opportunity to comment. 

(54)  This review does not affect the date on which the measures imposed by Regulation (EC) 

No 1911/2006 will expire pursuant to Article 11(2) of the basic Regulation. 

G. UNDERTAKING 

(55)  Following  final  disclosure  the  applicant  offered  an  undertaking  in  accordance  with 
Article 8 of the basic Regulation. The applicant's stated that the offer would be based on 
the  reasonable  expectation  that  some  of  its  claims  made  following  the  final  disclosure 
would  be  accepted  and  would  result  in  a  minimum  import  price  workable  for  the 
applicant. Since, however, none of the comments raised by the applicant were found to 
be warranted and since the applicant appears not interested to offer a minimum import 
price based on the injury elimination level established in the original investigation, any 
further  detailed  analysis  of  the  undertaking  offer  as  to  its  acceptance  was  considered 
unnecessary. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. The table in Article 1(2) of Council Regulation (EC) No 1911/2006 is hereby amended by 
adding the following: 

'Country 

Company 

Amount of duty (per 
tonne) 

TARIC additional 
code 

Russia 

Joint Stock Company 
Acron 

EUR 20,11 

A932' 

2. The duty hereby imposed shall also be levied retroactively on imports of mixtures of urea 
and  ammonium  nitrate  in  aqueous  or  ammoniacal  solution  which  have  been  registered 
pursuant to Article 3 of Commission Regulation (EC) No 241/2009. 

3. The customs authorities are hereby directed to cease the registration of imports of mixtures 
of  urea  and  ammonium  nitrate  in  aqueous  or  ammoniacal  solution  originating  in  Russia 
produced and sold for export to the Community by Joint Stock Company Acron. 

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

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

Article 2 

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

Done at Brussels,  

For the Council 
Catherine ASHTON 
Member of the Commission 

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