CELEX: 51982PC0879
Language: en
Date: 1982-12-20
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on certain chemical fertilizer originating in the United States of America (submitted to the Council by the Commission)

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DOCUMENTS "COM"
COM (82) 879
Vol. 1982/0268
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   COM(82)879 final
                                                   Brussels , 20 December 1982
                         Proposal for a
                    COUNCIL REGULATION ( EEC )
 imposing a definitive anti-dumping duty on certain chemical fertilizer
                   originating in the United States of America
            ( submitted to the Council by the Commission )
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  COM ( 82 ) 879 final
 ---pagebreak---                    EXPLANATORY MEMORANDUM
           1     ......     .     2
On 22 July    and 21 August 1982    the Commission imposed provisional anti-
dumping duties on exports of urea ammonium nitrate solution fertilizer
originating in the USA .      The duties were imposed on three companies ,
Allied Corporation , Transcontinental Fertilizer Company and Kaiser
Aluminum Domestic and International Sales Corporation , all of whom      had
withdrawn from price undertakings accepted by the Commission in 1981 ^.
Allied Corporation did not co-operate in the Commission 's subsequent
investigation .    In addition , Kaiser was found to have been in breach of
its undertaking by exporting to the EEC via Transcontinental , whose
undertaking price was lower than Kaiser 's .
All three companies' undertakings had contained an indexation formula
requiring six monthly adjustments of export prices .     The Commission applied
this indexation formula as the basis on which the levels of dumping were
established .   Exports by Allied Corporation , Kaiser and Transcontinental
were on this basis dumped at margins of 19.05% , 12.13% and 12.01%
respectively .
With respect to injury the dumped shipments amounted to approximately 12%
of Community consumption in 1982 and were sold at prices considerably
below the Community producers' costs .
On the basis of these facts the Commission therefore submits to the
Council its proposal for a Council Regulation imposing definitive anti-
dumping duties on certain chemical fertilizer exported by the US companies
Allied Corporation , Kaiser Aluminum Domestic and International Sales
Corporation and Transcontinental Fertilizer Company at the respective
levels of 19.05% , 12.13% and 12.01% .    It is also proposed to collect
definitively all the amounts secured as provisional duty .
  0J N° L 214 , 22.07.1982 , p.   7
20J N° L 246, 21.08.1982 , p. 5
30J N° L 39 , 12.02.1981 , p. 35
 ---pagebreak---                                   Proposal for a
                           COUNCIL REGULATION ( EEC )
   imposing a definitive anti-dumping duty on certain chemical fertilizer
   originating in the United States of America
   THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
   Having regard to the Treaty establishing the European Economic Community ,
                                                                                    1
   Having regard to Council Regulation ( EEC ) N      3017 / 79 of 20 December 1979
   on protection against dumped or subsidized imports from countries not
   members of the European Economic Community , and in particular Article 12
   thereof , as amended by Council Regulation ( EEC ) N° 1580 / 82 of
  1 4 June 1 982 *",
   Having regard to the proposal submitted by the Commission after consultation
within the Advisory Committee       provided for by              the said Regulation
   ( EEC ) N° 3017 / 79 ,
           in 1981                                           3
   Whereas / the Council , by Regulation ( EEC ) N 349 / 81 , imposed a definitive
   anti-dumping duty on imports of urea ammonium nitrate solution fertilizer
    ( UAN ) originating in the United States of America ( USA ) the level of duty
   being 6.5% ;
   Whereas this definitive anti-dumping duty did not apply to UAN exported
                                                                 Corppratj on ) ,
   by inter alia Allied Corporation ( formerly Allied Chemical /         Kaiser
   Aluminum Domestic and International Sales Corpora^fon^and Transcontinental
    Fertiliser Co. ^ ranS ?si1nJe eprfce undertakings were offered by these
                                                                                      4
    companies and                       were considered acceptable by the Commission ;
      0J N° L 339 , 31.12.1979 , p.  1
    20J N° L 178 , 22.06.1982 , p. 9
    30J N° L 39, 12.02.1981 ., p. 4
    40J N° L 39 , 12.02.1981 , p. 35
 ---pagebreak--- Whereas Allied Corporation , Transcontinental                               and
Kaiser                                                                have by
correspondence dated 7 June , 2 July and 23 July 1982 respectively informed
the Commission of their withdrawal from their individual price undertakings ;
Whereas in accordance with Article 10(6 ) of the said Council Regulation
( EEC ) N° 3017 / 79 , the Commission informed the Member States forthwith
                                   1
and reopened the proceedings ; whereas this reopening was also warranted
by evidence submitted to the Commission by the EEC producers of changed
circumstances as regards imports of UAN^ to the Community from the USA to
justify a need for a review in terms of Article 14 of the said Council
Regulation ( EEC ) N° 3017 / 79 ;
Whereas                the Commission considered that the companies which
withdrew from their undertakings did so in order to export UAN to the
Community at price levels below those specified in the undertakings ; whereas
according to the information available to the Commission
                                                                       any exports
at such price levels would be dumped and cause injury to the Community
industry ;
Whereas the dumping margins                                               determined
during the previous investigation were 6.5% for AlLied Corporation and
Transcontinental                            and 5% for Kaiser;
                                       whereas these levels were those at which
duties would have been imposed had these companies' price undertakings not
been accepted ;
Whereas the Community 's interests therefore called for the immediate
application of provisional measures based on the evidence available to the
Commission ; whereas the Commission has , accordingly , in terms of Article 10(6 )
of the same Council Regulation ( EEC ) N° 3017 / 79 imposed provisional anti-
dumping duties at the above-mentio ed levels on the three companies concerned
                                     3           . .4
by Regulation ( EEC ) N     1976 / 82 , as amended ;
  OJ N° C 179 , 16.07.1982 , p. 4
^ Common Customs Tariff subheading : ex 31.02 C ; Nimexe code : ex 31.02-90
30J N° L 214, 22.07.1982 , p. 7
40J N° L 246 , 21.08.1982 , p. 5
 ---pagebreak---                                              - 3 -
          Whereas the Commission at the same time commenced further investigation
          and officially so advised the exporters and importers known to be concerned
          as well as representatives of the exporting country ;
          Whereas the Commission has given the parties directly concerned the opportunity
          to make known their views in writing and to request a hearing ; whereas all
          the exporters concerned and certain importers have made their views known
          in writing and have requested and been granted a hearing .;
                                                                             could be
          Whereas in order that a full exami nr.t i cn of the svnilshle facts /      made hy
          the Commission before definitive measures were taken ,, the Council by Regulation
           ( EEC ) N° 3044 / 82 V r0 longed the validity of the provisional anti-dumping duties
          by two months ;
          Whereas the Commission has for the purpose of the further investigation
          sought and verified information deemed to be necessary at the premises of
          the following EEC producers :-
          Azotes et Produits Chimiques SA , Paris
          Compagnie Française de l' Azote , Paris
          Général des Engrais , Paris
          Société Chimique de la Grande Paroisse , Paris
          Ruhr Stickstoff AG , Bochum
          BASF AG , Ludwigshafen
          Neder landsche Stickstof Maatschappij , Brussels
          Unie van Kunstmestf abri eken BV , Utrecht ;
          and the following importers :- Demufert SA , Brussels;Ferdi s SA , Brussels ;
          Whereas Allied Corporation did not co-operate in the investigation ; whereas
          Kaiser informed the Commission that they had not exported to the EEC since
          offering their undertaking and accordingly no relevant export price existed for
mparison purposes ; whereas , however , an investigation took place at the premises of
          Transcontinental in Philadelphia which revealed that the product exported
          by it     had been produced by Kaiser ;
 ---pagebreak--- Whereas the Commi ssion,as a result of this further investigation , has
established updated normal values for the companies concerned ; whereas ,
because of the lack of co-operation from Allied Corporation the Commission
had to establish whether there was dumping in the case of Allied in
conformity with Article 7 paragraph 7(b ) of Regulation ( EEC ) N° 3017 / 79 on
the basis of the facts available ; whereas^ of the facts avai lable^ publi shed
data on US domestic prices had to be rejected by the Commission , since
the exporters and importers concerned disputed their accuracy and since
the Commission had reason to believe that even if these prices accurately
reflected conditions on the US market they were not sufficient to cover
the producer 's fixed and variable costs ; whereas consequently the Commission
took account of the fact that in 1981 Allied Corporation had subscribed to
a price undertaking in order to keep its export prices in line with normal
value and that in order to avoid future discrepancy between normal value
and export prices the undertaking included an indexation formula requiring
the six monthly adjustment of export prices ;
 ---pagebreak---                                -  5 -
Whereas since Allied Corporation had made two large shipments to the Community
since withdrawing from their price undertaking the reference period for
the purposes of establishing dumping was taken from the date of the first
shipment ( July 1982 ) to the end of 1982 ; whereas the Commission has applied
i ndexat i on
the / formula for the reference period and since the resulting price is that
at which Allied would have had to export in accordance with the terms of
the price undertaking ]?^ sused this price to establish the normal value for
the reference period ;
Whereas Kaiser and Transcontinental were required to apply the same indexation
formula as Allied Corporation to adjust their export prices six monthly ;
Whereas although Kaiser made no direct shipments during the period of
validity of its price undertaking , the investigation revealed that the
single shipment made by Transcontinental during this period was of product
manufactured by Kaiser ; whereas , consequently , a normal value was established
for Kaiser by applying the            formula for adjusting Kaiser 's export
price for the six month period during which the single shipment took place ,
i.e. the first six months of 1982 ;
Whereas since Transcontinental made no sales of the product on the US
domestic market and since the only shipment made by this company to the EEC
during the relevant period was of product manufactured by Kaiser , the
Commission considered it appropriate to take the normal value established for
Kaiser as the basis for Transcontinental ^ normal value ; whereas adjustment
of Kaiser 's normal value was made to take account of a reasonable profit
margin for Transcontinental ; whereas for this purpose 5% before taxation was
considered reasonable ;
 ---pagebreak---  Whereas for Allied and Transcontinental export prices were determined on
the basis of the prices actually paid for the products exported to the
Community ;
Whereas , since Kaiser made no direct shipments to the Community during the
relevant period but exported via Transcontinental and since during the
investigation Transcontinental would not reveal the price it paid to Kaiser
for the product , the Commission determined Kaiser 's export price by reducing
that of Transcontinental by the amount of a reasonable profit margin
      for the resale of such product to the Community , namely 5% ; whereas , in
addition , Kaiser 's undertaking price was significantly higher than that of
Transcontinental ; whereas Kaiser was required by the terms of its undertaking
to take all possible steps to ensure that the undertaking was not evaded
by resales made for export to the Community of products sold in countries
not members of the Community ; whereas the Commission therefore has reason to
believe that Kaiser 's undertaking has been violated ;
Whereas all comparisons of normal values with export prices were made at
an FOB US port level ;
  Whereas    such      comparisons show the existence of dumping in respect of
  the three companies concerned, the margins of dumping being equal to the
  amounts by which the normal values as established exceed the prices for
  export to the Community ;
  Whereas since Allied Corporation made shipments at different price levels
  a weighted average dumping margin for this company was determined ;
  Whereas the margins varied according to each exporter and were as follows :
  Allied Corporation     19.05%
  Kaiser    Aluminum Domestic /International Sales Corporation    12.13%
  Transcontinental     Fertilizer Company   12.01% ;
  Whereas the Commission considered that the results of its investigation
  provided as accurate a basis for determination of the level of dumping as
  possible and that        lower levelswould constitute a bonus for Allied
  Corporation 's withdrawal from its undertaking and subsequent non-cooperation
  and the withdrawal from      their           undertakings by Kaiser and
  T rans continental ;
 ---pagebreak--- Whereas with regard to the injury caused by the dumped imports the evidence
available to the Commission shows that for the companies concerned the
quantity of these imports for the first eight months of 1982 amounted to
118 850 tonnes which , if taken on an annual basis , would account for
some 12% of total Community consumption of UAN ;
Whereas the prices paid in the Community for the dumped products in
question significantly undercut the prices of the Community producers ;
Whereas the impact on this Community industry has been that losses continue
to be made on UAN sales ;
Whereas in considering whether injury has been caused by other factors the
evidence available to the Commission shows that
certain other Community producers situated in other Member States
                                          , , .     , of . UAN .
have entered the market and increased their sa les / part l cu lar ly. in France ;
whereas , however , the investigation has shown that the low level of these
producers' prices resulting in considerable losses was due to the fact that
they had to compete with the dumped imports ; whereas, accordingly, injury
caused by the dumped imports has been sustained by producers throughout
the Community and the allegation of the exporters and importers concerned
that any injury to French and German producers was solely as a result of
increased sales of UAN from other Community producers cannot be supported ;
Whereas , furthermore , the Commission is currently undertaking an anti-
dumping review procedure concerning the remaining exports of UAN to the
Communi ty ;
Whereas the        impact           of the dumped imports of the companies
concerned has therefore been isolated from that of the other exports subject
 to the above review investigation ;
Whereas the exporters and importers concerned further alleged that the
 French producers , comprising 43% of Community production of UAN could not
be considered to have sustained injury in view of the Decision of the
                          i     an alteration of
Minister for Competition     requi ring / certain aspects of the French producers
 4
   Bulletin Officiel de la Concurrence et de la Consommation of 12.12.1981
 ---pagebreak--- pricing policy regarding , inter alia , nitrogen based fertilizers ;
           whereas they further alleged that although this decision refers
to both solid ( mainly ammonium nitrate ) and liquid ( UAN ) nitrogen based
fertilizers this does not reduce its relevance since            ammonium nitrate
                                                  however ,
and UAN are effectively like products ;      whereas^ / i n its investigation
the Commission sought and verified data relating to production and sales
of UAN , this data clearly permitting    separate identification of the
product concerned; wherens the Commission is satisfied that in the course of
 this investigation it received correct information on the particular situation
 relating to Community producers of UAN ; whereas the Commission , in the light
of this information is satisfied that the dumped imports of UAN from the
 companies concerned have caused material injury to the Community producers ,,
 including those in France ; whereas the Commission sees no contradiction
 between this specific injury finding regarding UAN and the Decision of~the
 French authorities which referred to the behaviour of fertilizer producers
 in relation to a much wider range of both phosphorous and nitrogen based
 fertilizers ;
Whereas no representations have been received by the Commission from con­
sumers in the Community ; whereas in any case the interest of consumers in
the Community is not served in the long run by a Community industry weakened
or reduced by persistent dumping ; whereas in these circumstances protection
of the Community 's interests calls for the imposition of definitive anti-
dumping duties on urea ammonium nitrate solution fertilizer originating in
the United States of America and exported by the three companies concerned ,
which , having regard to the extent of injury caused , should be equal to
the dumping margins found , and for the definitive collection of all amounts
secured by way of provisional duty in respect of the product concerned ;
Whereas the exporters and importers concerned were informed of the Commission 's
findings in accordance with Article 7 of the said Council Regulation ( EEC )
N° 3017 / 79 ;
Whereas , however , these definitive measures regarding the imports by those
exporters which have withdrawn from their undertakings shall not in any
way prejudice the results of the review procedure regarding other exports of
UAN from the USA currently being undertaken by the Commission ;
Whereas , until the current or any subsequent review procedure requires the
 repeal , annulment or amendment of Regulation ( EEC ) N 3 349 / 81 it shall remain
 in force ,
 HAS ADOPTED THE FOLLOWING REGULATION :
 ---pagebreak---                                 Article   1
1.    A definitive anti-dumping duty is hereby imposed on urea ammonium
nitrate solution fertiliser , falling         within Common Customs Tariff
subheading ex 31 . 02 C -'"•a corresponding to NIMEXE code ex 31.02-90 exported
by Allied Corpora * ion . Kaiser Aluminum Domestic and International Sales
Corporation and Transcontinental Fertilizer Company .
2.    The rates of duty shall be based on the customs value determined in
accordance with Council Regulation ( EEC ) N° 1224 / 80 of 28 May 1980 on the
                                              1
valuation of goods for customs purposes         and are as follows :
Allied Corporation       19.05%
Kaiser Aluminum      Domestic and International Sales Corporation      12.13 /£
Transcontinental Fertilizer          Company    12.01%
3.    The provisions in force for the application of customs duties shall
apply to the duty .
                               Article    2
 The amounts secured by way of provisional duty pursuant to Regulation
 ( EEC ) N° 1976 / 82 shall be definitively collected at a rate of
 6.5% for exports by Allied Corporation
 6.5% for exports by       Transcontinental Fertilizer   Company
 5.0% for exports by Kaiser Aluminum         Domestic and International Sales
                          Corporat i on .
                               Article    3
 This Regulation shall enter into force on the day following its publication
  in the Official Journal of the European Communities .
  This Regulation shall be binding in its entirety and directly applicable
  in all  Member  States .
  Done at Brussels                              For the Council
 1 0J N° L 134 , 31 . 05.1980