CELEX: 51989PC0035
Language: en
Date: 1989-01-30
Title: Proposal for a COUNCIL REGULATION (EEC) accepting undertakings offered in connection with the anti-dumping proceeding concerning imports of urea originating in Austria, Hungary, Malaysia or Romania, confirming the undertakings accepted pursuant to Council Regulation No 3339/87 and terminating the investigations (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (89) 35
Vol. 1989/0013
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Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                    COM ( 89 ) 35      final
                                                                      Brusse l s,30’ January 1989
                                   Proposal for a
                            COUNCIL REGULATION ( EEC )
             accepting undertakings offered in connection with
          the anti-dumping proceeding concerning imports of urea
     originating in Austria , Hungary , Malaysia or Romania , confirming
 the undertakings accepted pursuant to Council Regulation No 3339/ 87 and
                       terminating the investigations
                        ( presented by the Commission )
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I. ЕШШ
   (а) й®1
    By means Of a notice published in. the Official Journal of the European
    Cor. asml ties , the Gcssnission anDOiraced the initiation of an anti-durapliig
    proceeding conoernir.g imports of ’area originating in Austria , Hutigary ,
    E^daysia , Bonania , the United States or Venezuela , 1
    Coofttssiou Regulation (ESC) No 2823/88 OF 24 August 1968 imposed a
    prov: 1. sional anti^iuirpiag duty on imports of urea originating in the
    oount’das crvncerned .^ The duty was extended for a. period not exceeding
    tv® months by Regulation (ESC) No 4018/88 . 3
   (h) gaassims gjrfloeë&lÆg
    Council Regulation (SEC) No 3339/ 8? imposed a definitive antidumping
    duty on imports of urea origina ting in Libya or Saudi Arabia and
    accepted undertakings given in oonneotion with Imports of urea
    originating in Czechoslovakia , the German Democratic Republic , Kuwait ,
    Trinidad and Tobago , the USSR or Yugoslavia am terminated the
    iTwestigations . ~ In recital 49 of the Regulation , the Council
    oons.td«rei That the measures adopted were of a transitional nature aid.
    would, have to be reviewed at the end of the proceeding under way .
 •  Oi   ÏÏO  C 271 . 9.10 . 193? , p.4 .
2   OU   No   L 235 , 25.08.1988 , p.S.
3   OU   No   L SES , 23 12.1986 , p.3 ,
4   Cl    NO  L 81?.  7.11,398?, p. 11
 ---pagebreak---                                       - 2 -
II . DUMPING
     (a) Ouïrent prnraqriirg
     The weighted average margins for each of the exporters concerned were
     established as follows :
     Austria              Chemie Linz              over    50.0%
     USA                  Agrlco                            6.4%
                          First Mississippi Corp            0.0%
                          Other exporters                  21.0%
     Hungary              Chemolimpex              over    51.0%
     Malaysia             ABF/Petronas                     41.0%
     Romania              ICE Chimica              over    55.0%
     Venezuela            Pequiven/Nitroven (*)            21.5%
     (b) Préviens proceeUng
     Pursuant to recital 49 of Council Regulation (EEC) No 3339/ 87 , there is
     no reason to review the dumping findings as established in the previous
     investigation and set out in that Regulation .
III . INJURY
     (a) Ouïrent proœeding
     The main facts established by the Commission are as follows :
     Imports of urea originating in the six countries concerned by this
     proceeding grew by more than 33% between 1984 and 1986 , and by almost
     186% between 1986 ard 1987 .
     The share of the non-captive urea market held by these countries grew
     from 5.53% in 1984 to about 15% in 1987 .
*
     For this exporter the Commission lias , on the basis of suffici'ent
     evidence , revised the dumping margin , which had h-en r'-ovis:. e. .al' y
     established as 35% .
 ---pagebreak---                                     - 3 -
Price urde*-oatting on these imports is oc^idersble : up to 17% for urea
originating in Hungary , 20*> for Austria , 23% for Malaysia and over 30::
for the other countries involved in the proceeding .
TLe impact on the Community industry has bean as fellows :
Besnrd.'te an increase of ©bout 2S% in urea consumption in the Ctamraunlty
.oetweaa 1884 ©nd 1887 , the market share held, by Ceanooity manufacturers
fell, frcaa over 92& to about 75% during the ague period .
The tesorts in question also depressed the prices charged by the
Caoauniuy producers and adversely affected their profitability . During
the refers oa period 1*ree out of five manufacturers moved from profit
into loss end the losses already being made by the otter two increased .
In coroluaion , ttse increase .in dumped imports of urea, deprived the
Ccamranity industry of the benefits of increased consumption and , by
depressing prices , led to loss of market share for the Commuiiity
producers and a eV.xp deterioration in their financial results .
As a result , the Gasffidssion oonsiders th&fc the dumped imports of urea
 frcir, the countries concerned by this proceeding caused material injury
to the Community industry .
 Pury.i&nt to recital 49 of Council Regulation (EEC) No 3339/87 , there is
 no reason to review the dumping findings as established in the previous
 irr.'estigation. ansi set out in that Regulation .
 ---pagebreak---                                       - 4 -
IV . OCMMUNITY INTEREST
In view of the serious difficulties confronting the Community industry
concerned , the Commission considers that the Community interest requires
that definitive measures be taken concerning imports of urea originating in
the countries involved in this proceeding in order to eliminate the injury
caused to the Community industry .
V.   DEFINITIVE MEASURES
     (a) Current proceeding
     The producers/exporters from the following countries offered
     undertakings which the Commission regarded as acceptable , considering
     that they were such as to bring some stability to the Community market
     while allowing the exporters in question to maintain a share of the
     Community market :
     Austria ;
     Hungary ;
     Malaysia ;
     Romania .
     (b) EresLous
     Having reviewed the measures as requested by the Council , the
     Commission found that the undertakings accepted pursuant to Council
     Regulation (EEC ) No 3339/ 87 had been adhered to and that they were such
     as to have alleviated considerably the difficulties facing the
     Community industry by reducing Imports of urea originating in the
     countries concerned to a reasonable share of Community consumption . As
     a result , the Commission considers that these undertakings should be
     confirmed .
On the basis of the above facts , trie Commission hereby presents to the
Council a proposal for a Council Regulation accepting the undertakings
offered in connection with the anti-dumping proceeding cetera ur.g ir. ports
ci urea originating in Austria , Hungary , Malaysia or Romania ,
 ---pagebreak---                                    - 5 -
confirming the undertakings aooepted pursuant to Council Regulation (EEC)
No 3339/87 and terminating the investigations .
This proposal should be examined jointly with the proposal for a Regulation
imposing a definitive anti-dumping duty on imports of urea originating in
the United States of America or Venezuela and amending Council Regulation
(EEC) No 3339/87 .
 ---pagebreak---                                  Proposai for a
                           COUNCIL REGULATION CEEC )
               accepting undertakings offered in connection with
            the anti-dumping proceeding concerning imports of urea
       originating in Austria , Hungary , Malaysia or Romania , confirming
   the undertakings accepted pursuant to Council Regulation No 3339/ 87 and
                         terminating the investigations
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
Having regard to Council Regulation (EEC) No 2423/ 88 of 11 July 1988 on
protection against dumped or subsidized imports from countries not members
of the European Economic Community , 1 and in particular Article 12 thereof ,
Having regard to the proposal from the Commission , presented after
consultations within the Advisory Committee as provided for by the above
Regulation ,
Whereas :
A. PROVISIONAL MEASURES.
1 . Commission Regulation (EEC) No 2623/ 88 imposed a provisional anti¬
     dumping duty on imports of urea originating in Austria , Hungary ,
     Malaysia , Romania , the USA or Venezuela . 2 That duty was extended for
     a period not exceeding two months by Regulation (EEC) No 4018/88 . 3
 1   OJ No L 209 , 2.8.1988 , p. 1 .
 2   OJ No L 235 , 25.8.1988 , p. 5 .
 3   OJ No L 355 , 23.12.1988 , p. 3 .
                                                                              £
 ---pagebreak---                                      - 2 -
2 . Following the Imposition of the provisional anti-dumping duty , the
     Community producers and several exporters of the product concerned
     asked for and obtained a hearing and also made known in writing their
     views on the Regulation imposing the provisional duty .
3.   In addition to the investigations which resulted in the determination
     of the provisional anti-dumping duty , the Commission oarried out
     further investigations at the premises of the following Community
     producers :
     Belglum
     Nederlandse Stikstof Maatschappij B.V. (N.S.M. ) , Brussels
     Franoe
     Compagnie française de l' azote (Cofaz) , Paris
     Société Chimique de la Grande Paroisse , Paris
     Ireland
     Irish Fertilizer Industries (IFI ) , Dublin
C. DUMPING
 (a) Normal value
      a.l . Austria
 4 . Normal value was definitively calculated according to the method used
      for the provisions! o^loulaticn of normal value , in other words on the
             of the rrioen charged during the reference period on the domestic
      marbst !rr the Austrian exporter , whicb. provided sufficient evidence .
      The Austrian, exporter expr&sssd no objection to the method laid down in
      recital 10 cf Regulation (EEC) No 2623/88 or the results obtained by
      the Commission .
                                                                               %
 ---pagebreak---    a.l . lileysia,
5. Norm! value was definitively calculated on the basis of constr acted
   value , since the average selling price on the Malaysian domestic market
   during the reference period was lower than the cost of production .
   Normal value was definitively established according to the method , and
   in accordance with the information , given in recitals 11 , 12 and 14 of
   Regulation (EBC) No 2623/88 .
   In this connection , the Malaysian firms concerned by the current
   proceeding reiterated for the most part the arguments they had put .
   forward prior to adoption of the Regulation . In these circumstances ,
   and in the absence of fresh evidence , the Council confirms the validity
   of the method referred to above .
   a . 3 Hungary and Romania
6. As Hungary and Romania are state-trading countries , normal value was
   definitively calculated according to the method used for the
   provisional calculation , that is on the basis of prices charged on the
   Austrian domestic market and according to the method , and in accordance
   with the information , given in recitals 18 to 21 of Regulation (EEC ) No
   2623 / 88 .
7. The Hungarian exporter contested the choice of Austria as an analogous
   country , maintaining that Austria was not representative because the
   Austrian exporter had a monopoly position and. its production costs were
   greater than the Hungarian production costs .
   Although no evidence was offered in support of these arguments , the
   Commission noted that prioes on the Austrian market were influenced by
   a considerable level of imports , and that in this sense they were
   representative . As regards costs , the Commission received not the
   slightest evidence that sane costs In Hungary were lower than cos ts
   found in Austria . In any case , even if it were possible to establish
   exactly the existence and extent of the advantages and disadvantages in
   question , any adjustment on this basis of costs determined in a market
                                                                             S
 ---pagebreak---                                       - 4 -
    eoanomy oountry would Imply taking as a basis for comparison oosts in a
    non-markat economy oountry , which. is precisely what Article 2(5) of
    Regulation (EEC) Ho 2423/88 alms to prevent .
    In these oircumstanoes the Council confirms the choice of Austria as an
    analogous country for the establishment of normal value in Hungary .
8 . The Romanian exporter repeated its objections to the choice of Austria
    as an analogous country , on the grounds that the Austrian market was
    very narrow and therefore not representative , that it was largely made
    up of urea for technological use whereas Romania exports only
    agricultural urea , and that Austria has no natural gas ; Romania
    therefore proposed Kuwait as a reference country .
    The Council confirms the Commission 's position , set out in recital 21
    of Regulation (EEC) No 2623/88 , as follows :
    - although the Austrian market is limited , it is a competitive market
       where prices are influenced by substantial imports and are
       representative in this sense ;
    - the argument based on the type of urea is not relevant , since there
       are no significant differences in the technology and processes
       involved In the production of urea ;
    - any possible advantage resulting from the cost of gas was difficult
       to quantify and might be counterbalanced by other competitive
       disadvantages , as explained in recital 20 of Regulation (EEC) No
       2623/88 .
    In these circumstances , the Council considers it appropriate and not
    unreasonable to base normal value .in Romania on prices on the Austrian
    domestic market . It is not therefore appropriate to choose Kuwait as
     reference oountry .
 ---pagebreak---                                      - B -
(b) Export prloes
9.   Export prioee were definitively determined on the basis of the prices
     actually paid or payable for products sold for export to the Community .
(c) r’.nrqptrH arm
10 . In general , normal value was oompared transaction by transaction with
     export prioes at ex-works level .
     The adjustments provisionally made , where appropriate , in recital 23 of
     Regulation (ESC) No 2623/88 to take account of differences affecting
     prloe comparability were retained .
11 . The dumping margin calculated for each exporter is equal to the
     difference between the normal value as established and the prloe for
     each export transaction to the Community , duly adjusted .
     On the basis of the free-at-frentier prioe , the weighted average
     dumping margin for each of the exporters concerned is as follows :
      Austria             Chemie Linz             over     50.0%
      Hungary             Chemolimpex             over     51.0%
      Malaysia            ABF/Petronas                     41.0%
      Romania             ICE Chimica             over     55.0%
D. INJÜRY
12 . As no new evidence was receive!, the Council confirms the facts and
     Commission conclusions presented in recitals 27 , 30 , 32 and 36-4.0 of
     Regulation (ESC ) No 2623/ 88 .
                                                                               λ
 ---pagebreak---                                       - 6 -
     As regards the effect of dumped. Imports an the market share held by the
     exporters , on Community production and on the sal es and market share of
     Camraunlty producers , as determined following the additional
     investigations carried out after the imposition of the provisional
     anti-dumping duty , the Council refers to the amended information
     contained in recitals 14 , 17 , 19 aid 20 of Regulation (EEC) No . . ./89
     imposing a definitive anti-dumping duty on imports of urea originating
     in the United States of America or Venezuela .
 E. gimmm
13 . As regards the existence in certain Member States of the Community of
     quantitative restrictions concerning Imports of urea originating in
     Hungary or Romania , it was argued by the Romanian exporter that the
     imposition of an anti-dumping duty on imports of urea in addition to
     the quantitative restrictions was Incompatible with same provisions of
     the GATT . The Council oonsiders that neither Community law nor
     international rules forbid the Imposition of Import duties , customs
     duties or any other measure affecting imports , provided that injury has
     As for the advisability of such measures in this case , the Council
     notes that during the reference period more than half of the exports
     were concentrated on the markets of the Member States not protected by
     quantitative restrictions , namely Belgium , Luxembourg and the United
     Kingdom . In addition , it was established that the quantitative
     restrictions on imports of the products concerned into Germany and
     Ireland had been substantially exceeded .
     The Council also notes that there is substantial price undercutting on
     these Imports , reaching 17% In the case of Hungary aid 38% in that of
     Romania .
     As a result , the quantitative restrictions existing in certain Member
      States do not eliminate the Injury caused to the majority of the
      Community by the unfair trading practices of the Hungarian and Romanian
      exporters .
                                                                               H
 ---pagebreak---                                        - 7 -
14 . As regards the Community 's interest in talcing protective measures
     concerning dumped imports , Malaysia repeated the arguments put forward
     in recital 42 of Regulation (EEC) No 2623/ 88 .
С.   ШРЕКЕАКШСЗ
15 .  The following producers/exporters offered undertakings in accordance
     with Article 10 Of Regulation (EEC) No 2423/88 :
      Austria             Chemie Linz GmbH
      Hungary             Chemolimpex
      Malaysia            Asean Bintulu Fertili zer
                          SEN . BHD (ABF ) /Petrol .lam
                          National Berhard (Petronas )
      Romania             ICE Ghimioa
The Commission regarded these undertakings as acceptable , considering that
they were such as to bring some stabil i ty to the Community market while
allowing the exporters in question to maintain a share of the Community
market .
H.              QF TES PîOfïSTONAL UTTf
16 . Given the dumping margins established and the injury caused , the
     Council considers it necessary to collect definitively the amounts
     secured by way of a provisional duty . However , such collection is
     considered inappropriate in the oase of products originating in
     Malaysia , since Malaysia qualifies for special differential treatment
     under Article 13 of the GMT anti-dumping code .
                                                                             A
 ---pagebreak---                                                - 8 -
Н.                                ; ммешшз
17 . Having reviewed the measures as requested by the Council , the
        Commission found that the undertakings accepted pursuant to Regulation
        (EEC) No 3339/8? had been adhered to and that they were such, as to have
        alleviated, considerably the difficulties facing the Community industry
        by reducing imports of urea originating in the countries concerned to a
        reasonable share of Community consumption .
        In these circumstances , the Council confirms the validity of the
        undertakings accepted pursuant to Regulation (EEC) No 3339/87 .
m.                   MHŒ GF THE ]
18 . The exporters concerned were informed of the main conclusions of the
        investigation and had the opportunity to make known their point of
        view .
        In consultations within the Advisory Committee , certain Member States
        opposed the proposed undertakings .
        The Commission therefore presents this proposal for acceptance of the
        undertakings to the Council to terminate the anti-dumping
         investigation ,
HAS ADOPTED THIS RBSOLATICN :
                                             Artide 1
The vitriertakings offered by :
                Chemie T.trvz GraM , Austria
                Cheiaolimpax , Hungary
                Asasm Blntulu Fertilizer SEN . HID (ABF), Petroliam National Berhard
                ( Petranas ), Malaysia
                ICE Chiraioa , Romania
1-n connection, with the anti-dumping proceeding concerning exports of urea
■ PP j i "• -r,           Combined Nomenclature cone oi02 10 10 or «5.LO2 10 S-3
or i.-.vi'v- rixi? :in /*?;stri& . Hungary , Malaysia or Romania are hereby accepted .
                                                                                       43
 ---pagebreak---                                  Article 2
The anti-dumping investigation referred to in Article 1 is hereby
terminated as regards the exporters mentioned in that Article .
                                 Article 3
This Regulation shall enter into foroe on the day following that of its
puhlioation in the Official Journal of the European Conmunltles .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,
                                                For the Council