CELEX: 51991PC0312
Language: en
Date: 1991-08-07
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING A DEFINITIVE ANTI-DUMPING DUTY FOLLOWING A PARTIAL REVIEW OF ANTI-DUMPING MEASURES CONCERNING IMPORTS OF UREA ORIGINATING IN VENEZUELA AND TERMINATING THE REVIEW OF ANTI-DUMPING MEASURES CONCERNING IMPORTS OF UREA ORIGINATING IN TRINIDAD AND TOBAGO

COMVIISSION OF THE EUROPEAN COMVIUNITIES
                                                                              C0MC91) 312 final
                                                                              Brussels, 7 August 1991
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                                                                Proposal for a
                                                           COUNCIL REGULATION (EEC)
                                       ameMing a definitive anti-dumping duty following a partial review
                                        of anti-dumpiig measures oorrerning inports of urea originating
                                       in Venezuela and terminatir^ the review of anti-dumping measures
                                         ooirerniig imports of urea originating in Trinidad and Tobago
                                                        (presented by the Commission)
       •*&::,
 ---pagebreak---                            EXPLANATORY MEMORANDUM
concerning the Council Regulation amending a definitive anti-dumping duty
following a partial review of anti-dumping measures concerning imports of
urea originating in Venezuela and terminating the review of anti-dumping
measures concerning imports of urea originating in Trinidad and Tobago.
 I.     PROCEEDING
        In a notice published in the Official Journal of the European
        Communities,1 the Commission announced the opening of an
        investigation to review anti-dumping measures imposed on imports of
        urea originating in Trinidad and Tobago and Venezuela by Council
        Regulation (EEC) No 450/892 and Commission Decision
        NO 89/143/EEC.3
        The requests for a review were based on Article 14 of Regulation
        (EEC) No 2423/88 concerning changes of circumstances. As regards
        Trinidad and Tobago, the alleged change of circumstances concerned
        a fall in production costs and a substantial increase in the price
        of exports to the Community, which, it was claimed, had put an end
        to dumping. The change of circumstances alleged by Venezuela
        concerned a change in the official exchange rate used by the
        Commission in the previous proceeding to establish the dumping
        margin.
1 OJ No C 55, 2.3.1991, p. 4.
2 OJ No L 52, 24.2.1989, p. 1.
3 OJ No L 52, 24.2.1989, p. 37
 ---pagebreak---                                 - 2-
11
   • TRINIDAD AND TOBAGO
a)   Dumping
     A transaction-by-transaction comparison of the constructed normal
     value and export prices to the Community led to the conclusion that
     dumping had ceased.
b)   Injury
     In the absence of dumping, the Commission did not consider it
     worthwhile to review the question of injury.
c)    Conclusion
     Given the absence of a duming margin and the honesty of the
     exporter involved, the Trinidad and Tobago Urea Company Ltd (TTUC),
     the Commission is of the opinion that the anti-dumping measures
     currently imposed on this country should be abolished.
III. VENEZUELA
a)   Dumping
     As there had been no exports to the Community, the new exchange
     rate cited as a change of circmustances had not been applied, and
     it was therefore not possible to make a comparison with the new
     normal value established in the course of the investigation.
b)   Injury
     As regains the injury, the Venezuelan exporters' arguments that
     since there had been no exports to the Community, the injury to
     Community producers had been eliminated and that Community
     producers had substantially increased their prices were not
     considered sufficiently relevant by the Commission.
 ---pagebreak---                                - 3 -
   The Commission considers that the suspension of exports can be
   interpreted neither as an indication of the elimination of the
   injury nor as a change of circumstances justifying a review of the
   injury. The alleged increase in Community producers' prices is held
   to be a normal consequence of the imposition of anti-dumping
   measures.
o) Conclusion
   Given the above, the Commission considered that in the absence of
   exports to the Community, it was unable to gauge the accuracy of
   the argument put forward by the Venezuelan exporters concerning the
   elimination of dumping as a result of the application of the new
   exchange rate. Consequently, the Commission felt that the fairest
   solution for the exporters involved, Nitroven and Pequiven, would
   be to abolish the current ad valorem anti-dumping duty of 21.5%,
   replacing it with a variable duty based on the exporters' new
   normal value, as established during the course of this proceeding.
   Consequently, the Commission submits a proposal for a Council
   Regulation:
   - terminating the review of the anti-dumping measures imposed on
   imports of urea originating in Trinidad and Tobago and cancelling
   the undertaking imposed by Council Regulation (EEC) No 3339/87 and
   confirmed by Commission Decision No 89/143/EEC of 21 February 1989;
   - Imposing a variable definitive anti-dumping duty on imports of
   urea originating in Venezuela exported by Nitroven and Pequiven,
   and retaining the ad valorem anti-dumping duty on other imports of
   urea originating in Venezuela.
 ---pagebreak---                           COUNCIL KBGOLATTCN (EEC) No
                                      Of
      amending a definitive anti-dumping duty following a partial review
       of anti-dumping measures concerning imports of urea originating
       in Venezuela and terminating the review of anti-dumping measures
        concerning Imports of urea originating in Trinidad and Tobago
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 Ccaranunity,1 and in particular Articles 9, 12 and
14 thereof,
Having regard to the proposal from the Commission, submitted after
consultations within the Advisory Committee as provided for by the above
Regulation,
Whereas:
                                 A. PROCEDURE
  (1)    In November 1990, pursuant to Article 14 of Council Regulation
          (EEC) No 2423/88, the Commission received a request for a review of
         the anti-dumping measures imposed on imports of urea originating in
         Trinidad and Tobago and Venezuela by Council Regulation (EEC)
         No 450/892 and Commission Decision No 89/143/EEC.3
1   OJ No L 209, 2.8.1988, p. 1.
2   OJ No L 52, 24.2.1989, p. 1.
3   OJ No L 52, 24.2.1989, p. 37.
 ---pagebreak---  (2)    With regard to Trinidad and Tobago, this request was made by the
        Trinidad and Tobago Urea Company Ltd, the successor to the National
        Energy Corporation of Trinidad and Tobago Ltd, which had offered an
        undertaking in connection with the abovementionned Decision which
        had been accepted. The review was requested on the ground of a
        change in circumstances, resulting from the fact that a fall in
        production costs and a substantial increase in the prices of
        exports to the Community had put an end to any dumping.
(3)     With regard to Venezuela, the request made by Venezolana del
        Nitrogeno CA (Nitroven) and Petroquimica de Venezuela SA (Pequiven)
        for a review of the definitive anti-dumping duty of 21.5% Imposed
        by Council Regulation (EEC) No 450/89 was based on the change in
        circumstances brought about by an adjustment on 14 March 1989 of
        the official rate of exchange which had been used by the Commission
        to compare the normal value and the export price in order to
        calculate the dumping margin. According to these companies, the
        application of the new exchange rate would show that there was no
        dumping.
                           SUBSEQUENT PROCESSING
(4)     Having concluded that the requests contained sufficient evidence of
        a change in circumstances, the Commission announced its decision to
        open an investigation in a Notice of review of anti-dumping
        measures concerning Imports of urea originating in Trinidad and
        Tobago or in Venezuela published in the Official Journal of the
        European Communities.4
(5)     The Commission officially notified the producers/exporters directly
        involved and the representatives of the exporting countries.
4  OJ No C 55, 2.3.1991, p. 4.
 ---pagebreak---                                    - 3 -
(6) The Commission collected and verified all information it deemed
    necessary to enable it to establish the facts and carried out
    checks at the premises of the exporting companies involved, namely:
    - Trinidad & Tobago Urea Co Ltd (TTUC), Port of Spain, Trinidad
    - Petroqubnica de Venezuela SA (Pequiven), Caracas, Venezuela
    - Venezolana del Nitrogeno CA (Nitroven), Caracas, Venezuela
    - Palmaven SA, Caracas, Venezuela
(7) The investigation of dumping as provided for in Article 7 paragraph
    1 point c) of Council Regulation (EEC) No 2423/88 covered the
    period from 1 January 1990 to 31 December 1990.
                                C. PRODUCT
(8) The product in question is a nitrogen compound whose chemical
    formula is 00 (NH 2 ) 2 . It is produced synthetically from a
    reaction between ammonia and carbonic acid and comprises
    approxijnately 45% nitrogen. Urea is sold in prilled form (Trinidad
    and Tobago), granular form (Venezuela) or liquid form. It is mainly
    used as fertilizer.
    Urea falls within CN codes 3102 10 10 and 3102 10 99.
 ---pagebreak---                                 - 4 -
                          D. DUMPING REVIEW
     I. TRINIDAD AND TOBAGO
     a) Normal value
(9)  As TTUC's average urea sales price on its domestic market was lower
     than the production cost during the period of the investigation,
     the constructed normal value was used, in accordance with
     Article 2(3)(b)(ii) of Council Regulation (EEC) No 2423/88.
(10) The constructed normal value was calculated by adding a profit
     margin of 7% to the cost of production. This margin was held to be
     reasonable, given that in the current economic climate, it
     represents the minimum necessary to allow urea producers to run
     their plants under normal operating conditions while producing an
     acceptable return on capital employed and securing the investment
     financing required to continue operating at a profit.
     b) Export prices
(11) Export prices were established on the basis of the prices actually
     paid or payable for the product sold for export to the Community,
     in accordance with Article 2(8) (a) of Regulation (EBC) No 2423/88.
     c) Comparison
(12) The constructed normal value was compared, transaction by
     transaction, with export prices at the ex-factory stage.
     In accordance with Article 2(10) of Regulation (EEC) No 2423/88,
     the Commission made due allowance in the form of adjustments for
     differences affecting price comparability, such as transport,
     insurance and handling charges, credit terms, commissions and
     ancillary costs.
 ---pagebreak---                                    5 -
     d) Anti-dumping margin
(13) An examination of the above facts showed that no dumping was taking
     place.
     II- VENEZUELA
     a) Normal value
(14) As urea is sold on the domestic Venezuelan market at prices fixed
     by government decree that are lower than the cost of production,
     the constructed normal value was used, in accordance with
     Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88.
(15) The constructed normal value was calculated by adding a profit
     margin of 7% to the cost of production. This margin was held to be
     reasonable, given that in the current economic climate, it
     represents the minimum necessary to allow urea producers to run
     their plants under normal operating conditions while producing an
     acceptable return on capital employed and securing the investment
     financing required to continue operating at a profit.
     k) Export prices
(16) No urea originating in Venezuela was exported to the Community
     during the investigation period.
     c) Comparison
(17) Under these circumstances, it was not possible to compare the
     normal value and the export price.
 ---pagebreak---                                  - 6 -
                             E. CONCLUSION
      I. TERMINATION OF THE REVIEW AS REGARDS TRINIDAD AND T0BM3O
(18) Given that there is no evidence of dumping and in view of the
     behaviour of the exporter involved, which has generally respected
     its undertaking and has also substantially increased the prices of
      its exports to the Community, the Council is of the opinion that
      the anti-dumping measures currently Ijonposed on this country should
     be lifted.
(19) Under these circumstances, the Council considers that the review of
     the anti-dumping measures concerning iirports of urea originating in
     Trinidad and Tobago should be terminated.
(20) This conclusion has not met with any objections from the anti-
     dumping committee.
     H . AMENDMENT OF THE DEFINITIVE DUTIES AS REGARDS VBJKZUKLA
(21) As regards Venezuela, in the absence of any exports to the
     Ccramunity it is not possible to verify the accuracy of the argument
     put forward by the exporters claiming that the application of the
     new official exchange rate has put an end to dumping. Consequently,
     the fairest solution would appear to be to abolish the ad valorem
     duty of 21.5% currently in force, replacing it with a variable duty
     based on the new normal value for the exporters, as established in
     the course of the present procceeding.
(22) As regards the injury, in their request the exporters argued that
     the injury had been eliminated as a result of the fact that there
     had been no exports to the Community, and that the prices of
     Oammunity producers had risen steadily since the imposition of the
     anti-dumping duty.
 ---pagebreak---                                     - 7-
        The Council observes that as a result of the previous anti-dumping
        proceeding, the exporters decided to suspend all exports to the
        Community. The Council is of the opinion that this suspension can
        be interpreted neither as an indication that the injury has been
        eliminated, nor as a change of circumstances justifying a review of
        the injury.
        Furthermore, as regards the claim that Community producers have
        raised their prices, even should this claim be substantiated, these
        price increases would be a normal consequence of the existence of
        anti-dumping measures.
        Consequently, the Council does not consider the arguments advanced
        concerning injury to be relevant.
(23)    However, as noted above, the Council considers that a fair response
        to the exporters' request would be to take account of the results
        of this proceeding and to base the variable anti-dumping duty on
        the exporters' new normal value.
        This variable anti-dumping duty is established in the form of a
        minimum price, free at Community frontier, calculated on the basis
        of the cost of producing the urea as established in the course of
        the investigation period, plus a reasonable profit margin plus the
        ancillary costs incurred up to the Community frontier. On this
        basis, the minimum price free at Community frontier is ECU ... per
        tonne.5 It should be noted that this minimum price is lower than
        the price used as a basis for calculating the ad valorem duty
        established in the previous proceeding.
(24)    The ad valorem duty of 21.5% is retained for imports of urea
        originating in Venezuela, with the exception of urea exported by
        Pequiven and Nitroven.
(25)    These conclusions have not met with any objections from the anti-
        dumping committee.
5  In accordance with the provisions of Article 5 of Regulation (EEC)
   No 2423/88 concerning the non-disclosure of business secrets, this
   figure has been deliberately omitted from the published version of this
   regulation.
 ---pagebreak---                                       8 -
(26)    All the producers/exporters involved in this proceeding and the
        representatives of the Community producers were informed of the
        main facts and considerations on the basis of which it was proposed
        to recommend the termination of the review as regards Trinidad and
        Tobago and the amendment of the definitive measures as regards
        Venezuela. They were also granted a period of time in which to make
        their comments known following notification. The Commission noted
        their remarks and took due account of them.
HAS ADOPTED TEES REGULATION:
                                 Article 1
1.      The review of anti-dumping measures concerning iinports of urea
        originating in Trinidad and Tobago is hereby terminated.
2.      The undertaking made by the National Energy Corporation of Trinidad
        and Tobago Ltd, and taken up by the Trinidad and Tobago Urea
        Company Ltd, which had been accepted by Council Regulation (EEC) No
        3339/87 and confirmed by Commission Decision No 89/143/EEC, is
        hereby cancelled.
                                 Article 2
        The anti-dumping duty of 21.5% (additional code 8550) imposed by
        Regulation (EEC) No 450/89 on imports of urea originating in
        Venezuela and falling within CN codes 3102 10 10 and 3102 10 99
        shall be retained for iinports of urea originating in Venezuela,
        with the exception of urea produced and exported to the Community
        by Venezolana del Nitrogeno CA (Nitroven) and Petroquimioa de
        Venezuela SA (Pequiven) (additional code 8549), for which the
        anti-dumping duty shall be the difference between the net price per
        tonne free at Community frontier, not cleared through customs, and
        the sum of ECU 110.5 per tonne.
 ---pagebreak---                            - 9 -
                         Article 3
The provisions in force concerning customs duties shall apply.
                         Article 4
This Regulation shall enter into force on the day following that of
its publication in the Official Journal of the European
Communities.
This Regultion shall be binding in its entirety and directly
applicable in all Member States.
Done at Brussels,                       For the Council,
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(91)312final
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                                 Catalogue number : CB-CO-91-367-EN-C
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