Council Regulation (EC) No 663/98 of 23 March 1998 amending Regulation (EC) No 2022/95 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia
26. 3. 98 ‹ EN ‹ Official Journal of the European Communities L 93/1 I (Acts whose publication is obligatory) COUNCIL REGULATION (EC) No 663/98 of 23 March 1998 amending Regulation (EC) No 2022/95 imposing a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia THE COUNCIL OF THE EUROPEAN UNION, (2) 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 Com- munity (1), and in particular Article 12 thereof, Having regard to the proposal submitted by the Commis- sion after consulting the Advisory Committee, In June 1994, a Community-wide anti-dumping investigation concerning imports of ammonium nitrate originating in Lithuania and Russia was initiated (3) subsequent to a complaint lodged by the European Fertiliser Manufacturers Association (EFMA). In August 1995, the Council, by Regulation (EC) No 2022/95 (4), imposed a definitive anti-dumping duty, in the form of a variable duty, on imports of ammonium nitrate originating in Russia. The amount of duty was set at the difference between a minimum import price of ECU 102,9 per tonne net of product and the net cif price, Community frontier before customs clearance, where the latter was lower. The Commission simultaneously ter- minated the regional anti-dumping proceeding in respect of imports of ammonium nitrate origin- ating in Russia by Decision 95/345/EC (5). A. PROCEDURE 1. Previous measures (1) 1994, anti-dumping measures by Commission Decision In May 94/293/EC (2), were adopted with regard to imports of ammonium nitrate originating in Lithuania and Russia, fol- lowing a regional anti-dumping proceeding con- cerning the United Kingdom. Measures were in the form of the acceptance of undertakings which were intended to limit exports from each country to the United Kingdom to 100 000 tonnes per annum. The undertaking accepted from the Russian authorities was, however, breached within the first year of its operation. imports into terminated proceeding was the Com- For imports originating in Lithuania, by munity-wide 95/344/EC (6) without Commission Decision measures in view of the findings of the investiga- tion concerning the causation of injury. However, the undertaking concerning imports into the United Kingdom originating in Lithuania, accepted in the framework of the regional anti-dumping proceeding, remained in place. The investigation that led to the imposition of the Community-wide measures is hereinafter referred to as ‘the original investigation’. The investigation period of from 1 April 1993 to 31 March 1994. investigation was the original (1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Council Regulation (EC) No 2331/96 (OJ L 317, 6. 12. 1996, p. 1). (2) OJ L 129, 21. 5. 1994, p. 24. (3) OJ C 158, 9. 6. 1994, p. 3. (4) OJ L 198, 23. 8. 1995, p. 1. (5) OJ L 198, 23. 8. 1995, p. 29. (6) OJ L 198, 23. 8. 1995, p. 27. L 93/2 ‹ EN ‹ Official Journal of the European Communities 26. 3. 98 (3) (4) (5) 2. Request for a reopening of the investiga- tion In April 1997, EFMA lodged a request pursuant to Article 12 of Council Regulation (EC) No 384/96 (hereinafter referred to as ‘the basic Regulation’) to reopen the investigation into imports of ammo- nium nitrate originating in Russia with a view to examining whether the measures had had an effect on resale prices or subsequent selling prices. The request was lodged on behalf of Community producers whose collective output of ammonium nitrate constitutes a major proportion, as defined by Article 5(4) of the basic Regulation, of the total Community production of the product concerned, that is, by the Community industry in the pro- ceeding. in the Community. The It was alleged that the imposition of anti-dumping duties on imports of ammonium nitrate originating in Russia had led to no movement, or insufficient movement, in resale prices or subsequent selling information prices submitted by the Community industry contained prima facie evidence to justify the reopening of the investigation consisting of a comparison of the resale price per tonne which should have been expected following the imposition of measures (calculated by adding to the minimum import price set by Council Regulation (EC) No 2022/95 all costs incurred between import and resale) with actual resale prices per tonne in two Member States (France and the United Kingdom), which were alleged to account for 82 % of the consumption of ammonium nitrate in the Community. 3. Reopening of the investigation The evidence submitted in the request was con- sidered sufficient. On 29 May 1997, therefore, the Commission announced by a notice published in the Official Jounal of the European Commun- ities (1) the reopening of the investigation, pursuant to Article 12 of the basic Regulation, concerning the anti-dumping measures applicable to imports of ammonium nitrate originating in Russia and commenced the reinvestigation. (6) The Commission officially advised the producers/ exporters and importers/traders/distributors known the ex- to be concerned, the representatives of the investigation. porting country and the Community producers of the reopening of Interested parties were given the opportunity to make their views known in writing and to request a hearing. All parties who so requested were granted hearings. Written and oral submissions were also received from certain importers/traders/distributors and from EFMA and certain of its constituent members. Questionnaires were sent by the Commission directly to all producers/exporters and importers/ traders/distributors known to be concerned. (a) Producers/exporters in the country of origin and their related companies No replies to the questionnaire were received within the time limit set. One producer/exporter replied after the expiry of the time limit, but in a manner which could only be considered insuffi- cient. This company was then given the oppor- tunity to rectify the deficiencies in its response, which it failed to do. The company was therefore informed that it would be considered as non-co- operating and was given the opportunity to in accordance with comment on this Decision, Article 18(4) of the basic Regulation. The company replied, outside the deadline, that it had supplied non-confidential information which should be used by the Commission. The non-confidential informa- tion already supplied was, however, clearly insuffi- cient for the purposes of the reinvestigation. (b) Importers/traders/distributors in the Com- munity Nine unrelated importers/traders/distributors made the Commission and themselves known to responded to the questionnaire. Of two subsequently did not cooperate and were therefore excluded from the reinvestigation conducted. Both this Decision and companies were informed of were given an opportunity to comment, in ac- cordance with Article 18(4) of the basic Regulation. these, The Commission carried out investigation visits at the premises of the following companies: — Unifert France, SA, France, — SHM Trading Ltd, United Kingdom, — ConAgra Resources Europe Ltd, United Kingdom, (1) OJ C 162, 29. 5. 1997, p. 5. — Common Market Fertilisers, SA, Belgium. 26. 3. 98 ‹ EN ‹ Official Journal of the European Communities L 93/3 three remaining importers/ The traders/distributors were not the Commission but appropriate account was taken of the information provided in their replies. cooperating visited by (7) (8) (9) The reinvestigation covered the period from 1 April 1996 to 31 March 1997 (hereinafter referred to as ‘the period of reinvestigation’). The investigation exceeded the normal time period of six months provided for in Article 12(4) of the basic Regulation owing to the Commission being hampered in its efforts to gather information by the marked lack of cooperation. B. PRODUCT UNDER CONSIDERATION The product reinvestigated is the same product, originating in Russia, as that concerned by the original investigation: i. e. ammonium nitrate, which is a fertiliser produced in prill or granular form, currently classifiable within CN codes 3102 30 90 (ammonium nitrate, other than in aqueous solu- tion) and 3102 40 90 (mixtures of ammonium nitrate with calcium carbonate or other inorganic non-fertilisers substances with a nitrogen content exceeding 28 % by weight). C. THE REINVESTIGATION period of reinvestigation was accounted for by the purchases of cooperating companies. Furthermore, a number of cooperating companies were related to non-cooperators also involved in the trade of ammonium nitrate orignating in Russia. Despite the fact that this meant the Commission could not be wholly confident as to the completeness of the information supplied, it was nonetheless not dis- regarded, where relevant, as it was considered that the deficiencies were not such as to cause undue difficulty in arriving at a reasonably accurate finding, in accordance with Article 18(3) of the basic Regulation. In this respect, costs between import and resale verified on-the-spot at co- operating companies considered to have provided the most detailed information were used to calcu- late the resale price level which could reasonably have been expected for the product concerned after the adoption of measures. 2. Movement of resale prices in the Com- munity (12) Pursuant to Article 12(1) and (2) of the basic Regu- lation, it was determined whether, following the imposition of definitive anti-dumping duties in 1995, the expected movement in resale prices in the Community had occurred. In particular, the resale price to the first independent buyer which should have been expected during the period of reinvestigation (the ‘benchmark resale price’) was compared with the resale price actually found for the same period (the ‘actual resale price’). 1. Cooperation (a) Calculation of the benchmark resale price (10) No of producer/exporter ammonium nitrate located in Russia — or related importer/trader/ located within or outside the Com- distributor munity — cooperated with the reinvestigation. In addition, as indicated in Recital (11) below, little cooperation was received from unrelated importers/ traders/distributors located within or outside the Community. Recourse was therefore made to facts available in accordance with Article 18 of the basic Regulation. Information received from customs authorities in the United Kingdom, from published trade jour- nals, importers/traders/ distributors and from the Community industry was used, where appropriate. cooperating from (11) Only 20 % of imports into the Community of ammonium nitrate originating in Russia during the (13) In order to calculate the benchmark resale price it was considered appropriate to add to the minimum import price established pursuant to the original investigation all costs incurred between import and resale plus an amount for profit. However, in the absence of any more suitable information, a distinction was made between costs associated with imports accounted for by co- operating importers/traders/distributors — for which the costs incurred between import and resale were verified on-the-spot — and those associated with imports accounted for by non-cooperators — whose costs were estabished on the basis of the facts available, in accordance with Article 18 of the basic Regulation. L 93/4 ‹ EN ‹ Official Journal of the European Communities 26. 3. 98 (14) In order to calculate the costs incurred between import and resale for cooperating companies, appropriate amounts for customs duty, handling and ancillary costs, selling, general and adminis- trative expenses (including credit costs) and profit were taken into consideration, as verified on-the- spot. price for imports accounted for by cooperating importers/traders/distributors and that calculated for imports accounted for by non-cooperators. (18) For imports accounted for by cooperating compa- nies, the actual resale price was calculated on the basis of information verified on-the-spot. argued, after disclosure of One importer the findings of the reinvestigation, that the profitability used did not reflect actual profitability verified on-the-spot. The rate of profitability used was re- viewed and, after consideration, an appropriate adjustment was made. (15) amounts appropriate For non-cooperators, for customs duty, handling and ancillary costs, product losses, selling, general and administrative expenses (including credit costs) and profit were taken into consideration, taking the highest costs found, by Member State, for cooperating companies. Due account was taken of the fact that imports made into the United Kingdom accounted for by non- cooperating companies were primarily made in bulk, as indicated by evidence provided by customs authorities. In this respect, the costs of bags and bagging were also included in the calculation of costs incurred between import and resale for imports accounted for by non-cooperating compa- nies made into the United Kingdom. The amount for profit was determined on the basis of informa- tion contained in the request for a reinvestigation. (16) Weighted average costs incurred between import and resale and profit were added to the minimum import price established pursuant to the original investigation (established on a cif Community fron- in order to establish the tier basis duty unpaid) Community benchmark resale price, denominated in ecu, for the period of reinvestigation. (b) Actual resale price after the imposition of the measures (17) for all imports The actual resale price to the first independent into the Community of buyer ammonium nitrate originating in Russia during the period of reinvestigation was then established. A distinction was made between the actual resale (19) For imports accounted for by non-cooperators, the actual resale price was calculated, on the basis of the facts available, in accordance with Article 18 of the basic Regulation, on a monthly basis for the period of reinvestigation, by reference to market prices published in trade journals, on a Member State by Member State basis. In the absence of any more suitable information, in order not to reward non-cooperation and in view of the fact that the market prices all imported ammonium nitrate whilst, according to information received during the course of the rein- vestigation, Russian ammonium nitrate trades at a lower price imported ammonium nitrate, the lowest market price published therein was taken. referred to were those for than other (20) Finally, a single weighted average actual resale price, denominated in ecu, was calculated for all imports of the product concerned (both made in bulk and bagged) for the period of reinvestigation. (c) Insufficient movement of resale prices (21) (22) The difference between the actual resale price and the benchmark resale price was then calculated in order to determine whether or not there had been sufficient movement in resale prices following the imposition of anti-dumping measures. It was found that the imposition of anti-dumping in measures had led to insufficient movement resale prices in the Community. The actual resale price remained below the benchmark resale price on a weighted average basis. This shortfall in price movement is expressed below as a percentage of the weighted average actual resale price: 9,0 %. In view of the significant shortfall in the move- ment of resale prices, it was not considered neces- sary to investigate any further whether the subse- quent selling prices in the Community had moved sufficiently. 26. 3. 98 ‹ EN ‹ Official Journal of the European Communities L 93/5 (d) Other factors affecting the average resale price of the product after imposition of the anti- dumping duty (29) (23) No other arguments were brought forward by in- terested parties, nor were any other factors found during the reinvestigation, explaining why resale prices as indicated above did not move to the extent that could reasonably be expected after the imposition of the anti-dumping duty. Certain importers argued that low resale prices for reflected the poor condition of the market ammonium nitrate. Such a situation does not, however, address the issue under consideration which is that, for the period of reinvestigation (i. e. one year), resale prices did not sufficiently reflect costs realised, had the minimum import price been respected. incurred and profit (e) Conclusion (24) The Council concludes that for ammonium nitrate originating in Russia, the anti-dumping measures have not led to sufficient movement in resale prices in the Community within the meaning of Article 12(2) of the basic Regulation. 3. Recalculation of the dumping margin (25) In accordance with Article 2 of the basic Regula- tion, a new dumping margin was established, as required by Article 12(2) of that Regulation. (a) Normal value (26) As no producer/exporter claimed a change in normal value had occurred, as provided for by Article 12(5) of the basic Regulation, the normal value as established in the original investigation for the analogue country, Poland, was used for the recalculation of the dumping margin. (b) Reassessed export price (27) One export price was calculated for all ammonium nitrate originating in Russia imported into the Community during the period of reinvestigation. for In the absence of export prices imports accounted for by non-cooperators it was decided to construct such prices in accordance with Article 2(9) of the basic Regulation. In this regard, Eurostat import statistics were not considered a reliable basis for establishing such prices in view of the apparent existence of an association or compensatory ar- rangement. This consideration concurs with evidence provided by customs authorities in the United Kingdom indicating widespread overstate- ment of export prices by certain non-cooperators. This is also the conclusion drawn from information concerning resale invoices in the hands of the Commission which indicates a price for resale far below that which would allow an importer to carry on normal business, were the minimum import price being respected; in other words, if all costs incurred between import and resale were deducted inde- from the resale invoice price to the first pendent buyer, reached, Community frontier before customs clearance, which is lower than the minimum import price. an import price is Reliable export prices at the Community frontier were therefore constructed on the basis of the price at which the imported product was first resold to an independent buyer, established on the basis of facts available in accordance with Article 18 of the basic Regulation, i. e. the information referred to in Recital (19) above, with adjustments made for all incurred between importation and resale, costs including the anti-dumping duty payable, plus a reasonable amount for profit. The amount for profit was determined on the basis of information contained in the request for a reopening of the reinvestigation, which has been corroborated by other sources. (30) A weighted average Community frontier export price was then calculated for all imports of ammo- nium nitrate originating in Russia. (c) Comparison (31) A fair comparison was made between the normal value as established in the original investigation and the weighted average export price as es- tablished above, in accordance with Article 2(10) of the basic Regulation. (d) Dumping margin (28) For imports accounted for by cooperating im- prices were porters/traders/distributors, calculated, using information verified on-the-spot, on the basis of the price paid or payable by these operators. export (32) The comparison of normal value with reassessed weighted the existence of a higher dumping margin as compared export prices showed average L 93/6 ‹ EN ‹ Official Journal of the European Communities 26. 3. 98 with that found in the original investigation. The recalculated weighted average dumping margin, expressed as a percentage of the cif price free at the Community frontier, is: 41,9 %. (e) Conclusion (33) As the reinvestigation has shown that the measures in force have led to insufficient movement in resale in the Community and that dumping prices margins have increased, the measures in force should be amended, in line with the findings on export prices, in accordance with Article 12(3) of the basic Regulation. 4. Proposed change of the measures ap- plicable (34) The measures previously applicable did not have their intended effect upon the resale price of ammonium nitrate originating in Russia, due to absorption of the anti-dumping measures in force. Actual resale prices for the period of reinvestigation did not reflect the costs incurred between the levels of import and resale. During the course of the reinvestigation it was considered whether it would be appropriate simply to increase the minimum import price to reflect the increased dumping margin. The very fact, however, that absorption of anti- dumping duties in the form of a minimum import price has taken place also means that any increase in the level of the minimum import price might be equally ineffective in revising resale prices or subsequent selling prices in the Community. From the foregoing, it can be seen that the flexib- ility permitted to the Russian producers/exporters by the variable anti-dumping duty hitherto ap- plicable has failed to revise prices for ammonium nitrate originating in Russia to the extent that the injurious effect of the dumping has not been removed. (35) It is concluded from the finding of the reinvestiga- tion — and taking into account the past history of anti-dumping measures concerning imports of ammonium nitrate originating in Russia, which involved the breach of an undertaking in the first year following its acceptance by the Commission (see Recital (1) above) — that it is also prudent to alter the form of measures in force. In view of the possibility of absorption of an ad valorem duty for seasonal and price-sensitive product, this the Council considers it appropriate to amend the def- initive anti-dumping duty imposed on imports of ammonium nitrate originating in Russia from the minimum import price currently in force to a specific duty per tonne. This form of anti-dumping measure would be more effective in revising resale prices and thus remedying the injurious effect of the dumping. One importer argued that the problem of absorp- tion of the anti-dumping duty in force was confined to imports made in bulk and that, there- fore, while the specific duty was appropriate for imports made in bulk, the minimum import price should remain in force for imports made in bags. After consideration of the merits of this argument it was not accepted for the reason that the findings of the reinvestigation indicated that absorption of the duties was not confined to those imports made in bulk. One producer located in Russia, which had at no time prior to disclosure of the findings of the rein- vestigation made itself known, proposed an under- taking. After consideration, this proposal was judged to be unacceptable due to the total lack of cooperation from all Russian producers/exporters. (36) The new level of anti-dumping duty was deter- mined by adding to the previous level of the duty (minimum import price less export price at the Community frontier in the original investigation period) the difference between the export prices in the original investigation and those of the current reinvestigation. The amended duty, to be levied on a per tonne net basis at the Community frontier, is ECU 26,3 per tonne, HAS ADOPTED THIS REGULATION: Article 1 Article 1(2) of Regulation (EC) No 2022/95 is hereby replaced by the following: The rate of the anti-dumping duty applicable ‘2. shall be ECU 26,3 per tonne. ’ Article 2 This Regulation shall enter into force on the day fol- lowing that of its publication in the Official Journal of the European Communities. 26. 3. 98 ‹ EN ‹ Official Journal of the European Communities L 93/7 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 23 March 1998. For the Council The President M. MEACHER