Notice of Final Determination of Sales at Less Than Fair Value; Solid Fertilizer Grade Ammonium Nitrate From the Russian Federation

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce determines that solid fertilizer grade ammonium nitrate from the Russian Federation is being, or is likely to be, sold in the United States at less than fair value. The estimated dumping margins are shown in the Continuation of Suspension of Liquidation section of this notice. On May 19, 2000, the Department signed a suspension agreement with the Ministry of Trade of the Russian Federation (“the Agreement”). However, pursuant to a request from the Petitioner, we have continued and completed the investigation.

EFFECTIVE DATE:

July 11, 2000.

FOR FURTHER INFORMATION CONTACT:

Laurel LaCivita or Rick Johnson, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-4243 or (202) 482-3818, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR Part 351 (1999).

Case History

Since the Preliminary Determination of Sales at Less Than Fair Value: Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation, 65 FR 1139 (January 7, 2000) (“Preliminary Determination”), the following events have occurred: on February 15, 2000, one importer, ConAgra International Fertilizer Company (“ConAgra”), requested that the Department determine critical circumstances on a company-specific basis with respect to JSC Acron (“Acron”), a mandatory respondent in this investigation. In response to our request pursuant to section 351.301(c)(3)(i) of the Department's regulations, on February 16, 2000, Petitioner, the Committee for Fair Ammonium Nitrate Trade (“COFANT”), submitted additional surrogate factor value information, and Nevinka provided 1998 financial statements of another Polish ammonium nitrate producer. ConAgra provided information and argument concerning surrogate country selection with respect to Poland and Venezuela. Petitioner, JSC Nevinnomyssky Azot (“Nevinka”) and ConAgra submitted case briefs on April 28, 2000. On May 3, 2000, all three parties submitted rebuttal briefs. On February 7, 2000, Petitioner requested a public hearing, but withdrew that request on May 2, 2000.

Continuation of Investigation

On May 19, 2000, the Department signed a suspension agreement with the Ministry of Trade of the Russian Federation. On June 29, 2000, we received a request from Petitioner requesting that we continue the investigation. Pursuant to this request, we have continued and completed the investigation in accordance with section 734(g) of the Act. If the ITC determines that material injury exists, the Agreement shall remain in force but the Department shall not issue an antidumping order so long as (1) the Agreement remains in force, (2) the Agreement continues to meet the requirements of subsections (d) and (l) of the Act, and (3) the parties to the Agreement carry out their obligations under the Agreement in accordance with its terms.

Scope of the Investigation

For purposes of this investigation, the products covered are solid, fertilizer grade ammonium nitrate products, whether prilled, granular or in other solid form, with or without additives or coating, and with a bulk density equal to or greater than 53 pounds per cubic foot. Specifically excluded from this scope is solid ammonium nitrate with a bulk density less than 53 pounds per cubic foot (commonly referred to as industrial or explosive grade ammonium nitrate).

The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheading 3102.30.00.00. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

Period of Investigation

The period of investigation (“POI”) is January 1, 1999 through June 30, 1999.

Critical Circumstances

On November 1, 1999, the Department issued its preliminary affirmative critical circumstances finding with respect to imports of ammonium nitrate from the Russian Federation. See Preliminary Determination of Critical Circumstances: Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation (“Preliminary Determination of Critical Circumstances”), 64 FR 60422 (November 5, 1999). Specifically, we determined, pursuant to section 733(e) of the Act, that there was a history of injurious dumping of the subject merchandise and that imports were massive over a relatively short period of time. We also stated that we would make a final determination of critical circumstances on a company-specific basis, as appropriate, in our final determination in this investigation.

As noted in the Preliminary Determination, the Department requested information regarding shipments of ammonium nitrate from Nevinka on November 8, 1999. On November 23, 1999, Nevinka provided the requested information, and as discussed below, established its entitlement to a separate rate. Previously, on September 15, 1999, Acron notified the Department that it would not participate in the investigation and, subsequently, did not provide any information regarding critical circumstances or its entitlement to a separate rate. Because there is a history of injurious dumping, in this final determination, we need only determine whether imports were massive over a relatively short period of time. We are making this determination separately with respect to Nevinka and the Russia-wide entity. Our findings are as follows:

Nevinka

We analyzed Nevinka's November 23, 1999 data and found that Nevinka's exports were massive within the meaning of section 733(e)(1)(B) of the Act. Because this information is proprietary, see the proprietary discussion and analysis in our May 22, 2000 memorandum Antidumping Duty Investigation of Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation: Final Determination of Critical Circumstances (“Final Determination of Critical Circumstances Memorandum”).

Russia-Wide Entity

With regard to the critical circumstances finding for the Russia-wide entity, we have determined that massive imports exist. See our discussion and analysis of this issue in Comment 3 and Comment 4 of the June 30, 2000. Issues and Decision Memorandum for the Final Determination in the Antidumping Investigation of Ammonium Nitrate from the Russian Federation for the Period of Investigation (“POI”) Covering January 1, 1999 Through June 30, 1999 (“Issues and Decision Memorandum”) (see Analysis of Comments Received section below). We included Acron in the Russian-wide entity because it failed to establish its entitlement to a separate rate.

Nonmarket Economy Country Status

The Department has treated the Russian Federation (“Russia”) as a nonmarket economy (“NME”) country in all past antidumping investigations. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 64 FR 38626 (July 19, 1999); Titanium Sponge from the Russian Federation: Final Results of Antidumping Administrative Review, 64 FR 1599 (January 11, 1999); Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the Russian Federation, 62 FR 61787 (November 19, 1997); and Notice of Final Determination of Sale at Less Than Fair Value: Pure Magnesium and Alloy Magnesium from the Russian Federation, 60 FR 16440 (March 30, 1995). A designation as an NME remains in effect until it is revoked by the Department (see section 771(18)(C) of the Act). The Department has continued to treat the Russian Federation as an NME for this final determination, because no party has sought revocation of the NME status in this investigation.

Surrogate Country

When the Department is investigating imports from a NME, section 773(c) of the Act requires that the Department base normal value (“NV”) on the NME producer's factors of production, valued in a surrogate market economy country or countries considered appropriate by the Department. In accordance with section 773(c)(4), the Department, in valuing the factors of production, utilizes, to the extent possible, the prices or costs of factors of production in one or more market economy countries that are comparable in terms of economic development to the NME country and are significant producers of comparable merchandise. The sources of individual factor values are discussed in the NV section below.

In its Preliminary Determination, the Department determined that Poland, Tunisia, Colombia, Turkey, South Africa, and Venezuela were countries comparable to the Russian Federation in terms of overall economic development. See Memorandum to Rick Johnson, Program Manager, from Jeff May, Director, Office of Policy; Re: Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation: Nonmarket Economy Status and Surrogate Country Selection. Petitioner submitted information on the record indicating that Poland, Turkey and South Africa are significant producers of identical merchandise. See Submission from Akin, Gump, Strauss, Hauer & Feld, L.L.P., November 5, 1999. Nevinka submitted information in support of its argument that Venezuela is a significant producer of comparable merchandise. See Submission from White & Case, November 5, 1999. As noted in the Preliminary Determination of Solid Agricultural Grade Ammonium Nitrate from the Russian Federation; Selection of a Surrogate Country (“Surrogate Country Memorandum”), in the event that more than one country satisfied both statutory requirements, the Department has a preference to narrow the field to a single country on the basis of data availability and quality. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 64 FR 38626 (July 19, 1999); and Notice of Final Determination of Sales at Less Than Fair Value: Certain Cased Pencils from the Peoples' Republic of China, 59 FR 55625 (November 8, 1994).

Congress provided the Department with broad discretion in selecting surrogate countries in NME cases. See section 773(c)(1)(B) of the Act (valuation of factors of production shall be based on the best available information from a market economy country(s) considered to be appropriate); see, also, Lasko Metals v. United States, 43 F3d. 1442, 143 n.3 (Fed. Cir. 1994). Consequently, in its Preliminary Determination, the Department determined that Poland qualified as an appropriate surrogate country because it satisfied the statutory criteria listed. Furthermore, we were able to obtain publicly available, contemporaneous information on the majority of factor inputs required.

While we have used surrogate prices for certain factors from countries other than the selected surrogate country in previous cases, it is the Department's preference and practice to rely on factor value information from one surrogate country to the extent possible. See, e.g., Final Determination of Sales at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China, 57 FR 21058 (May 18, 1992). Accordingly, in our Preliminary Determination, we calculated NV using publicly available information from Poland to value Nevinka's factors of production, with one exception, monoethanolamine, which we valued using Venezuelan data, since there was no Polish data available at the time of the issuance of the Preliminary Determination.

In accordance with section 351.301(c)(3)(i) of the Department's regulations, interested parties were provided the opportunity to place additional publicly available information on the record within 40 days after the date of publication of the Preliminary Determination. Petitioner, Nevinka and ConAgra submitted comments on February 16, 2000. In these submissions, Petitioner submitted additional surrogate factor value information; Nevinka provided 1998 financial statements of an additional Polish ammonium nitrate producer; and ConAgra provided argument concerning surrogate country selection. For the final determination, we have continued to rely on Poland as our primary surrogate country in this investigation for the final determination. For a full discussion of the Department's position in this regard, see Comment 1 in our Issues and Decision Memorandum.

Separate Rates

Nevinka

In our Preliminary Determination, we preliminarily determined that Nevinka met the criteria for the application of a separate rate. See Preliminary Determination at 1142. At verification, we found no discrepancies with the information provided in Nevinka's questionnaire response that would cause the Department to reverse this determination. In addition, we have not received any other information since the Preliminary Determination which would warrant reconsideration of our separate rates determination with respect to Nevinka. We, therefore, determine that Nevinka will be assigned an individual dumping margin.

Russia-Wide Rate

As stated in the Preliminary Determination, companies that failed to respond to our questionnaires or reported no shipments were assigned the Russia-wide rate.

As noted in the Preliminary Determination, U.S. import statistics indicate that the total quantity and value of U.S. imports of solid fertilizer grade ammonium nitrate from the Russian Federation are greater than the total quantity and value of solid fertilizer grade ammonium nitrate reported by all Russian companies that submitted responses. Given this discrepancy, we have concluded that not all producers/exporters of Russian solid fertilizer grade ammonium nitrate with shipments during the POI responded to our questionnaire. Since our Preliminary Determination, we have received no information which contradicts the information already on the record. Accordingly, for the final determination, we are applying a single antidumping duty deposit rate—the Russia-wide rate—to all producers/exporters in the Russian Federation, other than those specifically identified below under “Suspension of Liquidation.”

As noted in our Preliminary Determination, the Russia-wide antidumping rate is based on adverse facts available, in accordance with section 776 of the Act. Section 776(a)(2) of the Act provides that “if an interested party or any other person—(A) withholds information that has been requested by the administering authority or the Commission under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.” Use of facts available is warranted in this case because the producers/exporters other than Nevinka failed to respond to the Department's questionnaire. Therefore, in accordance with section 776(a)(2)(D) of the Act, we find that use of facts available is warranted with respect to all companies but Nevinka.

Section 776(b) of the Act provides that adverse inferences may be used when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. By failing to respond to the Department's questionnaire and failing to provide any reasoning for not responding, Russian producers/exporters of ammonium nitrate, other than Nevinka, failed to act to the best of their ability in this investigation. Therefore, the Department has determined that, in selecting from among the facts otherwise available, an adverse inference is warranted. As an adverse inference, the Department has presumed that these producers/exporters are under government control and has assigned them a common, Russia-wide rate based on adverse inferences.

In accordance with our standard practice, as adverse facts available, we are assigning to the Russia-wide entity (i.e., those companies not receiving a separate rate), which did not cooperate in the investigation, the higher of: (1) The highest margin stated in the notice of initiation; or (2) the highest margin calculated for any respondent in this investigation (see, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod from Japan, 63 FR 40434 (July 29, 1998)). Because the highest margin on the record is the calculated margin for Nevinka, the Department is assigning this rate as the adverse facts available Russia-wide rate. Accordingly, for the final determination, the Russia-wide rate is 253.98 percent.

Section 776(c) of the Act requires the Department to corroborate secondary information used as facts available to the extent practicable. Secondary information is information derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise. Since the margin selected represents Nevinka's calculated margin in this investigation, this margin does not represent secondary information, and, thus, does not need to be corroborated.

Affiliation

Nevinka originally reported its U.S. sales as CEP sales, claiming that it was affiliated with its U.S. trading company, Transammonia, through Transammonia's stock ownership of Nevinka and a close supplier relationship between Nevinka and Transammonia. In our Preliminary Determination, we examined the facts on the record and did not find the existence of an affiliation, as defined by the statute, between Nevinka and Transammonia. We noted that Transammonia's ownership of Nevinka is below the five percent requirement under section 771(33)(E) of the Act. In addition, we found no evidence of (and respondent has not argued for) a basis for affiliation with respect to the statutory definitions under section 771(33), subsections (A) through (D) or subsection (F), of the Act. Furthermore, with respect to section 771(33)(G) of the Act, we did not find that Nevinka's relationship with Transammonia constitutes a “close supplier relationship” which would indicate control by either party over the other.

Since the Preliminary Determination, we conducted a verification of the information on the record concerning the relationship between Nevinka and Transammonia. We found no evidence that warranted reversing our finding that Transammonia and Nevinka are not affiliated. See the proprietary discussion of this issue on page 2 and verification exhibits 11 and 18 of our April 19, 2000 verification report, “Sales and Factors of Production in the Antidumping Duty Investigation of Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation: JSC Nevinnomyssky Azot (“Nevinka”),” and Comment 6 of our Issues and Decision Memorandum. Thus, for the final determination, we have continued to treat transactions between Transammonia and Nevinka as EP transactions.

Fair Value Comparisons

To determine whether sales of solid fertilizer grade ammonium nitrate products from the Russian Federation sold to the United States by Nevinka were made at less than fair value, we compared EP to NV, as described in the “Export Price” and “Normal Value” sections of this notice.

Export Price

Although Nevinka claimed, in its questionnaire response, that its sales through Transammonia should be considered CEP sales, as discussed above, the Department has determined that the relationship between Nevinka and Transammonia does not meet the statutory definition of affiliation. Therefore, because the subject merchandise was sold to the first unaffiliated purchaser in the United States prior to importation and because there is no indication that treatment as CEP is otherwise warranted, for the final determination, we have examined Nevinka's sales to Transammonia as EP sales in accordance with section 772(a) of the Act. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared the POI-wide weighted-average EP to NV based on factors of production. Consequently, we calculated EP based on the same methodology as in the Preliminary Determination.

Normal Value

For the final determination, we calculated NV as we did in the Preliminary Determination, based on factors of production reported by Nevinka. We valued all the input factors using publicly available published information as discussed in the “Surrogate Country” and “Factor Valuations” sections of this notice.

Usage Rates and Factor Valuations

In our calculation of NV, we used the same factors of production and the same surrogate values as in the Preliminary Determination, with the following exceptions:

• We revised our calculations for lilamin and caustic magnesite by using the actual usage rates found at verification to have applied during the period in which Nevinka produced ammonium nitrate for shipment to the United States. See Comment 7 of our Issues and Decision Memorandum.
• We revised our calculation of ammonia synthesis catalyst to account for the actual purchase price paid for a market-economy input that the Department found to be incorrectly reported at verification. See Comment 8 of our Issues and Decision Memorandum.
• We revised our valuation of catalysts to include the data submitted by Petitioner on February 16, 2000 concerning catalysts. See our proprietary discussion of these catalysts in our Analysis Memorandum for the Final Determination: JSC Nevinnomyssky Azot (“Nevinka”), May 22, 2000 (“Analysis Memorandum”). In addition, in applying freight calculations for catalysts in accordance with Sigma v. United States, 117 F.2d 1401 (Fed. Cir. 1997) we used the freight distance from the nearest port to Nevinka as facts available since Nevinka did not report the freight distances for catalysts in its questionnaire response.
• We revised the reported labor factor to account for corrections to the response made at verification. (See, page 2 of the April 19, 2000 verification report and verification exhibit 3.) In addition, we revised the wage rate used to account for the updated Russian regression-based wage rate, revised in May 2000, at Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, http://ia.ita.doc.gov/wages/98wages/gdp00web.htm.
• We recalculated the surrogate depreciation ratio as a percentage of COM plus overhead, as discussed in the Memorandum from Doreen Chen to Edward Yang re Analysis of Ministerial Error Allegation (“Ministerial Error Memo”), February 1, 2000 and Comment 2 of our Issues and Decision Memorandum.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by Nevinka for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by respondents.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the Issues and Decision Memorandum which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Issues and Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, Room B-099 of the Department. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Suspension of Liquidation

On May 19, 2000, the Department signed a suspension agreement with the Ministry of Trade of the Russian Federation. Pursuant to that suspension agreement, we have instructed Customs to terminate the suspension of liquidation of all entries of solid fertilizer grade ammonium nitrate from Russia. Any cash deposits of entries of solid fertilizer grade ammonium nitrate from Russia shall be refunded and any bonds shall be released.

On June 29, 2000, we received a request from petitioner requesting that we continue the investigation. Pursuant to this request, we have continued and completed the investigation in accordance with section 734(g) of the Act. We have found the following weighted-average dumping margins:

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our determination. Because our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threatening material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the Agreement will have no force or effect, and the investigation shall be terminated. See Section 734(f)(3)(A) of the Act. If the ITC determines that such injury does exist, the Agreement shall remain in force but the Department shall not issue an antidumping order so long as (1) the Agreement remains in force, (2) the Agreement continues to meet the requirements of subsections (d) and (l) of the Act, and (3) the parties to the Agreement carry out their obligations under the Agreement in accordance with its terms. See section 734(f)(3)(B) of the Act.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix 1—Issues in Decision Memorandum

1. Surrogate Country Selection

2. Correction of Clerical Errors

3. Critical Circumstances for Acron

4. Critical Circumstances for “All Others'

5. Valuation of Market-Economy Freight Services

6. Affiliation between Nevinka and Transammonia

7. Valuation of Lilamin and Caustic Magnesite

8. Valuation of Ammonia Synthesis Catalyst