[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1139-1144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-395]


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DEPARTMENT OF COMMERCE

[International Trade Administration]
[A-821-811]


Notice of Preliminary 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.

EFFECTIVE DATE: January 7, 2000.

FOR FURTHER INFORMATION CONTACT: Doreen Chen, Laurel LaCivita, or Rick 
Johnson, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-0408, (202) 482-4243, and 
(202) 482-3818, respectively.

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 the regulations at 19 CFR Part 351 (1999).

Preliminary Determination

    We preliminarily determine that solid fertilizer grade ammonium 
nitrate (``ammonium nitrate'') from the Russian Federation is being, or 
is likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733 of the Act. The estimated 
margins of sales at LTFV are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    This investigation was initiated on August 12, 1999. See Initiation 
of Antidumping Duty Investigation: Solid Fertilizer Grade Ammonium 
Nitrate from the Russian Federation, 64 FR 45236 (August 19, 1999). 
Since the initiation of this investigation the following events have 
occurred:
    On August 17, 1999, the Department requested comments from 
petitioner and respondents regarding the criteria to be used for model-
matching purposes. Petitioner and respondents submitted comments on the 
proposed model-matching criteria on August 31, 1999, and September 7 
and 15, 1999.
    On August 17, 1999, the Department issued Section A of its 
antidumping questionnaire to the Embassy of the Russian Federation, as 
well as courtesy copies (with the exception of JSC Kirovo-Chepetsk, for 
which we did not have an address) to the following possible producers/
exporters of subject merchandise named in the petition: JSC Angarsk 
Petrochemical Co., JSC Berezniki Azot, JCS Cherepovets PO Azot, JSC 
Dorogobuzh, JSC Kemerovo Azot, JSC Kirovo-Chepetsk, JSC Meleuz Prod. 
Assoc. Minudobreniya, JSC Nevinnomyssky Azot (``Nevinka''), JSC Acron, 
JSC Novomendeleyevsk Chemical Plant, JSC Novomoskovsk AK Azot, JSC 
Minudobreniya, and JSC Kuybyshevazot.
    On August 31, 1999, the following companies with period of 
investigation (``POI'') shipments to the U.S. submitted information 
regarding the quantity and value of these shipments of subject 
merchandise to the United States during the POI: JSC Acron and Nevinka.
    We received a complete Section A response from Nevinka. Companies 
JSC Cherepovets PO Azot, JSC Kemerovo Azot, JSC Minudobreniya, JSC 
Kubyshevazot, JSC Berezniki Azot, JSC Novomendeleyevsk Chemical Plant 
and JSC Kirovo-Chepetsk reported that they made no sales to the United 
States during the POI. On October 27, 1999, we sent a letter to JSC 
Kirovo-Chepetsk seeking clarification and information on a particular 
shipment. The due date given for this information was November 24, 
1999. We also informed JSC Kirovo-Chepetsk that if it had knowledge 
that this shipment was destined for the United States, it was required 
to respond fully to the Department's antidumping questionnaire by the 
due date of December 2, 1999. JSC Kirovo-Cheptesk failed to provide the 
requested information regarding the shipment at issue within the 
provided deadlines. Finally, companies JSC Angarsk Petrochemical Co., 
JSC Dorogobuzh, JSC Meleuz Production Association Minudobreniya, JSC 
Novomoskovsk AK Azot and JSC Acron did not respond to the Department's 
questionnaire.
    On September 3, 1999, the United States International Trade 
Commission (``ITC'') preliminarily determined that ``there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of imports from Russia of solid fertilizer 
grade ammonium nitrate.'' (64 FR 50103, September 15, 1999).
    On September 20, 1999, Nevinka submitted its complete section A 
response. On November 15, 1999, Nevinka submitted its response to 
sections C and D of the questionnaire.
    On October 14, 1999, the Department issued a Section A supplemental 
questionnaire to Nevinka. On November 11, 1999, Nevinka submitted its 
response to the Department's supplemental section A questionnaire. On 
November 21, 1999, the Department issued a supplemental section C and 
D, and second supplemental A questionnaire. On December 14, 1999, 
Nevinka submitted its supplemental sections C, D, and a second 
supplemental section A questionnaire response.

[[Page 1140]]

    On October 22, 1999, we requested publicly-available information 
for valuing the factors of production and comments on surrogate country 
selection. On November 5 and 12, 1999, petitioner and Nevinka submitted 
comments and rebuttals on the surrogate country selection, 
respectively. On November 30 and December 7, 1999, petitioner and 
Nevinka submitted comments and rebuttals on surrogate values, 
respectively.
    Petitioner submitted comments regarding Nevinka's questionnaire 
response on September 29 and November 22, 1999.
    On December 17 and 20, 1999, petitioner submitted comments on 
Nevinka's claim of affiliation and on the supplemental questionnaire 
sections C and D response. On December 21, 1999, Nevinka provide 
rebuttal comments to petitioner's December 17 and 20, 1999 submissions. 
Because of the late dates of these submissions, the Department has not 
had time to analyze fully this information provided by petitioner and 
Nevinka. Therefore, the Department has not considered these submissions 
for its preliminary determination.

Critical Circumstances

    On November 1, 1999, the Department issued its preliminary 
determination that critical circumstances exist with respect to 
Nevinka. On November 8, 1999, the Department requested information 
regarding shipments of ammonium nitrate from Nevinka. On November 23, 
1999, Nevinka provided the requested information. For a complete 
discussion of our preliminary analysis of critical circumstances, see 
Memorandum to Deputy Assistant Secretary Joseph Spetrini, dated 
November 1, 1999, on file in Room B-099 of the Department headquarters 
and the Preliminary Determination of Critical Circumstances: Solid 
Fertilizer Grade Ammonium Nitrate from the Russian Federation, 63 FR 
60422 (November 5, 1999). The Department will make its final 
determination of critical circumstances, on a company-specific basis as 
appropriate, concurrent with the final determination of sales at LTFV 
in this investigation.

Scope of 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.

Facts Available

    Section 776(a) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information which cannot be verified, the 
Department shall use, subject to sections 782(d) and (e) of the Act, 
facts otherwise available in reaching the applicable determination. 
Pursuant to section 782(e), the Department shall not decline to 
consider submitted information if all of the following requirements are 
met: (1) The information is submitted by the established deadline; (2) 
the information can be verified; (3) the information is not so 
incomplete that it cannot serve as a reliable basis for reaching the 
applicable determination; (4) the interested party has demonstrated 
that it acted to the best of its ability; and (5) the information can 
be used without undue difficulties.
    Nevinka has reported factor usage information for a large number of 
catalysts used in the production of ammonium nitrate (see Exhibit 18 of 
Nevinka's December 14, 1999 submission). However, there is currently no 
surrogate value information on the record regarding these catalysts, 
nor has the Department been able to locate such values independently. 
However, Nevinka has reported an actual price for ammonia synthesis 
catalyst purchased from a market economy country and in market economy 
currency in its supplemental section D questionnaire response. 
Therefore, as facts otherwise available, we used the actual price for 
ammonia synthesis catalyst as a surrogate value for all other catalysts 
for which Nevinka reported usage factors in its supplemental section D 
questionnaire response.
The Russia-Wide Rate
    Respondents that are not entitled to a separate rate are considered 
to constitute a single enterprise under common control by the 
government of the Russian Federation. See, e.g., Final Determination of 
Sales at Less Than Fair Value: Bicycles from the People's Republic of 
China, 61 FR 19026 (April 30, 1996). Companies that failed to respond 
to our questionnaires or reported no shipments were assigned the 
Russia-wide rate. Companies JSC Cherepovets PO Azot, JSC Kemerovo Azot, 
JSC Minudobreniya, JSC Kubyshevazot, JSC Berezniki Azot and JSC 
Novomendeleyevsk Chemical Plant reported, and the Department confirmed 
through an examination of U.S. Customs data, that they had no shipments 
during the POI. Since these companies did not report any shipments, we 
have no basis for determining a margin. Therefore, these companies were 
assigned the Russia-wide rate, the composition of which is described 
below.
    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. Moreover, on September 15, 1999, JSC Acron, which had 
notified the Department of its shipment quantities and values, 
submitted a letter to the Department, stating that it would not 
participate in the antidumping investigation on solid fertilizer grade 
ammonium nitrate. Accordingly, 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.''
    The Russia-wide antidumping rate is based on the facts available. 
Section 776(a)(2)(B) of the Act requires the Department to use facts 
available when a party does not provide the Department with information 
by the established deadline or in the form and manner requested by the 
Department.
    In addition, section 776(b) of the Act provides that, if the 
Department finds that an interested party ``has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information,'' the Department may use

[[Page 1141]]

information that is adverse to the interests of that party as the facts 
otherwise available.
    As discussed above, all Russian producers/exporters that do not 
qualify for a separate rate are treated as a single enterprise. Because 
some exporters of the single enterprise failed to respond to the 
Department's requests for information, that single enterprise is 
considered to be uncooperative. In such situations, the Department 
generally selects as total adverse facts available the higher of the 
highest margin from the petition or the highest rate calculated for a 
respondent in the proceeding. In the present case, there is only one 
calculated margin (which is the highest margin on the record). Because 
the highest margin on the record is the calculated margin, the 
Department is assigning this rate as the adverse facts available 
Russia-wide rate. Accordingly, for the preliminary determination, the 
Russia-wide rate is 264.59 percent. For the final determination, the 
Department will consider all margins on the record at that time for the 
purpose of determining the most appropriate margin.

Nonmarket Economy Country Status

    The Department has treated the Russian Federation as a nonmarket 
economy (``NME'') country in all past antidumping duty investigations 
and administrative reviews (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); 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 is continuing to treat 
the Russian Federation as an NME for this preliminary determination, 
because no party has sought revocation of NME status in this 
investigation.

Surrogate Country

    When the Department is investigating imports from an 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.
    The Department has determined that Poland, Tunisia, Colombia, 
Turkey, South Africa, and Venezuela are 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 Surrogate Country Memorandum, in the event that 
more than one country satisfies 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 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); 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, 
1443 n.3 (Fed. Cir. 1994). The Department has determined that Poland 
qualifies as an appropriate surrogate because it satisfies 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 
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, we have calculated NV using 
publicly available information from Poland to value Nevinka's factors 
of production, with the exception of one input, monoethanolamine, which 
we valued using Venezuelan data, since there was no Polish data 
available for this preliminary determination. For a further discussion 
of the Department's selection of Poland as the primary surrogate, see 
Memorandum to Edward C. Yang; Re: Surrogate Country Selection 
(``Surrogate Country Memorandum''), dated December 30, 1999.
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for a final determination in an antidumping investigation, 
interested parties may submit publicly available information to value 
factors of production within 40 days after the date of publication of 
this preliminary determination.

Separate Rates

    The Department presumes that a single dumping margin is appropriate 
for all exporters in an NME country. See Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide from the People's Republic of 
China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide''). The Department 
may, however, consider requests for a separate rate from individual 
exporters. Nevinka has requested a separate, company-specific rate. To 
establish whether a firm is sufficiently independent from government 
control to be entitled to a separate rate, the Department analyzes each 
exporting entity under a test arising out of the Final Determination of 
Sales at Less Than Fair Value: Sparklers from the People's Republic of 
China, 56 FR 20588 (May 6, 1991) and amplified in Silicon Carbide. 
Under the separate rates criteria, the Department assigns separate 
rates in NME cases only if a respondent can demonstrate the absence of 
both de jure and de facto government control over export activities. 
For a complete analysis of separate rates, see Memorandum to Edward C. 
Yang, Re: Separate Rates for Exporters that Submitted Questionnaire 
Responses

[[Page 1142]]

(``Separate Rates Memorandum''), dated December 30, 1999.
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies.
    Nevinka has placed on the administrative record a number of 
documents to demonstrate absence of de jure control. These documents 
include laws, regulations, and provisions enacted by the central 
government of the Russian Federation, describing the elimination of 
export duties and licensing requirements on the export of mineral 
fertilizers including ammonium nitrate. Nevinka also placed on the 
record legislative enactments privatizing state-owned enterprises. This 
information provides a sufficient basis for a preliminary finding that 
there is an absence of de jure government control. See Separate Rates 
Memorandum, dated December 30, 1999.
2. Absence of De Facto Control
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or 
subject to the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.
    There is no evidence on the record to suggest that there is any 
government involvement in the determination of sales prices. Nevinka 
has reported that the prices with its U.S. customers cannot be revised 
or changed by any of the state authorities. Nevinka stated that there 
are no restrictions on the usage of export revenues and that 
distribution of profits resulting from export revenue is within the 
jurisdiction of the meeting of shareholders and the Board of Directors.
    Nevinka stated that its company is managed through the joint 
responsibilities of shareholders, a supervisory board and a general 
director. Nevinka explained that the general director and members of 
the supervisory board are elected by a majority vote at an annual 
general meeting of shareholders and the general director and members of 
the supervisory board serve at five-year and one-year terms, 
respectively. Nevinka also noted that it is not required to notify any 
governmental authorities of the selection or appointment of its 
managers. Nevinka stated that it has authority to negotiate and sign 
contracts and other agreements. Nevinka claimed that no external 
organization reviews or approves any aspect of Nevinka's U.S. sales 
transactions. This information provides a sufficient basis for a 
preliminary finding that there is an absence of de facto government 
control. See Separate Rates Memo, dated December 30, 1999. Therefore, 
the Department preliminarily determines that Nevinka is eligible to 
receive a separate rate.

Affiliation

    Nevinka originally reported its U.S. sales as CEP sales. Nevinka 
claimed that it is affiliated with its U.S. trading company, 
Transammonia, through Transammonia's stock ownership of Nevinka and a 
close supplier relationship between Nevinka and Transammonia. The 
Department issued supplemental questionnaires seeking further 
information on Nevinka's claim of affiliation with Transammonia. See 
supplemental section A questionnaire (October 14, 1999) , second 
section A supplemental questionnaire (November 21, 1999) and 
supplemental sections C & D questionnaire (November 12, 1999). Nevinka 
responded to our supplemental section A questionnaire on November 11, 
1999 and second section A supplemental questionnaire and supplemental 
sections C & D questionnaire on December 14, 1999.
    Section 771(33) of the Act defines affiliated persons as including:

    (A) Members of a family, including brothers and sisters (whether 
by whole or half blood), spouse, ancestors, and lineal descendants;
    (B) Any officer or director of an organization and such 
organization;
    (C) Partners;
    (D) Employer and Employee;
    (E) Any person directly or indirectly owning, controlling, or 
holding with power to vote, five percent or more of the outstanding 
voting stock or shares of any organization and such organization;
    (F) Two or more persons directly or indirectly controlling, 
controlled by, or under common control with, any person;
    (G) Any person who controls any other person.
    For purposes of this paragraph, a person shall be considered to 
control another person if the person is legally or operationally in 
a position to exercise restraint or direction over the other person.

The legislative history makes clear that the statute does not require 
majority ownership for a finding of control. Rather, the statutory 
definition of control encompasses both legal and operational control. A 
minority ownership interest, examined within the context of the 
totality of the evidence, is a factor that the Department considers in 
determining whether one party is legally or operationally in a position 
to control another. See Certain Cut-To-Length Carbon Steel Plate From 
Brazil, 62 FR 18486, 18490 (April 15, 1997); see also 19 CFR 
351.102(b).
    The Department has stated that merely identifying ``the presence of 
one or more of the other indicia of control (as per Section 771(33) of 
the Act) does not end [the Department's] task.'' See Antidumping 
Duties; Countervailing Duties: Notice of Proposed Rulemaking and 
Request for Public Comments, 61 FR 7310 (February 27, 1996). The 
Department is compelled to examine all indicia, in light of business 
and economic reality, to determine whether they constitute evidence of 
control. In determining whether control over another person exists, 
within the meaning of section 771(33) of the Act, the Department will 
consider the following factors, among others: corporate or family 
groupings; franchise or joint venture agreements; debt financing; and 
close supplier relationships. However, the Department will not find 
affiliation on the basis of these factors unless the relationship has 
the potential to impact decisions concerning the production, pricing, 
or cost of the subject merchandise or foreign like product. See section 
351.102(b) of the Department's regulations.
    In the present case, as discussed below, we do not find the 
existence of an affiliation, as defined by the statute, between Nevinka 
and Transammonia. First, we note that Transammonia's ownership of 
Nevinka is below the five percent requirement under section 771(33)(E). 
The Department has also 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 (F).
    Furthermore, with respect to section 771(33)(G), we did not find 
that Nevinka's relationship with Transammonia constitutes a ``close 
supplier relationship'' which would indicate control by either party 
over the

[[Page 1143]]

other. The Statement of Administrative Action (SAA) defines a close 
supplier relationship as one where ``the supplier or buyer becomes 
reliant upon another.'' SAA accompanying the URAA, H.R. Doc. No. 103-
316, vol. 1 at 838 (1994); see also, Certain Cold-Rolled and Corrosion-
Resistant Carbon Steel Flat Products from Korea (Korean Steel), 62 FR 
18404, 18417 (April 15, 1997). To establish a close supplier 
relationship, the party must demonstrate that the ``relationship is so 
significant that it could not be replaced.'' See Korean Steel, at 62 FR 
18417.
    In Korean Steel, the Department provided additional guidance 
regarding close supplier relationships. Specifically, the Department 
established a threshold requirement that, in order to find a close 
supplier relationship, actual reliance between the companies must be 
found:

    Only if we make such a finding [of reliance] can we address the 
issue of whether one of the parties is in a position to exercise 
restraint or direction over the other. When the Preamble to our 
Proposed Regulations * * * states that ``business and economic 
reality suggest that these relationships must be significant and not 
easily replaced,'' it suggests that we must find significant indicia 
of control. Korean Steel, 62 FR at 18417.

    With respect to whether reliance exists in this case, the 
Department has examined relevant information submitted by Nevinka on 
the record of this investigation. First, we note that the current 
record indicates that there are alternative sources of ammonium nitrate 
supply and distribution. For example, the Petition, at exhibits 6 and 
8, indicates that there are 12 additional producers of ammonium nitrate 
in Russia alone, and five known U.S. importers of Russian-origin 
ammonium nitrate. Moreover, additional record information, which is 
proprietary in nature, leads us to the conclusion that there is a lack 
of actual reliance on Nevinka by Transammonia, and vice versa. In this 
respect, we also believe that information on the record does not 
support a finding that Transammonia holds a dominant position in the 
U.S. market place which might, de facto, create actual reliance on 
Transammonia by Nevinka. See Memorandum to the File, Re: Analysis 
Memorandum for the Preliminary Determination for JSC Azot Nevinnomyssky 
(Nevinka) (``Analysis Memo'') (Proprietary Version) at pg. 5.
    Second, in examining reliance, we have considered comparative sales 
statistics of both companies, e.g., the proportion of sales made by the 
producer through the trading company vis-vis the trading company's 
total sales, as well as the proportion of sales made by the producer 
through the trading company to the total sales made by the producer, in 
accordance with Notice of Final Determination of Sales at Less Than 
Fair value: Large Newspaper Printing Presses and Components Thereof, 
Whether Assembled or Unassembled from Japan, 61 FR 38139, 38157 (July 
23, 1996) (LNPP from Japan). In this regard, the Department has also 
determined that a close supplier relationship may occur when a majority 
of sales are made to one customer. See Notice of Final Determination of 
Sales at Less Than Fair Value: Open-End Spun Rayon Singles Yarn From 
Austria, 62 FR 43701 (August 15, 1997), citing LNPP from Japan.
    In this case, we find that the various proportions of sales (of 
subject merchandise and of all products), both with respect to 
Nevinka's sales to Transammonia and Transammonia's sales of Nevinka's 
product, are insufficient to support a determination of reliance. See 
Analysis Memo (Proprietary Version) at pg. 5.
    Third, we did not find the length and terms of the contract between 
Nevinka and Transammonia provides sufficient evidence of reliance. 
Because this information is proprietary, see Analysis Memo (Proprietary 
Version) at pg. 5.
    In sum, we do not find that actual reliance exists with respect to 
the business relationship between Nevinka and Transammonia. We also do 
not find that other evidence combined with this supply relationship 
suffices to find any type of control that would lead to a finding of 
affiliation. See Analysis Memo. Nevinka has not argued for a finding of 
control under any other aspect of section 771(33)(G) of the Act other 
than through a close supplier relationship. Therefore, we preliminarily 
determine that Nevinka and Transammonia are not affiliated as defined 
by the statute, and have consequently examined Nevinka's sales to the 
first unaffiliated party (Transammonia) in the United States, which are 
export price 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 has claimed that its sales through Transammonia 
should be considered CEP sales, as discussed above, the Department has 
preliminarily 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 of CEP is warranted, we 
have examined Nevinka's sales to Transammonia as EP sales in accordance 
with section 772(a) of the Act. We will examine the EP/CEP designation 
further at verification. In accordance with section 777A(d)(1)(A)(i) of 
the Act, we compared POI-wide weighted-average EPs to the only one NV 
based on factors of production.
    We calculated EP based on FOB prices to an unaffiliated trading 
company. We made deductions from the starting price for inland freight 
(plant warehouse to port). These services were assigned a surrogate 
value based on public information from Poland. See Memorandum to Edward 
C. Yang; Re: Factor Valuation for Nevinka (``Factor Valuation Memo''), 
dated December 30, 1999. We used Nevinka's reported date of sale, which 
was the date of shipment. The Department normally uses invoice date as 
the date of sale ``absent satisfactory evidence that the material terms 
of sale were finally established on a different date.'' See Canned 
Pineapple Fruit from Thailand: Notice of Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 63 FR 43661, 
43668 (October 16, 1997), citing Antidumping Duties; Countervailing 
Duties, 62 FR 27296, 27348 (May 19, 1997). Although we have accepted 
the shipment based date of sale for this preliminary determination, we 
will continue to review whether the date of shipment is the appropriate 
date of sale for the final determination.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from an NME country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs, including 
depreciation. We calculated NV based on factors of production reported 
by Nevinka. For a further

[[Page 1144]]

discussion, see Analysis Memo. We valued all the input factors using 
publicly available published information as discussed in the 
``Surrogate Country'' and ``Factor Valuations'' sections of this 
notice.

Factor Valuations

    When possible, we valued material inputs on the basis of tax-
exclusive domestic prices in the surrogate country. When we were not 
able to rely on domestic prices, we used import prices to value 
factors. As appropriate, we adjusted import prices to make them 
delivered prices. For those values not contemporaneous with the POI, we 
adjusted for inflation using producer or wholesale price indices, as 
appropriate, published in the International Monetary Fund's 
International Financial Statistics. For input(s) sourced from a market 
economy and paid for in market economy currency, we used the actual 
price paid for the input to calculate the factors-based NV in 
accordance with our standard practice. See Lasko Metal Products v. 
United States, 437 F. 3d 1442 (Fed. Cir. 1994).
    To value caustic magnezite, sodium hydrate, diethanolamine, 
vanadium pentoxide, tri-sodium phosphate, hydrazine hydrate, sulphuric 
acid and aluminum sulphate, we used public information on Polish prices 
published by the United Nations Trade Commodity Statistics for 1998 
(``UNTCS''). To value technical alumina, we used public information 
published by UNTCS for 1997. To value monoethanolamine, we used a 
Venezuelan price using public information published by the UNTCS for 
1997 because no Polish data on this input was available.
    For catalysts, as noted above in the ``Facts Available'' section, 
we used the market economy price for one catalyst provided by Nevinka, 
since there are no record values for any catalysts other than ammonia 
synthesis. However, for the final determination, we will attempt to 
find more appropriate values for these catalysts.
    For natural gas, natural gas equivalents and electricity, we used 
second quarter 1999 values from Energy Prices and Taxes: Second Quarter 
1999, International Energy Agency, OECD.
    We used Polish transport information to value transport for raw 
materials. For domestic inland freight (truck), we used a price quote 
from a Polish trucking company. For domestic inland freight (rail), we 
used freight rates as quoted from the Polish National Railroad.
    For labor, we used the Russian regression-based wage rate at Import 
Administration's home page, Import Library, Expected Wages of Selected 
NME Countries, revised in May 1999. Because of the variability of wage 
rates in countries with similar per capita gross domestic products, 
section 351.408(c)(3) of the Department's regulations provides for the 
use of a regression-based wage rate. The source of this wage rate data 
on the Import Administration's homepage is found in the 1998 Year Book 
of Labour Statistics, International Labour Office (``ILO'') (Geneva: 
1998), Chapter 5: Wages in Manufacturing.
    To value overhead, general expenses and profit, we used public 
information reported in the 1998 financial statements of Zaklady Azotwe 
Kedzierzyn S.A., a Polish ammonium nitrate producer.

Verification

    As provided in section 782(i) of the Act, we will verify all 
company information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with sections 733(d) and (e) of the Act, we are 
directing the U.S. Customs Service to suspend liquidation of all 
imports of subject merchandise that are entered, or withdrawn from 
warehouse, for consumption on or after the date 90 days prior to the 
date of publication of this notice in the Federal Register. We will 
instruct the U.S. Customs Service to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the NV 
exceeds the EP, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              [percent]
------------------------------------------------------------------------
JSC Azot Nevinnomyssky.....................................       264.59
Russia-Wide................................................       264.59
------------------------------------------------------------------------

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether imports of solid fertilizer grade ammonium nitrate from the 
Russian Federation are materially injuring, or threatening material 
injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. A list 
of authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes. In accordance with section 
774 of the Act, we will hold a public hearing, if requested, to afford 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs. Tentatively, any hearing will be held fifty-
seven days after publication of this notice at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230, at a time and location to be determined. Parties should confirm 
by telephone the date, time, and location of the hearing two days 
before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the date of publication of this notice. 
Requests should contain: (1) The party's name, address, and telephone 
number; (2) the number of participants; and (3) a list of the issues to 
be discussed. At the hearing, each party may make an affirmative 
presentation only on issues raised in that party's case brief, and may 
make rebuttal presentations only on arguments included in that party's 
rebuttal brief. See 19 CFR 351.310(c).
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of the preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(d) and 777(i)(1) of the Act.

    Dated: December 30, 1999.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-395 Filed 1-6-00; 8:45 am]
BILLING CODE 3510-DS-P