[Federal Register Volume 65, Number 133 (Tuesday, July 11, 2000)]
[Notices]
[Pages 42669-42673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17514]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-811]


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:

[[Page 42670]]

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,

[[Page 42671]]

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

[[Page 42672]]

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

[[Page 42673]]

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:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              (percent)
------------------------------------------------------------------------
JSC Nevinnomyssky Azot.....................................       253.98
Russia-Wide................................................       253.98
------------------------------------------------------------------------

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.

    Dated: June 30, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.

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

[FR Doc. 00-17514 Filed 7-10-00; 8:45 am]
BILLING CODE 3510-DS-P