[Federal Register Volume 66, Number 43 (Monday, March 5, 2001)]
[Notices]
[Pages 13286-13292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5156]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-823-810]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Solid Agricultural Grade
Ammonium Nitrate From Ukraine
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary determination of sales at less than fair
value.
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SUMMARY: We preliminarily determine that solid agricultural grade
ammonium nitrate from Ukraine is being, or is likely to be, sold in the
United States at less than fair value, as provided in section 733 of
the Tariff Act of 1930, as amended. The estimated dumping margin for
J.S.C. ``Concern'' Stirol is 113.38 percent. The Ukraine-wide rate,
which is applicable to all other producers/exporters, is 113.38
percent. We also preliminarily determine that critical circumstances
exist.
Interested parties are invited to comment on this preliminary
determination. If this investigation proceeds on the current schedule,
we will make our final determination not later than 105 days after the
date of publication of this preliminary determination in the Federal
Register.
EFFECTIVE DATE: March 5, 2001.
FOR FURTHER INFORMATION CONTACT: Melani Miller or Jarrod Goldfeder,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-0116 or (202) 482-0189,
respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as
[[Page 13287]]
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 of Commerce (``the
Department'') regulations are to the regulations at 19 CFR part 351
(April 2000).
SUPPLEMENTARY INFORMATION
Case History
Since the initiation of this investigation on November 8, 2000 (see
Initiation of Antidumping Duty Investigation: Solid Agricultural Grade
Ammonium Nitrate from Ukraine, 65 FR 66966 (November 8, 2000) (``Notice
of Initiation'')), the following events have occurred:
In the Notice of Initiation, the Department invited parties to
comment on the request made by the petitioner (the Committee for Fair
Ammonium Nitrate Trade) for an expedited preliminary determination. On
November 13, 2000, we received comments from J.S.C. ``Concern'' Stirol
(``Stirol''), a Ukrainian producer/exporter of the subject merchandise;
the petitioner; and ConAgra, Inc. (``ConAgra''), an interested party
and importer of the subject merchandise. Based on our review of these
comments and the original request from the petitioner, we announced our
intention to issue our preliminary determination by February 23, 2001.
See November 22, 2000 memorandum to the Acting Deputy Assistant
Secretary ``Whether to Expedite the Preliminary Determination,'' which
is on file in Import Administration's Central Records Unit (``CRU''),
Room B-099 of the main Department of Commerce building.
On November 22, 2000, the Department issued an antidumping
questionnaire to the Ukrainian Embassy in Washington, DC and requested
that the Embassy forward the questionnaire to all Ukrainian producers/
exporters of subject merchandise that sold to the United States during
the period of investigation (``POI''). The Department also sent the
antidumping questionnaire directly to the four producers/exporters
named in the petition.\1\
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\1\ The four companies named in the petition were Stirol, Open
Joint Stock Company ``AZOT'' Cherkassy (``Cherkassy''), J.S. Co.
Rivneazot (``Rivneazot''), and Severodonetsk State Manufacturing
Enterprise ``Azot Association'' (``Severodonetsk'').
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Pursuant to the allegation of critical circumstances in the
petition, the Department, in its November 22, 2000 questionnaire, also
requested information regarding shipments of the subject merchandise to
the United States for the period January 1998 through the most recent
date for which data was available (including, at minimum, November
2000). We received this information from Stirol on December 6, 2000. At
the Department's request, Stirol submitted revised shipment data on
February 7, 2001. No other company provided the requested information.
The petitioner provided supplemental information with respect to its
critical circumstances allegation on February 13, 2001. The critical
circumstances analysis for this preliminary determination is discussed
below in the ``Critical Circumstances'' section.
Also on November 22, 2000, in response to a request by the
petitioner to alter the POI, we issued a memorandum explaining our
decision not to do so in this investigation. See November 22, 2000
memorandum to the Acting Deputy Assistant Secretary ``Time Period for
the Period of Investigation'' (``POI Memo''), which is on file in the
Department's CRU. This issue is discussed further in the ``Period of
Investigation'' section, below.
On November 22, 2000, the Department also invited interested
parties to comment on surrogate country selection and to provide
publicly available information for valuing the factors of production.
We received responses from the petitioner and Stirol on December 27,
2000. Both Stirol and the petitioner filed rebuttal comments on
surrogate values on January 3, 2001. Stirol and the petitioner
submitted further surrogate value information on February 13, February
15, February 16, February 20, and February 21, 2001.
On November 27, 2000, the United States International Trade
Commission (``ITC'') notified the Department of its affirmative
preliminary injury determination in this case.
On December 6, 2000, we received a response from Severodonetsk
indicating that it did not make any shipments of the subject
merchandise to the United States during the POI.
On December 27, 2000, and January 12, 2001, the Department received
questionnaire responses for Sections A, C, and D from Stirol. We issued
supplemental questionnaires to Stirol on January 10 and January 24,
2001, and received supplemental responses from Stirol on January 24 and
February 7, 2001. We received comments on Stirol's responses from the
petitioner on January 5 and January 19, 2001.
With regard to Cherkassy, we received an improperly filed Section A
response on December 27, 2000. This response was resubmitted by
Cherkassy on January 12, 2001. We received comments on Cherkassy's
Section A response from the petitioner on January 22, 2001. We issued a
Section A supplemental questionnaire to Cherkassy on January 24, 2001.
Despite the Department's numerous attempts to contact Cherkassy and to
allow Cherkassy to file its responses, Cherkassy neither submitted a
response to the Section A supplemental questionnaire nor to Sections C
and D of the questionnaire.
On January 3, 2001, we sent letters to Rivneazot and the Embassy of
Ukraine informing them that, because we had not received any
questionnaire responses from Rivneazot or from any other producer/
exporter of the subject merchandise, we were assuming that, other than
the companies already participating, no other companies (including
Rivneazot) would be participating in this investigation. In response,
on January 30, 2001, the Embassy of Ukraine notified us that Rivneazot
did not make any shipments of the subject merchandise to the United
States during the POI. We received no other response to these letters.
Finally, on February 13 and February 15, 2001, both the petitioner
and Stirol provided comments and rebuttal comments on several issues
related to the preliminary determination.
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on February 13, 2001,
Stirol requested that in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination by 30 days. At the same time, Stirol requested that the
Department extend by 30 days the application of the provisional
measures prescribed under 19 CFR 351.210(e)(2). In accordance with 19
CFR 351.210(b), because (1) our preliminary determination is
affirmative, (2) the requesting exporter accounts for a significant
proportion of exports of the subject merchandise, and (3) no compelling
reasons for denial exist, we are granting Stirol's request and are
postponing the final determination until no later than 105 days after
the publication of this notice in the Federal Register. Suspension of
liquidation will be extended accordingly.
Scope of Investigation
For purposes of this investigation, the products covered are solid,
fertilizer grade ammonium nitrate (``ammonium
[[Page 13288]]
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 for purposes of the Customs Service,
the written description of the merchandise under investigation is
dispositive.
Period of Investigation
As noted above, the petitioner requested that the Department alter
the normal POI called for in section 351.204(b)(1) of the Department's
regulations to include the first quarter of 2000, either by defining
the POI as the first and second quarters, or by expanding the POI to
include the first, second, and third quarters. As explained in the POI
Memo, we have not adopted the petitioner's suggested POI. Thus, the POI
for this investigation corresponds to the two most recent fiscal
quarters prior to the filing of the petition, i.e., April 1, 2000
through September 30, 2000.
Nonmarket Economy Country and Market Oriented Industry Status
The Department has treated Ukraine as a nonmarket economy (``NME'')
country in all past antidumping investigations. See, e.g., Notice of
Preliminary Determinations of Sales at Less Than Fair Value: Steel
Concrete Reinforcing Bars from Poland, Indonesia, and Ukraine, 66 FR
8343 (January 30, 2001) and Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
Ukraine, 62 FR 61754 (November 19, 1997) (``CTL Plate from Ukraine'').
This NME designation remains in effect until it is revoked by the
Department (see section 771(18)(C) of the Act).
The respondents in this investigation have not requested a
revocation of Ukraine's NME status. We have, therefore, preliminarily
determined to continue to treat Ukraine as an NME.
Separate Rates
In an NME proceeding, the Department presumes that a single dumping
margin is appropriate for all exporters unless a firm establishes that
it is eligible for a separate rate. In this investigation, Stirol has
requested that it be assigned a separate rate. Pursuant to this
request, Stirol has provided the requested company-specific separate
rates information and has stated that it is not subject to any element
of governmental ownership or control. Although Cherkassy submitted
information relating to separate rates, that information was
incomplete.
The Department establishes whether each exporting entity is
entitled to a separate rate based on its independence from government
control over its exporting activities by applying 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), as
modified by Final Determination of Sales at Less Than Fair Value:
Silicon Carbide from the People's Republic of China (59 FR 22585, May
2, 1994).
The Department's separate rate test is not concerned, in general,
with macroeconomic/border-type controls, e.g., export licenses, quotas,
and minimum export prices, particularly if these controls are imposed
to prevent dumping. The test focuses, rather, on controls over the
investment, pricing, and output decision-making process at the
individual firm level. See CTL Plate from Ukraine; Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, from the People's
Republic of China: Final Results of Antidumping Duty Administrative
Review, 62 FR 61276 (November 17, 1997) (``TRBs IX''); and Honey from
the People's Republic of China: Preliminary Determination of Sales at
Less than Fair Value, 60 FR 14725, 14726 (March 20, 1995).
Under the separate rates test, the Department assigns a separate
rate in an NME case only if an individual respondent can demonstrate
the absence of both de jure and de facto governmental control over its
export activities:
1. Absence of De Jure Control
The Department considers three factors which support, though do not
require, a finding of de jure absence of governmental control. These
factors include: (1) An absence of restrictive stipulations associated
with an individual exporter's business and export licenses; (2) any
legislative enactments decentralizing control of companies; or (3) any
other formal measures by the government decentralizing control of
companies (see, e.g., TRBs IX).
Stirol has placed documents on the record that it claims
demonstrate the absence of de jure governmental control, including the
``Law of Ukraine On Economic Associations,'' the ``Law of Ukrainian SSR
On Foreign Economic Activities,'' and the ``Edict of the President of
Ukraine On Improvement of the Currency Regulation.'' These laws,
enacted by the Government of Ukraine, demonstrate a significant degree
of deregulation of Ukrainian business activity, as well as deregulation
of Ukrainian export activity.
Because the Government of Ukraine created a right of ownership of
business enterprises for private persons and collectives, open joint-
stock companies, such as Stirol, are now distinct legal entities.
According to Stirol, through this ownership right, it has the right to
freely engage in economic activity, negotiate and sign contracts, and
independently develop business plans. It also may independently choose
its managers.
In a prior case, CTL Plate from Ukraine, the Department analyzed
Ukraine's laws and regulations, and found that they establish an
absence of de jure control. We have no new information in this
proceeding that would cause us to reconsider this determination.
Moreover, although the Government of Ukraine does maintain export
controls for certain categories of goods, Stirol states that the
subject merchandise exported to the United States is not subject to any
of these controls. Additionally, Stirol asserts that the subject
merchandise does not appear on any government list regarding export
provisions or licensing and that there are no export quotas applicable
to the subject merchandise.
Accordingly, we preliminarily determine that there is an absence of
de jure governmental control over Stirol's export pricing and marketing
decisions.
2. Absence of De Facto Control
The Department typically considers four factors in evaluating
whether a 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 its 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 (see Final Determination of Sales at Less Than Fair
Value: Certain Preserved Mushrooms from the People's
[[Page 13289]]
Republic of China, 63 FR 72255 (December 31, 1998)).
Stirol has asserted (and has provided supporting documentation)
that it: (1) Establishes its own export prices; (2) negotiates
contracts without guidance from any governmental entities or
organizations; (3) makes its own personnel decisions with regard to the
selection of management; and (4) retains the proceeds from export sales
(although 50 percent of foreign currency earnings must be converted
into Ukrainian currency) and uses profits according to its business
needs without any restrictions. Additionally, Stirol has stated that it
does not coordinate or consult with other exporters regarding its
pricing. This information supports a preliminary finding that there is
an absence of de facto governmental control of the export functions of
Stirol.
Consequently, subject to verification, we preliminarily determine
that Stirol has met the criteria for the application of separate rates.
Also, because Cherkassy failed to provide the information needed to
support its claim for a separate rate, we preliminarily determine that
Cherkassy is subject to the Ukraine-wide rate, discussed below.
Ukraine-Wide Rate
Information on the record of this investigation indicates that
Stirol, the only company that demonstrated its eligibility for a
separate rate, did not account for all exports of subject merchandise
to the United States from Ukraine during the POI. Therefore, because we
presume that NME producers/exporters that are not eligible for a
separate rate do not act independently from the government, we
preliminarily determine that all Ukrainian producers/exporters of
ammonium nitrate, other than Stirol, failed to respond to our
questionnaire.
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.'' Pursuant to section 782(e) of the
Act, the Department shall not decline to consider information that is
submitted by an interested party and that is necessary to the
determination, even if that information does not meet all the
applicable requirements established by the Department, if all of the
following requirements are met: (1) The information is submitted by the
deadline established for its submission; (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 in providing the information and meeting the requirements
established by the Department with respect to the information; and (5)
the information can be used without undue difficulties.
Section 776(b) of the Act further provides that adverse inferences
may be used when an interested party has failed to cooperate by not
acting to the best of its ability to comply with a request for
information. In this case, except for Stirol, any Ukrainian producers/
exporters of subject merchandise that exported to the United States
during the POI failed to act to the best of their ability by not
providing a response to the Department's questionnaire. Thus, the
Department has determined that, in selecting from among the facts
otherwise available, an adverse inference is warranted.
It is the Department's practice to assign to respondents which do
not provide a full response to the Department's antidumping
questionnaire the higher of: (1) The highest margin stated in the
notice of initiation; or (2) the highest margin calculated for any
respondent in the 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)). In this case, the highest
margin on record is 257 percent, the rate from the petition as
recalculated by the Department in the Notice of Initiation.
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' such as the petition, the Department shall,
to the extent practicable, corroborate that information from
independent sources reasonably at the Department's disposal. The
Statement of Administrative Action accompanying the URAA, H.R. Doc. No.
103-316 (1994) (SAA), states that ``corroborate'' means to determine
that the information used has probative value. See SAA at 870.
In order to determine the probative value of the information used
to calculate the Ukraine-wide rate, we examined evidence supporting the
calculations in the petition. In accordance with section 776(c) of the
Act, to the extent practicable, we examined the key elements of the
export price (``EP'') and normal value (``NV'') calculations on which
the petition margin calculations were based. The petitioner's
methodology for calculating EP and NV is discussed in the Notice of
Initiation. To corroborate the petitioner's EP calculations, we
compared the U.S. sales prices in the petition to official U.S.
government import statistics for the subject merchandise during the
POI. To corroborate the petitioner's NV calculations, we compared the
factor consumption rates for the most significant inputs reported in
the petition to the factor consumption rates reported by Stirol, the
only responding company in this investigation. Regarding the factor
values, because the Department has preliminarily determined to use a
different surrogate country than was used in the petition, we have
substituted the factor values developed for this preliminary
determination for those in the petition. In instances where a factor
was reported in the petition for which we did not develop a surrogate
value, we continued to use the value in the petition.
After making these changes, we found that the margin calculated for
Stirol, 113.38 percent, is the highest margin on the record of this
case.\2\ Since this margin is a calculated margin in this
investigation, this margin does not represent secondary information,
and, thus, does not need to be corroborated. Thus, the Department has
preliminarily determined the Ukraine-wide rate to be 113.38 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 based on adverse facts available.
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\2\ See, also, February 23, 2001, memorandum to the Deputy
Assistant Secretary ``Preliminary Determination Adverse Facts
Available Rate,'' which is on file in the Department's CRU.
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Fair Value Comparisons
To determine whether sales of the subject merchandise by Stirol for
export to the United States 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, below. In accordance with section
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs
to the NVs.
[[Page 13290]]
Export Price
For Stirol, we used EP methodology in accordance with section
772(a) of the Act because the subject merchandise was sold directly to
unaffiliated customers in the United States prior to importation, and
constructed export price (``CEP'') methodology was not otherwise
appropriate. We calculated EP based on FOB Ukrainian port prices. Where
appropriate, we made deductions from the starting price (gross unit
price) for inland freight from the plant/warehouse to the port of
export and foreign brokerage and handling expenses. Because the
domestic inland freight and brokerage and handling expenses were paid
in a nonmarket economy currency, we based these charges on surrogate
values from Indonesia. (See ``Normal Value'' section below for further
discussion.)
Normal Value
1. Surrogate Country
Section 773(c)(4) of the Act requires the Department to value the
NME producer's factors of production, to the extent possible, in one or
more market economy countries that: (1) Are at a level of economic
development comparable to that of the NME, and (2) are significant
producers of comparable merchandise. Regarding the first criterion, the
Department has determined that Pakistan, Indonesia, Sri Lanka, the
Philippines, and Egypt are countries comparable to Ukraine in terms of
overall economic development (see memorandum from Jeff May, Director,
Office of Policy, to Susan Kuhbach, Office Director, AD/CVD
Enforcement, Office 1, dated November 14, 2000 (``Surrogate Country
Memorandum'')). The petitioner has alleged that India is also
economically comparable to Ukraine based on a comparison of per capita
GNP in 1998 and 1999.
Regarding the second criterion (related to significant production
of comparable merchandise), Stirol has argued that, among the countries
that are economically comparable to Ukraine, Indonesia and Egypt are
significant producers of merchandise comparable to ammonium nitrate.
The petitioner has alleged that India, Indonesia, and Pakistan are
significant producers of comparable merchandise.
The petitioner argues that the Department should depart from the
Surrogate Country Memorandum, as it has done in past cases, and select
India as the appropriate surrogate country in this investigation. See,
e.g., Notice of Final Determination of Sales at Less Than Fair Value:
Certain Small Diameter Carbon and Alloy Seamless Standard, Line and
Pressure Pipe From Romania, 65 FR 39125 (June 23, 2000) (determining
that, although not included in the original Office of Policy surrogate
country memorandum, Indonesia was the most appropriate surrogate
country for Romania because Indonesia was a significant producer of
merchandise comparable to the subject merchandise and, contrary to
other potential surrogate countries, provided reliable surrogate values
for virtually all factors of production) (``Pipe from Romania''). While
conceding that Indonesia is a suitable surrogate country, the
petitioner claims that India is a more appropriate surrogate because,
in addition to satisfying the two statutory criteria, India has the
most complete and reliable set of publicly available information among
possible surrogate countries. Moreover, the petitioner asserts that
India is a more significant producer of comparable merchandise than
Indonesia. Finally, the petitioner was able to obtain the financial
statements of an Indian producer of ammonium nitrate to use in valuing
selling, general, and administrative expenses (``SG&A''), profit, and
overhead expenses, whereas the Indonesian data obtained by the
petitioner pertained to a urea producer.
Stirol argues that Indonesia and Egypt are suitable surrogate
countries as both satisfy the statutory criteria. For Indonesia, Stirol
was able to obtain contemporaneous and reliable surrogate data,
including official Indonesian import statistics for valuing all raw
material inputs and audited financial reports from Indonesia producers
of identical and comparable merchandise for purposes of calculating
overhead, SG&A, and profit. Stirol was not able to obtain data for
Egypt.
Stirol objects to the use of India as a surrogate country,
asserting that India is not economically comparable to Ukraine.
Although the two countries are similar in terms of per capita GDP,
Stirol argues that, according to The World Factbook 2000, India is not
comparable to Ukraine in terms of overall economic development. See
Pipe from Romania, 65 FR at 39125 (noting that Indonesia was included
among the countries that are economically comparable to Romania because
Indonesia's GNP per capita and overall economic development were
similar to the countries listed in the Office of Policy surrogate
country memorandum). Finally, Stirol argues that the public data
available for India is neither reliable nor contemporaneous with the
POI.
For purposes of the preliminary determination, we have used
Indonesia as our surrogate. As noted in the Surrogate Country
Memorandum, Indonesia is economically comparable to Ukraine. Indonesia
is also a significant producer of merchandise similar to the
merchandise under investigation. Although the Department has the
authority to select a country that is not included in the Surrogate
Country Memorandum, there should be a good reason to do so. In this
case, Indonesia was identified in the Surrogate Country Memorandum as
being economically comparable to Ukraine. Indonesia is also a
significant producer of comparable merchandise. Moreover, there is
sufficient publicly available information on Indonesian values.
Accordingly, we have calculated normal value using publicly available
information from Indonesia to value Stirol's factors of production,
except where noted below.
2. Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on the factors of production reported by Stirol using Indonesian
values, except where noted below.
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. For those values not
contemporaneous with the POI, unless otherwise noted below, we adjusted
for inflation using price indices published in the International
Monetary Fund's International Financial Statistics. As appropriate, we
adjusted input values to make them delivered prices.
For a detailed analysis of surrogate values, see the memorandum
from the Team to the File, dated February 23, 2001, ``Valuation of
factors of production for the preliminary determination,'' which is on
file in the Department's CRU.
Natural Gas: For purposes of valuing natural gas as both a material
input and energy input, we used publicly available natural gas data for
Indonesia for 1998 derived from the Second Quarter 2000 Energy Prices &
Taxes, which is published by the International Energy Agency of the
OECD (``Energy Prices & Taxes''). To inflate the 1998 Energy Prices and
Taxes natural gas value to the POI, we used a regional inflation index
specific to the energy sector.
Auxiliary Materials and Catalysts: With the exception of denatured
alcohol, belting, and materials purchased from a market economy country
and paid for in a market economy currency, we valued all of the other
material inputs and catalysts using Indonesian import statistics
obtained
[[Page 13291]]
from the Indonesian Bureau of Statistics. For denatured alcohol,
because we found the Indonesian import statistics to be unreliable, we
valued these inputs using Indian import statistics. To value belting,
we used an Indian price quote from a published news article. For
materials purchased from market economy suppliers that were paid for in
market economy currency (i.e., lilamine, potassium hydroxide, and
ukon), we used the actual purchase prices paid by Stirol during the
POI.
Labor: We valued labor using the method described in 19 CFR
351.408(c)(3).
Energy: To value electricity, we used the 1997 electricity rates
reported in Energy Prices and Taxes.
Inland Freight Rates: To value truck freight, we used a August 1999
rate quote from an Indonesian trucking company. With regard to rail
freight, we used a February 2001 rail rate from an Indonesian rail
company obtained by the Department from the American Embassy in
Jakarta, Indonesia.
Brokerage and Handling: We valued brokerage and handling using
publicly available February 2001 price quotes from an Indonesian
freight forwarder that provides both import-and export-related cargo
services.
Factory Overhead, SG&A, and Profit: We derived ratios for factory
overhead, SG&A, and profit using the 1999 annual report of one
Indonesian producer of a product similar to the subject merchandise.
Critical Circumstances
The petitioner has alleged that there is a reasonable basis to
believe or suspect that critical circumstances exist with respect to
imports of ammonium nitrate from Ukraine.\3\ The petitioner submitted
information supplementing its allegation on February 13, 2001.
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\3\ For a further discussion of the Department's critical
circumstances analysis, see February 23, 2001, memorandum to the
Deputy Assistant Secretary ``Critical Circumstances Preliminary
Determination: Massive Imports,'' which is on file in the
Department's CRU.
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According to section 733(e) of the Act, the Department may make a
critical circumstances determination at any time after initiation of an
investigation, including prior to a preliminary determination of
dumping, assuming adequate evidence of critical circumstances is
available. The Department's policy bulletin No. 98.4 of October 15,
1998,\4\ provides further guidance on this section of the Act, stating
that, if the facts of a case show that importers, exporters, or
producers had knowledge that a case was likely to be filed, and the
other statutory and regulatory criteria are met, the Department should
issue its preliminary finding on critical circumstances before the
preliminary determination, and as soon as possible after the
initiation.
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\4\ See Department October 15, 1998 Policy Bulletin No. 98.4,
``Timing of Issuance of Critical Circumstances Determinations''
(``policy bulletin''), which can be found on the Department's web
page at http://ia.ita.doc.gov.
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While the petitioner did include arguments and evidence relating to
critical circumstances in the petition, the petitioner did not provide
at that time evidence that importers, exporters, or producers of
ammonium nitrate had early knowledge of the case. This evidence was
only provided on February 13, 2001. Thus, there was not sufficient
information on the record for the Department to make an early
preliminary critical circumstances determination. Therefore, we are
making our preliminary critical circumstances determination in
conjunction with this preliminary less than fair value determination.
Section 733(e)(1) of the Act provides that the Department will
determine that critical circumstances exist if there is a reasonable
basis to believe or suspect that: (A)(i) There is a history of dumping
and material injury by reason of dumped imports in the United States or
elsewhere of the subject merchandise, or (ii) the person by whom, or
for whose account, the merchandise was imported knew or should have
known that the exporter was selling the subject merchandise at less
than its fair value and that there was likely to be material injury by
reason of such sales, and (B) there have been massive imports of the
subject merchandise over a relatively short period.
With respect to the first criterion, there is currently an
antidumping duty order on ammonium nitrate from Ukraine in the European
Community (``EC''). The existence of an antidumping duty order in the
EC on ammonium nitrate from Ukraine is sufficient evidence of a history
of injurious dumping. Accordingly, there is no need to examine importer
knowledge.
In addressing the second criterion, i.e., whether there are
``massive imports'' over a ``relatively short time period,'' the
Department ordinarily bases its analysis on import data for at least
the three months preceding (the ``base period'') and following (the
``comparison period'') the filing of the petition. Imports normally
will be considered massive when imports during the comparison period
have increased by 15 percent or more compared to imports during the
base period. Section 351.206(i) of the Department's regulations also
provides, however, that if the Department finds that importers, or
exporters or producers, had reason to believe, at some time prior to
the beginning of the proceeding, that a proceeding was likely, the
Department may consider a base and comparison period of not less than
three months from that earlier time.
In this case, the petitioner has argued that importers, exporters,
or producers of ammonium nitrate had reason to believe that an
antidumping proceeding was likely as early as January 2000, well before
the filing of the petition, based on the increase in imports of
ammonium nitrate from Ukraine and the corresponding decrease in
ammonium nitrate imports from Russia following the January 2000
preliminary determination in the investigation of ammonium nitrate from
Russia. See Notice of Preliminary Determination of Sales at Less Than
Fair Value; Solid Fertilizer Grade Ammonium Nitrate from the Russian
Federation, 65 FR 1139 (January 7, 2000) and Notice of Final
Determination of Sales at Less Than Fair Value; Solid Fertilizer Grade
Ammonium Nitrate from the Russian Federation, 65 FR 42669 (July 11,
2000) (``Ammonium Nitrate from Russia''). Thus, the petitioner contends
that, as a result of the shift of imports of ammonium nitrate from
Russia to Ukraine, importers, exporters, or producers of ammonium
nitrate would have been aware that an investigation of ammonium nitrate
from Ukraine would likely be forthcoming. Alternately, the petitioner
argues that two press reports relating to Ammonium Nitrate from Russia
published in May and August 2000 in Green Markets, a fertilizer
industry publication, are sufficient evidence to impute knowledge that
importers, or exporters or producers, had reason to believe, at some
time prior to the beginning of the proceeding, that a proceeding was
likely.
In order to determine whether the facts of this case showed that
importers, exporters, or producers had advance knowledge that a case
was likely to be filed, we examined whether conditions in the industry
or published reports and statements provided a basis for inferring
knowledge that an antidumping investigation of ammonium nitrate from
Ukraine was likely. As noted above, the petitioner provided two
articles relating to the Ammonium Nitrate from Russia investigation
from May and August 2000. The May 2000 article did not specifically
mention imports of ammonium nitrate from Ukraine; however, the August
2000 article did
[[Page 13292]]
state that the U.S. industry was closely monitoring imports of this
product from Ukraine. The petitioner did not provide any published
reports or information indicating that knowledge of a possible
antidumping investigation of ammonium nitrate from Ukraine was publicly
available as of January 2000. We did a search of Lexis-Nexis and the
Internet to see if there were any other articles or information
pertaining to ammonium nitrate from Ukraine. Our research revealed
nothing prior to the August 2000 report.
Therefore, we find no evidence that importers, or exporters or
producers, had reason to believe that a proceeding on ammonium nitrate
from Ukraine was likely as of January or May 2000. However, we find
that the press report in August 2000 was sufficient to establish that,
by early August 2000, importers, exporters, or producers knew, or
should have known, that a proceeding was likely. Accordingly, it is
appropriate to utilize a comparison period starting in August 2000.
Therefore, to determine whether imports of subject merchandise have
been massive over a relatively short period, we compared shipment data
for Stirol and all other Ukrainian importers covered by the Ukraine-
wide rate during the comparison period, August 2000 through November
2000, to shipments during the base period, April 2000 to July 2000.
Based on our analysis of the data from the above base and
comparison periods, we found that shipments made by both Stirol and all
other Ukrainian producer/exporters during the POI increased by more
than 15%.
Because of the alleged seasonality of ammonium nitrate shipments
(see Ammonium Nitrate from Russia), we examined whether this observed
increase was due to a seasonal surge. We compared the reported shipment
data for Stirol and the data for all other Ukrainian producers/
exporters to relevant historical data on all ammonium nitrate shipments
to the United States (with the exception of imports from Russia and
Ukraine). We used total imports in to the United States of ammonium
nitrate to test for seasonality rather than historical shipment
patterns by Ukrainian producers/exporters because Ukraine only recently
entered the U.S. market. Hence, historical data for Ukraine was not
available.
We compared the percent change from the base to the comparison
period to the historical percent change of all sales of ammonium
nitrate made to the United States for the same base and comparison
periods from 1996 through 1999, excluding data from Ukraine and Russia.
This data shows that, during these same base and comparison periods in
the years from 1996 through 1999, there was a small percentage increase
relative to the increase in shipments for Stirol and all other
Ukrainian producers/exporters in 2000. Thus, the increase in shipments
by Stirol and all other Ukrainian producers/exporters does not appear
to be explained by seasonality of shipments.
Therefore, we preliminarily determine that the increases in imports
for Stirol and all other Ukrainian producers/exporters were massive
over a relatively short period. Having met both requirements for an
affirmative determination of critical circumstances, we preliminarily
determine that critical circumstances exist for both Stirol and the
Ukraine-wide entity. We will make a final determination concerning
critical circumstances when we make our final determination of this
investigation.
Verification
As provided in section 782(i) of the Act, we will verify all
information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
the Customs Service to suspend liquidation of all imports of subject
merchandise from Ukraine entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. In addition, we are directing Customs to suspend
liquidation of any unliquidated entries of subject merchandise entered,
or withdrawn from warehouse, for consumption on or after the date which
is 90 days prior to the date on which this notice is published in the
Federal Register. We will instruct the 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 or CEP, as appropriate, as
indicated in the chart below. These suspension of liquidation
instructions will remain in effect until further notice.
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
J.S.C. ``Concern'' Stirol.................................. 113.38
Ukraine-wide rate.......................................... 113.38
------------------------------------------------------------------------
The Ukraine-wide rate applies to all entries of the subject
merchandise except for entries from exporters/factories that are
identified individually above.
ITC 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 150 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in six copies must be
submitted to the Assistant Secretary for Import Administration no later
than April 20, 2001, and rebuttal briefs no later than April 25, 2001.
A list of authorities used and an executive summary of issues should
accompany any briefs submitted to the Department. Such 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, the hearing will be held on
April 27, 2001, at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230. Parties should confirm
by telephone the time, date, and place of the hearing 48 hours before
the scheduled time.
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 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.
Oral presentations will be limited to issues raised in the briefs. If
this investigation proceeds normally, we will make our final
determination not later than 105 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. Richard W. Moreland is
temporarily fulfilling the duties of the Assistant Secretary for Import
Administration.
Dated: February 23, 2001.
Richard W. Moreland,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5156 Filed 3-2-01; 8:45 am]
BILLING CODE 3510-DS-P