[Federal Register Volume 68, Number 41 (Monday, March 3, 2003)]
[Notices]
[Pages 9980-9984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4928]


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DEPARTMENT OF COMMERCE

International Trade Administration


Suspension of Antidumping Duty Investigation: Urea Ammonium 
Nitrate Solutions From the Russian Federation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: March 3, 2003.

FOR FURTHER INFORMATION CONTACT: Paige Rivas or Thomas F. Futtner, AD/
CVD Enforcement, Office 4, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-0651, and (202) 482-3814, respectively.

SUMMARY: The Department of Commerce (the Department) has suspended the 
antidumping duty investigation involving urea ammonium nitrate 
solutions (UANS) from the Russian Federation (Russia). The basis for 
this action is a suspension agreement (the Agreement) between the 
Department, JSC Nevinnomysskij Azot (Nevinka), JSC Kuybyshevazot/
Togliatti, and S.P. Novolon/Novomoskovsk, which together account for 
substantially all imports of UANS from Russia. In the Agreement, the 
signatory companies have agreed to cease exports of UANS from Russia to 
the United States until July 1, 2003, and, following that period, to 
revise prices to ensure that such exports are sold at or above an 
agreed reference price.

SUPPLEMENTARY INFORMATION:

Background

    On May 9, 2002, the Department initiated antidumping duty 
investigations to determine whether imports of UANS from Lithuania, 
Belarus, Russia, and Ukraine are being, or are likely to be, sold in 
the United States at less than fair value (LTFV). See Initiation of 
Antidumping Investigations: Urea Ammonium Nitrate Solutions from 
Belarus, Lithuania, the Russian Federation, and Ukraine, 67 FR 35492 
(May 20, 2002). On June 4, 2002, the International Trade Commission 
(ITC) preliminarily determined that there is a reasonable indication 
that an industry in the United States is materially injured or 
threatened with material injury by reason of imports of UANS from 
Belarus, Russia and Ukraine. See Urea Ammonium Nitrate Solution from 
Belarus, Lithuania, the Russian Federation and Ukraine, 67 FR 39439 
(June 7, 2002). On October 3, 2002, the Department published its 
preliminary determination that UANS is being, or is likely to be, sold 
in the United States at LTFV, as provided in section 733 of the Act (67 
FR 62008). See Notice of Preliminary Determination of Sales at Less 
Than Fair Value: Urea Ammonium Nitrate Solutions from the Russian 
Federation, 67 FR 62008 (October 3, 2002) (Preliminary Determination). 
The Department and Nevinka initialed a proposed agreement suspending 
this investigation on January 17, 2003, at which time we invited 
interested parties to provide written comments on the agreement. We 
received comments from Agrium US, Inc. on February 5, 2003, the 
Nitrogen Solutions Fair Trade Committee (the petitioner), Nevinka, the 
Committee For Competitive Fertilizer Markets, and J.R. Simplot, on 
February 10, 2003. We have taken these comments into account in the 
final version of the suspension agreement.
    The Department, Nevinka, JSC Kuybyshevazot/Togliatti, and S.P. 
Novolon/Novomoskovsk signed the final suspension agreement on February 
19, 2003.
    Accordingly the Department has suspended the investigation pursuant 
to sections 734(b)(1) and (c) of the Act. Pursuant to section 734(g) of 
the Act, parties have 20 days from the date of publication of this 
notice to request a continuation of the investigation.

Scope of Investigation

    For a complete description of the scope of the investigation, see 
Preliminary Determination.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and has 
considered the comments submitted with respect to the proposed 
suspension agreement. Based on our review of these comments, we have 
made changes to the originally proposed agreement. In accordance with 
section 734(c)(l) of the Act, we have determined that extraordinary 
circumstances are present in this case. See Memorandum from Bernard 
Carreau to Faryar Shirzad, ``Existence of Extraordinary Circumstances: 
Agreement Suspending the Antidumping Duty Investigation of Urea 
Ammonium Nitrate Solutions from the Russian Federation.''
    In accordance with section 734(c)(l)(A) and (B) of the Act, we have 
determined that the Agreement provides that the subject merchandise 
will be sold at or above the established reference price and, for each 
entry of each exporter, the amount by which the estimated normal value 
exceeds the export price (or constructed export price) will not exceed 
15 percent of the

[[Page 9981]]

weighted-average amount by which the estimated normal value exceeded 
the export price (or constructed export price) for all LTFV entries of 
the producer/exporter examined during the course of the investigation. 
We have determined that the Agreement will eliminate completely the 
injurious effect of exports to the United States of the subject 
merchandise and prevent the suppression or undercutting of price levels 
of UANS by imports of that merchandise from Russia. See Memorandum from 
Bernard Carreau to Faryar Shirzad, ``The Prevention of Price 
Suppression or Undercutting of Price Levels in the Suspension Agreement 
On UANS from the Russian Federation.''
    In addition, in accordance with section 734(c)(1) of the Act, we 
have determined that the signatory producers/exporters collectively are 
the producers and exporters in Russia which, during the antidumping 
duty investigation of the merchandise subject to the Agreement, 
accounted for substantially all (not less than 85 percent) of the 
subject merchandise imported into the United States. See Id.
    Moreover, in accordance with section 734(d) of the Act, we have 
determined that the agreement is in the public interest, and that the 
agreement can be monitored effectively. See Memorandum to Faryar 
Shirzad from Jeffrey May, ``Public Interest Assessment of the Agreement 
Suspending the Antidumping Duty Investigation of UANS from the Russian 
Federation.'' We find, therefore, that the criteria for suspension of 
an investigation pursuant to sections 734(b)(1), (c), and (d) of the 
Act have been met. The terms and conditions of this agreement, signed 
February 19, 2003, are set forth in Annex 1 to this notice.

International Trade Commission

    In accordance with section 733(f) of the Act, the Department has 
notified the ITC of the Agreement.

Suspension of Liquidation

    Pursuant to section 734(f)(2)(B) of the Act, the suspension of 
liquidation of all entries of UANS from Russia entered, or withdrawn 
from warehouse, for consumption, directed in our Preliminary 
Determination, shall continue in effect, subject to subsection 
734(h)(3). This suspension of liquidation shall terminate at the close 
of the 20-day period beginning on the day after the date on which 
notice of suspension of the investigation is published unless a review 
petition is filed under section 734(h)(1) of the Act.
    Notwithstanding the Agreement, the Department will continue the 
investigation if it receives such a request within 20 days after the 
date of publication of this notice in the Federal Register, in 
accordance with section 734(g) of the Act.
    This notice is published pursuant to section 734(f)(1)(A) of the 
Act.

    Dated: February 19, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Annex 1--Agreement Suspending the Antidumping Investigation on Urea 
Ammonium Nitrate Solutions From the Russian Federation

    Pursuant to section 734(b)(1) and (c) of the Tariff Act of 1930, as 
amended (19 U.S.C. 1673c(b)(1) and (c)) (the Act), and section 208 of 
part 351 of Title 19 of the Code of Federal Regulations (the 
Regulations) (2002), the U.S. Department of Commerce (the Department or 
DOC) and the signatory producers/exporters of Urea Ammonium Nitrate 
Solutions (``UANS'') from the Russian Federation (the Signatories) 
agree as follows:

I. Definitions

    For purposes of this Agreement, the following definitions apply:
    A. Agreement--For purposes of this Agreement, means this UANS 
suspension agreement pursuant to sections 734(b)(1) and (c) of the Act.
    B. UANS--means the urea ammonium nitrate solutions from the Russian 
Federation and referred to as the ``subject merchandise'' of the 
suspended investigation.
    C. Effective Date--means the date on which this Agreement is signed 
by the Department and producers/exporters from the Russian Federation 
representing substantially all of the imports of UANS into the United 
States.
    D. Date of Sale--means the date on which price and quantity become 
firm, e.g., the date the contract is signed or the specification date 
if the price and quantity become firm on that date.
    E. Party to the Proceeding--means any interested party, as provided 
for in section 771(9) of the Act, that actively participated in the 
antidumping investigation, through written submission of factual 
information or written argument, or a signatory to this Agreement.
    F. Producer/Exporter--means: (1) A foreign manufacturer or producer 
of UANS; (2) a foreign producer or reseller that also exports UANS; and 
(3) an affiliated person by whom or for whose account UANS is imported 
into the United States, as defined in section 771(33) of the Act. U.S. 
imports of UANS produced by any producer in the Russian Federation will 
be attributed to that producer for purposes of this Agreement, 
regardless of whether first shipped to the United States by another 
exporter in the Russian Federation or in another country.
    G. Quarter--means the relevant quarter calendar year, consistent 
with the following schedule:

First Quarter--January 1-March 31;
Second Quarter--April 1-June 30;
Third Quarter--July 1-September 30; and
Fourth Quarter--October 1-December 31.

    H. Reference Price--means the minium F.O.B. Russian port of export 
price calculated weekly by DOC for sales of UANS for export to the 
United States, as described in Section VI.
    I. Floor Price--means the fixed price, as designated in Section VI, 
below which the Reference Price may not fall.
    J. Current Market Price--means the U.S. domestic price calculated 
weekly by DOC as described in Section VI.
    K. Moratorium Period--means the period defined in section IV of 
this Agreement.
    L. Violation--means noncompliance with the terms of this Agreement, 
whether through an act or omission, except for noncompliance that is 
inconsequential, inadvertent, or does not substantially frustrate the 
purposes of this Agreement.
    M. Indirect Exports--means exports of UANS from Russia to the 
United States through one or more third countries, whether or not such 
exports are further processed, provided that the further processing 
does not result in a substantial transformation or a change in the 
country of origin, or through arrangements such as swaps, exchanges, or 
displacements.
    N. United States--means the customs territory of the United States 
of America (the 50 States, the District of Columbia and Puerto Rico) 
and foreign trade zones located within the territory of the United 
States.
    O. U.S. Purchaser--means the first purchaser in the United States 
that is not affiliated with the Russian producer or exporter and all 
subsequent purchasers, from trading companies to consumers.
    P. Selling Agent--means an importer, agent, broker, distributor, or 
any other entity involved in the transaction between the Signatory and 
the first unaffiliated U.S. customer.

[[Page 9982]]

II. Suspension of Investigation

    On the Effective Date, the Department will suspend its antidumping 
investigation of UANS from the Russian Federation initiated on May 9, 
2002 (67 FR 35492, May 20, 2002), in accordance with section 734(b)(1) 
and (c) of the Act and 19 CFR 351.208 (2002).
    The Department determines that extraordinary circumstances are 
present in this case, that this Agreement will eliminate completely the 
injurious effect of exports to the United States of UANS from the 
Russian Federation, and that this Agreement will prevent suppression or 
undercutting of price levels of domestic products by imports of that 
merchandise. The Department also determines that this Agreement is in 
the public interest, and that effective monitoring of the Agreement by 
the United States is practicable.
    The Signatories collectively are the producers and exporters in the 
Russian Federation that, during the antidumping duty investigation of 
UANS from the Russian Federation, accounted for substantially all of 
the subject merchandise exported from the Russian Federation to the 
United States, as defined in section 351.208(c) of the Regulations. The 
Department may at any time during the operation of the Agreement 
require additional producers/exporters to sign the Agreement in order 
to ensure that not less than substantially all sales of UANS from the 
Russian Federation to the United States are covered by the Agreement.

III. Contingency

    Continued application of the Suspension Agreement shall be 
dependent upon all of the signatory Russian producers and exporters of 
UANS reaching an agreement, by March 3, 2003, with the Russian 
Federation Ministry of Economic Development and Trade MEDT, whereby 
MEDT and the signatories agree to establish an Export Certification 
Program and to abide by each of the conditions outlined in the Appendix 
to the letter dated February 19, 2003, from Maxim Medvedkov, Deputy 
Minister of MEDT, to Faryar Shirzad, Assistant Secretary of Commerce 
for Import Administration. A copy of this Agreement (``the Russian 
Agreement'') shall be placed on the record of this Suspension Agreement 
at that time. Should this contingency not be met by this date, this 
Suspension Agreement shall lapse and the provisions of section 734(i) 
of the Act shall apply.

IV. Moratorium Period

    As of the Effective Date, each Signatory Producer/Exporter agrees, 
pursuant to section 734(b)(1) of the Act, to cease exports of UANS to 
the United States during the period ending on June 30, 2003.

V. Reference Price Period

    Each Signatory agrees that, following the Moratorium Period, i.e., 
beginning July 1, 2003, and in order to satisfy the requirements of 
section 734(c)(1)(B) of the Act, for each entry of UANS subject to this 
Agreement, the amount by which the estimated normal value exceeds the 
export price (or the constructed export price) will not exceed 15 per 
cent of the weighted average amount by which the estimated normal value 
exceeded the export price (or the constructed export price) for all 
less-than-fair-value entries examined during the investigation.

VI. Reference Price Methodology

    A. The Reference Price will be based on a Current Market Price, 
adjusted to reflect an F.O.B. Russian Federation port of export price. 
In addition, there will be a Floor Price below which the Reference 
Price shall not fall. The Reference Price will be determined on a 
weekly basis.
    B. The Department will issue the first Reference Price under this 
Agreement seven days before the termination of the Moratorium Period, 
utilizing the calculation methodology in section VI.C. below. This 
first Reference Price will be applicable to the week after the end of 
the Moratorium Period.
    C. The Current Market Price will be determined as follows:
    1. The Department will calculate an average of the weekly Northeast 
and Southeast F.O.B. from Green Markets and the Atlantic Coast region 
of Fertilizer Week price ranges from publicly available information.
    2. The Department will calculate a simple average of the four most 
recent weekly averages derived in subsection 1 above. This four week 
average (converted from a short ton basis to a metric ton basis) will 
be the Current Market Price.
    3. After consultations, the Department and the Signatories to the 
Agreement, should they agree that the currently used sources for the 
valuation of the Current Market Price for UANS are no longer 
appropriate, may agree to select an alternative source. The Department 
will give parties at least 30 days notice before choosing another 
source(s) for the purposes of Current Market Price valuation.
    4. To express the Current Market Price on an F.O.B. Russian 
Federation port of export basis, an amount for costs associated with 
delivering the merchandise from the Russian Federation to the United 
States shall be deducted from the Current Market Price calculated in 
section C.2. This amount will be $36 per metric ton. Except when 
section C.3 applies, the result of this calculation shall be the 
Reference Price. After consultations, the Department and the 
signatories to the Agreement, should they agree that the amount for 
costs associated with delivering the merchandise from the Russian 
Federation to the United States are no longer appropriate, may revise 
this amount. The Department will give parties at least 30 days notice 
prior to any change becoming effective.
    D. The Floor Price is the price below which the UANS subject to 
this Agreement may not be sold. The Floor Price will be $85 F.O.B. 
Russian Federation port. The Reference Price shall be not less than the 
Floor Price.
    E. Reference Prices are F.O.B. Russian Federation port of export. 
If the sale for export is on terms other than F.O.B. Russian Federation 
port of export, the Signatories to this Agreement shall ensure that the 
F.O.B. Russian Federation port of export price is not lower than the 
Reference Price, by adjusting the relevant costs to ensure compliance 
with the Reference Price requirements.

VII. Reporting Requirements

    A. Each Signatory will supply to the Department 30 days after the 
end of each Quarter all information that the Department determines is 
necessary to ensure that the Signatory is in full compliance with the 
terms of this Agreement. Such information shall include, but not be 
limited to, complete price information on each sale of UANS directly or 
indirectly to unaffiliated purchasers in the United States, including 
information supporting any relevant adjustments to the price under 
section 772 of the Act.
    B. The Department may reject any information submitted under this 
Agreement that is untimely or any information which it is unable to 
verify to its satisfaction.

VIII. Disclosure

    The Department may make available to representatives of each 
domestic Party to the Proceeding, under administrative protective 
orders drawn in accordance with section 777 of the Act and section 
351.305 of the Regulations, business proprietary information submitted 
to the Department for each Quarter, as well as

[[Page 9983]]

the results and methodology of its calculation of Reference Prices.

IX. Monitoring

    A. The Department will monitor entries of UANS from the Russian 
Federation to ensure compliance with this Agreement. Among other means, 
the Department will review publicly-available data and other official 
import data, including, as appropriate, records maintained by the U.S. 
Customs Service, to determine whether there have been imports that are 
inconsistent with the provisions of this Agreement.
    B. The Department may require, and each Signatory agrees to 
provide, confirmation, through documentation provided to the 
Department, that the price received on any sale subject to this 
Agreement was not less than the established reference price. The 
Department may require that such documentation be provided, and be 
subject to verification, within 30 days of the sale.
    C. The Department may require, and each Signatory agrees to report, 
on computer disk in the prescribed format and using the prescribed 
method of data compilation, each sale of the merchandise subject to 
this Agreement, either directly or indirectly to unaffiliated 
purchasers in the United States, including each adjustment applicable 
to each sale, as specified by the Department.
    D. Each Signatory agrees to permit review and on-site inspection of 
all information deemed necessary by the Department to verify the 
reported information.

X. Expedited Reviews

    A. If a surge, as defined in paragraph B, in U.S. imports of UANS 
from the Russian Federation occurs, any party to the proceeding may 
request that the Department conduct a review pursuant to section 751(b) 
of the Act to determine whether the Suspension Agreement continues to 
meet the requirements of section 734(c)(1)(A) of the Act. If a surge 
has occurred, and the Department receives an appropriately documented 
request, the Department will regard the surge as good cause to conduct 
a changed circumstances review and shall conduct such a review and 
complete it within 45 days of initiation.
    B. For purposes of section X.A., a surge in U.S. imports of UANS 
from the Russian Federation shall be considered to have occurred 
whenever imports of such UANS exceed the following amounts in metric 
tons. These annual levels will be divided evenly into four quarterly 
amounts, and a surge will be considered to have occurred if, in any one 
calendar quarter, the level of imports exceeds one-quarter of those 
annual amounts.

--------------------------------------------------------------------------------------------------------------------------------------------------------
    Moratorium  to June 30, 2003         July-Dec. 2003               2004                    2005                   2006                   2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     60,000 MT.............  150,000 MT............  200,000 MT...........  250,000 MT...........  300,000 MT
--------------------------------------------------------------------------------------------------------------------------------------------------------

XI. Anticircumvention

    A. The Signatories will not circumvent this Agreement. Together 
with each sales report provided pursuant to section VII.A, each 
Signatory will certify to the Department in writing that the sales 
reported therein include all sales by that signatory directly or 
indirectly to unaffiliated purchasers in the United States or for 
delivery to the United States, and that the Signatory did not make any 
other such sales pursuant to any bundling arrangement, on-site 
processing arrangement, discounts/free goods/financing package, swap, 
exchange, or other arrangement in circumvention of this Agreement.
    B. The signatories to this Agreement will not engage in any of the 
following activities:
    1. Exchange (``swap'') subject merchandise for non-subject 
merchandise to be entered into the United States in place of the 
subject merchandise, thereby evading the requirements of this 
Agreement. Swaps include but are not limited to the following different 
types of swaps:
    a. Ownership Swaps--involve the exchange of ownership of UANS 
without physical transfer. These may include exchange of ownership of 
UANS in different countries, so that the parties obtain ownership of 
products located in different countries, or exchange of ownership of 
UANS produced in different countries, so that the parties obtain 
ownership of products of different national origin.
    b. Flag Swaps--involve the exchange of indicia of national origin 
of UANS, without any exchange of ownership.
    c. Displacement Swaps--involve the sale or delivery of UANS from 
the Russian Federation to an intermediary country (or countries) which, 
regardless of the sequence of events, results in the ultimate sale or 
delivery into the United States of displaced UANS, where the exporter 
in the Russian Federation knew or had reason to know that the export 
sale would have that result.
    2. Transship subject merchandise to the United States through third 
countries inconsistent with the terms of this Agreement.
    C. To help prevent circumvention of this Agreement, Signatories 
agree to take the following steps:
    1. Establish contracts that incorporate the terms of this Agreement 
and obligate purchasers, including customers in and outside the United 
States (i) to only use, resell, or enter into any other arrangements 
pursuant to terms that prohibit circumvention of this Agreement, (ii) 
not to engage in any of the activities listed in section XI.B, (iii) to 
include the same requirement in any subsequent contracts for the sale 
or transfer of such UANS, (iv) to provide to the Department all 
requested information, including subsequent arrangements entered into 
for the sale, transfer, exchange, or loan to the United States of UANS, 
and (v) to comply with requests for verification. Signatories shall 
refuse to enter into contracts with parties unwilling to comply with 
the terms of this Agreement. Signatories must ensure that their 
customers of any nationality will not engage in activities to 
circumvent this Agreement.
    2. Require any Selling Agents to establish a contract with third 
parties to ensure that their sales of subject merchandise are 
consistent with the requirements of this Agreement. These contracts 
must also require the Selling Agent to maintain documentation 
demonstrating that sales of subject merchandise are made consistent 
with this Agreement and authorize the Department to verify the Selling 
Agent's records.
    D. At any time and without prior notice, the Department may conduct 
verifications of Importers or Selling Agents to determine whether they 
are selling subject merchandise in accordance with this Agreement.
    E. The Department shall investigate any allegations of 
circumvention brought to its attention.

XII. Consultations

    A. The Department and any Signatory may request consultations at 
any time regarding the implementation, operation (including any changes 
in the relationship of the reference price to

[[Page 9984]]

market prices), and/or enforcement of this Agreement.
    B. If the Department requests consultations with any Signatory 
concerning potential noncompliance with, or Violation of, this 
Agreement, it may simultaneously request that Signatory to provide the 
Department with all information relating to the allegation, including 
all sales information pertaining to covered and non-covered merchandise 
manufactured or sold by the Signatory. The Signatory will provide the 
requested information to the Department within 15 days of the 
Department's request. Any Party to the Proceeding may submit comments 
on the information submitted by the Signatory within 10 days after the 
information is received by the Department. The consultations shall be 
held within 45 days after the Department's request for consultations or 
for relevant information, unless the Department and the Signatory agree 
on a later date.

XIII. Termination

    Any Signatory may terminate this Agreement at any time upon notice 
to the Department. Termination shall be effective 90 days after such 
notice is received by the Department. Upon termination, the Department 
shall follow the procedures outlined in section 734(i)(1) of the Act.

XIV. Violations

    A. In reviewing the operation of this Agreement for the purpose of 
determining whether this Agreement has been violated or no longer meets 
the requirements of section 734(d)(1) of the Act, the Department will 
consider imports of UANS into the United States from all sources, and 
factors including, but not limited to, the volume of trade, patterns of 
trade, and whether any reseller's export price is being complied with 
and is satisfying the conditions under section 734 of the Act.
    B. If the Department determines that this Agreement is being or has 
been violated or no longer meets the requirements of section 734(c) or 
(d) of the Act, the Department shall take whatever action it deems 
appropriate under section 734(i) of the Act and the Regulations.
    C. In the event that the Department resumes the original 
investigation, it will conduct the resumed investigation on the basis 
of the original administrative record and the statutes, regulations, 
policies, and practices in effect on the Effective Date.

XV. Other Provision

    By entering into this Agreement, the Signatories do not admit that 
any sales of UANS have been made at less than fair value.

XVI. Duration

    This Agreement will remain in force until the underlying 
antidumping proceeding is terminated in accordance with U.S. law, or 
until it is terminated pursuant to section XIII or XIV of this 
Agreement.

XVII. Effective Date

    The effective date of this Agreement is February 19, 2003.

    Signed on the 19th day of February, 2003.

Faryar Shirzad,
Assistant Secretary for Import Administration.

Walter J. Spak,
White & Case, Counsel to JSC Nevinnomysskij Azot, Counsel to JSC 
Kuibyshevazot/Togliatti, Counsel to S.P. Novolon/Novomoskovsk.
[FR Doc. 03-4928 Filed 2-28-03; 8:45 am]
BILLING CODE 3510-DS-P