[Federal Register Volume 77, Number 138 (Wednesday, July 18, 2012)]
[Notices]
[Pages 42273-42276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17518]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-801]


Solid Urea From the Russian Federation: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on solid urea from 
the Russian Federation. The review covers one producer/exporter of the 
subject merchandise, MCC EuroChem (EuroChem). The period of review 
(POR) is July 1, 2010, through June 30, 2011. We have preliminarily 
found that sales of the subject merchandise have not been made at 
prices below normal value.
    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue and (2) a 
brief summary of the argument. We will issue the final results not 
later than 120 days after the date of publication of this notice.

DATES: Effective July 18, 2012.

FOR FURTHER INFORMATION CONTACT: Dustin Ross or Minoo Hatten, AD/CVD 
Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0747 or (202) 482-1690, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to section 751(a)(1) of the Tariff Act of 1930, as amended 
(the Act), and 19 CFR 351.213(b), the Ad Hoc Committee of Domestic 
Nitrogen Producers and its individual urea-producing members, CF 
Industries, Inc., and PCS Nitrogen Fertilizer, L.P. (collectively, the 
petitioners) and EuroChem requested an administrative review of the 
antidumping duty order on solid urea from Russia with respect to 
EuroChem on August 1, 2011.\1\ On August 26, 2011, in accordance with 
19 CFR 351.221(c)(1)(i), we published a notice of initiation of 
administrative review of the antidumping duty order on solid urea from 
the Russian Federation.\2\ On March 26, 2012, we extended the deadline 
for the preliminary results by 75 days, to June 15, 2012.\3\ On June 1, 
2012, we extended the deadline for the preliminary results by an 
additional 26 days, to July 11, 2012.\4\ We are conducting the 
administrative review of the order in accordance with section 751(a) of 
the Act.
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    \1\ See the petitioners' letter to the Department, dated August 
1, 2011, at 1, and EuroChem's letter to the Department, dated August 
1, 2011, at 1, respectively.
    \2\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 76 FR 
53404 (August 26, 2011).
    \3\ See Solid Urea From the Russian Federation: Extension of 
Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 77 FR 17410 (March 26, 2012).
    \4\ See Memorandum to Gary Taverman, ``Solid Urea from the 
Russian Federation: Extension of Time Limit for Preliminary Results 
of Antidumping Duty Administrative Review.''
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Scope of the Order

    The merchandise subject to the order is solid urea, a high-nitrogen 
content fertilizer which is produced by reacting ammonia with carbon 
dioxide. The product is currently classified under the Harmonized 
Tariff Schedules of the United States (HTSUS) item number 
3102.10.00.00. Such merchandise was classified previously under item 
number 480.3000 of the Tariff Schedules of the United States. Although 
the HTSUS subheading is provided for convenience and customs purposes, 
the written description of the merchandise subject to the order is 
dispositive.

[[Page 42274]]

Fair-Value Comparisons

    Pursuant to section 773(a)(1)(B)(ii) of the Act and 19 CFR 
351.414(c)(1) and (d), to determine whether EuroChem's sales of solid 
urea from Russia were made in the United States at less than normal 
value, we compared the constructed export price (CEP) to the normal 
value as described in the ``Constructed Export Price'' and ``Normal 
Value'' sections of this notice. In these preliminary results, the 
Department applied the average-to-average comparison methodology 
adopted in the Final Modification for Reviews.\5\ In particular, the 
Department compared monthly, weighted-average CEPs with monthly, 
weighted-average normal values, and granted offsets for non-dumped 
comparisons in the calculation of the weighted-average dumping margin.
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    \5\ See Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin and Assessment Rate in Certain Antidumping 
Proceedings: Final Modification, 77 FR 8101 (February 14, 2012) 
(``Final Modification for Reviews'').
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    When making this comparison in accordance with section 771(16) of 
the Act, we considered all products sold in the home market as 
described in the ``Scope of the Order'' section of this notice, above, 
that were in the ordinary course of trade for purposes of determining 
an appropriate product comparison to the U.S. sale. If contemporaneous 
sales of identical home-market merchandise, as described below, were 
reported, then we made comparisons to the monthly weighted-average 
home-market prices that were based on all such sales. If there were no 
contemporaneous sales of an identical merchandise, then we identified 
sales of the most similar merchandise that were contemporaneous with 
the U.S. sales in accordance with 19 CFR 351.414(e).

Product Comparisons

    In accordance with section 771(16) of the Act, we compared products 
produced by EuroChem and sold in the U.S. and home markets on the basis 
of the comparison product which was either identical or most similar in 
terms of the physical characteristics to the product sold in the United 
States. In the order of importance, these physical characteristics are 
form, grade, nitrogen content, size, urea-formaldehyde content, other 
additive/conditioning agent, coating agent, and biuret content.

Date of Sale

    Section 351.401(i) of the Department's regulations states that, 
normally, the Department will use the date of invoice, as recorded in 
the producer's or exporter's records kept in the ordinary course of 
business, as the date of sale. The regulation provides further that the 
Department may use a date other than the date of the invoice if the 
Secretary is satisfied that a different date better reflects the date 
on which the material terms of sale are established. For all U.S. 
sales, EuroChem reported contract date as the date of sale. EuroChem 
defines contract date, which coincides with shipment date for all U.S. 
sales during the period of review, as the date on which the material 
terms of sale are established and no longer subject to change. EuroChem 
provided sample contracts for U.S. sales covered by this review, which 
support EuroChem's contention that price and quantity are subject to 
change and not finalized until the date of contract.\6\ Based on record 
evidence, and consistent with previous administrative reviews, all 
material terms of sale are established on the date of contract.\7\ 
Therefore, we have used contract date as reported by EuroChem as the 
date of sale for all U.S. sales.
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    \6\ See VI-57 of EuroChem's October 27, 2011, response to the 
Department's questionnaire.
    \7\ See Solid Urea from the Russian Federation: Final Results of 
Antidumping Duty Administrative Review, 76 FR 66690 (October 27, 
2011).
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    With respect to its home-market sales, EuroChem reported invoice 
date as the date of sale, explaining that price and quantity are not 
finalized and are subject to change until invoicing because at the date 
of invoice, the product is loaded for delivery, weighed, and the exact 
quantity is recorded for the invoice and transportation documents.\8\ 
This is consistent with our regulatory presumption for invoice date as 
the date of sale.\9\ Thus, because the evidence does not demonstrate 
that the material terms of sale were established on another date, and 
consistent with previous reviews, we have used invoice date as the date 
of sale in the home market.\10\
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    \8\ See VI-41 of EuroChem's October 27, 2011, response to the 
Department's questionnaire.
    \9\ See 19 CFR 351.401(i).
    \10\ See Solid Urea from the Russian Federation: Final Results 
of Antidumping Duty Administrative Review, 76 FR 66690 (October 27, 
2011).
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Constructed Export Price

    In accordance with section 772(b) of the Act, we used CEP for 
EuroChem because the subject merchandise was sold in the United States 
by a U.S. seller affiliated with the producer and export price was not 
otherwise indicated.
    We calculated CEP based on the free-on-board or delivered price to 
unaffiliated purchasers in, or for exportation to, the United States. 
We also made deductions for any movement expenses in accordance with 
section 772(c)(2)(A) of the Act. In accordance with section 772(d)(1) 
of the Act, we calculated the CEP by deducting selling expenses 
associated with economic activities occurring in the United States, 
which includes direct selling expenses and indirect selling expenses. 
Finally, we made an adjustment for profit allocated to these expenses 
in accordance with section 772(d)(3) of the Act.

Normal Value

A. Home Market Viability as Comparison Market

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating normal 
value (i.e., the aggregate volume of home-market sales of the foreign 
like product is five percent or more of the aggregate volume of U.S. 
sales), we compared the volume of EuroChem's home-market sales of the 
foreign like product to the volume of its U.S. sales of subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.\11\ 
Based on this comparison, we determined that EuroChem had a viable home 
market during the POR. Consequently, we based normal value on home-
market sales to unaffiliated purchasers made in the usual quantities in 
the ordinary course of trade and sales made to affiliated purchasers 
where we find prices were made at arm's length, described in detail 
below.
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    \11\ See Memorandum titled ``2010-2011 Administrative Review of 
the Antidumping Duty Order on Solid Urea from the Russian 
Federation--Preliminary Results Analysis Memorandum for EuroChem,'' 
(``Preliminary Analysis Memorandum'') dated concurrently with this 
notice, at 2.
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B. Level of Trade

    To the extent practicable, we determined normal value for sales at 
the same level of trade as the U.S. sales. When there were no sales at 
the same level of trade, we compared U.S. sales to home-market sales at 
a different level of trade. The normal-value level of trade is that of 
the starting-price sales in the home market. For CEP, the level of 
trade is that of the constructed sale from the exporter to the 
affiliated importer. To determine whether home-market sales are at a 
different level of trade than U.S. sales, we examined stages in the 
marketing process and selling functions along the chain of distribution 
between the producer and the unaffiliated customer.
    In the home market, EuroChem reported a single channel of 
distribution. Within this single channel of distribution, EuroChem 
reported a

[[Page 42275]]

single level of trade for all three customer types (i.e., distributors, 
traders, and end-users). After analyzing the data on the record with 
respect to the selling functions performed for each customer type, we 
find that EuroChem made all home-market sales at a single marketing 
stage (i.e., one level of trade) in the home market.\12\
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    \12\ See VI-36 through VI-46 of EuroChem's October 27, 2011, 
response to the Department's questionnaire.
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    In the U.S. market, EuroChem had only CEP sales through its 
affiliated reseller \13\ and, thus, a single level of trade.\14\
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    \13\ See IV-13 of EuroChem's November 8, 2011, response to the 
Department's questionnaire.
    \14\ See section 772(b) of the Act.
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    We found that there were significant differences between the 
selling activities associated with the CEP level of trade and those 
associated with the home-market level of trade. For example, the CEP 
level of trade involved little or no strategic and economic planning, 
personnel training, distributor/dealer training, procurement/sourcing 
service, packing, order input/processing and freight/delivery 
services.\15\ Therefore, we have concluded that CEP sales constitute a 
different level of trade from the level of trade in the home market and 
that the home-market level of trade is at a more advanced stage of 
distribution than the CEP level of trade.
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    \15\ See VI-44 to VI-45 of EuroChem's October 27, 2011, response 
to the Department's questionnaire.
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    We were unable to match CEP sales at the same level of trade in the 
home market or to make a level-of-trade adjustment because the 
differences in price between the CEP level of trade and the home-market 
level of trade cannot be quantified due to the lack of an equivalent 
CEP level of trade in the home market. Also, there are no other data on 
the record which would allow us to make a level-of-trade adjustment. 
Because the data available does not provide an appropriate basis on 
which to determine a level-of-trade adjustment and the home-market 
level of trade is at a more advanced stage of distribution than the 
CEP, we made a CEP-offset adjustment to normal value in accordance with 
section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). The CEP offset 
was the sum of indirect selling expenses incurred on home-market sales 
up to the amount of indirect selling expenses incurred on the U.S. 
sales. See Preliminary Analysis Memorandum at 2.

C. Calculation of Normal Value Based on Comparison Market Prices

    We based normal value on the starting prices to home-market 
customers. Pursuant to section 773(a)(6)(B)(ii) of the Act, we deducted 
inland-freight expenses EuroChem incurred on its home-market sales. We 
made adjustments for differences in domestic and export packing 
expenses in accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) 
of the Act. We made deductions for direct selling expenses, as 
appropriate. See Preliminary Analysis Memorandum at 5 through 6.

Affiliation

    The Department may calculate normal value based on a sale to an 
affiliated party only if it is satisfied that the price to the 
affiliated party is comparable to the price at which sales are made to 
parties not affiliated with the exporter or producer, i.e., sales were 
made at arm's-length prices.\16\ We excluded from our analysis home-
market sales to an affiliated customer for consumption in the home 
market where we determined that the sales to that affiliated customer 
were not made at arm's-length prices. To test whether the sales to an 
affiliated customer were made at arm's-length prices, we compared these 
prices to the prices of sales of comparable merchandise to unaffiliated 
customers, net of all rebates, movement charges, direct selling 
expenses, and packing. Pursuant to 19 CFR 351.403(c) and in accordance 
with our practice, when the prices charged to an affiliated customer 
were, on average, between 98 and 102 percent of the prices charged to 
unaffiliated parties for merchandise comparable to that sold to the 
affiliated customer, we determined that the sales to that affiliated 
customer were at arm's-length prices.\17\ We exclude from our analysis 
all sales to an affiliated customer for consumption in the home market 
where we determined that these sales, on average, were not sold at 
arm's-length prices. See Preliminary Analysis Memorandum at 4.
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    \16\ See 19 CFR 351.403(c).
    \17\ See Antidumping Proceedings: Affiliated Party Sales in the 
Ordinary Course of Trade, 67 FR 69186 (November 15, 2002).
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Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act and 19 CFR 351.415, based on the exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that a 
dumping margin of 0.00 percent exists for EuroChem for the period July 
1, 2010, through June 30, 2011.

Disclosure and Public Comment

    The Department intends to disclose to interested parties the 
calculations performed in connection with these preliminary results 
within five days of the date of publication of this notice.\18\ 
Pursuant to 19 CFR 351.309(c), interested parties may submit cases 
briefs not later than the later of 30 days after the date of 
publication of this notice. Rebuttal briefs, limited to issues raised 
in the case briefs, may be filed not later than five days after the 
date for filing case briefs.\19\ Parties who submit case briefs or 
rebuttal briefs in this proceeding are encouraged to submit with each 
argument: (1) A statement of the issue; (2) a brief summary of the 
argument; and (3) a table of authorities.\20\ Case and rebuttal briefs 
should be filed using Import Administration's Antidumping and 
Countervailing Duty Centralized Electronic Service System (IA 
ACCESS).\21\
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    \18\ See 19 CFR 351.224(b).
    \19\ See 19 CFR 351.309(d).
    \20\ See 19 CFR 351.309(c)(2) and (d)(2).
    \21\ See 19 CFR 351.303.
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    Pursuant to 19 CFR 351.310(c), 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, 
filed electronically via IA ACCESS. An electronically filed document 
must be received successfully in its entirety by the Department's 
electronic records system, IA ACCESS, by 5 p.m. Eastern Standard Time 
within 30 days after the date of publication of this notice.\22\ 
Requests should contain: (1) The party's name, address, and telephone 
number; (2) the number of participants; and (3) a list of issues to be 
discussed. Issues raised in the hearing will be limited to those raised 
in the respective case briefs. The Department will issue the final 
results of this administrative review, including the results of its 
analysis of the issues raised in any written briefs, not later than 120 
days after the date of publication of this notice, pursuant to section 
751(a)(3)(A) of the Act.
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    \22\ See 19 CFR 351.310(c).
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Assessment Rates

    Upon issuance of the final results, the Department shall determine, 
and CBP shall assess, antidumping duties on all appropriate entries 
covered by this review. EuroChem reported the name of the importer of 
record and the entered value for all of its sales to the United States 
during the POR. If EuroChem's weighted-average dumping margin is

[[Page 42276]]

above de minimis (i.e., 0.50 percent) in the final results of this 
review, we will calculate an importer-specific assessment rate on the 
basis of the ratio of the total amount of dumping calculated for the 
importer's examined sales and the total entered value of those sales in 
accordance with 19 CFR 351.212(b)(1).
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. This clarification will apply to entries of subject 
merchandise during the POR produced by EuroChem for which it did not 
know its merchandise was destined for the United States. In such 
instances, we will instruct CBP to liquidate unreviewed entries at the 
all-others rate if there is no rate for the intermediate company(ies) 
involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
    We intend to issue instructions to CBP 15 days after publication of 
the final results of this review.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of solid urea from the Russian Federation entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication as provided by section 751(a)(2) of the Act: (1) The cash 
deposit rate for EuroChem will be the rate established in the final 
results of this administrative review; (2) for merchandise exported by 
manufacturers or exporters not covered in this review but covered in a 
prior segment of the proceeding, the cash deposit rate will continue to 
be the company-specific rate published for the most recent period; (3) 
if the exporter is not a firm covered in this review, a prior review, 
or the original investigation but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; (4) the cash deposit rate for all 
other manufacturers or exporters will continue to be 64.93 percent, the 
all-others rate established in Urea From the Union of Soviet Socialist 
Republics; Final Determination of Sales at Less Than Fair Value, 52 FR 
19557 (May 26, 1987). These cash deposit requirements, when imposed, 
shall remain in effect until further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 11, 2012.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. 2012-17518 Filed 7-17-12; 8:45 am]
BILLING CODE 3510-DS-P