[Federal Register Volume 75, Number 72 (Thursday, April 15, 2010)]
[Notices]
[Pages 19610-19613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8644]
-----------------------------------------------------------------------
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
[[Page 19611]]
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, 2008,
through June 30, 2009. We preliminarily determine that, during the POR,
EuroChem sold the subject merchandise at less than 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.
EFFECTIVE DATE: April 15, 2010.
FOR FURTHER INFORMATION CONTACT: Dustin Ross or Minoo Hatten, AD/CVD
Operations, Office 5, 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
On July 14, 1987, the Department published the antidumping duty
order on solid urea from the Union of Soviet Socialist Republics
(Soviet Union). See Antidumping Duty Order; Urea From the Union of
Soviet Socialist Republics, 52 FR 26367 (July 14, 1987). Following the
break-up of the Soviet Union, the antidumping duty order on solid urea
from the Soviet Union was transferred to the individual members of the
Commonwealth of Independent States. See Solid Urea From the Union of
Soviet Socialist Republics; Transfer of the Antidumping Order on Solid
Urea From the Union of Soviet Socialist Republics to the Commonwealth
of Independent States and the Baltic States and Opportunity to Comment,
57 FR 28828 (June 29, 1992). The rate established in the less-than-
fair-value investigation for the Soviet Union was applied to each new
independent state, including the Russian Federation (Russia).
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 (collectively, the Ad Hoc
Committee), requested an administrative review of the antidumping duty
order on solid urea from Russia with respect to EuroChem on July 31,
2009. On August 25, 2009, in accordance with 19 CFR 351.221(c)(1)(i),
we published a notice of initiation of administrative review of the
order. See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Request for Revocation in Part, 74 FR 42873
(August 25, 2009). We are conducting the administrative review of the
order in accordance with section 751(a) of the Act.
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. Previously such merchandise was classified 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.
Sales Analyzed
During the review we learned from the respondent that liquidation
of entries of EuroChem's subject merchandise was not suspended due to
the importer's misclassification of entries during the POR. EuroChem
stated that it requested U.S. Customs and Border Protection (CBP) to do
a post-entry adjustment to suspend liquidation. After querying CBP's
system, we are satisfied that there is one suspended entry on which to
assess collectable duties. See memo to file dated March 29, 2010, which
is on file in the Central Records Unit (CRU) of the main Commerce
building, room 1117. Therefore, pursuant to section 751(a)(2)(C) of the
Act, we have calculated the weighted-average margin using all of
EuroChem's sales of solid urea during the POR. For details on our
methodology for assessing duties for entries in this POR, see
``Assessment Rates'' section below.
Fair-Value Comparisons
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.
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
appropriate product comparisons to the U.S. sales of subject
merchandise. We compared the U.S. sales to home-market sales of
identical merchandise that were most contemporaneous with the U.S.
sales in accordance with 19 CFR 351.414(e). Pursuant to section
777A(d)(2) of the Act, we compared the CEP of each U.S. transaction to
the weighted-average price of sales of the foreign like product for the
calendar month that corresponds most closely to the calendar month of
the individual export sale.
Product Comparisons
We compared U.S. sales to weighted-average prices of home-market
contemporaneous sales of the foreign like product. Wherever possible,
we compared U.S. sales with sales of the foreign like product in the
home market. Specifically, in making our comparisons, if an identical
home-market model was reported as described by the characteristics
listed below, we made comparisons to weighted-average home-market
prices of that model. We calculated the weighted-average home-market
prices on a level of trade-specific basis. If there were no
contemporaneous sales of an identical model, we identified the most
similar home-market model. We found contemporaneous sales of identical
merchandise in the home market for all U.S. sales in accordance with
section 771(16) of the Act.
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 met the physical characteristics of the
product sold in the United States. In order of importance, these
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. The Department has
a long-standing practice of finding that, where shipment date precedes
invoice date, shipment date better reflects the date on which the
material terms of sale are
[[Page 19612]]
established. See Notice of Final Determination of Sales at Less Than
Fair Value and Negative Final Determination of Critical Circumstances:
Certain Frozen and Canned Warmwater Shrimp From Thailand, 69 FR 76918
(December 23, 2004), and accompanying Issues and Decision Memorandum at
Comment 10; see also Notice of Final Determination of Sales at Less
Than Fair Value: Structural Steel Beams From Germany, 67 FR 35497 (May
20, 2002), and accompanying Issues and Decision Memorandum at Comment
2.
For all U.S. sales, EuroChem reported shipment dates which preceded
the date of invoice. For each of these sales, EuroChem reported the
date of invoice as the date of sale. The date of invoice is the date on
which the final invoice is printed for the U.S. customer following the
transfer of subject urea from the ocean vessel to the barge at the U.S.
port. Based on record evidence, all material terms of sale are
established at the time of shipment, with provisions between customer
and producer for variance between agreed-upon price and quantity and
final measured price and quantity at the U.S. port of unloading.
Consistent with our normal practice, for all U.S. sales EuroChem
reported we used the date of shipment as the date of sale.
With respect to EuroChem's home-market sales, shipment date and
invoice date are the same for every transaction. Therefore, we use
invoice date as the date of sale for all home-market sales.
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
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. sale of subject
merchandise in accordance with section 773(a)(1)(C) of the Act. 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.
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.
Pursuant to section 773(a)(6)(B)(i) of the Act, we deducted home-market
packing costs. We made deductions for direct selling expenses, as
appropriate.
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. See 19 CFR 351.403(c). We excluded from
our analysis sales to affiliated customers for consumption in the home
market that we determined not to be arm's-length prices. To test
whether these sales were made at arm's-length prices, we compared the
prices of sales of comparable merchandise to affiliated and
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
party were, on average, between 98 and 102 percent of the prices
charged to unaffiliated parties for merchandise comparable to that sold
to the affiliated party, we determined that the sales to the affiliated
party were at arm's-length prices. See Antidumping Proceedings:
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186
(November 15, 2002). We included in our calculation of normal value
those sales to affiliated parties that were made at arm's-length
prices.
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. 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 single level of trade for all three customer types (i.e.,
distributors, traders, and end-users). EuroChem states that, within
this single level of trade, greater selling functions are performed for
end-users relative to distributors or traders. After analyzing the data
on the record with respect to these functions, we find that EuroChem
made all home-market sales at a single marketing stage (i.e., one level
of trade) in the home market.
In the U.S. market, EuroChem had only CEP sales through its
affiliated reseller to unaffiliated customers through a single channel
of distribution and, thus, a single level of trade. See section 772(b)
of the Act. 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 sales-strategic and economic
planning, distributor/dealer training, procurement/sourcing service,
order input/processing, and freight/delivery service. Therefore, we
considered the CEP level of trade to be different from the home-market
level of trade and at a less advanced stage of distribution than the
home-market level of trade. Consequently, we could not match U.S. sales
to sales at the same level of trade in the home market nor could we
determine a level-of-trade adjustment based on EuroChem's home-market
sales of the foreign like product. Because the data available do not
provide an appropriate basis 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 have made a CEP-offset adjustment to
normal value in accordance with section 773(a)(7)(B) of the Act. The
CEP offset is the sum of indirect selling expenses incurred on the
home-market sales up to the amount of indirect selling expenses
incurred on the U.S. sales.
[[Page 19613]]
Preliminary Results of the Review
As a result of this review, we preliminarily determine that a
dumping margin of 20.92 percent exists for EuroChem for the period July
1, 2008, through June 30, 2009.
Disclosure and Public Hearing
We will disclose the calculations used in our analysis to parties
to this review within five days of the date of publication of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within 30 days of the publication of this notice in the Federal
Register. See 19 CFR 351.310(c). If a hearing is requested, the
Department will notify interested parties of the hearing schedule.
Interested parties are invited to comment on the preliminary
results of this review. Interested parties may submit case briefs
within 30 days of the date of publication of this notice. See 19 CFR
351.309(c). Rebuttal briefs, which must be limited to issues raised in
the case briefs, may be filed not later than 35 days after the date of
publication of this notice. See 19 CFR 351.309(d). Parties who submit
case briefs or rebuttal briefs in this review are requested to submit
with each argument (1) a statement of the issue and (2) a brief summary
of the argument with an electronic version included.
We intend to issue the final results of this administrative review,
including the results of our analysis of issues raised in the case
briefs, within 120 days after the date on which the preliminary results
are published. See 19 CFR 351.213(h)(1).
Assessment Rates
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries. In accordance with 19 CFR 351.212,
we have calculated an importer/customer-specific assessment rate for
these preliminary results of review. We divided total dumping margins
for the reviewed sales by the entered value of the single suspended
entry for this POR. For detailed explanation of our method for
assessing duties, see ``2008-2009 Administrative Review of the
Antidumping Duty Order on Solid Urea from Russia - Preliminary Results
Analysis Memorandum for EuroChem'' on file in the CRU of the main
Commerce building, room 1117. We will instruct CBP to assess the
importer/customer-specific rate on the suspended entry of subject
merchandise made by the importer during the POR.
The Department clarified its ``automatic assessment'' regulation on
May 6, 2003. This clarification applies to entries of subject
merchandise during the POR produced by EuroChem where EuroChem did not
know that its merchandise was destined for the United States. In such
instances, we will instruct CBP to liquidate unreviewed entries
EuroChem-produced merchandise 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).
The Department intends to issue assessment instructions directly to
CBP 15 days after the date of publication of the final results of this
administrative 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 subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the date of publication, as
provided by section 751(a)(1) of the Act: (1) the cash-deposit rate for
EuroChem will be the rate established in the final results of this
review; (2) for previously reviewed or investigated companies not
listed above, 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 less-than-
fair-value 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) if neither the exporter nor the
manufacturer is a firm covered in this review, the cash-deposit rate
will 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 deposit
requirements, when imposed, shall remain in effect until further
notice.
Notification to Importer
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 this notice in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: April 9, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-8644 Filed 4-14-10; 8:45 am]
BILLING CODE 3510-DS-S