Preliminary Determination of Critical Circumstances: Solid Fertilizer Grade Ammonium Nitrate From the Russian Federation

DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-811]

Preliminary Determination of Critical Circumstances: Solid

Fertilizer Grade Ammonium Nitrate From the Russian Federation

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: November 5, 1999.

FOR FURTHER INFORMATION CONTACT: Doreen Chen at (202) 482-0408 or Rick

Johnson at (202) 482-3818, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230.

Preliminary Determination of Critical Circumstances

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations are references

to the provisions codified at 19 CFR Part 351 (1999).

Critical Circumstances

On August 12, 1999, the Department of Commerce (``the Department'')

initiated an investigation to determine whether imports of solid

fertilizer grade ammonium nitrate from the Russian Federation

(``Russia'') are being, or are likely to be, sold in the United States

at less than fair value. In the petition filed on July 23, 1999,

petitioner alleged that there is a reasonable basis to believe or

suspect that critical circumstances exist with respect to imports of

solid fertilizer grade ammonium nitrate from Russia. On September 3,

1999, the International Trade Commission (``ITC'') determined that

there was threat of material injury to the domestic industry from

imports of solid fertilizer grade ammonium nitrate from Russia.

In accordance with 19 CFR 351.206(c)(2)(i), because petitioner

submitted a critical circumstances

[[Page 60423]]

allegation more than 20 days before the scheduled date of the

preliminary determination, the Department must issue a preliminary

critical circumstances determination no later than the date of the

preliminary determination. In a policy bulletin issued on October 8,

1998 (Policy Bulletin Number 98.4), the Department stated that it may

issue a preliminary critical circumstances determination prior to the

date of the preliminary LTFV determination, assuming adequate evidence

of critical circumstances exists (see Change in Policy Regarding Timing

of Issuance of Critical Circumstances Determinations, 63 FR 55364

(October 15, 1998)). In accordance with this policy, we are issuing a

preliminary critical circumstances decision in the investigation of

imports of solid fertilizer grade ammonium nitrate from Russia.

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.

History of Dumping and Importer Knowledge

To determine whether there is a history of injurious dumping of the

merchandise under investigation, in accordance with section

733(e)(1)(A)(i), the Department considers evidence of existing

antidumping orders on solid fertilizer grade ammonium nitrate from

Russia in the United States or elsewhere to be sufficient. To support a

finding of history of injurious dumping of Russian ammonium nitrate,

the petition states that the European Community (``EC'') issued an

antidumping order in 1995 on imports of ammonium nitrate from Russia.

This order remains in effect today. The existence of an antidumping

order on Russian ammonium nitrate in the EC is sufficient evidence of a

history of injurious dumping. Accordingly, there is no need to examine

importer knowledge.

Massive Imports

In determining 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. However, as stated in

the Department's regulations at section 351.206(i), if the Secretary

finds that importers, exporters, or producers had reason to believe, at

some time prior to the beginning of the proceeding, that a proceeding

was likely, then the Secretary may consider a time period of not less

than three months from that earlier time.

In this case, petitioner argues that importers, exporters, or

producers of Russian solid fertilizer grade ammonium nitrate had reason

to believe that an antidumping proceeding was likely before the filing

of the petition. The Department examined whether conditions in the

industry and published reports and statements provide a basis for

inferring knowledge that an antidumping investigation on the subject

merchandise was likely. The Department found that, as a result of an

investigation on Russian ammonium nitrate imports by the International

Trade Commission under section 332(g) of the Tariff Act of 1930, as

amended (published on May 6, 1998), there was considerable press

coverage discussing concerns of ammonium nitrate producers, among

others, concerning the influx of imports of subject merchandise and the

likelihood of a remedial trade action, including the filing of an

antidumping petition. On December 3, 1998, a coalition of U.S.

producers of solid fertilizer grade ammonium nitrate formed the

Committee for Fair Ammonium Nitrate Trade (``COFANT''), to monitor

developments with respect to the importation of ammonium nitrate and to

pursue available remedies, should unfair trade practices be identified.

On December 7, 1998, the formation of this coalition was reported in a

trade publication. Significantly, this trade publication also reported

in the same article that ``some of the committee members already have

been active in trying to get federal officials to find evidence of

Russian AN dumping.'' See Petition for the Imposition of Antidumping

Duties: Solid Agricultural Grade Ammonium Nitrate from the Russian

Federation (July 23, 1999) at Exhibit 37, p. 5.

The press coverage leading up to the formation of COFANT and the

announcement thereof in early December 1998, including the explicit

reference to a dumping action against imports of ammonium nitrate from

Russia, are sufficient evidence that the Russian producers and

importers were on notice that an antidumping proceeding concerning the

subject merchandise was likely. Thus, we preliminarily determine that

by early December 1998, importers, exporters, or producers knew or

should have known that a proceeding was likely concerning solid

fertilizer grade ammonium nitrate from Russia (see discussion in the

Determination of Critical Circumstances Memorandum, November 1, 1999).

Therefore, we examined the increase in import volumes during the

period of December 1998 through May 1999 as compared to June 1998

through November 1998. The Department found that imports of subject

merchandise escalated by over 257.88 percent (see Attachment 1 to the

Determination of Critical Circumstances Memorandum). Furthermore, while

the record indicated that seasonality might account for some of that

increase, we preliminary determine that the 257.88 percent increase is

not simply a function of seasonality, as the actual volume increase

from the period December to May compared to the same period in the

previous two years indicates an actual volume increase of 88.31 percent

(see Attachment 2 to the Determination of Critical Circumstances

Memorandum). Therefore, pursuant to section 733(e) of the Act and

section 351.206(h) of the Department's regulations, we preliminarily

determine that there have been massive imports of solid fertilizer

grade ammonium nitrate from Russia over a relatively short time.

Conclusion

We preliminarily determine that there is a reasonable basis to

believe or suspect that critical circumstances exist for imports of

solid fertilizer grade ammonium nitrate from Russia.

Suspension of Liquidation

In accordance with section 733(e)(2) of the Act, upon issuance of

an affirmative preliminary determination of sales at less than fair

value in the investigation, the Department will direct the U.S. Customs

Service to suspend liquidation of all entries of solid fertilizer grade

ammonium nitrate from Russia, as appropriate, that are entered, or

withdrawn from warehouse, for consumption on or after 90 days prior to

the date of publication in the Federal Register of our preliminary

determination of sales at less than fair value. The Customs Service

shall

[[Page 60424]]

require a cash deposit or posting of a bond equal to the estimated

preliminary dumping margin reflected in the preliminary determination

of sales at less than fair value published in the Federal Register.

This suspension of liquidation will remain in effect until further

notice.

Final Critical Circumstances Determination

We will make a final determination concerning critical

circumstances for Russia when we make our final determination regarding

sales at less than fair value in this investigation, which will be 75

days after the preliminary determination regarding sales at less than

fair value, unless this investigation is extended.

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. This notice is published pursuant to section

777(i) of the Act.

Dated: November 1, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-29062 Filed 11-4-99; 8:45 am]

BILLING CODE 3510-DS-P