In what is a victory for Russian fertilizer producer MCC Eurochem, the U.S. Department of Commerce has issued a final decision in EuroChem’s new-shipper review, setting a zero percent weighted-average margin on solid urea imports from the Russian Federation produced and exported by EuroChem based on a specified period of review. All other Russian fertilizer manufacturers or exporters will still be subject to a 64.93 percent tariff, the rate established by the existing anti-dumping duty order against solid urea from Russia and Ukraine.
EuroChem had requested the new-shipper review in January 2007, claiming that it did not export solid urea to the U.S. at less than fair market value during the period of review from July 1, 2006, through Dec. 21, 2006, and that it has never been affiliated with any Russian exporter or producer who exported solid urea to the U.S. during the antidumping duty order period of investigation.
The DOC followed that request by initiating a new-shipper review, but a group of fertilizer companies known as the Ad Hoc Committee of Domestic Nitrogen Producers submitted a letter to the DOC in February 2007 arguing that EuroChem was not eligible for a new-shipper review because its factories existed and produced urea during the period of investigation, and because it was affiliated with entities that were part of the non-market-economy entity that produced and exported subject merchandise during the period of investigation.
The Ad Hoc Committee, whose urea producing members include CF Industries Holdings Inc. and PCS Nitrogen Inc., submitted other arguments as well, including the claim that the DOC would create a potentially large and unnecessary administrative burden by continuing the new-shipper review because any producer that has changed over time and has been acquired by a new owner could use this precedent to justify eligibility for a new-shipper review.
In addition to its initial claims, EuroChem argued that the new-shipper review was warranted because a “meaningful difference” exists between Soviet entities and open joint-stock companies in the Russian Federation, of which EuroChem is one. EuroChem charged that the Ad Hoc Committee was ignoring the fact that the Soviet Union itself no longer exists, and that the “massive transformation” of the Russian economy since the period of investigation was significantly more than a simple “corporate restructuring.”
The DOC ultimately concluded that the new-shipper review was warranted based on its analysis of the competing arguments, and rendered its final decision in the case this spring. The decision, which appeared in a May 22 Federal Register notice, was heralded by the Agricultural Retailers Association, which last summer sent a letter to the DOC urging support for EuroChem’s new-shipper review request.
“We believe EuroChem’s new shipper review should proceed under the normal rules that apply to all market economy products, and any inquiry into cost of production should focus on what EuroChem’s costs actually are and not on what those costs ‘should be,'” the 2007 ARA letter stated. “Assigning a higher cost, in order to offset an alleged distortion in Russia’s domestic natural gas market, we believe would be the same as using antidumping calculations as a shortcut to impose an additional countervailing duty, without meeting the procedural and substantive requirements of a countervailing duty investigation.”
In a Dec. 26, 2007, letter to DOC Secretary Carlos Gutierrez, Reps. Marion Berry (D-Ark.) and Jo Ann Emerson (R-Mo.) also voiced their support for EuroChem’s request, saying “the current restrictive antidumping measures are outdated, unnecessary, and extremely injurious to American farmers.”
Antidumping duties on urea imports from Russia and Ukraine currently remain in place after a 2005 sunset review decision by the U.S. International Trade Commission. The ITC decision was subsequently upheld in a 2007 appeals ruling by the U.S. Court of International Trade (GM Dec. 3, 2007)