On June 30, 2021, fertilizer manufacturers CF Nitrogen, LLC; Terra Nitrogen, Limited Partnership; and Terra International (Oklahoma) LLC filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that urea ammonium nitrate solutions (UAN) from Russia and Trinidad and Tobago are being sold in the US at less than fair value.
The petitioners additionally allege that the governments of Russia and Trinidad and Tobago are providing unfair subsidies to their countries’ producers and exporters of UAN to the US. The companies seek the imposition of antidumping (AD) and countervailing (CVD) duties on imports of the chemicals from the two nations, alleging dumping margins ranging from 169.96 percent to 391.65 percent for Russia and 158.81 percent for Trinidad and Tobago as well as an unspecified total level of subsidies exceeding 1 percent.
Under US law, a domestic industry can petition the government to initiate an AD investigation to determine whether an imported product is sold in the US at less than fair value (ie, dumped). A domestic industry may also seek a CVD investigation into alleged subsidization of foreign producers or exporters by a foreign government. AD/CVD duties may be imposed if the DOC determines that imported goods are dumped and/or unfairly subsidized and if the ITC determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.
Products covered by the petition
The merchandise subject to the petition includes all mixtures of urea and ammonium nitrate in aqueous or ammonia solutions, regardless of nitrogen concentration by weight and the presence of additives, such as corrosion inhibitors and soluble micro- or macronutrients.
The products covered by the petition are currently classified under subheading 3102.80.0000 of the Harmonized Tariff Schedule of the US.
The total value of US imports of UAN from Russia and Trinidad and Tobago was $297.3 million in 2020.
Foreign producers and US importers of UAN
The petition identifies five exporters and eight US importers of UAN from Russia and Trinidad and Tobago. See the lists of exporters and importers from the petition.
Estimated schedule of investigations
AD and CVD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD and CVD investigations on UAN from Russia and Trinidad and Tobago.
6/30/2021 – Petition filed
8/16/2021 – ITC preliminary injury determination
9/23/2021 – DOC preliminary CVD determinations, if not postponed
11/29/2021 – DOC preliminary CVD determinations, if fully postponed
12/7/2021 – DOC preliminary AD determinations, if not postponed
1/26/2022 – DOC preliminary AD determinations, if fully postponed
6/17/2022 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed
8/1/2022 – ITC final injury determination, if DOC determinations are fully postponed and DOC final determinations are aligned
8/8/2022 – AD and CVD orders published
Consequences for exporters and US importers
US AD and CVD investigations can result in the imposition of substantial duties in addition to already-applicable duties and tariffs. If the ITC and DOC make affirmative preliminary determinations, US importers will be required to post cash deposits corresponding to the ad valorem AD and/or CVD duty rates determined for the subject merchandise on or after the date on which the DOC’s preliminary determination is published in the Federal Register. In certain circumstances, such duty deposit requirements may retroactively go into effect 90 days prior to the date of publication. The AD and CVD duties will remain in effect if the DOC and ITC make affirmative final determinations.
The DOC calculates specific AD and CVD margins for certain individual producers and exporters selected for examination. Such rates are often much lower than those alleged in the petition. However, producers and exporters that do not participate in the investigations may be subject to substantially higher rates. Duties imposed at these higher rates may force exporters to stop shipping to the US and importers to cease importation of subject merchandise. Thus, interested parties – including foreign producers, exporters and importers – should have a strategy for addressing AD and CVD investigations, including possible participation.
Under the statutory time schedule for AD and CVD investigations, the first decision (the preliminary ITC determination of whether or not there is a reasonable indication that the US industry is materially injured, or threatened with material injury, by reason of the subject imports) must be made within 45 days after the filing of the petition – in this case, by August 16, 2021. An ITC hearing (ie, a public conference) is held around 21 to 23 days after the filing date. As a result, agency staff work, including the issuance of questionnaires to interested parties, begins almost immediately. Thus, quick action is encouraged to understand the specific implications of these developments as well as to prepare and implement a pertinent strategy.