Russia’s EuroChem Loses Exemption From EU Ammonium-Nitrate Levy

Russia’s EuroChem Group faces a European Union tariff on ammonium nitrate because the EU withdrew approval of a minimum-price pledge that the company made to win an exemption from the levy.

The EU said EuroChem will be subject to the duty of 32.82 euros ($42.48) a metric ton because the company’s acquisition of a fertilizer production and sales facility in the bloc creates “a high risk of cross-compensation.” Earlier this year, EuroChem completed the purchases of a nitrogen-fertilizer distribution unit from Germany’s K+S AG and of Belgian fertilizer assets from BASF SE.

“The undertaking accepted from the EuroChem Group becomes impracticable and therefore should be withdrawn,” the European Commission, the EU’s trade authority in Brussels, said today in the Official Journal. The decision will take effect tomorrow.

The levy on EuroChem is part of EU trade protection against Russian makers of ammonium nitrate for allegedly selling it in the 27-nation bloc below cost, a practice known as dumping. Seeking to help EU producers including BASF, the bloc in July 2008 renewed for five years an anti-dumping duty on Russian ammonium nitrate of 47.07 euros a ton while lowering the rate against EuroChem to 32.82 euros a ton and exempting the company from the levy in return for its price pledge.

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