1. The Complainant further claims that, in its opinion, the Ministry of Commerce “did not take into consideration” allegations and means of evidence that, as stated by such participant, were sufficient to demonstrate the injury that the imports of urea at issue allegedly caused to the national production. Essentially, AGROMEX claims that the Final Determination does not contain any evaluation whatsoever of the evidence rendered during the administrative investigation.

In general terms, AGROMEX argued the following:

“...some of the evidence and arguments submitted by the Complainant during the investigation, were not evaluated in accordance with the applicable formalities... The authority has the obligation to evaluate diligently each and all evidence submitted... likewise, it must grant each evidence submitted, the corresponding evaluation and value in accordance with law... Hence, the investigating authority did not take into consideration the arguments and means of proof submitted by the Complainant on October 25, 1999, means of proof and arguments that are enough to demonstrate the existence of the unfair trade practice... In the Preliminary Determination, item 185, it is established: [“]In the next stage of the investigation, the Ministry of Commerce will gather more elements... that may allow it to make a final determination regarding the effects on prices...[”] According to the facts and rationale as established in the Final Determination, the investigating authority did not analyze the information provided on October 25, 1999 to pursue what it had previously stated in item 185 of its Preliminary Determination, and did not provide the legal grounds for its lack of consideration, so to speak, or its [“]unilateral dismiss of requested evidence... [”] Moreover, the injury was proved, as it is expressed in paragraph 164 of the Final Determination... Based on the arguments and means of proof provided by the national producers companies, which are specified in item 33 of the Final Determination at issue, the investigating authority had all necessary elements to acknowledge and sanction the existence of the unfair trade practice (dumping), circumstance that inexplicably and unlawfully did not occur... Just by reading the Final Determination, it may be seen that the investigating authority did only mention which were the arguments and means of evidence submitted, but they were not duly evaluated upon the issuance of the above mentioned Final Determination... by reading the Final Determination, it cannot be determined in what portion of the same there is a listing and evaluation of the evidence submitted... there is no diligence in connection with such evidence or the evaluation... the fact of not valuating the evidence submitted by the petitioner, is a fact that infringes the formalities required by law... [the Ministry of Commerce] should have examined the opportunity and value of such evidence... to determine if there are enough evidences to support the petitioner’s claim... ...” Brief in Support to the Complaint, Pages 51-67

2. The Ministry of Commerce -and in the same sense, the participants in opposition to the Complaint of AGROMEX-, on other hand, argues that the Complaint of AGROMEX on this issue, does not identify the evidence that was not allegedly evaluated, and that it does not provide any explanation of their alleged evidentiary value.

Essentially, the Ministry of Commerce argued the following:

“...The Complainant only says that the investigating authority did not evaluate the evidence submitted by such participant during the course of the investigation, and mentions the law provisions that were allegedly infringed, but it does not explain the reason for which they were allegedly infringed, besides that there is no indication whatsoever of the proofs that were not allegedly taken into consideration, and in any event, what would be the alleged evidentiary value... [the Complainant] only mentions that the investigating authority did not evaluate evidence provided by such participant during the investigation... such omission may only prejudice the Complainant, and therefore this argument should be dismissed by this Panel. Notwithstanding the above, and only on an ad cautelam basis, the investigating authority challenges all statements made by the Complainant in its Brief,... it was not possible to analyze the merits of the case because the petitioner lost its legal standing as a plaintiff [legitimación procesal activa], and therefore this investigating authority terminated the investigation without analyzing the merits and evaluating the arguments and evidence provided by the participants in the final stage of the investigation... in its Preliminary Determination, the investigating authority did not acknowledge to have all necessary elements to recognize the existence of an unfair international trade practice... the investigating authority was not obliged to analyze the merits of the case... in view that the Complainant did loose its legal standing as a plaintiff...” Brief in Opposition to the Complaint, Pages 74-88

3. In opinion of this Binational Panel, it is not actually strange that the Ministry of Commerce had not analyzed the merits of evidence rendered by AGROMEX during the final stage of the administrative investigation, taking into consideration that, according to what has been analyzed in this decision, the Ministry of Commerce did terminate the investigation on the basis that there was no “subject matter” anymore, as a consequence of the alleged lack of “legal standing of the plaintiff”.

Therefore, there is an explanation -although it is not justifiable, according to the decision that this Binational Panel has adopted in item D above-, to the fact that the Ministry of Commerce acted based consistently on its prior reasoning, and based also on a principle of procedural economy, reason why it did not analyze the merits of the case because of having considered first that the lack of “legal standing of the plaintiff” had necessarily left the administrative proceeding on the matter of unfair international trade practices “without subject matter”.

4. To the extent that this Binational Panel has denied the reasoning and legal grounds that allegedly supported the Ministry of Commerce’s determination to terminate the investigation, based on the fact that the investigation lacked “subject matter”, because the petitioner did not allegedly have “legal standing of a plaintiff” -because of the reasons mentioned in item D above-, upon remand of the Final Determination according to this Binational Panel’s decision, the Ministry of Commerce must evaluate the merits of all evidences available in the administrative record of the investigation. The decision on this particular claim is, therefore, necessarily subsumed and linked to the decision that this Binational Panel has taken previously with respect to the matter on the alleged change of legal standing of the Complainant.

It is worth mentioning that in any event, it is not within the scope of this Panel review, and therefore this Binational Panel makes no decision in that regard, to resolve or make any determination regarding the opportunity, validity or evidentiary value of any evidence referred to by the Complainant.

F. ON THE ISSUANCE OF THE PRELIMINARY AND FINAL DETERMINATIONS OUT OF LEGAL TERMS

1. AGROMEX claims that the issuance of the Preliminary and Final Determinations out of the legal terms provided for in the LCE, left AGROMEX defenseless and, as argued by AGROMEX, “increased even more the injury caused” to the national production by the imports of urea.

“...By issuing the above mentioned determinations out of term, the investigating authority did place the Complainant in a clear defenseless scenario... The investigating authority exceeded the maximum time periods provided for in Articles 57 and 59 of the Foreign Trade Law ...so it has merits for this Panel to determine the illegality of the Final Determination in order for the investigating authority to issue a new one in accordance with law... The unlawful conduct of the investigating authority ...obviously affected the sense of the final determination at issue, such affectation was in the sense that said circumstance increased even more the injury caused to the national producer companies because of the imports of urea...Accordingly, this Panel must order the revocation of the Final Determination at issue, by ordering the absolute nullity of all proceedings leading to it, for violation of the essential due process formalities, specifically for not complying with the time periods as provided by the Foreign

Trade Law and its Regulations...” Brief in Support to the Complaint, Pages 67-79 (emphasis in the original).

2. On the other hand, the Ministry of Commerce and the participants in opposition to the Complaint of AGROMEX, essentially argue that the issuance of the Preliminary and Final Determinations out of the legal terms provided for in the LCE and its Regulations, in no way affected the defense of AGROMEX nor such circumstance varied the sense of the Final Determination.

“...the issuance of the preliminary and final determinations out of term, did not affect at no time the defense of the Complainant and did not affect the sense of the determination at issue, because the facts submitted during the course of the investigation were the ones which, added to the analysis of the arguments and evidence provided by the participants and those gathered by the Ministry of Commerce itself, determined the sense of the determinations issued... and consequently, the sense of the determination could not be different, and therefore such circumstance cannot constitute a claim of the Complainant based on the alleged excess of the legal terms... Even assuming the argument that the investigating authority exceeded the time periods as set forth in the LCE and its Regulations, that does not imply a violation to the Antidumping Code, because such [Code] provides in its Article 5.10 the following: [“]5.10 Except for extraordinary circumstances, the investigations must have terminated within a year, and in any event within a time period of 18 months, counted as from its initiation...[”]” Brief in Opposition to Complaint, Pages 91-100 (emphasis in the original)

3. This Binational Panel agrees, in the essence, with the Ministry of Commerce and the participants in opposition to the Complaint of AGROMEX. In opinion of this Binational Panel, there are no elements on the record of this review according to which it may be sustained that AGROMEX suffered an affectation to its possibility of defense, or supporting the circumstances under which it could be asserted that if the Preliminary and Final Determinations had been issued within the legal terms, the sense of such resolutions would have varied.

In fact, the record of this review actually reveals that AGROMEX was always aware of the development of the investigation, and that it had enough and due opportunity to defend -circumstance that, by the way, is undisputed-. As for the reasons according to which the sense of such resolutions would have allegedly varied, in the event that the Preliminary and Final Resolutions had been issued within the legal terms set forth in the LCE and its Regulations, this Binational Panel does not have any other elements more than mere statements without evidence to support them -stating that the delay in the issuance of the above mentioned determinations “increased” the alleged injury to the national production-, that naturally cannot be the basis for this Binational Panel to make an adverse determination on this claim.

G. ON THE HYPOTHETIC DISPENSE OF COUNTERVAILING DUTIES DUE TO PUBLIC INTEREST REASONS

1. The Complainant further challenges certain statement made by the Ministry of Commerce in item 75 of the Final Determination, stating that “finally, and assuming that the national producer could reopen its facility, reinitiate the production of urea and, for procedural purposes of the investigation, recover its status of national producer, it would come before us a national interest issue provided for in Article 88 of the [LCE]”. The mentioned item reads literally:

“75. According to the results of the analysis of the information and arguments submitted by the participants, as well as to the information gathered by the [Ministry of Commerce], it was determined that there are no indications that allow us to assume the possibility of the reestablishment of the production of urea within the short or medium term, not only on labor terms, but on the operational scheme of the producer facilities, particularly in connection with the supply of ammonium under competitive conditions from Petroquímica Cosoleacaque, S.A. de C.V. Besides, it must be taken into consideration that there is a total national closing of the urea producer facilities, since September, 1999, which circumstance leads us to conclude that there is no current national production of urea and that there will not be within the short or medium terms. Finally, and assuming that the national producer could reopen its facility, reinitiate the production of urea and, for procedural purposes of the investigation, recover its status of national producer, it would come before us a national interest issue provided for in Article 88 of the Foreign Trade Law. Accordingly, in such situation and if as a result of the investigation the [Ministry of Commerce] should impose countervailing duties to the imports of urea from the United States of America and the Russian Federation, it is worth mentioning that the effects of such a measure -because of the high dumping margins as mentioned in the preliminary determination-, would have very serious repercussions for final users of this product, the domestic agricultures. That is to say, even if the [Ministry of Commerce] had reached a confirmation that it is the case of imposing countervailing duties, the [Ministry of Commerce] would not impose them anyway pursuant to the above mentioned public interest issue involved, due to the serious adverse repercussions for the domestic agricultural field. Final Determination, Page 107

2. Essentially, AGROMEX argues that the mention by the Ministry of Commerce of the alleged topic of “public interest”, has no reasoning nor legal grounds, insofar as such hypothesis is not provided for in Article 88 of the LCE. On the contrary, AGROMEX argues that Article 88 of the LCE is, in any event, the law provision that supports the imposition of countervailing duties in protection of the national production. Specifically, AGROMEX mentions the following:

“The investigating authority, in the final determination at issue, determines not to impose countervailing duties to the imports of urea from the mentioned countries, by unlawfully and illogically arguing an alleged defense of public interest issues, feature that in no way is explained, based on applicable law provisions or reasoned... The investigating authority, by expressing that the assessment of countervailing duties could cause a prejudice to the public interest, made an statement that in no way is duly grounded nor reasoned, because such an argument does not meet the mentioned legal hypothesis. That is so because Article 88 of the Foreign Trade Law provides the following: [“]Art. 88.- Upon the assessment of a countervailing duty, or the proposition to apply a safeguard measure, the [Ministry of Commerce], besides of providing a timely defense to the national production, must avoid to the extent possible that such assessment may have adverse repercussions on other productive processes and in consumers [”]. According to the language of the above mentioned provision, as claimed by the investigating authority, it may be clearly stated that the Ministry of Commerce has a confusion, in view that such provision does precisely provide that the Ministry of Commerce should impose a countervailing duty to provide a timely defense to the national production, but in no way makes reference or mentions the public interest as such, but only in the way that a countervailing duty should avoid a negative repercussion on productive processes and consumers... This constitutes a statement that lacks of all validity, because it has no legal grounds nor any reasoning, that is to say, in order for such statement to be duly grounded and reasoned, it should be expressed the specific applicable law provision, as well as the special circumstances, particular reasons or immediate causes that have been taken into consideration... obviously in reference to the specific case there is no such a reasoning, in view that the investigating authority did only mention an alleged violation to a law provision, namely the Article 88 of the Foreign Trade Law, allegedly supporting its arguments on it, but with no mention on the reasons why such provision would be allegedly infringed...” Brief in Support to the Complaint, Pages 79-90

3. On the other hand, the Ministry of Commerce -with the support of the participants in opposition to the Complaint-, sustains the validity of the above mentioned criterion of public interest, not only because the Ministry of Commerce argues that Article 88 of the LCE does certainly provide for such criterion, but also because the assessment of countervailing duties to the imports of urea, in the absence of national production, would attract, in the opinion of the Ministry of Commerce, “serious repercussions to the domestic agricultural sector”.

“Public interest is a legal feature acknowledged by the Mexican courts and it is not an alleged feature as stated by the Complainant in the page 91 of its Brief... As indicated in the Final Determination, there is no national production of urea, and there is no possibility of reinitiate the same within the short or medium terms, circumstance which leads us to the public interest issue, in the sense that serious repercussions for the agricultural domestic sector might derive from the assessment of countervailing duties, which is an unacceptable event in the absence of national production.” Brief in Opposition to the Complaint, Pages 101-113 (emphasis in the original)

4. Moreover, both UNOCAL and PRONAMEX support the interpretation made by the Ministry of Commerce, but also point out that the reasoning of the Ministry of Commerce as stated in the Final Determination with respect of the eventual application of the mentioned public interest criterion, is only a hypothetical case, used to support the termination of the investigation without imposing definitive countervailing duties whatsoever.

5. In the opinion of this Binational Panel, the statement of the Ministry of Commerce with respect to the eventual application of a public interest criterion -whether actually provided for or not in Article 88 of the LCE- is certainly a matter only hypothetical. In opinion of this Binational Panel, the reasoning of the Ministry of Commerce does not strengthen any argument stated in the Final Determination -in view of the undisputed fact that the Ministry of Commerce did not analyze the merits of the case in the final stage of the investigation- although it certainly does not affect nor cause any prejudice to the Complainant in this review.

Based on the above, regardless of the agreement or disagreement of this Binational Panel with the gratuitous statements made by the Ministry of Commerce with respect to the potential application of the mentioned public interest criterion, and regardless of their de validity or not -analysis which, in any event, would result unbeneficial to this review- this Binational Panel finds that the statements at issue are made with respect to a hypothesis that is not happening in this review and, therefore, that cannot prejudice the Complainant in this review.

H. ON THE ALLEGED OMISSION OF RELEVANT INFORMATION IN THE RECORD

1. AGROMEX also challenges the lack of reasoning and legal grounds of the Final Determination based on the statements made in items 73 and 74, the ones which read as follows:

“73. The [Ministry of Commerce] asked Petroquímica Cosoleacaque, S.A. de C.V., to provide precise information on the reasons for lack of supply [of ammonium] to [AGROMEX]; the status of the negotiations of a new ammonium supply agreement with such company; and the approximate time for reinitiating the supply of the necessary ammonium to reactivate the production of urea.

74. From the information provided by Petroquímica Cosoleacaque, S.A. de C.V., it may be clearly stated that there are no indications that may allow us to assume any possibility of the reestablishment of the production of urea within the short or even medium terms, circumstance that, in addition to the total closing of the domestic producer facilities at a national level, leads us to conclude that there is no current national production of urea and that there will not be within the short or even medium terms.” Final Determination, Page 107

2. Essentially, AGROMEX claims that the above mentioned information is not included in the administrative record of the investigation, and that as consequence of that, AGROMEX did not have access to it:

“...the investigating authority, in sections 73 and 74 of the determination at issue, states that it requested information on the Complainant to Petroquímica Cosoleacaque, S.A. de C.V. (PECOSA) and that based on such information, the investigating authority purportedly and unlawfully based the determination at issue, and therefore there is an evident constitutional infringement... because there was no respect to the right of being heard in regard to this issue, since the Complainant never had knowledge of this information, and therefore it could not have any chance of being heard in connection therewith... in the administrative record at issue, there are no requirements made to Petroquímica Cosoleacaque, S.A. de C.V. and even less there is an answer from such company, therefore it is obvious that there is a illegality in the final determination, because the Ministry of Commerce had the obligation to file with the administrative record the alleged communications, and it did not comply it, so by making such an statement without support in the necessary documentation, besides of contravening the mentioned law provisions, left the Complainant totally and absolutely defenseless...” Brief in Support to the Complaint, Pages 92-97

3. On another hand, the Ministry of Commerce -with the support of the participants in opposition to the Complaint of AGROMEX-, argued that the information requested to Petroquímica Cosoleacaque, S.A. de C.V. (“PECOSA”) is indeed contained in the administrative record in both public and confidential versions, but that with respect to the latter version (the confidential), the information was classified as governmental confidential information, reason why the petitioner had not access to such information.

“...it is obvious to infer that the Complainant did not review the administrative record and now intends to create a confusion to this Panel... it is widely known that each participant involved in an antidumping investigation, has access to the not confidential version of the administrative record in which it is integrated all public information... it is worth mentioning that there is another type of information which the participants have no access to in accordance with law, as may be the case, for example, of reserved commercial information and governmental confidential information... On December 2, 1999, the investigating authority required PECOSA, among other things, to provide information on the ammonium sale conditions to Agro Nitrogenados, S.A. de C.V., copies of the notifications of supply suspensions to such company, and information on their commercial relationship from May 1997 to April 1998. Such requirement was included in the administrative record as soon as possible in both the confidential and not-confidential versions... PECOSA responded the above mentioned requirement on December 10, 1999. Its response contained information on sale and price conditions of ammonium to the Complainant, explanations on the pricing mechanisms for minimum contractual guaranteed volumes, as well as information on the base price, a summary of the mechanisms applied for each client and information related to communications with the Complainant in connection with the supply suspension. Based on the content of PECOSA’s response, on the fact that the Ammonium Supply Agreement provided to [the Ministry of Commerce] by the Complainant itself on October 25, 1999 indicated the confidential character of the information contained therein, as well as on the information related to such agreement, the investigating authority determined to classify the PECOSA’s response as confidential governmental information (which is information classified as privileged information in terms of Rule 3 of the Rules of Procedure) ...it must be pointed out that the official writ in connection with the response to the above mentioned requirement is contained in the administrative record, as mentioned precisely in volume 14 of the non-confidential version, page 235, and volume 37 of the confidential version, page 55... Later, on January 21, 2000, the investigating authority considered necessary to make a new requirement to PECOSA to provide information on negotiations to update the ammonium supply agreement with AGROMEX and, if that is the case, on the conditions which in its opinion could vary and the reasons for such modifications. On January 28, 2000, PECOSA responded the request, by providing information related to the ammonium supply agreement with AGROMEX; PECOSA indicated that the commercial relationship was suspended since August, 1999 due to the moratoria incurred by such company. The same way as in the previous response, the information was classified as governmental confidential information (which is privileged information according to Rule 3 of the Rules of Procedure). Additionally, the official writ that was issued in connection with the response to such request was classified as public information. As may be seen, it is clear that this authority made the proper information requests and received the responses indicated in items 73 and 74 of the final determination, which documents provided, the same as the official writs that were issued in connection therewith, are part of the administrative record of the antidumping investigation. The investigating authority complied with the essential due process formalities and in no way it may be argued that there is an infraction to the right to be heard as claimed by the Complainant... The investigating authority does reiterate that both the information requests to PECOSA as the official writs that were issued in connection therewith, were immediately integrated to the administrative record, so the Complainant had full opportunity to act during the investigation to defend itself... the Complainant cannot argue that it had no knowledge of the commercial situation between the mentioned companies [PRIVILEGED INFORMATION]. In any event, it is information dealing with facts of the Complainant itself...” Brief in Opposition to the Complaint, Pages 115-22

4. In analyzing this issue, this Binational Panel notices in first place that its decision is necessarily subsumed and linked to the determination that this Binational Panel has adopted previously in connection with the issue on the alleged change of legal standing of the Complainant.

5. Accordingly, the opinion that this Binational Panel could provide with respect to the opportunity or validity of the claim argued by the Complainant, or respect with the existence of the documents in the administrative record or their classification, would result evidently unbeneficial to this review to the extent that, as it has been mentioned before, the decision of this Binational Panel in regard to this Complaint, is superseded by the determination that the Binational Panel has adopted in connection with its analysis of the invalidity of the reasoning and legal grounds of the Final Determination, as expressed by the Ministry of Commerce, to terminate the administrative investigation on the basis of the alleged fact that the investigation was left “without subject matter” due to reasons linked with the petitioner.
 

Now therefore, based on the above and on what is provided for in Article 1904.8 of the NAFTA, this Binational Panel hereby orders to remand the Final Determination to the Ministry of Commerce, in order for the investigating authority to issue the corresponding final determination to be consistent with this Decision, particularly with what it is provided for in sections III. D. and III. E., and in general to adopt any measures not incompatible with this Decision, with respect to the imports of urea, product classified in the tariff item 3102.10.01 of the Tariff of the Importation General Tax Law, original from the United States of America, regardless of the exporting country.

The Investigating Authority shall have a time period of sixty working days, counted as from the day following the date of its notification of this Decision, to submit to the responsible Secretariat the Determination on Remand referred to in Rule 73(1) of the Rules of the NAFTA Article 1904 Panel Rules.

It is so ordered by this Binational Panel on May 23rd, 2002, in this:

Review by a Binational Panel pursuant to Article 1904 of the North American Free Trade Agreement of the Final Determination of the Antidumping Investigation on the Imports of Urea, product classified under Tariff Item 3102.10.01 of the Tariff of the Importation General Tax Law, original from the United States of America and the Russian Federation, regardless of the exporting country.

File Number before the Mexican Section of the Free Trade Agreements Secretariat:
MEX-USA-00-1904-01.