Letter to The Honorable Paul Piquado, Assistant Secretary for Import Administration, U.S. Department of Commerce

Letter

A company in eastern Ohio employing more than 100 Ohioans has reported facing unfair competition from underpriced imports from Russia. In response to concerns raised by AMG Vanadium, Inc. of Guernsey County, U.S. Sens. Sherrod Brown (D-OH) and Rob Portman (R-OH), and U.S. Rep. Bob Gibbs (OH-18) called on the Obama Administration to enforce existing trade law and demand that Russia abide by international trade obligations.

"We have trade enforcement laws for a reason -- to level the playing field when trading partners cheat. But it takes enforcement of our trade laws if they're to be effective," Brown said. "That's why we are urging the Commerce Department to defend this Cambridge company and its workers."

"Ohio companies and workers should not be subjected to an uneven playing field and should be treated fairly in the global economy," said Portman. "I hope the Commerce Department reviews the case, and enforces trade laws so that this Cambridge company and its workers are protected from a foreign competitor's unfair trade practices."

"Companies like AMG Vanadium, Inc. and its employees depend on our trade laws to protect them from illegal foreign imports," Gibbs said. "I fully expect the Commerce Department to address this circumvention of the law and ensure American jobs are protected."

AMG Vanadium, Inc., a leading domestic producer of ferrovanadium, which is used in beam for bridges and buildings, employs nearly 130 people at its production facilities in Cambridge. Additionally, the company has invested over $10 million into its Cambridge facilities in recent years. To evade an antidumping duty, the largest Russian producer has been shipping a nearly finished form of this product to the U.S. and having it finished into ferrovanadium in a simple, one-stage process. Imports of vanadium pentoxide from Russia have surged--increasing from zero in 2004 to 2,680 MT in 2010--hurting domestic production and AMG Vanadium, Inc.

In addition, Senators Portman and Brown have worked together on other efforts to combat duty evasion, including work on the ENFORCE Act, which would crack down on illegal trade practices and trans-shipment of products into the United States.

Full text of the letter is below.

December 12, 2011

The Honorable Paul Piquado
Assistant Secretary for Import Administration
U.S. Department of Commerce
1401 Constitution Ave., NW
Washington, D.C. 20230

Dear Mr. Piquado:

We understand that the Commerce Department is conducting a duty circumvention inquiry covering vanadium pentoxide imports from Russia. As you know, efforts to evade required duties can undermine the ability of U.S. producers to make investments and create jobs.

AMG Vanadium, Inc., a leading domestic producer of ferrovanadium, employs nearly 130 people at its production facilities in Cambridge, Ohio. Currently, the company is undertaking a comprehensive expansion program that is vitally important to AMG Vanadium, Guernsey County, the state of Ohio, and the broader Appalachian region.

We are told that ferrovanadium imports from Russia are subject to a 108 percent antidumping duty. To evade this duty, the largest Russian producer has been shipping a nearly finished form of this product (vanadium pentoxide) to the U.S. and having it "toll converted" into finished ferrovanadium. This conversion step is a simple, one-stage process that adds very little value to the vanadium pentoxide. To fuel this duty-evasion scheme, imports of vanadium pentoxide from Russia have surged -- increasing from zero in 2004 to 2,680 MT in 2010.

This flow of ferrovanadium into the U.S. market is inflicting exactly the same type of harm on the domestic ferrovanadium industry that the antidumping order is intended to prevent -- price depression, underselling, lost sales and lost market share. Even though AMG Vanadium is a highly competitive, technologically advanced company, its continued viability and its workers' jobs depend on maintaining effective relief from unfairly traded imports.

We believe this situation squarely fits the statutory criteria for taking action against circumvention. We urge you to enforce the statute rigorously and ask that you keep us informed regarding the progress of the circumvention inquiry.

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