Council Regulation (EC) No 1212/2005 of 25 July 2005 imposing a definitive anti-dumping duty on imports of certain castings originating in the People's Republic of China

• (121) In this respect, it should be firstly noted that the investigation did not show a growing demand but rather a stable consumption against steadily increasing imports throughout the period under examination. Regarding the impact of the telecommunications market in 2002, this was not reflected in the Chinese imports of the product concerned which continued steadily growing at dumped prices. Furthermore, the claim was not substantiated with evidence. Finally, the investigation showed that the Community industry suffered material injury over the period under examination. On this basis, the above arguments were rejected.

Effects of other factors

Imports from other third countries

• (122) Import volumes from other third countries decreased from 70 600 tonnes in 2000 to 49 000 tonnes in the IP, their market share decreased from 12 % in 2000 to 8,5 % in the IP. Most of these imports originated in Poland, the Czech Republic and India. However, on the basis of Eurostat data, the average prices of castings imported from third countries were on average considerably higher than the corresponding prices of dumped imports originating in the PRC (from 12 % difference in 2000 they reached a 55 % difference in the IP). Moreover, on average, the prices from other countries increased by 16 percentage points over the period under examination. Therefore, these imports cannot have caused injury to the Community industry.

Performance of other Community producers

• (123) As regards the production and sales volumes of the other Community producers, they held a market share of around 18,5 % during the IP. During the period under examination, their sales have decreased steeply in terms of volume (21 %) and they have lost considerable market share (4,9 percentage points). No indication was found that the prices of other Community producers were lower than those of the cooperating Community industry. Therefore, it can be reasonably concluded that the products produced and sold by the other Community producers have not caused material injury to the Community industry.

• (124) No other factors, which could at the same time cause injury to the Community industry, were raised by interested parties or identified during the course of the investigation.

Conclusion on causation

• (125) The vulnerable situation of the Community industry coincided with a sharp increase in imports from the PRC and a substantial price undercutting by these imports.

• (126) As to the imports from other third countries, in view of their declining market share over the period under examination and in view of the average prices which were found to be considerably higher than those of the dumped imports during the IP, it is concluded that these factors have not contributed to the injury suffered by the Community industry.

• (127) It is therefore concluded that the dumped imports originating in PRC have caused material injury to the Community industry within the meaning of Article 3(6) of the basic Regulation.

COMMUNITY INTEREST

• (128) In accordance with Article 21 of the basic Regulation, the Commission considered whether the imposition of the anti-dumping measures would be contrary to the interests of the Community as a whole. The determination of the Community interest was based on an examination of all the various interests involved, i.e. those of the Community industry, the importers and traders, and the users of the product concerned.

• (129) In order to assess the Community interest, the Commission carried out an investigation into the likely effects of the imposition/non-imposition of anti-dumping measures on the economic operators concerned. In addition to the Community producers and importers, the Commission requested information from all interested parties known to be concerned such as users and consumers associations.

Interest of the Community industry

• (130) The Community industry is composed of large as well as small and medium-sized companies.

• (131) The imposition of measures is expected to prevent a further distortion of the market and a deterioration of prices. This would enable the Community industry to recover lost market share, while still selling at cost covering prices, which again will lead to lower unit costs due to higher productivity. In conclusion, it is expected that mainly the decrease in unit costs (due to a higher capacity utilisation and subsequently the higher productivity) and to a certain extent a slight price increase, will allow the Community industry to improve its financial situation, without distorting the consumers market.

• (132) On the other hand, should anti-dumping measures not be imposed, it is likely that the negative trend of the financial situation of the Community industry will continue. The situation of the Community industry is particularly marked in the IP by a loss of revenue due to depressed prices and further decreasing market share. Indeed, in view of the decreasing revenue, it is most likely that the financial situation of the Community industry will deteriorate further in the absence of any measures. This would ultimately lead to cuts in production and more closures of production sites, which would therefore threaten employment and investments in the Community.

• (133) Accordingly, it is concluded that the imposition of anti-dumping measures would allow the Community industry to recover from the injurious dumping.

Interest of unrelated importers/traders in the Community

• (134) As mentioned in recital (11), 15 companies provided the information requested in the notice of initiation for selecting a sample within the time-limit set for this purpose. From these companies, a representative sample of four importers was selected. Questionnaires were sent to all four companies.

• —sampled unrelated importers/traders in the Community

• (135) Out of the four sampled companies, one did not reply to the questionnaire and was therefore excluded from the proceeding. All other selected companies provided full and complete questionnaire replies. These companies accounted for 19 % of total imports of castings in volume originating in the PRC during the IP.

• (136) A certain number of cooperating importers claimed that one sampled importer should not have been selected as it is a subsidiary of another company, which is allegedly the largest individual customer of a complainant company, and a supplier of that complainant company. This alleged relationship was claimed to be sufficient to exclude this importer from the sample as it constitutes a conflict of interest. In this respect, it should be noted that the alleged relationship between that importer and the complainant company does not go beyond that of a commercial relationship between independent economic operators and as such could not justify a conflict of interest. Furthermore, the claim was not substantiated. This argument was therefore rejected.

• (137) They further argued that the imposition of measures would most likely have an impact on employment in the Community user industry and the importers. It was alleged that, since the latter have no margin to absorb any duty, they would be immediately forced out of business causing them to lay off their personnel at once. In addition, it was argued that there is a substantial increase in demand in the Community, especially account being taken of the 10 new Member States which in a process of rapid development will further boost it. In this context, the imposition of duties could also lead to a shortage in supplies on the European market and, consequently, a major price increase. Furthermore, the Community producers would then be free to control the market in the absence of any significant competition.

• (138) In respect of the negative impact of measures on employment in the Community user industry and the importers, this was not substantiated. Regarding the negative impact for users in the Community, as stated below (140), no user or user association made itself known in the framework of the proceeding. Regarding the negative impact on importers, contrary to the allegations, the strong position established by them in the Community market reflects their healthy and steadfast situation rather than a frail state. Furthermore, it should be noted that the absorption of the duty would render void the very purpose of its imposition, which is to restore a fair playing field in the market found to be distorted from uncompetitive behaviour of operators having adopted dumping practices. As for the alleged shortage in supplies due to the increased demand of the 10 new Member States, it should be firstly noted that the Community industry does not produce at full capacity and therefore any shortage could be covered by increasing its capacity utilisation and reducing stocks. In addition, existing production in certain new Member States together with imports from third countries will continue to supply the market at reasonable prices contributing to a transparent and competitive environment.

• (139) Therefore, it can be concluded that the likely effects of the imposition of anti-dumping measures on unrelated importers/traders would not be significant.

Interest of users and consumers

• (140) No user or consumer associations made themselves known within the time-limit set in the notice of initiation. Given the non-cooperation of these parties, it can be concluded that the imposition of any anti-dumping measure would not unduly affect their situation.

Competition and trade distorting effects

• (141) With respect to the effects of possible measures on competition in the Community, it appears likely that the exporting producers concerned will be able to continue to sell castings, albeit at non-injurious prices, as they have a strong market position. This taken with the large number of producers in the Community and imports from other third countries will ensure that users and retailers will continue to have a wide choice of different suppliers of castings at reasonable prices. A certain number of cooperating importers argued that the Community industry is not competitive and that it is characterised by the presence of local and regional markets which are dominated by monopolies/duopolies. They further submitted that one of the Community cooperating producers had been condemned in the past for an abuse of dominant position to impede the access of the product concerned to the French market.

• (142) In this respect, it should be firstly noted that the argument concerning the alleged presence of local and regional markets, dominated by monopolies/duopolies, was not substantiated by any evidence and was therefore rejected. Concerning the decision on the abuse of dominant position, it refers to a situation in the past, fully outside the period under examination and to product outside the product scope of this investigation. In addition, a subsequent relevant decision within the period under examination on a complaint lodged by an importer against the same producer regarding its anti-competitive behaviour on the French market did not condemn the producer and the procedure was terminated. On this basis, the above argument was rejected.

• (143) Thus, there will be an important number of actors in the market, which will be able to satisfy the demand. On the basis of the above, it is therefore concluded that competition will most likely remain strong after the imposition of anti-dumping measures.

Conclusion on Community interest

• (144) In the light of the above, it is concluded that no compelling reasons exist against imposing measures in the present case and that the application of measures would be in the interest of the Community.

DEFINITIVE ANTI-DUMPING MEASURESInjury elimination level

• (145) In view of the conclusions reached with regard to dumping, resulting injury, causation and Community interest, measures should be taken in order to prevent further injury being caused to the Community industry by the dumped imports.

• (146) For this purpose, first the import prices were compared with the Community industry's prices without making an adjustment for an adequate profit margin. The comparison was made with regard to comparable product types. The difference was expressed as a percentage of the corresponding export turnover. This analysis showed for all exporting producers' margins which were already above their dumping margins. Thus, in order to apply the lesser-duty-rule, it was not considered necessary to determine a profit margin which the Community industry could have achieved in the absence of dumped imports, as the corresponding injury margin would have been higher than the dumping margin.

• (147) In the light of the foregoing, it is considered that, in accordance with Article 7(2) of the basic Regulation, definitive anti-dumping duties should be imposed in respect of imports of castings originating in the PRC at the level of the dumping margins found as these would, in all cases, be lower than the injury margins.

• (148) The individual anti-dumping duty rate for the companies granted market economy status specified in this Regulation was established on the basis of the findings of the present investigation. Therefore, it reflects the situation found during that investigation with respect to these companies. These duty rates (as opposed to the countrywide duty applicable to ‘all other companies’) are thus exclusively applicable to imports of products originating in the PRC and produced by these companies and thus by the specific legal entities mentioned. Imported products produced by any other company not specifically mentioned in the operative part of this Regulation with its name and address, including entities related to this specifically mentioned, cannot benefit from this rate and shall be subject to the countrywide duty.

• (149) Any claim requesting the application of an individual company anti-dumping duty rate (e.g. following a change in the name of the entity or following the setting up of new production or sales entities) should be addressed to the Commission forthwith with all relevant information, in particular any modification in the company's activities linked to production, domestic and export sales associated with, for example, that name change or that change in the production and sales entities. If appropriate, the Regulation will accordingly be amended by updating the list of companies benefiting from individual duties.

• (150) In view of the findings above, the anti-dumping duty rates are as follows:

• (151) All parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of definitive anti-dumping duties. They were also granted a period within which they could make representations subsequent to this disclosure. The oral and written comments submitted by the parties were duly considered, and, where appropriate, the findings have been modified accordingly. All parties were given detail responses to the comments they have submitted.

FORM OF MEASURES

• (152) Four exporting producers having obtained individual treatment indicated that would offer a price undertaking but failed to submit a sufficiently substantiated undertaking offer within the deadlines set in Article 8(2) of the basic Regulation. Consequently no undertaking offers could be accepted by the Commission. Nevertheless, the Council in view of the complexity of the issue for the economic operators in question (predominantly small and medium-sized enterprises) and given that the definitive disclosure was not preceded by a provisional disclosure, considers that they should exceptionally be allowed to complete their undertaking offers beyond the above-mentioned deadline.

• (153) The Chinese authorities also requested that consideration be given to finding a comparable solution for the numerous cooperating Chinese exporting producers concerned by the proceeding, as for the four exporting producers mentioned in the previous recital. Should it be found, following discussion to that end, that a change in the form of the measures other than the acceptance of undertakings, is appropriate an interim review will be carried out as expeditiously as possible,

HAS ADOPTED THIS REGULATION:

Article 1

• —it did not export to the Community the product described in paragraph 1 during the investigation period (1 April 2003 to 31 March 2004),

• —it is not related to any of the exporters or producers in the People’s Republic of China which are subject to the anti-dumping measures imposed by this Regulation,

• —it has actually exported to the Community the product concerned after the investigation period on which the measures are based, or it has entered into an irrevocable contractual obligation to export a significant quantity to the Community,

• —it operates under market economy conditions defined in Article 2(7)(c) of the basic Regulation or alternatively that it fulfils the requirements to have an individual duty in accordance with Article 9(5) of the basic Regulation,

the Council, acting by simple majority on a proposal submitted by the Commission after consulting the Advisory Committee, may amend paragraph 2 by adding the new exporting producer (i) to the companies subject to the duty rate of 0 % applicable to companies to whom market economy treatment was granted in accordance with Article 2(7)(c) of the basic Regulation or (ii) to the companies subject to the weighted average duty rate of 28,6 % applicable to companies to whom individual treatment was granted in accordance with Article 9(5) of the basic Regulation respectively.

Article 2

• —they are manufactured, shipped and invoiced directly by the said companies to the first independent customer in the Community, and

• —such imports are accompanied by a valid undertaking invoice. An undertaking invoice is a commercial invoice containing at least the elements and the declaration stipulated in the Annex, and

• —the goods declared and presented to customs correspond precisely to the description on the undertaking invoice.

Article  3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX

The following elements shall be indicated in the commercial invoice accompanying the company's sales of certain castings to the Community which are subject to an undertaking.

• 1.The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’.

• 2.The name of the company mentioned in Article 1 of the Commission Decision 2006/109/EC accepting the undertaking issuing the commercial invoice.

• 3.The commercial invoice number.

• 4.The date of issue of the commercial invoice.

• 5.The TARIC additional code under which the goods on the invoice are to be customs cleared at the Community frontier.

• 6.The exact description of the goods, including: —product code number (PCN) used for the purposes of the investigation and the undertaking (e.g. PCN 1, PCN 2, etc.), —plain language description of the goods corresponding to the PCN concerned, —company product code (CPC) (if applicable), —CN code, —quantity (to be given in tonnes).

• 7.The description of the terms of the sale, including: —price per tonne, —the applicable payment terms, —the applicable delivery terms, —total discounts and rebates.

• 8.Name of the company acting as an importer in the Community to which the commercial invoice accompanying goods subject to an undertaking is issued directly by the company.

• 9.The name of the official of the company that has issued the invoice and the following signed declaration: ‘I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by this invoice is being made within the scope and under the terms of the undertaking offered by (COMPANY), and accepted by the European Commission through Decision 2006/109/EC, I declare that the information provided in this invoice is complete and correct.’

[^E0001]: OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 461/2004, OJ L 77, 13.3.2004, p. 12.

[^E0002]: OJ C 104, 30.4.2004, p. 62.

[^E0003]: OJ L 47, 17.2.2006, p. 59.

[^E0004]: OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Regulation (EC) No 648/2005 of the European Parliament and of the Council (OJ L 117, 4.5.2005, p. 13).