Commission Implementing Regulation (EU) 2022/927 of 15 June 2022 imposing a definitive countervailing duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) originating in India following an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 of the European Parliament and of the Council

(251) The Commission noted that the information necessary to establish the existence of a price undercutting was provided to the party. Regarding the review investigation period, the findings with regard to price undercutting were set out in recitals (193) and (194) above. For the years 2017, 2018 and 2019, recital (191) provided the unit prices for Indian imports and recital (222) the weighted average unit sales prices of the sampled Union producers to unrelated customers. Therefore, the party had all the information, on the basis of which the Commission concluded the existence of undercutting. Therefore, the claim was rejected.

(252) Finally, the party claimed that the import volumes decreased between 2019 and the review investigation period. Therefore, the party concluded that there was no volume effect.

(253) The Commission observed that the imports from India in the review investigation period moved back to the levels of 2017. Moreover, the main impact of the imports from India was found at the level of the low prices, which resulted in significant pressure on the Union market prices. Therefore, the claim was rejected.

(254) The volumes imported from other third countries represented only between 2 %- 4 % of the market share in the review investigation period. As shown in the table 4, during the review investigation period, the average import price from third countries was 50 % higher than the average import price from India.

(255) As indicated in recital (42), one party claimed that general competitiveness issues should justify a finding of discontinuation or non-recurrence of injury. The party listed various factors, such as the decrease of the Union consumption of ductile pipes that fell since the Euro crisis which resulted in a decrease of public spending, difficulties in attracting staff, the maintenance of the dominant position, the pressure of cheaper Chinese imports on the bidding process for public procurement. Moreover, the party claimed that the plastic pipes are the first competitor of the Union industry as they are less expensive and thus attract a significant part of public tenders.

(256) Contrary to the party’s claim, the Union consumption and the market share of the Union industry increased, while employment remained stable during the period considered. Moreover, there is no evidence that the plastic pipes gained market shares during the period considered against ductile pipes. It should be also noted that plastic pipes are not in competition for the large pipe diameters. Consequently, these factors did not contribute to the injury found. In addition, Chinese imports were made at significantly higher prices than Indian imports, and in far lower volumes. Finally, the party failed to specify how the dominant position, if any, could have caused injury. Therefore, these claims were rejected.

(258) During the period considered, the volumes dropped by half. Although the prices of the exports increased by 17 %, this was not sufficient to cover the costs of production over the entire period considered as illustrated in table 8 above. Therefore, the exports did not attenuate the causal link between the exports subsidized from India and the injury found.

(259) Possible other factors, such as the COVID-19 crisis, were also examined, but none of them could attenuate the causal link between the subsidised imports and the material injury suffered by the Union industry. The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the subsidised imports.

(260) Following final disclosure, Tata Metaliks Limited claimed that the COVID-19 crisis impacted negatively the economic situation of the Union industry in the first semester of 2020. The party stated that the initial lockdowns imposed for public health measures forced many construction projects to a halt.

(261) As described above, the Union market for ductile pipes during the review investigation period was not significantly impacted by the lockdowns due to COVID-19 crisis. The total Union consumption of that year was similar to the year 2018. Therefore, the claim was rejected.

(262) In light of the above considerations, the Commission concluded that the subsidised imports from India caused material injury to the Union industry and that other factors, considered individually or collectively, did not attenuate the causal link between the subsidised imports and the material injury. The injury is clear in particular in the evolution of production, capacity utilisation, sales volume in the Union market, market share, productivity, profitability and return on investments.

(263) The Commission concluded in recital (242) that the Union industry suffered material injury during the review investigation period. Therefore, the Commission assessed, in accordance with Article 18(2) of the basic Regulation, whether there would be a likelihood of continuation of injury caused by the subsidized imports from India if the measures were allowed to lapse.

(264) In this respect the following elements were analysed by the Commission: the production capacity and spare capacity in India, relationship between prices in the Union and the Indian prices; the attractiveness of the Union market and the impact of potential imports from India on the Union industry’s situation should the measures lapse.

(265) As already described in recitals (168) to (172), the spare capacity available in India represented around 500 000 tonnes yearly, which exceeds the consumption of the product concerned on the Union market, which amounted in the review investigation period to [388 000 to 454 000] tonnes. Moreover, Indian producers planned to invest in new production capacity. Thus, for the next years there will be an excess of the supply over demand on the Indian market. Consequently, this will represent further incentive of the Indian producers to focus more and more on export markets.

(266) The available and future spare capacity of the Indian exporting producers could be used to produce the product concerned to export to the Union market if measures were allowed to lapse.

(267) Following final disclosure, Tata Metaliks Limited claimed that there was no evidence that the alleged spare production capacity in India will be necessarily used for production of ductile pipes and exported as a result of excess of supply over demand in India. Moreover, the Commission did not examine the attractiveness of other export markets and did not analyse any post review investigation period data. Finally, the party claimed that the any determination regarding likelihood of continuation of subsidy and injury has to be based on positive evidence (35). Therefore, the party concluded that the conclusion on likelihood was incorrect.

(268) The Commission observed that the party confirmed the existence of spare capacity in India. In addition, as explained in recitals (168) to (172) above, the Commission established the spare capacity in question specifically for the product concerned. Also, as explained in the same recitals, the Commission established that in the long run the demand on the Indian market will subside while the party itself acknowledged that it had plans to expand its sales to the Union market. Furthermore, as described below in Section 6.2, the Union market was considered attractive for Indian producers, and it could, therefore, be concluded that available spare capacities in India would, at least partially, be used to increase exports to the Union market. Therefore, the claim was rejected.

(269) Regarding the positive evidence required under the case-law mentioned, the Commission considered that it complied with all requirements of the existing jurisprudence and its assessment and conclusion of the likelihood of continuation of subsidisation and injury were based on positive evidence, collected during the investigation. Consequently, the claim was rejected.

(270) In view of the above, the Commission concluded that the expiry of the measures would in all likelihood result in a significant increase of subsidized imports from India at prices undercutting the Union industry prices, and therefore further aggravating the injury suffered by the Union industry. As a consequence, the viability of the Union industry would be at serious risk.

(271) The Union market is attractive in terms of its size and prices. As mentioned in recital (176), it is by far the most important export market for Indian producers of ductile pipes, accounting for 40 % of their total exports. Exports to the Union are 25 times higher than exports to its second largest export market, which is Qatar accounting for 2 % of Indian exports of ductile pipes. Also, Indian import prices to the Union market were slightly higher than those other countries during the review investigation period.

(272) Despite the existing measures, Indian exporting producers sold to the Union a substantial volume of ductile pipes during the period considered and still had considerable market share during the review investigation period ([10 – 14] %). These were sold at a price which, even including the countervailing duties, significantly undercut the Union industry sales prices on the Union market.

(273) The Union market is hence considered attractive for Indian producers, and it can be concluded that available spare capacities in India would, at least partially, be used to increase exports to the Union market. In this respect, it is recalled that the market share of India imports was at high levels [17 – 19] % in the investigation period of the original investigation, i.e. prior to the imposition of countervailing duties.

(274) On this basis, and noting the past and current injurious situation of the Union industry, the absence of measures would in all likelihood result in a significant increase of subsidized imports from India of the product concerned at injurious prices, leading to even higher losses for the Union producers. Therefore, the Commission concluded that, should the measures be allowed to lapse, this would in all likelihood result in a significant increase of subsidised imports from India at injurious prices and material injury would be likely to continue.

(275) In accordance with Article 31 of the basic Regulation, the Commission examined whether maintaining the existing anti-subsidy measures would be against the interest of the Union as whole. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, users and the public policy interests with respect to the product concerned as embodied in the Directive 2009/125/EC of the European Parliament and of the Council (36) (‘EcoDesign Directive’) and its product-specific Regulations. In line with the third sentence of Article 31(1) of the basic Regulation, special consideration was given to the need to protect the industry from the negative effects of injurious subsidization.

(276) All interested parties were given the opportunity to make their view known pursuant to Article 31(2) of the basic Regulation.

(277) The Union industry is located in three Member States (France, Germany and Spain), and employs directly over 2 200 employees in relation to the product concerned.

(278) The anti-subsidy measures in force did not prevent subsidised imports from India from entering the Union market and the Union industry suffered material injury during the review investigation period.

(279) On the basis of the above, the Commission established that there is a strong likelihood of continuation of injury caused by imports from this country should the measures expire. The influx of substantial volumes of subsidized imports from India would cause further injury to the Union industry.

(280) Following final disclosure, Tata Metaliks Limited claimed the Union industry has been protected for over six years while having a market share of 85 %. Thus, it is unlikely for the Union industry to be impacted if the existing measures are repealed. In the event the Union it is, it may request the Commission to start a new investigation.

(281) Contrary to the claim made by the interested party, the Commission established that the Union industry is still suffering from material injury caused by the subsidised imports from India, based on the analysis of all relevant injury indicators including the development of Union Industry’s market share. The Commission concluded that the injury is likely to continue and deteriorate should the measures be allowed to lapse. Consequently, the claim was rejected.

(282) The Commission thus concluded that the maintenance of the anti-subsidy measures against India is in the interest of the Union industry.

(283) The Commission contacted all known unrelated importers, traders and users. None of them replied to the Commission’s questionnaire.

(284) The Commission did not receive any comments indicating that the maintenance of the measures would have a significant negative impact on the importers and users, outweighing the positive impact of the measures on the Union industry.

(285) On the basis of the above, the Commission concluded that there were no compelling reasons of the Union interest against the maintenance of the existing measures on imports of the product concerned originating in India.

(286) On the basis of the conclusions reached by the Commission on continuation of subsidy, continuation of injury and Union interest, the anti-subsidy measures on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) from India should be maintained.

(287) After disclosure, Tata Metaliks Limited argued that a continuation of the measures should be considered as an exception and not the norm. It referred in particular to Article 18(1) of the basic Regulation and Article 21.3 of the ASCM Agreement, which state that a measure shall only remain in force as long as it is necessary and shall expire upon five years from its imposition. Since the duties have been extended pending this review, it argued that by the time this review would likely conclude, the duties would already have been in force for more than seven years. For this reason, it requested the Commission to terminate the investigation.

(288) The Commission recalled that the decision to continue the measures was based on a thorough assessment of all the facts found during the expiry review investigation in accordance with Article 18(2) of the basic Regulation. Therefore the continuation of the measures was neither automatic nor constituted a ‘norm’. It thus rejected the claim that the measures should be terminated.

(289) To minimise the risks of circumvention due to the high difference in duty rates, special measures are needed to ensure the application of the individual countervailing duties. The companies with individual countervailing duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the countervailing duty applicable to ‘all other companies’.

(290) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of countervailing duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(291) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 23(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a countrywide duty.

(292) The individual company countervailing duty rates specified in this Regulation are exclusively applicable to imports of the product concerned originating in India and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual countervailing duty rates.

(293) After disclosure, Tata Metaliks Limited requested the Commission to assign it an individual countervailing margin. In the alternative, it considered the Commission should at least consider extending the individual countervailing rates assigned to the other cooperative producers of the product concerned from India in the original investigation to it in light of its cooperation with the Commission in this expiry review investigation.

(294) The Commission recalled that the objective of an expiry review investigation under Article 18(2) of the basic Regulation is solely to determine whether the existing measures are still necessary and does not allow for establishing individual duty rates for companies that did not cooperate in the original investigation. Such claims can only be addressed under review investigations pursuant to Article 19(3) or 19(4) of the basic Regulation. The request was therefore rejected.

(295) A company may request the application of these individual countervailing duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission (37). The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

(296) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (38) when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

(297) The measures provided for in this regulation are in accordance with the opinion of the Committee established by Article 15(1) Regulation (EU) 2016/1036,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

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.

Done at Brussels, 15 June 2022.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 55.

(2) Commission Implementing Regulation (EU) 2016/387 of 17 March 2016 imposing a definitive countervailing duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron), originating in India (OJ L 73, 18.3.2016, p. 1).

(3) Commission Implementing Regulation (EU) 2016/388 of 17 March 2016 imposing a definitive anti-dumping duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) originating in India (OJ L 73, 18.3.2016, p. 53).

(4) Judgment of the General Court of 10 April 2019, Jindal Saw Ltd and Jindal Saw Italia SpA v European Commission, T-301/16, ECLI:EU:T:2019:234 and T-300/16, ECLI:EU:T:2019:235.

(5) Commission Implementing Regulation (EU) 2020/526 of 15 April 2020 re-imposing a definitive countervailing duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) originating in India as regards Jindal Saw Limited following the judgment of the General Court in T-300/16 (OJ L 118, 16.4.2020, p. 1).

(6) Commission Implementing Regulation (EU) 2020/527 of 15 April 2020 re-imposing a definitive anti-dumping duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) originating in India as regards Jindal Saw Limited following the judgment of the General Court in T-301/16 (OJ L 118, 16.4.2020, p. 14).

(7) Notice of the impending expiry of certain anti-subsidy measures, OJ C 210, 24.6.2020, p. 28.

(8) Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ L 176, 30.6.2016, p. 21).

(9) Notice of Initiation of an expiry review of the anti-subsidy measures applicable to imports of tubes and pipes of ductile cast iron originating in India (OJ C 90, 17.3.2021, p. 8).

(10) Notice of Initiation of an expiry review of the anti-dumping measures applicable to imports of tubes and pipes of ductile cast iron originating in India (OJ C 90, 17.3.2021, p. 19).

(11) https://trade.ec.europa.eu/tdi/case_details.cfm?ref=ong&id=2521&sta=1&en=20&page=1&c_order=date&c_order_dir=Down.

(12) Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (OJ C 86, 16.3.2020, p. 6).

(13) OJ C 210, 24.6.2020, p. 28.

(14) Commission Implementing Regulation (EU) 2020/1336 of 25 September 2020 imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols originating in the People’s Republic of China (OJ L 315, 29.9.2020, p. 1), recitals (442) and (460-471).

(15) 1 October 2013 to 30 September 2014.

(16) The figures in the original investigation were shown in ranges or indexes because of confidentiality.

(17) The exported quantities represented in the review investigation period less than 0,1 % in terms of turnover of the product concerned.

(18) Commission Implementing Regulation (EU) 2022/433 of 15 March 2022, imposing definitive countervailing duties on imports of stainless steel cold-rolled flat products originating in India and Indonesia and amending Implementing Regulation (EU) 2021/2012 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of stainless steel cold-rolled flat products originating in India and Indonesia (OJ L 88, 16.3.2022, p. 24), recitals (190)-(205).

(19) RoDtep Scheme guidelines: https://fieo.org/uploads/files/file/Notification%20No_%2019%20English.pdf and https://commerce.gov.in/press-releases/centre-notifies-rodtep-scheme-guidelines-and-rates/

(20) https://www.livemint.com/industry/govt-should-include-iron-and-steel-in-rodtep-to-make-exports-competitive-eepc-11640938763351.html

(21) The original regulation, recitals (131) – (278).

(22) Website of Indian Railways, https://indianrailways.gov.in/railwayboard/uploads/directorate/traffic_tran/downloads/2021/Policy-Iron-Ore-Traffic-220121.pdf.

(23) See National Steel Policy 2017, Annex 9 of the Review request.

(24) See National Steel Policy 2017, Annex 9 of the Review request, p. 24.

(25) See National Steel Policy 2017, Annex 9 of the Review request, p. 20.

(26) See National Steel Policy 2017, Annex 9 of the Review request, p. 22.

(27) See National Steel Policy 2017, Annex 9 of the Review request, p. 29.

(28) See Foreign Trade Policy 2015-2020, p. 43-44, Annex 9 of the Review request.

(29) See 2019 National Mineral Policy, p. 9, Annex 9 of the Review Request.

(30) The relevant circular is published on the website of Indian Railways, https://indianrailways.gov.in/railwayboard/uploads/directorate/traffic_comm/Freight_Rate_2016/RC_16_16.pdf.

https://www.tatametaliks.com/tata-metalik-ir-20-21/focus-on-downstream.html#:~:text=Tata%20Metaliks%20had%20foreseen%20the,in%20H1%20FY%202022%2D23.

(31) The intention to invest in capacity increase were made public by the major producers of the product concerned in India such as Vedanda.

(32) Review request, Annex 17.

(33) Review request, Annex 17.

(34) Review request, Section 5.1.6.

(35) United States – Sunset reviews of Anti-dumping Measures on Oil Country Tubular Goods From Argentina (WT/DS/268/AB/R).

(36) Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of Ecodesign requirements for energy-related products (OJ L 285, 31.10.2009, p. 10). The EcoDesign Directive is implemented through product-specific Regulations directly applicable in all Union countries. The EcoDesign Regulation covers the new EcoDesign requirements with regard to small, medium and large power transformers. Tier 1 of the EcoDesign Regulation entered into force on 1 July 2015, and Tier 2 on 1 July 2021. The Tier 2 requirements are more stringent than those for Tier 1. Although the full effects cannot yet be assessed on such a short period of time since the entry into force of Tier 2, it is generally believed that these Tier 2 requirements will require the highest quality types of GOES to design and manufacture transformers in a cost-efficient manner and within the required space limitations.

(37) European Commission, Directorate-General for Trade, Directorate G, Rue de la Loi 170, 1040 Brussels, Belgium.

(38) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).