Commission Implementing Regulation (EU) 2023/934 of 11 May 2023 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) and a partial interim review pursuant to Article 11(3) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

(239) Concerning the proposal to extend the measures to the HTYP incorporated in the downstream products, the Commission noted that contrary to the steel wind towers case, the products to which the duties would be extended were not included in the product scope of the investigation. Indeed, the definition of the product concerned in the steel wind towers case already included the towers imported as part of a wind turbine: “The product concerned is certain utility scale wind towers of steel, […], currently falling under CN codes ex 7308 20 00 (TARIC code 7308200011), and ex 7308 90 98 (TARIC code 7308909811) and, when imported as part of a wind turbine , currently falling under CN codes ex 8502 31 00, …” The Commission cannot in principle impose duties on a product that was not within the scope of the investigation. In this case particularly, the Commission considered that the multitude of possible transformations covered within the suggested CN codes would expand the application of the duties beyond the scope of the investigation.

(240) Therefore, the Commission found that the request of the users would have expanded the scope of the investigation beyond the application. The request was thus rejected.

(241) Consequently, the Commission confirmed its initial position on the revised duty level.

(242) The users have also pointed out a lack of capacity of the Union producers. The Union consumption of HTYP was 230 000 tonnes in the RIP, 73 % higher than the production capacity of the Union industry, which amounts only to 134 ktonnes. This demonstrates the overall need for imports.

(243) Furthermore, following the RIP, in 2022 several Union producers have temporarily reduced or fully stopped their production as a reaction to the increase in energy prices in Europe. However, this was only a temporary measure and it is not visible that this will lead to a long-term reduction of the production volume of the Union producers.

(244) All cooperating users have argued that for their segment, only one Union producer provides the quality of HTYP used within their products, whereas other Union producers are to a large extent focused on supplying the tire industry or are integrated competitors. The users have further argued that other third countries either produce expensive specialised grades, like South Korea, or do not offer sufficient capacity or quality, with the exception of Vietnam.

(245) Exports from Vietnam during the RIP had a 5 % Union market share. However, Vietnamese exports only amounted to 12 000 tonnes and cover only a fraction of the needed imports to satisfy the demand on the Union market. The Commission therefore noted that imports from China are generally needed to ensure the supply stability on the Union Market.

(246) The Commission, however, concluded in the previous section that the revised duties ranging from 9,7 % to 23,7 %, will not have a prohibitive effect to continue to source from China especially in view of the fact that the users still have the choice of an exporting producer at the lower end of the duties. Consequently, the supply stability will not be endangered by the prolongation of the duties at the revised duty level.

(247) Therefore, the Commission concluded that the interest of the users for supply stability does not lead to a compelling reason against the continuation of the measures.

(248) Several users and the integrated producer emphasized the importance of the HTYP weaving and coating industry for the job market and the fact that the increased duties on HTYP may lead to a transfer of production capacities outside of the EU. The integrated producer argued that the workforce in the EU involved in the production of downstream products made out of HTYP consists of around 100 000 skilled workers.

(249) The Commission recognized that the HTYP weaving and coating industry is an important employer for the EU job market. However, as stated in recitals (238) and (240), the users still have sourcing options at the lower range of the duties or from other third countries and the expected financial impact of the revised duties does not constitute a compelling reason for not imposing the duties. In addition, no concrete evidence was submitted to support these claims.

(250) The Commission therefore maintained its conclusions.

(251) On the basis of the above, the Commission concluded that there were no compelling reasons of the Union interest against the maintenance of the measures on imports of HTYP originating in China and their extension at the revised levels.

(252) Following the above comments of user, the user’s association and one integrated producer, the Commission confirmed its assessment.

(253) Two Chinese exporting producers, Unifull and OTIZ, have claimed that the conditions for the suspension of the measures according to Article 14(4) of Regulation (EU) 2016/1036 were met. The claim is based on the increase of Chinese import prices post-RIP, as well as the argument that the Union industry’s injury was caused by the energy crisis, the shortage of semiconductors for the automotive industry (leading to a fall in demand of HTYP products for the Union industry), and a decrease of international ocean freight costs.

(254) According to these two exporters, imports from China could help the EU downstream industry to overcome a current supply shortage and avoid the increase in the HTYP prices of Union producers post-RIP.

(255) According to Article 14(4) of the basic Regulation, measures may only be suspended where market conditions have temporarily changed to an extent that injury would be unlikely to resume as a result of the suspension and the suspension is in the Union Interest.

(256) It is correct that Chinese prices have increased post-RIP by 36 %. However, these increased Chinese prices are still at a level below the COP of the Union industry during the RIP. Therefore, the higher Chinese prices post-RIP have not led to a changed situation, in which injury is unlikely to resume. To the contrary, a suspension of the measures would lead to a situation in which the current injurious situation of the Union producers, on top of high energy prices, would be worse off by facing dumped prices from Chinese competitors. While it is in the interest of the users to get access to cheaper HTYP, Unifull and OTIZ have not detailed an overriding Union interest to suspend the measures. In any event, the interest of the users is analysed in detail below in section 3.10.

(257) Unifull and OTIZ also do not elaborate how the alleged decrease of international ocean freight cost relate to the Union industry’s injurious situation.

(258) The Commission therefore rejected this claim.

(259) On the basis of above, the Commission found that there was continuation of injurious dumping so that, it was in the Union interest to maintain the anti-dumping measures on imports of HTYP originating in China following an expiry review pursuant to Article 11(2) of the basic Regulation.

(260) In the Notice of Initiation of the partial interim review investigation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the applicant, the producers in China, the importers in the Union known to be concerned, and the Chinese authorities of the initiation of the partial interim review investigation and invited them to participate in the investigation.

(261) All interested parties had the opportunity to comment on the initiation of the partial interim review and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(262) In the Notice of Initiation, the Commission stated that it might sample interested parties, in accordance with Article 17 of the basic Regulation.

(263) In order to decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers in China and unrelated importers in the Union to provide the information specified in the respective Notice of Initiation. In addition, the Commission asked the Mission of China to the Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(264) One unrelated importer came forward as an interested party, but did not provide the requested sampling information. Eight exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of four companies pertaining to two corporate groups on the basis of the largest representative volume of exports to the Union that could reasonably be investigated within the time available. These companies represented over 70 % of the estimated total Union imports of the product under review subject to measures. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the country concerned were given the opportunity to comment on the selection of the sample. No comments were received.

(265) One exporting producer in China (Oriental Industries (Suzhou) Ltd, (‘OTIZ’)) requested an individual examination under Article 17(3) of the basic Regulation and submitted a questionnaire reply within the deadline set. It is noted that the interim review investigation was conducted in parallel with the expiry investigation and an investigation initiated on the basis of Article 5 of the basic Regulation. Given the added complexity of concurrent and distinct assessments in three HTYP investigations, the Commission considered that the examination of the request, also at definitive stage of the investigation would have been unduly burdensome and disproportionate and would prevent the proper completion of the investigation in good time. Therefore, no individual examination was granted to OTIZ.

(266) The Commission sent a questionnaire concerning the existence of significant distortions in China within the meaning of Article 2(6a)(b) of the basic Regulation to the GOC.

(267) The Commission sent questionnaires to the sampled exporting producers. The same questionnaires had also been made available online on the day of initiation.

(268) The Commission received questionnaire replies from three groups of exporting producers (from sampled exporting producers and from OTIZ).

(269) In view of the outbreak of Covid-19 and the confinement measures put in place by various third countries, the Commission could not carry out verification visits pursuant to Article (16) of the basic Regulation at the exporting producers’ premises.

(270) The Commission instead cross-checked remotely all the information deemed necessary for its determinations in line with its Notice on the consequences of the Covid-19 outbreak on anti-dumping and anti-subsidy investigations (90).

(272) As stated above in recital (253) two Chinese exporters, Unifull and OTIZ, claimed that the conditions to suspend the measures under Article 14(4) of Regulation (EU) 2016/1036 were met.

(273) The Commission rejected this claim also with regard to the Interim Review for the reasons explained in recitals (253) to (258).

(274) On 20 February 2023, the Commission disclosed the essential facts and considerations on the basis of which it intended to revise the level of anti-dumping duties. All parties were granted a period within which they could make comments on the disclosure.

(275) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. The parties who so requested were granted a hearing.

(276) As set out in Section 3.4.4.1 above, the Commission concluded that it was not appropriate to use domestic prices and costs in China to establish normal value with respect to the imports of HTYP from China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation.

(277) Consequently, the Commission proceeded in the partial interim review investigation to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation.

(278) As it follows from the analysis set out in Section 3.4.4.2, Türkiye met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country.

(279) In addition to the First Note (see recitals (39)-(40)), and after having analysed the comments received thereto, the Commission issued the Second note on the sources for the determination of the normal value on 30 November 2022 (the ‘Second Note’) (the First Note and Second Note are collectively referred to as the ‘Notes‘).

(280) In the Second Note, the Commission updated the list of factors of production and informed interested parties of its intention to use Türkiye as the representative country under Article 2(6a)(a), first indent of the basic Regulation. It also informed interested parties that it would establish selling, general and administrative costs and profits based on publicly available financial statements of an HTYP producer in Türkiye. Furthermore, an additional note with revised exchange rates for a number of benchmarks as well as including a more detailed disclosure of benchmark for labour cost calculation was issued and placed on the open file on 16 December 2022.

(281) The Commission invited interested parties to comment on the Notes. Comments were received from all sampled exporting producers as well as from the applicant (in support of Türkiye as the representative country) and a group of users (IVGT, Delcotex, Gleistein, Guth&Wolf, Heytex and Jakob Eschbach). The arguments of the parties are addressed in Section 4.5.3 below.

(282) Further to the establishment of existence of significant distortions in accordance with Article 2(6a) of the basic Regulation, outlined in Section 3.4.4.1 above, the following comments were received in the context of the partial interim review investigation and were addressed by the Commission as follows.

(283) In the course of the investigation, comments were received from the sampled exporting producers, OTIZ and a group of users.

(284) In their comments on the First Note, Guxiandao, apart from stating that the application of Article 2(6a) of the basic Regulation would be WTO incompatible, alleged that the analysis in the request pertaining to the existence of significant distortions – in China in general as well as concerning Guxiandao specifically – was flawed for the following reasons: (i) the interim review request’s allegations are general in nature – for example when referring to energy or labour costs – and they concern China or its chemical sector, rather than the HTYP market; the allegations also rely exclusively on the Report, rather than being based on positive evidence; (ii) the applicant, in assessing whether significant distortions exist, relies on supporting evidence that is either irrelevant – typically outdated – or factually wrong – quoting past distortive obligations which no longer exist under Chinese law; (iii) the raw materials PTA and MEG are two commodity goods traded globally and priced in a transparent manner and in line with international prices, for which reason the request’s claims about their prices being distorted in China is flawed; (iv) the applicant failed to provide any positive and concrete evidence as regard the factors listed in Article 2(6a)(b) of the basic Regulation and therefore no valid conclusion can be drawn concerning the existence of significant distortions.

(285) Similarly, Unifull and OTIZ expressed their opinion that Article 2(6a) of the basic Regulation is not compatible with Article 2.2 and 2.2.1.1 of the ADA and the WTO jurisprudence, as well as that there is lack of evidence with regard to the alleged significant distortions in relation to the Chinese HTYP industry. A group of users made a similar claim in support of the exporting producers.

(286) The arguments raised by the parties could not be accepted. At the outset, the Commission emphasized its position that the provisions of Article 2(6a) of the basic Regulation are fully consistent with the European Union’s WTO obligations. As to the arguments concerning the allegedly flawed significant distortions analysis in the interim review request, the Commission recalled, first of all, that Article 2(6a)(e) of the basic Regulation lays down an obligation to collect the data necessary for the application of this methodology when the investigation has been initiated on this basis. Consequently, far from drawing conclusions concerning the existence of significant distortions, the Commission merely deemed the evidence submitted by the applicant on the significant distortions sufficient to initiate the investigation. Moreover, the Commission pointed out that certain types of distortions present in China – such as distortion related to energy or labour – are cross-cutting, affecting the entire Chinese economy and therefore also prices and/or the raw materials and costs of production of the product under review. Further, concerning the claim that allegations in the interim review request rely exclusively on the Report and are at any rate based on outdated or inaccurate information, the Commission pointed out that the request may be striving to demonstrate the unchanged nature of the significant distortions by referring to policy documents of the 12th or 13th planning cycle. In addition, the Commission recalled that Article 2(6a)(d) of the basic Regulation explicitly provides the Union industry with the possibility to rely on the information contained in the Report when bringing a complaint or a review request. The Commission therefore considered that the evidence identified in the request and referred to in the respective Notice of Initiation was sufficient to warrant initiation of an investigation on the basis of Article 2(6a) of the basic Regulation. As to the claim that raw materials PTA and MEG are traded internationally and their prices in China are therefore not being distorted, this argument has to be dismissed (without prejudice for the assessment of a specific claim on undistorted nature of raw materials sourced from abroad, as outlined in recitals (309)-(310) for the reasons set out above, in particular in recitals (98)-(100).

(287) With respect to the choice of the representative country, a group of users suggested in response to the Second Note that Republic of Korea is the most appropriate representative country, given the level of economic development similar to China, production of HTYP, availability of relevant public data, and its adequate level of social and environmental protection.

(288) It is recalled that for the purpose of identifying countries with a level of economic development similar to China, the Commission considers on the basis of the database of the World Bank (91) only ‘upper-middle income’ countries on a gross national income basis. However, Republic of Korea has been classified, in and prior to RIP, as a ‘high income’ country by the World Bank and hence cannot be considered as a potential representative country.

(289) Guxiandao claimed in its response to the Notes that the GTA data concerning the main raw materials for HTYP production is inaccurate, when compared to the statistics from the official data portal of the Turkish Statistical Institute. The Commission noted that, the data reported in GTA system for Türkiye is based on the general trade view while the data that was gathered from the official Turkish statistics is based on a special trade view (which excludes goods that enter or exit a free trade zone or bonded warehouse). Hence the differences in figures are duly justified and cannot render the GTA data unreliable. Therefore, Guxiandao cannot validly claim that the GTA data are inaccurate and its argument has to be dismissed.

(290) Guxiandao further submitted in response to the Second Note that the prices for raw materials in Türkiye disclosed in Annex I (List of factors of production and their prices in Türkiye) are inconsistent with the prices disclosed for Türkiye in Annex II (Comparison of import statistics for potential representative countries). The Commission noted that the statistics in Annex II are only raw data for the purposes of comparison between different countries, aggregated at the common HS6 level without including the applicable customs duties for individual importing countries. The data in Annex I on the other hand outlines values at the level of Turkish national tariff codes and includes the customs duties as well. Therefore, the price levels in Annex I and Annex II are not intended to be identical and the argument of the party has to be dismissed as unfounded.

(291) Further to the final disclosure, Guxiandao claimed that no calculation worksheet was provided in relation to the adjustment for import duties in Annex I, which led to an inadequate disclosure by the Commission. It was observed by the Commission that the data including prices of factors of production in Türkiye has been generated automatically from GTA at the level of Turkish national tariff codes (including all conventional and preferential customs duties based on the Market Access Map database – MacMap), it was duly disclosed and was used in this case by the Commission without further modification. It was noted that no additional calculation worksheet or the like was produced by the Commission for this purpose. Hence, Guxiandao’s claim has to be dismissed

(292) Guxiandao claimed that Türkiye is not appropriate to be selected as a representative country. The company submitted that, first, the currency depreciation and high inflation led to abnormal market conditions in Türkiye which inevitably impacted the local costs and which in turn made Türkiye manifestly unsuitable as a representative country. Guxiandao reiterated its claim in response to the final disclosure, adding that local prices and/or import prices affected by significant local currency depreciation into Türkiye cannot reflect undistorted prices or benchmarks. Second, according to Guxiandao, Kordsa Türkiye cannot be considered a producer of HTYP destined to the open market, as its limited polyester yarn production capacity is mainly, if not exclusively, used for captive use in its own downstream tire cord fabric production. This view was supported also by a group of users claiming that Kordsa Türkiye uses HTYP mostly for its own production for pre-tire materials. Guxiandao claimed that HTYP is only marginal and subordinate business in support of cord fabric and that the biggest majority, if not all, of the external revenues in the segment “Industrial yarn and cord fabric” relate to revenue from sales of industrial fabrics and nylon yarn, and not of HTYP. Guxiandao reiterated this argument in its response to the final disclosure. The parties concluded that the financial result of the company is thus not representative of a HTYP producer and hence there is no financial information readily available for HTYP operation in Türkiye. Third, Guxiandao maintained in the Second Note that Kordsa Türkiye produces only one specific type of HTYP (high value-added HMLS for automotive use), which makes it unsuitable for representative country purpose, as the operational result from one single product type, is not representative of that concerning Chinese HTYP producers which produce a wide range of product types. In conclusion, Guxiandao submitted that the Commission should disregard the profit margin of Kordsa Türkiye and use a more reasonable profit margin representative of Chinese HTYP producers. Guxiandao maintained in its response to the final disclosure that the profit level of 15,3 % established by the Commission is excessively high for an HTYP producer and that a maximum of 6 % (equal to the target profit margin for sampled Union producers in the present case, established by applying Article 7(2c) of the basic Regulation) is thus a reasonable proxy for the undistorted and reasonable profit that an HTYP producer can normally achieve.

(293) The Commission observed that the choice of the representative country was based on the three criteria: level of economic development, production of the product concerned and availability of relevant public data. A potential impact of a devaluing currency or inflation level is not among those criteria. In any event, the submitting party has not demonstrated how the depreciation of the Turkish Lira and high inflation would actually have affected the prices of inputs sourced in Türkiye, and if so what the real impact on the normal value that is calculated in CNY would be. Moreover, the parties did not provide any information indicating that (and to what extent) Turkish lira would be used in import transactions for raw materials forming a basis for establishing the undistorted cost benchmarks in this case. In addition, when establishing benchmarks on the basis of import prices for the calculation of normal value under Article 2 (6a)(a) of the basic Regulation, the import values into the representative countries are ultimately converted into the currency of the exporting country, i.e. in this case CNY. Therefore, the Commission found that this claim was unsubstantiated and rejected it.

(294) Regarding Kordsa Türkiye’s product portfolio and source of revenues, the Commission noted that in the event when no financial information is readily available specifically and solely in relation to product concerned by investigation (in this case HTYP), which is rarely the case, the Commission seeks to identify the closest readily available proxy, including consolidated information of producer(s) active, among others in the business of the product concerned. In this case, as outlined in recital (111) approximately 86 % of Kordsa Türkiye’s external revenues in 2021 were generated in the segment covering HTYP. Furthermore, contrary to what the parties submit, Kordsa Türkiye does indeed generate external revenue by producing and selling also polyester yarn (92). In fact, Kordsa is “[o]ne of the leaders of the […] HMLS polyester yarn market”, with “a portfolio of yarns that are suitable for use in such applications as cord fabrics, heavy-duty textiles, industrial fabrics, chafer fabrics, single-end cords and ropes” (93), hence for use also in industries other than the automotive industry. This makes the parties’ argument on captive use of HTYP unfounded. Moreover, tire reinforcement is one of the main applications for HTYP and the Chinese HTYP producers, including Guxiandao also produce HMLS yarn and serve customers in the automotive industry. Hence it would be misleading to state that Kordsa Türkiye’s HTYP business is unrepresentative of the business activities of the Chinese HTYP producers. Lastly, the parties did not propose as an alternative to Kordsa Türkiye any other suitable HTYP producer with readily available financial data specifically and solely for HTYP, let alone a HTYP producer with wider HTYP portfolio than that of Kordsa Türkiye.

(295) In these circumstances, the consolidated SG&A and profit identified for Kordsa Türkiye are therefore deemed sufficiently representative and suitable to be applied for the purposes of the present investigation and the arguments of the parties have to be dismissed. It was further observed that, the target profit of 6 % proposed to be used by Guxiandao and the profit in the representative country refer to different concepts governed by different rules prescribed in different legal provisions. In particular, the target profit is the profit achieved by the Union industry for domestic sales in the Union under normal conditions of competition and it is used to calculate the injury margin under Article 9(4) of the basic Regulation. The profit in the representative country was used in the calculation of normal value by reference to the appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation. This profit must reflect the profit achieved by a company producing the product under investigation or a similar product, in a representative country. Since the concept of the target profit and of profit in a representative country are not comparable, the claim of Guxiandao was dismissed as irrelevant. Moreover, Guxiandao provided no evidence suggesting that the amount for profit included in the constructed normal value was not undistorted and reasonable within the meaning of Article 2(6a)(a).

(296) Guxiandao took the view that the Commission should select Brazil as the suitable representative country instead of Türkiye, given that financial data are readily available for Kordsa group company in Brazil and because Brazil had hardly any imports from China concerning the key inputs for production of the HTYP (PTA, MEG, PET chips) compared to Türkiye in 2021 and therefore is less likely affected by the alleged distortions. Guxiandao reiterated this argument in its response to the final disclosure, adding that if Kordsa Türkiye’s annual report for 2021 at company group consolidated level was acceptable as source for establishing the undistorted SG&A and profit in Türkiye, the same equally applied to Kordsa Brazil since the consolidated accounts also included the operational result of Kordsa Brazil.

(297) First, financial data for Kordsa Brazil is only available for 2019, while the period under review in the present case, which is of primary relevance, covers the year 2021. In addition, as outlined above, readily available and profitable data exist in relation to Kordsa Türkiye for 2021. While the financial statement of Kordsa Türkiye for 2021 used for the purposes of this case consolidated also the data of its subsidiaries, including Kordsa Brazil, it was evident that the profit and SG&A figures in the consolidated statement were more representative of Kordsa Türkiye’s operations rather than operations of Kordsa Brazil. This is because, the revenue generated by the Europe-Middle East-Africa geographical segment (covering solely operations in Turkey) was almost three times higher than the revenues generated by Kordsa Brazil (representing the South American segment) (94). In any event, Article 2(6a)(a) of the basic Regulation requires that the amount for administrative, selling and general costs and for profits included in the constructed normal value is undistorted and reasonable. Guxiandao adduced no evidence demonstrating that this is not the case. Second, while the proportion of undistorted import quantities on the total imports for PET chips, PTA and MEG into Türkiye was lower than that of the undistorted imports into Brazil, the total quantity of undistorted imports for each of these inputs into Türkiye was significantly higher than the total quantity of undistorted imports into Brazil. In fact, while Brazil may have sufficiently representative data on PET chips and MEG imports available, this does not apply to the PTA imports, which were insignificant compared to Türkiye and accounted only for around 7 % of the PTA imports into Türkiye. The argument submitted by Guxiandao therefore has to be rejected.

(298) Regarding the SG&A of Kordsa Türkiye, which is to be applied in the present case to construct the normal value for the exporting producers, Guxiandao submitted that to ensure fair comparison between the constructed normal value and the export price, the packaging expenses, which according to Guxiandao form part of the SG&A (based on the Note 21 to the Kordsa Türkiye financial statements) should be excluded.

(299) First, the Commission took the profit and loss statement and operating items listed therein as a basis for calculating the SG&A costs for Kordsa Türkiye. Note 21 to the financial statements, referred to by Guxiandao lists ‘Expenses by nature’, which evidently cover not only the operating expenses, but also the material costs, including packaging costs included in the cost of goods sold. Simple comparison of the total of operating expenses in the profit and loss statement and of the total of the expenses in Note 21 also shows that the latter amount is significantly higher. It would therefore be manifestly wrong to extrapolate from the mere reference to Note 21 in the profit and loss statement part listing operating items that all expenses outlined in Note 21 correspond to the operating expenses. In view of the above, the argument made by Guxiandao has to be rejected.

(300) Furthermore, a group of users urged the Commission to use Chinese exporting producers’ own SG&A and profit to calculate the normal value.

(301) The Commission noted that once the existence of significant distortions for the exporting country is established in accordance with Article 2(6a)(b) of the basic Regulation, the normal value is constructed by reference to undistorted prices or benchmarks in an appropriate representative country (in this instance Türkiye) for each exporting producer according to Article 2(6a)(a). The Commission underlines that this provision also specifically requires that the constructed normal value includes a reasonable amount for undistorted SG&A costs and profit in the appropriate representative country. Once the Commission establishes the existence of the significant distortions affecting the product under review in the exporting country, it is prevented from using the actual SG&A costs and profit of individual exporting producers as they were found to be distorted. The interested parties did not provide any evidence that the actual SG&A costs and profit of the Chinese exporting producers were undistorted. Therefore, this claim is rejected.

(302) Unifull, while agreeing with the choice of Türkiye as the appropriate representative country, disputed the choice of data on electricity/natural gas. The party argued that depreciation of the Turkish lira against the euro and the US dollars pushed up the import price of natural gas/electricity, that the Russia’s 2022 invasion of Ukraine affected the Türkiye’s natural gas and electricity price and that extraordinary weather in Türkiye in 2021 also had pushed up electricity price. Unifull submitted that, as a result, the Commission should abandon using Türkiye’s natural gas/electricity price data and replace it with data from Brazil or other appropriate countries, for a fair reflection of the actual and normal energy price.

(303) The Commission noted that while the depreciation might have contributed to an increase in gas/electricity prices in Türkiye, such price increase would not be unusual as it corresponded with a wider European trend, as confirmed by the very article quoted by Unifull in support of its claim. Furthermore, dry weather conditions in 2021 and the Russia’s 2022 invasion of Ukraine are developments that would have affected, if at all, energy prices in 2022 rather than in the review investigation period. This would transpire from the articles quoted by Unifull as well as from the fact that invasion of Ukraine by Russia took place in February 2022. Moreover, as outlined by Unifull, Türkiye imported some 45 % of gas from Russia in 2021, hence not being entirely reliant on the imports from Russia. Therefore, Unifull failed to substantiate its claim calling for replacement of gas/electricity price and hence such claim has to be dismissed.

(304) The applicant submitted that Türkiye has a level of economic development similar to the People’s Republic of China and has a much more representative dataset for the factors of production compared to the other countries. The applicant thereby supported the conclusion of the Commission.

(305) On the basis of the information submitted by interested parties (eight exporting producers submitted information on HTYP inputs) and other relevant information available on the file, the Commission established, in the First Note, an initial list of factors of production such as materials, energy and labour, used for the production of the product under review.

(306) In accordance with Article 2(6a)(a) of the basic Regulation, the Commission also identified sources to be used for establishing undistorted prices and benchmarks. The main source that the Commission proposed to use included the Global Trade Atlas (‘GTA’). Finally, the Commission identified the Harmonised System (‘HS’) codes of the FOPs which in the First Note were initially considered to be used for the GTA analysis on the basis of information provided by the interested parties.

(307) The Commission invited the interested parties to comment and propose publicly available information on undistorted values for each of the FOP mentioned in the First Note. Subsequently, in the Second Note, the Commission updated tariff classification information on and expanded the list by a number of FOPs based on the comments received from the interested parties.

(309) Guxiandao claimed that two of its directly or indirectly imported materials have been purchased at undistorted values from third countries. Guxiandao further considered that the value of another principal raw material is not to be affected by the alleged significant distortions because the purchase prices were negotiated with suppliers based on prices on international markets which are very transparent and the purchase prices are in line with international prices. Guxiandao also considered that the materials whose suppliers’ ownership is private and the electricity cost from solar energy shall not be considered to be distorted.

(310) Guxiandao provided supporting evidence (i.e. purchase invoices, import documents and contracts) for the two raw materials mentioned in recital (309) above. The evidence showed that the purchases for vast majority of one and a small proportion of the other material were made in USD and directly from markets free from distortions. Therefore, the Commission accepted this claim to the extent that these undistorted imports of the two raw materials into China for this particular exporting producer during the RIP, are concerned. However, for the other costs related to materials purchased in China (irrespective of the supplier’s ownership or source of energy), the Commission was unable to positively establish, on the basis of the evidence on the file, that they were not distorted. The claim was therefore rejected. As stated in recital (114), Türkiye was established as the representative country in this case and, therefore, the undistorted costs of the factors of production must be based on the corresponding undistorted import prices in Türkiye.

(311) CIRFS argued in its response to the final disclosure that the Commission should explain how it could ensure that the two raw materials imported by Guxiandao and used for the normal value calculation were not affected by any significant distortion. CIRFS noted that it was not in a position to fully exercise its rights of defence to provide useful comments with respect to this specific treatment applied to Guxiandao.

(312) Reference was made to the Commission assessment of Guxiandao’s claim and criteria used in examining and accepting such claim. The Commission maintained that it sufficiently disclosed the facts, while respecting the confidentiality of Guxiandao’s purchasing data. Approach applied in assessing Guxiandao’s claim (and explained by the Commission) involved careful examination of purchasing records and contracts as well as analysis of variety of parameters such as the sales channels used, certificates of origin, invoice currency as well as other sales terms. CIRFS was thus in a position to comment on the approach applied and exercise duly its rights of defence.

(313) In order to establish the undistorted price of raw materials, the Commission used as a basis the weighted average import price (CIF) to the representative country, as reported in the GTA, from all third countries excluding China and countries that are not members of the WTO and listed in Annex I of Regulation (EU) 2015/755. The Commission decided to exclude imports from China as it concluded that it is not appropriate to use domestic prices and costs in China due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation (see recital (100) above). In the absence of any evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected exports. The weighted average import price was adjusted for import duties, where applicable. After excluding imports from the PRC and countries which are not members of the WTO into the representative country, the volume of imports from other third countries remained representative.

(314) The Commission expressed the transport cost incurred by the cooperating exporting producers for the supply of raw materials as a percentage of the actual cost of such raw materials and then applied the same percentage to the undistorted cost of the same raw materials in order to obtain the undistorted transport costs. The Commission considered that, in the context of this investigation, the ratio between the exporting producer’s raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory.

(315) For a small number of FOPs, due to their insignificant share in the total raw material costs in the RIP, regardless of the source used, the Commission treated those FOPs as consumables, as explained in recital (334).

(316) In their comments on the final disclosure, Unifull argued that MEG purchased and used by this group was imported from abroad through traders and, consequently, this MEG was not affected by the distortions on the Chinese market. Unifull therefore argued that its cost, instead of benchmarks described above, should be used when establishing the normal value.

(317) The Commission pointed out that the anti-dumping questionnaire explicitly requests the exporting producer to indicate whether it considers that any of the factors of production has been made at undistorted values and, in such case, submit all relevant evidence to support such claim. However, at no point during the investigation before its comments to the final disclosure had Unifull made any specified or substantiated claim that any of the materials were purchased at undistorted values nor did it identify any transactions that would have been made at undistorted values. On the contrary, Unifull had reported that all purchases of MEG were made from a Chinese domestic supplier without any reference to imports. The documents sent after the final disclosure, essentially purchase contracts and invoices from Chinese trader of MEG, do not provide substantiated reasoning why the purchase price of MEG would not be affected by distortions. Therefore, this claim, which was based on an assertion that was unsupported and could not be verified during the investigation, was rejected.

(318) In their comments on the final disclosure Unifull also claimed that the benchmark price for PTA was inflated due to exceptional circumstances (exceptionally high shipping rates from Asia to Türkiye in 2021) that do not reflect normal market conditions while at the same time Unifull did not incur any international shipping costs for PTA as it was sourcing domestic PTA in China. Consequently, Unifull considered that the PTA benchmark price should be adjusted downwards by 0,24 CNY/Kg or at the very least 0,15 CNY/Kg to compensate the high shipping cost.

(319) The Commission disagreed with this claim. Pursuant to Article 2(6a)(a) of the basic Regulation, the normal value shall be constructed using benchmarks corresponding to costs of production in appropriate representative country. In contrast to what Unifull claimed, the methodology used by the Commission is in strict compliance with this principle and the Commission applied the corresponding undistorted cost of PTA in Türkiye in establishing the benchmark. Together with its comments Unifull provided an analysis of Turkey’s import data extracted from UN COMTRADE. However, this analysis merely illustrates CIF and FOB import prices and thus deduces the shipping cost, but provides no evidence to support Unifull’s claim that the import prices in Türkiye would be distorted or that they would not reflect normal market conditions.

(320) The Commission also noted that, according to Article 2(6a)(a) of the basic Regulation, the normal value should reflect the undistorted price of the raw materials in the representative country, in this case Türkiye. It should therefore reflect the price that a producer of HTYP would pay in Türkiye for a raw material delivered at the factory gate. The methodology applied by the Commission reflects this approach. If the adjustments suggested by the Unifull were made, the resulting price would not reflect the undistorted price on the Turkish market but rather an arbitrary price between the price that a producer of HTYP would pay in Türkiye and EXW price (when sold for export) in the countries that sell to Türkiye. This would be contrary to Article 2(6a)(a) of the basic Regulation and thus this claim is rejected.

(321) To establish the benchmark for labour costs the Commission used the most recent statistics published by the Turkish Statistical Institute (98). This institute publishes detailed information on labour costs in different economic sectors in Türkiye. The Commission established the benchmark based on hourly labour costs for 2020 for the economic activity “Manufacture of chemicals” NACE code 20 according to NACE Rev.2 classification. The values were further adjusted for inflation using the domestic consumer price index (99) to reflect the costs for the review investigation period. Compared to the Second Note and following a claim raised by Guxiandao, the benchmark value for labour was modified to take account of the annual average inflation rate.

(322) To establish the benchmark price for electricity and gas, the Commission used prices for companies (industrial users) in Türkiye published by the Turkish Statistical Institute (100). The benchmark was established based on the price for electricity and gas, published on 31 March 2022. The price referred to is the average for 2021. The Commission used the data on the industrial electricity and gas prices in the corresponding consumption bands, net of VAT.

(323) Guxiandao argued that in addition to the VAT applied on electricity and gas prices identified for Türkiye, the electricity prices include additional taxes and fees (consumption tax, TRT and Energy Fund fees), which should be deducted by the Commission for the purposes of establishing benchmark cost of electricity. First, it was noted that there is no evidence on the file showing that (and to what extent, if any) companies in Türkiye would have recovered any of the said taxes and fees, hence meriting any deduction from the benchmark costs. Moreover, Guxiandao failed to substantiate its claim specifically with respect to the dataset published by the Turkish Statistical Institute and used for the purposes of this case.

(324) With respect to coal, the Commission used the average price of coal in Türkiye in 2021 based on the GTA statistics (101).

(325) In their comments on the final disclosure the applicant, CIRFS questioned the use of coal as an energy source in establishing the normal value and also whether the environmental cost of coal is fairly reflected in the undistorted price of coal.

(326) The Commission recalled that following the methodology laid down in the basic Regulation and pursuant to Article 2(6a)(a) of it, the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks. It followed from this that, notwithstanding of substitution the prices of factors of production with undistorted benchmarks, the consumption of the factors of production shall reflect the actual consumption by each exporter and producer separately. Consequently, the Commission did not have any discretion to choose alternative sources of energy to substitute those used by each exporting producer or to add arbitrary elements to the undistorted prices observed in the appropriate representative country. Doing so would be contrary to Article 2(6a)(a) of the basic Regulation. Regarding the reflection of environmental costs in the undistorted price of coal, it was noted that in establishing the constructed normal value in accordance with Article 2(6a)(a) of the basic Regulation, environmental costs are not specifically accounted for. Therefore, this claim was rejected.

(327) Furthermore, in response to the final disclosure, CIRFS requested the Commission that, in view of the Commission’s report on significant distortions in Russia (102), coal imports from Russia into Türkiye be excluded from the average import price of coal into Türkiye considered for the purposes of constructing the normal value under Article 2(6a) of the basic Regulation. More specifically, CIRFS argued with reference to the Commission report that while the Russian coal industry has been privatized to a large extent, the market is concentrated and prices are influenced by applicable fiscal measures and by railway costs (set by the state owned railways companies). Moreover, CIRFS made an additional submission six days after the deadline for comments on the final disclosure, reiterating its request and additionally arguing for exclusion of Colombian coal imports from the import price of coal for Türkiye. The Commission, taking into consideration the negligible impact the acceptance or rejection of this claim would have on the measures, decided that there was no need to analyse it further. Regarding the additional claim made in relation to imports of Colombian coal, reference was made to point 7 of the Notice of Initiation. Under the said provision, in order to complete the investigation within the mandatory deadlines, the Commission will not accept submissions from interested parties after the deadline to provide comments on the final disclosure. Therefore, CIRFS claims were dismissed.

(328) CIRFS submitted in response to the final disclosure that the Commission should explain, why the 2021 price of gas in Türkiye selected for the purpose of the normal value calculation has significantly decreased, while according to the Turkish Statistical Institute, the average unit price of natural gas in Türkiye sharply increased in 2021 compared with 2020. As already outlined in the disclosed Second Note, the Commission sourced the data on gas prices directly from the database of the Turkish Statistical Institute, using average prices for 2021 for the respective consumption bands, while converting the figures from Turkish Lira to the RMB using the applicable official exchange rate to construct the normal value for the exporting producers.

(329) Furthermore, CIRFS stated in response to the final disclosure that the Commission should explain with respect to gas the methodology used to select the most appropriate consumption band for each Chinese producer. It was noted in this respect that, as outlined in recital (322), the Commission attributed to each sampled producer the gas cost in the consumption band corresponding to its actual total gas consumption over the RIP.

(330) According to Article 2(6a)(a) of the basic Regulation, “the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits”. In addition, a value for manufacturing overhead costs needs to be established to cover costs not included in the factors of production referred to above.

(331) For establishing an undistorted and reasonable amount for SG&A and profits, the Commission used the SG&A (6,6 %) and profit (15,3 %) of the HTYP producer in Türkiye, Kordsa Türkiye, for which figures relating to 2021 financial data (i.e. for the period fully overlapping with the RIP) were readily available.

(332) Based on the undistorted prices and benchmarks described above, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

(333) First, the Commission established the undistorted costs of manufacturing for each legal entity manufacturing and exporting the product under review based on the factors of production purchased by each of the companies and identified in Table 15. The Commission then applied the undistorted unit costs to the actual consumption of the individual factors of production of each of the sampled exporting producers. The Commission reduced the costs of manufacturing by the undistorted revenues generated for by-product (in this case waste yarn) resold.

(334) Second, to arrive at a total undistorted cost of manufacturing, the Commission added manufacturing overheads. Manufacturing overheads incurred by the sampled exporting producers were increased by the costs of consumables referred to in recital (315) and subsequently expressed as a share of the costs of manufacturing actually incurred by each of the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

(335) Finally, the Commission added SG&A and profit, determined on the basis of the Turkish HTYP producer (see recital (331)). SG&A and profit, both expressed as a percentage of the cost of goods sold and applied to the undistorted total cost of manufacturing, amounted to 6,6 % and 15,3 % respectively.

(336) On that basis, the Commission determined the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

(337) Guxiandao claimed in response to the final disclosure that the Commission groundlessly linked the value of consumables and manufacturing overheads to that of other inputs. According to Guxiandao, the Commission shall identify the benchmark for the consumables and manufacturing overheads separately from other inputs or, otherwise accept the company’s actual cost for consumables and manufacturing overheads. Similar claim was raised by Guxiandao with respect to the construction of the transport cost for the supply of raw materials.

(338) As explained in recital (100) the investigation found that prices or costs of the product under investigation, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation. Guxiandao failed to demonstrate that the prices of its consumables, its manufacturing overheads or its transport cost are not distorted. It could not be positively established that these costs are not distorted and therefore, in view of third indent of the second paragraph of Article 2(6a)(a) they cannot be used in the construction of the normal value. The Commission was unable to find any reasonable benchmark for these costs, nor any reasonable benchmark for these costs were suggested by Guxiandao or any other interested party. When appropriate benchmarks cannot be found for a cost, the Commission may in principle establish them as a ratio to the cost group they relate to (be it cost of all raw materials or the manufacturing costs). Once the undistorted costs of raw materials or manufacturing costs are established, the Commission will apply the benchmark to estimate the undistorted cost in question, thereby preserving the exporting producer’s cost structure. This means that if, for instance, consumables represent 1 % of all raw materials costs in the accounts of an exporting producer, following construction of the normal value they will still represent 1 % of the raw material costs.

(339) As set out in recital (334), in order to arrive at an undistorted cost of consumables and overheads, the sampled producers’ share of cost of consumables as well as manufacturing overheads on the costs of manufacturing actually incurred was applied to the undistorted costs of manufacturing. As explained in recital (338), in the absence of a specific data concerning undistorted overhead in the available financial data of the producer(s) in the representative country, the Commission determined the undistorted overhead data for the exporting producer following this method. Furthermore, given that numerous factors of production typically accounting for an insignificant share on the total raw material costs were identified in this case, the Commission deemed it reasonable to include such inputs (using the producers’ actual costs) among consumables and treat them accordingly. Moreover, regarding the transport costs, as outlined in recital (314) and in the absence of data in the file on the undistorted transport costs in the representative country, the Commission considered the ratio between the exporting producer’s raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory. Guxiandao’s claim was therefore rejected.

(340) The sampled exporting producers exported the product concerned directly to independent customers in the Union. The export price for Guxiandao and Unifull for these direct sales was therefore the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(341) In addition to the direct sales, the Unifull group made also some sales via the other related producer in the group. For these sales, the export price was adjusted in accordance with Article 2(10)(i) of the basic Regulation deducting the respective selling expenses of the selling entity and reasonable profit (established at 6,89 % in the recent investigation on certain polyvinyl alcohols (103) and used in the present investigation given the similarity of industry and the lack of cooperation from unrelated importers).

(342) The Commission compared the normal value and the export price of the sampled exporting producers on an ex-works basis.

(343) In order to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments to the export price were made for transport, insurance, handling and loading, discounts, commission, credit costs, bank charges and other import charges.

(344) In its response to the final disclosure, Guxiandao requested an adjustment to constructed normal value to ensure fair comparison with the export price under Article 2(10) of the basic Regulation. According to Guxiandao, elements such as freight and insurance that could have been included in the SG&A used in the construction of the normal value should be removed, as the same were deducted from the export price thereby creating asymmetry between the two.

(345) The Commission noted that Guxiandao failed to demonstrate that freight and insurance have been included in the SG&A used for the construction of the normal value. It follows that the requested adjustment was neither substantiated nor quantified and thus the request was rejected.

(346) In their comments on the final disclosure Unifull argued that an adjustment in accordance with Article 2(10)(i) of the basic Regulation is not warranted for the sales through related producers in the group. Notably Unifull argued that none of the group companies is acting as an agent selling the products of the principal. Unifull also argued that it acts as a whole as a single group and that its decision-making, production arrangements and sales are all made at group level and under a single general manager, rather than by the individual companies of the group. In the sensitive version of the comments Unifull also outlined the reasons why sales were made through each respective party and it claimed that these reasons were unrelated to the functions of trader/agent.

(347) In this respect, the Commission noted that, pursuant to Article 2(10) of the basic Regulation, a fair comparison must be made between the export price and the normal value. That provision states that, where the normal value and the export price are not on such a comparable basis, due allowance, in the form of adjustments, is to be made, on the merits, for differences in factors which are claimed, and demonstrated, to affect prices and price comparability. Among the factors for which adjustment can be made, Article 2(10)(i) of the basic Regulation provides in particular that an adjustment is to be made for differences in commissions paid in respect of the sales under consideration. That provision states that the term ‘commissions’ is to be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis. However, an adjustment under Article 2(10)(i) of the basic Regulation cannot be made where the producer established in a third State and its related distributor responsible for exports to the European Union form a single economic entity (‘SEE’).

(348) In the analysis of whether there is a single economic entity between a producer and its related distributor, it is crucial to consider the economic reality of the relationship between that producer and that distributor. In view of the requirement of a conclusion reflecting the economic reality of the relationship between that producer and that distributor, the Commission is required to take account of all factors relevant to the determination as to whether or not that distributor carries out the functions of an integrated sales department within that producer or, in turn performs other type of functions. In accordance with the need to have regard to all relevant factors and the general discretion afforded to the Commission to assess complex economic situations, the Commission must carry out its assessment on a case-by-case basis and in a holistic manner.

(349) In terms of the burden of proof, where the Commission has adduced consistent indicia to establish that a trader affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it will be for that trader or that producer to adduce evidence that an adjustment under Article 2(10)(i) of the basic Regulation is not justified.

(350) In the case at hand the Commission notes that both companies belong to the same group under the same management. However, both companies concerned sold the product concerned they produced as well as re-sold the products concerned produced by the other company. The Commission found that each producing, selling and re-selling company should be considered to be acting as an agent working on a commission basis rather than the internal sales department of the other company. It is uncontested that each company had its own fully fledged sales department and incurred the relevant costs. With regards to re-sales, each company performed a function of a trader acting on commission basis that was reflected in the export price component that had to be adjusted in order to eliminate asymmetry vis-a-vis the domestic price constructed on the ex-factory basis. The Commission therefore adduced consistent indicia to establish that each exporting producer of the group carried out functions comparable to those of an agent working on a commission basis with regards to resales of the other producer’s products. Unifull, on the other hand, failed to adduce evidence that an adjustment under Article 2(10)(i) of the basic Regulation is not justified. The claim was therefore rejected.

(351) In view of the above, and considering that a transfer of funds occurs between two related entities, the Commission was justified in examining whether the actual value of the mark-up differs from what an unrelated trader would obtain. Based on the nominal profit identified in this case, the Commission did not consider the mark-up to sufficiently reflect a commission that would have been due in an arm’s length transaction. As mentioned in recital (341), the Commission therefore considered that an adjustment should be based on the SG&A of the trader and a nominal profit identified in this case.

(352) For the sampled exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned to calculate the dumping margin, in accordance with Article 2(11) and (12) of the basic Regulation.

(353) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin on the basis of the margins of the sampled exporting producers.

(354) On this basis, the definitive dumping margin of the cooperating exporting producers outside the sample is 17,2 %.

(355) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted vast majority, if not totality of exports to the Union during the review investigation period. Therefore, the Commission considered it appropriate to set the country-wide dumping margin applicable to all other non-cooperating exporting producers at the level of the highest dumping margin of the sampled exporting producer, namely of Unifull group. The dumping margin thus established was 23,7 %.

(357) In accordance with Article 11(3) of the basic Regulation, the Commission analysed whether the change in circumstances with regard to dumping could reasonably be said to be of a lasting nature.

(358) Between the review investigation period of the original investigation (i.e. 1 July 2008 to 30 June 2009) and 2021, the production capacity of the Chinese HTYP producers subject to the measures more than tripled from [747 000 – 955 000] tonnes in 2009 to [2 508 000 – 3 205 000] tonnes in 2021. Moreover, as evidenced by the governmental strategies as well as the planning documents issued at a provincial and municipal level (see recitals (69) – (75)), since the original investigation the Chinese HTYP industry has been transforming through focus on significant investments into infrastructure and acceleration of research into cutting-edge technologies and development of high performance materials. Such considerable increase in investments and capacity inevitably had an impact on the cost structure and lead to an increase in fixed costs of the Chinese exporting producers. This in turn must have structurally affected the normal value and therefore the dumping margin.

(359) Given that the domestic HTYP consumption has been stable in China and thus not capable of absorbing the increased capacities and diluting the increased fixed costs, the exporting producers in China aimed at ramping up production volume by increasing export sales, mainly to the Union (being the leading export destination for the Chinese exporting producers). In fact, the production volumes of Chinese exporting producers subject to measures roughly doubled since the original investigation, which is in line with doubling of the Chinese exports to the Union over that period. To increase the export sales, the producers must have adjusted their export prices to a level appropriate to secure the necessary gains in volume (see recital (147) for decreasing pricing trend of Chinese imports subject to measures). This is demonstrated by the fact that between the RIP of the original investigation and 2021, the Chinese exports (subject to measures) to the Union almost doubled in volume despite being subject to the anti-dumping duties and were dumped, as established in the present investigation (and consistent with the findings in the 2017 expiry review). In conclusion, the Chinese HTYP producers expanded significantly their production capacity and adjusted their export behaviour to gain efficiencies justifying that expansion. These changes structurally affected the normal value, the export price of the Chinese exporting producers and thereby their dumping margin in a way that is considered to be of a lasting nature pursuant to Article 11(3) of the basic Regulation.

(360) On the basis of the conclusions reached by the Commission on continuation of dumping, continuation of injury and Union interest, the anti-dumping measures on imports of HTYP originating in China following an expiry review pursuant to Article 11(2) of the basic Regulation should be maintained.

(361) Furthermore, as a result of the partial interim review pursuant to Article 11(3) of the basic Regulation and in accordance with Article 9(4) of the basic Regulation, an anti-dumping duty should be imposed on imports of the product concerned originating in China at the level of the lesser of the injury margin on which the measures in force are based and the dumping margins found in the current interim review.

(363) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping 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 anti-dumping duty applicable to ‘all other companies’.

(364) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping 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.

(365) 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 13(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 country-wide duty.

(366) The individual company anti-dumping duty rates specified in this Regulation are exclusively applicable to imports of the product under review originating in China and produced by the named legal entities. Imports of the product under review 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 anti-dumping duty rates.

(367) A company may request the application of these individual anti-dumping duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission (104). 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.

(368) An exporter or producer that did not export the product concerned to the Union during the period that was used to set the level of the duty currently applicable to its exports may request the Commission to be made subject to the anti-dumping duty rate for cooperating companies not included in the sample. The Commission should grant such request, provided that three conditions are met. The new exporting producer would have to demonstrate that: (i) it did not export the product concerned to the Union during the period that was used to set the level of the duty applicable to its exports; (ii) it is not related to a company that did so and thus is subject to the anti-dumping duties; and (iii) has exported the product concerned thereafter or has entered into an irrevocable contractual obligation to do so in substantial quantities.

(369) Imports from Zhejiang Hailide New Material Co. Ltd. are subject to a separate investigation and duties may be imposed in a separate regulation.

(370) All interested parties were informed of the essential facts and considerations on the basis of which it was intended to recommend that the existing measures be maintained and that definitive anti-dumping duties be imposed on imports of HTYP from China. They were also granted a period to make representations subsequent to the disclosure. The comments submitted by interested parties were duly considered, and, where appropriate, the findings have been modified accordingly.

(371) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (105) 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.

(372) The Committee established by Article 15(1) of Regulation (EU) 2016/1036 did not deliver an opinion on the measures provided for in this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

(a) it did not export the goods described in paragraph 1 originating in the People’s Republic of China during the review investigation period (1 January 2021 – 31 December 2021);

(b) it is not related to an exporter or producer subject to the measures imposed by this Regulation; and

(c) it has either actually exported the goods described in paragraph 1 or has entered into an irrevocable contractual obligation to export a significant quantity to the Union after the end of the review investigation period; the Commission may amend Annex in order to attribute to that party the duty applicable to cooperating producers not included in the sample, i.e. 17,2 %.

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, 11 May 2023.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) OJ L 315, 1.12.2010, p. 1.

(3) OJ L 176, 30.6.2016, p. 21.

(4) OJ L 49, 25.2.2017, p. 6.

(5) OJ L 167, 30.6.2017, p. 31.

(6) WT/DS295/AB/R, 29 November 2005.

(7) OJ C 248, 30.6.2022, p. 107.

(8) OJ C 205, 31.5.2021, p. 4.

(9) OJ C 87, 23.2.2022, p. 2 and C 248, 30.6.2022, p. 142.

(10) Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the purposes of Trade Defence Investigations, 20 December 2017, SWD(2017) 483 final/2.

(11) Report – Chapter 2, p. 6-7.

(12) Report – Chapter 2, p. 10.

(13) Available at: Constitution of the People's Republic of China (npc.gov.cn), accessed on 15 November 2022.

(14) Report – Chapter 2, p. 20-21.

(15) Report – Chapter 3, p. 41, 73-74.

(16) Report – Chapter 6, p. 120-121.

(17) Report – Chapter 6. p. 122 -135.

(18) Report – Chapter 7, p. 167-168.

(19) Report – Chapter 8, p. 169-170, 200-201.

(20) Report – Chapter 2, p. 15-16, Report – Chapter 4, p. 50, p. 84, Report – Chapter 5, p. 108-9.

(21) See at: https://aiqicha.baidu.com/company_detail_70517450166132 (accessed on 18 November 2022).

(22) See at: http://www.szse.cn/disclosure/listed/bulletinDetail/index.html?786334a3-123e-4960-bb6a-19fa0d397bd9, p. 99 (accessed on 18 November 2022).

(23) See for example Art. 33 of the CCP Constitution, Article 19 of the Chinese Company Law or the Guidelines on stepping up the United Front work in the private sector for the new era issued by the General Office of the CCP’s Central Committee in 2020.

(24) See at: cfa.com.cn (accessed on 21 November 2022).

(25) Report – Chapter 5, p. 100-1.

(26) Report – Chapter 2, p. 26

(27) See for example: Blanchette, J. – Xi’s Gamble: The Race to Consolidate Power and Stave off Disaster; Foreign Affairs, vol. 100, no. 4, July/August 2021, pp. 10-19.

(28) Report – Chapter 2, p. 31-2.

(29) Available at: https://www.reuters.com/article/us-china-congress-companies-idUSKCN1B40JU (accessed on 15 November 2022).

(30) Available at: www.gov.cn/zhengce/2020-09/15/content_5543685.htm (accessed on 15 November 2022)

(31) Financial Times (2020) – Chinese Communist Party asserts greater control over private enterprise, available at: https://on.ft.com/3mYxP4j (accessed on 15 November 2022).

(32) See at: http://www.szse.cn/disclosure/listed/bulletinDetail/index.html?786334a3-123e-4960-bb6a-19fa0d397bd9, p. 43 (accessed on 18 November 2022).

(33) See at: https://www.guxiandao.com/index.php?g=news&m=index&a=view&id=161 (accessed on 18 November 2022).

(34) Report – Chapters 14.1 to 14.3.

(35) Report – Chapter 4, p. 41-42, 83.

(36) Available at: https://www.miit.gov.cn/zwgk/zcwj/wjfb/yj/art/2022/art_a01b7532a39a41e891d2540da6981d72.html (accessed on 17 November 2022)

(37) Optimize regional layout, strengthen international cooperation, promote digital transformation, eliminate backward production capacity and mergers and reorganizations in accordance with laws and regulations, cultivate leading enterprises, promote the integration and development of large and small enterprises, and consolidate and enhance industrial competitiveness.

(38) Ibid., Art. II.

(39) Available at: https://huanbao.bjx.com.cn/news/20210906/1175114.shtml (accessed on 17 November 2022).

(40) See Chapter V of the Plan.

(41) See Section 2.2.2. of the Plan.

(42) See Section 4.1.1. of the Plan.

(43) See Section 4.1.3. of the Plan.

(44) Available at: www.qg.gov.cn/zwgk/zcfg/sjfgwj/202112/t20211207_2666343.htm (accessed on 18 November 2022).

(45) See Section III.2.5. of the Plan.

(46) See Section III.4.1 of the Plan Available at:

https://huanbao.bjx.com.cn/news/20210707/1162695.shtml (accessed on 22 November 2022).

(47) Available at: https://huanbao.bjx.com.cn/news/20211201/1191133.shtml (accessed on 18 November 2022).

(48) See Section III.2.1 of the Plan.

(49) See the Plan; Available at:

https://www.zj.gov.cn/art/2021/6/24/art_1229540815_4671249.html (accessed on 22 November 2022)

(50) See Section IV.7 of the Plan.

(51) Available at: https://www.cq.gov.cn/zwgk/zfxxgkml/szfwj/qtgw/202108/t20210803_9538603.html (accessed on 22 November 2022)

(52) See Section III.1.4 of the Plan.

(53) Report – Chapter 6, p. 138-149.

(54) Report – Chapter 9, p. 216.

(55) Report – Chapter 9, p. 213-215.

(56) Report – Chapter 9, p. 209-211.

(57) Report – Chapter 13, p. 332-337.

(58) Report – Chapter 13, p. 336.

(59) Report – Chapter 13, p. 337-341.

(60) Report – Chapter 6, p. 114-117.

(61) Report – Chapter 6, p. 119.

(62) Report – Chapter 6, p. 120.

(63) Report – Chapter 6, p. 121-122, 126-128, 133-135.

(64) See official policy document of the China Banking and Insurance Regulatory Commission (CBIRC) of 28 August 2020: Three-year action plan for improving corporate governance of the banking and insurance sectors (2020-2022), available at: http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=925393&itemId=928 (accessed on 15 November 2022). The Plan instructs to ‘ further implement the spirit embodied in General Secretary Xi Jinping’s keynote speech on advancing the reform of corporate governance of the financial sector’. Moreover, the Plan’s section II aims at promoting the organic integration of the Party’s leadership into corporate governance: ‘we shall make the integration of the Party’s leadership into corporate governance more systematic, standardised and procedure-based […] Major operational and management issues must have been discussed by the Party Committee before being decided upon by the Board of Directors or the senior management.’

(65) See CBIRC’s Notice on the Commercial banks performance evaluation method, issued on 15 December 2020. http://jrs.mof.gov.cn/gongzuotongzhi/202101/t20210104_3638904.htm (last viewed on 12 April 2021).

(66) Available at: https://huanbao.bjx.com.cn/news/20211201/1191133.shtml (accessed on 18 November 2022).

(67) See Paragraph 3 of the Section Safeguard Measures of the Plan.

(68) Available at: https://huanbao.bjx.com.cn/news/20210906/1175114-3.shtml (accessed on 22 November 2022)

(69) See Section 8.7. of the Plan.

(70) See at: http://zj.sina.cn/shaoxing/2022-03-03/detail-imcwipih6326336.d.html (accessed on 18 November 2022).

(71) See IMF Working Paper ‘Resolving China’s Corporate Debt Problem’, by Wojciech Maliszewski, Serkan Arslanalp, John Caparusso, José Garrido, Si Guo, Joong Shik Kang, W. Raphael Lam, T. Daniel Law, Wei Liao, Nadia Rendak, Philippe Wingender, Jiangyan, October 2016, WP/16/203

(72) Report – Chapter 6, p. 121-122, 126-128, 133-135.

(73) See OECD (2019), OECD Economic Surveys: China 2019, OECD Publishing, Paris. p. 29, available at:

https://doi.org/10.1787/eco_surveys-chn-2019-en (accessed on 15 November 2022).

(74) See: http://www.gov.cn/xinwen/2020-04/20/content_5504241.htm (accessed on 22 November 2022).

(75) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(76) If there is no production of the product under review in any country with a similar level of development, production of a product in the same general category and/or sector of the product under review may be considered.

(77) Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (OJ L 123, 19.5.2015, p. 33). Article 2(7) of the basic Regulation considers that domestic prices in those countries cannot be used for the purpose of determining normal value.

(78) See https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf, p. 160.

(79) See https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf, p. 117.

(80) The Commission informed the sampled cooperating exporting producers of its intention to use the data provided by these producers for the purposes of the expiry review investigations. No objections were received.

(81) Wood Mackenzie – see https://www.woodmac.com/

(82) Commission Implementing Regulation (EU) 2017/325 of 24 February 2017 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 49, 25.2.2017, p. 6), as amended by Commission Implementing Regulation (EU) 2017/1159 of 29 June 2017 amending Council Implementing Regulation (EU) No 1105/2010 and Commission Implementing Regulation (EU) 2017/325 as regards the definition of the product scope of the current anti-dumping measures concerning imports of high tenacity yarns of polyesters originating in the People’s Republic of China, and providing for the possibility of repayment or remission of duties in certain cases (OJ L 167, 30.6.2017, p. 31).

(83) Approximately 14 %, if considering exclusively exports subject to the measures.

(84) 2022 semi-annual reports of the countries on the WTO website https://www.wto.org/english/tratop_e/adp_e/adp_e.htm

(85) See Fujian Billion diversifies into industrial yarn production (innovationintextiles.com) and http://en.three-v.com.cn/about.html for more details.

(86) Commission Implementing Regulation (EU) 2022/977 of 22 June 2022 accepting two requests for new exporting producer treatment with regard to the definitive antidumping measures imposed on imports of high tenacity yarns of polyesters originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council and amending Commission Implementing Regulation (EU) 2017/325 (OJ L 167, 24.6.2022, p. 55)..

(87) The 14(6) database contains data on imports of products subject to anti-dumping or anti-subsidy measures or investigations, both from the countries and exporting producers concerned by the proceeding and from other third countries and other exporting producers, at the level of the 10-digit TARIC codes and TARIC additional codes.

(88) The figures of the Chinese exporting producers subject to duties are not confidential as such. However, providing the detailed figures would indirectly reveal the precise import figures of Hailide, the exporter not subject to duties.

(89) Commission Implementing Regulation (EU) 2021/2239 of 15 December 2021 imposing a definitive anti-dumping duty on imports of certain utility scale steel wind towers originating in the People’s Republic of China (OJ L 450, 16.12.2021, p. 59) (‘the steel wind towers case’).

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

(91) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(92) p. 133 of 2021 Annual Report.

(93) p. 61 of 2021 Annual Report available on https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf

(94) See Kordsa_Annual_Report_EN_2021.pdf, p. 158, Note 3 -Segment reporting, a) External revenue as well as the Directory on p. 205 of the annual report.

(95) http://www.gtis.com/gta/secure/default.cfm

(96) http://www.macmap.org

(97) https://data.tuik.gov.tr/Bulten/DownloadIstatistikselTablo?p=tg4QGRdNcBVDQo/mmOOyD/8g3GlHdKhwM0SMnhh4V/APyz9UrZvk0kK90vktK5jo

(98) The labour costs are available at https://data.tuik.gov.tr/Bulten/DownloadIstatistikselTablo?p=tg4QGRdNcBVDQo/mmOOyD/8g3GlHdKhwM0SMnhh4V/APyz9UrZvk0kK90vktK5jo

(99) https://data.tuik.gov.tr/Bulten/Index?p=Consumer-Price-Index-December-2021-45789

(100) https://data.tuik.gov.tr/Kategori/GetKategori?p=cevre-ve-enerji-103&dil=2

https://data.tuik.gov.tr/Bulten/Index?p=Electricity-and-Natural-Gas-Prices-Period-II:-July-December,-2021-45566

https://data.tuik.gov.tr/Bulten/Index?p=Electricity-and-Natural-Gas-Prices-Period-I:-January-June,-2021-37459

(101) http://www.gtis.com/gta/secure/default.cfm

(102) Commission Staff Working Document on significant distortions in the economy of the Russian Federation for the purposes of trade defence investigations, 22.10.2020, SWD(2020) 242 final.

(103) Recital (352) of the 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).

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

(105) 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).