# L_2018231EN.01002001.xml

| 14.9.2018 | EN | Official Journal of the European Union | L 231/20 |
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14.9.2018

EN

Official Journal of the European Union

L 231/20

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COMMISSION IMPLEMENTING REGULATION (EU) 2018/1236

of 13 September 2018

terminating the investigation concerning the possible circumvention of the anti-dumping measures imposed by Implementing Regulation (EU) 2015/82 on imports of citric acid originating in the People's Republic of China by imports of citric acid consigned from Cambodia, whether declared as originating in Cambodia or not

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to 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 (1) (‘the basic Regulation’), and in particular Articles 13 and 14(5) thereof,

Whereas:

1.   PROCEDURE

PROCEDURE

1.1.   Previous investigations and existing measures

Previous investigations and existing measures

| (1) | The Council, following an anti-dumping investigation (‘the original investigation’), imposed a definitive anti-dumping duty on imports of citric acid originating in the People's Republic of China (‘PRC’) by Regulation (EC) No 1193/2008 (2). The measures took the form of an ad valorem duty ranging between 6,6 % and 42,7 %. |
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(1)

The Council, following an anti-dumping investigation (‘the original investigation’), imposed a definitive anti-dumping duty on imports of citric acid originating in the People's Republic of China (‘PRC’) by Regulation (EC) No 1193/2008 (2). The measures took the form of an ad valorem duty ranging between 6,6 % and 42,7 %.

2

ad valorem

| (2) | By Implementing Regulation (EU) 2015/82 (3) the European Commission (‘the Commission’), following an expiry review and partial interim review (‘previous investigations’) pursuant to Article 11(2) and (3) of the basic Regulation respectively, maintained the definitive measures and amended their level. The definitive anti-dumping duties in force on imports of citric acid originating in the PRC now range between 15,3 % and 42,7 % (‘the measures in force’). |
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(2)

By Implementing Regulation (EU) 2015/82 (3) the European Commission (‘the Commission’), following an expiry review and partial interim review (‘previous investigations’) pursuant to Article 11(2) and (3) of the basic Regulation respectively, maintained the definitive measures and amended their level. The definitive anti-dumping duties in force on imports of citric acid originating in the PRC now range between 15,3 % and 42,7 % (‘the measures in force’).

3

| (3) | By Implementing Regulation (EU) 2016/32 (4) the Commission, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, extended the anti-dumping duty of 42,7 % imposed on imports of citric acid originating in the PRC to imports of citric acid consigned from Malaysia, whether declared as originating in Malaysia or not. |
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(3)

By Implementing Regulation (EU) 2016/32 (4) the Commission, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, extended the anti-dumping duty of 42,7 % imposed on imports of citric acid originating in the PRC to imports of citric acid consigned from Malaysia, whether declared as originating in Malaysia or not.

4

1.2.   Request

Request

| (4) | The Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on citric acid originating in the PRC by imports consigned from Cambodia, whether declared as originating in Cambodia or not, and to make such imports subject to registration. |
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(4)

The Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on citric acid originating in the PRC by imports consigned from Cambodia, whether declared as originating in Cambodia or not, and to make such imports subject to registration.

| (5) | The request was lodged on 30 October 2017 by the European industry manufacturing citric acid. |
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(5)

The request was lodged on 30 October 2017 by the European industry manufacturing citric acid.

| (6) | The request contained sufficient evidence on a change in the pattern of trade between the Union, the PRC and Cambodia which appeared to stem from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty, namely the transhipment, with or or without minor processing operations, of the product concerned originating in the PRC via Cambodia to the Union. |
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(6)

The request contained sufficient evidence on a change in the pattern of trade between the Union, the PRC and Cambodia which appeared to stem from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty, namely the transhipment, with or or without minor processing operations, of the product concerned originating in the PRC via Cambodia to the Union.

| (7) | Furthermore, the request contained sufficient evidence that the practice described above was undermining the remedial effects of the existing anti-dumping measures both in terms of quantities and prices and that the prices of the product under investigation were dumped in relation to the normal value previously established for the product concerned. |
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(7)

Furthermore, the request contained sufficient evidence that the practice described above was undermining the remedial effects of the existing anti-dumping measures both in terms of quantities and prices and that the prices of the product under investigation were dumped in relation to the normal value previously established for the product concerned.

1.3.   Product concerned and product under investigation

Product concerned and product under investigation

| (8) | The product concerned by the possible circumvention is citric acid (including trisodium citrate dihydrate (‘citric salt’)), falling within CN codes ex 2918 14 00 (TARIC code 2918140090) and ex 2918 15 00 (TARIC code 2918150019) and originating in the PRC (‘the product concerned’). |
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(8)

The product concerned by the possible circumvention is citric acid (including trisodium citrate dihydrate (‘citric salt’)), falling within CN codes ex 2918 14 00 (TARIC code 2918140090) and ex 2918 15 00 (TARIC code 2918150019) and originating in the PRC (‘the product concerned’).

| (9) | The product under investigation is the same as that defined in the previous recital, but consigned from Cambodia, whether declared as originating in Cambodia or not, currently falling within the same CN codes as the product concerned (‘the product under investigation’). |
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(9)

The product under investigation is the same as that defined in the previous recital, but consigned from Cambodia, whether declared as originating in Cambodia or not, currently falling within the same CN codes as the product concerned (‘the product under investigation’).

| (10) | The investigation showed that citric acid and citric salt exported from the PRC to the Union and consigned from Cambodia have the same basic physical and chemical characteristics and have the same uses, and are therefore to be considered as like products within the meaning of Article 1(4) of the basic Regulation. |
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(10)

The investigation showed that citric acid and citric salt exported from the PRC to the Union and consigned from Cambodia have the same basic physical and chemical characteristics and have the same uses, and are therefore to be considered as like products within the meaning of Article 1(4) of the basic Regulation.

1.4.   Initiation

Initiation

| (11) | Having determined, after having informed the Member States, that sufficient evidence existed for the initiation of an investigation pursuant to Articles 13(3) and 14(5) of the basic Regulation, the Commission decided to investigate the possible circumvention of the anti-dumping measures imposed on imports of product concerned originating in the PRC and to make imports of citric acid consigned from Cambodia, whether declared as originating in Cambodia or not, subject to registration. |
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(11)

Having determined, after having informed the Member States, that sufficient evidence existed for the initiation of an investigation pursuant to Articles 13(3) and 14(5) of the basic Regulation, the Commission decided to investigate the possible circumvention of the anti-dumping measures imposed on imports of product concerned originating in the PRC and to make imports of citric acid consigned from Cambodia, whether declared as originating in Cambodia or not, subject to registration.

| (12) | The investigation was initiated by Commission Implementing Regulation (EU) 2017/2300 on 13 December 2017 (5) (‘the initiating Regulation’). |
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(12)

The investigation was initiated by Commission Implementing Regulation (EU) 2017/2300 on 13 December 2017 (5) (‘the initiating Regulation’).

5

1.5.   Investigation period and reporting period

Investigation period and reporting period

| (13) | The investigation period covered the period from 1 January 2014 to 30 September 2017 (‘the investigation period’ or ‘IP’). Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade following the continuation of the measures and the increase of the definitive anti-dumping duties by Implementing Regulation (EU) 2015/82 and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 October 2016 to 30 September 2017 (‘the reporting period’ or ‘RP’) in order to examine if imports were undermining the remedial effect of the measures in force in terms of prices and/or quantities and the existence of dumping. |
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(13)

The investigation period covered the period from 1 January 2014 to 30 September 2017 (‘the investigation period’ or ‘IP’). Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade following the continuation of the measures and the increase of the definitive anti-dumping duties by Implementing Regulation (EU) 2015/82 and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 October 2016 to 30 September 2017 (‘the reporting period’ or ‘RP’) in order to examine if imports were undermining the remedial effect of the measures in force in terms of prices and/or quantities and the existence of dumping.

1.6.   Investigation

Investigation

| (14) | The Commission officially informed the authorities of the PRC and Cambodia, the exporting producers and traders in those countries, the importers in the Union known to be concerned and the Union industry of the initiation of the investigation. Questionnaires/Exemption Claim Forms were sent to the producers/exporters in Cambodia and the PRC and to the importers in the Union known to the Commission or which made themselves known within the deadlines specified in recital 16 of the initiating Regulation. |
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(14)

The Commission officially informed the authorities of the PRC and Cambodia, the exporting producers and traders in those countries, the importers in the Union known to be concerned and the Union industry of the initiation of the investigation. Questionnaires/Exemption Claim Forms were sent to the producers/exporters in Cambodia and the PRC and to the importers in the Union known to the Commission or which made themselves known within the deadlines specified in recital 16 of the initiating Regulation.

| (15) | Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time-limit set in the initiating Regulation. |
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(15)

Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time-limit set in the initiating Regulation.

| (16) | Replies to questionnaires/exemption forms were received from one Cambodian exporting producer, Wang Kang Biochemical Co., Ltd (‘WKB’), and five Union importers. |
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(16)

Replies to questionnaires/exemption forms were received from one Cambodian exporting producer, Wang Kang Biochemical Co., Ltd (‘WKB’), and five Union importers.

| (17) | A verification visit was carried out in March 2018 at the premises of WKB. |
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(17)

A verification visit was carried out in March 2018 at the premises of WKB.

| (18) | The Commission consulted also several governmental departments and agencies in Cambodia, including the Ministry of Commerce, the Ministry of Finance, the Ministry of Industry and Handicraft, the Custom Authorities and the Council of Development of Cambodia. |
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(18)

The Commission consulted also several governmental departments and agencies in Cambodia, including the Ministry of Commerce, the Ministry of Finance, the Ministry of Industry and Handicraft, the Custom Authorities and the Council of Development of Cambodia.

2.   RESULTS OF THE INVESTIGATION

RESULTS OF THE INVESTIGATION

2.1.   General considerations

General considerations

| (19) | In accordance with Article 13(1) of the basic Regulation, the following elements should be analysed successively in order to assess possible circumvention:






  — | whether there was a change in the pattern of trade between Cambodia, the PRC and the Union, |
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(19)

In accordance with Article 13(1) of the basic Regulation, the following elements should be analysed successively in order to assess possible circumvention:

—

whether there was a change in the pattern of trade between Cambodia, the PRC and the Union,

| — | if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the anti-dumping measures in force, |
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—

if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the anti-dumping measures in force,

| — | if there is evidence of injury or the remedial effects of the anti-dumping measures in force were being undermined in terms of the prices and/or quantities of the product under investigation, and |
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—

if there is evidence of injury or the remedial effects of the anti-dumping measures in force were being undermined in terms of the prices and/or quantities of the product under investigation, and

| — | whether there is evidence of dumping in relation to the normal values previously established for the product concerned. |
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—

whether there is evidence of dumping in relation to the normal values previously established for the product concerned.

2.2.   Change in pattern of trade

Change in pattern of trade

| (20) | Changes in the pattern of trade between Cambodia, the PRC and the Union in the IP are analysed on the basis of the import and export statistics of Cambodia. |
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(20)

Changes in the pattern of trade between Cambodia, the PRC and the Union in the IP are analysed on the basis of the import and export statistics of Cambodia.

| (21) | During the consultations with the Cambodian custom authorities, the Commission received the database of all the import and export transactions under Harmonised System (HS) heading 2918 for the IP. The database allowed for identification of the month and year of each given single transaction, description of the Cambodian customs code up to eight digits level, detailed product description, name of the exporter/importer, volume and value of the transaction, country of import/origin/destination. |
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(21)

During the consultations with the Cambodian custom authorities, the Commission received the database of all the import and export transactions under Harmonised System (HS) heading 2918 for the IP. The database allowed for identification of the month and year of each given single transaction, description of the Cambodian customs code up to eight digits level, detailed product description, name of the exporter/importer, volume and value of the transaction, country of import/origin/destination.

| (22) | Furthermore, during the consultations with the Cambodian Ministry of Commerce and the Ministry of Industry and Handicraft, it was confirmed that the sole cooperating Cambodian exporting producer, WKB, is the only exporter and producer of the product under investigation existing in Cambodia. |
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(22)

Furthermore, during the consultations with the Cambodian Ministry of Commerce and the Ministry of Industry and Handicraft, it was confirmed that the sole cooperating Cambodian exporting producer, WKB, is the only exporter and producer of the product under investigation existing in Cambodia.

| (23) | The product concerned was imported into Cambodia, both from China directly and also via Thailand and Vietnam, by the sole exporting producer of the product under investigation in Cambodia, WKB, and by other non-exporting Cambodian companies. |
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(23)

The product concerned was imported into Cambodia, both from China directly and also via Thailand and Vietnam, by the sole exporting producer of the product under investigation in Cambodia, WKB, and by other non-exporting Cambodian companies.

| (24) | The imports by other companies, active mainly in the garment and textile industry, were relatively low in volumes and were consumed internally in Cambodia — no export transaction of citric acid or citric salt other than the exports from WKB are noted in the custom records. Therefore, these imports can be excluded from the analysis of the change in the pattern of trade between Cambodia, the PRC and the Union. |
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(24)

The imports by other companies, active mainly in the garment and textile industry, were relatively low in volumes and were consumed internally in Cambodia — no export transaction of citric acid or citric salt other than the exports from WKB are noted in the custom records. Therefore, these imports can be excluded from the analysis of the change in the pattern of trade between Cambodia, the PRC and the Union.

| (25) | WKB first appeared in the customs statistics of Cambodia as an importer of citric acid in the year 2015. WKB's imports are substantial compared to the rest of Cambodian imports and show an increasing trend in the period from 2015 to the RP. |
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(25)

WKB first appeared in the customs statistics of Cambodia as an importer of citric acid in the year 2015. WKB's imports are substantial compared to the rest of Cambodian imports and show an increasing trend in the period from 2015 to the RP.

citric acid

| (26) | WKB also appeared first in export statistics as an exporter of citric salt both to the Union and to third countries in the year 2015. |
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(26)

WKB also appeared first in export statistics as an exporter of citric salt both to the Union and to third countries in the year 2015.

citric salt

| (27) | Data on Cambodian imports of the product concerned originating in China and exports of the product under investigation from Cambodia to the Union are shown in the tables below. It should be underlined the volumes of exports are much higher than volumes of imports, which is explained below by the production process of WKB.

  Table 1


  Import volumes (tonnes) from the PRC to Cambodia | 2014 | 2015 | 2016 | RP |
| --- | --- | --- | --- | --- | --- |
| WKB (*1) | 0 | 2 250 | 1 200 | 2 990 |
| Other companies (*2) | 398 | 497 | 581 | 533 |
| Imports total | 398 | 2 747 | 1 781 | 3 523 |
| Source: Cambodian custom authorities. |

(27)

Data on Cambodian imports of the product concerned originating in China and exports of the product under investigation from Cambodia to the Union are shown in the tables below. It should be underlined the volumes of exports are much higher than volumes of imports, which is explained below by the production process of WKB.

Table 1

Table 1

Import volumes (tonnes) from the PRC to Cambodia

Import volumes (tonnes) from the PRC to Cambodia

2014

2015

2016

RP

WKB (*1)

*1

0

2 250

1 200

2 990

Other companies (*2)

*2

398

497

581

533

Imports total

Imports total

398

398

2 747

2 747

1 781

1 781

3 523

3 523

Source: Cambodian custom authorities.

Source:

Table 2

Table 2

Export volumes (tonnes) from Cambodia

Export volumes (tonnes) from Cambodia

| | 2014 | 2015 | 2016 | RP |
| --- | --- | --- | --- | --- |
| WKB (*3) | 0 | 872 | 9 174 | 24 221 |
| Other companies | 0 | 0 | 0 | 0 |
| Exports total
   (*4) | 0 | 872 | 9 174 | 24 221 |
| Source: Cambodian custom authorities. |

2014

2015

2016

RP

WKB (*3)

*3

0

872

9 174

24 221

Other companies

0

0

0

0

Exports total
   (*4)

Exports total

*4

0

872

9 174

24 221

Source: Cambodian custom authorities.

Source:

| (28) | The increase in volumes, of both exports from Cambodia to the Union and of exports from the PRC to Cambodia has taken place following the continuation of the measures and the increase of the definitive anti-dumping duties by Implementing Regulation (EU) 2015/82. This constitutes a change in the pattern of trade between the PRC and Cambodia on the one hand, and Cambodia and the Union, on the other hand. |
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(28)

The increase in volumes, of both exports from Cambodia to the Union and of exports from the PRC to Cambodia has taken place following the continuation of the measures and the increase of the definitive anti-dumping duties by Implementing Regulation (EU) 2015/82. This constitutes a change in the pattern of trade between the PRC and Cambodia on the one hand, and Cambodia and the Union, on the other hand.

2.3.   Alleged circumvention practice

Alleged circumvention practice

2.3.1.   Due cause or economic justification other than imposition of the anti-dumping duty

Due cause or economic justification other than imposition of the anti-dumping duty

| (29) | According to the findings of the investigation, there is due cause or economic justification regarding the start of economic activity and establishment of production by WKB in Cambodia. The fact that a Chinese investor invested in WKB does not alter those findings. Indeed, the main reason for the location of production facilities in Cambodia was a package of incentives offered to the Chinese investor. |
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(29)

According to the findings of the investigation, there is due cause or economic justification regarding the start of economic activity and establishment of production by WKB in Cambodia. The fact that a Chinese investor invested in WKB does not alter those findings. Indeed, the main reason for the location of production facilities in Cambodia was a package of incentives offered to the Chinese investor.

due cause or economic justification regarding

| (30) | WKB was established in 2014 (production started in 2015). Before establishment of WKB, the Er-Kang Group (mother group of WKB) was not involved in the production of the product concerned in the PRC. The Er-Kang group also does not have any production activity in Malaysia, where the measures were recently extended by Regulation (EU) 2016/32. |
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(30)

WKB was established in 2014 (production started in 2015). Before establishment of WKB, the Er-Kang Group (mother group of WKB) was not involved in the production of the product concerned in the PRC. The Er-Kang group also does not have any production activity in Malaysia, where the measures were recently extended by Regulation (EU) 2016/32.

| (31) | The establishment of WKB was part of a bigger investment project. At the same time, two other companies (a producer of starch and a producer of specialized starch) were established on the same location by the Er-Kang Group. |
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(31)

The establishment of WKB was part of a bigger investment project. At the same time, two other companies (a producer of starch and a producer of specialized starch) were established on the same location by the Er-Kang Group.

| (32) | The decision to locate production in Cambodia was driven to some extent by the access to raw-materials (cassava) but even more by the package of incentives offered by the Cambodian government. As confirmed during the consultations with the Council of Development of Cambodia and the Cambodian Ministry of Finance, the total Er-Kang Group investment was qualified as a qualified investment project (‘QIP’). QIP, upon fulfilment of certain criteria of investment value and local employment content (thresholds are defined according to the sector of activity) and of export obligations, grants certain privileges with regard to import customs duties and taxes on imported machines and raw materials and to income tax grace period. |
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(32)

The decision to locate production in Cambodia was driven to some extent by the access to raw-materials (cassava) but even more by the package of incentives offered by the Cambodian government. As confirmed during the consultations with the Council of Development of Cambodia and the Cambodian Ministry of Finance, the total Er-Kang Group investment was qualified as a qualified investment project (‘QIP’). QIP, upon fulfilment of certain criteria of investment value and local employment content (thresholds are defined according to the sector of activity) and of export obligations, grants certain privileges with regard to import customs duties and taxes on imported machines and raw materials and to income tax grace period.

2.3.2.   Transhipment allegation

Transhipment allegation

| (33) | As indicated in recital (6), the circumvention practice alleged in the request was the transhipment, with or or without minor processing operations, of the product concerned via Cambodia to the Union. |
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(33)

As indicated in recital (6), the circumvention practice alleged in the request was the transhipment, with or or without minor processing operations, of the product concerned via Cambodia to the Union.

| (34) | In order to assess this allegation, the Commission examined the quantities and type of the product concerned imported to Cambodia, whether the production or certain stages of production of the product under investigation take place in Cambodia, details of the production process, and the quantities and types of the product under investigation which is exported to the Union. |
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(34)

In order to assess this allegation, the Commission examined the quantities and type of the product concerned imported to Cambodia, whether the production or certain stages of production of the product under investigation take place in Cambodia, details of the production process, and the quantities and types of the product under investigation which is exported to the Union.

| (35) | Since the only exporter of the product under investigation, as explained in recital (22), is WKB, the Commission limited its examination to this company. |
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(35)

Since the only exporter of the product under investigation, as explained in recital (22), is WKB, the Commission limited its examination to this company.

| (36) | The investigation confirmed that WKB has a full and active production line (including fermentation tanks) of the product under investigation located in Cambodia and that the product exported later to the Union is produced there. |
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(36)

The investigation confirmed that WKB has a full and active production line (including fermentation tanks) of the product under investigation located in Cambodia and that the product exported later to the Union is produced there.

| (37) | WKB has a production process of citric salt where citric acid is used as one of the raw materials. This citric acid is mainly imported from the PRC but also from Thailand. The decision on the source country being based on price levels. These operations are thus economically rational and do not suggest any intent to circumvent. Indeed, if the sole intention was to circumvent the measures WKB would import only from the PRC and then simply export the product to the Union directly or after small transformations. |
| --- | --- |

(37)

WKB has a production process of citric salt where citric acid is used as one of the raw materials. This citric acid is mainly imported from the PRC but also from Thailand. The decision on the source country being based on price levels. These operations are thus economically rational and do not suggest any intent to circumvent. Indeed, if the sole intention was to circumvent the measures WKB would import only from the PRC and then simply export the product to the Union directly or after small transformations.

| (38) | Furthermore, it has to be underlined that only a relatively small amount of citric acid is used in the manufacturing process, compared with the final amount of produced citric salt. Citric acid is added at a late stage of the production process in order to reduce the pH value of the final product. |
| --- | --- |

(38)

Furthermore, it has to be underlined that only a relatively small amount of citric acid is used in the manufacturing process, compared with the final amount of produced citric salt. Citric acid is added at a late stage of the production process in order to reduce the pH value of the final product.

| (39) | Finally, no citric acid imported by WKB, whether of Chinese or Thai origin, is later sold or exported by the company. |
| --- | --- |

(39)

Finally, no citric acid imported by WKB, whether of Chinese or Thai origin, is later sold or exported by the company.

| (40) | The findings of recitals (37) to (39) were confirmed following an on-spot verification of purchases, stock movements of the raw material in question and its consumption records as well as stocks and sales volumes of the final product, namely citric salt. |
| --- | --- |

(40)

The findings of recitals (37) to (39) were confirmed following an on-spot verification of purchases, stock movements of the raw material in question and its consumption records as well as stocks and sales volumes of the final product, namely citric salt.

| (41) | In light of those findings, it is concluded that the allegations of transhipment and circumvention of the measures imposed on imports from the PRC via consignments from Cambodia cannot be confirmed. Citric acid is a raw-material (imported from the PRC or Thailand) which is used by WKB in limited amounts for the production of citric salt. |
| --- | --- |

(41)

In light of those findings, it is concluded that the allegations of transhipment and circumvention of the measures imposed on imports from the PRC via consignments from Cambodia cannot be confirmed. Citric acid is a raw-material (imported from the PRC or Thailand) which is used by WKB in limited amounts for the production of citric salt.

| (42) | Following disclosure, the Union industry commented on those findings casting doubts as to the ratio of citric acid used in the production process of citric salt and as to general treatment of citric acid as a raw-material in the production process of citric salt. According to the Union industry, citric acid would be a semi-product rather than a raw material, and it is the fermentation process that leads to citric acid which is later transformed into citric salt. |
| --- | --- |

(42)

Following disclosure, the Union industry commented on those findings casting doubts as to the ratio of citric acid used in the production process of citric salt and as to general treatment of citric acid as a raw-material in the production process of citric salt. According to the Union industry, citric acid would be a semi-product rather than a raw material, and it is the fermentation process that leads to citric acid which is later transformed into citric salt.

| (43) | In this regard, it has to be underlined that production process used by WKB is different that production process applied by the Union industry. As indicated in recitals (37), (38) and (40), the amount of citric acid purchased and used in the production process, its origin and the stage at which it is added to the production process were verified on location at WKB premises. Furthermore, even if the Union industry's allegations with respect to the production process were confirmed, they would not affect overall the Commission's assessment of the circumvention of the measures in the light of findings in recital (49). |
| --- | --- |

(43)

In this regard, it has to be underlined that production process used by WKB is different that production process applied by the Union industry. As indicated in recitals (37), (38) and (40), the amount of citric acid purchased and used in the production process, its origin and the stage at which it is added to the production process were verified on location at WKB premises. Furthermore, even if the Union industry's allegations with respect to the production process were confirmed, they would not affect overall the Commission's assessment of the circumvention of the measures in the light of findings in recital (49).

| (44) | Furthermore, the Union industry indicated that in its official website WKB was described itself as producer of both citric acid and citric salt. Only after September 2017 was the website modified and citric acid removed from the list of products. |
| --- | --- |

(44)

Furthermore, the Union industry indicated that in its official website WKB was described itself as producer of both citric acid and citric salt. Only after September 2017 was the website modified and citric acid removed from the list of products.

| (45) | In this regard, it is clear on the basis of detailed Cambodian customs statistics as well as the production, purchase and sales records of WKB that it was never involved in production and/or sales of citric acid. |
| --- | --- |

(45)

In this regard, it is clear on the basis of detailed Cambodian customs statistics as well as the production, purchase and sales records of WKB that it was never involved in production and/or sales of citric acid.

| (46) | As explained in recitals (47) to (50), the operations of WKB in Cambodia also cannot be considered a minor transformation of the product in order to avoid anti-dumping duties, as alleged in the request. Moreover, as both citric acid and citric salt are covered by the anti-dumping measures, this minor transformation would not constitute a practice different than transhipment, and the investigation has shown that WKB is not transhipping. |
| --- | --- |

(46)

As explained in recitals (47) to (50), the operations of WKB in Cambodia also cannot be considered a minor transformation of the product in order to avoid anti-dumping duties, as alleged in the request. Moreover, as both citric acid and citric salt are covered by the anti-dumping measures, this minor transformation would not constitute a practice different than transhipment, and the investigation has shown that WKB is not transhipping.

2.3.3.   Assembly operations

Assembly operations

| (47) | As per recital (12) of the initiating Regulation, if circumvention practices via Cambodia covered by Article 13 of the basic Regulation, other than transhipment, are identified in the course of the investigation, the investigation may also cover these practices. Therefore, the Commission examined whether assembly operations within the meaning of Article 13(2) of the basic Regulation were taking place in Cambodia and whether such operations would constitute circumvention. |
| --- | --- |

(47)

As per recital (12) of the initiating Regulation, if circumvention practices via Cambodia covered by Article 13 of the basic Regulation, other than transhipment, are identified in the course of the investigation, the investigation may also cover these practices. Therefore, the Commission examined whether assembly operations within the meaning of Article 13(2) of the basic Regulation were taking place in Cambodia and whether such operations would constitute circumvention.

| (48) | In accordance with Article 13(2)(b) of the basic Regulation, in order to establish circumvention of the anti-dumping measures through assembly operations, the Commission must verify that the parts (raw materials) used in the assembly operation from the countries subject to the anti-dumping measures constitute 60 % or more of the total value of the parts (raw materials) of the assembled product and that the value added to the parts (raw materials) brought in is not greater than 25 % of the manufacturing cost. |
| --- | --- |

(48)

In accordance with Article 13(2)(b) of the basic Regulation, in order to establish circumvention of the anti-dumping measures through assembly operations, the Commission must verify that the parts (raw materials) used in the assembly operation from the countries subject to the anti-dumping measures constitute 60 % or more of the total value of the parts (raw materials) of the assembled product and that the value added to the parts (raw materials) brought in is not greater than 25 % of the manufacturing cost.

| (49) | In the case of WKB, it was found that the raw materials originating in the country subject to measures (namely the PRC) did not constitute 60 % or more of the total value of the raw materials used in the production of the product under investigation. |
| --- | --- |

(49)

In the case of WKB, it was found that the raw materials originating in the country subject to measures (namely the PRC) did not constitute 60 % or more of the total value of the raw materials used in the production of the product under investigation.

| (50) | As the investigation showed that the 60 % criterion was not met and the assembly operation cannot be considered as circumvention within the meaning of Article 13(2) of the basic Regulation, it was not considered necessary to examine the second criterion of 25 % added value in the costs of manufacturing. |
| --- | --- |

(50)

As the investigation showed that the 60 % criterion was not met and the assembly operation cannot be considered as circumvention within the meaning of Article 13(2) of the basic Regulation, it was not considered necessary to examine the second criterion of 25 % added value in the costs of manufacturing.

2.3.4.   Conclusion on circumvention

Conclusion on circumvention

| (51) | In light of recitals (29) to (50), it is concluded that no evidence of circumvention within the meaning of Article 13(1) and (2) of the basic Regulation was found with regard to the activity of the WKB. |
| --- | --- |

(51)

In light of recitals (29) to (50), it is concluded that no evidence of circumvention within the meaning of Article 13(1) and (2) of the basic Regulation was found with regard to the activity of the WKB.

| (52) | Since WKB represents 100 % of the Cambodian exports of the product under investigation to the Union during the IP, it could not be established that the measures in force on imports originating in the PRC are being circumvented by imports consigned from Cambodia. |
| --- | --- |

(52)

Since WKB represents 100 % of the Cambodian exports of the product under investigation to the Union during the IP, it could not be established that the measures in force on imports originating in the PRC are being circumvented by imports consigned from Cambodia.

2.4.   Undermining of the remedial effects of the duty and evidence of dumping

Undermining of the remedial effects of the duty and evidence of dumping

| (53) | As the investigation showed that the operations carried out in Cambodia cannot be considered as circumvention within the meaning of Article 13(1) and (2) of the basic Regulation, it was not considered necessary to examine those aspects. |
| --- | --- |

(53)

As the investigation showed that the operations carried out in Cambodia cannot be considered as circumvention within the meaning of Article 13(1) and (2) of the basic Regulation, it was not considered necessary to examine those aspects.

3.   TERMINATION OF THE INVESTIGATION

TERMINATION OF THE INVESTIGATION

| (54) | In view of the findings in recitals (51) and (52), the current anti-circumvention investigation should be terminated. The registration of imports of the product under investigation introduced by the initiating Regulation should therefore be discontinued and that Regulation should be repealed. |
| --- | --- |

(54)

In view of the findings in recitals (51) and (52), the current anti-circumvention investigation should be terminated. The registration of imports of the product under investigation introduced by the initiating Regulation should therefore be discontinued and that Regulation should be repealed.

| (55) | Interested parties were informed of the essential facts and considerations on the basis of which the Commission intended to terminate the investigation and were given the opportunity to comment. The comments received were not of a nature to change the above conclusions. |
| --- | --- |

(55)

Interested parties were informed of the essential facts and considerations on the basis of which the Commission intended to terminate the investigation and were given the opportunity to comment. The comments received were not of a nature to change the above conclusions.

| (56) | The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of the basic Regulation, |
| --- | --- |

(56)

The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of the basic Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

The investigation initiated by Commission Implementing Regulation (EU) 2017/2300 in order to determine if imports into the Union of citric acid (including trisodium citrate dihydrate), originating in the People's Republic of China, currently falling within CN codes ex 2918 14 00 (TARIC code 2918140090) and ex 2918 15 00 (TARIC code 2918150019) and consigned from Cambodia, whether declared as originating in Cambodia or not, are circumventing the measures imposed by Commission Implementing Regulation (EU) 2015/82, is hereby terminated.

Article 2

Customs authorities shall discontinue the registration of imports established in accordance to Article 2 of Commission Implementing Regulation (EU) 2017/2300.

Article 3

Commission Implementing Regulation (EU) 2017/2300 is hereby repealed.

Article 4

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, 13 September 2018.

For the Commission

The President

Jean-Claude JUNCKER

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(1)  
  OJ L 176, 30.6.2016, p. 21.

1

(2)  Council Regulation (EC) No 1193/2008 of 1 December 2008 imposing a definitive anti-dumping duty and collecting definitively the provisional duties imposed on imports of citric acid originating in the People`s Republic of China (OJ L 323, 3.12.2008, p. 1).

2

(3)  Commission Implementing Regulation (EU) 2015/82 of 21 January 2015 imposing a definitive anti-dumping duty on imports of citric acid originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 and of partial interim reviews pursuant to Article 11(3) of Regulation (EC) No 1225/2009 (OJ L 15, 22.1.2015, p. 8).

3

(4)  Commission Implementing Regulation (EU) 2016/32 of 14 January 2016 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) 2015/82 on imports of citric acid originating in the People's Republic of China to imports of citric acid consigned from Malaysia, whether declared as originating in Malaysia or not (OJ L 10, 15.1.2016, p. 3).

4

(5)  Commission Implementing Regulation (EU) 2017/2300 of 12 December 2017 initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Implementing Regulation (EU) 2015/82 on imports of citric acid originating in the People's Republic of China by imports of citric acid consigned from Cambodia, whether declared as originating in Cambodia or not, and making such imports subject to registration (OJ L 329, 13.12.2017, p. 39).

5

(*1)  Only citric acid.

*1

(*2)  Citric acid and citric salt.

*2

(*3)  Only citric salt.

*3

(*4)  Export to EU remains in the range of 55 % to 85 % of the total exports

*4

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