# EUR-Lex - 52011PC0867 - EN

*|*

# 52011PC0867

**Proposal for a COUNCIL REGULATION extending the definitive anti-dumping duty imposed by Regulation (EU) No 511/2010 on imports of certain molybdenum wires originating in the People's Republic of China to imports of certain molybdenum wires consigned from Malaysia, whether declared as originating in Malaysia or not and terminating the investigation in respect of imports consigned from Switzerland /* COM/2011/0867 final - 2011/0422 (NLE) */**

			*

			*

EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

·
Grounds for and objectives of the proposal

This proposal concerns the application of Council Regulation (EC) No 1225/2009 on protection against dumped
imports from countries not members of the European Community[1] (‘the basic Regulation’) in the proceeding
concerning imports of certain molybdenum wires
consigned from Malaysia and Switzerland, whether declared as originating in
Malaysia and Switzerland or not.

·
General context

This proposal is made in the context of the
implementation of the basic Regulation and is the result of an investigation
which was carried out in line with the substantive and procedural requirements
laid out in the basic Regulation.

The measures currently in force are a
definitive anti-dumping duty imposed by Council Regulation (EU) No 511/2010 (OJ
L 150, 16.6.2010, p. 17.) on imports of certain molybdenum wire originating in
the People's Republic of China.

·
Consistency with other policies and
objectives of the Union

Not applicable.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

·
Consultation of interested parties

Interested parties concerned by the proceeding
have had the possibility to defend their interests during the investigation, in
line with the provisions of the basic Regulation.

·
Collection and use of expertise

There was no need for external expertise.

·
Impact assessment

This proposal is the result of the
implementation of the basic Regulation.

The basic Regulation does not provide for a
general impact assessment but contain an exhaustive list of conditions that
have to be assessed.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

·
Summary of the proposed action

A definitive anti-dumping duty of 64,3% was
imposed on imports of certain molybdenum wire originating in the People's
Republic of China ('PRC') in June 2010.

The current investigation was initiated on 18
May 2011 pursuant to Article 13(3) of the basic Regulation upon a request
submitted by the European Association of Metals (Eurometaux) on behalf of a
Union producer of molybdenum wires. The applicant alleged that the measures in
force were circumvented by means of transhipment via Malaysia and Switzerland

The findings in the present case are based on
facts available as co-operation was obtained neither from exporting producers
in the countries concerned nor from any importer in the EU. No comments were
received from the Chinese, Malaysian or Swiss authorities.

According to the request, there is no
production of molybdenum wires in Malaysia or Switzerland. In the course of the
present investigation, the Commission received no evidence which would
contradict that information.

Switzerland

The investigation could not establish any
transhipment practices of molybdenum wires originating in the PRC via
Switzerland as there were no imports of the product concerned from Switzerland
declared as originating in Switzerland into the EU during the IP. Consequently
the investigation concerning the possible circumvention of anti-dumping
measures by imports of molybdenum wires consigned from Switzerland should be
terminated and the registration of imports of molybdenum wires consigned from
Switzerland, introduced by the initiating Regulation, should be discontinued.

Malaysia

The decrease of Chinese imports and parallel
increase of imports from Malaysia constituted a change in the pattern of trade
between the PRC and Malaysia on the one hand and the Union on the other.

The investigation did not bring to light any
other due cause or economic justification for the transhipment than the avoidance
of the measures in force. No elements were found, other than the duty, which
could be considered a compensation for the cost of transhipment.

The comparison of weighted average normal value
as established in the original investigation and the weighted average export
price showed dumping.

It was further established that the export
prices from Malaysia undersold those of the Union industry as established
during the original investigation. As far as the undermining effects in terms
of volumes are concerned, the level of imports from Malaysia in the IP amounts
to around 6% of the level of imports of the product originating in the PRC
before the imposition of measures. It is therefore concluded that the Malaysian
imports undermine the remedial effects of the duties in terms of both
quantities and prices.

Consequently, it is proposed to extend the
anti-dumping measures to imports of molybdenum wires consigned from Malaysia,
whether directly or via a third country and whether declared as originating in
Malaysia or not.

·
Legal basis

Council Regulation (EC) No 1225/2009 of 30
November 2009 on protection against dumped imports from countries not members
of the European Community and in particular Article 13 thereof.

·
Subsidiarity principle

The proposal falls under the exclusive
competence of the Union. The subsidiarity principle therefore does not apply.

·
Proportionality principle

The proposal complies with the proportionality
principle for the following reason.

The form of action is described in the
above-mentioned basic Regulation and leaves no scope for national decision.
Indication of how financial and administrative burden falling upon the Union,
national governments, regional and local authorities, economic operators and
citizens is minimized and proportionate to the objective of the proposal is not
applicable.

·
Choice of instruments

Proposed instrument: Council Regulation.

Other means would not be adequate because the
basic Regulation does not provide for alternative options.

4.           BUDGETARY IMPLICATION

The proposal has no implication for the Union
budget.

2011/0422 (NLE)

Proposal for a

COUNCIL REGULATION

extending the definitive anti-dumping duty
imposed by Regulation (EU) No 511/2010 on imports of certain molybdenum wires
originating in the People's Republic of China to imports of certain molybdenum
wires consigned from Malaysia, whether declared as originating in Malaysia or
not and terminating the investigation in respect of imports consigned from
Switzerland

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to Council Regulation (EC) No
1225/2009 of 30 November 2009 on protection against dumped imports from
countries not members of the European Community[2]
(‘the basic Regulation’), and in particular Article 13 thereof,

Having regard to the proposal submitted by
the European Commission ('the Commission') after consulting the Advisory
Committee,

Whereas:

A. PROCEDURE

1.
Existing measures

(1)
By Regulation (EU) No 511/2010[3] ('the original Regulation'),
the Council imposed a definitive anti-dumping duty of 64,3% on imports of
certain molybdenum wires as defined in Article 1(1) of the said Regulation ('the
product concerned)' originating in the People's Republic of China ('PRC' or
'country concerned'). These measures will hereinafter be referred to as 'the
measures in force' and the investigation that led to the measures imposed by
the original Regulation will be hereinafter referred to as ' the original
investigation'.

2.
Request

(2)
On 4 April 2011, the Commission received a
request pursuant to Article 13(3) of the basic Regulation to investigate the
alleged circumvention of the measures in force. The request was submitted by
the European Association of Metals (Eurometaux) on behalf of a Union producer
of certain molybdenum wires ('the applicant').

(3)
The request alleged that following the
imposition of the measures in force, there had been a significant change in the
pattern of trade between PRC, Malaysia and Switzerland on the one hand and the
Union on the other. The applicant claimed that this change was due to
transhipment of molybdenum wires via Malaysia or Switzerland.

(4)
The request concluded that there was
insufficient due cause or economic justification for the transhipment other
than the existence of the measures in force.

(5)
Finally, the applicant alleged that the remedial
effects of the measures in force were being undermined both in terms of
quantities and prices and that the prices of molybdenum wires from Malaysia and
Switzerland were dumped when related to the normal value established in the
original investigation.

3.
Initiation

(6)
Having determined, after consulting the Advisory
Committee, that sufficient prima facie evidence existed for initiation
of an investigation pursuant to Article 13 of the basic Regulation, the
Commission initiated an investigation by Regulation (EU) No 477/2011[4] ('the initiating Regulation').
Pursuant to Articles 13(3) and 14(5) of the basic Regulation, the Commission, by
the initiating Regulation, also directed the customs authorities to register
imports of the product concerned consigned from Malaysia or Switzerland,
whether declared as originating in Malaysia or Switzerland or not, as of 19 May
2011.

4.
Investigation

(7)
The Commission officially advised the
authorities of the PRC, Malaysia and Switzerland, the exporting producers and
traders in those countries, the importers in the Union known to be concerned as
well as the Union producers of the initiation of the investigation.

(8)
Questionnaires were sent to the
producers/exporters in Malaysia, Switzerland and the PRC as well as to Union
importers known to be concerned and/or mentioned in the request. 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. All
parties were informed that non-cooperation might lead to the application of
Article 18 of the basic Regulation and to findings being based on the facts
available.

(9)
One Union importer contacted the Commission,
declaring that it had never purchased any molybdenum wires from outside the
Union.

(10)
Two Malaysian companies submitted that during
the IP they neither manufactured nor exported to the Union any molybdenum
wires.

(11)
One Swiss company declared that they were not
involved in producing or selling the molybdenum wires over the past three
years.

(12)
One Chinese producer replied to the
questionnaire indicating that, from 2009 onwards, they exported molybdenum
wires neither to the Union nor to Malaysia or Switzerland.

(13)
The Commission received no comments from the
Chinese, Malaysian or Swiss authorities.

5.
Investigation Period

(14)
The investigation period covered the period from
1 April 2010 to 31 March 2011 ('the IP'). Data was collected for the period
from 2007 to the end of the IP ('period considered') to investigate the alleged
change in the pattern of trade.

B. RESULTS OF THE INVESTIGATION

1.
General considerations/degree of
cooperation

(15)
As mentioned in recital (10), only two companies
in Malaysia cooperated but they did not export the product concerned to the
Union during the IP. As mentioned in recital (11), only one Swiss company
submitted information according to which they were not involved in producing or
selling the product concerned over the past three years. Consequently, findings
in the present investigation had to be based on facts available in accordance
with Article 18 of the basic Regulation.

(16)
In accordance with Article 13(1) of the basic
Regulation, the assessment of possible circumvention practices was made by
analyzing successively (1) whether there was a change in the pattern of trade
between PRC, Malaysia and Switzerland on the one hand
and the Union on the other; (2) 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 duty; (3) if there was
evidence of injury or that the remedial effects of the duty were being
undermined in terms of the prices and/or quantities of the like product; and (4)
whether there was evidence of dumping in relation to the normal values
previously established for the like product, if necessary in accordance with
the provisions of Article 2 of the basic Regulation.

2.
Product concerned and like product

(17)
The product concerned is as defined in the
original investigation, i.e. molybdenum wire, containing
by weight at least 99,95 % of molybdenum, of which the maximum cross-sectional
dimension exceeds 1,35 mm but does not exceed 4,0 mm, originating in the PRC, currently
falling within CN code ex 8102 96 00.

(18)
The product under investigation is the same as
that defined in recital (17) but consigned from Malaysia
or Switzerland, whether declared as originating in Malaysia or Switzerland or
not.

(19)
As far as imports declared as originating in
Switzerland are concerned it was established, on the basis of data from
Surveillance II database, that there were no imports of the product concerned
to the Union during the IP.

(20)
As far as imports declared as originating in
Malaysia are concerned, in the absence of cooperation, the comparison of
molybdenum wires exported to the Union from PRC against molybdenum wires
consigned from Malaysia to the Union was based on information available in
accordance with Article 18 of the basic Regulation, including information
provided in the request. No information obtained during the present
investigation suggested that molybdenum wires exported to the Union from the
PRC and molybdenum wires consigned from Malaysia to the Union would not have
the same basic physical characteristics and the same uses. Therefore, they are
considered as like products within the meaning of Article 1(4) of the basic
Regulation. No submissions to the contrary were made during the investigation.

3.
Change in the pattern of trade

Imports of molybdenum wires into the Union

3.1.1.
PRC and Malaysia

(21)
Due to lack of cooperation from the Chinese
exporting producers, in order to assess the level of imports for the year 2010
and the IP different statistical sources have been compared. Those included
both publicly available sources like Eurostat as well as other sources like the
database pursuant to Article 14(6) of the basic Regulation and Surveillance II
database.

(22)
As stated in recital 27 of the original
Regulation, imports from the PRC amounted to 87 tonnes in 2007, 100 tonnes in
2008 and 97 tonnes in the original IP (1 April 2008 to 31 March 2009).

(23)
The imports of the product concerned from the
PRC dropped significantly after the imposition of the measures (from 97 tonnes
in the original IP to below 10 tonnes in the IP). On the other hand Malaysian
imports increased from none in 2009 to around 6 tonnes in the IP.

3.1.2.
PRC and Switzerland

(24)
According to the Eurostat data, i.e. data at the
CN code level, the imports from Switzerland increased from virtually none in
2009 and preceding years to 5 tonnes in both 2010 and 2011. However, the
investigation established that no imports of the product concerned from
Switzerland, declared as originating in Switzerland, into the Union were made
during the IP. Furthermore, no such imports were made in the whole year 2010
while original provisional measures were in force since December 2009.

3.1.3.
Imports from the PRC into Malaysia and
Switzerland

(25)
The Chinese statistical sources indicate that exports
of the product concerned to Malaysia started in 2010, while only negligible
quantities were exported in 2009 and 2008.

(26)
The Swiss statistical sources show that imports
from the PRC into Switzerland started in 2010 and continued in 2011 although
negligible quantities were imported in 2009 and 2008. However, this import data
relates at the level of CN code and hence has a scope broader than the
definition of the product concerned in the present investigation. As noted
above it was established that there were no exports of the product concerned
from Switzerland, declared as originating in Switzerland, to the EU.
Consequently, the investigation could not establish any transhipment practices
of molybdenum wires originating in PRC via Switzerland.

3.1.4.
Conclusion on the change of pattern of trade

Malaysia

(27)
The overall decrease of exports of the product
concerned from the PRC to the Union as from 2010 and the parallel increase of
exports from Malaysia and of exports from the PRC to Malaysia after the
imposition of the original measures constituted a change in the pattern of
trade between the above mentioned countries on the one hand and the Union on
the other hand.

Switzerland

(28)
As far as Switzerland is concerned, no change in
the pattern of trade between the PRC, Switzerland and the EU could be
established with regard to imports of the product concerned. Consequently, the
investigation of possible circumvention of anti-dumping measures by imports of
molybdenum wires consigned from Switzerland should be terminated.

4.
Nature of the circumvention practice and
insufficient due cause or economic justification

(29)
Article 13(1) of the basic Regulation requires that
the change in the pattern of trade stems from a practice, process or work for
which there is insufficient due cause or economic justification other than the
imposition of the duty. The practice, process or work includes, inter alia, the
consignment of the product subject to measures via third countries.

(30)
The comparison of trade flows between the PRC
and Malaysia on the one hand and Malaysia and the EU on the other hand
indicates the existence of transhipment practices. The allegation in the
request has not been contested by any operator from neither the above mentioned
countries nor from the EU. It is recalled that no producers of molybdenum wires
from Malaysia cooperated with this investigation.

(31)
The investigation did not bring to light any other
due cause or economic justification for the transshipment than the avoidance of
the measures in force. No elements were found, other than the avoidance of the
payment of the duty, which could be considered as a compensation for the costs
of transshipment of the product concerned from the PRC via Malaysia.

(32)
This conclusion is further corroborated by the
fact that no producer of molybdenum wires from Malaysia came forward during the
present investigation.

(33)
In addition, it is noted that imports from
Malaysia had discontinued around the time of the publication of the initiating
Regulation.

(34)
It is therefore concluded that, in the absence
of any other sufficient due cause or economic justification within the meaning
of the second sentence of Article 13(1) of the basic Regulation, the change in
the pattern of trade between the PRC and Malaysia on the one hand and the Union
on the other hand was due to the imposition of the measures in force.

5.
Undermining of the remedial effects of
the duty in terms of the prices and/or the quantities of the like product

(35)
To assess whether the imported products from Malaysia
had, in terms of quantities and prices, undermined the remedial effects of the
measures in force, data from available statistical sources as described in
recital (21) above were used as the best data available concerning quantities
and prices of exports from Malaysia.

(36)
The increase of imports from Malaysia was
considered to be significant in terms of quantities. The level of imports from
Malaysia in the IP amounts to around 6% of the level of imports of the product
originating in the PRC to EU before the imposition of measures.

(37)
The comparison of the injury elimination level as
established in the original Regulation and the weighted average export price
showed significant underselling. It
was therefore concluded that the remedial effects of the measures in force are
being undermined both in terms of quantities and prices.

6.
Evidence of dumping in relation to the
normal value previously established for the like product

(38)
In the absence of cooperation from any exporting
producer, export prices were based on facts available pursuant to Article 18 of
the basic Regulation. The prices available from statistical sources as
described in recital (21) were considered to be the most reliable.

(39)
In accordance with Article
13(1) of the basic Regulation, it was considered appropriate that the normal
value to be used in an anti-circumvention investigation is the normal value
established during the original investigation. In the absence of cooperation and pursuant to Article 18 of the basic
Regulation, for the purpose of comparing the export price and normal value, it
was considered appropriate to assume that the product mix of the goods observed
during the present investigation was the same as in the original investigation.

(40)
In the original investigation,
the USA was considered to be an appropriate market economy analogue country.
Since the analogue country producer made only marginal sales on the domestic US
market, it was found unreasonable to use US domestic sales data for the
purposes of determining or constructing normal value. Consequently, the normal
value for the PRC was established on the basis of export prices from the USA to
other third countries, including the EU.

(41)
In accordance with Article 2(11) and 2(12) of the
basic Regulation, dumping was calculated by comparing the weighted average
normal value as established in the original Regulation and the weighted average
export prices established during this investigation’s IP, expressed as a
percentage of the net, free-at-Union-frontier price,
before customs duty.

(42)
The comparison of the weighted average normal value
and the weighted average export prices showed dumping.

C. MEASURES

(43)
In view of the findings above, it was concluded
that the definitive anti-dumping duty imposed on imports of molybdenum wires
originating in the PRC was circumvented by transhipment via Malaysia.

(44)
In accordance with the first sentence of Article
13(1) of the basic Regulation, the existing anti-dumping measures on imports of
the product concerned originating in the PRC, should be extended to imports of
the same product consigned from Malaysia, whether declared as originating in
Malaysia or not.

(45)
The measures to be extended should be the ones
established in Article 1(2) of Regulation (EU) No 511/2010, which are a
definitive anti-dumping duty of 64,3% applicable to the net,
free-at-Union-frontier price, before customs duty.

(46)
In accordance with Articles 13(3) and 14(5) of
the basic Regulation, which provides that any extended measure should apply to
imports which entered the Union under registration imposed by the initiating
Regulation, duties should be collected on those registered imports of
molybdenum wires consigned from Malaysia.

D. TERMINATION OF THE INVESTIGATION
IN RESPECT OF IMPORTS FROM SWITZERLAND

(47)
In view of the findings regarding Switzerland,
the investigation concerning the possible circumvention of anti-dumping
measures by imports of the product concerned consigned from Switzerland should
be terminated and the registration of imports of molybdenum wires consigned
from Switzerland, introduced by the initiating Regulation, should be
discontinued.

E. REQUESTS FOR EXEMPTION

(48)
It is recalled that during the present
investigation no producer/exporter of molybdenum wires to the Union made itself
known or was found to exist in Malaysia. Nevertheless, any producer from
Malaysia which did not export the product under investigation to the Union
during the IP and which considers lodging a request for an exemption from the
extended anti-dumping duty pursuant to Articles 11(4) and 13(4) of the basic
Regulation will be required to complete a questionnaire in order to enable the
Commission to determine whether an exemption may be warranted. Such exemption
may be granted after the assessment of the market situation of the product
concerned, production capacity and capacity utilisation, procurement and sales
and the likelihood of continuation of practices for which there is insufficient
due cause or economic justification and the evidence of dumping. The Commission
would normally also carry out an on-the-spot verification visit. The request
should be addressed to the Commission forthwith, with all relevant information,
in particular any modification in the company's activities linked to the
production and sales.

(49)
Where an exemption is warranted, the Commission
will, after consultation of the Advisory Committee, propose the amendment of the
extended measures in force accordingly. Subsequently, any exemption granted
will be monitored to ensure compliance with the conditions set therein.

F. DISCLOSURE

(50)
Interested parties were informed of the
essential facts and considerations leading to the above conclusions and were
given the opportunity to comment and to be heard,

HAS ADOPTED THIS REGULATION:

Article 1

1.         The
definitive anti-dumping duty imposed by Regulation (EU) No 511/2010 on imports
of molybdenum wire, containing by weight at least 99,95 % of molybdenum, of
which the maximum cross-sectional dimension exceeds 1,35 mm but does not exceed
4,0 mm, currently falling within CN code ex 8102 96 00 and originating in the
People’s Republic of China, is hereby extended to imports of molybdenum wire, containing
by weight at least 99,95 % of molybdenum, of which the maximum cross-sectional
dimension exceeds 1,35 mm but does not exceed 4,0 mm, currently falling within
CN code ex 8102 96 00 (TARIC code 8102 96 00 11), consigned from Malaysia,
whether declared as originating in Malaysia or not.

2.         The
duties extended by paragraph 1 of this Article shall be collected on imports
consigned from Malaysia, whether declared as originating in Malaysia or not,
registered in accordance with Article 2 of Commission Regulation (EU) No
477/2011 and Articles 13(3) and 14(5) of Regulation (EC) No 1225/2009.

3.         Unless
otherwise specified, the provisions in force concerning customs duties shall
apply.

Article 2

1.         Requests
for exemption from the duty extended by Article 1 shall be made in writing in
one of the official languages of the European Union and must be signed by a
person authorized to represent the entity requesting the exemption. The request
must be sent to the following address:

European
Commission

Directorate-General
for Trade

Directorate
H

Office: N105 4/92

1049
Bruxelles/Brussel

BELGIQUE/BELGIË

Fax +32 2297 98 81

Email: TRADE-13-3-MOLYBDENUM@ec.europa.eu

2.         In
accordance with Article 13(4) of Regulation (EC) No 1225/2009, the Commission,
after consulting the Advisory Committee, may authorise by decision the
exemption of imports which do not circumvent the anti-dumping measures imposed
by Regulation (EU) No 511/2010 from the duty extended by Article 1 of the
present Regulation.

Article 3

The investigation initiated by Regulation
(EU) No 477/2011 concerning the possible circumvention of the of anti-dumping
measures imposed by Council Implementing Regulation (EU) No 511/2010 on imports
of certain molybdenum wires originating in the People’s Republic of China by
imports of certain molybdenum wires consigned from Switzerland, whether
declared as originating in Switzerland or not, is hereby terminated.

Article 4

Customs
authorities are hereby directed to discontinue the registration of imports,
established in accordance with Article 2 of Regulation (EU) No 477/2011.

Article 5

This Regulation
shall enter into force on the day following 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, [...]

For
the Council

The
President

[1]               OJ L 343, 22.12.2009, p. 51.

[2]               OJ L 343, 22.12.2009, p.51.

[3]               OJ L 150, 16.6.2010, p. 17.

[4]               OJ L 131, 18.5.2011, p. 14.