2000R1603 — EN — 31.01.2003 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILREGULATION(EC)No1603/2000
of20July2000
imposing a definitive anti-dumping duty on imports of ethanolamines originating in the United
StatesofAmerica
(OJ L 185, 25.7.2000, p. 1)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 153/2003 of 27 January 2003 L 25 23 30.1.2003
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COUNCILREGULATION(EC)No1603/2000
of20July2000
imposing a definitive anti-dumping duty on imports of ethanola-
minesoriginatingintheUnitedStatesofAmerica
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December
1995 on protection against dumped imports from countries not
members of the European Community (1), and in particular Articles
11(2) and 11(3) thereof,
Having regard to the proposal submitted by the Commission after
having consulted the Advisory Committee,
Whereas:
A.PROCEDURE
1.Measuresinforce
(1)In February 1994, the Council imposed definitive anti-dumping
duties on imports of ethanolamines originating in the UnitedStates (Regulation (EC) No 229/94 (
2)). The duties took the
form of minimum-price-based variable duties for the three types
of ethanolamines, i.e. monoethanolamine (MEA), diethanolamine
(DEA) and triethanolamine (TEA).
2.Requestforareview
(2)Following the publication on 23 July 1998 (3) of a notice of
impending expiry of the anti-dumping measures in force with
regard to imports of ethanolamines originating in the USA, theCommission received a request to review these measurespursuant to Article 11(2) and 11(3) of Regulation (EC) No 384/96 (the ‘Basic Regulation’), i.e. a request for an expiry and
interim review.
(3)The request was lodged on 30 October 1998 by the Conseil
européen des fédérations de l'industrie chimique (CEFIC) on
behalf of Community producers whose collective output consti-
tuted a major proportion of the total Community production ofethanolamines.
(4)The CEFIC argued that expiry of the measures would be likelyto result in a continuation or recurrence of increased dumpingand injury to the Community industry and that there werereasons to review the measures because they lacked effective-ness. Having determined, after consulting the AdvisoryCommittee, that the evidence was sufficient, the Commission
initiated an investigation (
4) pursuant to Articles 11(2) and 11(3)
of the Basic Regulation. The investigation therefore covered notonly the question of what would happen if the measures wereallowed to lapse (see Article 11(2)), but also whether a modifica-tion of the existing anti-dumping measures (minimum-price-based variable duties) was warranted (see Article 11(3)).
3.Investigation
(5)The Commission officially advised the Community producers
supporting the request for review (the ‘applicant Communityproducers’), the exporting producers and their related importers,2000R1603 — EN — 31.01.2003 — 001.001 — 2
(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No
905/98 (OJ L 128, 30.4.98, p.18).
(2) OJ L 28, 2.2.1994, p. 40.
(3) OJ C 231, 23.7.1998, p. 3.
(4) OJ C 27, 2.2.1999, p. 3.
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as well as the users known to be concerned, and gave them the
opportunity to make their views known in writing and/or torequest a hearing.
(6)The Commission sent questionnaires to the parties known to beconcerned and received replies from the four applicant Commu-nity producers, four US exporting producers and five of theirrelated importers. Questionnaires were also sent to a large
number of users of the product; two of their replies were consid-
ered complete.
(7)One US exporting producer declared its intention to cooperate inthe investigation, although it had not exported to the Community
during the investigation period (IP). The interest of this producer
in the investigation stemmed from its involvement in the originalinvestigation.
(8)The Commission sought and verified all information deemed
necessary for the determination of the likely continuation and
recurrence of dumping and injury and the analysis of theCommunity interest. Verification visits were carried out at thepremises of the following companies:
(a)exporting producers
Dow Chemical Company, Midland, Michigan (USA)Huntsman Chemical Company, Houston, Texas (USA)Union Carbide Corporation, Danbury, Connecticut (USA)
(b)importers in the Community related to the exporting produ-
cers
Huntsman Co. Belgium CVBA, Brussels, BelgiumUnion Carbide Benelux, Antwerp, BelgiumUnion Carbide Europe SA, Geneva, Switzerland
(c)applicant Community producers
BASF AG, Ludwigshafen, Germany
BP Chemicals Ltd, London, UK and Lavera, France
(d)Community users
Krems Chemie AG, Krems a.d. Donau, AustriaSynthesia Española SA, Barcelona, Spain
(9)The investigation of continuation and recurrence of dumping
covered the period from 1 January to 31 December 1998 (the
‘investigation period’ or ‘IP’). The examination of continuation
and recurrence of injury covered the period from 1 January1995 to the end of the IP (the ‘IIP’).
B.PRODUCTCONCERNEDANDLIKEPRODUCT
1.Productconcerned
(10)The product concerned here is the same as that covered by the
previous investigation. It is recalled that ethanolamines areobtained by making ethylene oxide react with ammonia. As aresult of this synthesis, three competing reactions occur,
resulting in three different types of ethanolamine: mono-
(MEA), di- (DEA) and tri-ethanolamines (TEA). The proportionsof the three types in the total output are determined by theproduction installation design, but can, to a certain extent, becontrolled by the choice of the ammonia/ethylene oxide ratio.The product concerned is used as an intermediate for surfactants
(used in detergents and personal care products), fertilisers, crop
protection agents, corrosion inhibitors, lubrication oils, photo-graphic chemicals, cosmetics and polyurethane, and as a gasscrubber absorption aid or additive for the cement, metal-worksand paper industries. Because of the combined production2000R1603 — EN — 31.01.2003 — 001.001 — 3
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process (see above), when DEA is produced, the other types of
ethanolamine (MEA and TEA) are produced as well and inlarger quantities.
2.Likeproduct
(11)Production installations of the Community industry will typically
produce 30-33 % DEA. Either MEA or TEA can account for asmuch as 54 % of total ethanolamines production. Given thecombined production process, the claim of one exportingproducer that the different types of ethanolamine should be
treated separately with respect to the injury analysis cannot be
justified.
(12)Since the imposition of the anti-dumping measures under review,the market has been characterised by strong growth in thedemand for DEA, especially in the USA. This has been triggeredby the use of DEA in the production of glyphosate herbicides,which are suited to crops genetically modified to be resistant to
such herbicides.
(13)The product concerned imported from the country under investi-gation is identical in terms of physical and technical
characteristics to the Community-produced product. There is nodifference in use between the Community-produced products andthe imported products. It has further been found that the productconcerned imported from the country under investigation is iden-
tical to that sold on its domestic market. Therefore, all these
products must be considered as one product.
C.LIKELIHOODOFCONTINUATIONOFDUMPING
1.Preliminary remarks
(14)Following the allegation made in the complaint that circum-
stances had changed since the original investigation, the level
of dumping for the IP was examined.
(15)Of the four US exporting producers who replied to the question-naire, two had significant exports to the Community during the
IP, while another two declared no or only very few exports.
(16)For the exporting producer which had a small quantity of exportsit was decided in the absence of any other information that adumping margin could reasonably be based on this small volumeof exports.
2.Normalvalue
(17)Normal value was established for each type of the product
concerned, based on the price of all actual domestic sales in the
USA (see Article 2(1) of the Basic Regulation: ‘prices paid orpayable, in the ordinary course of trade, by independent custo-mers in the exporting country’). For product types which werenot sold in representative quantities or not in the ordinary course
of trade on the domestic market, the normal value was calculated
in accordance with Article 2(3) of the Basic Regulation.
(18)With regard to the three US exporting producers, the domesticsales of the product under consideration were found, in accor-dance with Article 2(2) of the Basic Regulation, to representmore than 5 % of the sales volume of exports of the productfrom the USA to the Community. It was also established that
for the same three exporting producers, sufficient domestic sales
of the product had been made in the ordinary course of trade inaccordance with Article 2(4) of the Basic Regulation to permitthe prices of such sales to be used to determine normal value.
3.Exportprice
(19)In all cases, the imports of the product concerned were made by
companies which are related to the US exporting producers. It2000R1603 — EN — 31.01.2003 — 001.001 — 4
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was therefore considered that the prices of the sales from the
producing companies to the importing companies were unreli-able. For that reason, and in accordance with the provisions of
Article 2(9) of the Basic Regulation, the export prices were
constructed on the basis of the price at which the importedproduct was first resold to independent buyers in the Commu-nity. Allowance was made for all costs incurred betweenimportation and resale, including commissions and a profit
margin of 5 %, which was considered reasonable on the basis
of information from interested parties on imports of the productconcerned.
4.Comparison
(20)The normal value was compared with the export price on a
transaction-by-transaction basis at ex-works level and at thesame level of trade. For the purpose of ensuring a fair compar-ison between normal value and export price, differences infactors which were claimed and demonstrated to affect compar-
ability (see Article 2(10) of the Basic Regulation) were taken
into account. Thus, adjustments were made for inland and oceanfreight, insurance, handling, loading and ancillary costs, creditcosts and commissions.
(21)A comparison of normal values with export prices was made forall types covered by the present investigation. For the coop-
erating exporting producers, this comparison showed the
existence of a weighted average dumping margin, expressed asa percentage of cif value, of 33 % for Dow Chemical, 38,2 %for Union Carbide and 40,1 % for Huntsman.
5.Lastingnatureofchangedcircumstances
(22)The Commission examined whether the changes in dumping
margins were likely to prove lasting. It was found that the lowerdumping margins were largely due to increased export prices,which have applied for at least two years. For this reason, and
as the export quantities involved were viewed as representative,
the Commission concludes that the findings represent a lastingchange in the circumstances of these imports from the USA. Noevidence was submitted which contradicted these findings.
6.Conclusion
(23)The expiry review initiated under Article 11(2) of the Basic
Regulation indicated that, if measures were removed, therewould be a likelihood of continuation of dumping, mainly onthe grounds that substantial dumping was found to exist during
the IP and that it was reasonable to conclude that such dumping
would continue.
(24)The Article 11(3) interim review, initiated on the basis of arequest to revise measures in order to take into due account thecurrent market conditions, concluded that the circumstanceswhich led to the existing measures have changed significantly
and that such changes are to be considered sufficiently lasting
to warrant a downward revision of the dumping margins estab-lished during the original investigation.
D.DEFINITIONOFTHECOMMUNITYINDUSTRY
1.TotalCommunityproduction
(25)The complaint was lodged on behalf of four out of the five EU
ethanolamine manufacturers. One company, Union Carbide Ltd.
(UK), did not participate in the investigation, nor did it support
the complaint. It should be noted that this company is related tothe US producer Union Carbide Corp. USA. An assessment wasmade, therefore, as to whether this company should be excludedfrom the definition of Community production in accordance withArticle 4(1) of the Basic Regulation. It was found that the manu-2000R1603 — EN — 31.01.2003 — 001.001 — 5
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facturer concerned itself imported the dumped product in signif-
icant quantities. As there could therefore be no guarantee thatthe economic situation of this manufacturer was not affected by
its relationshipto the US p roducer, it was considered that it
should be excluded from the determination of Communityproduction. Total Community production therefore is accountedfor by the following companies: BASF AG, Ludwigshafen,Germany; BP Chemicals Ltd, London, United Kingdom; Condea
Chemie GmbH, Marl, Germany and Akzo Nobel Surface Chem-
istry AB, Stenungsund, Sweden.
2.Communityindustry
(26)The Commission sent questionnaires to the applicant Community
producers and received replies from three of them. One replythat failed to provide cost of production data for the period1995 to 1997 was accepted on the grounds that the companytook over the ethanolamines business on 1 July 1998 from
another company and therefore did not have access to the data.
The forth producer sent only an incomplete questionnaire replyand was consequently considered a non-cooperator. The threeapplicant Community producers which co-operated in the inves-tigation constitute the Community industry within the meaningof Article 4(1) of the Basic Regulation, as they represent 77,5 %
of the total Community production. They are referred to below
as the ‘Community industry’.
3.Determination oftherelevant Communitymarket
(27)Part of the Community industry's production (around 28 %) is
for internal, i.e. captive, use. Of this amount, the great majority(around 95 %) is for use at one Community producer's plant,earmarked and used for that sole purpose. The investigationconfirmed that the applicant Community producers do not
purchase the product concerned from independent parties, either
inside or outside the Community, for their captive use. Ethanola-mines intended for captive use are therefore not considered to bein competition with ethanolamines otherwise available in theCommunity, the latter being the relevant Community market forthe product concerned.
E.ANALYSIS OF THE SITUATION ON THE COMMUNITY
MARKET
1.Communityconsumption
(28)Community consumption was based on the volume of sales of
the Community industry, the sales volume of the non-coop-erating Community producer, Eurostat-information on theimport volume and an estimate of the sales of the Community-based manufacturer related to the US exporting producer Union
Carbide (
1) on this market.
(29)Consumption calculated on this basis increased by 14 % duringthe IIP: from around 152000 tonnes in 1995 to around 172000
tonnes in the IP. This increase is attributed to DEA and TEAsales, which rose by 19 % and 21 % respectively. The demandfor MEA has remained stable. MEA and DEA each representaround 29 % of overall consumption in the IP and TEA around42 %.2000R1603 — EN — 31.01.2003 — 001.001 — 6
(1) Based on the complaint and information from the US exporting producer.
The sales correspond to 10 % of the total sales of all ethanolamines
produced within the Community market.
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2.Importsfromthecountryconcerned
(a) Volume, price trend and market share
(30)Imports from the USA increased by 14 % over the IIP, in line
with the trend of overall Community consumption. However,the figures contain an underlying downward trend in DEA-imports (–38 % over the IIP), which accounted for only 12,6 %of total imports in the IP. This should be seen in light of the
high DEA demand on the US domestic market. On the other
hand, notwithstanding the stable demand for MEA on theCommunity market during the IIP, imports from the USAincreased by 86 % over the same period. Imports of TEA duringthis period grew by 11 %.
(31)Since imports are made by related importers, prices for importsfrom the USA, whether established on the basis of informationsubmitted by the exporting producers or Eurostat figures, werenot deemed reliable for the purpose of establishing price trends.
In order to establish more reliably the pricing behaviour of the
exporting producers concerned, their related importers' resaleprices were analysed — more specifically prices to industrialend-users found to be representative for overall sales. Theseprices declined 10 % on average from 1995 to 1996 and werefound to be substantially lower than the Community industry
sales prices during both those years. This trend was most
pronounced for MEA, with a 14 % decrease of the resale price.Towards the end of the IIP, the resale price of TEA was back atthe 1995 level, whereas DEA became 13 % more expensive andMEA was still 4 % cheaper. In the IP, the price levels of therelated importers and the Community industry were comparable.
(32)The overall market share for imports from the USA is stableover the IIP at 29 %. However, the figures contain an underlyingincrease in market share for MEA from 17 % to 32 % and a
decrease of DEA market share from 25 % to 13 %. TEA
decreased slightly from 42 % to 39 %.
(b) Price behaviour of exporting producers
(33)In order to assess the price behaviour of US exporting producers,
their sales as well as those of the Community industry were
analysed. In a first step, sales prices to first independent custo-
mers were compared on the Community market. Given that theCommunity industry sells only to industrial end-users, and thatthese customers also cover a significant share (over 50 %) ofthe sales of the US exporting producers, a comparison at this
level of trade was considered representative. For the determina-
tion of dumping, this comparison was made on the basis of datafor the two main US exporting producers.
(34)Since all imports into the Community originating in the USA
were made via related importers, the above comparison used
the prices charged to the first independent buyers in the Commu-nity at an ex-related-importer level, i.e. after deduction of freightcosts in the Community, discounts and rebates. The comparisonshowed that during the IP, the overall average price levels for
imports from the USA and Community industry sales were
comparable.
(35)In a second step, an analysis was made of the import prices ofethanolamines originating in the USA, i. e. the prices between
the exporting producers and their related importers, as compared
to the minimum prices determining the variable duties. Thisshowed that no significant amounts of anti-dumping duties hadbeen collected, as these import prices were significantly aboveminimum prices for most of the IIP.
(36)In a third step, given the relation between exporting producersand the importers, it was established for the IP whether theresale prices received by these importers from their first inde-pendent customers and the respective actual import prices2000R1603 — EN — 31.01.2003 — 001.001 — 7
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reflected the related importers' costs between importation and
resale. All costs actually incurred between importation andresale, such as freight from the Community border, handling,
insurance, packaging, credit expenses, import duties, SGA costs
and a 5 % profit margin were therefore deducted from the resaleprices. This resulted in import prices constructed independentlyof the relationship between the exporting producers and theirrelated importers.
(37)These constructed import prices for both exporting producerswere not only significantly lower than the actual import pricesdeclared by their related importers, but were also significantly
lower than the applicable minimum prices for the various types
of ethanolamine. This finding is confirmed by the fact that therelated importers incurred significant financial losses during theIP. Indeed, the margins they realised between purchase price(actual import price) and resale price on the Community marketwere not sufficient to cover the costs incurred between importa-
tion and resale. It should be noted that the pattern established for
the IP has also been observed for the remainder of the periodconsidered, i.e. 1995 to 1997.
(38)On the basis of the above three-stepanalysis, it is concluded thatthe resale prices of US exporting producers on the Communitymarket were in line with those of the Community industry.Furthermore, it has been found that actual import price levelswere situated above the minimum prices. However, these actualimport prices have not, or at least not fully, reflected the anti-
dumping measures in force if account is taken of the costs
incurred between importation and resale. Therefore, it can beconcluded that the US exporting producers and their relatedimporters absorbed the anti-dumping measures, at least partially,by setting artificially high actual import prices which constitute
transfer prices.
3.SituationoftheCommunityindustry
(a) Production, production capacity and capacity
utilisation
(39)Production increased by 38 % during the IIP, particularly from
1996 to 1997, following an expansion of capacity from roughly
117000 to 139000 tons. The increase in production, combined
with the more moderate increase in capacity, improved theoverall Community industry's capacity utilisation from 81,8 %to 91,1 % over the IIP.
(40)As mentioned above, the capacity installed at one Communityproducer's plant in 1997 accounts for around 95 % of Commu-nity production for captive purposes and was designed to serveonly that purpose. The above mentioned increase in productioncapacity, however, is a result of this investment in captive use
production as this reduced the captive use at another plant of
the same company. This in turn liberated capacity for freemarket sales.
(b) Sales volume
(41)The sales volume of the Community industry on the Community
market increased by 27 % over the IIP to approximately 96000
tons, driven by the increase of DEA and TEA sales (by 32 %and 28 % respectively) over this period.
(c) Market share
(42)The Community industry increased its market share overall from
50 % to 56 % during the period 1995 to 1997, gaining 11 % forMEA, 5 % for DEA and 3 % for TEA. Between 1997 and the IPmarket share overall and for TEA remained stable, increasedfurther for DEA (from 61 % to 63 %), but fell for MEA (from53 % to 49 %).2000R1603 — EN — 31.01.2003 — 001.001 — 8
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(d) Stocks
(43)Stocks increased by 10 % over the IIP. This increase is lower
than the production increase of 38 %.
(e) Development of sales price and manufacturing
cost
(44)Overall sales price dropped 17 % from 1995 to 1996. This was
followed by increases in 1997 and 1998 respectively of 3 % and9 % over 1996 prices. In contrast to the minimum prices and thesituation in 1995, DEA has become the most expensive productover the IIP.
(45)Resale prices of US imports in the Community were substan-tially below the Community industry's sales prices in 1995 and1996. The downward pressure of 17 % on the Community indus-
try's sales prices from 1995 to 1996 occurred at the same time
MEA imports from the USA almost doubled and the resale priceof US imports of MEA dropped by 14 % to ECU 605 per tonne,lowering the Community industry's sales price by 22 % toECU 647 per tonne.
(46)Apart from market conditions, sales prices are essentially drivenby the cost of raw materials. The overall manufacturing cost
dropped by 7 % from 1995 to 1996 and, compared to 1996,
increased slightly by between 1 % and 2 % for the year 1997and the IP. Over the whole period, manufacturing costs fell by6 % but prices declined by 10 %. DEA is the only exceptionhere: the average price fell by only 1 % while manufacturing
costs decreased by 4 %.
(47)It should also be underlined that the production of ethanolaminesfor the Community industry is important since it allows to use
own-produced upstream ethylene oxide, providing economies ofscale for this upstream production process, and to use the etha-nolamines as an intermediate for other products (captive use). Itwas claimed that purchase prices for ethylene oxide were over-
stated causing a downward pressure on the ethanolamines
business. It was found, however, that the companies involvedorganise their ethylene oxide and ethanolamines businesses asseparate profit centres, making cross-subsidisation unlikely, andchecks were carried out as to whether the transfer price at whichthis raw material was incorporated in the cost of production of
ethanolamines reflected market value. In all cases it was found
that the transfer prices used reflected the sales prices of ethyleneoxide quoted to independent customers purchasing similar quan-tities.
(f) Profitability
(48)Profitability has been affected by sales prices and manufacturing
costs. Profits fell from 3,94 % in 1995 to loss-making levels of
–8,64 % in 1996 and –8,49 % in 1997. The price recovery in the
IP was insufficient to generate a profit and profitability remainednegative at –1,37 %.
(g) Investments
(49)Investment in ethanolamines for the free market remained fairly
stable between 1995 and 1998 at around ECU 4 million a year,except for 1996, when the figure was twice that. In that year,
major changes were made to one plant after the group's captive
production was taken over by another plant belonging to thesame Community producer.
(h) Employment
(50)The production of ethanolamines is not a labour intensive
process. Overall, employment rose by 23 % and reached 166persons in 1998.2000R1603 — EN — 31.01.2003 — 001.001 — 9
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4.Importvolumesandpricesfromotherthirdcountries
(51)On the basis of Eurostat information, Bulgarian export prices are
lower than actual US import prices from the same source. As
explained above, it should however be noted that Eurostat pricesfor imports originating in the US are not considered reliable.One Bulgarian producer, Burgas, has had a stable 3 % share ofthe Community market since 1996. Based on Eurostat informa-tion, approximately 70 % of its exports are MEA — a market
share of 6 % in this segment during the IP (compared to 49 %
for the Community industry and 32 % for US exporting produ-cers).
(52)The market share of all other countries declined to 2 % acrossall types of ethanolamines and 6 % for MEA. However, these
imports originate from a variety of sources, none of which holds
a significant market share.
5.ConclusiononthesituationoftheCommunitymarket
(53)Production volume and capacity of the Community industry
show a positive trend. Sales volumes increased, especially for
DEA and TEA. Market share increased overall but dropped forMEA, when compared with 1997. Although better than in 1996and 1997, profitability remained insufficient in 1998 because ofcontinued pressure on sales prices. Indeed, the initial fall in sales
prices from 1995 to 1996 has still not been compensated and
there is still price pressure from the imports concerned.
(54)The continuation of the downward pressure on the Communityindustry's sales prices and the consequent negative profitabilityare directly linked to the pricing behaviour of the US exportingproducers, in particular the absorption of the measures in force
and the resulting price pressure.
F.LIKELIHOOD OF CONTINUATION OF INJURIOUS
DUMPING
1.Analysisofdemandforethanolamines
(55)Because of the combined production process, the increased
consumption of DEA and TEA in the Community leads to a
significant supply of MEA. Upward price pressure has been
most pronounced for DEA, accentuated by the gradual with-drawal by the US exporting producers from this market(illustrated by a corresponding drop in US market share from25 % to 13 % over the IIP).
(56)At the same time, worldwide ethanolamine production capacity
is further increasing in anticipation of continued growth in
demand for DEA, with major producers both in the Communityand in the USA investing at similar rates. High demand for DEAhas led to corresponding upward price adjustments in thissegment, while DEA consumption — and thus prices — during
the previous investigation were low. The effect on sales prices
(and consequently on profitability) of increasing capacity andincreasing demand for DEA remains unclear, but the (world-wide) excess production of MEA, in particular, threatens todepress market conditions.
2.AnalysisofthesituationoftheUSexportingproducers
(57)The world-wide capacity increase threatens to create excess
production, especially of MEA, while the Community market,with a price level higher than other third countries, is attractive
for US exporting producers. US production capacity increased by
more than one third over the 1995 to 1998 period. From 1997 tothe IP, capacity installed rose 19,9 % to 524000 tons for thethree US producers Union Carbide, Huntsman and DowChemical and, although production increased by 9 %, the capa-city utilisation rate fell from 90,4 % to 83 %. New capacity2000R1603 — EN — 31.01.2003 — 001.001 — 10
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installed is generally aimed at DEA, bringing excess production
of MEA.
(58)Furthermore, the investigation showed that US producers
exported significant quantities of the product concerned to the
Community throughout the period examined, indicating that theCommunity market is an important outlet for their production.From 1997 to the IP corresponding US exports to the Commu-nity increased by 12,4 %, whereas domestic sales increased
only 4,9 % and exports to other third countries decreased by
2,7 %. During the IP, US domestic sales represented 67,1 % oftotal sales by the three US producers mentioned above, exportsto the Community 13,6 % and exports to third countries 19,3 %.
(59)The investigation also demonstrated that US domestic prices areat a higher level than sales prices in the Community market. The
higher price level in the USA can be directly attributed to the
high consumption of DEA on the US market.
(60)Finally, it should be noted that South Korea has imposedmeasures against imports of ethanolamines from the USA. Whileit is not considered that the quantities involved, even if theywere entirely deflected, are such as to disrupt the Community
market, the fact that anti-dumping measures have been imposed
shows that US exporting producers are prepared to carry outexports at dumped prices.
(61)The prices of both the Community industry and the exportingproducers over the IIP have constantly been above theminimum-price-based variable anti-dumping measures. It has
been shown that actual import prices do not reflect the resale
prices of the related importers concerned and that import pricesreflecting costs incurred between importation and resale havesystematically been below minimum prices, indicating that theUS exporting producers have partially absorbed the anti-dumping
measures imposed. At the same time, the Community industry
has not been able to recover from the negative situation it hasexperienced and still faces an unsatisfactory situation in termsof profits during the IP.
(62)The investigation confirmed that, as in the previous investigationperiod (1991 to 1992) before imposition of measures, US produ-
cers exported significant quantities onto the Community market.
From 48 000 tons in the previous IP, these dropped to 44 000tons at the beginning of the IIP, before rising to 51000 tons atthe end. They represent 40 % of total Community productionduring the IP.
(63)It was found that in line with growing demand for DEA in the
USA which put upward pressure on US sales prices for DEA
and ethanolamines in general, a somewhat less pronounced pricechange was observed on the Community market. This trend inconsumption has at the same time meant that MEA is producedin increasing quantities, with the risk that due to a lack of
commensurate demand it will be sold at lower and lower prices.
The effect on the price of TEA is expected to be less, as smallerproduction surpluses are predicted.
(64)One US exporting producer contended that the Communityindustry itself has an overcapacity of MEA that creates a down-ward pressure on prices. It was, however, unable to substantiate
this claim. It should also be noted that one US producer alleged
that the Community industry undercut its prices for DEA in1998. The investigation showed, however, that the Communitycompany quoted did not sell any DEA to the client mentioned.
3.Conclusion on likelihood of continuation of injurious
dumping
(65)The investigation showed that, despite the anti-dumpingmeasures in force and increased production, production capacity,consumption and sales volumes, the Community industry is stillin a fragile state, in particular as far as its sales prices and profit-2000R1603 — EN — 31.01.2003 — 001.001 — 11
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ability are concerned. The Community industry was allowed to
fill the gap left by the partial retreat by US exporting producersfrom the DEA Community market. However, due to the partial
absorption by US exporting producers of the measures in force,
their excess production of MEA and the resulting growth in EUimports of MEA from the USA at dumped prices, prices for allethanolamines remained too low to restore the profitability of theCommunity industry, even with anti-dumping measures.
(66)The investigation established that the imports concerned are stilltaking place at significantly dumped prices. It has been foundthat domestic US prices have increased since the previous inves-tigation, although to a lesser extent than the prices of US exportsto the Community. This has led to smaller dumping margins than
those in the initial investigation, not least because of the absorp-
tion. It was further found that export quantities are significant,being equivalent to 40 % of total Community production duringthe IP.
(67)The Community industry has been unable to recover from thenegative situation affecting it since the previous investigation;
prices of imports from the USA have been below minimum
prices, (given actual costs between importation and resale),thereby partially absorbing the anti-dumping measures in forceand preventing the Community industry from improving itssituation; capacity increases in the USA are likely to depress
market conditions in the Community, in particular due to excess
MEA; and the Community market, as compared to othermarkets, remains attractive to the US exporting producers, whocontinue to export significant quantities to the Community atdumped prices — it is therefore concluded that there is a likeli-hood of continuation of injurious dumping.
G.COMMUNITYINTEREST
1.Introduction
(68)In the previous investigation, the adoption of measures was
considered not to be against the interest of the Community. Thepresent investigation is a review, analysing a situation in whichanti-dumping measures were already in place and its remit is
thus to assess any undue negative impact of the measures on
the parties concerned. It was therefore examined whether,despite the conclusions on the likelihood of continuation ofinjurious dumping, there were compelling reasons to concludethat it was not in the Community interest to maintain measures.
For this purpose, and pursuant to Article 21(1) of the Basic
Regulation, account was taken of the impact on all partiesinvolved in the proceedings of maintaining the existingmeasures, imposing alternative measures or dropping themeasures.
2.InterestoftheCommunityindustry
(69)The existing measures have not led to a price level on the
Community market that would allow the Community producersto regain profitability. The investigation showed that the
measures have never become fully effective — while actual
import prices have been above the minimum prices set, the latterhave not been reflected in related importers' resale prices. Theoutlook for the situation in the Community market is not favour-able given the distinct possibility of an inflow of MEA,produced in recently installed production sites, and continuing
pressure on prices, which in 1999 in some instances even went
below set minimum prices.
(70)In view of the above, continuing measures to limit the downwardpressure on ethanolamine prices would be in the interest of theCommunity industry.2000R1603 — EN — 31.01.2003 — 001.001 — 12
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3.Interestofusers
(71)The Commission received four questionnaire replies from etha-
nolamines users, two of which were considered complete and
were followed upby an on-site investigation. As those four usersrepresent only 1,4 % of Community consumption during the IP,the information submitted could not be considered representa-tive. The users argued that any increase in their cost ofproduction should be avoided, since this affects their profit-
ability.
(72)Information collected in the course of the investigation indicated
an incidence of the purchase price of ethanolamines in the costof production of the finished product during the IP ranging from2,21 % to 18,82 % (the latter figure relating to an extreme case,
for a product for which ethanolamine can be perfectly substi-
tuted by another unrelated chemical). The overall weightedaverage stands at 4,33 % of the cost of production. Themaximum impact of the measures proposed is on average lessthan one percent and can therefore be considered limited.
(73)One additional user of the product concerned claimed that itplanned to produce a chemical product, glyphosate intermediate,in the Community using DEA. This company claimed it wasunable to do so because of the artificially high import prices(due to anti-dumping measures) and the absence of local
(Community) supply of DEA. It should be noted here that the
minimum price on which the variable duty is based was alwayslower than the purchase prices established for the various inter-ested parties during the IP. This showed that this user's firstclaim did not reflect reality. The investigation further showedthat DEA was not sufficiently available in the USA and that
exports to the Community decreased as a result. It took some
time for the Community producers to adapt to the increase indemand, but DEA supply has never been so short that priceswere affected significantly and the company's second claimmust be considered as ill-founded.
4.ConclusiononCommunityinterest
(74)Maintaining measures would be in the interest of the Community
industry in ensuring that prices, especially for MEA, are raised
to a non-injurious level. The users of the product which came
forward did not represent an important share of Communityconsumption and/or could not substantiate their claims. In anyevent, the incidence of measures on their cost of production islimited. On the basis of these considerations, it was concludedthat there were no compelling reasons not to continue measures,
in order to ensure competitive conditions of fair pricing and
avoid the continuation of injury to the Community industry.
H.ANTI-DUMPINGMEASURES
(75)Since it was determined that US exporting producers absorbed
the measures over an extended period and the import volumeremained significant, it was concluded that the underlying trendswere lasting. In these circumstances, it had to be decided onwhich basis the investigation carried out pursuant to both Article
11(2) and 11 (3) of the Basic Regulation had to be concluded.
As the measures presently in force had not led to the anticipatedpositive effect for the Community industry, it was decided that:
— the anti-dumping measures should be renewed,
— their form should be revised,
— their level should be adapted to the level of dumping and
injury found.
(76)It should be noted here that actual import prices are used in anti-dumping proceedings to determine both dumping and injurymargins. The investigation demonstrated that the actual importprices do not reflect the related importers' resale prices. Usingsuch data would underestimate the actual dumping and injury2000R1603 — EN — 31.01.2003 — 001.001 — 13
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margins for the IP. Therefore, it was concluded that the dumping
and injury margins determined pursuant to Article 11(3) of theBasic Regulation needed to be based on the constructed import
price.
(77)In order to calculate the injury threshold, a non-injurious sales
price for the Community industry was determined, allowing for
an 8 % profit margin, and compared with the US related impor-
ters' resale prices. Any difference was expressed as a percentageof the constructed CIF import value. On the basis of this metho-dology the underselling margins, which were lower than thecorresponding dumping margins, were 10,4 % for Union CarbideCorporation, 13,9 % for Dow Chemical Company and 20,5 %
for Huntsman Chemical Company. In the previous investigation,
by comparison, the minimum-price-based variable duties werebased on overall underselling margins of 45,2 % for UnionCarbide, 53,5 % for Dow Chemical and 39,5 % for Huntsman.
(78)Specific fixed duties based on the difference between the non-injurious price and the US related importers' resale prices,amount to EUR 59,25 per tonne for Union Carbide Corporation,EUR 69,40 per tonne for Dow Chemical Company andEUR 111,25 per tonne for Huntsman Chemical Company. This
type of measure is considered appropriate, as imports from the
USA take place mainly through related sales companies. Theresidual specific fixed duty is set at EUR 111,25 per tonne.
(79)All parties concerned were informed of the essential facts and
considerations on which the continuation of measures at an
updated level and in an updated form is based. They weregranted a period within which to make representations subse-quent to disclosures.
HAS ADOPTED THIS REGULATION:
Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of
ethanolamines currently classifiable within CN codes ex 2922 11 00(monoethanolamine) (TARIC code 2922 1100 10), ex 2922 12 00
(diethanolamine) (TARIC code 2922 1200 10) and 292213 10 (trietha-
nolamine), originating in the United States of America.
2. The rate of the definitive duty applicable to the net free-at-
Community-frontier price, before duty, for the following companies'products shall be as follows:
Country Company Specific fixed duty
United States
of AmericaUnion Carbide Corporation
Old Ridgebury Road
Danbury
Connecticut 06817
(TARIC additional code: A115)EUR 59,25 per ton
Huntsman Chemical Corporation
3040 Post Oak Boulevard
PO Box 27707
Houston
Texas 77056
(TARIC additional code: A116)EUR 111,25 per ton
Dow Chemical Company
2040 Dow Center
Midland
Michigan 48674
(TARIC additional code: A145)EUR 69,40 per ton
All other companies
(TARIC additional code: A999)EUR 111,25 per ton2000R1603 — EN — 31.01.2003 — 001.001 — 14
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3. Unless otherwise specified, the provisions in force concerning
customs duties shall apply.
4. In cases where goods have been damaged before entry into free
circulation and, therefore, the price actually paid or payable is appor-tioned for the determination of the customs value pursuant to Article145 of Commission Regulation (EEC) No 2454/93, the amount of theanti-dumping duty, calculated on the basis of the amounts set above,shall be reduced by a percentage which corresponds to the apportioning
of the price actually paid or payable.
Article 2
This Regulation shall enter into force on the day following that of its
publication in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable
in all Member States.2000R1603 — EN — 31.01.2003 — 001.001 — 15
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