1999R0603 — EN — 15.11.2002 — 003.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILREGULATION(EC)No603/1999
of15March1999
imposingadefinitiveanti-dumpingdutyonimportsofpolypropylenebinderorbalertwineorigi-
nating in Poland, the Czech Republic and Hungary, and collecting definitively the provisional
dutyimposed
(OJ L 75, 20.3.1999, p. 1)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 968/2000 of 8 May 2000 L 112 1 11.5.2000
►M2Council Regulation (EC) No 1657/2001 of 10 August 2001 L 221 1 17.8.2001
►M3Council Regulation (EC) No 2011/2002 of 11 November 2002 L 311 1 14.11.2002
▼B
COUNCILREGULATION(EC)No603/1999
of15March1999
imposing a definitive anti-dumping duty on imports of polypropy-
lene binder or baler twine originating in Poland, the CzechRepublic and Hungary, and collecting definitively the provisional
dutyimposed
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 notmembersof the European Community(
1), and in particular Article
9(4) thereof,
Having regard to the proposal submitted by the Commission after
consulting the Advisory Committee,
Whereas:
A.PROVISIONALMEASURES
(1)By Commission Regulation (EC) No 2107/98(2) (hereinafter
referred to as ‘the provisional duty Regulation’) provisionaldutieswere impos ed on importsof polypropylene binder or balertwine originating in Poland, the Czech Republic, Hungary andSaudi Arabia. All cooperating Hungarian exporting producersand one cooperating Czech exporting producer offered price
undertakings, which were accepted by the provisional duty
Regulation and by Commission Regulation (EC) No 2649/98.
B.SUBSEQUENTPROCEDURE
(2)Following the imposition of the provisional measures, certain
exporting producersand importersof the product concerned
submitted comments in writing. Those parties who so requested
were granted an opportunity to be heard.
(3)Since the publication of the provisional duty Regulation, theCommission continued to seek and verify all informationdeemed necessary for its definitive findings and carried outinvestigations of the following companies:
(a)Complainant Community producers
— Pippo Tuote Oy, Outokumpu, Finland,
— Irish Ropes, Kildare, Ireland;
(b)Exporting producer
WKI Isoliertechnik Spolska z.o.o., Weltyn, Poland.
(4)Parties were informed of the essential facts and considerations
on the basis of which it was intended to recommend the imposi-tion of definitive anti-dumping dutiesand the definitivecollection of amounts secured by way of provisional duty. Theywere also granted a period within which to make representations
subsequent to this disclosure.
(5)The oral and written comments submitted by the interested
partieswere cons idered and, where deemed appropriate, takeninto account in the definitive findings.1999R0603 — EN — 15.11.2002 — 003.001 — 2
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation aslas t amended by Regulation (EC)
No 905/98 (OJ L 128, 30. 4. 1998, p 18).
(2) JO L 267, 2. 10. 1998, p. 7. Regulation as amended by Commission Regula-
tion (CE) No 2649/98 (JO L 335, 10. 12. 1998, p. 41).
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C.PRODUCTCONCERNEDANDLIKEPRODUCT
(6)In the absence of any new information, the provisional findings,
as set out in recitals 6 to 8 of the provisional duty Regulation,are confirmed.
D.DUMPING
1.Poland
(a)Cooperation
(7)As described in recital 9 of the provisional duty Regulation, two
companies' replies to the questionnaire had been consideredinadequate for the purposes of the investigation, as the informa-tion provided did not permit an accurate determination either ofnormal values or of export prices. Subsequent to the adoption ofprovisional measures, these two companies requested to be
allowed to rectify the deficienciescontained in their previous
submissions, and to be granted the opportunity of a late verifica-tion.
(8)One of the two companiesclaimed that it wasa s mall company,with only limited export activity during the investigation periodand limited resources for dealing with the requirements of theinvestigation. This request for a late verification could not,however, be accepted since, as had already been made clearwhen informing the company of itsins ufficient cooperation, it
would mean discriminating against other companies which had
made the effort to cooperate properly. Moreover, the companyhad been duly informed of the consequences of its non-coopera-tion and had previously been granted more than one opportunityto rectify the deficienciescontained in itsreply to the ques tion-
naire.
(9)The other company justified its request on the grounds that it
had wrongly considered itself to be operating on a different levelto all the other Polish firms concerned by the investigation,
because it primarily produced baler twine under an outward
processing regime, whereby raw materials acquired in theCommunity market were processed into finished products inPoland, before being returned to the Community for sale. Thisparticular situation had caused the company to believe — erro-
neously — that it would not be affected by the anti-dumping
investigation as such and consequently it had originally notsubmitted a complete reply to the questionnaire. The Commis-sion considered that, because of the special situation of thecompany compared to the other Polish producers, the fact ofallowing it to submit additional information would not constitute
discrimination against other cooperating companies. The
company wastherefore given a further opportunity to s ubmitthe necessary information, which was duly verified. The resultsof the verification are set out in recitals 13 and 15 hereto.
(10)A third company, which came forward only after the provisionalduty Regulation had been published, asked to be allowed tocooperate in the proceeding. Thisreques t wasrejected asthedeadline for a reply to the questionnaire had long since expired.
(b)Normal value
(11)Two companiesques tioned the profit margin which had been
used by the Commission in constructing normal values andproposed that a lower rate of profit be used. One companyclaimed that the profit margin used in constructing the normal
value did not reflect the fact that profit marginsin the baler
twine business are rather low and tend to be strongly influencedby seasonal and climatic fluctuations. The alternative marginsuggested by this company was that achieved from all companyoperations, including products different from those under investi-gation. The other company claimed that, because of its position1999R0603 — EN — 15.11.2002 — 003.001 — 3
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asa relatively new producer of baler twine, it actually had no
means of influencing the existing level of selling prices in themarket, and thusof obtaining the higher margin relied upon by
the Commission.
The Commission considers that the profit margin used in
constructing the normal value was correctly determined in accor-
dance with Article 2(6) of the Basic Regulation, i.e. theweighted average profit realised on domestic sales by the solecooperating Polish exporting producer which had sufficientquantities of domestic sales of the like product in the ordinary
course of trade. These claims could not, therefore, be accepted.
(12)In the course of reviewing the calculations, it was decided that
an adjustment for technical characteristics made whenconstructing the normal value for three Polish exporting produ-cerswasnot required (s ee recital 8 below).
(13)As far as the company WKI Isoliertechnik Spolska z.o.o. (here-inafter ‘WKI’) isconcerned, itss alesof baler twine on thePolish domestic market were, overall, made in representativequantities, i.e. they constituted 5 % or more of the quantityexported to the Community. However, the individual typesof
baler twine sold for export to the Community did not correspond
to those sold on the domestic market. Normal value was there-fore constructed, in accordance with Article 2(3) of the BasicRegulation. As for all other cooperating Polish producers,constructed normal value was calculated on the basis of thecost of production in Poland (including selling, general and
administrative (SG&A) expenses) plus a reasonable amount of
profit. The company's own SG&A expenses were used. The rateof profit wascalculated, in accordance with Article 2(6)(a) ofthe Basic Regulation, using the actual rate of profit establishedfor the sole cooperating producer located in Poland which had
sufficient quantities of domestic sales of the like product in the
ordinary course of trade.
(c)Export price, comparison and dumping margin
(14)Following the disclosure of the Commission's definitive findings,
one company pointed out a clerical error in the calculation of itsdumping margin. The calculation hasbeen rechecked and theerror rectified. No other commentswere received in thisres pectfrom the Polish exporting producers. After revision of the calcu-lations, the dumping margins are as follows:
— BZLP Bezalin: 17,2 %
— CZWC Chemitex: 20,3 %— PAT Defalin SA: 16,3 %— Industrial Chemistry
Research Institute: 28,4 %
— Terplast sp z.o.o.: 23,0 %.
(15)In the case of WKI, all sales of the product concerned on the
Community market were made to related customers in theCommunity. Export priceswere therefore cons tructed in accor-
dance with Article 2(9) of the Basic Regulation, on the basis of
the price at which the imported products were first resold to anindependent buyer within the Community. For thiscompany, theweighted average normal value per type of the productconcerned wascompared with the weighted average exportprice, in accordance with Article 2(11) of the Basic Regulation.
The weighted average dumping margin determined, expressed as
a percentage of the cif import price at the Community frontierduty unpaid, isasfollows :
— WKI Isoliertechnik
Spolska z.o.o., Weltyn: 46 %.1999R0603 — EN — 15.11.2002 — 003.001 — 4
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(16)In view of the fact that the import volume represented by coop-
erating Polish exporting producers, after the inclusion of WKI,has increased from less than 70 % to more than 90 %, the resi-
dual dumping margin for Poland has been revised. The revised
residual dumping margin, now set at the level of the highestdumping margin found for a cooperating company located inPoland, and expressed as a percentage of the cif import price atthe Community border, duty unpaid, is46 %.
2.CzechRepublic
(a)Normal value
(17)One of the two Czech exporting producersclaimed that normal
value had been constructed for several types of baler twine, for
which there had been sales on the domestic market. According tothe company, normal value for these types should therefore havebeen based on the corresponding domestic sales prices.However, this request could not be accepted since the products
sold on the domestic market largely did not correspond to those
sold on the export market and, in the very small number of caseswhere they allegedly did, such sales were not in the ordinarycourse of trade.
(18)The same company questioned a small adjustment for technicalcharacteristics made by the Commission in the provisional dutyRegulation when constructing the normal value. After carefulconsideration of the arguments presented, it was concluded that
the adjustment could not in the final analysis be justified, and
the calculationswere corrected accordingly.
(19)Finally, the same company also claimed that the rate of profitused by the Commission in constructing the normal value wastoo high and did not correspond to the actual profitability of thebaler twine business, which was in reality lower. In this connec-tion it should be pointed out that the profit margin was
calculated in accordance with Article 2(6) of the Basic Regula-
tion on the basis of the profits obtained on domestic sales of thelike product by the producer concerned. The claim wasthereforerejected, and the provisional findings are confirmed in thisrespect.
(b)Export price
(20)No commentswere received in thisres pect.
(c)Comparison
(21)Both Czech companies asked for a level of trade adjustment,
arguing that while domestic sales were to end-users, export sales
were to dealers. However, no reliable evidence was produced insupport of this assertion. Indeed, in the case of one company itwas established that export sales as well as domestic sales hadbeen made to end-users; in the case of the other company, asignificant proportion of domestic sales were found to have
been made to dealersand the company failed to demons trate
that there were consistent and distinct differences in functionsand pricesof the s eller for different levelsof trade in thatmarket. Consequently, these claims could not be accepted.
(22)One company claimed that export transactions had beencompared with domestic transactions of a substantially lowervolume, for which a higher selling price would therefore be
normal. However, the domestic sales were found to be suffi-
ciently representative and in the ordinary course of trade andthey therefore allowed a fair comparison, which has been madein accordance with Article 2(10) of the Basic Regulation. In anyevent, the simple fact that the quantity sold on average per trans-action on the domestic market was smaller than the average1999R0603 — EN — 15.11.2002 — 003.001 — 5
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quantity sold per transaction on the export market is not consid-
ered sufficient for an adjustment to normal value.
(d)Dumping margin
(23)After revision of the calculations, the dumping margins are as
follows:
— Lanex a.s.: 24,8 %
— Juta a.s.: 21,8 %
The residual dumping margin is set at 24,8 %.
3.Hungary
(a)Normal value
(24)One company objected to the method used by the Commission
in determining the constructed normal value. It claimed that theSG&A expenses relating to the company's wholly ownedsubsidiary should not have been included in the constructednormal value due to the fact that the subsidiary was concernedwith a different selling activity. However, the verification estab-
lished that the vast majority of sales of baler twine on the
domestic market had been made via this subsidiary. As theSG&A expenses had evidently been incurred in the sale of balertwine on the domestic market, they should consequently havebeen accounted for in the cost calculation of the subsidiary.
These expenses have therefore to be taken into account in estab-
lishing the SG&A expenses of the parent company. Therefore,the provisional findings in this respect are confirmed.
(25)Another company claimed that the cost of production it hadsubmitted for one specific type of baler twine for one monthwas higher than in other months and should therefore be disre-garded. The company, however failed to provide any
satisfactory explanation as to why this anomaly had occurred
and the claim wastherefore rejected.
(b)Export price, comparison and dumping margin
(26)No commentswere received with regard to the determination of
export price, the comparison and the dumping margin as set outin the provisional duty Regulation. The provisional findings on
the dumping marginsare therefore confirmed at the following
rates:
— Elso Magyar Kenderfono
Rt: 33,3 %
— Partium '70 Rt: 12,1 %— Tiszai Vegyi Kombinat Rt: 26,4 %
The residual dumping margin remains at 33,3 %.
4.SaudiArabia
(27)In view of the findings on the injury threshold (see recital 71
hereto) no definitive determination of dumping hasbeen made
in respect of the sole cooperating exporting producer.
E.COMMUNITYINDUSTRY
(28)In the absence of any new information, the provisional findings
as stated in recital 35 of the provisional duty Regulation, arehereby confirmed.1999R0603 — EN — 15.11.2002 — 003.001 — 6
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F.INJURY
1.General
(29)In view of the findings on the injury threshold (see recital 71
hereto) the Saudi Arabian importshave been excluded from theinjury analysis.
2.Communityconsumption
(30)In determining total apparent consumption on the Community
market, the total sales of the Community industry plus the salesby the remaining non-cooperating Community producerson the
Community market, were added to the importsinto the s ame
market.
The volume of imports was, for the purposes of the definitive
findings, determined on the basis of adjusted Eurostat figures asstated in recital 36 of the provisional duty Regulation. TheCommission continued to investigate after the imposition of theprovisional duty and obtained and verified new data. Thisresulted in a change in the apparent consumption for the period
considered (i.e. the period between 1994 and the investigation
period) due to adjusted import figures concerning mainly Poland.On this basis, Community consumption increased from 40 231tonnesin 1994 to 51 788 tonnesin 1996 and remained relativelystable thereafter, reaching 51 288 tonnes in the investigationperiod, which represents an overall increase of 27 % over the
period considered.
3.Allegation ofanti-competitive behaviour
(31)In their comments following the disclosure, the Polish exporting
producerscontinued to argue that the calculation of price-under-
cutting marginsaswell asthe findingson other injury factors ,causation and Community interest were vitiated on account oftwo investigations, allegedly initiated by the Commission againstanti-competitive practicesby the Community producersof poly-
propylene granulatesand the Community producersof baler
twine.
(32)The Polish exporting producers were unable to substantiate theirallegation that a concerted practice existed for the raw materialand for baler twine. Although investigation into olefins and poly-olefins, such as polypropylene, was started in 1995 (Case No IV/
E-2/35.765) the findings were negative and the case was closed.
As for baler twine, the Commission established that no officialcomplaint had been lodged and that none waspending.
(33)Some interested parties argued that discussions had taken placebetween the Community producersand the Polis h exporting
producerswhich is , per se, anti-competitive behaviour. It should,
however, be noted that those consultations were held in theframework of the textile agreement asprovided for by thatagreement.
(34)In the light of the above it wasconcluded that the abovemen-
tioned allegations were groundless.
4.Volumeandmarketshareofthedumpedimports
(a)Cumulation
(35)Since for the remaining three countries, i.e. the Czech Republic,
Hungary and Poland, no new information wasreceived, theconclusions reached in recital 37 of the provisional duty Regula-tion are confirmed.1999R0603 — EN — 15.11.2002 — 003.001 — 7
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(b)Volume, value and market share of imports from the
exporting countries concerned
(36)The volume of importsfrom the three remaining countriesconcerned increased from 5 264 tonnes in 1994 to 14 147 tonnesduring the investigation period, representing an increase of169 %.
(37)In terms of market share based on total Community consump-tion, the market penetration of the dumped importsfrom thethree countriesconcerned ros e from 13 % in 1994 to 27,6 %during the investigation period in volume terms — an increaseof 111 %.
(c)Prices of the dumped imports
(38)The results of the comparison showed that price-undercutting
margins(calculated on a weighted-average to weighted-averagebasis), expressed as a percentage of the Community industry'saverage selling prices, ranged as follows: for Poland from 4,7to 16,3 % with an overall weighted average of 11,9 %; for the
Czech Republic from 16,1 % to 19,2 % with an overall weighted
average of 16,1 % and for Hungary from 16,9 % to 21,4 % withan overall weighted average of 18,2 %.
(39)A Hungarian exporting producer claimed that the Commission in
its calculation of undercutting should take into consideration the
price at which thiscompany purchas ed polypropylene granulatesin Hungary. Thisargument hasto be rejected asin a price-undercutting analysis actual import prices to the Communityfrom the countriesconcerned are compared with actual pricesof the Community industry.
5.SituationoftheCommunityindustry
(40)Asmentioned in recital 3 hereto, following the publication of the
provisional duty Regulation the Commission continued to seekand verify all information deemed necessary for their definitivefindings and carried out investigations at the premises ofCommunity producersof the product concerned. Thisled to the
findingson injury indicatorsfor the Community indus try, which
varied insignificantly from those, stated in the provisional dutyRegulation. For the sake of completeness the injury indicatorsare set out below.
(a)Production, capacity and capacity utilisation
(41)Production of the Community industry increased during the
period considered, rising from 28 877 tonnes in 1994 to 33 557
tonnes in the investigation period. This represents an overall
increase of 16 %. Production increased at a lower rate thanCommunity consumption, which increased by 27 % during theperiod considered.
(42)On the basis of the methodology described in recital 43 of theprovisional duty Regulation, capacity increased from 42 232tonnesin 1994 to 46 484 tonnesduring the inves tigation period,which represents an increase of 10 %. This increase was in linewith expectationsof market growth. The rate of capacity utilis a-
tion increased slightly during the period considered, rising from
68,4 % in 1994 to 72,2 % in the investigation period.
(b)Sales volume
(43)The volume of sales of the Community industry on the Commu-
nity market increased during the period considered, from 24 840tonnesin 1994 to 26 796 tonnesin the inves tigation period. Thisrepresents an overall increase of 8 %.1999R0603 — EN — 15.11.2002 — 003.001 — 8
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(c)Market share
(44)The Community industry's market share decreased from 61,7 %
in 1994 to 58,3 % in 1995, 57,7 % in 1996 and 52,2 % duringthe investigation period. The overall loss of market share was
9,5 percentage pointsbetween 1994 and the inves tigation period.
(d)Stocks
(45)Stocks significantly increased between 1994 and the investiga-
tion period by 42 %.
(e)Average sales price and price evolution
(46)The weighted average pricesof the product concerned s old by
the Community industry on the Community market fluctuatedover the period considered, increasing by 11 % overall.
(f)Profitability
(47)The profitability of the Community industry, expressed as a
percentage of net sales, decreased from a weighted average
profit of 3,5 % in 1994 to 1,3 % in the investigation period. It
should be noted, however, that the financial situation deterio-rated particularly from 1995 onwards, falling from a profit of13,4 % to a profit of 1,3 % in the investigation period.
(g)Investment
(48)Yearly investments made by the Community industry increased
overall, rising from ECU 1,17 million in 1994 to ECU 1,29
million in the investigation period, with a peak in 1996 of ECU3,26 million. This represents an overall increase of 11 % overthe period considered.
(h)Employment
(49)Employment rose from 590 in 1994 to 722 in 1995. Since 1995
employment in the Community industry decreased to 669, i.e. by7,3 %.
(i)Comments on injury
(50)Interested parties argued that the situation of the Community
industry can be considered as stable or good. The decline in
market share and profitability observed during the period consid-
ered could not be an indicator of injury because it wascompensated for by an improvement in other injury indicators.
In this respect, it should be recalled that, in accordance with
Article 3(5) of the Basic Regulation, no single injury factor can
necessarily give decisive guidance as to the situation of theCommunity industry. In the present case, it is accepted that thefollowing of the injury indicatorsasCommunity production,capacity utilisation, sales, sales price, investment, employment
were not in a negative trend during the period under investiga-
tion.
It should be noted that the above situation has to be seen in the
light of a long expansion of Community consumption. Indeed,
during the period under investigation production increased at a
lower rate than Community consumption. Moreover, in spite ofthe increase in productivity over the same period, the Commu-nity industry suffered a significant loss in market share at atime when Community consumption had increased by 27 %.
Furthermore, the Community industry showed a significant dete-
rioration in its financial results from 1995 onwards, profitsfalling from 13,4 % to 1,3 % of net sales in the investigationperiod, and suffered significant price pressure from the dumpedimportsthroughout the period cons idered, with price undercut-ting of up to 21,4 % during the investigation period.1999R0603 — EN — 15.11.2002 — 003.001 — 9
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(51)The exporting producersargued that employment increas ed
during the period under investigation. However, it should also
be noted that after an increase in 1996, employment levels wereagain on the decline in the investigation period. As regardsinvestment, it should be noted that one Community producersuffered from a factory fire and had to replace its productionmachinery in 1996. This is one of the reasons for the increased
investment noted during the period under investigation.
6.Conclusiononinjury
(52)In the absence of any other arguments concerning the situation
of the Community industry and in the light of the above, theconclusion that the Community industry has suffered materialinjury within the meaning of Article 3(1) of the Basic Regula-
tion, as stated in recitals 36 to 51 of the provisional duty
Regulation, ishereby confirmed.
G.CAUSATIONOFINJURY
1.Effectsofthedumpedimports
(53)In view of conclusions on cumulation as set out in recital 35
hereto, the findingson the volume and market s hare of the
dumped importsfrom the countriesconcerned were changed
accordingly. It wasfound that the volume of dumped importsfrom Poland, the Czech Republic and Hungary increasedsubstantially between 1994 and the investigation period (169 %).It should be noted that, between 1994 and 1995, the volume ofthe dumped importsinto the Community increas ed by 62 % and
a further significant increase occurred between 1996 and the
investigation period. This had the effect that the cumulated totalmarket share of imports from the three exporting countriesconcerned increased from 13,1 % in 1994 to 27,6 % in the inves-tigation period, i.e. by 14,5 percentage points. In contrast, the
Community industry's market share decreased by 9,5 percentage
pointsbetween 1994 and the inves tigation period. Moreover, itshould be noted that the Community industry lost 5,4 percentagepointsin market s hare between 1996 and 1997 alone, which isthe period during which the increase in imports from theexporting countriesconcerned became particularly relevant.
(54)Moreover, it wasfound that the pricesof the dumped imports
undercut the Community industry's prices significantly
throughout the whole period considered, including the periodfrom 1995 onwards, thus exerting downward pressure on thesales prices of the Community industry.
The decline in profitability experienced by the Community
industry between 1995 and the investigation period was thereforeclearly linked to the depressed sales prices over that period,which in turn occurred at a time of significant price undercuttingby the dumped imports.
(55)One exporting producer claimed that itsvolume of exportsto theCommunity had been so small in comparison with Community
consumption of the product concerned during the investigation
period that it could hardly have caused any injury to theCommunity industry. This argument has to be dismissed becausethe export volume of an individual company isnot relevant indetermining the extent of the injury caused to the Communityindustry, injury being assessed for countries as a whole, and not
in relation to single companies.
2.Effectsofotherfactors
(a)General
(56)The cooperating exporting producersargued that any material
injury suffered by the Community industry could not be attribu-table to importsoriginating in the three countriesconcerned.1999R0603 — EN — 15.11.2002 — 003.001 — 10
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They argued that the Community industry's profitability between
1995 and the investigation period had fallen due to the inflatedpricesof raw material paid by the Community indus try. Further-
more, they claimed that any decline in profitability in thisperiod
was also due to increased overheads, in particular depreciationcharges and interest expenses, as a result of the substantialinvestment made by the Community industry.
The Commission, in recital 58 of the provisional duty Regula-
tion, has already addressed the argument concerning the priceof raw material, establishing that the Community industry couldnot raise its prices sufficiently due to the significant price under-cutting found for importsfrom the exporting countries
concerned.
(57)Furthermore, asregardsthe impact of the inves tmentsmade bythe Community industry on profitability, it was found that these
had a marginal impact on the Community industry's costs ofproduction during the period considered, mainly because anycosts related to these new investments were compensated for bygainsin productivity and by an overall reduction in other generaland administrative expenses.
(b)Other imports
(58)No new commentswere received relating to the effect of imports
from other countries. Therefore, the findings and conclusions onthe effect of importsfrom countriesother than Poland, the CzechRepublic and Hungary on the injuriouss ituation of the Commu-nity industry, as stated in recital 54 of the provisional dutyRegulation, are hereby confirmed.
(c)Europe Agreements
(59)The Hungarian exporting producersargued that in itspreliminary
findings the Commission had not distinguished between thegrowth of importscaus ed by dumping and the growth of importsforeseeable due to the implementation of the Europe Agreementresulting in improved access to the Community market.
The Europe Agreement, although clearly aimed at establishing
preferential trade relationships with Hungary, by phasing outthe duty on importsof baler twine from 9 % to 0 %, doesnotprevent the Community from taking action if unfair trade prac-tices have been established. Furthermore, the levels of
undercutting and dumping found for the three countries
concerned by thisinves tigation cannot be explained by thereduction of the duty previously in force. In these circumstancesthe phasing out of the duty is not considered sufficient to breakthe causal link between the dumped imports and the materialinjury suffered by the Community industry.
Thisargument hastherefore to be rejected.
(d)Effects of the dismantling of the MFA
(60)The Polish exporting producers argued that in its preliminary
findings the Commission did not take into consideration thefact that the dismantling of the MFA would result in loss ofmarket share and account, to a certain extent, for the price
suppression experienced by the Community industry.
It should be noted that during the investigated period imports
from Poland were under a quota system in accordance with thetextile agreement between the Community and Poland. The rele-
vant quotasfor 1995, 1996 and 1997 were 5 281, 5 545 and
5 823 tonnes respectively. Polish exporting producers did notfully use the quota allocated to them in 1995 and 1996. Onlyduring the investigation period did the exporting producers fromPoland fully use their quota. The increasing trend of the importsoriginating in Poland coincided with the presence of dumping.1999R0603 — EN — 15.11.2002 — 003.001 — 11
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In this respect it was concluded that the increase in exports to
the Community as such did not cause injury to the Communityindustry, but the fact that those exports were made, as estab-
lished in the investigation, at dumped injurious prices.
Furthermore, the dismantling of the quota system, provided forby the MFA, happened in 1998 which isafter the period underinvestigation.
Thus, the dismantling of the MFA in this case appears to be irre-
levant.
(e)Effects of bad weather conditions
(61)Some exporting producersargued that the injury s uffered by the
Community industry was not due to the dumped imports from
the countries concerned, but to the increased costs resultingfrom allegedly reduced consumption, due to the adverse weatherconditions.
It wasfound that cons umption in the Community market
increased during the period under investigation, when dumped
importsfrom the countriesconcerned increas ed by 169 %despite the weather conditions. It is clear that the Communityindustry mainly lost market share due to the increased presenceof dumped imports, rather than the adverse weather conditions.
(f)Overcapacity of the Community industry
(62)Some interested parties argued that the injury suffered by the
Community industry was not due to the dumped imports, but toovercapacity.
It was established during the investigation that Community
production was not sufficient to supply the Community balertwine market. Thus, the argument concerning the alleged overca-pacity hasto be rejected.
(g)Structural changes in the baler twine market
(63)Furthermore, the same interested parties argued that the Commu-
nity industry failed to recognise the gradual market trends fromfine baler twine to netsand from medium to heavy baler twine.Moreover, they argued that the shift from medium baler twine to
heavy baler twine had had a direct impact on the total tonnage
sold, as less heavy baler twine than medium baler twine isneeded to produce the same weight of bales.
It is indeed true that during the period under investigation these
shifts occurred in the Community baler twine market. Neverthe-
less, it was found that the Community industry, especially with
the investment on replacing old machinery, kept up with thesechanges by increasing its presence in the heavy baler twinemarket. Moreover, it should be noted that consumption increasedduring the investigated period, thus the argument concerning theimpact on the tonnage from the shift from medium baler twine
to heavy baler twine hasto be rejected.
3.Conclusiononcausation
(64)In the light of the above, although it cannot be excluded that
some other factors may have had a negative impact on the situa-
tion of the Community industry, this impact was not such as tobreak the causal link between the injury suffered by the Commu-nity industry and the dumped imports originating in the countriesconcerned. Therefore and in the absence of any new information,
the conclusion that the combined effect of the imports of baler
twine originating in Poland, the Czech Republic and Hungary,taken in isolation, have caused material injury to the Communityindustry is confirmed.
This conclusion is drawn in particular given the loss in market
share of the Community industry, combined with a deterioration1999R0603 — EN — 15.11.2002 — 003.001 — 12
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in profitability, which coincided with an increase in the volume
and market share of the dumped imports, at prices whichconstantly undercut those of the Community industry.
H.COMMUNITYINTEREST
(65)It was claimed that the conclusion on the Community interest in
the provisional duty Regulation was not supported by factualevidence. In particular, it was argued that the Commission hadnot taken into consideration the impact of anti-dumpingmeasures on the importers, in order to support its conclusions
concerning the Community interest.
It should be noted that the Commission contacted all known
importers. Only limited and general replies were received. More-over, no additional substantiated comments were submitted fromthe abovementioned partiesafter the adoption of provis ionalmeasures.
(66)In the absence of a reaction from users, it has been assumed thatthe impact of any expected price increase would be limited,taking into account the level of the duty proposed. It is alsothought that the imposition of measures will lead to a reinstate-
ment of effective competition that will enable the Community
industry to regain the lost market share and improve its profit-ability.
(67)It wastherefore concluded that the findingss et out in recitals66
to 67 of the provisional duty Regulation could be confirmed.
I.DEFINITIVEMEASURES
1.Definitivemeasures
(a)Injury elimination level
(68)A Hungarian exporting producer argued that itsexport priceshad
to be adjusted for the purposes of the injury elimination level
assessment, to take account of the difference in raw materialpricesbetween the Hungarian and the Community indus try.
However, as stated in recital 70 of the provisional duty Regula-
tion, the injury elimination level wasdetermined on the bas isofthe costs of production of the Community industry plus a reason-
able amount of profit. Any considerations of differences in costs
of production between the Hungarian and the Communityindustry are therefore irrelevant in this respect.
(69)For the purpose of establishing the level of the measures defini-
tively to be imposed, it was considered that the prices of the
dumped imports should be increased to a non-injurious level.The necessary price increase or injury margin was determinedon the basis of a comparison of the weighted-average exportprices for those types of baler twine used in the determinationof price undercutting at a cif Community frontier level, with
the actual weighted-average cost of production of the Commu-
nity industry plus a profit margin of 5 %. This profit marginwascons idered to be the profitability likely to be achieved inthe absence of injurious dumping and takes account of the factthat the product concerned is considered by the interested partiesasa commodity.
(70)An injury margin was established for each of the cooperatingexporting producers concerned and expressed as a percentage ofthe cif value of their exportsto the Community.
(71)Following the disclosure of the provisional findings, commentswere submitted with regard to the method used in the determina-tion of the injury margin for the Saudi Arabian exportingproducer.
It was argued that the Commission should include in its calcula-
tions one specific type of baler twine, which represented the1999R0603 — EN — 15.11.2002 — 003.001 — 13
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majority of Saudi Arabian sales to the UK market. The Commis-
sion considered this argument and found that the inclusion ofthese sales by the Saudi Arabian exporting producer to the UK
market would make the calculationsmore repres entative. The
Commission revised its calculations accordingly, using the samemethodology asexplained in recital 70 of the provis ional dutyRegulation.
On the basis of this methodology the revised injury margin for
the sole Saudi exporting producer (Synthec) was found to be ata‘de minimus ’ level and for two Polish exporting producers
PAT Defalin s.a. and Terplast sp z.o.o. 27 % and 6,1 % accord-ingly. The injury elimination level for WKI Isoliertechnik
Spolska z.o.o., Weltyn is 15,7 %. The injury margins concerning
the other exporting producersremain unchanged.
(72)In view of the findings set out above, it is proposed that defini-tive anti-dumping dutiesbe impos ed on importsof binder orbaler twine originating in the Czech Republic, Hungary, andPoland. Asto importsfrom Saudi Arabia, it ispropos ed, inapplication by analogy of Article 9(3) of the Basic Regulation,
to terminate the proceeding without measures.
(73)In accordance with Article 9(4) of the Basic Regulation, for all
exporting producers the proposed duty is based on the lower ofthe injury or the dumping margin. The same applies for the resi-dual duties. It should be noted that for the definitive findingsPolish cooperating producers now account for more than 90 %
of total Polish exports. Therefore, a residual duty was calculated
using the highest duty found for an individual cooperatingexporting producer located in Poland.
(b)Form and level of the definitive measures
(74)Based on the above conclusions on dumping, injury, causation
and Community interest, it was considered what the form and
level of anti-dumping measures should be to remove the trade-
distorting effects of injurious dumping and to restore effectivecompetitive conditionson the Community market.
(75)Definitive measures should take the form of ad-valorem duties,
the ratesof which have been fixed individually for cooperatingcompanies. However, for those companies which have offeredprice undertakings, this form of measure is acceptable. These
undertakingsreflect the definitive findingsof the inves tigation
with respect to the minimum prices provided therein and havebeen accepted by Commission Decision 1999/215/EC(
1).
(c)Undertakings
(76)It will be recalled from recital 72 et seq. of the provisional duty
Regulation that undertakingshad been offered by the coop-
erating exporting producersin Hungary, and accepted by the
Commission.
(77)After the adoption of the provisional anti-dumping measures, onecooperating Czech exporting producer (Juta a.s.) offered a priceundertaking to the Commission, in accordance with Article 8(1)of the Basic Regulation. The Commission considered that theundertaking offered by the exporting producer concerned was
acceptable, and, after consulting the Advisory Committee, an
amendment to the provisional duty Regulation was accordinglymade by Commission Regulation (EC) No 2649/98(
2).
Following the Commission's disclosure of its definitive findings,the other cooperating Czech company and a Polish company also
offered undertakingswhich were judged acceptable. The
Commission's acceptance of the undertakings is now consoli-dated in Decision 1999/215/EC.1999R0603 — EN — 15.11.2002 — 003.001 — 14
(1) See page 34 of thisOfficial Journal.
(2) OJ L 335, 10. 12. 1998, p. 41.
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2.Collection oftheprovisionalduties
(78)Five other Polish producers also offered an undertaking which,
in contrast to those accepted from other producers in the present
proceedings, would have given the companies concerned a free
choice in deciding whether to export under the undertaking ornot. The Commission rejected these offers on the grounds thatthe companieswould have had the option of exporting higher-priced productsunder the undertaking, while lower-pricedproductsbore the duty. It s hould be noted that the minimum
price which hasto be res pected for each product group on a
quarterly weighted average basis is intended to ensure that allsales are made at a non-injurious price. Allowing some sales tobe made outside the undertaking would have prevented this aimfrom being achieved.
(79)In the light of the seriousness of the injury suffered by the
Community industry, it is considered necessary that the amounts
securd by way of the provisional anti-dumping duties imposedby Regulation (EC) No 2107/98 should be definitively collectedat the rate of the definitive dutiesimpos ed.
J.TERMINATION OF THE PROCEEDING IN RESPECT OF
SAUDIARABIA
(80)In view of the conclusions of the definitive investigation, the
proceeding concerning importsoriginating in Saudi Arabia isterminated by Commission Decision 1999/215/EC without the
imposition of measures. The amounts secured by way of a provi-
sional anti-dumping duty should therefore be released.
HAS ADOPTED THIS REGULATION:
Article 1
1. Asdefinitive anti-dumping duty ishereby impos ed on importsof
polypropylene binder or baler twine, currently classifiable within CN
code ex 5607 41 00 (TARIC code 5607 41 00*10), originating inPoland, the Czech Republic and Hungary.
2. The rate of the definitive anti-dumping duty applicable to the net
free-at-Community-frontier pricesbefore duty of the productsmanufac-
tured by the companies listed below shall be as follows:
Country CompanyRate of
duty (%)TARIC
additional
code
Poland BZLP Bezalin 19,4 8450
PAT Defalin s.a. 16,3 8569
Industrial Chemistry Research
Institute12,8 8578
Terplast sp z.o.o. 6,1 8579
WKI Isoliertechnik Spolka
z.o.o.15,7 A091
All other companies20,3 8900
Czech Republic All companies24,8 8900
Hungary Tiszai Vegyi Kombinat Rt 26,4 8582
All other companies32,9 8900
3. Unless otherwise specified, the provisions in force concerning
customs duties and other customs practices shall apply1999R0603 — EN — 15.11.2002 — 003.001 — 15
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Article 2
1. Notwithstanding Article 1, the definitive duty shall not apply to
importsof polypropylene binder or baler twine produced and directly
exported and invoiced to an importing company in the Community by
the companieslis ted in paragraph 2, which have offered price under-takings accepted by the Commission.
2. Importsmade within the context of the undertakingsoffered and
accepted shall be declared under the following TARIC additionalcodes:
Country CompanyTARIC
additional
code
Czech Republic Juta a.s. 8596
Lanex a.s. 8580
Hungary Partium '70 Rt 8581
Elso Magyar Kenderfono Rt 8583
Article 3
1. The amounts provisionally secured by Regulation (EC) No 2107/
98 with respect to imports originating in the countries mentioned in
Article 1 shall be collected at the duty rate definitively imposed.
2. The amounts provisionally secured by Regulation (EC) No 2107/
98 with respect to imports originating in Saudi Arabia shall bereleased.
3. Article 2(2) of Regulation (EC) No 2107/98 shall be repealed.
Article 4
ThisRegulation s hall enter into force on the day following itspublica-
tion in the Official Journal of the European Communities .
ThisRegulation s hall be binding in itsentirety and directly applicable
in all Member States.1999R0603 — EN — 15.11.2002 — 003.001 — 16
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