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This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL REGULATION (EC)No 1567/97
of 1 August 1997
imposing a definitive anti-dumping duty on imports of leather handbags originating in the People’s
Republic of China and terminating the proceeding concerning imports of plastic and textile
handbags originating in the People’s Republic of China
(OJ L 208, 2.8.1997, p. 31)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 2380/98 of 3 November 1998 L296 1 5.11.1998
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COUNCIL REGULATION (EC)No 1567/97
of 1 August 1997
imposing a definitive anti-dumping duty on imports of leather
handbags originating in the People’s Republic of China and termi-nating the proceeding concerning imports of plastic and textile
handbags originating in the People’s Republic of China
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
1995onprotectionagainstdumpedimportsfromcountriesnotmembersof the European Community(
1), and in particular Articles 9 (2), 9 (4)
and 10 (2) thereof,
Having regard to the proposal presented by the Commission after
consulting the Advisory Committee,
Whereas:
A.PROVISIONAL MEASURES
(1)By Regulation (EC) No 209/97(2) the Commission imposed a
provisionalanti-dumpingdutyonimportsintotheCommunityofhandbags originating in the People’s Republic of China andfalling within CNcodes 42022100 (leather), 42022210(plastic) and 42022290 (textiles).
B.SUBSEQUENT PROCEDURE
(2)Subsequent to the imposition of the provisional anti-dumping
duty, the interested parties who so requested were granted anopportunity to be heard by the Commission. A number of thesepartiesalsomadewrittensubmissionsmakingtheirviewsonthefindings known.
(3)The Commission’s services investigated further aspects of theCommunity interest and sought and verified all informationdeemednecessaryforthedefinitivefindings.Becauseofthelargenumber of parties which made themselves known well after theexpiry of the deadline and the arguments raised by interestedparties at a very advanced stage of the investigation and imme-diatelyaftertheimpositionofprovisionalmeasures,theCommis-sion exceptionally agreed to include these parties in the invest-igation regarding Community interest.
(4)Upon request, parties were informed in writing of the essentialfactsandconsiderationsonthebasisofwhichitwasintendedtorecommendboththeimpositionofdefinitivedutiesandthedefin-itive collection of the amounts secured by way of provisionaldutywithrespecttoleatherhandbags,andfurthertoterminatetheproceeding with respect to plastic and textile handbags.
(5)The oral and written comments presented by the parties wereconsidered, and, where appropriate, the Commission’s findingswere modified to take account of them.
C.SUPPORT FOR THE COMPLAINT
(6)Some interested parties have claimed that the complaint did not
receive support from a major proportion of total Communityproductionbecausetherewasnoevidencethatindividualprodu-cers accounting for a major proportion gave such support. They
(1) OJ No L 56, 6. 3. 1996, p. 1.
(2) OJ No L 33, 4. 2. 1997, p. 11.
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also pointed out that the opposition of several National Federa-tions affects the representativeness of the complainant.
(7)Afterexaminationpriortotheinitiationoftheproceeding,itwasdetermined that the National Federations of Belgium, France,Greece,Italy,Portugal,SpainandtheUnitedKingdomsupportedthe complaint. The production of their associated membersaccounts for a major proportion (around 70%) of totalCommunityproductionunderthetermsofArticle5(4)ofRegu-lation (EC) No 384/96 (hereinafter referred to as ‘the basicregulation').
(8)ThesupportofthemembersoftheNationalFederations(i.e.theindividualcompanies)wasobtainedbytheEuropeanCommitteeofNationalFederationsoftheLeather,TravelGoodsandAlliedIndustries (CEDIM) through the abovementioned NationalFederations, which have the legal capacity to represent theirmembers.
(9)No opposition was registered prior to initiation of the invest-igation as three other National Federation members of CEDIM(Austria, Germany and the Netherlands) agreed within CEDIMnot to oppose the complaint. Finally no company or NationalFederation from the remaining five other Member States(Denmark,Finland,Ireland,LuxembourgandSweden)expressedopposition to the complaint.
(10)Subsequenttotheinitiationoftheproceeding,theBritishFedera-tion decided to withdraw its support. The Austrian, German andDutch Federations, which initially abstained, also decided toopposetheproceeding.Thischangeinpositioncannotthrowintoquestion retrospectively the validity of the initiation of theproceeding. Given the low production in these countries (lessthan 7% of total Community production) such opposition doesnot call into question the fact that the complainant continues torepresent a major proportion of total Community production.
(11)Finally, almost all companies which expressed opposition to theproceedingareimportersandretailersofhandbags,whicharenotproducing the product concerned. Their opposition is thereforeirrelevant for evaluating the representativeness of the complaint.
(12)It can therefore be concluded that, prior to the initiation of theproceeding, the Commission sought and obtained, from thecomplainant, evidence that it fulfilled the requirement of Article5(4)ofthebasicregulationwithregardtorepresentativenessandthat the required degree of support was maintained throughoutthe proceeding.
D.INVESTIGATION
(13)Some interested parties have claimed that the sample of
Community producers as described in recital 5 of CommissionRegulation (EC) No 209/97 is neither representative nor statisti-callyvalidbecausethesampledcompanieswereselectedfromaseparate list of companies submitted by the respective NationalFederationsandnotfromthemembershiplistsusedtoassesstherepresentativeness of the complaint. These parties claim that theNational Federations were thus allowed to pre-select onlyCommunityproducerswhosupportedthecomplaint,thosewhosefinancial indicators facilitated findings of injury or those willingto cooperate.
(14)The sample of Community producers was based on detailedinformation previously not available to the National Federationswiththatdegreeofdetailorfortheperiodinquestion.Therefore,it is considered that a valid sample of Community producerscouldnothavebeenselectedonthebasisofthelistofmemberssubmitted by the National Federations as the basis for thecomplaint.
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(15)The argument that the National Federations could have pre-
selectedthoseCommunityproducerswhoseindicatorsfacilitatedfindings of injury is also incorrect. Indeed, it should be recalledthat general data concerning production, sales, consumption andemployment have been assessed at total Community industrylevel where no pre-selection is possible. As far as dataconcerning the sampled Community producers are concerned,thisinformationisofsuchadetailedandconfidentialnaturethatit is not normally submitted to the National Federations andtherefore leaves no scope for any pre-selection by any NationalFederations. Thus, this argument should also be rejected.
(16)Some parties have also argued that the non-disclosure of theidentity of the sampled Community producers has resulted in adenial of their right of defence.
(17)Thethreatofcommercialretaliationisconsideredtobeaseriouscommercial pressure justifying the non-disclosure of the identityoftheCommunityproducers.Moreover,itisnotconsideredthatthe lack of knowledge of the identity of the sample Communityproducershamperstherightsofdefenceofinterestedpartieswhohave access to the non-confidential versions of the responses tothequestionnairessubmittedbyotherinterestedpartiesduringtheproceeding.
(18)One interested party has claimed that the sample of unrelatedimportersisdistortedbythefactthatonlylargeunrelatedimpor-tershavebeensampled.Becauseoftheirbargainingpowertheseimporterstendtoimportatlowerprices,whichhasresultedinadistortion in the dumping margins found.
(19)This claim is unfounded; unrelated importers were sampledaccordingtotheirvolumeofimportsandemployment,toreflectlarge, medium and small importers.
ThenamesofthesampledunrelatedimportersinFranceinrecital
10ofRegulation(EC)No209/97shouldbeamendedasfollows:‘Dané&Galiay(Paris)'shouldread‘PollyconceptSA'.Thisdoesnot affect the validity of the findings of the Commission, sincethe data of the latter has been used consistently.
(20)Subsequent to the imposition of the provisional anti-dumpingmeasures, a producer/exporter (Gebr. Picard International Ltd)was sent, on its request, an exporter’s questionnaire and itsubmittedacompletereply.Thisproducer/exporterhadnotbeeninvestigatedpriortoRegulation(EC)No209/97asithadinitiallyfocusedonitsroleasanimporter,andnotasarelatedexporter,although it had as such manifested itself within the time-limitsestablished in paragraph 7 of the Notice of Initiation.
(21)A large number of producers/exporters manifested themselvesand offered to cooperate immediately before or following thepublication of Regulation (EC) No 209/97, i.e. well beyond thetime-limit established in paragraph 7 of the Notice of Initiation.Accordingly, these companies have not been considered to beinterested parties in the proceeding and their requests for indi-vidual treatment have been dismissed as being inadmissible onthese grounds.
E.PRODUCT UNDER CONSIDERATION — LIKE PRODUCT
1.Product under consideration
(22)For the purpose of the preliminary findings, the Commission
consideredleather,plasticandtextilehandbagstobeoneproduct,given the fact that they were considered to possess the samecharacteristics and be intended for the same use.
(23)After the imposition of provisional measures, several interestedpartiesclaimedthatadistinctionshouldbemadebetweenleatherhandbagsontheonehandandsynthetichandbags(plastic/textile)on the other.
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Some parties have also claimed that a distinction should furtherbe made between leather handbags, patch leather handbags andpolyurethane (PU) coated split leather handbags in view of thealleged differences in style, quality, finish, use, price andconsumer perception.
(24)It should be recalled that it is the standard practice of theCommission,asconfirmedbytheEuropeanCourtofJustice,thattheproductunderconsiderationbedefinedaccordingtoitsbasicphysical characteristics, use, interchangeability and consumerperception.
(25)In this respect, the investigation has shown that the differenttypes of raw materials used in the manufacture of leather andsynthetic handbags confer on the product distinctly differentphysical characteristics.
While their general use is the same, it has now been found that
the consumer has a clearly different perception of leather hand-bagsandsynthetichandbagsrespectively,consumerchoicebeinggoverned mainly by the type of external raw material of thehandbag.
(26)The investigation has also shown that in the handbag marketstable consumer preferences exist. Therefore, the interchange-ability of the two types of handbags is almost non-existent,excepttoaverylimitedextentinthesectorofleather-lookplastichandbags. This has allowed a notable price differential betweenleather handbags and synthetic handbags, resulting in twodifferent market segments, separated by clear dividing linesbetween which it is not considered that interchangeability cantake place to a significant degree.
(27)Therefore,andinaccordancewiththewell-establishedpracticeofthe institutions concerning the product definition, leather andsynthetic handbags are to be considered different products.
2.Like product
(28)Several parties have argued that the leather handbags manufac-
tured in the Community and those imported from the People’sRepublicofChinaarenotlikeproductsinthesenseofArticle1(4) of the basic regulation due to the differences in quality,design and use. It has also been argued that the differences inquality between the imported handbags and those manufacturedin the Community are such that both products are not incompetition.
(29)Theinvestigationhasfurthershownthat,withineachofthetwoproducts under consideration (leather handbags/synthetic hand-bags), imported handbags cover the full range of types, fromhighertolowerquality,andassuchareindirectcompetitionwiththeentirerangeoftheCommunityproduction.Thesefindingsaresupported by the information supplied on this issue by severalcooperating importing-Community producers on this issueshowing that the handbags manufactured in the Community andthoseimportedfromthePeople’sRepublicofChinadonothavequalitydifferences,bothitemsbelongtothesamecollectionsandaresoldtothesamecustomers.Therefore,acrosstherangethereare no quality differences for comparable models.
(30)Concerning differences in design, it cannot be concluded thatthese would be such as to constitute a different like product. Inthis respect, some importers have even acknowledged that theydesigntheirhandbagsintheCommunity,followingthefashionofthe season, as is the case with Community manufacturers.
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F.DUMPING
1.Normal value
(31)Astotheselectionoftheanaloguecountry,oneimporteralleged
thatneitherRegulation(EC)No209/97northedisclosuredocu-ments sufficiently explained why India or Taiwan were notselected as analogue countries. The Council considers howeverthat recitals 24 to 26 of Regulation (EC) No 209/97 are suffi-ciently precise on this point.
(32)Several interested parties have requested that the names of thetwocooperatingIndonesiancompaniesbedisclosedallegingthatthiswouldbenecessarytoexercisetheirrightsofdefenceeffec-tively. The Council, however, does not consider it possible todisclose the names of these companies, as the cooperation ofthese companies could only be secured provided a strict guar-antee of confidential treatment of the identity of the companiesweregivenbytheCommission.Inaddition,supplyingtheactualnamesofthecompaniesinvolvedwouldnotaddtotherightsofdefence of these interested parties. In this regard, the essentialeconomicfactscharacterizingthesituationofthesetwoexportershave been set out in recitals 28 and 29 of Regulation (EC) No209/97.
(33)Inviewofthefactthatleatherhandbagsandsynthetichandbagshave been considered to be different products, separate normalvalues were constructed for leather and synthetic handbags, inaccordancewithArticle2(7)ofthebasicregulation,onthebasisof the cost of production for these two products of the twocooperatingIndonesianproducers,towhichareasonableamountfor profit and selling, general and administrative costs (‘SGA')was added. The findings in the fourth indent of recital 28 ofRegulation(EC)No209/97ontherepresentativenessofthetwoIndonesianproducersareconfirmedinrespectofbothlikeprod-ucts.
(34)IthasbeenallegedthatthecostofproductionofthecooperatingIndonesianproducersshouldbeadjustedtotakeintoaccountthefact the Chinese exporters predominantly import raw materialsunder inward processing relief procedures. In this respect itshouldbenotedthattherawmaterialsforbothlikeproductsusedby the cooperating Indonesian producers were found to be ofnon-Indonesian origin and imported into Indonesia free ofcustoms duties under a procedure of inward processing relief. Itfollows that the procurement patterns in Indonesia and in Chinaarethesameandthatthereforenoadjustmentiswarrantedinthisrespect.
(35)It was submitted by one exporter that the percentage of SGAused by the Commission was not representative of the SGAincurred by the Chinese exporters. Accordingly, the SGA hasbeen reviewed on the basis of the actual SGA incurred by theIndonesianexportersofhandbagsattheleveloftradecomparableto that of sales made by the Chinese exporters.
2.Export price
(36)In view of the low level of cooperation of Chinese exporters
(including exports of Gebr. Picard International Ltd.) in thisproceeding,whichamountstoonly1,58%ofallexportsfromthePeople’sRepublicofChina,theexportpricesofthecooperatingexporters could not be considered representative of the pricescharged by exporters which did not cooperate.
(37)For the purpose of the definitive findings, export prices of thecooperatingcompaniesShiltonandLee&Maninrespectofthetwolikeproductswereestablishedusingthesamemethodasforthe provisional findings. With regard to these companies, thefindings set out in recitals 33 and 34 of Regulation (EC) No209/97 are confirmed.
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(38)The third cooperating exporter (Gebr. Picard International Ltd),
not granted individual treatment by Regulation (EC) No 209/97,was found to make all of its exports to the Community via arelated company established in the Community; thus its exportpriceswereconstructedonthebasisofArticle2(9)ofthebasicregulation by deducting, from the prices charged by the relatedimporter to its first independent customers, its SGA and a profitmargin based on the average profit of unrelated importers.
(39)Export prices of the non-cooperating Chinese exporters wereestablished as explained under recital 32 of Regulation (EC) No209/97. This methodology is herewith confirmed.
3.Comparison
(40)TheweightedaveragenormalvaluefobIndonesiaforeachofthe
leather and synthetic handbags was compared with the weightedaverage export price fob China with respect to each of the twolike products concerned. For the purpose of ensuring a faircomparison between normal value and the export price, dueallowance in the form of adjustments was made in accordancewith Article 2 (10) of the basic regulation, where claims weremade and satisfactory evidence was supplied demonstrating thatsuch differences affected price comparability.
(41)It was argued by one exporter that the comparison of normalvalueandexportpriceshouldbemadeinrespectofeverysinglehandbag model or catalogue number (commonly referred to as‘style number')rather than on the basis of averages of each likeproduct. The Council considers, however, that as a practicalmatter a comparison at this level is not possible in view of theextremevarietyofmodelnumbers,eachhavingdifferentphysicalcharacteristics and combinations of features and accessories. Inaddition, no objective criteria were found to exist for distin-guishingparticularcategoriesormodelswithintherespectivelikeproduct;forsimilarreasons,itwasnotpossiblefortheCommis-sion to compare normal value and export price on the basis ofcategoriesregroupingmodelorcataloguenumbers.ItfollowsthattheonlyreasonablemethodfortheCommissionwastocomparenormalvalueandexportpriceinrespectofaveragesforeachofthe two products concerned (i.e. separately for leather handbagsand synthetic handbags).
4.Dumping margins
(42)As indicated above, three cooperating producers/exporters — all
privately-owned companies based in Hong Kong with handbagfactoriesinChina—presentedadmissiblerequestsforindividualtreatmenti.e.theestablishmentofseparateexportpricesandthusof individual dumping and injury margins.
(43)The findings set out in recitals 37 to 40 of Regulation (EC) No209/97,withregardtothetwocompanieshavingbeenprovision-ally granted individual treatment, are confirmed.
(44)Inaddition,theclaimforindividualtreatmentofathirdexporter/producer(Gebr.PicardInternationalLtd)wasinvestigated.Itwasfoundthatitsfactualsituationwasverysimilartothatofthetwocompanies having been provisionally granted individual treat-mentanddescribedinrecitals38and39ofRegulation(EC)No209/97.
(45)The Council considers that the three cooperating companiesclaiming individual treatment enjoyed a degree of genuine inde-pendencefromthepublicChineseauthoritiescomparabletothatwhichwouldprevailinamarketeconomycountry,andthusthatthe risk of channelling exports through these sources with indi-vidual anti-dumping duty rates would seem to be very limited.Accordingly, separate export prices and individual dumping andinjury margins have been established for the three exportersconcerned, as an exception to the principle of calculatingcountry-wide dumping margins in respect of non-market
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economy countries (Article 9 (5) of the basic regulation). It
shouldbepointedoutthatindividualtreatmentisgrantedonlyinrespect of the like product which was actually produced andexportedtotheCommunitybytheexporterconcernedduringtheinvestigation period, i.e. leather handbags in respect of Shiltonand Gebr. Picard International Ltd. and synthetic handbags inrespect of Lee & Man.
(46)Thedumpingmarginsestablishedforthecompaniesgrantedindi-vidual treatment have been established as follows:
— Shilton, in respect of leather handbags: nil,
— Gebr.PicardInternationalLtd,inrespectofleatherhandbags:
7,7%,
— Lee & Man, in respect of synthetic handbags: 64,7%.
(47)The weighted average dumping margin for the exporters not
granted individual treatment has been established at:
— 83,5% in respect of leather handbags, and
— 151% in respect of synthetic handbags
of the cif export price Community frontier duty unpaid.
G.LEATHER HANDBAGS
A. INJURY
1.Consumption in the Community market
(48)Between 1992 and the investigation period, the consumption of
leather handbags in the Community increased from around 51million units to 52,3 million units, i.e. an increase of approxi-mately 2,5%.
2.Volume and market share of imports
(49)Between 1992 and the investigation period, imports of leather
handbagsoriginatinginthePeople’sRepublicofChinaincreasedfrom 8,2 million units to 10,4 million units, i.e. by 27%. Whenmeasuredinvalue,theincreaseamountsto15%,fromECU43,6million in 1992 to ECU 50 million in the investigation period.
(50)The share of the Community market taken up by imports ofleather handbags originating in the People’s Republic of Chinaincreasedfrom16%in1992to20%intheinvestigationperiod.
3.Prices of dumped imports and undercutting
(51)As mentioned in the provisional regulation, due to the non-
cooperationbytheChineseexporters,officialstatisticaldatahavebeen used for the analysis of the price evolution of importedleather handbags. Thus, the average cif import price of leatherhandbagshasdecreasedby9%,fromECU5,29perunitin1992to ECU 4,79 per unit in the investigation period.
(52)Thecalculationofthepriceundercuttinghasfollowedthemeth-odology used in Regulation (EC) No 209/97, that is, the cifimports prices of the sampled unrelated importers, adjusted tocustomerdeliverlevel,werecomparedtothesellingpricesintheCommunity of those Community producers whose productioncomprised the most basic types sold, at the same level of trade.
(53)When expressed as a percentage of the Community producers’selling prices, the comparison with import prices of unrelatedimporters, as recalculated following substantiated argumentssubmittedbyinterestedpartiesaftertheimpositionofprovisionalmeasures, show an undercutting for leather handbags amountingto 31,4%.
4.Situation of the Community industry
(a)Production
(54)Production of leather handbags by the Community industry
increased from an estimated 26,5 million units in 1992 to 30,3million units in the investigation period. When measured in
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value, production increased from an estimated ECU 905 million
in1992toECU1100millionintheinvestigationperiod,i.e.by21%.
(b)Sales volume
(55)AdeclineinsalesvolumeintheCommunityofoutputmanufac-
tured by the Community industry between 1992 and the invest-igationperiodhasbeenestablished.Indeed,salesdecreasedfromaround21millionunitsin1992to20millionunitsintheinvest-igationperiod,i.e.adecreaseofaround5%.Whenmeasuredinvalue, sales decreased by around 8%, from around ECU 600million in 1992 to ECU 550 million in the investigation period.
(c)Market share
(56)TheshareoftheCommunitymarketoccupiedbytheCommunity
industrywhenmeasuredinunitsdecreasedfromaround41%in1992 to around 39% during the investigation period.
(d)Profitability and employment
(57)Following Article 3 (8) of the basic regulation, profitability and
employmentofCommunityproducershasbeencalculatedforthenarrowest group of products for which information has beenprovidedbythesampledCommunityproducers,thatis,handbagsmade of both leather and synthetics.
Therevisedweightedaverageprofitabilityconcerningsalesinthe
Communityshowsadeclinefrom5,9%in1992to1,3%duringthe investigation period.
On all sales, the Community industry achieved an overall profit
of around 5%.
(58)Employment figures in the handbag sector as extrapolated fromthe information received by Community producers in theCommunity interest analysis show that employment declinedfromabout18600peoplein1992to14000peopleintheinvest-igation period, a drop of 25%.
5.Conclusion on injury
(59)TheeconomicindicatorsoftheCommunityindustryexaminedin
conjunctionwiththeconclusionsdrawninrespectofthevolumeofimportsandtheirpricesshowthattheCommunityproducers’situation has deteriorated between 1992 and the investigationperiodinrespectofleatherhandbags.Ashasbeendemonstrated,the Community industry as a whole suffered declining salesvolume, loss of market share, declining employment anddeclining profitability in the Community market.
(60)As far as production is concerned, further reference is made tothe fact that exports of the Community producers increasedsignificantly.
(61)It is therefore the view of the Council that the situation of theCommunityindustryisclearlyprecariousandthetrendpointstoa further deterioration.
B. CAUSATION
1.Effects on the dumped imports
(62)The penetration of the Community market by imports of leather
handbagsfromthePeople’sRepublicofChinaatdumpedpriceswhich significantly undercut the prices of Community producerscoincided with a loss of market share and a deterioration of thefinancial situation of the Community industry. Given theincreasing volume of low priced, dumped handbags, it becameapparent during the investigation that many Community produ-cers were unable to compete against the dumped imports.
(63)Moreover,duetothefactthatcompetitiontakesplaceacrosstherange and to the fact that the distribution system is shared byproducts both manufactured in the Community and imported
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from the People’s Republic of China, the high price differentialin the form of undercutting is a direct cause of the precarioussituation of the Community industry.
(64)Accordingly, it is considered that dumped imports from thePeople’sRepublicofChinaincreasedatasignificantrateandarelikely to enter at prices which will prevent price increases.
2.Effects of other factors
(65)Care was taken to ensure that any impact on the Community
industrycausedbyotherfactorswasnotattributedtotheimportsconcerned.
(66)In this respect, particular reference was made by certain inter-estedpartiestoimportsintotheCommunityofhandbagsorigin-ating in India.
Available Eurostat data shows that the volume of imports of
leather handbags from India has remained stable between 1992andtheinvestigationperiodataround5millionunits.Asregardsthe prices of these imports, these have increased from aroundECU8in1992toaroundECU9,2intheinvestigationperiod,anincreaseof15%,wellabovethepricesofChinesehandbags.Theshare of volume of the Community market occupied by importsof handbags from India has decreased by 4% from 1992 to theinvestigation period.
(67)AstoimportsofleatherhandbagsfromHongKong,whenmeas-uredinunits,thesehaveincreasedfromaround400000unitsin1992 to around 750000 units in the investigation period. Withrespect to total imports of handbags into the Community, HongKong increased its share of the volume of Community handbagimportsfrom1,9%in1992to3,3%intheinvestigationperiod.However, the share of the Community market occupied byimports of handbags originating in Hong Kong has remained atrelatively low levels, increasing from 0,6% in 1992 to 1,4% involume in the investigation period.
(68)As to imports from other third countries, their share of totalimportshasdecreasedfrom32%in1992to30%intheinvest-igationperiod.TheshareoftheCommunitymarketoccupiedbythese imports has decreased from 12% of volume in 1992 to11% in the investigation period.
It should be noted that the Community market share of imports
from all third countries, excluding the People’s Republic ofChina,hasremainedstablefrom1992totheinvestigationperiod,at 23%, when measured in units.
3.Conclusion on causation
(69)Although certain other factors may have contributed to the
precarious situation of the Community industry, taken in isola-tion, the high volumes of dumped imports from the People’sRepublicofChinaarethreateningtocausematerialinjurytotheCommunity industry. This conclusion is based on the variouselementssetoutaboveandinparticularthelevelofpriceunder-cutting,themarketsharegainedbyimportsofhandbagsfromthiscountry, at the expense of the Community industry, and thedeterioration of the profitability of the Community producers.
C. COMMUNITY INTEREST
1.General considerations
(70)It should be recalled from recitals 76 et seq. of Regulation (EC)
No209/97thatanappreciationofthevariousinterests,includingthe interests of the Community industry, importers, distributorsand retailers was made, and that the Commission provisionallyconcluded that there were no compelling reasons not to takeactionagainsttheimportsinquestion.Furthermore,theCommis-sion undertook to conduct an examination of certain issues
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concerning Community interest which had not been sufficiently
substantiated when the provisional determination took place.
2.Impact on the Community industry
(a)Current situation of the industry
(71)The information received from the 50 Community producers
respondingtothequestionnaireonCommunityinterestaddressedto interested parties and representing around 20% of totalhandbagCommunityproductionshowsthatamajorproportionoftheproductionintheCommunityisofleatherhandbags.Intermsof value, 93% of the total Community production is of leatherhandbags.
(72)Substantial creative value is added to the product in theCommunity in the form of design, innovation and quality.Community producers have a special know-how in working theleather,whichistheresultofalongtraditioninthissectorintheCommunity.
(73)TheshareoftheCommunityleatherhandbagmarketheldbytheCommunityindustrywas39%intheinvestigationperiod,asignof its economic importance.
(74)TheviabilityoftheCommunityindustryisalsoevidentfromitsperformance on the export markets, significant and increasingdue to the locomotive effect of the brand names promotinghandbags ‘made in Europe'.Exports of leather handbags by theCommunity industry have increased from around 6 million unitsin 1992 to around 10 million units in the investigation period.
(b)Effects of the imposition/non-imposition of measures
(75)Intheabsenceofanti-dumpingmeasures,thereisnoelementthat
indicates that the negative situation of the Community industrywouldnotcontinue,tothedetrimentofanindustrythatisinher-ently both viable and competetive.
(76)ThesituationofimportingproducersintheCommunityhasbeenexaminedanditisconcludedthatthemajorityofthecompaniesinvestigatedbytheCommissionmanufactureleatherhandbagsintheCommunityandimportsynthetichandbagsfromthePeople’sRepublic of China. In those cases where such importing produ-cers imported leather handbags, such imports are, in general,ancillary.
3.Impact on importers-traders
(77)Furtherinvestigationhasshownthatthefullamountoftheprovi-
sional anti-dumping duty (39,2%) is being shared, generally inan equal proportion, by the different steps in the distributionchain: in particular the importer, the retailer and, finally, theconsumer.Thisseemstobepossibleduetotheaveragemarkupof importers and retailers respectively of around 70% on cifincluding a profit of 14% on turnover.
(78)The impact of any definitive measures on importers and tradershas to be seen in the light of the findings of the productconcerned.Indeed,areductioninthescopeofapplicationofthemeasures to leather handbags only (see recitals 118 et seq.) willminimize the impact of measures on these interested parties.
(79)Someimportershaveclaimedthattheyhadtoceasetheiractivityor are experiencing financial difficulties. Since importers aregenerally purchasing in US dollars, they are currently sufferingfromthestrengthoftheUSdollaragainstEuropeancurrencies.Itis concluded, therefore, that the weak financial situation ofcertain importers/traders is also attributable to currency fluctu-ations.
(80)As to the argument that the imposition of anti-dumping dutieswill not have the effect of increasing sales of the Communityproducers but would make importers purchase from other thirdcountries,itshouldbementionedthatitisnotthepurposeofany
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anti-dumping measure to limit imports from third countries at
non-dumped prices. Moreover, the investigation has confirmedthat it is not likely that a major proportion of importers willsource leather handbags from other third countries, due to theskilled labour and know-how necessary to manufacture leatherhandbags currently available in the People’s Republic of China.
(81)Given the above, measures on imports of leather handbags arenot likely to endanger the business performance of the distribu-tion chain.
4.Impact on consumers
(82)As has been mentioned above, the full amount of the duty is
currently being shared by the different steps in the distributionchain. Therefore, the effect of the duty on the consumer in theform of a price increase is not likely to exceed 9%.
(83)Furthermore, leather handbags being a fashion product notpurchasedonregularbasis,amoderateincreaseinthepricesforthe consumer should be seen in the light of the lack of a clearperceptionoftheappropriatepriceforahandbagforaconsumer,which is not likely to affect demand substantially in the longterm.
(84)In view of this, it is not expected that definitive measures onimportsofleatherhandbagswillhaveasignificantimpactontheconsumer.
5.Conclusion on Community interest
(85)In the light of the above, it is considered that the conclusions
drawn by the Commission in Regulation (EC) No 209/97concerningCommunityinterestshouldbeconfirmedwithrespectto leather handbags. There are no compelling reasons whichwould lead to the conclusion that adopting definitive measureswould not be in the interest of the Community.
H.SYNTHETIC HANDBAGS
A. INJURY
1.Consumption in the Community market
(86)Between 1992 and the investigation period, the consumption of
synthetic handbags in the Community increased from 73 millionunitsto96millionunits,i.e.anincreaseofapproximately31%.
2.Volume and market share of imports
(87)Between 1992 and the investigation period, imports of synthetic
handbagsoriginatinginthePeople’sRepublicofChinaincreasedfrom 53 million units to 78 million units, i.e. by 47%. Whenmeasuredinvalue,theincreaseamountsto31%,fromECU152million in 1992 to ECU 199 million in the investigation period.
(88)The share of the Community market taken by imports of hand-bags originating in the People’s Republic of China increasedfrom 73% in 1992 to 81% in the investigation period.
3.Prices of dumped imports and undercutting
(89)Theaveragecifimportpriceofsynthetichandbagsasreportedby
Eurostathasdecreasedby10%,fromECU2,8perunitin1992to ECU 2,5 per unit in the investigation period.
(90)The undercutting margin amounts to 27,8% for synthetic hand-bags.
4.Situation of the Community industry
(a)Production
(91)The estimated production of synthetic handbags by the
Community industry has remained stable at around 14 millionunits between 1992 and the investigation period.
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(b)Sales volume
(92)AdeclineinsalesvolumeintheCommunityofhandbagsmanu-
factured by the Community industry of around 70% between1992 and the investigation period has been established. Indeed,salesdecreasedfromaround6millionunitsin1992toaround2million units in the investigation period.
(c)Market share
(93)TheshareoftheCommunitymarketoccupiedbytheCommunity
industry when measured in units decreased from around 9% in1992 to around 3% during the investigation period.
(d)Profitability and employment
(94)The overall profitability of Community producers declined
progressively from 5,9% in 1992 to 1,3% during the invest-igation period.
(95)Employment figures in the handbag sector declined from about18600 people in 1992 to 14000 people in the investigationperiod, a drop of 25%.
5.Conclusion on injury
(96)It is considered that the Community industry of synthetic hand-
bags suffered material injury within the meaning of Article 3 ofthe basic regulation.
(97)This stems from the deterioration of the economic factors of theCommunity industry during the period 1992 to the investigationperiod, namely declining sales volume, loss of market share,declining employment and declining profitability, as seen in thelightoftheincreaseinthevolumeofimportsofsynthetichand-bags from the People’s Republic of China and its prices.
B. CAUSATION
1.Effects of the dumped imports
(98)Given the above findings, it is considered that the imports of
synthetic handbags from the People’s Republic of China had,taken in isolation, a material impact on the situation of theCommunity industry.
(99)Indeed, given that synthetic handbags manufactured in theCommunity and those imported from the People’s Republic ofChinacompeteacrosstherange,wherethedistributionsystemiscommon to both products, the undercutting found indicates that,taken in isolation, imports of synthetic handbags from thePeople’s Republic of China caused material injury to theCommunity industry.
2.Effects of other factors: imports from third countries
(100)The Commission has examined the impact on the Community
industryoffactorsotherthanimportsofsynthetichandbagsfromthePeople’sRepublicofChina,namely,importsfromotherthirdcountries.
(101)Concerning India, available Eurostat data shows that even if thevolume of imports from India has increased from 1,6 millionunitsin1992to3,4millionunitsintheinvestigationperiod,theirshareoftotalimportsofsynthetichandbagsintotheCommunityhas increased only from 2,6% in 1992 to 3,6% in the invest-igation period. The share of the Community synthetic handbagmarket occupied by these imports has remained at a low level,being 3,5% in the investigation period.
(102)ImportsofsynthetichandbagsfromHongKong,whenmeasuredin units, have increased from 1,5 million units in 1992 to 6,5millionunitsintheinvestigationperiod.However,theirshareofthe Community synthetic handbag market has remained at a
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relatively low level, increasing from 2% in 1992 to 7% in the
investigation period.
(103)As to imports from other third countries, their share of the totalimport of synthetic handbags into the Community has decreasedfrom11%in1992to5,5%intheinvestigationperiod.Theshareof the Community synthetic handbags market occupied by theseimports has decreased from 9,7% in 1992 to 5% in the invest-igation period.
3.Conclusion on causation
(104)Theaboveanalysisshowsthat,evenifcertainotherfactorsmight
have contributed to the injury suffered by the Communityindustry,itisconsideredthat,takeninisolation,thehighvolumeof synthetic handbags imported from the People’s Republic ofChina at dumped prices have caused material injury to theCommunity industry.
C. COMMUNITY INTEREST
1.Community industry
(105)The indicators of the Community synthetic handbag industry
show that it is not likely that the Community industry wouldbenefitfromanyanti-dumpingmeasureimposed.Theimpositionof measures would not have the effect of increasing the sales oftheCommunitysynthetichandbagsmanufacturers,giventhatitislikely that synthetic handbags will be sourced from other thirdcountriesinthemediumterm.Indeed,ithasbeenascertainedthattheproductionprocessinthesyntheticsectorisofsuchanaturethat it can be transferred to another third country within a rela-tively short period of time. In this respect, evidence has beenprovidedbysomeinterestedpartiesshowingthatthishasalreadytaken place in some instances. There are, therefore, strongreasons to expect that most of the volume and price benefitswhich anti-dumping measures may have will not go to theCommunity industry but to imports from other third countries.
(106)Inaddition,theconsequencesofthenon-impositionofmeasureson the employment levels of the Community synthetic handbagproducersisrelativelylimited,giventhelowsalesvolumeintheCommunityofCommunityproducedsynthetichandbagsandtheestimated employment figures for synthetic handbags of around500employees.WhilethesejobsmaybeexposedtocompetitionfromdumpedimportsofhandbagsfromthePeople’sRepublicofChina, this figure has to be compared to a total employmentfigure for the entire Community handbags sector of around14000employees.Inthisrespect,itisexpectedthatanincreasein the sales volume of the Community manufacturers of leatherhandbags may have the effect of offsetting this negative impact,if any.
2.Impact on importers/traders
(107)In view of the high share of the Community synthetic handbag
market held by imports from the People’s Republic of China, ifdefinitiveanti-dumpingmeasuresoftheprovisionalamountweretobeimposed,asubstantialimpactonCommunityimportersandtraders would be expected.
(108)Indeed, a comparison of the market shares held respectively bytheCommunityindustry(around2%intheinvestigationperiod)and the imports from the People’s Republic of China (around80%intheinvestigationperiod)indicatethattheresultingnega-tive impact on importers and traders of the product would beclearly disproportionate to any possible benefit in the short termto the Community industry which would be gained through theimposition of anti-dumping measures.
(109)Theestimatedemploymentforthedistributionchainofsynthetichandbags has been estimated at around 4100 employees. It isconsidered that the imposition of anti-dumping measures onimports of synthetic handbags will have, at least in the medium
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term, a negative impact on this employment. Indeed, since theexpected switch in the source of supply to other third countrieswill take place in the medium term, it is expected that in themeantimeacertainnumberofjobsinthedistributionsectorwillbe at risk. On the other hand, the employment levels of theCommunity synthetic handbags manufacturers are not expectedto decrease to a significant extent, in view of the fact that theCommunity industry is concentrating on the export markets.
3.Impact on consumers
(110)Inthisrespect,ithastoberecalledthat,shouldadefinitiveduty
beimposed,ashortageinsupplywilloccur,atleastintheshortterm, thus restricting consumer choice.
Theeffectontheconsumerintheformofacertainpriceincrease
should also be seen in the light of the likely absence of anybenefit for the Community producer and the negative impact onthe distribution chain.
4.Conclusion on Community interest
(111)In view of the abovementioned facts and trends which differ
significantly from those established in respect of leather hand-bags, it is considered that there are compelling reasons why theimposition of definitive measures on imports of synthetic hand-bagsisnotintheinterestoftheCommunity.Thenegativeimpactof definitive anti-dumping measures on imports of synthetichandbagsfromthePeople’sRepublicofChinawouldbedispro-portionate to any actual benefit to the Community industry.
I.DUTY
1.Leather handbags
(112)Someinterestedpartieshavearguedthatthedutyshouldtakethe
form of a variable duty. However, given the wide variety ofleather handbags and the fact that it is considered thatcompetition is taking place across the whole range of leatherhandbags and not among those in the lower price range, it isconsideredthatmeasuresshouldtaketheformofan advalorem
duty.
Theprovisionalconclusionswithrespecttothetypeofdutytobe
applied are therefore confirmed.
(113)As for the calculation of the injury threshold, i.e. price under-selling,theCouncilconfirmsthemethodologyfollowedbyRegu-lation (EC) No 209/97 (recitals 103 to 105). Thus, the weightedaverage profit shortfall of the sampled Community producersduring the investigation period was added to the percentage ofthe undercutting found. On this basis, the weighted averageinjurymarginforleatherhandbags,expressedasapercentageofthe free-at-Community-frontier price, amounts to 38%.
(114)For the companies which requested and were granted individualtreatment,theirinjurymargin,whenexpressedasapercentageofthe free-at-Community-frontier price amounts to the following:
— for Shilton, given that the dumping margin found is nil, in
accordance with Article 7 (2) of the basic regulation, it wasnot considered necessary to calculate an individual injurymargin,
— for Picard, the injury margin amounts to 32,7%.
(115)In accordance with Article 7 (2) of the basic regulation, as the
injury elimination level is below the dumping margin found, theanti-dumping duty calculated on the basis of the free-at-frontierprice should amount to 38%.
(116)For the companies which requested and were granted individualtreatment,theanti-dumpingdutyshouldamounttothefollowing:
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— for Shilton: nil,
— for Picard: 7,7%, which is the dumping margin established
for this company.
2.Synthetic handbags
(117)Inviewofthefactthatitisconsideredthattherearecompelling
reasonsnottoadoptanti-dumpingmeasuresconcerningsynthetichandbags,theproceedingwithrespecttoimportsofplastichand-bags (CNcode 42022210) and textile handbags (CNcode42022290) should be terminated.
J.COLLECTION OF PROVISIONAL DUTIES
(118)Concerning leather handbags, since the Community industry is
suffering a threat of material injury, the Council considers itappropriatetodecidethat,pursuanttoArticle10(2)ofthebasicregulation, the amounts secured by way of provisional anti-dumpingdutyunderRegulation(EC)No209/97forleatherhand-bags be released.
(119)Theprovisionaldutiessecuredwithrespecttoplasticandtextilehandbags should also be released,
HAS ADOPTED THIS REGULATION:
Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of
handbagswithoutersurfaceofleather,ofcompositionleatherorpatentleather falling within CNcode 42022100 originating in the People’sRepublic of China.
2. For the purpose of this Regulation, leather handbags shall be
understoodtomeanbags,whetherornotwithshoulderstrap,includingthose without handle, with outer surface of leather, of compositionleatherorpatentleather,designedprimarilytocontainsmallobjectsforpersonaluse,suchaskeys,purses,make-upandcigarettes,regardlessoftheir size and form.
3. Therateofthedutyshallbe38%ofthenet,free-at-frontierprice,
before duty (Taric 8900), with the exception of imports of leatherhandbags which are manufactured by the following companies, whichshall be subject to the following rates of the duty:
—►
M1Zengcheng Jane Shilton Leather Goods Company Ltd ◄:
0,0% (Taric additional code 8961),
— Gebr. Picard International Ltd: 7,7% (Taric additional code 8087),
▼M1
— C-DuckLeatherGoodsCompanyLtd:0,0%(Taricadditionalcode:
8961),
— Wideland Trading Company: 0,0% (Taric additional code: 8961),— Lucci Creation Ltd: 0,0% (Taric additional code: 8961),— KunshanC&SLeather Products Co. Ltd: 0,0% (Taric additional
code: 8961),
— Yamani Continental Inc.: 0,0% (Taric additional code: 8961),— IP Handbag Industrial Ltd: 0,0% (Taric additional code: 8961),— W.K. Maxy Industries Ltd and W.K. Maxy Leather Goods Indus-
tries Zhongshan Co. Ltd: 0,0% (Taric additional code: 8961),
— Lai Wah Industries Ltd: 3,1% (Taric additional code: 8310),— Shenzhen Colleen Handbag Co. Ltd: 4,2% (Taric additional code:
8311),
— The Well Leatherware Manufactory Ltd: 6,5% (Taric additional
code: 8451),
— Shenzhen Crownwick Leatherwares Co. Ltd: 12,4% (Taric addi-
tional code: 8452),
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— Shundi South Sea Leather Handbag Factory Ltd and Nam Chow
Leather Products Co. Ltd: 39,0% (Taric additional code: 8453),
— EverTrustLeatherProductsShenzhenCo.Ltd:45,2%(Taricaddi-
tional code: 8454),
— Dongguan Sitoy Leather Products Factory Ltd: 58,3% (Taric addi-
tional code: 8455).
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Article 2
1. The anti-dumping proceeding concerning imports of handbags
with outer surface of plastic sheeting or with outer surface of textilematerialsfallingwithinCNcodes42022210and42022290isherebyterminated.
2. The amounts secured by way of provisional anti-dumping duties
under Commission Regulation (EC) No 209/97 shall be released.
Article 3
This Regulation shall enter into force on the day following that of its
publication in the Official Journal of the European Communities .
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicablein
all Member States.