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"B COUNCIL REGULATION (EC) No 467/98
of 23 February 1998
imposing a definitive anti-dumping duty on imports of certain footwear with uppers of leather or plastics
originating in the People’s Republic of China, Indonesia and Thailand
(OJ L 60, 28.2.1998, p. 1)
Corrected by:
"C1 Corrigendum, OJ L 114, 16.4.1998, p. 32 (467/98)1998R0467 — EN — 01.03.1998 — 000.001 — 1
COUNCIL REGULATION (EC) No 467/98
of 23 February 1998
imposing a definitive anti-dumping duty on imports of certain footwear
with uppers of leather or plastics originating in the People’s Republic of
China, Indonesia and Thailand
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995
on protection against dumped imports from countries not members of the
European Community (1) and in particular Article 9(4) thereof,
Having regard to the proposal submitted by the Commission after consulting
the Advisory Committee,
Whereas:
A. PROCEDURE
(1) On 22 February 1995, the Commission announced by means of a
notice published in the Official Journal of the European Commu-
nities (2), the initiation of an anti-dumping proceeding with regard to
imports into the Community of certain footwear with uppers of leather
or plastics originating in the People’s Republic of China, Indonesia andThailand and commenced an investigation.
(2) The proceeding was initiated as a result of a complaint lodged by the
European Confederation of the Footwear Industry (CEC) on behalf of
national footwear federations whose complainant members (188 in
total) accounted for a major proportion (namely 53 %) of theCommunity production of the footwear subject to this investigation.The complaint contained evidence of dumping of the said product and
of material injury resulting therefrom which was considered sufficient
to justify the initiation of a proceeding.
(3) The Commission officially notified the exporters and importers known
to be concerned and their representative associations, as well as therepresentatives of the exporting countries involved, of the initiation of
the proceeding. All parties directly concerned were given the
opportunity to make their views known in writing and to request ahearing within the time limit set out in the notice of initiation.
(4) The authorities of the exporting countries concerned as well as a
number of exporters, Community importers, their representativeassociations and trade associations made their views known in writing.
All parties who so requested within the time limit were granted a
hearing.
(5) In view of the large number of Community producers which were party
to the complaint, and in conformity with Article 17 of CouncilRegulation (EC) No 384/96 (hereinafter referred to as ‘the Basic
Regulation’), it was considered appropriate to limit the investigation to
a number of these producers which could reasonably be investigatedwithin the time available. In this context, the questionnaires used tocollect data and thus permit an evaluation of any injury to the
Community industry, were addressed to the national producers’
federation in the Community and to 89 of the 188 Communityproducers expressly supporting the complaint. Of these 89 Communityproducers, 87 submitted complete and meaningful replies. For
verification purposes, given the difficulty in carrying out detailed
on-the-spot investigations in respect of the abovementioned 87Community producers (hereinafter referred to as ‘the first group’),15 of those Community producers (hereinafter referred to as ‘the
verification sample’) were selected and their responses subjected to
in-depth, on-the-spot verifications.
(6) The Commission also sent questionnaires to the following:!B
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Regulation (EC) No 2331/96
(OJ L 317, 6. 12. 1996, p. 1).
(2) OJ C 45, 22. 2. 1995, p. 2.1998R0467 — EN — 01.03.1998 — 000.001 — 2
— the Chinese, Indonesian and Thai producers/exporters listed in the
complaint,
— the Hong Kong exporters listed in the complaint,— the authorities of the exporting countries concerned,
— the exporters who, while not listed in the complaint, made
themselves known and requested a questionnaire.
In total, 13 replies to the questionnaire were received from producers/
exporters in Indonesia, 17 from producers/exporters in the People’s
Republic of China and three from producers/exporters in Thailand.
(7) In view of this number of replies, 33 in total, the Commission
proposed, in accordance with Article 17 of the Basic Regulation, to
limit its investigation to a reasonable number of cooperatingproducers/exporters representing the largest representative volume ofproduction which could reasonably be investigated within the time
available. Agreement was reached with the cooperating producers/
exporters on the selection of a sample of four producers/exporters fromthe People’ s Republic of China and seven from Indonesia. Given that,in total, only three producers/exporters from Thailand cooperated, all
three were investigated.
(8) In addition, the Commission sent questionnaires to all known
importers. Replies were received from 14 such importers.
(9) The Commission sought and verified all the information it deemed
necessary for the purpose of a determination of dumping and injury,and carried out investigations at the premises of the followingcompanies:
(10) (a) Community producers
The verification sample referred to in recital 5 consisted of a
total of 15 Community producers situated in France, Italy,Portugal, Spain and the United Kingdom, which are all MemberStates with a significant production of the footwear under
investigation. Together these Member States accounted for 89 %
of total Community production of the product in question in1994, i.e. the investigation period as defined in recital 13.
The 15 Community producers in the verification sample
requested that their identities be kept confidential on the
grounds that some of them had been threatened withcommercial retaliation by certain customers who where at the
same time importers and major retailers in the Community. The
investigation confirmed that certain Community producers hadbeen subjected to severe commercial pressure to stop cooper-ating in the investigation and to withdraw their support for the
complaint. Accordingly, it was considered appropriate not to
disclose the names of these 15 Community producers.
The representatives of certain exporters and importers have
criticised the granting of such anonymity on the grounds that
complaining domestic industries should be prepared to face anykind of ‘commercial retaliation’. In this respect, it has to bestressed that the anonymous treatment was granted because the
threat exerted went far beyond what could be considered as
‘normal’ in commercial relations. The limited protection sogranted was, moreover, considered particularly appropriate inthe context of a sampling exercise, where a few selected
Community producers are particularly exposed as they
represent, and act for the benefit of, a much larger group.The identities of the 87 Community producers in the first groupwere, however, disclosed to the parties having so requested.
(b) Unrelated importers/distributors
— Atlex SA, Rouen (F),
— British Shoe Corporation Ltd, Leicester (UK),
— Chasseurop SA, Le Havre (F),
— Groupe André SA, Paris (F),!B1998R0467 — EN — 01.03.1998 — 000.001 — 3
— Intermedium BV , Hoofddorp (NL).
(c) Related importer
— Nick’ s Sports and Leisure Footwear Ltd, Warrington (UK).
(d) Exporters/producers in Indonesia
— PT Dragon,
— PT Emperor Footwear Indonesia,— PT Fortune Mate,— PT Golden Adishoes,— PT Indosepamas Anggun/PT Primashoes Ciptakreasi,
— PT Kingherlindo.
(e) Exporters/producers in Thailand
— Bangkok Rubber,
— CK Shoes,— PSR Footwear.
(f) Exporter in Hong Kong
— Grosby (China) Ltd.
(11) Parties were informed of the essential facts and considerations on the
basis of which it was intended to recommend the imposition ofdefinitive anti-dumping duties. They were also granted a period withinwhich to make representations subsequent to the disclosure.
(12) The parties’ representations were considered, and the Commission
altered its conclusions where appropriate.
(13) The investigation of dumping covered the period from 1 January 1994
to 31 December 1994 (hereinafter referred to as ‘the investigation
period’). The examination of injury covered the period from 1991 tothe investigation period. In addition, for the purpose of the additional
examination referred to in recitals 138 to 143, certain developments
occurred in 1995 and 1996 which were also taken into account.
The geographical scope of the investigation was the Community as
constituted at the time of initiation of the proceeding, that is to say all15 Member States.
(14) Owing to the volume and complexity of the information gathered from
many different sources and, in particular, in the light of the numerous
types of footwear covered by the investigation and the need to carry out
an additional examination to evaluate the effects of the Community-wide quota imposed in the course of the investigation period onimports of the footwear concerned originating in the People’s Republic
of China, the investigation exceeded the normal duration provided for
in Article 6(9) of the Basic Regulation. Pursuant to Article 24 of theBasic Regulation this investigation is indeed not subject to the
mandatory time limits provided for in Article 6(9).
B. PRODUCT UNDER CONSIDERATION AND LIKE PROD-
UCT
1.Description of the product under consideration
(15) The product under consideration in this proceeding is ‘non-sports’
footwear, not covering the ankle, with insoles of a length of 24 cm ormore:
— with outer soles of rubber, plastics or composition leather and
uppers of leather, falling within CN codes ex 6403 99 93 (if not
identifiable as men’ s or women’ s footwear), ex 6403 99 96 (if for
men) and ex 6403 99 98 (if for women),
— with outer soles of rubber or plastics and uppers of plastics, for
women (falling within CN code ex 6402 99 98).!B1998R0467 — EN — 01.03.1998 — 000.001 — 4
It should be noted that no footwear for use in sporting activities, with a
single or multi-layer non injected moulded sole, manufactured fromsynthetic materials specially designed to absorb the impact of verticalor lateral movements and with technical features such as hermetic pads
containing gas or fluid, mechanical components which absorb or
neutralize impact or materials such as low-density polymers, whichcan be classified for customs purposes in all the abovementioned CNcodes, is covered by this proceeding.
(16) For practical purposes and in order to appropriately gather and handle
the data collected, each of the above mentioned CN codes was
considered as one ‘category’. Four categories were thus formulated as
follows:
Category 1: CN code ex 6403 99 93 (i.e. ‘unisex’ adults — leather uppers)
Category 2: CN code ex 6403 99 96 (i.e. men’ s — leather uppers)Category 3: CN code ex 6403 99 98 (i.e. womens’ s — leather uppers)Category 4: CN code ex 6402 99 98 (i.e. women’ s — plastic uppers)
(17) Although the footwear falling within any of the above categories can
cover a wide range of styles and types, as well as be produced by
different production methods, their essential characteristics, their uses
and consumer perception thereof remain basically the same. Therefore,for the purposes of this proceeding and in accordance with consistentCommunity practice, they were regarded as forming one product.
2.Like product
(18) As regards the footwear produced and sold domestically in Indonesia
and Thailand, where such sales had taken place and information in that
respect had been made available, the investigation showed that suchproducts were either alike in all respects to, or closely resembling,those exported to the Community from the countries in question.
(19) Similarly, footwear subject to the current investigation produced in
Indonesia and exported to the Community was considered to be a like
product to the footwear produced and exported from the People’s
Republic of China to the Community. This is particularly relevant inthe light of the fact that Indonesia has been used as the analoguecountry for the determinaton of normal value for the People’ s Republic
of China as set out in recitals 42 and 43.
(20) The investigation also established that the footwear produced in the
Community and that imported from the three countries concerned were
similar as far as their overall design, general characteristics and usesare concerned. While there may be some minor differences betweenthe product imported from the countries concerned and the
Community production, these diffferences do not affect the substantial
characteristics, properties, perception and uses of the product.
(21) In this respect, certain parties have claimed that imported and
Community-produced footwear belong to different product segmentswhich do not compete with each other. They argued that footwear,imported at a price higher than the average, would not be alike, within
the meaning of Article 1(4) of the Basic Regulation, to footwear
imported below or at the average price.
(22) The issue has been the source of repeated and seemingly contradictory
statements by importers, some of them claiming that they import lowquality footwear that they simply could not find in the Community,while others claimed that they order in the People’ s Republic of China,
Indonesia or Thailand sophisticated products manufactured in accord-
ance with their own specifications, design and sometimes rawmaterials. This contradiction shows that the People’s Republic of
China, Indonesia and Thailand are in fact capable of producing, and do
indeed produce and export to the Community, the full range ofproducts on offer on the market. The argument that footwear importedfrom the three countries concerned and that produced in the
Community belong to different product segments cannot therefore be
accepted.
(23) Accordingly, footwear subject to this proceeding produced in the
People’ s Republic of China, Indonesia and Thailand and exported tothe Community was considered to be a like product to footwear!B1998R0467 — EN — 01.03.1998 — 000.001 — 5
produced in the Community within the meaning of Article 1(4) of the
Basic Regulation.
C. DUMPING
1.General
(24) It has been the consistent practice of the Community Institutions
(hereinafter referred to as the ‘Institutions’) to consider relatedproducers/exporters, or producers/exporters within the same group, as
one economic entity and to establish a single dumping margin (and,
where appropriate, a single duty) for those producers/exporters. Thispractice has been adhered to in this proceeding. Calculating individualdumping margins and antidumping duty rates in such circumstances
might encourage circumvention of any anti-dumping measures by
enabling related producers/exporters to channel their exports to theCommunity through the related producer/exporter (or the producer/
exporter within the same group) with the lowest duty.
2.Indonesia
(a) Sampling
(25) As mentioned in recital 7, sampling as provided for in Article 17 of the
Basic Regulation was used and seven Indonesian producers/exporterswere selected as the sample, in agreement with the cooperatingproducers/exporters.
(26) In accordance with Article 9(6) of the Basic Regulation it was agreed
with the other Indonesian producers/exporters which cooperated with
the investigation but which were not included in the sample, that they
would be attributed the weighted average dumping margin establishedfor the producers/exporters in the sample.
(27) The producers/exporters selected in the sample and which fully
cooperated with the investigation were informed that they would begiven their own dumping margin (and, where appropriate, their ownindividual duty rate).
(b) Normal value
(28) In order to establish normal value for each of the seven Indonesian
producers/exporters in the sample, it was first determined whether the
total domestic sales of the footwear concerned by each producer wererepresentative when compared to their total sales of the footwearconcerned exported to the Community. In accordance with Article 2(2)
of the Basic Regulation, domestics sales are normally considered
representative when the total domestic sales volume of the like productsold by each producer represents at least 5 % of its sales volume of theproduct under consideration exported to the Community. A further
representativity test was then carried out on a model by model basis.
(29) Only one of the cooperating Indonesian producers/exporters in the
sample had sufficient domestic sales of two models of the like product
in the ordinary course of trade in the investigation period within themeaning of Article 2(2) and (4) of the Basic Regulation to enablenormal value to be calculated on such a basis. Given that all these sales
were profitable, normal value was therefore calculated on the basis of
the prices paid or payable on the domestic market for all these sales.Normal value for this company’ s other models was constructed, inaccordance with Article 2(3) and (6) of the Basic Regulation, by
adding to their manufacturing costs, the selling, general and adminis-
trative expenses (hereinafter referred to as ‘SG&A’) and profit foundfor the two models referred to immediately above.
(30) The other six Indonesian producers/exporters in the sample did not
have sufficient domestic sales of the footwear concerned during theinvestigation period within the meaning of Article 2(2) of the Basic
Regulation. It was therefore considered appropriate to construct
normal value on the basis of Article 2(3) of the Basic Regulation byadding to the manufacturing cost of each model exported to theCommunity a reasonable amount for SG&A and for profit. In this
respect, it was considered, in accordance with Article 2(6)(a) of the
Basic Regulation, that the amounts of SG&A and profit of the!B1998R0467 — EN — 01.03.1998 — 000.001 — 6
producer/exporter which did have sufficient domestic sales (see
preceding recital) should be used to construct normal value for thesix other Indonesian producers/exporters in the sample.
(31) One producer/exporter which had agreed to be included in the sample,
did not provide costs by model, despite several requests to do so. Sinceit was therefore impossible to calculate domestic profitability and
constructed normal values for this producer/exporter, facts available as
set out in recital 41 were applied in establishing the dumping marginfor this producer/exporter in accordance with Article 18 of the BasicRegulation.
(c) Export price
(32) Exports for six of the seven producers/exporters included in the sample
were made directly to independent importers in the Community. Theexport prices of these producers/exporters were established byreference to the prices paid or payable for the footwear sold, in
accordance with Article 2(8) of the Basic Regulation. The export price
of one Indonesian producer/exporter included in the sample, whichsold via a related company in Taiwan, had to be adjusted (see recital36).
(d) Comparison
(33) For the purpose of ensuring a fair comparison between normal value
and the export prices of the producers/exporters in the sample, dueallowance in the form of adjustments was made in accordance withArticle 2(10) of the Basic Regulation for differences affecting price
comparability, whenever these were claimed and duly justified. In
consequence, adjustments were made, where appropriate, for dif-ferences in transport, insurance, handling, loading and ancillary costs,credit costs, bank charges, guarantees/warranties and levels of trade.
(34) In the case of one of the Indonesian producers/ exporters in the sample,
a level of trade allowance was claimed. The producer/exporter
contended that such an allowance was warranted because its export
sales to the Community were made in large quantities to distributorsand wholesalers, whilst its domestic sales were allegedly made in smallquantities to retailers and traders. Upon further examination during the
on-the-spot investigation, it was established that the domestic
purchasers were in fact also distributors and wholesalers. Con-sequently, this claim was rejected, since normal value and export
price were at the same level of trade and no adjustment was therefore
required or warranted.
(35) An allowance was also claimed by two of the Indonesian producers/
exporters in the sample as their export sales were, in contrast with theirdomestic sales, allegedly made on an OEM brand basis. This wasverified in detail by the Commission during the on-the-spot
investigations and it was clearly established that, for export sales,
there were distinct sales channels with consistently lower prices forOEM customers. Since the difference in level of trade for OEMcustomers could not be quantified because of the absence of the same
sales channels on the domestic market in Indonesia, a special
adjustment has been granted, in accordance with Article 2(10)(d)(ii)of the Basic Regulation, by deducting from the own brand constructed
normal values, an amount corresponding to 10 % of the gross profit
margin.
(36) One Indonesian producer/exporter sold footwear for export to the
Community through a related trading company located in Taiwan. Ithas been determined that because of the relationship between the twocompanies, the prices charged by the producing company to the trading
company are not reliable. To establish a reliable export price to the
Community from Indonesia, the price charged from Taiwan to theCommunity was adjusted to an ex-Indonesia level. As the relatedtrader’s functions can be considered similar to those of a trader acting
on a commission basis, an adjustment of 5 %, based on information
supplied by the company itself, was therefore deducted from the pricescharged by the related company to independent customers in theCommunity. This figure was considered reasonable given the degree of
the related trader’s involvement in the selling activities of the exporter.
No information was provided which would indicate that the use of this!B1998R0467 — EN — 01.03.1998 — 000.001 — 7
figure is inappropriate. Thus, the export prices were adjusted
accordingly.
(e) Dumping margins
(37) To calculate the dumping margin of each Indonesian producer/exporter
in the sample, a comparison was made between weighted average
normal values and the weighted average export prices of the
producers/exporters, since it was clearly established that there wasno pattern of export prices which varied significantly between eitherdifferent purchasers, regions or time periods, in accordance with
Article 2(11) of the Basic Regulation.
(38) The comparison showed the existence of dumping of the footwear
concerned during the investigation period by all of the producers/
exporters included in the sample. Because of the relationship between
P .T. Indosepamas Anggun and P .T. Primashoes Ciptakreasi, theseproducers/exporters were treated as one company and a single margincalculated therefore, in accordance with the Institutions’ established
practice as set out in recital 24.
The individual dumping margins for these producers/exporters, thus
established and expressed as a percentage of the CIF price at
Community frontier are:
— PT Dragon:5,9 %
— PT Emperor Footwear:2,0 %
— PT Fortune Mate: 14,9 %
— PT Golden Adishoes: 18,6 %— PT Indosepamans Anggun/P .T. Primashoes Ciptakreasi: 12,7 %
(39) The dumping margin for the cooperating producers/exporters which
were not selected was based on the weighted average margin of theindividual dumping margins established for each producer/exporter in
the sample, with the exception of the producer/exporter referred to in
recital 31 (P .T. Kingherlindo) for which facts available were applied.This company’ s dumping margin was disregarded in establishing the
weighted average margin for the sample in accordance with Article
9(6) of the Basic Regulation. The dumping margin thus establishedand expressed as a percentage of the CIF price at Community frontierwas 12,3 %. The producers/exporters to which this margin applies are:
— PT Bosaeng Jaya
— PT Karet Murni Jelita— PT Koryo International
— PT Lintas Adhikrida
— PT Universal Wisesa— PT V olmacarol
(40) For those producers/exporters in Indonesia which neither replied to the
Commission’ s questionnaire nor made themselves known, the dumpingmargin, has in accordance with Article 18 of the Basic Regulation,been determined on the basis of the facts available. In view of the
unusually high degree of non-cooperation in this case on the part of
Indonesian producers/exporters (more than 74 %), the absence of otherreliable information from independent sources and in order to avoid
rewarding non-cooperation, it was considered appropriate to base the
residual dumping margin on the highest margin of dumping alleged inthe complaint, i.e. 50 %.
(41) In determining the dumping margin for the producer/exporter referred
to in recital 31 (P .T. Kingherlindo), it was considered that the partial
cooperation it had shown should be distinguished from the totalnon-cooperation of the producers/exporters referred to in recital 40.
Accordingly, it was decided that the margin calculated for this
producer/exporter should be lower than the margin calculated for thenon-cooperating producers/exporters. Its margin was therefore based!B
!C1
!B1998R0467 — EN — 01.03.1998 — 000.001 — 8
on the arithmetic average of the residual margin and the weighted
average margin calculated for the sample, i.e. 31,1 %.
3.People’s Republic of China
(a) Choice of analogue country
(42) In accordance with Article 2(7) of the Basic Regulation, normal value
was based on data collected from producers in a market economycountry (the ‘analogue country’).
(43) In the complaint, Thailand was proposed as the most appropriate
analogue country. However, the choice of this country was opposed bya number of importers as well as the Chinese producers/exporters onthe grounds that the levels of economic development in the People’s
Republic of China and Thailand were dissimilar. Two trade bodies, the
Foreign Trade Association (FTA) and the Federation of the EuropeanSporting Goods Industry (FESI) put forward Indonesia, as did the
Chinese producers/exporters. A number of other countries were also
proposed at various stages of the proceeding by certain interestedparties without, however, providing evidence justifying why any one ofthese countries should be given preference over another.
Having examined the information available in respect of all the
countries suggested, it was finally considered that, in accordance withArticle 2(7) of the Basic Regulation, Indonesia was a reasonable
choice of analogue country as there appeared to be a large number of
suppliers in that market and a certain degree of similarity between theproduction processes employed there and in the People’s Republic ofChina. Furthermore, no significant differences were apparent as
regards the access to raw materials. In addition, sales on the Indonesian
domestic market were also representative when compared to exportsfrom the People’s Republic of China to the Community. Moreover,
Indonesia had been proposed by the Chinese producers/exporters
themselves and no objection was raised by the Community producerson the Commission’ s intention in this respect.
(b) Individual treatment
(44) In accordance with Article 9(5) of the Basic Regulation, it is the
Institutions’ policy to calculate country-wide dumping margins for nonmarket-economy countries, except for those producers/exporters who
can demonstrate that they should be granted individual treatment, i.e.
that their export prices should be established separately and theirdumping margin be calculated individually.
(45) All of the Chinese pr oducers/exporters which replied to the
Commission’ s questionnaire requested individual treatment. In exam-ining the merits of these claims, the Commission sought to verifywhether the producers/exporters which cooperated in this proceeding
enjoyed a degree of legal and factual independence from the State,
comparable to that which would prevail in a market economy countryand which would justify a departure from the principle of determininga single country-wide dumping margin. To this end, detailed questions
regarding the ownership, management, control, determination of
commercial and business policies were addressed to the producers/exporters. None of the responding producers/exporters, with the sole
exception of Grosby (China) Limited, were able to show, to the
satisfaction of the Commission, that their operations were sufficientlyindependent from the Chinese authorities to qualify for individualtreatment. Their requests were consequently rejected and the
producers/exporters informed accordingly.
(46) Grosby (China) Limited was a legal entity incorporated under Hong
Kong law but manufacturing the like product in a production facility in
the People’s Republic of China. No legal entity existed in the People’s
Republic of China but the capital goods physically present there wereincluded as assets in the accounts of the Hong Kong company.
The Commission carried out on-the-spot verifications at the premises
of the company in Hong Kong in order to examine the circumstancesunder which it operated and its relations with the Chinese State. Inparticular the company concerned was able to show, to the satisfaction
of the Commission, that the management and control of the factory,
both in terms of production and marketing, was clearly in their hands!B1998R0467 — EN — 01.03.1998 — 000.001 — 9
and that their operations were sufficiently independent from the
Chinese Authorities. It was also established that the export prices tothe Community and the marketing policies were determined by theHong Kong company without any interference from the Chinese State.
In view of the above, it was considered possible to grant individual
treatment to Grosby (China) Limited and, consequently, to calculate a
separate dumping margin as an exception to the principle of
calculating country-wide dumping margins in respect of non market-economy countries as required by Article 9(5) of the Basic Regulation.
(c) Country-wide dumping margin for the People’s Republic of China
(47) In total, 17 exporters in the People’ s Republic of China replied to the
Commission’ s questionnaire. The producers/exporters concerned
however represented only 14,3 % of total exports from the People’s
Republic of China and it was consequently decided, in view of theparticularly high level of non-cooperation, to establish the margin ofdumping for the People’s Republic of China on the basis of Article 18
of the Basic Regulation, i.e. on the basis of the facts available.
In order to calculate the single country-wide margin of dumping for
the People’ s Republic of China, the Commission first calculated, the
dumping margin of the 16 cooperating producers/exporters to whichindividual treatment was not granted (see (i) below). Secondly, the
Commission established the dumping margin for the non-cooperating
producers/exporters (see (ii) below).
The country-wide dumping margin for the People’s Republic of China
was then calculated as the average of these two dumping margins (see
(iii) below).
( i ) Dumping margin for cooperating producers/ex-
porters
Sampling
(48) As mentioned in recital 7, sampling, as provided for in Article 17f the
Basic Regulation, was used in respect of the 17 cooperating
producers/exporters in the People’s Republic of China. Four producers/exporters were selected, in agreement with the cooperating producers/exporters concerned.
However, as one of these producers/exporters, Grosby (China) Limited,
was subsequently granted individual treatment, it was removed from
this sample (see recital 46).
Accordingly, the three remaining producers/exporters included in the
sample for the People’s Republic of China are:
— Fujian Footwear and Headgear Import & Export Corporation,
— Zhejiang Animal By-Products Import & Export Corporation,— Zhangjiang Yitai.
Normal value
(49) Normal value for the Chinese producers/exporters included in the
sample was calculated on the basis of the domestic prices in Indonesia
and on constructed normal values established for the producers/exporters included in the sample for Indonesia, in accordance withArticle 2(7) of the Basic Regulation.
It should be noted that the three Chinese producers/exporters
concerned had been requested to give detailed specifications of the
footwear exported to the Community. Only limited information was
provided by the producers/exporters and the Commission consequentlyhad to establish, on the basis of the facts available, which Indonesianmodels were identical or, in the absence of identical models, those
Indonesian models which most closely resembled the Chinese models
exported to the Community. On this basis, the Commission was able tofind comparable models for models representing 34,7 % of the total
exports from the three producers/exporters concerned. For these
models, the normal values established for the purpose of determiningthe Indonesian dumping margins could therefore be used.!B1998R0467 — EN — 01.03.1998 — 000.001 — 10
(50) For those Chinese exported models for which there was no like
domestically sold Indonesian model, the constructed value wasestablished by adding a reasonable amount for SG&A expenses andprofit to the manufacturing cost of comparable exported Indonesian
models. The SG&A and profit margin were established on the basis
described in recitals 29 and 30.
Export price — calculation of export price
(51) The investigation showed that the exports of the three Chinese
producers/exporters in the sample were made directly to independent
customers in the Community. It was, therefore, possible to establish
export prices on the basis of prices actually paid or payable, inaccordance with Article 2(8) of the Basic Regulation.
Comparison
(52) For the purpose of ensuring a fair comparison between normal value
and the export prices of the producers/exporters in the sample,
allowance in the form of adjustments was made in accordance withArticle 2(10) of the Basic Regulation for duly justified differences
affecting price comparability. Consequently, adjustments were made
for differences in physical characteristics, transport, insurance, hand-ling, loading and ancillary costs, packing and credit costs.
Dumping margin
(53) The Commission first calculated a dumping margin for each of the
three producers/exporters in the sample. For this purpose, the
Commission made a comparison between normal value at ex-workslevel and the export prices of the cooperating Chinese producers/exporters at FOB level, ex-Chinese frontier. This comparison was
based on the weighted average selling price of each model of footwear
manufactured by the producers/exporters in the sample and exported tothe Community during the investigation period for which a comparablemodel of footwear could be found.
(54) In the absence of any significant variations in export prices either by
region, purchaser or time period, the normal value was compared withthe export price on a weighted average basis in accordance with Article
2(11) of the Basic Regulation.
The comparison showed the existence of dumping of the footwear
concerned originating in the People’ s Republic of China and exported
by the producers/exporters in the sample to the Community during the
investigation period. The weighted average dumping margin, expressedas a percentage of the CIF Community frontier price, amounts to
45,2 %.
(ii) D u m p i n g m a r g i n f o r non-cooperating producers/
exporters
(55) The dumping margin for the non-cooperating producers/exporters was
established on the basis of the facts available in accordance with
Article 18 of the Basic Regulation. In this particular case, given theunusually high level of non-cooperation and in the absence of otherreliable information from independent sources, the most appropriate
facts available have been considered to be the highest dumping margin
alleged in the complaint. The dumping margin established on this basiswas 50 % of the CIF Community frontier price.
(iii) C o u n t r y - w i d e d u m p i n g m a r g i n f o r t h e Pe o p l e ’s
Republic of China
(56) As indicated in recital 47, a single dumping margin was calculated for
the People’s Republic of China by using the weighted average of the
margins established for the cooperating producers/exporters (i.e.
45,2 %, see recital 54) and the non-cooperating producers/exporters(i.e. 50 %, see recital 55).
The dumping margin thus established for all producers/exporters in the
People’ s Republic of China, except Grosby (China) Limited, expressed
as a percentage of the CIF Community frontier price, was 47,6 %.!B1998R0467 — EN — 01.03.1998 — 000.001 — 11
(d) Dumping margin for Grosby (China) Limited
(i) N o r m a l v a l u e
(57) As far as Grosby (China) Limited was concerned, it should be noted
that normal value was calculated in the same way as that of the other
cooperating producers/exporters in the People’s Republic of China, i.e.on the basis of prices or constructed values of comparable modelsproduced in the analogue country, i.e. Indonesia.
(ii) E x p o r t p r i c e
(58) Since Grosby (China) Limited made its export sales via a related
importer, Nick’ s Sports and Leisure Footwear Ltd (UK), the exportprice was constructed pursuant to Article 2(9) of the Basic Regulation,
i.e. on the basis of the price at which the imported products were first
resold to an independent buyer. Adjustments were made for all costsincurred between importation and resale and for profits accruing, inorder to establish a reliable export price, at the Community frontier
level. A profit margin of 5 % was used since this was the profit margin
found for the independent importer which had the most similar tradingstructure to that of Nick’ s Sports and Leisure Footwear Ltd (UK) andhad been the subject of an on-the-spot verification visit.
(iii) C o m p a r i s o n
(59) For the purpose of ensuring a fair comparison between normal value
and export price, an allowance in the form of adjustments was made, inaccordance with Article 2(10) of the Basic Regulation for differences
in transport and insurance.
(iv) D u m p i n g m a r g i n
(60) In the absence of any significant variations in export prices either by
region, purchases or time period, the normal value was compared with
the export price on a weighted average basis, in accordance with
Article 2(11) of the Basic Regulation. On this basis, the dumpingmargin for Grosby (China) Limited was found to be 1,3 %.
4.Thailand
( i ) Dumping margin for cooperating producers/ex-
porters
(a) Normal value
(61) In order to establish normal value for each of the three cooperating
Thai producers/exporters, it was first determined whether the totaldomestic sales of the footwear concerned by each producer/exporter
were representative when compared to their total sales of the footwear
concerned exported to the Community. In accordance with Article 2(2)of the Basic Regulation, domestic sales are normally considered
representative when the total domestic sales volume of the like product
sold by each producer represents at least 5 % of its sales volume of theproduct under consideration exported to the Community.
(62) None of the producers/exporters had sufficient domestic sales of the
footwear concerned during the investigation period within the meaning
of Article 2(2) of the Basic Regulation. It was consequently considered
appropriate to construct normal value on the basis of Article 2(3) of theBasic Regulation by adding to the manufacturing cost of each modelexported to the Community a reasonable amount for SG&A and for
profit. Two of the producers/exporters were related and one of these
two related producers/exporters sold sports shoes and sports wear, i.e.the same general category of products, on the Thai domestic market.The SG&A and profit for these two producers/exporters was
established by reference to the domestic sales of these products in
accordance with Article 2(6)(b) of the Basic Regulation. In the absenceof any domestic sales of the product concerned, or the same generalcategory of products by the third cooperating Thai producer/exporter,
their SG&A and profit was, in accordance with Article 2(6)(c)
established on any other reasonable basis, in this case the SG&A and!B1998R0467 — EN — 01.03.1998 — 000.001 — 12
profit established for the other two cooperating producers/exporters
referred to immediately above.
(63) One of the three cooperating Thai producers/exporters produced and
exported shoes partly made from raw materials which it obtained free
of charge from its customers in the Community. Because the prices of
the raw materials were not divulged to the producer/exporter, it wasunable to report them in its manufacturing costs. As the producer/exporter had no domestic sales, normal value had to be constructed. In
the absence of full information on raw material costs the Commission
constructed normal value by using the available company’ s manu-facturing costs and the SG&A and profit as established in the
preceding recital. Since both the constructed value and the export price
reported by this producer/exporter excluded the same raw materialcosts, both were directly comparable.
(b) Export price
(64) The investigation showed that, except in the case referred to in recital
67, exports were made directly to independent customers in the
Community. Export prices were consequently established on the basis
of the prices actually paid or payable.
(c) Comparison
(65) For the purpose of ensuring a fair comparison between normal value
and the export prices of the producers/exporters, due allowance in the
form of adjustments was made in accordance with Article 2(10) of the
Basic Regulation for differences affecting price comparability, when-ever these were claimed and duly justified. In consequence, adjust-
ments were made, where appropriate, for differences in transport,
insurance, handling, loading and ancillary costs, credit costs, bankcharges, guarantees/warranties and levels of trade.
(66) An allowance was also claimed by one of the Thai producers/exporters
as their export sales were, in contrast to their domestic sales, allegedly
made on an OEM brand basis. During the investigation it was clearlyestablished that export sales were made at a different level of tradethan domestic sales. An allowance was consequently granted by
deducting from the own brand constructed normal values, an amount
corresponding to 10 % of the gross profit margin in accordance withArticle 2(10)(d)(ii) of the Basic Regulation.
(67) One Thai pr oducer/exporter sold footwear for export to the
Community through a related trading company located in the USA.
It has been determined that because of the relationship between the twocompanies, the prices charged by the Thai producing company to the
US company were not reliable. To establish a reliable export price to
the Community from Thailand, the price charged to the Communitywas adjusted to an ex-Thailand level. As the related company’ sfunctions can be considered similar to those of a trader acting on a
commission basis, an adjustment of 5 % was deducted from the prices
charged by the related company to independent customers in theCommunity. This figure was considered reasonable given the degree ofthe related trader’s involvement in the selling activities of the exporter.
No information was provided which would indicate that this figure is
inappropriate. Thus, the export prices were adjusted accordingly.
(d) Dumping margins
(68) To calculate the dumping margin of each cooperating Thai producer/
exporter, the Commission made, in accordance with Article 2(11) of
the Basic Regulation, a comparison between weighted average normal
values and the weighted average export prices of the producers/exporters since it was clearly established that there was no pattern ofexport prices which varied significantly between different purchasers,
regions or time periods.
(69) The comparison showed the existence of dumping of the footwear
concerned during the investigation period by one of the three
cooperating producers/exporters. The margin thus established and
expressed as a percentage of the CIF price at Community frontier is:
— CK Shoes: 1,4 %!B1998R0467 — EN — 01.03.1998 — 000.001 — 13
The investigation revealed that the two other cooperating Thai
producers/exporters were related, one producer/exporter holding sharesof the other. In addition, shares of one of these producers/exporterswere held by a company in the USA. Both producers/exporters
exported the product concerned to the Community during the
investigation period.
Although these producers/exporters maintained separate production
facilities only one dumping margin was calculated therefor in line with
the Institutions’ established practice as set out in recital 24.
The margin thus established was:
— PSR Footwear/Bangkok Rubber Company: 0 %.
(ii) D u m p i n g m a r g i n f o r non-cooperating producers/
exporters
(70) For those producers in Thailand which neither replied to the
Commission’ s questionnaire nor made themselves known, the dumping
margin has, in accordance with Article 18 of the Basic Regulation,
been determined on the basis of the facts available. In view of theunusually high degree of non-cooperation in this case on the part ofThai producers/exporters (99 %), the absence of other reliable
information from independent sources and in order to avoid rewarding
non-cooperation, it was considered appropriate to base the residualdumping margin on the highest margin of dumping alleged in the
complaint, i.e. 50 %.
D. COMMUNITY INDUSTRY
(71) As mentioned in recital 5, in view of the large number of Community
producers which were party to the complaint, it was consideredappropriate to collect data concerning the Community industry from
three sources, namely the national producers’ federations in the
Community, the 87 Community producers in the first group and the 15Community producers in the verification sample. Injury indicators
were then considered at the most appropriate level (i.e. on the widest
basis for general indicators and on a narrower basis for those whichcould only be collected from individual companies).
Accordingly:
— Production, sales, market share and employment in the Commu-
nity were established at the level of each national footwearfederation and thus cover the entire Community production of the
like product,
— General trends concerning prices, costs and profitability were
established at the level of the 87 Community producers in the firstgroup, which were selected with a view to covering, in as balanced
a way as possible, the four categories of product under
consideration, as well as reflecting the various company sizesand production structures in the main producer Member States,
— Price undercutting and injury-elimination level calculations were
carried out on the basis of fully verified price and cost datacollected from the 15 Community producers in the verificationsample, which are representative in terms of size and product
range as well as location (they are all located in the major
producing Member States).
(72) Certain parties have claimed that the above methodology was deficient
on the grounds that it would depart from the provisions of both Articles
5(4) and 4(1) of the Basic Regulation, according to which therepresentative nature of the investigated Community industry wouldhave necessarily to be established on the basis of the ‘major
proportion’ test, and thus any evidence of injury would have to be
based on data provided by producers representing at least 25 % of totalCommunity production of the like product. In particular, it was argued
that the ‘total Community production’ figure used for assessing the
representativity of the 188 complaining Community producers wouldnot be reliable.!B1998R0467 — EN — 01.03.1998 — 000.001 — 14
The sampling exercise carried out by the Commission was also
questioned on the alleged grounds that the decision to resort tosampling was taken at an advanced stage, in response to an insufficientcooperation from the complaining industry during the initial stages of
the investigaiton.
1.Total Community production
(73) It should first be stressed that the level of support for the complaint
was established before initiation of the investigation. During the course
of the investigation it was established that the 188 complaining
Community producers continued to represent more than 25 % of totalCommunity output (namely 53 %). Therefore, the complainingCommunity producers represent a major proportion of total Commu-
nity output of the like product within the meaning of Article 4(1) of the
Basic Regulation.
Morevoer, it has also to be stressed that the ‘total Community
production’ figure of the like product was set at the maximum possible
level. Indeed, due to the lack of reliable data, no examination could becarried out in order to determine whether, in accordance with the
provisions of Article 4(1)(a) of the Basic Regulation, the production
volume of certain non-complaining producers should have beenexcluded from the ‘total production’ figure, on the grounds that theircore business would be importing rather than producing within the
Community.
Such would-be Community producers, some of which are known to
have made considerable imports, are also known to produce relatively
large quantities in the Community. Had sufficient, information in this
respect been made available, it is likely that part of this ‘totalCommunity production’ would have been excluded. Such reductionwould have increased the share of Community production of the
complaining Community producers. Conversely, the investigation
established that out of the 188 complaining Community producers,87 (i.e. the Community producers in the ‘first group’ as defined atrecital 5 were neither related to any producers/exporters nor
themselves significantly importing the product covered by this
investigation.
2.Sampling
(74) In this respect, it has to be recalled that given the very large number of
potential parties to the proceeding, the notice of initiation of thisproceeding explicity mentioned the fact that the investigation could beconducted by means of sampling. As a result, from the initial stages of
the investigation, cooperation was sought (via national federations)
from 89 Community producers selected amongst the 188 Communityproducers supporting the complaint.
Meaningful replies were received from 87 producers (referred to as
‘the first group’ in recital 5), from which, for verification purposes, 15were selected and their replies subjected to in-depth on-the-spotverifications (this latter group of producters is referred to as ‘the
verification sample’ in recital 5).
It should be noted that the provisions of the Basic Regulation do not
require in the case of sampling that relevant data be collected from
Community producers representing a major proportion of total
Community production as defined in Articles 4(1) and 5(4) of theBasic Regulation. Rather, Article 17(1) of the Basic Regulationprovides for the possibility of collecting data from a sample which is
representative of the Community industry. The very purpose of such
sampling provisions is to allow for a situation in which the share ofproduction represented by such sampled Community producers could,depending on the circumstances, be substantially less than 25 % of
total Community production.
In any event, the 87 Community producers in the first group alone
were found to account for 25,7 % of Community output of the like
product, thus qualifying, in the absence of declared opposition to the
complaint, as the Community industry.!B1998R0467 — EN — 01.03.1998 — 000.001 — 15
3.Conclusion
(75) In the light of the above, it is concluded that the representative nature
of the investigated Community industry was assessed in a reasonable
way and in conformity with the relevant provisions of the Basic
Regulation.
E.INJURY
1.General remark
(76) To the extent possible, all Eurostat figures used in the calculations
detailled below (relating to import volumes, values and thus prices per
pair) were corrected on the basis of data available (provided by theTaric database), in order to exclude footwear involving specialtechnology (none of which, as explained in recital 15, is covered by
this proceeding).
2.Consumption in the Community
(77) In calculating the total Community consumption of footwear subject to
this investigation, the following data were added together:
— the total sales volume in the Community of all Community
producers of the product concerned (using information obtainedfrom the Community footwear producers’ national federations in
combination with data for exports outside the Community as per
Eurostat), and
— the total imports into the Community of the product concerned
from third countries including the People’s Republic of China,
Indonesia and Thailand.
On this basis, Community consumption of the product concerned was
found to have declined from 327 million pairs in 1991 to 307 million
pairs in the investigation period, a decrease of approximately 6 %.
3.V olume and market share of dumped imports during the
investigation period
(78) The total volume of imports for the footwear subject to the present
investigation originating in the People’ s Republic of China was 28,6
million pairs in the investigation period.
The total volume of imports for the product concerned originating in
Indonesia stood at 15,9 million pairs in the investigation period whilst
the corresponding figure for Thailand was 11,8 million pairs.
Calculated on the basis of Community consumption (see preceding
recital), the share of the Community market held, during the
investigation period, by Chinese imports was 9,3 % whilst that of
Indonesia was 5,2 % and Thailand 3,9 %.
4.Cumulation
(79) In accordance with Article 3(4) of the Basic Regulation, an exami-
nation was made as to whether or not the effect of the dumped imports
from the three countries concerned should be assessed cumulatively.
As can be seen from the preceding recital, the individual volume of
imports from the People’ s Republic of China and Indonesia and their
market shares in the Community (9,3 % and 5,2 % respectively) were
not negligible during the investigation period. Furthermore, dumpingmargins which were more than de minimis were established for both
countries (see recitals 56 and 38 to 41).
Similarly, although not as large as that of the other two countries
concerned by this investigation and in spite of a slight decline over theperiod 1991 to 1994, the Thai market share in the Community was
3,9 %, i.e. more than de minimis, as was the residual dumping margin
of 50 % established for this country (see recital 70).
(80) The investigation also showed that the conditions of competition on the
Community market for the footwear imported from the People’s
Republic of China, Indonesia and Thailand are similar. Indeed, theChinese, Indonesian, Thai and Community products are:!B1998R0467 — EN — 01.03.1998 — 000.001 — 16
— interchangeable from the consumer’ s point of view,
— offered for sale in the same geographical areas of the Community,— sold through the same distribution channels,— simultaneously present on the Community market,— generally aimed at the same segment of the Community footwear
market (i.e. the low to lower-middle priced part of the market).
In addition, the Chinese, Indonesian and Thai products are sold at
prices found to undercut the Community industry’ s prices (see recital86).
(81) On this basis, it is considered that cumulation is warranted and,
accordingly, the effect of the dumped imports from all three countriesshould be assessed jointly for the purpose of injury analysis.
5.Cumulated volume, cumulated market share and devel-
opments of dumped imports
(82) The total volume of imports from the People’s Republic of China,
Indonesia and Thailand taken together rose from 38,6 million pairs in
1991 to 56,3 million pairs during the investigation period, a significant
increase of more than 45 %. This corresponds to an increase incombined market share from 11,8 % in 1991 to 18,4 % during theinvestigation period.
6.Prices of dumped imports and undercutting
(83) Given the different product mixes which can occur within each of the
four CN codes in question (see recital 17), any general examination of
the evolution of the import prices of dumped imports between 1991
and 1994 using only the corresponding categories of footwear shouldbe viewed with caution. To this end, using information received fromimporters and importers’ organisations, the investigation showed that
there had been a gradual shift to more sophisticated, up-market types
of footwear being imported, with a corresponding overall increase inimport prices.
(84) As regards price undercutting, comparisons were first made on a
category-by-category basis between the CIF import price (as reported
by Eurostat, after correction in order to exclude footwear involving
special technology as explained in recital 76), adjusted to duty paid,customer-delivered levels and the selling prices in the Community of
the Community producers at the same l evel of trade (i.e. to
distributors/wholesalers).
A second undercutting exercise was also carried out by selecting those
Chinese, Indonesian and Thai models exported to the Community inthe greatest volumes by the three Thai cooperating producers/exporters
and the Chinese and Indonesian producers/exporters in the dumping
samples (grouped into 17 representative so-called ‘families’ offootwear, for example; men’ s lace-up town shoes) and comparingtheir adjusted, customer-delivered price levels within the Community
to those of identical or comparable models produced by the
Community producers in the verification sample.
(85) In adjusting import prices to the duty paid, customer-delivered level,
account was taken of the normal duty rate or the duty rate applicable
under the GSP (as appropriate), as well as a margin for all unloading,
transport and other ancillary costs incurred specifically in relation withthe imports, together with the profits achieved by the importers. On thebasis of the evidence examined in respect of the product concerned it
was found that, in order to be compared in a fair way to the
Community producers’ prices and costs, the CIF import price for theproduct concerned had to be adjusted 2 % upwards, reflecting thevariable costs incurred, and then increased by an amount of ECU 0,96
per pair, reflecting the average fixed amount of costs incurred, plus the
customs duty.
(86) The two methods used to determine undercutting described in recital
84 resulted in the establishment of average undercutting margins
(expressed as a percentage of the Community industry’ s prices) in
excess of 25 % for the People’s Republic of China and of 10 % for bothIndonesia and Thailand.!B1998R0467 — EN — 01.03.1998 — 000.001 — 17
7.Conclusion concerning the volume of dumped imports and
their effect on prices in the Community
(87) As has been shown above, there was a significant increase of more
than 45 % in the combined volume of dumped imports from the three
countries in question between 1991 and the investigation period.Consumption, however, declined by about 6 % over the same timescale.
Even though certain increases in import prices which reflected the
evolution of the product-mix where observed over the four year periodunder examination, these prices were nevertheless at highly dumpedlevels which significantly undercut the prices of the Community
producers.
8.Situation of the Community industry
Preliminary remark
(88) As concerns the type of data given below, it should be noted that not all
economic factors collected at the level of individual Community
producers in the first group and the verification sample were found to
have a bearing on the state of the Community footwear industry for thedetermination of injury. For example, because production takes place
to order, stocks were usually not held and consequently were found to
have very little meaning in the injury analysis, as was the case withcapacity and capacity utilisation (since idle capacity cannot be strictlyallocated only to the like product). Thus, in accordance with Article
3(5) of the Basic Regulation, in the analysis of the situation of the
Community industry, only those economic factors which were found tohave a bearing on the state of this particular industry were taken intoconsideration.
Production
(89) The information received from the national federations showed that
production in the Community fell from approximately 259 million
pairs in 1991 to 224 millions pairs in the investigation period, a drop of
14 %.
Sales volume
(90) The data obtained from the national federations and Eurostat showed a
massive decline in sales volume of 22 % between 1991 and theinvestigation period (calculated using total production in theCommunity minus exports outside the Community).
Turnover
(91) The decline in sales value of the product concerned was found to be
16 % between 1991 and the investigation period. Such a decline,
although less marked than in terms of volume, was nevertheless
significant.
Market share
(92) On the basis of consumption figures as determined in recital 77 and
using data obtained from national federations and Eurostat, it wasfound that the market share of the Community producers on theCommunity market went down from 64,5 % in 1991 to 53,3 % during
the investigation period.
Prices of the Community producers
(93) As explained in recital 83 concerning the prices of imports, it is
considered that given the different product mixes which can occur
within each of the four CN codes in question, any general examinationof the evolution of the import prices of dumped imports between 1991
and 1994 using only the categories of footwear should be viewed with
caution. This also applies when analysing on this aggregate level datarelating to the Community industry.!B1998R0467 — EN — 01.03.1998 — 000.001 — 18
On a category basis, the investigation did, however, show certain trends
in the Community producers’ prices since it was found that only theCommunity producers’ weighted average selling price of the productbelonging to category 1 (‘unisex’ footwear) went up by a significant
amount between 1991 and the investigation period. This price increase
is likely to result from the fact that this category includes a very largeproportion of fashion footwear, very popular with young people, whichhave been very much in demand during recent years.
On the other hand, the prices of the products belonging to the other
categories either remained stable or only went up slightly, but in any
case this increase has been below the average level of inflation for theperiod under consideration and does not reflect the increase in the
production costs. The conclusion can therefore be drawn that prices
have been suppressed.
Profitability
(94) The profitability (in relation to turnover) on sales in the Community of
the like product for the Community produces in the first group
increased slightly from + 6,8 % in 1991 to + 7,3 % during the
investigation period. The Community producers in the verificationsample also confirmed this relatively stable trend with margins going
up from + 8,1 % to + 8,2 %. The Community producers’ capacity to
maintain their profitability in the face of the abovementioned pricesuppression is the result of a considerable effort of rationalisation andcost reduction on the part of the surviving Community producers.
More importantly, the cost structure of this particular industry explains
the fact that its operating businesses are either profitable or disappear.
Indeed, with direct expenses (raw materials and labour etc.)representing up to 80 % of the cost of a shoe, footwear is only madeto order, after a direct costing showing a sufficient profit for each
order. In this situation, no company can show losses for more than a
few months without being forced to close down. This explains why theCommunity producers in the first group and the verification samplewere, on average, not loss making.
This cost structure together with the increasing leverage of a number of
large retailers-importers who are able to select and change their source
of supply for any order on the sole basis of price (in the case of thePeople’ s Republic of China, Indonesia and Thailand dumped prices)
are key elements and explain the extreme vulnerability of this labour
intensive industry which has no means, over an extended period oftime, to resist sustained pressure from low-priced, dumped imports.
Community industry had therefore no choice but to try to maintain
profitability at the expense of market share. This was still feasible and
profitability remained stable at around 7 % over the period covered
since, despite a fall of more than 11 percentage points in their marketshare since 1991, the Community producers still held 53 % of theCommunity market in 1994.
Employment and company closures
(95) In the light of the above, the analysis of employment developments and
company closures appeared to be particularly relevant. Informationreceived from the national federations showed that employment in the
sector producing the footwear under investigation declined from about
127 250 people in 1991 to 114 000 people in the investigation period,a drop of approximately 10 %.
As concerns the number of Community producers manufacturing the
footwear subject to the current investigation which ceased production
between 1991 and 1994, details of the closure of 67 factories in seven
Member States (Belgium, France, Italy, the Netherlands, Portugal,Spain and the United Kingdom) were received from nationalproducers’ federations. Given that some Member States do not keep
detailed statistics for very small companies, the true figure on
company closures may have been much higher.!B1998R0467 — EN — 01.03.1998 — 000.001 — 19
9.Conclusions on injury
(96) All of the economic indicators mentioned above, based on information
supplied by the national footwear producers federations clearly showthat the Community producers’situation has deteriorated between 1991
and the investigation period (i.e. as regards production, sales volume,
market share, employment and company closures).
(97) Figures from individual companies (such as those relating to profit-
ability), examined at the end of the injury analysis period, relate to‘survivors’ and thus the most resilient producers. It follows that such
data understate the level of injury as a whole as far as the entire
Community production of the footwear under investigation isconcerned. It is only when the global situation is examined that thedisapperarance of producers, the reduction in production, sales and
employment and thus the full extent of the injury becomes evident.
In addition, any apparent ‘well-being’ of the Community producers
belonging to the first group or the verification sample may also havecome about due to their taking over part of the market share previouslyheld by the Community producers which went out of business during
the four year period under examination. These Community producers
have also been obliged to shift their production towards certain typesof footwear which, up until the present time, have been less subject to
the pressure exerted by dumped imports (e.g. fashion footwear which
has formed one of the ‘niches’ on the market).
In this respect, it has been claimed by a number of interested parties
that the Community producers have very successfully engaged in astrategy of specialisation in up-market fashion products. The result of
this is alleged to be that the Community producers no longer have the
capacity to make large volumes of low-cost product of the typeproduced in the exporting countries concerned by this proceeding. It istrue, that, given the advantages of their geographical proximity to the
Community markets and their ability to make quick delivery to meet
rising, and very often short-lived, consumer demand for fashionfootwear, it is to this sector that many of the Community producershave retreated with all or part of their output. Some producers have had
to relinquish altogether production of less fashionable, cheaper and
less value-added but high volume lines to the imports from outside theCommunity, whilst others have tried to produce a mixture of fashion
footwear and high volume, ‘classic’ lines. These ‘classic’ lines are
indeed the only ones generating the volumes required for maintainingan industrial and commercial structure of a viable size.
(98) It was therefore concluded that, overall, the Community producers of
the footwear under investigation have suffered injury which is
sufficient for it to be classified as material.
F.CAUSATION
(99) In accordance with Article 3 of the Basic Regulation, it was examined
whether the material injury suffered by the Community industry was
caused by the Chinese, Indonesian and Thai dumped imports, or
whether other factors had caused or contributed to that injury.
1.Effect of the dumped imports
(100) In examining the effects of the dumped imports, it has to be borne in
mind that, because of the nature of the products concerned and the
leverage of certain large distributors, the Community footwear marketis, at least at wholesale level, transparent and price sensitive.Moreover, as mentioned in recital 80, the imports of dumped products
from the countries concerned are affecting mainly the lower to
lower-middle end of the market, which is generally recognised as beingthe most sensitive to price variations and, consequently, the segmentwhere sales at low prices have inevitably substitution effects.
In addition, it should be recalled that the footwear subject to this
proceeding which is produced in the Community and the equivalent
footwear imported from the People’ s Republic of China, Indonesia andThailand are in direct competition with each other since they are soldthrough the same sales channels and there are very often, for the
consumer, few perceptible or significant differences in quality between
the imported products and the products produced in the Community.!B1998R0467 — EN — 01.03.1998 — 000.001 — 20
(101) In this context it was found that the increasing volume and market
share of those imports, in conjunction with the significant undercuttingfound, coincided with the loss of market share and general decline ofthe Community industry.
It was accordingly concluded that the low-priced, dumped imports
from the countries concerned are linked to the deteriorating situationof the Community industry.
2.Effect of other factors
(102) Consideration has also been given to the question of whether factors
other than the dumped imports from the People’ s Republic of China,
Indonesia and Thailand might have caused, or contributed to, the
material injury suffered by the Community industry in order to ensurethat any injury caused by other factors is not attributed to the dumpedimports.
(a) Imports from other third countries
(103) The question whether imports from countries other than the three
currently under investigation may have contributed to the material
injury suffered by the Community industry was first examined. In this
respect, particular reference was made by certain interested parties toimports into the Community from Vietnam. Eurostat data showed(after correction in order to exclude footwear involving special
technology as explained in recital 76) that the volume of imports in the
Community of the products concerned from Vietnam increased verysignificantly from approximately 30 000 pairs in 1991 to 15,9 million
pairs in 1994.
Given the surge in the volume of imports from Vietnam, it cannot be
denied that these imports may also have had a detrimental effect on the
situation of the Community industry. However, as concerns the prices
of these imports, given the lack of information on the product mix, itwas not possible to establish reasonable data upon which conclusionscould be drawn. It was therefore considered that the evidence produced
to date concerning the pricing of Vietnamese exports to the
Community was insufficient to warrant extending the scope of thecurrent investigation to Vietnam.
(104) Moreover, it should be noted that the Community market share of all
third countries including Vietnam, but excluding the People’ s Republicof China, Indonesia and Thailand, increased by 12 % between 1991
and 1994, whereas the market share of the three countries concerned
by this investigation increased more substantially, i.e. by 46 %, duringthe same period.
(105) It is therefore concluded that, even if imports from other third
countries may have contributed to the injury suffered by theCommunity industry, their impact cannot be considered as such ashaving broken the causal link between the dumped imports from the
three countries concerned and the material injury suffered by the
Community industry.
(b) Intra-Community competition
(106) It has been argued by several interested parties that there was
significant internal competition in the Community between producersin Italy, Portugal and Spain and producers in the other Member Statesand it was for this reason that certain Community producers found
themselves in an adverse economic situation. The competitive
evaluations of some Member States’ currencies and the Commission’ sdecision not to allow the payment of State aid to the Italian footwearindustry (
1) on the ground, inter alia , of its good health, have also been
cited as further indication that any injury the Community industry
might have suffered has been largely self-inflicted.
(107) In addressing the above arguments, however, a distinction should be
made between fair competition and unfair competition and it should berecalled that, within the framework of a single market, there aremechanisms to ensure that competition between Community producers
remains fair.!B
(1) Commision Decision 96/542/EC (OJ L 231, 12. 9. 1996, p. 23).1998R0467 — EN — 01.03.1998 — 000.001 — 21
In addition, in the assessment of the injury suffered by the Community
industry, the situation of the Community producers of the products inquestion in all Member States where these types of footwear areproduced in significant quantities has been considered. The results of
this assessment reflect the situation of the Community industry as a
whole. Accordingly, the aggregated data used for the injury assessmentwould compensate for internal differences, if any, in the Communityindustry’ s performance. In this respect, it is, for instance, worth noting
that if internal competition had been the only driving force on the
market, the Community industry’ s market share would not haveexperienced a decline from 64,5 % in 1991 to 53,3 % in 1994 as the
loss of market share by some would have been the gain of the others.
The investigation has shown that the diminishing production, market
share, and employment of producers in some Member States have in
no way been compensated by an improvement of the situation ofproducers in other Member States, as a number of interested partieshave argued.
It must also be stressed that the Commission’ s decision not to allow the
granting of a State aid to the Italian footwear industry was based on an
assessment of this industry as a whole, as opposed to the segment of
the market concerned by the present investigation. Furthermore, thisdecision was based on the impact that such a measure might have hadon the functioning of the internal market and specifically acknowl-
edges, inter alia , the difficult situation of employment in this sector in
all Member States.
(108) Further to the final disclosure, certain interested parties have argued
that, in view of the fact that certain Community producers reportedstrongly negative developments in recent years while others main-tained their turnover, the injury suffered by the Community industry
might result from disparities in the quality of the companies’
management, and not from the impact of the dumped importsconcerned.
(109) In this respect, it should be stressed that, due to differences in their
product range, it is normal that not all companies are as acutelyconfronted with the competition from the low-priced, dumped imports.
It is also normal that, in a competitive market, some companies
perform better than others and it its precisely the number ofCommunity producers which ensures that competition exists. More-
over, no evidence of mismanagement (relating for instance to
investment or employment policies) was found in the course of theinvestigation. As stated above, internal competition cannot, inparticular, be the cause of the overall decrease in market share of
the Community industry and therefore considered as a factor breaking
the causal link between the dumped imports and the injury suffered bythe Community industry.
(c) Recourse to subcontracting of labour intensive operations
(110) In addition, it was also argued that a number of Community producers
have transferred some of their more labour intensive operations to third
countries with low labour costs, thereby contributing to the overall
injury suffered by the Community industry, particularly with regard toemployment. In this regard, it is considered that the fact that someproducers have had to resort to such a course of action, which is a
defensive step taken in order to keep costs at levels which enable them
to compete with the low-priced imports, is additional evidence of thepressure exerted by the dumped imports.
3.Conclusions on causation
(111) Although certain factors other than dumped imports from the countries
concerned may have contributed to the injury suffered by the
Community industry, it is nevertheless concluded that a causal linkexists between low-priced, dumped imports from the People’s Republicof China, Indonesia and Thailand, taken in isolation, and the material
injury suffered by the Community industry. This conclusion is based
on the various elements set out above and in particular the level ofprice undercutting, the significant market share gained by thesecountries (and the corresponding loss in market share suffered by the
Community industry) and the huge increase in the quantities
concerned which resulted in a great number of producers situated in!B1998R0467 — EN — 01.03.1998 — 000.001 — 22
the Community being forced to close. This conclusion is moreover
strengthened by the fact that the overall efficiency of the Communityfootwear industry producing the products concerned is not in question,as evidenced, inter alia , by the achievements of the Community
producers on export markets outside the Community (exports in
volume by the Community industry indeed rose by 25 % between 1991and 1994).
G. COMMUNITY INTEREST
(112) On the basis of all evidence submitted, an examination was made of
whether, despite the conclusion on dumping and injury caused thereby,
compelling reasons existed which would lead to the conclusion that it
was not in the Community interest to impose measures in thisparticular case. For this purpose, and pursuant to Article 21(1) of theBasic Regulation, the impact of possible measures for all parties
concerned as well as the consequences of not taking measures were
examined.
In making such an appreciation, the need to eliminate the trade
distorting effects of injurious dumping and to restore effectivecompetition was given special consideration.
1.Impact on the Community industry and its suppliers
(a) Interest of the Community industry
(113) Without measures to correct the effect of the dumped Chinese,
Indonesian and Thai imports, it is considered inevitable that the
position of the Community producers would further deteriorate. More
Community producers, and finally the Community industry as a whole,would begin to incur financial losses, with the result that there wouldbe further factory closures and considerable job losses in addition to
those resulting from rationalisation and technological improvements. It
should also be borne in mind that if fewer producers are present on theCommunity market, competition may be reduced commensurately.
(114) Certain interested parties argued that, given the mobility of the
footwear industry world-wide, antidumping measures against thePeople’ s Republic of China, Indonesia and Thailand would have no
positive effect on the situation of the Community industry owing to a
likely shift of supply to other cheap labour third countries such asBangladesh, India or Vietnam. It has been argued moreover that the
situation of the industry producing footwear with uppers of leather or
plastics was comparable in this respect to that of the synthetichandbags manufacturers and that accordingly the Council should alsoin the present case refrain from taking measures (
1).
(115) Shift of supply between various countries has been an important factor
on the footwear market for a number of years. In this regard, it shouldbe noted that the Community industry has been able, by its automation
and rationalisation, to partly compensate for the importers’ constant
search of countries with the lowest labour costs. This could howevernot be the case in the face of the surge in dumped imports from the
three countries concerned by this proceeding. As far as the alleged
parallelism between the present proceeding and the synthetic handbagscase is concerned, it should be stressed that the substantial marketshare still held by the complainant Community industry in this case,
the nature of the capital holders in most exporting companies, as well
as the important industrial investment necessary to produce footwear,clearly exclude any reasonable and meaningful comparison betweenthe two industries. The Council cannot accept therefore that for the
sake of consistency, it should refrain from taking measures in the
present case.
In addition, the fact that producers/exporters could transfer their
production facilities to other countries in order to avoid payment ofanti-dumping duties is not, in itself, a sufficient reason for the Councilnot to impose measures in a case where exports have been found to
have been dumped on the Community market and to have caused
material injury to the Community industry. Were such a situation toarise, the Community industry could lodge a complaint requesting, for!B
(1) See recitals 105 and 106 of Council Regulation (EC) No 1567/97 (OJ L 208, 2. 8.
1997, p. 31).1998R0467 — EN — 01.03.1998 — 000.001 — 23
instance, the initiation of an anti-dumping proceeding against such
imports or the initiation of circumvention investigation in accordancewith Article 13 of the Basic Regulation.
(116) It was further argued that if measures were to be imposed, Chinese,
Indonesian and Thai producers/exporters would switch to theproduction of those types of footwear where the Community producers
have a technological and fashion-related advantage, thereby causing
further injury to the Community industry.
Leaving aside the fact that this type of argument cannot lead to the
conclusion that the Council should refrain from adopting measures in
the presence of injurious dumping, there is nothing to suggest that,even in the absence of measures, producers/exporters in the
abovementioned countries will not, in the future, decide to expand
the range of footwear which they manufacture and export. Indeed, anumber of submissions by importers pointed out that a trend towardshigher quality imported goods, with correspondingly higher prices had
been observed. As has been mentioned previously, this trend had
already started before the investigation period.
(b) Interest of companies supplying the Community industry (with
raw materials and machinery)
(117) It has been a notable feature of this investigation that the Community
producers (and their raw material or component suppliers etc.) in many
Member States tend to be grouped together geographically. The closure
of one factory can therefore have an adverse knock-on effect on othercompanies in the area in particular with regard to employment.
(118) It has been argued that, should measures be imposed, this would
jeopardise Community footwear machinery producers’ sales to thePeople’ s Republic of China, Indonesia and Thailand.
As far as the suppliers of footwear production machinery are
concerned, no evidence has been received showing that producers/
exporters in the People’ s Republic of China, Indonesia or Thailand are
the main or most important clients of the Community equipmentmanufacturers.
In any event, it should be noted that the Community industry is clearly
investing in automation, and in the injection process in particular. Thisautomation, which contributes to the technological improvement of the
footwear manufacturing process in the Community, is linked with
investments in machines and moulds produced in the Community.
2.Impact on consumers
(119) Although no representations were received from consumer organi-
sations following the publication of the notice of initiation of thisproceeding, some parties have argued that anti-dumping measureswould seriously affect Community consumers, particularly those with
the lowest income.
This argument concerning the foreseeable impact of measures on the
consumers’ buying price has been examined in detail. The results of
this examination, which as been based on the information available,are as follows:
(a) Impact in absolute terms
(120) Firstly, as far as footwear prices to distributors are concerned, it is
likely that, given the level of competition and the number of suppliers
either in the Community (where the Community industry still has a
53,3 % market share), or in third countries not concerned by thisproceeding (imports from which total a 28,3 % market share), thesesuppliers would not be able to significantly increase their prices
without running the risk of losing market share.
As for Indonesia and Thailand, it should be borne in mind that the
injury-elimination levels established for these countries are consider-
ably lower than for the People’s Republic of China, their averageimport price being during the investigation period ECU 6,97 and ECU7,16 per pair respectively. Given that the market share of footwear
originating in the People’s Republic of China is 9,3 %, (with an
average price of ECU 5,47 per pair during the investigation period) and!B1998R0467 — EN — 01.03.1998 — 000.001 — 24
in view of the duty level proposed, the average maximum foreseeable
impact of the measures proposed on the price of the footwearconcerned as a whole amounts to ECU 0,4 per pair.
Thus, consumers would only have to pay an additional amount of ECU
0,4 per pair if distributors decide to keep their margins unchanged and
pass the increased costs on to the consumer. Since the averageconsumption of the footwear concerned in the Community is below
one pair per person per year, the impact of the proposed measures on
the average consumer’ s annual budget would be clearly marginal.
(b) Impact in relative terms, effect of price on consumption
(121) In relative terms, the basis of the calculations was the average price of
the footwear concerned at delivered-warehouse distributor level,
namely ECU 13,5 per pair, which takes into account, for the imports,
the adjustment for differences in level of trade referred to in recital 85of this Regulation. Using the lowest mark-up found among thedistribution channels analysed below, i.e. 125 %, it is estimated that the
average price for the consumer of the product concerned is above ECU
30 per pair, including all costs and duties incurred between importationand sale to the final customer. As a consequence, the impact of the
anti-dumping duties on the price to the consumer would amount to
approximately 1,3 %.
This percentage should, as explained above, be examined in the light
both of the absolute value of the increase (ECU 0,4 per pair) and the
general evolution of prices over the injury investigation period. Indeed,
over the four years examined, and due to the penetration of the dumpedimports, the average market price at delivered-warehouse distributorlevel decreased in absolute terms, this decrease being of more than
10 % when adjusted in order to take into consideration the general
inflation rate.
(122) It should be added that, even if consumers do compare the prices which
are simultaneously offered in different shops, they are generally less
sensitive, as regards the product under investigation, to developmentsin the general level of prices. Indeed, the abovementioned decrease inprices did not prevent the global consumption of the product concerned
decreasing by 6 %.
This can be explained by a certain saturation which can be observed
for products which are consistently sold at such low prices that
consumers are unlikely to react to a limited overall change in the level
of prices. It is therefore doubtful that the full reflection of the duty, i.e.a maximum price increase of 1,3 %, will have any significant impacton the current trends of demand on the Community market.
(123) In the absence of any other element or reaction from consumer
organisations, it was concluded that the impact of the proposedmeasures on the consumer of the footwear concerned was likely to be
minimal.
3.Impact on distribution
(a) Impact on distribution as a whole
(124) It has been argued that the imposition of measures would also have a
strong negative impact on importers. More generally, diverging viewshave been expressed on the situation of the whole footwear distribution
chain which, it has been argued, is an activity with a far greater
significance in the Community than footwear production, in terms ofboth turnover and employment.
It should first be pointed out that, by its very nature, for a given
quantity of footwear, the distribution chain will have a higher turnover
than the manufacturing companies it buys from, simply by virtue of itsdistribution margin. Secondly, the employement figures for footwear
distribution in general, which include sales of all types of footwear,
cannot be compared with those of the Community production of theproduct concerned only.!B1998R0467 — EN — 01.03.1998 — 000.001 — 25
As final consumers in the Community do not buy shoes in significant
quantites outside the Community, negative consequences of antidump-ing duties for distribution as a whole could only result from asignificant reduction of consumption and therefore of turnover, or a
downward pressure on distribution margins in order to minimise an
increase in consumer prices and a decrease in consumption.
As explained above, in the light of the foreseeable impact of possible
measures on the consumers of the product concerned, it can beconsidered as highly unlikely that consumption of the productconcerned would drop significantly as a result of anti-dumping
measures, even if the distribution sector were to maintain its current
margins.
Taken as a whole, it can therefore be concluded that the effects of
possible measures on the distribution chain will be very limited. Carewas however taken to make an in-depth analysis in the light of thestructure of footwear distribution in the Community.
(b) Structure of footwear distribution in the Community
(125) Footwear distribution in the Community comprises four different
channels of sale to the end customer: branded retail chains, indepen-
dent retailers, non-specialised supermarkets and other types ofgenerally non-specialised distribution, for example clothing stores.
( i ) Independent retailers
(126) The traditional distribution channel consists of independent retailers,
generally buying from wholesalers. In the evolution of distribution
however, wholesalers tend to disappear as retailers enter into a closerrelationship with a more limited number of producers or tend to groupin purchasing associations while retaining their independence.
As far as the retailers themselves are concerned, they face an adverse
competitive situation due to both their individual lack of price control
on suppliers and the high margins of between 150 % to 200 % that are
required to cover the fairly high costs of operating in urban, oftenupmarket, areas. In fact, they have lost ground in a certain number ofMember States to more recent forms of distribution falling within the
other three categories and in particular the branded chains.
However, as a consequence of their strong presence in some other
Member States and their situation at the upper end of the market where
they maintain a continuous commercial relationship with theircustomers, it should be noted that independent retailers are still, atleast in terms of value added and employment (over 250 000 persons),
the most important distribution channel in the Community, although
probably not the largest one in terms of market share in volume.
(ii) B r a n d e d r e t a i l c h a i n s
(127) These chains, which are sometimes also involved in production in the
Community, are generally owned by one or two large companies in
each country, which in turn own several brands and operate across the
whole market range. They operate from out-of-town super or discountstores, which, because of their sales volume, prices and specialisation,can resist the non-specialised supermarkets’ pressure.
The branded retail chains also sell through town centre shops replacing
the independent retailers with less costly, standardised premises which
accommodate the need, on the part of some customers, for an
alternative retail buying environment to discount stores. Due to theirleverage, their access to world supply since they import on their ownaccount and the relatively low margins with which they operate,
generally around 25 % of the cost of sales for the central trading arm
and 100 % on average for the shops, branded retail chains are able togain market share rapidly once they enter a market and to achievegrowth rates in excess of 5 % per year.
(iii) N o n - s p e c i a l i s e d s u p e r m a r k e t s
(128) Important in terms of volume, but less in terms of value on the total
footwear market due to the low average price of their sales,
non-specialised supermarkets have a strong influence at the lower!B1998R0467 — EN — 01.03.1998 — 000.001 — 26
end of the market. Although they sometimes buy directly from
suppliers located outside the Community, they usually rely onspecialised importers for their imports, which constitute an importantpart of their footwear sales. Their traditional mark-up is around 100 %,
but it can range from around 60 % on promotional operations to over
130 % on some Community products. Due to the additional level of theimporter and the fixed part of the costs incurred, imports from thecountries concerned through this sales channel usually reach the
consumer at a price which is three times higher than the CIF level.
(iv) O t h e r s a l e s c h a n n e l s
(129) Other sales channels, such as mail order companies or garment stores,
have gained significance in certain Member States but none of these
has individually acquired importance on a Community-wide basis. Incertain Member States, specialised mail-order firms have a coststructure similar to the branded chains. Community-wide apparel
chains of ‘small’ shops also introduce footwear in their stores as a
fashion branded accessory, generally with higher margins than on theirusual clothing articles. Due to the fashion aspect of these sales, they
are in competition with the branded chains, although to a lesser extent
than the large general city centre stores.
(c) Specific impact of the proposed measures on the various sales
channels
(130) As regards the independent retailers, which still constitute the largest
source of employment in Community footwear distribution, the generalconclusion presented in recital 124 is strengthened by the fact that a
low proportion of their supplies of the product concerned usually
originates in the People’ s Republic of China, Indonesia or Thailand. Itshould be added that they are grouped in a confederation representingeight Member States on a representative level, and that no submission
opposing the possible imposition of anti-dumping measures was
received from this source or any other on their behalf.
(131) The companies owning branded chains have contested the need for the
imposition of antidumping duties. Although the general conclusion isalso applicable to them, the fact that some of them rely on the dumped
imports for the supply of the product concerned more than the
independent retailers explains why, within the distribution chain, theycould fear a negative effect of the measures on their comparative
competitive situation.
The direct effect of possible measures on the financial situation of
these companies would be negligible if the amount of the duty were tobe fully passed on to the consumer. Indirect adverse financial effectscould only be expected if, due to this price increase, consumers were to
significantly reduce their purchases of the product concerned.
However, should this happen, it would only be to a limited extent, asexplained in recital 122.
Moreover, the product concerned is never the sole source of revenue
for these specialised shops and, due to its particularly low prices,
represents less than 12 % of the turnover of the cooperating companies
operating branded chains. In this perspective, even a small contractionin the demand for the product concerned, which appears unlikely,
would have a negligible impact on the companies as a whole, in
particular if the demand is at least partly re-oriented to footwear with ahigher price, with probably a higher margin in absolute terms.
(132) As far as non-specialised supermarkets or other non-specialised stores
are concerned, in view of the even more limited extent to which their
sales rely on the product concerned, their situation should not be
affected by the imposition of measures even in the case of the marketevolution envisaged above.
(133) The situation of the importers supplying these non-specialised
distribution channels was examined, as the portion of their turnover
based on products imported from the countries concerned was found to
be significant. These companies are generally run with a very limitedand flexible structure allowing them to sell only when the tradingmargin they foresee covers the costs incurred. Their expertise on the
market and their ability to design and sell are not affected by the
country of origin of the goods. The anti-dumping measures having an!B1998R0467 — EN — 01.03.1998 — 000.001 — 27
impact on footwear distribution as a whole, these importers will be
able to benefit from any market situation, and continue to supply theirclients with Chinese, Indonesian or Thai imports, or any non-dumpedproducts, as well as Community-produced ones.
(134) In conclusion, it could not be established that the imposition of
anti-dumping measures on the footwear concerned would be such as toaffect significantly the financial situation of either the footwear
distribution chain as a whole or of a part of it.
4.Conclusion concerning Community interest
(135) Having examined all the various interests involved, it is considered that
positive reasons exist for taking measures and that there are no
compelling reasons not to take action against the dumped imports inquestion. Indeed, leaving the Community industry without adequateprotection against the injurious dumping would add to the difficulties
of this industry and could lead to its disappearance or relocation
outside the Community. The limited price increase resulting forconsumers from the imposition of antidumping measures can by no
means be considered to be of the same magnitude as the cost of the
total disappearance of a major Community industry.
Finally, in view of, inter alia , the time which has elapsed since the
completion of the investigation of dumping and injury, it is considered
appropriate that definitive anti-dumping duties on the imports of theproduct concerned be directly imposed, i.e. without resorting to theintermediate step of provisional duties.
H. DEFINITIVE DUTY
1.Simultaneous application of anti-dumping measures and
quantitative restrictions
(a) Legal aspects
(136) Certain interested parties argued that no antidumping measures should
be imposed on imports of the products subject to the presentinvestigation originating in the People’s Republic of China since they
are already subject to a Community-wide quantitative quota imposed
by Council Regulation (EC) No 519/94 (
1), i.e. during the investigation
period.
(137) The Community Institutions cannot subscribe to this point of view
which, they consider, is based on an incorrect interpretation of therationale of Regulation (EC) No 519/94. That Regulation introduced anew trade regime which led to the abolition of some 4 617 national
restrictions provided for under the previous regime vis-à-vis non-
market economy countries, almost all of which concerned the People’sRepublic of China. These restrictions were replaced by Communityquotas for seven Chinese products and Community surveillance for 26
other products.
Overall, these autonomous quotas, restricted to a few particularly
sensitive products, cannot be considered as an exception to some
hypothetical liberal trading regime with the People’ s Republic of Chinabut are part of the means of achieving the goal of a more liberal and,above all, more uniform trading regime with the People’ s Republic of
China, while any action under the Basic Regulation is directed against
injurious dumping.
Accordingly, the injury which the imposition of anti-dumping
measures would attempt to remedy has not been addressed by means
of another commercial defence instrument. Therefore, following ananti-dumping investigation which has shown that measures are
warranted with a view to remedying injurious dumping, the imposition
of such measures may be considered, irrespective of the existence ofany quantitative restrictions which may be applicable to the products inquestion. This conclusion had however to be subjected to a further
analysis, from an economic angle.!B
(1) OJ L 67, 10. 3. 1994, p. 89.1998R0467 — EN — 01.03.1998 — 000.001 — 28
(b) Economic aspects (impact of the quotas on import trends)
(138) Data available when preliminary findings were established (restricted
to 1995) showed that, after the end of the investigation period, importvolume from the People’ s Republic of China had decreasedsignificantly, while prices appeared to have increased.
These circumstances were considered as sufficiently exceptional to
warrant an additional examination, on the basis of the most recent data
available, of the trends in imports which occurred after theinvestigation period. During the time needed to carry out thisadditional examination, it was considered appropriate not to impose
any provisional measures.
(139) In order to examine the import trends for the product concerned in the
two years following the imposition of the quota, consideration wasgiven to some methodological points:
First, since the quota is allocated on an annual basis and for calendar
years, estimates on the basis of partial data corresponding to only somemonths of 1996 were considered as insufficiently accurate. Accord-
ingly, the analysis detailed below was carried out on the basis of
full-year data concerning both 1995 and 1996 and could only becompleted when such data were available for 1996.
Secondly, Regulation (EC) No 519/94, as amended, while imposing
quantitative restrictions on certain footwear falling within the same
nomenclature subheadings as those concerned by the present proceed-
ing, excluded from these restrictions footwear involving ‘specialtechnology’, which is by definition sold at least at ECU 9 (originallyECU 12) per pair at CIF level. As explained in recital 15, footwear
intended for the same use and with the same characteristics as
footwear involving special technology, but irrespective of its price, wasexcluded from the present anti-dumping investigation.
(140) For the years 1995 and 1996, footwear involving special technology
was excluded from the total imports reported under the CN codes
concerned, on the basis of TARIC data, in order to establish the import
volumes and values for the product concerned. In the absence ofcomplete TARIC statistics before 1995, corrections were made forprevious years, taking that year as a reference. When comparing
figures concerning imports from the People’s Republic of China in
1995 and 1996 with those referring to the years prior to the impositionof the quota, two conclusions can be drawn:
As foreseen, the quota had an obvious impact on import volumes from
the People’s Republic of China, which declined most noticeably
between 1994 and 1995 from 28,6 to 16,1 million pairs. In more detail,
import volumes decreased for all four categories of the productconcerned, corresponding to the four CN codes, between 1994 and1995. However, the volumes imported increased again between 1995
and 1996, where they reached 19,1 million pairs.
Furthermore, and more significantly in the context of an anti-dumping
proceeding, prices were not found to have increased as a consequence
of the implementation of the quota. Although one could have expectedprices to rise in parallel to the decrease in import volumes imposed by
the quota, no such thing happened. Indeed, the average import price
remained stable following the imposition of the quota, ranging fromECU 5,75 per pair in 1993, peak year for the volumes, to ECU 5,69 perpair in 1996. For none of the four categories concerned could a change
in the trend of the import price from the People’ s Republic of China be
observed. It should also be noted that, of the exporting countriesconcerned, the Chinese price levels are, by far, the lowest.
(141) Within the four CN codes analysed, it could not be established either
that a progressive shift to footwear involving special technology, which
was excluded from the investigation and highly priced, had taken
place, which could have explained the stagnation of the import pricefor the remaining products. Indeed, the proportion of footwearinvolving special technology in the total imports of the codes
concerned remained stable between 1995 and 1996 both in volume
and value terms.
(142) As far as Thailand and Indonesia are concerned, no significant change
in the overall trends of their imports and of the competitive conditions!B1998R0467 — EN — 01.03.1998 — 000.001 — 29
on the market could be established which would contradict the
findings detailed in recitals 78 to 87.
(143) In the light of the above, it has been concluded that the impact on
import trends of the quantitative restrictions applicable to imports of
the footwear concerned originating in the People’ s Republic of China is
not such as to justify a global reconsideration of the conclusion that, inthe present case, anti-dumping measures are warranted. However, asexplained below, it is considered appropriate that, for the deter-
mination of the form for the measures, the above described trends be
taken into account.
2.Injury elimination level
(a) Methodology
(144) In accordance with Article 9(4) of the Basic Regulation, an examin-
ation was carried out with a view to determining the level of duty
which would be adequate to remove the injury suffered by the
Community industry as a consequence of dumping.
Accordingly, it was considered that the export price of dumped imports
should be increased to a non-injurious price level corresponding to the
Community industry’ s cost of production and a reasonable profit
(hereinafter referred to as the ‘non-injurious price’). As far as the costof production is concerned, it was considered appropriate to take as areference the cost of production of the Community producers in the
verification sample.
As far as the profit margin is concerned, it was considered that a
margin of 7 % on turnover could be regarded as an appropriateminimum, taking into account the need for long-term investment and,
more particularly, the amount which the Community industry itself
was able to maintain as a minimum during the four year period underexamination (1991-1994), at the expense of its market share.
(145) As explained in recital 16, at the outset of the investigation it was
considered appropriate to divide the product in question intocategories, and perform price comparisons on the basis of thesecategories. However, as mentioned in recital 84, during the course of
the investigation it appeared that, as far as the cooperating producers/
exporters were concerned, greater certainty in the product matchingcould be achieved by using an even more detailed product split. To thisend, the most exported models of the Chinese and Indonesian
producers/exporters in the samples and the most exported models of
the cooperating Thai producers/exporters were selected and separatedinto 17 families of footwear.
In order to calculate the injury-elimination margin, the CIF import
price, adjusted to duty paid, customer-delivered levels was comparedto the non-injurious price of the Community producers at the samelevel of trade. Given the high level of non-cooperation from all three
countries concerned, this calculation was carried out on a category-
by-category basis and, only for cooperating producers/exporters, on afamily-by-family basis whenever the greater precision conferred abenefit to them for their cooperation. It should be noted that import
prices were adjusted to the duty paid, customer-delivered level by
using the adjustment methodology used for the undercutting assess-ment, as set out at recital 85.
(b) People’s Republic of China
(146) Since the dumping margin established for Grosby (China) Limited was
de minimis (1,3 %) and should thus result in any definitive
anti-dumping duty for this company to be set at 0 %, no injury-elimination level calculation was carried out for Grosby (China)Limited.
(147) As far as other exports from the People’s Republic of China are
concerned, the residual injury-elimination margin was found to be46,0 %, which is lower than the established dumping margin andshould therefore, in accordance with Article 9(4) of the Basic
Regulation, constitute the basis for the definitive anti-dumping duty
for all other imports originating in the People’ s Republic of China.!B1998R0467 — EN — 01.03.1998 — 000.001 — 30
(c) Indonesia
(148) Individual injury-elimination margins for cooperating producers/ex-
porters in the sample for Indonesia, expressed as a percentage of CIF
price, were found to range from 0 % to 99,5 %, with an average to be
applied to the cooperating producers/exporters outside the sample of33,6 %.
For the producers/exporters in the sample, these margins were found to
be, in all cases except two (PT Golden Adishoes and PT IndosepamasAnggun/P .T. Primashoes Ciptakreasi), higher than the respectivedumping margins established. In accordance with Article 9(4) of the
Basic Regulation, the level of the definitive anti-dumping duty for all
cooperating producers/exporters in Indonesia should therefore bebased on the dumping margins established, with the exception of:
— PT Golden Adishoes, whose injury-elimination margin, lower than
its dumping margin, was found to be nil and should thus result in
any definitive anti-dumping duty for this company being set at0% ,
and
— PT Indosepamas Anggun/PT Primashoes Ciptakreasi, whose
common injury-elimination margin (2,6 %) was lower than their
dumping margin and should thus constitute the basis for thedefinitive anti-dumping duty applicable to both producers/ex-porters as explained in recital 24.
(149) As regards the producer/exporter referred to in recital 31 (PT
Kingherlindo) for which facts available had to be applied, it was alsoconsidered in this context that the partial cooperation it had shown
would have to be distinguished from the total non-cooperation of those
producers in Indonesia which neither replied to the Commission’ squestionnaire nor made themselves known. However, since acalculation based on the same methodology as the one used for
dumping calculations (see recital 40) would have resulted in the
injury-elimination margin applicable to the company to amount to26,9 %, i.e. to be higher than the one found for non-cooperatingproducers/exporters, it was considered appropriate to align PT
Kingherlindo’s injury-elimination margin on the residual injury-elim-
ination margin, which, as explained in the following recital, amountedto 20,3 %.
(150) The injury-elimination margin for non-cooperating producers/ex-
porters in Indonesia was found to be 20,3 % and therefore lower thanthe residual dumping margin of 50 % established for this country.Accordingly, the residual anti-dumping duty for imports originating in
Indonesia should be established on the basis of this injury-elimination
margin.
(d) Thailand
(151) Since the dumping margins established for the three cooperating Thai
producers/exporters (namely CK Shoes and PSR Footwear/Bangkok
Rubber Company) were found to be either nil or de minimis and should
thus result in any definitive anti-dumping duties for these producers/exporters being set at 0 %, no injury-elimination level calculations
were carried out for producers/exporters concerned.
(152) For Thai non-cooperating producers/exporters, the injury-elimination
margin was found to be 24,7 %, i.e. lower than the residual dumpingmargin of 50 % established for this country. Accordingly, the residual
anti-dumping duty for imports originating in Thailand should be
established on the basis of this injury-elimination margin.
3.Form of definitive duties
(153) On the basis of the analysis detailed in recitals 138 to 143, it appeared
that while the imposition of the quota had the obvious desired effect of
limiting import volumes of the product concerned originating in the
People’ s Republic of China and thus the cumulated volumes originat-ing in the three countries concerned, it had no apparent effect on theprices of the imports in question, which can therefore be assumed to
have remained injurious. This effect arises mainly from the concen-
tration of imports on the low to lower-middle end of the range.!B1998R0467 — EN — 01.03.1998 — 000.001 — 31
(154) In these circumstances, it was considered that an ad-valorem duty
would disproportionately affect relatively expensive footwear, whilehaving a lesser effect on the low to lower-middle end sector.Conversely, a variable duty, based on a minimum price, would
precisely target the injurious price element left unremedied by the
quota. Accordingly, it was considered that the definitive antidumpingduty should take the form of a variable duty based on a minimumprice.
Such a measure will indeed encourage price increases relating to the
bulk of imports, which are concentrated at the low to lower-middle end
sector. The expected price increase will thus take place in the product
range most affected by the dumped imports, while at the same timeminimising the effect on the price of the least injurious imports ofmore sophisticated footwear. Therefore, while the quota has obviously
created a safety net against sudden and potentially injurious surges in
imports of the product concerned, a variable duty appears to beparticularly appropriate as a complementary safety net against the
injurious prices of these imports.
(155) As far as the level of the minimum price is concerned, the following
considerations were taken into account:
On the Community industry side, it was considered that the effects of
the proposed measures should allow the average import price, when
adjusted to the delivered importer warehouse level (in accordance with
the methodology presented in recital 85), to be equal to the averagenon-injurious price established for the calculation of the injury
elimination level for the product concerned as explained in recitals 144
and 145, which amounted, on a weighted average basis for the fourcategories concerned, to ECU 9,6 per pair on a delivered basis.
(156) As regards the imported products and their price breakdown, Eurostat
information on both import volumes and average prices was analysedin greater detail in the light of data relating to individual export
transactions provided by cooperating producers/exporters and im-
porters. On this basis it was established that, by setting the minimumprice at ECU 5,7 per pair on a CIF basis, the price breakdown ofimports would be changed to the effect that the foreseeable average
import price for products originating in the People’s Republic of China
would be ECU 7,5 per pair at CIF level, equivalent to the non injuriousprice of ECU 9,6 per pair at a delivered-warehouse-importer level.
Indeed, both in volume and value terms, a majority of the total imports
and a part of the imports in each category took place under theproposed minimum price. The increase in the price of these
predominant imports resulting from the imposition of the variable
duty is thus expected to have a strong influence on the averageforeseeable import price. In doing this analysis, care was taken toensure that the effect of the quotas on the import volumes, as presented
in recital 140, be reflected in an appropriate way.
(157) The data available in relation with products originating in Indonesia
and Thailand were for certain categories too limited to be considered
as representative of the total imports from these countries. However,the general conclusions presented in the preceding recital could be
confirmed to the effect that some imports originating in these countries
did in fact take place during the investigation period below the levelforeseen for the minimum price. It could also be confirmed that thesetting of the minimum price at ECU 5,7 per pair for Indonesia and
Thailand would, in line with the conclusions drawn in recitals 150 and
152, ensure that imports be made, on average, at non-injurious pricelevels.
(158) As regards producers/exporters for which individual duty rates were
foreseen, it is considered that the duty applicable should be the onebased on the minimum price, if such a duty is lower than the one
resulting from their individual ad valorem duty rate.
For all those producers/exporters for which a dumping margin of less
than 2 %, i.e. de minimis, was established, no duty shall apply thereto
in accordance with Article 9(3) of the Basic Regulation.
(159) Further to the final disclosure, certain interested parties, while
opposing any measures, have questioned the appropriateness of a dutybased on a single minimum price applicable to all four categories of!B1998R0467 — EN — 01.03.1998 — 000.001 — 32
footwear concerned and claimed that, in order to reflect price
differences, at least two different minimum prices, one for thecategory of footwear with uppers of plastics, the other for the threecategories of footwear with leather uppers, should be set. Conversely,
in the knowledge of the above claim, other interested parties have
beforehand opposed any split mainly on the ground that it would resultin an increase of the minimum price applicable to footwear withleather uppers.
(160) It cannot be denied in this respect that average import prices relating to
footwear with uppers of plastics are lower than those relating to
footwear with leather uppers. However, it should be stressed thatimports of both types also spread over wide and overlapping priceranges. Moreover, they are one like product and it is often beyond the
consumer’s perception capacity to differentiate plastic material from
leather. In this context, it can be expected that the measure will have avery limited impact, if any, on the usual hierarchy of prices amongstthe four footwear categories concerned. It is therefore considered that a
variable duty based on a single minimum price constitute an
appropriate and reasonable way to obtain the expected average priceincrease for all footwear categories concerned.
(161) The representatives of the complaining Community industry expressed
concern about the remedial effect one could expect from an
antidumping duty based on a minimum price in the case of imports
which are spread over a wide price range. They accordingly requestedthat an ad valorem duty be considered instead.
(162) The Council cannot agree with this line of reasoning and confirm that
the various considerations detailed in recitals 153 to 157 should have
an influence on the form of the measures and will be appropriately
taken into account by the setting up of a variable anti-dumping dutybased on a minimum price. Such a measure will indeed not lead to theautomatic collection of a duty but should nevertheless result, for
imports originating in the three countries concerned, in average price
increases which are consistent with the conclusions of the injury-elimination level calculations.
(163) The definitive anti-dumping duty should therefore be calculated as
follows:
(a) People’s Republic of China: for all producers/exporters, with the
exception of Grosby (China) Limited, for which a de minimis
dumping margin was found, the duty should be equal to thedifference between the minimum price of ECU 5,7 per pair andthe net, free at Community frontier, before duty, price per pair.
(b) Indonesia: for all producers/exporters, with the exception of P .T.
Golden Adishoes, whose exports were found to have been sold at
prices above the injury-elimination level, the duty should be equalto the difference between the minimum price of ECU 5,7 per pairand the net, free at Community frontier, before duty, price per pair.
For the following cooperating Indonesian producers/exporters, the
duty should be equal to the following rates or to the difference
between the minimum price of ECU 5,7 per pair and the net, free
at Community frontier, before duty, price per pair, whichever isthe lowest:
PT Emperor Footwear 2,0 %
PT Indosepamas Anggun 2,6 %PT Primashoes Ciptakreasi 2,6 %PT Dragon 5,9 %PT Fortune Mate 14,9 %PT Bosaeng Jaya 12,3 %PT Karet Murni Jelita 12,3 %PT Koryo International 12,3 %PT Lintas Adhikrida 12,3 %PT Universal Wisesa 12,3 %PT V olmacarol 12,3 %PT Kingherlindo 20,3 %!
B1998R0467 — EN — 01.03.1998 — 000.001 — 33
(c) Thailand: for all producers/exporters, with the exception of
Bangkok Rubber, CK Shoes and PSR Footwear, for which no or de
minimis dumping margins were found, the duty should be equal to
the difference between the minimum price of ECU 5,7 per pair
and the net, free at Community frontier, before duty, price per pair.
I.NEW EXPORTING PRODUCERS
(164) Pursuant to Article 11(4) of the Basic Regulation, a new exporter’s
review to determine individual dumping margins cannot be initiated inthis proceeding with regard to Indonesia as sampling was used in the
original investigation. However, in order to ensure equal treatment
between any new exporting producers and the producers/exporterscooperating in this investigation but not selected in the sample, it isconsidered that provision should be made for the weighted average, ad
valorem, duty rate (12,3 %) applicable, as an alternative to the variable
duty, to the latter producers/ exporters to be applicable to any newexporting producers which would otherwise be entitled to a review
pursuant to Article 11(4),
HAS ADOPTED THIS REGULATION:
Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of footwear
falling within CN codes ex 6402 99 98 (TARIC code 6402 99 98*90),
ex 6403 99 93 (TARIC code 6403 99 93*90), ex 6403 99 96 (TARIC code
6403 99 96*90) and ex 6403 99 98 (TARIC code 6403 99 98*90), originat-ing in the People’s Republic of China, Indonesia and Thailand, except asregards the footwear described in paragraph 3.
2. The definitive anti-dumping duty shall be:
Country Products manufactured by Variable or ad valorem dutyTARIC Addi-
tional Codes
People’ s Republic of
ChinaAll producers/exporters Equal to the difference between a mini-
mum price of ECU 5,7 per pair and the
net, free at Community frontier price perpair, before duty8900
with the exception of:
Grosby (China) Limited 0 % 8759!
B1998R0467 — EN — 01.03.1998 — 000.001 — 34
Country Products manufactured by Variable or ad valorem dutyTARIC Addi-
tional Codes
Indonesia All producers/exporters Equal to the difference between a mini-
mum price of ECU 5,7 per pair and thenet, free at Community frontier price perpair, before duty8900
with the exception of:
PT Golden Adishoes 0 % 8759
and of the following producers/exporters: Equal to the following rates or to the
difference between a minimum price ofECU 5,7 per pair and the net, free atCommunity frontier price per pair, before
duty whichever is the lowest:
PT Emperor Footwear 2,0 % 8760PT Indosepamas Anggun 2,6 % 8761
PT Primashoes Ciptakreasi 2,6 % 8761
PT Dragon 5,9 % 8763PT Fortune Mate 14,9 % 8764
PT Bosaeng Jaya 12,3 % 8765
PT Karet Murni Jelita 12,3 % 8765PT Koryo International 12,3 % 8765PT Lintas Adhikrida 12,3 % 8765
PT Universal Wisesa 12,3 % 8765
PT Volmacarol 12,3 % 8765PT Kingherlindo 20,3 % 8762
Thailand All producers/exporters Equal to the difference between a mini-
mum price of ECU 5,7 per pair and thenet, free at Community frontier price perpair, before duty8900
with the exception of:
Bangkok Rubber 0 % 8766
CK Shoes 0 % 8766PSR Footwear 0 % 8766
3. The duty shall not apply to footwear for use in sporting activities, with a
single or multilayer moulded, not injected sole, manufactured from syntheticmaterials specially designed to absorb the impact of vertical or lateral
movements and with technical features such as hermetic pads containing gas
or fluid, mechanical components which absorb or neutralise impact ormaterials such as low-density polymers (TARIC codes 6402 99 98*11 and6402 99 98*19, 6403 99 93*11 and 6403 99 93*19, 6403 99 96*11 and
6403 99 96*19 and 6403 99 98*11 and 6403 99 98*19).
4. Where any Indonesian party provides sufficient evidence to the
Commission that it did not export the goods described in paragraph 1 to
the Community during the investigation period, that it is not related to any
exporter or producer subject to the measures imposed by this Regulation andthat it has exported the goods concerned to the Community after theinvestigation period, or that it has entered into an irrevocable contractual
obligation to export a significant quantity to the Community, then the
Council, acting by simple majority on a proposal submitted by theCommission, after consulting the Advisory Committee, may amend paragraph2 by attributing that party, as an alternative to the variable duty, the ad
valorem duty rate applicable to cooperating exporting producers not in the
sample, i.e. 12,3 %.!B1998R0467 — EN — 01.03.1998 — 000.001 — 35
5. Unless otherwise specified, the provisions in force concerning duties and
other customs practices shall apply.
Article 2
This Regulation shall enter into force on the day following that of its
publication in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in all
Member States.!B1998R0467 — EN — 01.03.1998 — 000.001 — 36