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"B COUNCIL REGULATION (EC) No 603/1999
of 15 March 1999
imposing a definitive anti-dumping duty on imports of polypropylene binder or baler twine originating in
Poland, the Czech Republic and Hungary, and collecting definitively the provisional duty imposed
(OJ L 75, 20.3.1999, p. 1)
Amended by:
Official Journal
No page date
"M1 Council Regulation (EC) No 968/2000 of 8 May 2000 L 112 1 11.5.20001999R0603 — EN — 12.05.2000 — 001.001 — 1
COUNCIL REGULATION (EC) No 603/1999
of 15 March 1999
imposing a definitive anti-dumping duty on imports of polypropylene
binder or baler twine originating in Poland, the Czech Republic and
Hungary, and collecting definitively the provisional duty imposed
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 theEuropean 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. PROVISIONAL MEASURES
(1) By Commission Regulation (EC) No 2107/98 (2) (hereinafter referred
to as ‘the provisional duty Regulation’) provisional duties were
imposed on imports of polypropylene binder or baler twine originatingin Poland, the Czech Republic, Hungary and Saudi Arabia. All
cooperating Hungarian exporting producers and one cooperating
Czech exporting producer offered price undertakings, which wereaccepted by the provisional duty Regulation and by CommissionRegulation (EC) No 2649/98.
B. SUBSEQUENT PROCEDURE
(2) Following the imposition of the provisional measures, certain
exporting producers and importers of the product concerned submittedcomments in writing. Those parties who so requested were granted anopportunity to be heard.
(3) Since the publication of the provisional duty Regulation, the
Commission continued to seek and verify all information deemed
necessary for its definitive findings and carried out investigations ofthe following companies:
(a)Complainant Community producers
— Pippo Tuote Oy, Outokumpu, Finland,— Irish Ropes, Kildare, Ireland;
(b)Exporting producer
WKI Isoliertechnik Spolska z.o.o., Weltyn, Poland.
(4) Parties were informed of the essential facts and considerations on the
basis of which it was intended to recommend the imposition of
definitive anti-dumping duties and the definitive collection of amountssecured by way of provisional duty. They were also granted a periodwithin which to make representations subsequent to this disclosure.
(5) The oral and written comments submitted by the interested parties
were considered and, where deemed appropriate, taken into account in
the definitive findings.
C. PRODUCT CONCERNED AND LIKE PRODUCT
(6) In the absence of any new information, the provisional findings, as set
out in recitals 6 to 8 of the provisional duty Regulation, are confirmed.!B
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as last amended by Regulation (EC) No
905/98 (OJ L 128, 30. 4. 1998, p 18).
(2) JO L 267, 2. 10. 1998, p. 7. Regulation as amended by Commission Regulation
(CE) No 2649/98 (JO L 335, 10. 12. 1998, p. 41).1999R0603 — EN — 12.05.2000 — 001.001 — 2
D. DUMPING
1.Poland
(a) Cooperation
(7) As described in recital 9 of the provisional duty Regulation, two
companies’ replies to the questionnaire had been considered
inadequate for the purposes of the investigation, as the information
provided did not permit an accurate determination either of normalvalues or of export prices. Subsequent to the adoption of provisionalmeasures, these two companies requested to be allowed to rectify the
deficiencies contained in their previous submissions, and to be granted
the opportunity of a late verification.
(8) One of the two companies claimed that it was a small company, with
only limited export activity during the investigation period and limited
resources for dealing with the requirements of the investigation. This
request for a late verification could not, however, be accepted since, ashad already been made clear when informing the company of itsinsufficient cooperation, it would mean discriminating against other
companies which had made the effort to cooperate properly. Moreover,
the company had been duly informed of the consequences of itsnon-cooperation and had previously been granted more than one
opportunity to rectify the deficiencies contained in its reply to the
questionnaire.
(9) The other company justified its request on the grounds that it had
wrongly considered itself to be operating on a different level to all the
other Polish firms concerned by the investigation, because it primarily
produced baler twine under an outward processing regime, wherebyraw materials acquired in the Community market were processed intofinished products in Poland, before being returned to the Community
for sale. This particular situation had caused the company to believe —
erroneously — that it would not be affected by the anti-dumpinginvestigation as such and consequently it had originally not submitted acomplete reply to the questionnaire. The Commission considered that,
because of the special situation of the company compared to the other
Polish producers, the fact of allowing it to submit additionalinformation would not constitute discrimination against other cooper-ating companies. The company was therefore given a further
opportunity to submit the necessary information, which was duly
verified. The results of the verification are set out in recitals 13 and 15hereto.
(10) A third company, which came forward only after the provisional duty
Regulation had been published, asked to be allowed to cooperate in the
proceeding. This request was rejected as the deadline for a reply to thequestionnaire had long since expired.
(b) Normal value
(11) Two companies questioned the profit margin which had been used by
the Commission in constructing normal values and proposed that a
lower rate of profit be used. One company claimed that the profitmargin used in constructing the normal value did not reflect the factthat profit margins in the baler twine business are rather low and tend
to be strongly influenced by seasonal and climatic fluctuations. The
alternative margin suggested by this company was that achieved fromall company operations, including products different from those underinvestigation. The other company claimed that, because of its position
as a relatively new producer of baler twine, it actually had no means of
influencing the existing level of selling prices in the market, and thusof obtaining the higher margin relied upon by the Commission.
The Commission considers that the profit margin used in constructing
the normal value was correctly determined in accordance with Article
2(6) of the Basic Regulation, i.e. the weighted average profit realisedon domestic sales by the sole cooperating Polish exporting producerwhich had sufficient quantities of domestic sales of the like product in
the ordinary course of trade. These claims could not, therefore, be
accepted.!B1999R0603 — EN — 12.05.2000 — 001.001 — 3
(12) In the course of reviewing the calculations, it was decided that an
adjustment for technical characteristics made when constructing thenormal value for three Polish exporting producers was not required(see recital 8 below).
(13) As far as the company WKI Isoliertechnik Spolska z.o.o. (hereinafter
‘WKI’) is concerned, its sales of baler twine on the Polish domestic
market were, overall, made in representative quantities, i.e. they
constituted 5 % or more of the quantity exported to the Community.However, the individual types of baler twine sold for export to theCommunity did not correspond to those sold on the domestic market.
Normal value was therefore constructed, in accordance with Article
2(3) of the Basic Regulation. As for all other cooperating Polishproducers, constructed normal value was calculated on the basis of the
cost of production in Poland (including selling, general and adminis-
trative (SG&A) expenses) plus a reasonable amount of profit. Thecompany’ s own SG&A expenses were used. The rate of profit wascalculated, in accordance with Article 2(6)(a) of the Basic Regulation,
using the actual rate of profit established for the sole cooperating
producer located in Poland which had sufficient quantities of domesticsales of the like product in the ordinary course of trade.
(c) Export price, comparison and dumping margin
(14) Following the disclosure of the Commission’ s definitive findings, one
company pointed out a clerical error in the calculation of its dumping
margin. The calculation has been rechecked and the error rectified. No
other comments were received in this respect from the Polish exportingproducers. After revision of the calculations, the dumping margins are
as follows:
— BZLP Bezalin: 17,2 %
— CZWC Chemitex: 20,3 %
— PAT Defalin SA: 16,3 %
— Industrial Chemistry Research Institute: 28,4 %— Terplast sp z.o.o.: 23,0 %.
(15) In the case of WKI, all sales of the product concerned on the
Community market were made to related customers in the Community.Export prices were therefore constructed in accordance with Article
2(9) of the Basic Regulation, on the basis of the price at which the
imported products were first resold to an independent buyer within theCommunity. For this company, the weighted average normal value pertype of the product concerned was compared with the weighted
average export price, in accordance with Article 2(11) of the Basic
Regulation. The weighted average dumping margin determined,expressed as a percentage of the cif import price at the Community
frontier duty unpaid, is as follows:
— WKI Isoliertechnik Spolska z.o.o., Weltyn: 46 %.
(16) In view of the fact that the import volume represented by cooperating
Polish exporting producers, after the inclusion of WKI, has increased
from less than 70 % to more than 90 %, the residual dumping marginfor Poland has been revised. The revised residual dumping margin,
now set at the level of the highest dumping margin found for a
cooperating company located in Poland, and expressed as a percentageof the cif import price at the Community border, duty unpaid, is 46 %.
2.Czech Republic
(a) Normal value
(17) One of the two Czech exporting producers claimed that normal value
had been constructed for several types of baler twine, for which there
had been sales on the domestic market. According to the company,normal value for these types should therefore have been based on the
corresponding domestic sales prices. However, this request could not
be accepted since the products sold on the domestic market largely didnot correspond to those sold on the export market and, in the very!B1999R0603 — EN — 12.05.2000 — 001.001 — 4
small number of cases where they allegedly did, such sales were not in
the ordinary course of trade.
(18) The same company questioned a small adjustment for technical
characteristics made by the Commission in the provisional duty
Regulation when constructing the normal value. After carefulconsideration of the arguments presented, it was concluded that theadjustment could not in the final analysis be justified, and the
calculations were corrected accordingly.
(19) Finally, the same company also claimed that the rate of profit used by
the Commission in constructing the normal value was too high and did
not correspond to the actual profitability of the baler twine business,
which was in reality lower. In this connection it should be pointed outthat the profit margin was calculated in accordance with Article 2(6) ofthe Basic Regulation on the basis of the profits obtained on domestic
sales of the like product by the producer concerned. The claim was
therefore rejected, and the provisional findings are confirmed in thisrespect.
(b) Export price
(20) No comments were received in this respect.
(c) Comparison
(21) Both Czech companies asked for a level of trade adjustment, arguing
that while domestic sales were to end-users, export sales were todealers. However, no reliable evidence was produced in support of this
assertion. Indeed, in the case of one company it was established that
export sales as well as domestic sales had been made to end-users; inthe case of the other company, a significant proportion of domestic
sales were found to have been made to dealers and the company failed
to demonstrate that there were consistent and distinct differences infunctions and prices of the seller for different levels of trade in thatmarket. Consequently, these claims could not be accepted.
(22) One company claimed that export transactions had been compared
with domestic transactions of a substantially lower volume, for which ahigher selling price would therefore be normal. However, the domestic
sales were found to be sufficiently representative and in the ordinary
course of trade and they therefore allowed a fair comparison, whichhas been made in accordance with Article 2(10) of the BasicRegulation. In any event, the simple fact that the quantity sold on
average per transaction on the domestic market was smaller than the
average quantity sold per transaction on the export market is notconsidered sufficient for an adjustment to normal value.
(d) Dumping margin
(23) After revision of the calculations, the dumping margins are as follows:
— Lanex a.s.: 24,8 %
— Juta a.s.: 21,8 %
The residual dumping margin is set at 24,8 %.
3.Hungary
(a) Normal value
(24) One company objected to the method used by the Commission in
determining the constructed normal value. It claimed that the SG&Aexpenses relating to the company’ s wholly owned subsidiary should
not have been included in the constructed normal value due to the fact
that the subsidiary was concerned with a different selling activity.However, the verification established that the vast majority of sales ofbaler twine on the domestic market had been made via this subsidiary.
As the SG&A expenses had evidently been incurred in the sale of baler
twine on the domestic market, they should consequently have beenaccounted for in the cost calculation of the subsidiary. These expenses
have therefore to be taken into account in establishing the SG&A
expenses of the parent company. Therefore, the provisional findings inthis respect are confirmed.!B1999R0603 — EN — 12.05.2000 — 001.001 — 5
(25) Another company claimed that the cost of production it had submitted
for one specific type of baler twine for one month was higher than inother months and should therefore be disregarded. The company,however failed to provide any satisfactory explanation as to why this
anomaly had occurred and the claim was therefore rejected.
(b) Export price, comparison and dumping margin
(26) No comments were received with regard to the determination of export
price, the comparison and the dumping margin as set out in theprovisional duty Regulation. The provisional findings on the dumpingmargins are therefore confirmed at the following rates:
— Elso Magyar Kenderfono Rt: 33,3 %
— Partium ’70 Rt: 12,1 %
— Tiszai Vegyi Kombinat Rt: 26,4 %
The residual dumping margin remains at 33,3 %.
4.Saudi Arabia
(27) In view of the findings on the injury threshold (see recital 71 hereto)
no definitive determination of dumping has been made in respect of
the sole cooperating exporting producer.
E.COMMUNITY INDUSTRY
(28) In the absence of any new information, the provisional findings as
stated in recital 35 of the provisional duty Regulation, are hereby
confirmed.
F.INJURY
1.General
(29) In view of the findings on the injury threshold (see recital 71 hereto)
the Saudi Arabian imports have been excluded from the injury
analysis.
2.Community consumption
(30) In determining total apparent consumption on the Community market,
the total sales of the Community industry plus the sales by theremaining non-cooperating Community producers on the Community
market, were added to the imports into the same market.
The volume of imports was, for the purposes of the definitive findings,
determined on the basis of adjusted Eurostat figures as stated in recital
36 of the provisional duty Regulation. The Commission continued toinvestigate after the imposition of the provisional duty and obtainedand verified new data. This resulted in a change in the apparent
consumption for the period considered (i.e. the period between 1994
and the investigation period) due to adjusted import figures concerningmainly Poland. On this basis, Community consumption increased from40 231 tonnes in 1994 to 51 788 tonnes in 1996 and remained
relatively stable thereafter, reaching 51 288 tonnes in the investigation
period, which represents an overall increase of 27 % over the periodconsidered.
3.Allegation of anti-competitive behaviour
(31) In their comments following the disclosure, the Polish exporting
producers continued to argue that the calculation of price-undercutting
margins as well as the findings on other injury factors, causation and
Community interest were vitiated on account of two investigations,allegedly initiated by the Commission against anti-competitive prac-
tices by the Community producers of polypropylene granulates and the
Community producers of baler twine.
(32) The Polish exporting producers were unable to substantiate their
allegation that a concerted practice existed for the raw material and forbaler twine. Although investigation into olefins and polyolefins, such!B1999R0603 — EN — 12.05.2000 — 001.001 — 6
as polypropylene, was started in 1995 (Case No IV/E-2/35.765) the
findings were negative and the case was closed. As for baler twine, theCommission established that no official complaint had been lodgedand that none was pending.
(33) Some interested parties argued that discussions had taken place
between the Community producers and the Polish exporting producerswhich is, per se , anti-competitive behaviour. It should, however, be
noted that those consultations were held in the framework of the textile
agreement as provided for by that agreement.
(34) In the light of the above it was concluded that the abovementioned
allegations were groundless.
4.V olume and market share of the dumped imports
(a) Cumulation
(35) Since for the remaining three countries, i.e. the Czech Republic,
Hungary and Poland, no new information was received, the con-
clusions reached in recital 37 of the provisional duty Regulation are
confirmed.
(b) V olume, value and market share of imports from the exporting
countries concerned
(36) The volume of imports from the three remaining countries concerned
increased from 5 264 tonnes in 1994 to 14 147 tonnes during the
investigation period, representing an increase of 169 %.
(37) In terms of market share based on total Community consumption, the
market penetration of the dumped imports from the three countriesconcerned rose from 13 % in 1994 to 27,6 % during the investigation
period in volume terms — an increase of 111 %.
(c) Prices of the dumped imports
(38) The results of the comparison showed that price-undercutting margins
(calculated on a weighted-average to weighted-average basis),expressed as a percentage of the Community industry’ s average selling
prices, ranged as follows: for Poland from 4,7 to 16,3 % with an
overall weighted average of 11,9 %; for the Czech Republic from16,1 % to 19,2 % with an overall weighted average of 16,1 % and forHungary from 16,9 % to 21,4 % with an overall weighted average of
18,2 %.
(39) A Hungarian exporting producer claimed that the Commission in its
calculation of undercutting should take into consideration the price atwhich this company purchased polypropylene granulates in Hungary.
This argument has to be rejected as in a price-undercutting analysis
actual import prices to the Community from the countries concernedare compared with actual prices of the Community industry.
5.Situation of the Community industry
(40) As mentioned in recital 3 hereto, following the publication of the
provisional duty Regulation the Commission continued to seek and
verify all information deemed necessary for their definitive findingsand carried out investigations at the premises of Community producersof the product concerned. This led to the findings on injury indicators
for the Community industry, which varied insignificantly from those,
stated in the provisional duty Regulation. For the sake of completenessthe injury indicators are set out below.
(a) Production, capacity and capacity utilisation
(41) Production of the Community industry increased during the period
considered, rising from 28 877 tonnes in 1994 to 33 557 tonnes in the
investigation period. This represents an overall increase of 16 %.
Production increased at a lower rate than Community consumption,which increased by 27 % during the period considered.
(42) On the basis of the methodology described in recital 43 of the
provisional duty Regulation, capacity increased from 42 232 tonnes in
1994 to 46 484 tonnes during the investigation period, which!B1999R0603 — EN — 12.05.2000 — 001.001 — 7
represents an increase of 10 %. This increase was in line with
expectations of market growth. The rate of capacity utilisationincreased slightly during the period considered, rising from 68,4 %in 1994 to 72,2 % in the investigation period.
(b) Sales volume
(43) The volume of sales of the Community industry on the Community
market increased during the period considered, from 24 840 tonnes in
1994 to 26 796 tonnes in the investigation period. This represents an
overall increase of 8 %.
(c) Market share
(44) The Community industry’ s market share decreased from 61,7 % in
1994 to 58,3 % in 1995, 57,7 % in 1996 and 52,2 % during theinvestigation period. The overall loss of market share was 9,5
percentage points between 1994 and the investigation period.
(d) Stocks
(45) Stocks significantly increased between 1994 and the investigation
period by 42 %.
(e) Average sales price and price evolution
(46) The weighted average prices of the product concerned sold by the
Community industry on the Community market fluctuated over the
period considered, increasing by 11 % overall.
(f) Profitability
(47) The profitability of the Community industry, expressed as a percentage
of net sales, decreased from a weighted average profit of 3,5 % in 1994to 1,3 % in the investigation period. It should be noted, however, thatthe financial situation deteriorated particularly from 1995 onwards,
falling from a profit of 13,4 % to a profit of 1,3 % in the investigation
period.
(g) Investment
(48) Y early investments made by the Community industry increased overall,
rising from ECU 1,17 million in 1994 to ECU 1,29 million in theinvestigation period, with a peak in 1996 of ECU 3,26 million. This
represents an overall increase of 11 % over the period considered.
(h) Employment
(49) Employment rose from 590 in 1994 to 722 in 1995. Since 1995
employment in the Community industry decreased to 669, i.e. by 7,3 %.
(i) Comments on injury
(50) Interested parties argued that the situation of the Community industry
can be considered as stable or good. The decline in market share and
profitability observed during the period considered could not be anindicator of injury because it was compensated for by an improvementin other injury indicators.
In this respect, it should be recalled that, in accordance with Article
3(5) of the Basic Regulation, no single injury factor can necessarily
give decisive guidance as to the situation of the Community industry.In the present case, it is accepted that the following of the injury
indicators as Community production, capacity utilisation, sales, sales
price, investment, employment were not in a negative trend during theperiod under investigation.
It should be noted that the above situation has to be seen in the light of
a long expansion of Community consumption. Indeed, during the
period under investigation production increased at a lower rate than
Community consumption. Moreover, in spite of the increase inproductivity over the same period, the Community industry suffered asignificant loss in market share at a time when Community
consumption had increased by 27 %. Furthermore, the Community
industry showed a significant deterioration in its financial results from!B1999R0603 — EN — 12.05.2000 — 001.001 — 8
1995 onwards, profits falling from 13,4 % to 1,3 % of net sales in the
investigation period, and suffered significant price pressure from thedumped imports throughout the period considered, with price under-cutting of up to 21,4 % during the investigation period.
(51) The exporting producers argued that employment increased during the
period under investigation. However, it should also be noted that afteran increase in 1996, employment levels were again on the decline inthe investigation period. As regards investment, it should be noted that
one Community producer suffered from a factory fire and had to
replace its production machinery in 1996. This is one of the reasons forthe increased investment noted during the period under investigation.
6.Conclusion on injury
(52) In the absence of any other arguments concerning the situation of the
Community industry and in the light of the above, the conclusion that
the Community industry has suffered material injury within themeaning of Article 3(1) of the Basic Regulation, as stated in recitals 36to 51 of the provisional duty Regulation, is hereby confirmed.
G. CAUSATION OF INJURY
1.Effects of the dumped imports
(53) In view of conclusions on cumulation as set out in recital 35 hereto, the
findings on the volume and market share of the dumped imports from
the countries concerned were changed accordingly. It was found that
the volume of dumped imports from Poland, the Czech Republic andHungary increased substantially between 1994 and the investigation
period (169 %). It should be noted that, between 1994 and 1995, the
volume of the dumped imports into the Community increased by 62 %and a further significant increase occurred between 1996 and theinvestigation period. This had the effect that the cumulated total
market share of imports from the three exporting countries concerned
increased from 13,1 % in 1994 to 27,6 % in the investigation period,i.e. by 14,5 percentage points. In contrast, the Community industry’ smarket share decreased by 9,5 percentage points between 1994 and the
investigation period. Moreover, it should be noted that the Community
industry lost 5,4 percentage points in market share between 1996 and1997 alone, which is the period during which the increase in imports
from the exporting countries concerned became particularly relevant.
(54) Moreover, it was found that the prices of the dumped imports undercut
the Community industry’ s prices significantly throughout the wholeperiod considered, including the period from 1995 onwards, thus
exerting downward pressure on the sales prices of the Community
industry.
The decline in profitability experienced by the Community industry
between 1995 and the investigation period was therefore clearly linked
to the depressed sales prices over that period, which in turn occurred at
a time of significant price undercutting by the dumped imports.
(55) One exporting producer claimed that its volume of exports to the
Community had been so small in comparison with Community
consumption of the product concerned during the investigation period
that it could hardly have caused any injury to the Community industry.This argument has to be dismissed because the export volume of anindividual company is not relevant in determining the extent of the
injury caused to the Community industry, injury being assessed for
countries as a whole, and not in relation to single companies.
2.Effects of other factors
(a) General
(56) The cooperating exporting producers argued that any material injury
suffered by the Community industry could not be attributable toimports originating in the three countries concerned.
They argued that the Community industry’ s profitability between 1995
and the investigation period had fallen due to the inflated prices of rawmaterial paid by the Community industry. Furthermore, they claimed!B1999R0603 — EN — 12.05.2000 — 001.001 — 9
that any decline in profitability in this period was also due to increased
overheads, in particular depreciation charges and interest expenses, asa result of the substantial investment made by the Community industry.
The Commission, in recital 58 of the provisional duty Regulation, has
already addressed the argument concerning the price of raw material,
establishing that the Community industry could not raise its prices
sufficiently due to the significant price undercutting found for importsfrom the exporting countries concerned.
(57) Furthermore, as regards the impact of the investments made by the
Community industry on profitability, it was found that these had a
marginal impact on the Community industry’ s costs of productionduring the period considered, mainly because any costs related to thesenew investments were compensated for by gains in productivity and by
an overall reduction in other general and administrative expenses.
(b) Other imports
(58) No new comments were received relating to the effect of imports from
other countries. Therefore, the findings and conclusions on the effectof imports from countries other than Poland, the Czech Republic andHungary on the injurious situation of the Community industry, as
stated in recital 54 of the provisional duty Regulation, are hereby
confirmed.
(c) Europe Agreements
(59) The Hungarian exporting producers argued that in its preliminary
findings the Commission had not distinguished between the growth ofimports caused by dumping and the growth of imports foreseeable dueto the implementation of the Europe Agreement resulting in improved
access to the Community market.
The Europe Agreement, although clearly aimed at establishing
preferential trade relationships with Hungary, by phasing out the dutyon imports of baler twine from 9 % to 0 %, does not prevent the
Community from taking action if unfair trade practices have been
established. Furthermore, the levels of undercutting and dumpingfound for the three countries concerned by this investigation cannot beexplained by the reduction of the duty previously in force. In these
circumstances the phasing out of the duty is not considered sufficient
to break the causal link between the dumped imports and the materialinjury suffered by the Community industry.
This argument has therefore to be rejected.
(d) Effects of the dismantling of the MF A
(60) The Polish exporting producers argued that in its preliminary findings
the Commission did not take into consideration the fact that the
dismantling of the MFA would result in loss of market share and
account, to a certain extent, for the price suppression experienced bythe Community industry.
It should be noted that during the investigated period imports from
Poland were under a quota system in accordance with the textile
agreement between the Community and Poland. The relevant quotasfor 1995, 1996 and 1997 were 5 281, 5 545 and 5 823 tonnesrespectively. Polish exporting producers did not fully use the quota
allocated to them in 1995 and 1996. Only during the investigation
period did the exporting producers from Poland fully use their quota.The increasing trend of the imports originating in Poland coincided
with the presence of dumping.
In this respect it was concluded that the increase in exports to the
Community as such did not cause injury to the Community industry,but the fact that those exports were made, as established in theinvestigation, at dumped injurious prices. Furthermore, the dismantling
of the quota system, provided for by the MFA, happened in 1998 which
is after the period under investigation.
Thus, the dismantling of the MFA in this case appears to be irrelevant.!B1999R0603 — EN — 12.05.2000 — 001.001 — 10
(e) Effects of bad weather conditions
(61) Some exporting producers argued that the injury suffered by the
Community industry was not due to the dumped imports from the
countries concerned, but to the increased costs resulting from allegedlyreduced consumption, due to the adverse weather conditions.
It was found that consumption in the Community market increased
during the period under investigation, when dumped imports from the
countries concerned increased by 169 % despite the weatherconditions. It is clear that the Community industry mainly lost market
share due to the increased presence of dumped imports, rather than the
adverse weather conditions.
(f) Overcapacity of the Community industry
(62) Some interested parties argued that the injury suffered by the
Community industry was not due to the dumped imports, but to
overcapacity.
It was established during the investigation that Community production
was not sufficient to supply the Community baler twine market. Thus,
the argument concerning the alleged overcapacity has to be rejected.
(g) Structural changes in the baler twine market
(63) Furthermore, the same interested parties argued that the Community
industry failed to recognise the gradual market trends from fine baler
twine to nets and from medium to heavy baler twine. Moreover, theyargued that the shift from medium baler twine to heavy baler twine hadhad a direct impact on the total tonnage sold, as less heavy baler twine
than medium baler twine is needed to produce the same weight of
bales.
It is indeed true that during the period under investigation these shifts
occurred in the Community baler twine market. Nevertheless, it was
found that the Community industry, especially with the investment onreplacing old machinery, kept up with these changes by increasing itspresence in the heavy baler twine market. Moreover, it should be noted
that consumption increased during the investigated period, thus the
argument concerning the impact on the tonnage from the shift frommedium baler twine to heavy baler twine has to be rejected.
3.Conclusion on causation
(64) In the light of the above, although it cannot be excluded that some
other factors may have had a negative impact on the situation of theCommunity industry, this impact was not such as to break the causallink between the injury suffered by the Community industry and the
dumped imports originating in the countries concerned. Therefore and
in the absence of any new information, the conclusion that thecombined effect of the imports of baler twine originating in Poland, the
Czech Republic and Hungary, taken in isolation, have caused material
injury to the Community industry is confirmed.
This conclusion is drawn in particular given the loss in market share of
the Community industry, combined with a deterioration in profit-
ability, which coincided with an increase in the volume and market
share of the dumped imports, at prices which constantly undercut thoseof the Community industry.
H. COMMUNITY INTEREST
(65) It was claimed that the conclusion on the Community interest in the
provisional duty Regulation was not supported by factual evidence. Inparticular, it was argued that the Commission had not taken into
consideration the impact of anti-dumping measures on the importers,
in order to support its conclusions concerning the Community interest.
It should be noted that the Commission contacted all known importers.
Only limited and general replies were received. Moreover, no
additional substantiated comments were submitted from the above-
mentioned parties after the adoption of provisional measures.!B1999R0603 — EN — 12.05.2000 — 001.001 — 11
(66) In the absence of a reaction from users, it has been assumed that the
impact of any expected price increase would be limited, taking intoaccount the level of the duty proposed. It is also thought that theimposition of measures will lead to a reinstatement of effective
competition that will enable the Community industry to regain the lost
market share and improve its profitability.
(67) It was therefore concluded that the findings set out in recitals 66 to 67
of the provisional duty Regulation could be confirmed.
I.DEFINITIVE MEASURES
1.Definitive measures
(a) Injury elimination level
(68) A Hungarian exporting producer argued that its export prices had to be
adjusted for the purposes of the injury elimination level assessment, to
take account of the difference in raw material prices between the
Hungarian and the Community industry.
However, as stated in recital 70 of the provisional duty Regulation, the
injury elimination level was determined on the basis of the costs of
production of the Community industry plus a reasonable amount ofprofit. Any considerations of differences in costs of productionbetween the Hungarian and the Community industry are therefore
irrelevant in this respect.
(69) For the purpose of establishing the level of the measures definitively to
be imposed, it was considered that the prices of the dumped imports
should be increased to a non-injurious level. The necessary priceincrease or injury margin was determined on the basis of a comparisonof the weighted-average export prices for those types of baler twine
used in the determination of price undercutting at a cif Community
frontier level, with the actual weighted-average cost of production ofthe Community industry plus a profit margin of 5 %. This profitmargin was considered to be the profitability likely to be achieved in
the absence of injurious dumping and takes account of the fact that the
product concerned is considered by the interested parties as acommodity.
(70) An injury margin was established for each of the cooperating exporting
producers concerned and expressed as a percentage of the cif value oftheir exports to the Community.
(71) Following the disclosure of the provisional findings, comments were
submitted with regard to the method used in the determination of the
injury margin for the Saudi Arabian exporting producer.
It was argued that the Commission should include in its calculations
one specific type of baler twine, which represented the majority of
Saudi Arabian sales to the UK market. The Commission considered
this argument and found that the inclusion of these sales by the SaudiArabian exporting producer to the UK market would make thecalculations more representative. The Commission revised its
calculations accordingly, using the same methodology as explained
in recital 70 of the provisional duty Regulation.
On the basis of this methodology the revised injury margin for the sole
Saudi exporting producer (Synthec) was found to be at a ‘ de minimus ’
level and for two Polish exporting producers PAT Defalin s.a. andTerplast sp z.o.o. 27 % and 6,1 % accordingly. The injury elimination
level for WKI Isoliertechnik Spolska z.o.o., Weltyn is 15,7 %. The
injury margins concerning the other exporting producers remainunchanged.
(72) In view of the findings set out above, it is proposed that definitive
anti-dumping duties be imposed on imports of binder or baler twineoriginating in the Czech Republic, Hungary, and Poland. As to imports
from Saudi Arabia, it is proposed, in application by analogy of Article
9(3) of the Basic Regulation, to terminate the proceeding withoutmeasures.
(73) In accordance with Article 9(4) of the Basic Regulation, for all
exporting producers the proposed duty is based on the lower of the!B1999R0603 — EN — 12.05.2000 — 001.001 — 12
injury or the dumping margin. The same applies for the residual duties.
It should be noted that for the definitive findings Polish cooperatingproducers now account for more than 90 % of total Polish exports.Therefore, a residual duty was calculated using the highest duty found
for an individual cooperating exporting producer located in Poland.
(b) Form and level of the definitive measures
(74) Based on the above conclusions on dumping, injury, causation and
Community interest, it was considered what the form and level of
anti-dumping measures should be to remove the trade-distorting effectsof injurious dumping and to restore effective competitive conditions onthe Community market.
(75) Definitive measures should take the form of ad-valorem duties, the
rates of which have been fixed individually for cooperating companies.However, for those companies which have offered price undertakings,
this form of measure is acceptable. These undertakings reflect the
definitive findings of the investigation with respect to the minimumprices provided therein and have been accepted by CommissionDecision 1999/215/EC (
1).
(c) Undertakings
(76) It will be recalled from recital 72 et seq . of the provisional duty
Regulation that undertakings had been offered by the cooperating
exporting producers in Hungary, and accepted by the Commission.
(77) After the adoption of the provisional anti-dumping measures, one
cooperating Czech exporting producer (Juta a.s.) offered a price
undertaking to the Commission, in accordance with Article 8(1) of the
Basic Regulation. The Commission considered that the undertakingoffered by the exporting producer concerned was acceptable, and, afterconsulting the Advisory Committee, an amendment to the provisional
duty Regulation was accordingly made by Commission Regulation
(EC) No 2649/98 (
2). Following the Commission’ s disclosure of its
definitive findings, the other cooperating Czech company and a Polish
company also offered undertakings which were judged acceptable. The
Commission’ s acceptance of the undertakings is now consolidated inDecision 1999/215/EC.
2.Collection of the provisional duties
(78) Five other Polish producers also offered an undertaking which, in
contrast to those accepted from other producers in the presentproceedings, would have given the companies concerned a free choice
in deciding whether to export under the undertaking or not. The
Commission rejected these offers on the grounds that the companieswould have had the option of exporting higher-priced products underthe undertaking, while lower-priced products bore the duty. It should
be noted that the minimum price which has to be respected for each
product group on a quarterly weighted average basis is intended toensure that all sales are made at a non-injurious price. Allowing somesales to be made outside the undertaking would have prevented this
aim from being achieved.
(79) In the light of the seriousness of the injury suffered by the Community
industry, it is considered necessary that the amounts securd by way of
the provisional anti-dumping duties imposed by Regulation (EC) No
2107/98 should be definitively collected at the rate of the definitiveduties imposed.
J.TERMINATION OF THE PROCEEDING IN RESPECT OF
SAUDI ARABIA
(80) In view of the conclusions of the definitive investigation, the
proceeding concerning imports originating in Saudi Arabia is
terminated by Commission Decision 1999/215/EC without the
imposition of measures. The amounts secured by way of a provisionalanti-dumping duty should therefore be released.!B
(1) See page 34 of this Official Journal.
(2) OJ L 335, 10. 12. 1998, p. 41.1999R0603 — EN — 12.05.2000 — 001.001 — 13
HAS ADOPTED THIS REGULATION:
Article 1
1. As definitive anti-dumping duty is hereby imposed on imports of
polypropylene binder or baler twine, currently classifiable within CN code
5607 41 00 (TARIC code 5607 41 00*10), originating in Poland, the Czech
Republic and Hungary.
2. The rate of the definitive anti-dumping duty applicable to the net,
free-at-Community-frontier prices before duty of the products manufactured
by the companies listed below shall be as follows:
Country CompanyRate of duty
(%)TARIC additional code
Poland BZLP Bezalin 17,2 8450
PAT Defalin s.a. 16,3 8569Industrial Chemistry Research Institute 12,8 8578
Terplast sp z.o.o. 6,1 8579
WKI Isoliertechnik Spolka z.o.o. 15,7 A091All other companies 20,3 8900
Czech Republic All companies 24,8 8900Hungary All companies 32,9 8900
3. Unless otherwise specified, the provisions in force concerning customs
duties and other customs practices shall apply
Article 2
1. Notwithstanding Article 1, the definitive duty shall not apply to imports
of polypropylene binder or baler twine produced and directly exported andinvoiced to an importing company in the Community by the companies listed
in paragraph 2, which have offered price undertakings accepted by the
Commission.
2. Imports made within the context of the undertakings offered and accepted
shall be declared under the following TARIC additional codes:!B
!M1
!B
!M11999R0603 — EN — 12.05.2000 — 001.001 — 14
Country CompanyTARIC additional
code
Czech Republic Juta a.s. 8596
Lanex a.s. 8580
Hungary Partium ’70 Rt 8581
Tiszai Vegyi Kombinat Rt 8582Elso Magyar Kenderfono Rt 8583
Article 3
1. The amounts provisionally secured by Regulation (EC) No 2107/98 with
respect to imports originating in the countries mentioned in Article 1 shall be
collected at the duty rate definitively imposed.
2. The amounts provisionally secured by Regulation (EC) No 2107/98 with
respect to imports originating in Saudi Arabia shall be released.
3. Article 2(2) of Regulation (EC) No 2107/98 shall be repealed.
Article 4
This Regulation shall enter into force on the day following its publication in
theOfficial Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in all
Member States.!M1
!B1999R0603 — EN — 12.05.2000 — 001.001 — 15