1996R0081 — EN — 30.09.1998 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL REGULATION (EC)No 81/96
of 19 January 1996
amending Regulation (EEC)No 2455/93 imposing definitive anti-dumping duties on imports of
monosodium glutamate originating in Indonesia, the Republic of Korea and Taiwan and collectingdefinitively the provisional duties imposed and terminating the proceeding with regard to Thailand
(OJ L 15, 20.1.1996, p. 20)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 2051/98 of 24 September 1998 L 264 1 29.9.1998
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
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COUNCIL REGULATION (EC)No 81/96
of 19 January 1996
amending Regulation (EEC)No 2455/93 imposing definitive anti-
dumping duties on imports of monosodium glutamate originating inIndonesia, the Republic of Korea and Taiwan and collecting defin-itively the provisional duties imposed and terminating the
proceeding with regard to Thailand
THE COUNCIL OF THE EUROPEAN UNION,
Havingreg ard to the Treaty establishingthe European Community,
Having regard to Council Regulation (EC) No 3283/94 of 22 December
1994 on protection against dumped imports from countries not membersof the European Community (
1), and in particular Article 23 thereof,
Having regard to Council Regulation (EEC) No 2423/88 of 11 July
1988 on protection against dumped or subsidized imports from coun-tries not members of the European Economic Community (
2), and in
particular Articles 12, 14 and 15 thereof,
Havingreg ard to the proposal from the Commission submitted after
consultingthe Advisory Committee,
Whereas:
I.PREVIOUS PROCEDURE
(1)The Council, by Regulation (EEC) No 1798/90 (3), imposed
definitive anti-dumpingduties on imports of monosodium g luta-mate originating in Indonesia, the Republic of Korea, Taiwan,and Thailand with the exception of imports from certain produ-cers in these countries from which the Commission acceptedundertakings by Regulation (EEC) No 547/90 (
4), Decision 92/
493/EEC (5) and Decision 93/479/EEC (6).
II.REVIEW INVESTIGATION
(2)By a notice published in the Official Journal of the European
Communities (7), the Commission, after consultingthe Advisory
Committee and in accordance with Article 14 of Regulation(EEC) No 2423/88 (hereinafter referred to as ‘the Basic Regula-tion'), initiated a review of the anti-dumpingmeasures in force,followingan application lodg ed by the Community industry.
The application alleged, in particular, that the normal values
established originally had generally increased, while the exportprices for monosodium glutamate originating in most of thecountries concerned had significantly decreasing during 1993,thus resultingin increased dumpingwhen compared to the orig -inal findings. It was also alleged that the monosodium glutamateoriginating in the countries concerned had been imported in theCommunity at prices lower than the price levels contained in theexistingprice undertaking s and that, therefore, the price under-takings were not suitable measures in this proceeding. It wasfinally alleged that the aforementioned facts have resulted inrenewed financial losses for the Community industry, therebyaggravating the injury suffered. The evidence of changed circum-
(1) OJ No L 349, 31. 12. 1994, p. 1. Regulation as last amended by Regula-
tion (EC) No 1251/95 (OJ No L 122, 2. 6. 1995, p. 1).
(2) OJ No L 209, 2. 8. 1988, p. 1. Regulation as last amended by Regulation
(EC) No 522/94 (OJ No L 66, 10. 3. 1994, p. 10).
(3) OJ No L 167, 30. 6. 1990, p. 1. Regulation as last amended by Regula-
tion (EEC) No 2455/93 (OJ No L 225, 4. 9. 1993, p. 1).
(4) OJ No L 56, 3. 3. 1990, p. 23.
(5) OJ No L 299, 15. 10. 1992, p. 40.
(6) OJ No L 225, 4. 9. 1993, p. 35.
(7) OJ No C 187, 9. 7. 1994, p. 13.
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stances contained in the application was considered sufficient to
justify the openingof a review investig ation.
(3)The Commission officially advised the complainant Communityindustry, the exporters and the importers known to be concernedand the representatives of the exportingcountries, and g ave theparties directly concerned the opportunity to make their viewsknown in writingand to request a hearing .
(4)The Commission sent questionnaires to parties known to beconcerned and received replies to its questionnaires from thecomplainant Community industry, one Indonesian producer andits related sellingcompany, two Korean producers, two Taiwa-nese producers, one Thai producer and two importers in theCommunity.
(5)One Korean exporter, one Indonesian exporter, one importantconsumer of monosodium glutamate and the Fédération des
Associations de l’Industrie des Bouillons et Potages de la CEErequested, and were granted, a hearing.
(6)The Commission sought and verified all information it deemednecessary for the purposes of a determination and carried outinvestigations at the premises of the following companies:
(a) complainant Community producer:
Orsan SA (France);
(b) producers/exporters:
Indonesia:— PT Indomiwon Citra Inti,
— PT Jico Arg ung(related sellingcompany of PT Indom-
iwon Citra Inti);
Republic of Korea:
— Cheil Foods & Chemicals Inc.,
— Miwon Co. Ltd,— Miwon Trading& ShippingCo. Ltd (related selling
company of Miwon Co. Ltd);
Taiwan:
— Ve WongCorporation,
— TungHai Fermentation Ind. Corp.;
Thailand:
— Thai Fermentation Industry Corporation;
(c) importers:
GMS-Chemie-Handelsgesellschaft mbH (Germany).
(7)As Thai Fermentation Industry Corporation submitted a deficient
response to the Commission’s questionnaire and refused to coop-erate in the verification of the information it submitted, in accord-ance with Article 7 (7) (b) of the Basic Regulation, the findingshad to be based on the facts available.
(8)The investigation of dumping covered the period from 1 May1993 to 30 April 1994 (hereinafter referred to as ‘the invest-igation period').
III.CONTINUATION OF EXISTING MEASURES
(9)As the review investigation was still in progress beyond the
normal period of expirty of the measures, the Commission gavenotice(
1), in accordance with Article 15 (3) of the Basic Regula-
tion, that the measures concerning monosodium glutamate origin-atingin Indonesia, the Republic of Korea, Taiwan and Thailand
(1) OJ No C 164, 30. 6. 1995, p. 7.
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would remain in force after the end of the relevant five-year
period, pendingthe outcome of the review.
IV.PROVISIONAL MEASURES
(10)In the course of the review investigation the Commission found
that there were reasons to believe that the undertakings referredto in recital 1 were beingviolated and consequently, by Reg ula-tion (EC) No 1754/95 of 18 July 1995 (
1), withdrew its accep-
tance of the undertakings previously accepted from Cheil Foods& Chemicals Inc., Miwon Co. Ltd, Ve WongCorporation, TungHai Fermentation Ind. Corp., PT Indomiwon Citra Inti and ThaiFermentation Industry Corporation, and imposed instead a provi-sional anti-dumpingduty.
(11)By Regulation (EC) No 2678/95 (2), the Council extended the
validity of these duties for a period of two months.
V.SUBSEQUENT PROCEDURE
(12)Followingthe imposition of the provisional anti-dumpingduties,
Cheil Foods & Chemicals Inc., Miwon Co. Ltd, PT IndomiwonCitra Inti and TungHai Fermentation Ind. Corp. made theirviews known in writing. Parties who requested were granted ahearingby the Commission.
(13)The Commission continued to seek and verify all information itdeemed necessary for its definitive findings. In particular, furtherinvestigations were carried out at the premises of the followingimporters:
— DCT Chemie BV (Netherlands),
— Henry Lamotte GmbH (Germany),— Quimidroga SA (Spain),— Scanchem Ltd (United Kingdom),— Superfos Chemicals A/S (Denmark),— TangFrères (France),— VOS BV (Netherlands).
(14)The parties were informed in writingof the essential facts and
considerations on the basis of which it was intended to recom-mend the imposition of definitive anti-dumpingduties and thecollection of the amounts secured by way of a provisional duty.The parties were also granted a reasonable period within which tomake representations subsequent to the disclosure.
The oral and written comments presented by the parties were
considered and, where appropriate, the Commission’s findingswere modified to take account of them.
(15)The investigation exceeded the period of one year mentioned inArticle 7 (9) (a) of the Basic Regulation due to the unusualcomplexity of this case. As indicated above, verifications werecarried out at the premises of seven importers, the need to obtainand verify additional information only arisingat an advancedstage of the investigation.
VI.PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
1.Description of the product concerned
(16)The product covered by the complaint and for which the review
investigation was initiated is monosodium glutamate produced inthe form of crystals of various sizes and fallingwithin CN codeex 2922 42 10. It is mainly used as flavour enhancer in soups,
(1) OJ No L 170, 20. 7. 1995, p. 4.
(2) OJ No L 275, 18. 11. 1995, p. 22.
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broths, fish and meat dishes and ready made foods. The productis the same as that in the Regulation under review.
(17)Monosodium glutamate is available in various packing sizes,ranging from consumer packs of 0,5 gram to 1 000 kilo bulkbags. Smaller packing sizes are sold via retailers to privateconsumers, while the larger sizes of 25 kilo and more aredestined for industrial users. However, there are no differences inthe characteristics of monosodium glutamate packed in thevarious sizes.
2.Like product
(18)It was found that the conclusions of the Regulation under review
are still valid and that monosodium glutamate produced and soldby the Community industry on the Community market is aproduct like that produced in, and exported from, the four coun-tries in question to the Community.
VII.DUMPING
1.Preliminary remark
(19)With regard to Thai Fermentation Industry Corporation, it should
be noted that this company which was the sole producer inThailand havingsubmitted information, althoug h incomplete, inresponse to the Commission’s questionnaire, refused to cooperatein the verification of this information. In addition, none of thecooperatingimporters was supplied by this company. In thesecircumstances, it was not possible to make an individual findingfor this company, and findings concerning Thailand had to bebased on the facts available as described in recital 33.
2.Normal value
(a)General
(20)For all the exportingcountries concerned, normal values were
established for the relevant product types exported to theCommunity duringthe investig ation period, i.e. on the basis ofpackingsizes of 25 kilo bag s.
(b)Indonesia
(21)For the cooperatingIndonesian producer normal value had to be
constructed in accordance with Article 2 (3) (b) (ii) of the BasicRegulation, since almost all of its domestic sales were made at aloss duringthe investig ation period.
(22)The constructed normal value was based on the company’s ownmanufacturingcosts incurred duringthe investig ation period, inaccordance with Article 2 (3) (b) (ii) of the Basic Regulation. Tothese costs, an amount correspondingto the company’s ownselling, general and administrative expenses was added. In theabsence of any information on profits by other Indonesian produ-cers of the like product or in similar business sectors, it wasconsidered that the average profit realised during the invest-igation period by all other cooperating exporters on theirdomestic sales of the like product made in the ordinary course oftrade would form the most reasonable basis on which to deter-mine profit, since the structure of the markets concerned were toa large extent similar to that in Indonesia.
(c)Republic of Korea
(23)For the two Korean producers which replied to the Commission’s
questionnaire, normal value was established, in accordance withArticle 2 (3) (a) of the Basic Regulation, on the basis of the priceactually paid in the ordinary course of trade for domestic sales ofthe like product, which were made in sufficient quantities topermit a proper comparison.
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(d)Taiwan
(24)For the two Taiwanese producers which replied to the Commis-
sion’s questionnaire, normal value was established, in accordancewith Article 2 (3) (a) of the Basic Regulation, on the basis of theprice actually paid in the ordinary course of trade for domesticsales of the like product, which were made in sufficient quantitiesto permit a proper comparison.
3.Export price
(25)Export prices reported by all cooperatingproducers in Indonesia,
Korea and Taiwan in their replies to the Commission’s question-naire corresponded to the price levels of the price undertakings.However, a verification of these export prices confirmed theallegation in the review application that the price undertakingshad been violated and that the export prices reported were unreli-able.
(26)The above conclusion was reached after consideration of thefollowingfacts: the Commission requested information on resaleprices for the product concerned as well as information on thecosts between importation and resale from all importers havingpurchased monosodium glutamate from those exporters whichcooperated in this review.
A number of importers supplied the requested information on
resale prices and costs and this information was verified at thepremises of those importers which agreed to cooperate further inthe investigation. It was found that these latter importers, whichhad sourced the product concerned from the cooperatingexpor-ters in Korea, Indonesia and Taiwan, had all sold the productconcerned on the Community market at a loss duringthe periodinvestigated and, in some cases, the resale price did not evencover the purchase price. This was a regular pattern of pricingbehaviour, spanningthe entire investig ation period, for which noconvincingreason could be advanced other than the existence ofcompensatory arrangements. In addition, clear evidence wasfound duringthe verification visits to certain importers that theundertakings accepted from Miwon Co. Ltd (Korea) and PTIndomiwon Citra Inti (Indonesia) had been violated, i. e. that theimport prices were not at the level of the price undertakings asdemonstrated. In the case of the Indonesian company, the viola-tion was evidenced by the issue of credit notes relatingto sales ofthe product concerned and, in the case of the Korean company,on the existence of correspondence referringto prices substan-tially below the undertakingprice. The above facts alone showthat the actual export prices for the transactions concerned weresignificantly lower than those reported at the undertaking pricelevel.
In the above circumstances, which strongly support the existence
of compensatory arrangements and the unreliability of exportprices reported, it was concluded that the export prices reportedby the cooperatingexporters should be reconstructed in accord-ance with Article 2 (8) (b) of the Basic Regulation i. e. on thebasis of the prices at which the imported product was first sold toindependent customers, allowance beingmade for all costsincurred between importation and resale and for a reasonableprofit margin for the importers concerned.
(27)Accordingly, for the cooperating exporters in Korea, Taiwan andIndonesia, the export price was constructed by deductingfromthe weighted average resale prices of each of the cooperatingimporters to the first independent customer, an amount whichcorresponded to the importers’ costs between importation andresale plus an amount for profit of 5 %. This amount of profitwas considered reasonable as it was in line with that consideredappropriate for the product concerned in previous investigationsand was not contested. An additional deduction was made forcustoms duty and other costs, such as ocean freight and insur-ance, to arrive at an ex-works level in the countries of origin.
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(28)For those transactions by the cooperatingproducers for which
information on resales by importers could not be obtained, it wasconcluded that, in the light of the facts revealed by the verifica-tion of resale prices of monosodium glutamate exported by thoseproducers carried out at the seven importers referred to in recital13, the export prices submitted by exporters had to be disre-garded for the above same reasons. The export price thereforehad to be established, in accordance with Article 7 (7) (b) of theBasic Regulation, on the basis of the facts available, i. e. it wasconsidered that actual export prices in these cases were at thesame level as the export prices reconstructed as described inrecitals 25 to 27.
4.Comparison
(29)The weighted average normal value of 25 kilo bags, for each
cooperatingexporter, was compared with the export price estab-lished as described in recitals 25 to 28 at the same level of tradeand on an ex-works basis. For the purpose of a fair comparison,due allowance was made for the differences in sellingexpensesclaimed to affect price comparability for which satisfactoryevidence was submitted. Adjustments were made, in particular, inrespect of transport, insurance, handling, loading and ancillarycosts, packingcosts, credit and salesmen’s salaries.
5.Dumping margins
(30)The comparison showed the existence of dumpingmarg ins, being
equal to the amount by which the normal value, as established,exceeded the price for export to the Community.
(31)The weighted average dumping margin for each producer,expressed as a percentage of the free-at-Community-frontierprice, is as follows:
Indonesia
— PT Indomiwon Citra Inti: 64,7 %;
Republic of Korea
— Cheil Foods & Chemicals Inc.: 13,3 %,
— Miwon Co. Ltd: 32,7 %;
Taiwan
— TungHai Fermentation Ind. Corp.: 44,2 %,— Ve WongCorporation: 52,4 %.
(32)
For those producers in Indonesia, Korea and Taiwan which
neither replied to the Commission’s questionnaire nor otherwisemade themselves known, the dumpingmarg in was determined onthe basis of the facts available in accordance with Article 7 (7)(b) of the Basic Regulation. In this respect, it was considered, inthe light of the proportion of the total imports into theCommunity covered by the cooperatingproducers in each of thethree countries concerned, that the findings made with regard tothese companies provided the most appropriate basis for thedetermination of the dumpingmarg in.
On this basis it was concluded that it would provide a bonus for
non-cooperation, and might lead to circumvention of anti-dumpingmeasures, should any of the producers concerned bedeemed to have dumped at levels lower than the highest dumpingmargin found for any producer in the exporting countryconcerned which had cooperated.
It was, therefore, considered appropriate to use, for the non-coop-
erating producers concerned, the highest dumping margin found
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for a cooperatingproducer in the respective country, i. e. 64,7 %
for Indonesia, 32,7 % for Korea and 52,4 % for Taiwan.
(33)As far as Thailand is concerned, and for the reasons described inrecital 19, it was considered appropriate, given the absence ofany cooperatingproducer in this country, to base the country-wide dumping margin on the highest margin found for any coop-eratingproducer in one of the other countries, i. e. 64,7 %.
VIII.INJURY
Preliminary remark
(34)In accordance with Article 14 of the Basic Regulation, the invest-
igation sought to determine the extent of any changes in thecircumstances established in the Regulation under review withregard to the behaviour of the exporters on the Communitymarket or the situation of the Community industry. Since theoriginal five-year period of validity of the measures beingreviewed would normally have lapsed, the question of the likeli-hood of inury recurringin the absence of measures was alsoexamined.
The examination of the inury trends covered the period from
1991 to 1993 and the investigation period.
A. COMMUNITY INDUSTRY
(35)The complainant Community producer is the sole producer of the
like product in the Community and, consequently, represents totalCommunity production of the product concerned. Therefore, itconstitutes the Community industry in the meaningof Article 4(5) of the Basic Regulation.
B. SITUATION OF THE COMMUNITY INDUSTRY
(36)As there is only one Community producer of the product
concerned and due to the confidential nature of the informationrelatingto injury indicators, the fig ures describingthe develop-ment of production, capacity, capacity utilization, Communityconsumption, sales volume, market shares, price evolution andprofitability are given in the form of indices, starting from a baseof 100 for 1991 figures.
Production, capacity and capacity utilization
(37)Production by the Community industry of the product concerned
decreased in 1992 to 97,58, but recovered slightly in 1993 to98,58. Duringthe investig ation period, Community productionachieved 101,08.
The Community industry’s production capacity for the product
concerned remained by and large stable. The capacity decreasedin 1992 to 99,8 and thereafter increased in 1993 to 101,76 andduringthe investig ation period to 103,72. Between 1991 and theinvestigation period, the capacity utilization rate varied between100 and 96,88.
Community consumption
(38)Community consumption was stable duringthe period examined.
It was, on an indexed basis, 100 in 1991 and decreased to 96,83in 1992. In 1993, it increased to 101,08 and decreased subse-quently to 100,25 duringthe investig ation period.
Sales volume and market shares
(39)The Community industry’s sales volume in tonnes dropped from
100 in 1991 to 93,21 in 1992. In 1993, the quantity sold was107,36 and during the investigation period it decreased slightly to106,12.
The market share of the complainant Community producer
dropped, also on an indexed basis, from 100 in 1991, to 92,43 in1992, increased to 102,73 in 1993 and fell again slightly to
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102,28 duringthe investig ation period. It should be noted,
however, that its market share was at all times very substantial.
Price evolution
(40)Although the Commission industry’s sales prices increased
slightly to 101,66 in 1992, they fell substantially in the followingyear to 95,13. The situation improved somewhat duringtheinvestigation period, as the prices recovered to 95,91.
Profitability
(41)At the outset, it should be noted that, despite the anti-dumping
measures in force, the profitability of sales by the Communityindustry of the product concerned was at no time duringtheperiod examined at a satisfactory level, although the Communityindustry had achieved a reduction in costs of production. Indeed,the Community industry’s actual level of profitability was notonly far below the level considered by the Regulation underreview as appropriate, as evidenced by the request for a review ofthe undertakings submitted by Community industry in 1992, butremained so low over an extended period of time that the indus-try’s viability was jeopardized. The already low level prevailingin 1991 underwent a further sharp decrease in 1992. The down-ward trend continued in 1993, when the Community industrycame very close to a loss-makingsituation. The investig ationperiod saw some improvement of profitability which did not,however, reach the level of 1991. When consideringprofitability,it should also be borne in mind that, as mentioned above, itsdecline would have been even more significant had theCommunity producer not achieved a reduction in costs of produc-tion.
Conclusion
(42)The examination of the abovementioned indicators shows that,
notwithstandingcertain positive effects of the anti-dumpingmeasures currently in force, the financial situation of theCommunity industry remains precarious. While material injurywas established by the Regulation subject to review for theperiod from January 1989 to September 1992, the examination ofthe facts established in the current review demonstrates thatmaterial injury has persisted in the subsequent period. This isshown in particular by the further decrease in prices and thepersistent extremely low level of profitability.
C. BEHAVIOUR OF THE EXPORTERS CONCERNED
Volume of imports
(43)The volume of imports from the four countries concernedincreased from 11 228 tonnes in 1991 to 12 871 tonnes in 1992,but decreased thereafter to 7 921 tonnes in 1993 and 7 478 tonnesin the investigation period. With the exception of Thailand, theimports of the product concerned broken down by the four coun-tries involved, follow, by and large, a similar pattern to thedevelopment of total imports of monosodium glutamate fromIndonesia, Korea, Taiwan and Thailand. They represented thefollowingmarket shares:
(in %)
1991 1992 1993Investigation
period
Indonesia 2,99 3,55 3,21 2,34
Korea 9,94 12,34 6,78 7,39
Taiwan 7,56 8,55 4,61 4,24
Thailand 0,70 0,64 0,18 0,10
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This represents a development of the total market share of the
imports concerned from 21,18 % in 1991 to 25,07 % in 1992with a subsequent decrease to 14,78 % in 1993 and 14,07 % inthe investigation period.
Prices of the dumped imports
(44)It was investigated whether the exporting producers had undercut
the prices of the Community industry duringthe investig ationperiod. A comparison was therefore made on the basis of theconstructed weighted average export price (cif Community fron-tier, duty paid) as established in recitals 25 to 28 and theCommunity industry’s weighted average ex-works selling pricefor monosodium glutamate sold in the Community.
The level of undercuttingof the Community industry’s prices
was found to range between 20 % and 22 % for imports origin-atingin Taiwan, between 9 % and 11 % for imports orig inatinginthe Republic of Korea and 26 % for imports originating in Indo-nesia. With regard to the Thai exporter, it was not consideredpossible to calculate undercuttingg iven the fact that, as set out inrecital 19, they did not cooperate in the investigation. In view ofthe conclusion reached on the existence of compensatory arrange-ments, entered into by the cooperatingexporters (see recital 26),Eurostat figures concerning imports from Thailand could not beconsidered as a reliable source.
Conclusion
(45)Although the market penetration of imports from the countries
concerned has decreased considerably, their market share hasremained substantial, and a clear pattern of price undercuttinghasemerged.
D. CAUSE OF INJURY
1.Cumulation
(46)As far as imports from Thailand are concerned, it was concluded
that these imports, whose market share decreased to 0,1 % in theinvestigation period, should not be analysed cumulatively withimports of the other countries concerned with a view to deter-miningtheir effect on the situation of the Community industry assuch a low import volume could not have any serious impact onthe latter.
As in the original investigation and the reviews carried out prior
to this review, it was found that the effects of the imports fromKorea, Taiwan, and Indonesia have to be analysed cumulatively,since the imports of the product under consideration originatingin each of these countries are alike in all respects, interchange-able and followed the same pricingbehaviour. These importscompeted with the like product manufactured by the Communityindustry and with each other.
2.Effect of the dumped imports from the countries
concerned
(47)In determiningwhether any chang es had occurred in the causallink established by the Regulation and the Commission decisionsubject to review between the dumped imports and the materialinjury, the further developments since these earlier findings wereexamined. While some of the Community industry’s indicatorsimproved, its performance remained poor in particular regardingits price level, which fell after the imposition of the measures,and its continuinglow profitability. The latter can clearly belinked to the pricingbehaviour of the exporters as established inrecitals 25 to 28 which through price undercutting in a pricesensitive market managed to maintain their pressure on the pricesof the Community industry.
(48)Takingthis into consideration as well as the fact, as was outlinedabove, that the volume of imports from the three countriesconcerned remained at a substantial level, there cannot be any
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reasonable doubt that these imports have been a decisive factor
on the Community industry’s continuingpoor financial situation.
In conclusion, although certain improvements occurred in the
Community industry, it is still experiencingoverall materialinjury as a result of the behaviour of the Indonesian, Korean andTaiwanese exporters which, through price undercutting, could notfail to affect severely an industry in the process of recoveringfrom dumping.
3.Effect of other factors
(49)The impact on the situation of the Community industry of factors
other than the dumped imports concerned was also examined.
Imports from Brazil
(50)It was alleged that the Community producer imported substantial
quantities of the product concerned from Brazil at prices withwhich exporters from the four countries in question wereprevented from competing. It was found that the Communityproducer imported monosodium glutamate from Brazil during theinvestigation period in order to meet a sudden surge in demandand to counteract the effects of industrial action. The Communityproducer’s imports only however represented a small proportionof its output. Consequently, the purpose of these imports by theCommunity producer was to defend its competitive position inthe Community and to maintain its market share. Moreover,contrary to the above allegation, these products were importedand resold at a prive level which was comparable with theCommunity producer’s own production costs and sellingpricesrespectively.
(51)Some interested parties claimed that imports of monosodiumglutemate from Brazil were the reason for the difficult situationof the Community industry.
It was found that, while imports originating in Brazil increased
substantially over the period examined (from 1 076 tonnes in1991 to 4 376 tonnes duringthe investig ation period), the pricelevels of these imports, on the basis of information from Eurostat,increased slightly. Even were it to be concluded that importsfrom Brazil had contributed to the injury suffered by theCommunity industry, this would not alter the fact that the injurycaused by the dumped imports concerned, taken in isolation, ismaterial.
Imports from the United States of America
(52)One party claimed that imports of monosodium glutamate from
the United States of America might be responsible for the diffi-cult situation of the Community industry.
It was found, however, that imports from the United States
during the period examined remained at negligible levels (23tonnes in 1991 and 27 tonnes in 1993 and, in terms of marketshares, 0,04 % in 1991 and 0,05 % in 1993) and were sold atprices well above those of the dumped imports. It was, in addi-tion, claimed by the complainant that imports originating in theUnited States surged in July and August 1994. This development,however, took place after the investigation period and, therefore,could not be taken into consideration, in conformity with theCommunity institutions consistent practice, for the purpose of thepresent injury determination. Indeed, the final determination ofthe facts in an investigation always refers to the investigationperiod. Developments, which occurred after the end of thisperiod, cannot be taken into consideration since any other methodwould render the investigation virtually permanent, so that opera-tors concerned could manipulate the results by short-livedchanges of the pricing policy. Finally, neither the Basic Regula-tion nor the Agreement on Implementation of Article VI ofGATT 1994 warrant another method.
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Therefore, imports from the United States could not have had any
significant negative impact on the situation of the Communityindustry duringthe period considered which ended in April 1994.
Other imports
(53)The effects of imports other than those from Brazil, the United
States and the four countries concerned on the Communityindustry were also examined on the basis of the figures reportedby Eurostat. These imports, made mainly from Switzerland,Austria, China, Japan and HongKong , were, with the exceptionof Hong Kong, usually at significantly higher prices than thosefrom the four countries concerned. The quantities imported fromHongKongwere, in any event, very low. In this context, it isinterestingto note that neither Switzerland, Austria nor HongKonghad any production facilities for monosodium g lutamate.
In these circumstances, it can be ruled out that these other
imports have had any significant adverse impact on the situationof the Community industry.
Mismanagement of the Community industry
(54)One importer and the Fédération des Associations de l’Industrie
des Bouillons et Potages de la CEE alleged that the Community
industry used outdated technology in order to produce theproduct concerned. It was also alleged that the injury sustainedby the Community industry was due, at least in part, to theCommunity industry’s own deficient management andknow-how.
However, these allegations were not substantiated and, therefore,
had to be rejected. They were also contradicted by the Commis-sion’s own findings on the productivity and efficiency of theCommunity industry, as shown by its successful rationalizationefforts.
4.Conclusion
(55)In these circumstances, it was concluded that, even were it
accepted that the factors mentioned above had an adverse effecton the situation of the Community industry, the dumped importsfrom Indonesia, Korea, and Taiwan had, taken in isolation,continued to cause material injury to the Community industry.
E. RECURRENCE OF INJURY
(56)In the light of the above analysis and in order to assess the effect
of expiry of the measures in force, the followingwas considered:
(57)— as far as Thailand is concerned, as stated in recital 46, the
impact of exports from this country is negligible and there isno indication of a possible resurgence of dumped imports.The measures should therefore be repealed,
— monosodium glutamate is a commodity and price is the key
factor in customer choice, all customers beingindustrialusers. Sales at low prices have therefore inevitable substitu-tion effects as certain customers choose to be supplied at thelowest price offered,
— undercuttingmarg ins of up to 26 % have been established.
These injurious prices would most likely persist in the futureand would continue to prevent the Community industryrecoveringfrom injury, the situation of which would befurther aggravated should the anti-dumping measurescurrently in force not be continued.
— further evidence of the need for the Community industry to
continue to be protected against injurious dumping is thebehaviour of the exporters which led to the withdrawal of theundertakings by the Commission. Export prices reported bythe exporters had to be considered as unreliable because oflow resale prices on the Community market which can onlybe explained by the existence of compensatory arrangements.The likelihood of injurious dumpingrecurringis alsoconfirmed by information received by the Commission
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concerning exports of monosodium glutamate originating inthe four countries concerned which were made to the threenew Member States before their Accession. These exportswere found to have been made at prices substantially lowerthan the price level in the Community, demonstratingthepropensity for dumpingby the countries concerned.
(58)Under these circumstances it is concluded that the injury alreadysuffered by the Community industry and caused by dumpedimports from Korea, Taiwan and Indonesia could only worsen ifmeasures were allowed to lapse.
IX.COMMUNITY INTEREST
(59)In Regulation (EEC) No 2455/93, the Council concluded that it
was in the Community interest that measures be imposed onimports of monosodium glutamate from the four countriesconcerned. It was found that the conclusion on Communityinterest as set out in the Regulation subject to review shouldremain unchanged since in the subsequent period the develop-ment of the facts underlyingthis conclusion have only streng th-ened the case for maintainingthe measures.
(60)It should be noted that monosodium glutamate production issubject to strict environmental standards, continuingcompliancewith which may require substantial investment. The ability of theCommunity industry to underake any necessary investmentwould be endangered if its poor financial situation resulting frominjurious dumpingwere not remedied and effective competitionnot restored through the maintenance of anti-dumping measures,amended to reflect the latest findings.
(61)One interested party argued that to maintain the anti-dumpingmeasures at their current level would allow the Communityindustry to reinforce its strongposition on the Community marketto the detriment of users of monosodium glutamate. In thisrespect, it should be noted that, notwithstandingthe sig nificantshare of the Community market held by the Community industry,there is sufficient competition in that market as demonstrated bythe presence of imports from seven other countries duringtheinvestigation period, equal in volume to those from the countriesconcerned. As far as the impact of anti-dumpingmeasures on thesituation of the Community users of monosodium was concerned,it was acknowledged that any increase of the price of inputs wasof importance to them. However, although the industry usingmonosodium glutamate refused to indicate the percentage of itstotal costs attributable to monosodium glutamate, it did not denythat, as revealed by the investigation, the price of monosodiumglutamate has only a minor effect on the costs of the products inwhich it was used.
(62)In the light of the above, it is considered to be in the interest ofthe Community that the anti-dumpingmeasures remain in force,duly amended, in order to give the Community industry thenecessary opportunity to continue to redress its precarious finan-cial situation.
X.AMENDMENT OF THE MEASURES IN FORCE
1.Cooperating exporters
(63)The cooperatingexporters, on beinginformed of the finding s of
the investigation, offered new minimum price undertakings inrespect of exports to the Community of the product concerned.However, for the reasons described in recitals 25 to 28 above, itwas considered that undertakings were not an appropriatemeasure for removingthe injury beingsuffered by theCommunity industry. Indeed, the undertakings previouslyaccepted had to be withdrawn owingto violation and no appro-priate guarantees were given by the exporters regarding pricelevels or compliance that could justify the acceptance of such
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undertakings. Accordingly, the undertakings offered were, afterconsultation, not accepted by the Commission.
(64)For the purpose of establishingthe level of the duty to beimposed, account was taken of the dumpingmarg ins found andof the amount of duty necessary to eliminate the remaininginjurysustained by the Community industry.
Since the remaininginjury consisted mainly of price depression
and continuingabnormal low profitability, the removal of suchinjury required that the industry be put in a position in which itsprices could be increased to a profitable level. In order to achievethis, export prices should be increased accordingly. For calcu-latingthe necessary price increase, it was considered that pricesof the dumped imports had to be compared with the cost ofproduction of the Community industry plus a margin of profitsufficient to ensure the viability of that industry.
On this basis, the weighted average export prices were compared,
for the investigation period, on a free-at-Community-frontierlevel increased by customs duties, where appropriate, with thecost of production of the Community producer concerned, plus amargin of profit. This profit level used, which cannot be statedfor reasons of confidentiality and which did not reach the level ofprofits made by that producer prior to the impact of the importsconcerned, is considered to be obtainable in the absence ofdumped imports and is in line with that considered reasonable bythe Commission in the original investigation.
These comparisons showed injury margins which, expressed on a
weighted average basis as a percentage of the free-at-Community-frontier price, ranged from 25,4 % to 35,7 %.
(65)For one exporter, the margin of dumping found was below thecorrespondingincrease in export prices necessary to remove theinjury as calculated above. The duty to be imposed for thiscompany should, therefore, correspond to the dumpingmarg inestablished. For the other cooperatingexporters, as the marg insof dumpingfound were above the correspondingincreases inexport prices necessary to remove the injury, as calculated above,the duties to be imposed for these companies should, therefore,correspond to the injury margins established.
(66)Given the potential for absorption of the effect of an ad valorem
anti-dumping duty and given the violation of the undertakings, asestablished, a duty should be imposed in the form of a specificduty, i.e. fixed amount of ecus per kilo.
2.Other producers in the exporting countries concerned
(67)The cooperatingexporters accounted for a very hig h proportion
of total exports of the product concerned to the Community. Inestablishingthe level of duty for producers in the countriesconcerned which neither replied to the Commission’s question-naire nor otherwise made themselves known, it was, therefore,considered appropriate to establish the level of duty applicable tosuch producers at the highest amount of duty found for anexporter in each country.
3.Conclusion
(68)The Regulation subject to review should therefore be amended in
accordance with the above findings.
XI.COLLECTION OF THE PROVISIONAL DUTY
(69)In view of the dumpingmarg ins established, the violation of the
undertakigns and of the seriousness of the injury caused to theCommunity industry, it is considered necessary that the amountssecured by way of the provisional anti-dumpingduty be defin-itively collected, with the exception of those collected for importsfrom Thailand for the reasons set out in recital 57,
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HAS ADOPTED THIS REGULATION:
Article 1
Article 1 of Regulation (EEC) No 2455/93 shall be replaced by the
following:
▼M1
‘Article 1
1. Definitive anti-dumpingduties are hereby imposed on imports
of monosodium glutamate, falling within CN code ex 2922 42 00(TARIC code 2922 42 00*10), originating in the Republic of Koreaand Taiwan.
2. The rates of duty applicable of the net, free-at-Community-
frontier price, before duty, shall be as follows:
Country Product manufactured by Duty TARIC code
Taiwan All companies 20,4 % —
Korea — Cheil JedangCorporation 10,5 % 8843
— All other companies 12,3 % 8900'
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Article 2
The amounts secured by way of provisional anti-dumpingduties
pursuant to Regulation (EC) No 1754/95 shall be definitively collectedin full. The amount secured by way of provisional duty on imports fromThailand shall be released.
Article 3
This Regulation shall enter into force on the day following its publica-
tion in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in
all Member States.