COMMISSION IMPLEMENTING REGULATION (EU) 2021/2239

of 15 December 2021

imposing a definitive anti-dumping duty on imports of certain utility scale steel wind towers originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1), and in particular Article 9(4) thereof,

Whereas:

1. PROCEDURE

1.1. Initiation

(1) On 21 October 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of certain steel wind towers (‘SWT’ or ‘the product under investigation’) originating in the People’s Republic of China (‘the country concerned’ or ‘China’ or ‘the PRC’) on the basis of Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the Council (‘the basic Regulation’). It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 9 September 2020 by the European Wind Tower Association (‘the complainant’ or ‘EWTA’). The complaint was made on behalf of the Union industry of steel wind towers in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2. Interested parties and comments on initiation

(3) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers, the Chinese authorities and known users/importers about the initiation of the investigation and invited them to participate.

(4) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. The Commission held hearings with three users in March 2021.

(5) In its comments on the initiation, the Chinese industry organisation China Chamber of Commerce for Import & Export of Machinery & Electronic Products (‘CCCME’) claimed that the complainant failed to provide a meaningful summary of the confidential information used in the complaint, in particular with regard to Annexes 2.1 to 2.4 of the complaint. According to the CCCME, the excessive use of confidential data prevented the party from understanding the situation in the investigation period. The party reiterated those claims in its comments and hearing after the provisional stage.

(6) The Commission noted that in the respective annexes, the complainant marked as confidential only company-specific information, such as turnover, profit, production and sales volume of each company that provided its data for the preparation of the complaint. The aggregated figures of each indicator were submitted in the open version of the complaint. Contrary to CCCME’s claims, the information contained in the open version of the complaint was thus sufficient for the CCCME to submit detailed comments on the calculation of the injury margin in the complaint. EWTA itself also submitted, in reaction to CCCME’s comments, that it was contrary to the interest of the Union producers to give detailed information about their individual performances, even indexed, during the period considered (3). Consequently, the Commission rejected the claim.

1.3. Sampling

(7) In its Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

1.3.1. Sampling of Union producers

(8) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of production and Union sales volumes reported by the Union producers in the context of the pre-initiation standing analysis, taking also into account their geographical location. This sample consisted of three Union producers, located in two different Member States, which accounted for around 38 % of the estimated Union sales and production volume of the like product at initiation stage. The Commission invited interested parties to comment on the provisional sample. No party made any comments.

(9) The provisional sample consisting of three Union producers was thus considered to be representative of the Union industry and was confirmed as the final sample.

(10) CCCME and the association for wind energy in Europe ‘WindEurope’ questioned the representativeness of the complainants well after the deadline to comment on the sample of Union producers had past. The comments made by both parties could not alter the decision about the sample of Union producers and were dismissed.

1.3.2. Sampling of importers

(11) Upon initiation, one party alleged to be an unrelated importer provided the information specified in the Notice of Initiation and agreed to be included in the sample. That party turned out to be part of a group which main interests are equivalent to those of a user of SWT. Consequently, the Commission decided that sampling was not necessary. No comments were made to this decision.

1.3.3. Sampling of exporting producers in China

(12) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(13) Seven producers in the country concerned provided the requested information and agreed to be included in the sample. Only six of them exported steel wind towers to the Union during the investigation period. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. The provisional sample consisted of the companies Chengxi Shipyard Co., Ltd. (‘Chengxi Shipyard’), CS WIND China Co., Ltd. (‘CS Wind’), and Suzhou Titan New Energy Technology Co., Ltd. (‘Suzhou Titan’). In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the country concerned were consulted on the selection of the sample.

(14) One cooperating exporting producer commented on the selection of the provisional sample. The company Penglai Dajin Offshore Heavy Industry Co., Ltd. (‘Penglai Dajin’) requested to be included in the sample and claimed that the provisional sample was not representative for several reasons. First, the company argued that the sample was not geographically representative, as all sampled companies were located in Jiangsu province. Second, Penglai Dajin pointed out that one of the sampled companies is a State-owned enterprise and another one is a subsidiary of a foreign company. Third, the company claimed that, unlike some of the sampled exporting producers with a complicated group structure, it could reasonably be investigated within the time available. Finally, Penglai Dajin submitted that two of the sampled exporting producers were not representative of its production since they produced only large diameter steel towers.

(15) The Commission noted that, in line with the provisions of Article 17 of the basic Regulation, the provisional sample included companies with the largest representative volume of production, sales or exports, which could reasonably be investigated within the time available. In addition, Penglai Dajin did not bring forward any compelling reasons as to why it should replace any of the provisionally sampled exporting producers. Consequently, the Commission rejected the request by Penglai Dajin and confirmed the sample.

(16) Shortly thereafter, one of the sampled exporting producers, the company CS Wind, withdrew its cooperation. The Commission took note of this decision and informed the company of its intention to determine any potential anti-dumping duties for this company pursuant to the provisions of Article 18 of the basic Regulation. In addition, the Commission informed the Mission of the People’s Republic of China about the situation.

(17) Subsequently, the Commission supplemented the sample of exporting producers by adding to it the company Penglai Dajin, which was the next company of those that cooperated in terms of volume of exports and could reasonably be investigated taking into account the time limits.

1.4. Individual examination

(18) Initially, four exporting producers in the PRC that returned the sampling form requested individual examination under Article 17(3) of the basic Regulation. On the day of initiation, the Commission made the questionnaires available online (4). When announcing the sample, the Commission informed the exporting producers which were not sampled, that they were required to provide a questionnaire reply if they wished to be examined individually. However, none of the companies submitted a questionnaire reply. Therefore, no individual examination was granted.

1.5. Replies to questionnaires

(19) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

(20) The Commission made questionnaires for Union producers, unrelated importers, users, and exporting producers available online (5) on the day of initiation. The interested parties were made aware of the location of the questionnaires in the Notice of Initiation as well as when the Commission announced the sample or its decision to abandon sampling.

(21) Questionnaire replies were received from the three sampled exporting producers, three sampled Union producers and two users. No reply was received from the GOC. Subsequently, the Commission informed the GOC of its intention to apply Article 18 of the basic Regulation with regard to any potential findings of the existence of significant distortions.

(22) In view of the ongoing COVID-19 pandemic and the confinement measures put in place by various Member States as well as by various third countries, the Commission could not carry out verification visits pursuant to Article 16 of the basic Regulation. The Commission instead cross-checked remotely the information sent by parties in line with its Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (6).

(23) The Commission sought all the information deemed necessary for the determination of dumping, resulting injury and Union interest. In this respect, the Commission carried out remote crosschecks (‘RCC’) of the following companies/parties: Union producers and their association — GRI Renewable Industries S.L., Madrid, Spain — Welcon A/S, Give, Denmark — Windar Renovables S.L, Avilés, Spain — EWTA, Brussels, Belgium Users — GE Wind Energy GmbH, Salzbergen, Germany (‘GE’) — Vestas Wind Systems A/S, Aarhus N, Denmark and related companies (‘Vestas’) Exporting producers in the PRC — Chengxi Shipyard Co., Ltd., Jiangyin City and its related domestic producer CSSC Guangxi Shipbuilding & Offshore Engineering Co., Ltd., Qinzhou City — Penglai Dajin Offshore Heavy Industry Co., Ltd., Penglai and its related domestic producer Liaoning Dajin Heavy Industry Corporation, Fuxin — Suzhou Titan New Energy Technology Co., Ltd., Taicang City and its related domestic producers Baotou Titan Wind Power Energy Equipment Co., Ltd., Baotou Rare Earth High-tech Zone and Heze Titan New Energy Equipment Co.,Ltd., Heze City

1.6. Investigation period and period considered

(24) The investigation of dumping and injury covered the period from 1 July 2019 to 30 June 2020 (‘the investigation period’ or ‘the IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2017 to the end of the investigation period (‘the period considered’).

1.7. Non-imposition of provisional measures

(25) Pursuant to Article 7(1) of the basic Regulation, the deadline for the imposition of provisional measures was 18 June 2021. On 21 May 2021, in accordance with Article 19a(2) of the basic Regulation, the Commission informed the interested parties of its intention not to impose provisional measures.

(26) On 18 June 2021, the Commission confirmed its decision not to impose provisional measures and gave the interested parties the opportunity to submit additional information and/or to be heard. CCCME requested a hearing and submitted comments. The comments and claims presented during the hearing and in its submission are properly addressed in the respective sections of this regulation.

(27) Since no provisional anti-dumping measures were imposed, no registration of imports was performed.

1.8. Subsequent procedure

(28) The Commission continued to seek and verify all the information it deemed necessary for its final findings. When reaching its definitive findings, the Commission considered the comments submitted by interested parties.

(29) The Commission informed all interested parties of the essential facts and considerations on the basis of which it intended to impose a definitive anti-dumping duty on imports of steel wind towers originating in China (‘final disclosure’). All parties were granted a period within which they could make comments on the final disclosure.

(30) Parties who so requested were also granted an opportunity to be heard. On 23 September 2021, a hearing with EWTA took place. On 27 September 2021, hearings took place with CCCME and Suzhou Titan.

(31) After final disclosure and during the above mentioned hearing with the Commission services, CCCME repeated its allegation summarized in recital (5) above that EWTA would have made excessive use of confidential information. This would not only relate to the information provided in the complaint, but also to the information as provided to interested parties upon final disclosure. With regard to the latter, CCCME and Suzhou Titan found in particular that the disclosure of the underselling calculations provided to the exporting producers lacked sufficient detail on the side of the target price computation. Chengxi Shipyard made similar comments after final disclosure. The Commission reviewed the disclosed data and, although the exact target prices per product type of the Union industry could not be provided for confidentiality reasons, it provided the three sampled exporting producers with additional disclosure on the undercutting and underselling calculations on the same day.

(32) Notwithstanding the above, CCCME and Suzhou Titan requested the intervention of the Hearing Officer in view of (i) the fact that they considered that the Commission should better check certain Union industry data (this is addressed in recital (307)), (ii) that they would like to have the Hearing Officer’s view on the source the Commission had used for establishing Chinese import prices of SWT’s (addressed in recitals (317)-(318)), (iii) the discrepancies found when comparing three submissions from the complainant with each other (addressed in recital (306) and (307)), and (iv) the significant differences between dumping and injury margins (addressed in recital (292)-(295). A hearing with the Hearing Officer took place on 14 October 2021, during which the Commission clarified these issues. The Hearing Officer concluded that there was no breach of the rights of defence.

(33) After final disclosure, EWTA claimed that procedural problems in the investigation damaged the complainants’ right of defence and ability to assess and address the submissions from Chinese exporters and users. According to EWTA, throughout the investigation, Chinese exporters and other interested parties had made excessive use of confidential information while also consistently failing to provide meaningful summaries of their confidential submissions. This would have made it impossible for the complainants to assess and make meaningful comments on the relevant data and allegations in breach of their right to due process.

(34) The Commission dismissed the claim, as it was not further substantiated. Moreover, the Commission noted that all information provided in sensitive format was likewise submitted for the open file wherever its release would not have impaired the confidentiality interests of the submitting party.

(35) The comments submitted by the interested parties were considered and taken into account where appropriate in this Regulation.

(36) After final disclosure, several parties argued that the Commission should suspend the measures pursuant to Article 14(4) of the basic Regulation. The complainants and several Union producers opposed any suspension of measures. The Commission acknowledged receipt of the information provided by these parties and reminded them that, should the Commission consider it appropriate, the Commission may decide to suspend measures where market conditions have temporarily changed to an extent that injury would be unlikely to resume as a result of the suspension, and when it is in the Union interest to do so.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(37) Upon review of the product description in the notice of initiation, and in order to avoid any misunderstanding for national customs authorities, the Commission found it appropriate to slightly amend the description of the product as it was published in the notice of initiation. The changes did not require an amendment of the notice and did not affect interested parties in the proceeding. The changes are expressed below in italics.

(38) The product concerned is certain utility scale wind towers of steel, whether or not tapered, and sections thereof (7), whether assembled or not, whether or not including an embedded tower foundation section, whether or not joined with nacelles or rotor blades, and that are designed to support the nacelle and rotor blades for use in wind turbines that have electrical power generation capacities – either in onshore or offshore applications – equal to or in excess of 1,00 megawatt (‘MW’) and with a minimum height of 50 meters measured from the base of the tower to the bottom of the nacelle (i.e. where the top of the tower and nacelle are joined) when fully assembled (‘SWT’), originating in the PRC, currently falling under CN codes ex 7308 20 00 (TARIC code 7308200011), and ex 7308 90 98 (TARIC code 7308909811) and, when imported as part of a wind turbine, currently falling under CN codes ex 8502 31 00 (TARIC codes 8502310011 and 8502310085) (‘the product concerned’).

2.2. Like product

(39) The investigation showed that the following products have the same basic physical and technical characteristics as well as the same basic uses: — the product concerned; — the product produced and sold on the domestic market of the PRC; and — the product produced and sold in the Union by the Union industry.

(40) The Commission decided that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

2.3. Claims regarding the product scope

(41) Vestas requested the exclusion of larger steel wind towers on the grounds that the Union industry has capacity mainly for smaller towers (8).

(42) The Commission found the grounds for the request unfounded because, overall, the Union industry has production capacity for all required sizes of SWT, even if not all Union SWT producers manufacture the same dimensions. The Commission also found that all steel wind towers, no matter their size or point of importation, share the same features in terms of their basic physical and technical characteristics, their end-uses and interchangeability. The Commission therefore rejected the exclusion request.

(43) CCCME submitted that because of the diversity within the product scope, the product produced and sold on the domestic market of the PRC and the product produced and sold in the Union by the Union industry could not be considered as like products. Following final disclosure, CCCME asked for a narrowing of the product scope on the grounds of existing differentiated regulations and subsidies in the Union for tall versus short towers and the expected increase in height of SWT. CCCME provided no evidence on what models of towers should be excluded or the technical characteristics of the towers that should in its view be excluded.

(44) The above claim is rejected. The Commission noted that within a product group, it is natural that different models or types exist. When calculating undercutting, underselling, and dumping, such diversity of the product and any resulting differences in cost of production and prices are fully taken into account by the Product Control Number (‘PCN’). As mentioned in section 2.2, the Commission found that all steel wind towers share the same features in terms of their basic physical and technical characteristics, their end-uses and interchangeability, which are the relevant factors for the determination of the product concerned.

3. DUMPING

3.1. Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation

(45) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to the PRC, the Commission considered it appropriate to initiate the investigation having regard to Article 2(6a) of the basic Regulation.

(46) Consequently, in order to collect the necessary data for the possible application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in the PRC to provide information regarding the inputs used for producing SWT. Five exporting producers submitted the relevant information.

(47) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. No questionnaire reply was received from the GOC within the deadline. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC.

(48) The exporting producers Chengxi Shipyard and Suzhou Titan, as well as the industry organisation CCCME, commented on the application of Article 2(6a) of the basic Regulation in their submissions on the first note on the sources for the determination of the normal value of 1 December 2020. They reiterated their claims in their submissions on the second note on the sources for the determination of the normal value of 8 April 2021. Those comments are duly addressed in section 3.2.1 of this Regulation.

(49) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

(50) On 1 December 2020, the Commission informed the interested parties by a note (‘the First Note’) (9) on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of the product concerned. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified a number of possible representative countries, namely Mexico, South Africa and Turkey. The Commission received comments on the First Note from the two sampled exporting producers Chengxi Shipyard (10) and Suzhou Titan (11), CCCME (12), and the user Vestas (13). The comments were addressed in the second note on the sources for the determination of the normal value and are also summarised in section 3.2.2 of this Regulation.

(51) On 8 April 2021, the Commission informed the interested parties by a second note (‘the Second Note’) (14) on the relevant sources it intended to use for the determination of the normal value that it had identified Mexico as the most appropriate representative country. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on available information for the companies Arcosa Industries de México, S. de R.L. de C.V. and Speco Wind Power, S.A. de C.V., producers in the representative country. The Commission received comments on the Second Note from Chengxi Shipyard (15), Suzhou Titan (16), and CCCME (17). The comments are addressed in section 3.2.2 of this Regulation.

3.2. Normal value

3.2.1. Existence of significant distortions

(52) In recent investigations concerning the steel sector in the PRC (18) - steel being the main factor of production for wind towers - the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present. The Commission concluded in this investigation that, based on the evidence available, the application of Article 2(6a) of the basic Regulation was also appropriate.

(53) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles. (19) In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation (20), but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (21). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (22). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC (23). In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (24), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC (25).

(54) The complaint contained information on the distortions in the steel sector, and notably on the 13th Five-Year Plan (‘FYP’) for Steel and the preferential treatment of the enterprises active in the steel industry. Furthermore, the complaint provided an extensive list of state-owned enterprises (‘SOE’) producing SWT, including the following Chinese original equipment manufacturers (‘OEM’): China Shipbuilding Industry Corporation, Dongfang Electric Corporation, Xinjiang Goldwind (not a SOE, but with significant state ownership), Shanghai Electric (listed in Hong Kong and Shanghai, and 63 % state owned), Dalian Huarui Heavy Industry, Taiyuan Heavy Machinery Group Co Ltd, Guodian United Power Technology Company Limited, XEMC Windpower (with a majority stake by the Province of Hunan and the remaining shares traded at the Shanghai stock exchange), China Datang Corporation, and the insolvent company Baoding Tianwei Baobian Electric Co. The complaint also mentioned Envision Energy, which is a private company, but was still granted a 50 million RMB credit line by a state-owned bank.

(55) Furthermore, next to the OEMs mentioned above, the complaint also listed the following Chinese wind tower producers: Chengxi Shipyard Co., Ltd., a holding subsidiary of China State Shipbuilding Corporation and China CSSC Holdings Limited (both SOEs); Beijing JINGCHENG New Energy Co., Ltd. a subsidiary of state-owned Beijing JINGCHENG Machinery Electric Holding Co., Ltd.; Zhonghang Hongbo Windpower Equipment Co.,Ltd. which is one of the strategic partners of AVIC, China’s biggest state-owned aerospace and defence company; China Gezhouba Group Corporation (a SOE); Harbin Hongguang Boiler Group Co., Ltd. (a state-level high-tech enterprise); Jiangsu Baolong Electromechanical Manufacturing Co., Ltd, being one of the key leading enterprises of Liyang, who merged two former SOEs; and HuaDian Heavy Industries Co., Ltd., with a majority stake owned by the China State-owned Assets Supervision & Administration Commission.

(56) Additionally, the complaint mentioned the investigation of the US Department of Commerce into two Chinese Companies (CS Wind and Titan Wind) (26), which identified at least the following public policies in direct benefit of the production sector: Policy Lending to the Renewable Energy Industry, Export Buyer’s Credits, Two Free, Three Half Program for Foreign Invested Enterprises, Income Tax Benefits for Foreign Invested Enterprises Based on Geographic Location, Enterprise Income Tax Law, Research and Development Program, Import Tariff and VAT Exemptions for Use of Imported Equipment, Provision of Hot-Rolled Steel, Provision of Electricity for LTAR, Support Funds for Construction of Project Infrastructure Provided by Administration Commission of Lianyungang Economic and Technological Development Zone (‘LETDZ’), the Award for Good Performance in Paying Taxes, Award for Taicang City to Support Public Listing of Enterprises, Awards for Taicang City to Promote Development of Industrial Economy for the Three-year Period of 2010 to 2012, Special Funds for Development of Science and Technology, and the Award to Titan Baotou for Rare Earth High and New Technology Industrial Development Zone for Excellent Construction Projects.

(57) In the present investigation, the Commission examined whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the country report concerning the PRC (‘the Report’) (27), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including the product concerned. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC.

(58) Concerning the degree of ownership by the GOC in the sense of Article 2(6a)(b), first indent of the basic Regulation, there is no detailed data as to the exact share of SOEs and privately owned wind tower producers; however, some large Chinese wind tower producers, including Chengxi Shipyard and Fuchuan Yifan are SOEs.

(59) In the steel sector, which is the main factor of production of the wind towers, a substantial degree of ownership by the GOC persists. While the nominal split between the number of SOEs and privately owned companies is estimated to be almost even, from the five Chinese steel producers ranked in the top 10 of the world’s largest steel producers four are SOEs (28). At the same time, while the top ten producers only took up some 36 % of total industry output in 2016, the GOC set the target in the same year to consolidate 60 % to 70 % of steel production toaround ten large-scale enterprises by 2025 (29). This intention was repeated by the GOC in April 2019, announcing a release of guidelines on steel industry consolidation (30). Such consolidation may entail forced mergers of profitable private companies with underperforming SOEs (31).

(60) In addition, in the steel sector, many of the largest producers are specifically referred to in the ‘Steel Industry Adjustment and Upgrading plan for 2016-2020’. For instance, the Chinese State-owned Shanxi Taiyuan Iron & Steel Co. Ltd. (“TISCO”) mentions on its website that it is “a super iron and steel giant”, which “developed into an extraordinary large-scale iron and steel complex, which is integrated with business of iron mining, iron and steel production, processing, delivery and trading” (32). Baosteel is another major Chinese State-owned enterprise that engages in steel manufacturing and is part of the recently consolidated China Baowu Steel Group Co. Ltd. (formerly Baosteel Group and Wuhan Iron & Steel). (33)

(61) With certain level of government intervention in the wind tower industry and a high share of SOEs in the wind towers and steel sector, even privately owned producers are prevented from operating under market conditions. Indeed, both public and privately owned enterprises in the wind towers sector are also subject to policy supervision and guidance as set out in recitals (67) to (74) below.

(62) As to the GOC being in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation, the following examples illustrate the above trend of an increasing level of intervention by the GOC through state presence inside the economic operators in wind towers sector. Many wind tower producers explicitly emphasise party building activities on their websites, have party members in the company management and underline their affiliation to the CCP. The investigation revealed party building activities in a number of wind towers producers, including the sampled exporting producer Chengxi Shipyard. According to the Articles of association of CSSC holding limited, which holds 100 % of Chengxi Shipyard’s shares, the role of the party committee is as follows: “Supervise and ensure the effective implementation of the Party and State policies in the company […], Sticking to the principle of cadres managed by the Party, in combination with the operational management principle of members of the Board of Directors selected in accordance with law, as well as with the principle of operational managers applying human rights in accordance with law, the Party organization ensures pre-arrangements and puts forward opinions and suggestions as regards the candidates to the Board of Directors or to Managing Director level, or, after completing comprehensive research, provides opinions and suggestions to Board of Directors and the General Manager on existing candidates, […], Research and discuss matters related to the company's reform, development and stability and to major operations and management […]” (34).

(63) Also, in case of CS Wind, the investigation established that there were efforts to increase the number of party members in the company: “The foreign-funded enterprise CS Wind Power Equipment (Lianyungang) Co., Ltd. has more than 150 employees and used to have only 5 party members. Through the “integration of the Party and the masses”, the company’s Party members have now reached more than 70”. (35)

(64) Fuchuan Yifan describes the role of the Party Committee in the following way: “Party members and various departments’ essential staff closely cooperate, give full play to the function of pioneer role model, actively consolidate the effective strengths of each department, encourage staff towards vanguard and excellence, consider breakthrough projects as starting points, focus on cohesion, overcome difficulties, showcase talents and skills so as to ensure an active role as regards the company’s cost reduction and efficiency gains, income increase and fund-raising etc. and also to ensure that each project is duly completed in terms of quality and quantity” (36).

(65) Furthermore, party building activities were found in the sampled exporting producer Penglai Dajin and Shanghai Taisheng Wind Power Equipment.

(66) In addition, during the investigation the Commission established the existence of personal connections between wind towers producers and the CCP. The investigation showed presence of CCP members among the senior management in a number of companies manufacturing wind towers, including Chengxi Shipyard (the Chairman of the Board of Director and the General Director are both CCP members and at the same time hold the functions of the Secretary and Deputy Secretary of the Party Committee, respectively), Suzhou Titan (at least one member of the Board of Directors is a CCP member), Fuchuan Yifan (the Chairman of the Board of Directors and the Vice Chairman of the Board of Directors are both CCP members and at the same time hold the functions of the Secretary and Deputy Secretary of the Party Committee, respectively), and Shanghai Taisheng Wind Power Equipment (the Chairman of the Supervisory Board is a CCP member).

(67) Further, policies discriminating in favour of domestic producers or otherwise influencing the market in the sense of Article 2(6a)(b), third indent of the basic Regulation are in place in the wind towers sector.

(68) The steel industry, which is the main component of wind towers, is regarded as a key industry by the GOC (37). This is confirmed in the numerous plans, directives and other documents focused on steel, which are issued at national, regional and municipal level such as the ‘Steel Industry Adjustment and Upgrading plan for 2016-2020’. This Plan states that the steel industry is “an important, fundamental sector of the Chinese economy, a national cornerstone” (38). The main tasks and objectives set out in this Plan cover all aspects of the development of the industry (39).

(69) The 13th Five-Year Plan on Economic and Social Development (40) envisages support to enterprises producing high-end steel product types (41). It also focuses on achieving product quality, durability and reliability by supporting companies using technologies related to clean steel production, precision rolling and quality improvement (42).

(70) The ‘Catalogue for Guiding Industry Restructuring (2011 Version) (2013 Amendment)’ (43) (‘the Catalogue’) lists steel as encouraged industry.

(71) The GOC further guides the development of the sector in accordance with a broad range of policy tools and directives related to, inter alia market composition and restructuring, raw materials, investment, capacity elimination, product range, relocation, upgrading, etc. Through these and other means, the GOC directs and controls virtually every aspect in the development and functioning of the sector (44). The current problem of overcapacity is arguably the clearest illustration of the implications of the GOC’s policies and the resulting distortions.

(72) Wind energy is also supported on a provincial and municipal level, for example the Lianyungang Municipality’s 13th FYP for maritime economic development explicitly refers to the development of this industry. The plan envisages to “Build a wind power equipment industry chain”. Encourage and guide the transformation and upgrading of a number of leading wind power enterprises such as Guodian Power, Zhongfu Lianzhong, Tianshun Tower, and CSWind Power, gradually upgrade their development, design and manufacturing technologies, and promote megawatt blade projects” (45).

(73) As evidenced above, the GOC further guides the development of the sector in accordance with a broad range of policy tools and directives. Through these and other means, the GOC directs and controls virtually every aspect in the development and functioning of the sector.

(74) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of steel as the main raw material used in the manufacturing of the wind towers. Such measures impede market forces from operating freely.

(75) The present investigation has not revealed any evidence that the discriminatory application or inadequate enforcement of bankruptcy and property laws according to Article 2(6a)(b), fourth indent of the basic Regulation in the wind towers sector referred to above in recital (53) would not affect the manufacturers of SWT.

(76) The wind towers sector is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation, as also referred to above in recital (53). Those distortion affect the sector both directly (when producing SWT or the main inputs), as well as indirectly (when having access to capital or inputs from companies subject to the same labour system in the PRC) (46).

(77) Moreover, no evidence was submitted in the present investigation demonstrating that the wind towers sector is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, as also referred to above in recital (53). Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

(78) Finally, the Commission recalls that in order to produce wind towers, a number of inputs are needed. According to evidence on the file, all the sampled exporting producers sourced the large majority of their inputs in the PRC. Furthermore, the PRC is one of the major producers of steel - the key raw material in the wind towers production process. When the producers of wind towers purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned above. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

(79) As a consequence, not only the domestic sales prices of wind towers are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts A and B of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout the PRC. This means, for instance, that an input that in itself was produced in the PRC by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth. No evidence or argument to the contrary has been adduced by the GOC or the exporting producers in the present investigation.

(80) As indicated in recitals (21) and (47) respectively, the GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the Report and the additional evidence provided by the complainant, on the existence of significant distortions and/or on the appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand. Concerning GOC’s comments following the final disclosure, see recitals (116) to (123) below.

(81) Comments concerning the application of Article 2(6a) of the basic Regulation were received on initiation from CCCME. Subsequently, comments were received from CCCME, Suzhou Titan, and Chengxi Shipyard in response to the First Note and from CCCME, Suzhou Titan, and Chengxi Shipyard in response to the Second Note.

(82) In its comments on initiation, CCCME first submitted the following comments with regard to the determination of the normal value in the complaint: (a) The complainant provided inconsistent information on the share of steel plates in the cost of production of SWT. In several parts of the complaint, it claimed that steel plates accounted for more than 40 % of the cost of production but in the normal value calculation itself, the complainant reached approximately 60 % of the cost of production; (b) The complainant used an undistorted cost of steel plates of 869 EUR/tonne in the normal value construction although its own cost of that raw material was on average only 625 EUR/tonne; (c) The profit margin of 14 % used in the normal value construction was not feasible in a competitive market and a reasonable profit of 6 % should have been used instead; (d) The unit cost of other raw materials should also be corrected since they were in some cases up to three times higher than the costs of the complainant. On this point, CCCME did not provide any detailed information and did not identify which raw materials were affected.

(83) In addition, CCCME suggested that following the deficiencies of the normal value construction listed in recital (82), an alternative methodology of the construction of the normal value should be used. CCCME submitted that the target price of the Union industry should be used as a basis. The labour cost used to establish the target price should be replaced by the labour cost in Turkey, the representative country proposed by the complainant, which was more than ten times lower than the labour cost of the Union industry. A target profit of 10 %, as used by the complainant for the determination of the target price, should be added to arrive at the alternative normal value. CCCME pointed out that such normal value would result in a much lower dumping margin than the average margin of 55 % calculated by the complainant without providing an actual calculation.

(84) CCCME repeated the comments and claims described in recitals (82) and (83) also in the hearing and the submission after the provisional stage.

(85) With regard to the alleged deficiencies listed in recital (82), the Commission considered that CCCME must have misunderstood the data included in the complaint and the methodology used for the determination of the normal value under Article 2(6a) of the basic Regulation: (a) Where the complainant stated that steel plates accounted for more than 40 % of the cost of production of SWT, it referred to the cost of a SWT assembled with all internal parts. Those parts, according to the complaint, represented 17 % of the SWT’s cost of production (47). The complainant, however, based the dumping margin calculation on white towers, i.e. towers without the internal parts thus also excluding the labour cost of assembly. Therefore, the Commission considered that the higher share of steel plates on the cost of production in the normal value calculation could be reasonably explained. (b) The cost of raw materials incurred by the Union industry is not as such determinative for the construction of the normal value. Consistent with Commission practice, it is the cost incurred by the exporting producer or, where the normal value is constructed under Article 2(6a) of the basic Regulation, the cost in the representative country that matters. The Commission considered that the complainant provided sufficient evidence (i.e. screenshots of official Turkish import statistics (48)) supporting the unit price of steel plates used in the construction of the normal value. (c) The complainant based the profit level used in the normal value construction on the financial information of three SWT producers in Turkey (49). Therefore, the Commission considered that the profit used by the complainant was sufficiently substantiated. (d) CCCME suggested that the benchmarks, which were considerably higher than the cost of the Union producers, should be corrected. As explained under point (b) of this recital, the methodology under Article 2(6a) of the basic Regulation relies on the establishment of undistorted prices or benchmarks, and the resulting costs need not necessarily be the same as the costs of the Union producers.

(86) With regard to the alternative methodology suggested by CCCME as described in recital (83), the Commission noted that such construction of the normal value would be inconsistent with the provisions of Article 2(6a) of the basic Regulation. Moreover, CCCME’s approach appeared to be inconsistent. Where the cost of certain materials in Turkey exceeded the cost incurred by the Union industry, CCCME proposed to use the lower cost of the Union industry as a benchmark. Yet, where the cost in Turkey was lower, in particular the labour cost, CCCME suggested to use the Turkish cost as a benchmark. Moreover, as explained in recital (85), the complainant had correctly relied on costs in a representative country for the construction of the normal value.

(87) Based on the reasons elaborated in recitals (85) and (86), the Commission rejected the claims by CCCME referred to in recitals (82), (83) and (84).

(88) As further explained below, the Commission concluded in the present investigation that based on the evidence available and in view of the lack of cooperation of the GOC, the application of Article 2(6a) of the basic Regulation was appropriate.

(89) In its submission on initiation, CCCME further asserted that the complaint heavily relied on the Report, which, according to CCCME, was written with the purpose of facilitating the lodging of complaints for the European industry. This purpose means that the report could not have been written in an objective manner. CCCME added that because of its purpose, the Report fails to meet the standards of impartial and objective evidence and evidence of sufficient probative value. CCCME further claimed that the Report deliberately omits factual circumstances, elements, and conclusions and is not objective.

(90) Furthermore, CCCME claimed that the Report was published in 2017, including contents and references from 2016 and the years before. However, the current investigation was initiated on 21 October 2020, with the period of investigation on the dumping side covering the period from July 2019 to June 2020. Therefore, according to CCCME, the Report does not reflect the potential distortions during the IP. In particular, CCCME claimed that the Steel chapter of the Report covered the period up to 2017 and the complaint did not show that those distortions would still be present in the subsequent years, including the IP.

(91) The Commission noted that the Report is a comprehensive document based on extensive objective evidence, including legislation, regulations and other official policy documents published by the GOC, third party reports from international organisations, academic studies and articles by scholars, and other reliable independent sources. Since it was made publicly available in December 2017, any interested party had ample opportunity to rebut, supplement or comment on it and the evidence on which it is based. So far no evidence was provided by any party proving that the sources used in the Report would be wrong.

(92) With regard to the IP, the Commission observed that whereas the Report was published in 2017, it was broadly based on the Chinese 13th Five Year Plans, which were applicable from 2016 until 2020, therefore covering the IP.

(93) In addition, CCCME commented that the concept of significant distortions runs against the WTO law because such concept does not exist under Article 2.2 of the WTO Anti-Dumping Agreement (‘ADA’). Article 2.2 ADA limits the conditions in which normal value can be constructed to “no sales in the ordinary course of trade in the domestic market of the exporting country”, or “because of the particular market situation or the low volume of the sales in the domestic market of the exporting country”. Significant distortions are not listed in Article 2.2 ADA. Furthermore, CCCME claimed that Article 2.2 ADA does not allow for the construction of the normal value based on a representative country or international benchmarks, as envisaged in Article 2(6a) of the basic Regulation, since it only permits using “the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and profits” when constructing normal value.

(94) The Commission considered that the provisions of Article 2(6a) are fully consistent with the Union’s WTO obligations. As explicitly clarified by the WTO Appellate Body in DS473 European Union – Anti-Dumping Measures on Biodiesel from Argentina, WTO law permits the use of data from a third country, duly adjusted when such adjustment is necessary and substantiated. The existence of significant distortions renders costs and prices in the exporting country inappropriate for the construction of normal value. In these circumstances, this provision envisages the construction of costs of production and sale on the basis of undistorted prices or benchmarks, including those in an appropriate representative country with a similar level of development as the exporting country. Therefore, the Commission rejected this claim.

(95) CCCME added that Article 2(6a) of the basic Regulation appeared to violate Article 2.2.1.1 ADA, as according to Article 2(6a) of the basic Regulation, the Commission is entitled to disregard the cost of production and sales in the exporting country and directly use such data in a third country. This is contrary to the provisions of Article 2.2.1.1. ADA which stipulates that: “costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provide that such record are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sales of the product under consideration”. To support its claim, CCCME referred to the WTO jurisprudence, in particular, the DS473 European Union – Anti-Dumping Measures on Biodiesel from Argentina (‘DS473’), which established that investigating authorities must use the product costs actually incurred by producers or exporters for the calculation of constructed normal values, and the Panel Report in DS494 European Union – Cost Adjustment Methodologies II (Russia) (‘DS494’).

(96) The Commission recalled that neither of the quoted WTO cases concerned Article 2(6a) of the basic Regulation and the conditions for its application. Furthermore, the underlying factual situations in those cases are different from the underlying situation and criteria giving rise to the application of the methodology under this provision of the basic Regulation. As for the WTO dispute EU – Cost Adjustment Methodologies II, the Commission recalled that both the EU and Russia appealed the findings of the Panel, which are therefore not final and, according to standing WTO case-law, have no legal status since they have not been endorsed by the WTO Members. In any event, the Panel Report specifically considered the provisions of Article 2(6a) of the basic Regulation to be outside the scope of the dispute. The Panel found that these provisions are of a different essence and have different legal implications from the provisions under Article 2(5) of the basic Regulation, which were the object of that dispute and that the Article 2(6a) provisions did not replace the provisions under Article 2(5) when they were introduced. (50) These findings therefore have no significance for assessing the compatibility of Article 2(6a) of the basic Regulation with the relevant WTO rules. For these reasons, this claim was rejected.

(97) CCCME reiterated the above claims in its comments to the First Note. Suzhou Titan also endorsed all of the above comments by CCCME in its comments to the First Note.

(98) Moreover, CCCME claimed in its comments to the First Note that the wind tower industry is market oriented, as the majority of producers are privately owned, a number of raw materials are imported from abroad and the purchase prices of internals (51) are negotiated with European wind turbine OEM producers directly.

(99) The Commission noted that once it is determined that due to the existence significant distortions for the exporting country in accordance with Article 2(6a)(b) of the basic Regulation it is not appropriate to use domestic prices and costs in the exporting country, the normal value is constructed by reference to undistorted prices or benchmarks in an appropriate representative country for each exporting producer according to Article 2(6a)(a) of the basic Regulation. The same provision of the basic Regulation also allows the use of domestic costs if they are positively established not to be distorted. Therefore, the exporting producers had the possibility to provide evidence that their individual administrative/operational costs and/or other input costs of were actually undistorted. However, as laid out in recitals (52) to (79) above, the Commission has established the existence of distortions in the wind tower industry and there was no evidence as to the factors of production of individual exporting producers being undistorted. Therefore, these claims were rejected.

(100) In addition, CCCME claimed in its comments to the Second Note that Article 2(6a) of the basic Regulation requires the Commission to perform an individual examination of the distortions of every exporting producer. According to CCCME, the Commission is obliged to make a case-by-case analysis and find out (a) whether the alleged significant distortions apply to each sampled exporter; (b) whether each input and factor of production reported by this specific exporter has been “distorted” and therefore should be replaced by data from another source; and (c) explain why data from another source, concerning each input or factor of production, are considered “undistorted” by the Commission.

(101) Suzhou Titan reiterated the above claims in its comments to the Second Note.

(102) As explained in recital (99) above, if the existence of significant distortions is established, then the provisions of Article 2(6a) apply, a priori, to all exporting producers in the PRC and concern all costs relating to their factors of production. At the same time, that provision provides for the use of domestic costs which are positively established not to be affected by significant distortions.

(103) With regard to the argument that the Commission should prove that the costs from the representative country are undistorted, the Commission uses only costs which are not subject to distortions in an appropriate representative country in accordance with Article 2(6a)(a) of the basic Regulation. The Commission published two notes to the file on the factors of production giving the parties ample opportunity to comment, including by pointing to any possible abnormalities or other considerations potentially affecting the factors of production in the representative country or countries. In this context, interested parties have not questioned the level of different factors of production in the appropriate representative country set out in the First and Second Note. Therefore these claims were dismissed.

(104) Following the First Note, Chengxi Shipyard also submitted a set of comments concerning the significant distortions. First, Chengxi Shipyard claimed that Article 2(6a) of the basic Regulation is incompatible with WTO law and past WTO DSB rulings. Chengxi Shipyard claimed that Section 15 of China’s Protocol of Accession to the WTO exceptionally permitted importing WTO members to use a methodology that is not based on a strict comparison with domestic prices or costs of the industry under investigation in China, but that this derogation expired 15 years after the date of accession, that is on 11 December 2016. From that date, the Commission is obliged to use the standard methodology in establishing the normal value of the exporting country producers, that is to use only domestic prices and costs of the exporting country, unless other provisions of the WTO agreements including the ADA permit otherwise.

(105) Chengxi Shipyard added furthermore that there are no provisions in the WTO law that would allow not using the standard methodology in case of China. Chengxi Shipyard added that the conditions of Article 2 ADA, in particular Article 2.2.1 ADA are not compatible with the conditions of Article 2(6a) of the basic Regulation. Chengxi Shipyard clarified that the methodology prescribed by Article 2 ADA does not permit the use of information other than that in the exporting country in order to establish the normal value. If in exceptional circumstances the normal value needs to be constructed, the data relating to the cost of production and SG&A and profits have to be obtained from the sources in the country of export. To support the above claims, Chengxi Shipyard quoted the ruling of the EU-Biodiesel (Argentina) WTO dispute which required the Commission to use the costs reported in the producer/exporter’s records in accordance with Article 2.2.1.1 ADA.

(106) This claim was already discussed in recitals (94) to (96) above. With regard to the argument concerning China’s Accession Protocol, the Commission recalls that in anti-dumping proceedings concerning products from China, the parts of Section 15 of China’s Accession Protocol to the WTO that have not expired continue to apply when determining normal value, both with respect to the market economy standard and with respect to the use of a methodology that is not based on a strict comparison with Chinese prices or costs. Those arguments were therefore rejected.

(107) In addition, Chengxi Shipyard claimed that the alleged distortions are not well evidenced and, even if they existed, they do not affect all aspects of Chengxi Shipyard’s costs. Thus, not the entirety of the costs needs to be adjusted or established on a different basis. Chengxi Shipyard claimed that the main supporting evidence in the complaint was the Report, however, since there is no specific chapter devoted to the wind towers, the findings of the Report cannot be automatically treated as applicable to the wind towers industry.

(108) With regard to the argument that the Report does not include a specific chapter on wind towers, the Commission noted that the existence of the significant distortions giving rise to the application of Article 2(6a) of the basic Regulation is not linked to the existence of a specific sectoral chapter covering the product under investigation. The Report describes different types of distortions present in the PRC which are cross-cutting, affecting the entire Chinese economy and therefore also the prices and/or the raw materials and costs of production of the product under investigation. As explained in recitals (58) to (79) above, the wind tower industry is subject to a number of governmental interventions described in the Report (coverage by the Five-Year Plans and other documents, raw material distortions, financial distortions etc.), which are explicitly listed and referenced in this Regulation. Furthermore, the Report is not the only source of evidence used by the Commission for its determination, as there are additional probationary elements used for this purpose. Recitals (58) to (74) above have also detailed a number of distortions existing in the wind towers sector and/or affecting the raw materials and inputs beyond the significant distortions already described in the Report. The market circumstances and the underlying policies and plans giving rise to the significant distortions are still applicable to the wind towers sector and that of its costs of production. No party submitted any evidence to the contrary. Therefore, this argument was dismissed.

(109) Furthermore, Chengxi Shipyard commented that the six criteria required to prove the existence of significant distortions were either absent in the complaint, or were not applicable to Chengxi Shipyard. Among the criteria from Article 2(6a)(b) of the basic Regulation, the criteria under the first, fourth, fifth and sixth indent were not mentioned and substantiated with evidence in the complaint. With regard to the second indent, Chengxi Shipyard analysed one by one the Chinese wind tower (OEM) producers as listed by the complainant (see recital (54)) and came to the conclusion that the information is either not properly substantiated or is outdated. Chengxi Shipyard added that even if all that information was correct, there was no way of establishing the exact proportion of the state owned wind tower producers vs. the privately owned enterprises. It observed that the largest wind tower producers, including Titan Wind, Shanghai Taisheng, Dajin Heavy Industry, Tianneng Heavy Industries and CS Wind are all privately owned.

(110) On the element listed under the third indent of Article 2(6a)(b), Chengxi Shipyard commented that the US investigation into utility scale wind towers originating in inter alia the People’s Republic of China showed the subsidisation of two specific companies, which cannot be extrapolated to the other wind towers producers. Even if the Commission finds that significant distortions exist in certain aspects of Chengxi Shipyard’s costs, the other aspects of costs not having been proved to be significantly distorted should nonetheless be used in the construction of the normal value. Since, according to Chengxi Shipyard, the above six elements were not properly substantiated in the complaint, there is no evidence that the steel wind tower market itself is distorted.

(111) Finally, Chengxi Shipyard commented that even if the Commission finds that significant distortions exist in certain aspects of Chengxi Shipyard’s costs, the other aspects of costs, not having been proved to be significantly distorted, should nonetheless be used in the construction of the normal value.

(112) In response to the claims on sufficient evidence at initiation stage, the Commission recalls that section 3 of the Notice of Initiation referred to a number of elements in the Chinese wind towers market to substantiate that the market was affected by distortions across the wind towers value chain in the PRC. The Commission considered that the evidence listed in the Notice of Initiation was sufficient to warrant initiation of an investigation on the basis of Article 2(6a) of the basic Regulation. The determination on the actual existence of significant distortions and the consequent use of the methodology prescribed by Article 2(6a)(a) of the basic Regulation only occurs at the time of the provisional and/or final disclosure. In this case, even though certain information concerning distortions provided by the complainant was found to be outdated, the Commission deemed the evidence submitted by the complainant on the significant distortions sufficient to initiate the investigation on this basis. The Notice of Initiation clearly specified this at section 3 in accordance with the obligation stated in Article 2(6a)(e) of the basic Regulation. The claim by Chengxi Shipyard was hence rejected.

(113) Finally, Chengxi Shipyard recalled that Article 2(6a)(b) of the basic Regulation specifies that: “Significant distortions are those distortions which occur when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces because they are affected by substantial government intervention” (emphasis added). Chengxi Shipyard argued that the government intervention into the wind tower industry in China is not substantial, as it has as purpose building-up of renewable energy capacity both in the PRC and in the rest of the world. Chengxi Shipyard proposes a definition of “substantial” to refer to an intervention of the government which is arbitrary. However, when the intervention is aimed at correcting a market failure, it should not be seen as “substantial”. According to Chengxi Shipyard, pollution generated by non-renewable energy is a negative externality and there is no way third parties can stop or reduce this pollution through the market, as there is no ‘market for pollution’ in which those third parties could pay the factory to reduce its pollution. It is in this situation that the state must step in to correct for the failure of the market by taxing pollution or subsidising renewable energy to reduce its cost and ensure that firms adopt non-polluting renewable energy. Therefore, according to Chengxi Shipyard, subsidisation of the production of renewable energy sources is not a substantial intervention, as it serves a greater good of limiting the global pollution. Therefore it does not constitute a significant distortion in accordance with Article 2(6a)c of the basic Regulation.

(114) Concerning Chengxi Shipyard’s comment on the concept of “substantial government intervention”, the Commission noted that for the purpose of establishing the presence of significant distortions, it is not relevant whether the goal of the subsidies is to contribute to a positive social, environmental or economic outcome, as this would be arbitrary. Rather, the importance of subsidies is measured as them being substantial, i.e. of large value. The word “substantial” in this context should be interpreted in accordance with the standard definition, meaning “large in size, value, or importance”. Therefore, this claim was rejected.

(115) Upon final disclosure, several interested parties submitted comments concerning the application of Article 2(6a) of the basic Regulation.

(116) The GOC submitted, first, that the Report is flawed and decisions based on it lack a factual and legal basis. More specifically, the GOC claimed that it doubts that the Report can represent the official position of the Commission. On the factual side, the Report is, according to the GOC, misrepresentative, one-sided and out of touch with reality. Moreover, the fact that the Commission has issued country reports for a few selected countries raises concerns about Most Favoured Nation (‘MFN’) treatment. Further, relying by the Commission on the evidence in the Report is, in the GOC’s view, not in line with the spirit of fair and just law, as it effectively amounts to judging the case before trial.

(117) Second, the GOC argued that constructing normal value in accordance with Article 2(6a) of the basic Regulation is inconsistent with the ADA, in particular with Article 2.2. of the ADA which provides and exhaustive list of situations where the normal value can be constructed, the “significant distortions” not being listed among such situations. Moreover, using data from an appropriate representative country is, according to the GOC, inconsistent with GATT Article 6.1(b) and Article 2.2.1.1. of the ADA which require using the cost of production in the country of origin when constructing normal value.

(118) Third, the GOC claimed that the Commission’s investigating practices under Article 2(6a) of the basic Regulation are inconsistent with WTO rules insofar as the Commission, in violation of Article 2.2.1.1. of the ADA, disregarded records of the Chinese producer without determining whether those records are in accordance with the generally accepted accounting principles in China. In this connection, the GOC recalled that the Appellate Body in DS473 and the panel in DS494 asserted that according to Article 2.2.1.1 of the ADA, as long as the records kept by the exporter or producer under investigation correspond – within acceptable limits – in an accurate and reliable manner, to all the actual costs incurred by the particular producer or exporter for the product under consideration, they can be deemed to “reasonably reflect the costs associated with the production and sale of the product under consideration” and the investigating authority should use such records to determine the cost of production of the investigated producers.

(119) Fourth, the GOC submitted that the Commission should be consistent and fully examine whether there are so-called market distortions in the representative country. Readily accepting the representative country’s data without such evaluation represents “double standards”. The same applies, in the GOC’s view, to evaluating the price and costs of the EU industry.

(120) With regard to the first point on the status of the Report under the EU legislation, the Commission recalled that Article 2(6a)(c) of the basic Regulation does not prescribe a specific format for the reports on significant distortions, neither does that provision define a channel for publication. The Commission recalled that the report is a fact-based technical document used only in the context of trade defence investigations. The report was therefore appropriately issued as a Commission staff working document as it is purely descriptive and does not express any political views, preferences or judgements. That does not affect its content, namely the objective sources of information concerning the existence of significant distortions in the Chinese economy relevant for the purpose of the application of Article 2(6a)(c) of the basic Regulation. As to the remarks on the Report being factually flawed and one-sided, those were addressed in recital (91) above. In response to GOC’s claim concerning the violation of the MFN clause, the Commission recalled that, as provided for by Article 2(6a)(c) of the basic Regulation, a country report shall be produced for any country only where the Commission has well-founded indications of the possible existence of significant distortions in a specific country or sector in that country. Upon the entry into force of the new provisions of Article 2(6a) of the basic Regulation in December 2017, the Commission had such indications of significant distortions for China. The Commission also published a report on distortions in Russia in October 2020 (52), and, where appropriate, other reports may follow. Furthermore, the Commission recalled that the reports are not mandatory for the application of Article 2(6a). Article 2(6a)(c) describes the conditions for the Commission to issue country reports, and according to Article 2(6a)(d) the complainants are not obliged to use the report nor is the existence of a country report a condition to initiate an investigation under Article 2(6a) following Article 2(6a)(e). According to Article 2(6a)(e), sufficient evidence proving significant distortions in any country brought by complainants fulfilling the criteria of Article 2(6a)(b) is sufficient to initiate the investigation on that basis. Therefore, the rules concerning country-specific significant distortions apply to all countries without any distinction, and irrespective of the existence of a country report. As a result, by definition the rules concerning country distortions do not violate the most favoured nation treatment.

(121) Concerning the second and third arguments on the alleged incompatibility of Article 2(6a) of the basic Regulation with the WTO law, in particular the provisions of Article 2.2. and 2.2.1.1. ADA, as well as the findings in DS473 and DS494, these arguments were already addressed in recitals (94) and (96) above.

(122) With regard to the fourth point requesting the Commission to ascertain that third-country data used in the Commission proceedings are not affected by market distortions, the Commission recalled that, in accordance with Article 2(6a)(a) of the basic Regulation, it proceeds to construct the normal value on the basis of chosen data other than domestic prices and costs in the exporting country only where it establishes that such data is the most appropriate to reflect undistorted prices and costs. In this process, the Commission is bound to use only undistorted data. In that respect, interested parties are invited to comment on proposed sources for the determination of the normal value in the early stages of the investigation. The Commission’s ultimate decision as to which undistorted data should be used to calculate the normal value takes full account of those comments. As to the GOC’s request for the Commission to evaluate possible distortions in the EU’s internal market, the Commission failed to see the relevance of this point in the context of assessing the existence of significant distortions in accordance with Article 2(6a) of the basic Regulation.

(123) Consequently, the Commission rejected the GOC’s arguments.

(124) CCCME reiterated its arguments laid out in recitals (89) and (90) above concerning the Report, calling the Commission’s argumentation in recital (91) circular. However, CCCME did not adduce any further evidence concerning the Report, except for claiming that the five year plans in China are merely guiding documents expressing policy views for the future. As such, in CCCME’s view, the plans are not binding, given also that they are not adopted in the same manner as laws or decrees. Moreover, CCCME pointed out that similar documents can be also found in Europe, including among the Commission’s policy documents.

(125) Further, concerning the WTO compatibility of Article 2(6a) of the basic Regulation with WTO law, CCCME submitted that the concept of “significant distortions” included in Article 2(6a) of the Basic Regulation does not appear in any rule of the WTO ADA or the GATT 1994. In particular, the concept of “significant distortions” does not fall within any of the categories provided by Article 2.2 of the WTO ADA. Concerning the use of data from a third country, CCCME submitted that even though according to the Appellate Body in DS473 the use of data from a source outside the exporting country is not prohibited, the Commission seems to ignore the fact that the Appellate Body also emphasized that “this, however, does not mean that an investigating authority may simply substitute the cost from outside the country of origin for the cost of production in the country of origin”, as well as that “when relying on any out-of-country information to determine the ‘cost of production in the country of origin’ under Article 2.2 of the Anti-dumping Agreement, an investigating authority has to ensure that such information is used to arrive at the ‘cost of production in the country of origin’ and this may require the investigation authority to adapt that information.” This Commission’s approach therefore appears, in CCCME’s view, to be inconsistent with the EU’s obligation under Article 2.2 of the WTO ADA.

(126) Moreover, CCCME argued that Article 2(6a) of the basic Regulation also appears to violate Article 2.2.1.1 of the WTO ADA insofar as the Commission appears to repeat the same mistakes as in DS473 as its findings and reasoning in the present investigation seems to be very similar to the one in the biodiesel case. The Commission found that the prices of steel, as the main raw material in the wind tower production, are distorted in China, and the prices of steel paid by wind tower producers are exposed to systemic distortions. Thus, according to CCCME, based on the Appellate Body’s finding the EU – Biodiesel (Argentina) case, the Commission may also violate Article 2.2.1.1 of the WTO ADA.

(127) In addition, CCCME recalled that the third sub-paragraph of Article 2(6a)(a) of the basic Regulation clearly provides that the assessment on the issue of significant distortions shall be done for each exporter and producer separately, with the only exception of the application of sampling. Consequently, CCCME disagreed with the Commission’s statement in recital (102) that “once the existence of significant distortion is established, the provisions of Article 2(6a) apply, a priori, to all exporting producers in China and concerns all costs relating to their factors of productions” and required the Commission to improve its practice in this respect.

(128) With respect to CCCME’s claim concerning the non-binding character of the Chinese planning documents, the Commission recalled that the Chinese system of planning sets out priorities and prescribes the goals the central and local governments must focus on. Relevant plans exist on all levels of government and cover virtually all economic sectors and the authorities at each administrative level monitor the implementation of the plans by the corresponding lower level of government. As described in detail in the Report, the objectives set by the planning instruments are in fact of binding nature, with the planning system resulting in resources being allocated to sectors designated as strategic or otherwise politically important by the government, rather than being allocated in line with market forces. (53)

(129) As to CCCME’s arguments on compatibility of Article 2(6a) of the basic Regulation with ADA and the DSB findings, these were already addressed in recitals (94) and (96), including the explanation that DS473 did not concern the application of Article 2(6a) of the basic Regulation. Concerning the claim that the concept of “significant distortions” included in Article 2(6a) of the Basic Regulation does not appear in any rule of the WTO ADA or the GATT 1994, the Commission recalled that the basic Regulation, including Article 2(6a), is an act of secondary EU law as provided in Article 288 of the Treaty on the Functioning of the European Union. There is no requirement under EU law that its sources, including secondary law such as regulations, be based on international law or be linked to obligations stemming from international law such as the ADA or China’s Accession Protocol to the WTO.

(130) With respect to the claim concerning individual assessment of significant distortions for each exporter, CCCME merely expressed its disagreement with the Commission’s position, without bringing new arguments. The Commission therefore confirmed its position stated in recitals (99) and (102) above.

(131) Chengxi Shipyard reiterated its arguments concerning the incompatibility of Article 2(6a) of the basic Regulation with WTO law described in recital (104) above, pointing out that the Commission response in recitals (94) and (96) is very general and does not explain explicitly explain the legal basis in the WTO Agreements in support of application of Article 2(6a) of the basic Regulation, derogating from the general discipline clearly set out in the WTO agreement and DSB ruling in DS473. Thus, Chengxi Shipyard inferred from the Commission’s statement that it justifies the compatibility of Article 2(6a) with the WTO agreements on the ground of the remaining part of Section 15 of China’s Protocol of Accession to the WTO, pointing out that absent clear reasoning about why the Commission takes this view, the Commission’s disclosure does not meet the legal standards of adequate statement of reasons justifying its decision of applying Article 2(6a) of the basic Regulation.

(132) Moreover, Chengxi Shipyard claimed that it was not proven that the company is subject to significant distortions, mainly for three grounds: (i) the company business decisions are not directly influenced by the CCP, a finding which holds despite the Chairman of the Board of Director and the General Director of Chengxi Shipyard being CCP members and holding the functions of the Secretary and Deputy Secretary of the Party Committee at the company level, (ii) state shareholding, or state representatives present in the Board of Directors, do not indicate that the company’s business decisions are not responsive to the market demand and supply signal, or its operations are not market-oriented, (iii) existence of state intervention does not equal to significant distortion and the Commission failed to demonstrate that the alleged cross-cutting interventions by the GOC lead to significant distortions to the factors of production and consequently affect the cost and price of Chengxi Shipyard’s operation.

(133) As to Chengxi Shipyard arguments on WTO compatibility of Article 2(6a) of the basic Regulation, the Commission reiterates its view that the provisions of Article 2(6a) are fully consistent with the Union’s WTO obligations. The reasons for the Commission’s position are clearly indicated in recital (94) above. Similarly, the Commission stated already in recital (106) that in anti-dumping proceedings concerning products from China, the parts of Section 15 of China’s Accession Protocol to the WTO that have not expired continue to apply when determining normal value, both with respect to the market economy standard and with respect to the use of a methodology that is not based on a strict comparison with Chinese prices or costs. Chengxi Shipyard appears to conflate the obligation to state the reasons for the substantive application of Article 2(6a) of the basic Regulation with a purported obligation to explain the WTO legal basis supporting the application of Article 2(6a) of the basic Regulation, which is not relevant in addition to being incorrect (see also recital (129) above). Consequently, Chengxi Shipyard’s argument that the Commission’s disclosure does not meet the legal standards of adequate statement of reasons was rejected.

(134) Chengxi Shipyard’s claims on lack of evidence that the company is subject to significant distortions were already addressed in detail in recital (108) above. In addition, the Commission recalled that the existence of significant distortions giving rise to the application of Article 2(6a) of the basic Regulation is not linked to the existence of one specific factual element or information regarding a specific market covering the product concerned. In that respect, as evidenced in recitals (52) to (79), the Commission has established in this investigation the existence of significant distortions in the wind tower industry and related inputs sectors. The use of domestic costs in the construction of the normal value is allowed by Article 2(6a)(a) only if these costs are positively established not to be distorted in the course of the investigation. In that respect, however, Chengxi Shipyard did not submit any positive evidence of its factors of production being undistorted. Therefore, Chengxi Shipyard’s claim was rejected.

(135) In view of the above, the evidence available showed that prices or costs of the product concerned, including the costs of raw materials, energy and labour, were not the result of free market forces because they were affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as discussed in the following section.

3.2.2. Representative country

3.2.2.1. General remarks

(136) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation: — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income per capita (‘GNI p.c.’) similar to the PRC on the basis of the country classification database of the World Bank (54); — Production of the product concerned in that country; — Availability of relevant public data in the representative country. — Where there is more than one possible representative country, preference should be given, where appropriate, to the country with an adequate level of social and environmental protection.

(137) As explained in recitals (50) and (51), the Commission issued two notes for the file on the sources for the determination of the normal value. These notes described the facts and evidence underlying the relevant criteria and also addressed the comments received by the parties on these elements and on the relevant sources. In the Second Note, the Commission informed interested parties of its intention to consider Mexico as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

3.2.2.2. A level of economic development similar to the PRC

(138) In the First Note, the Commission identified Brazil, Malaysia, Mexico, Turkey, and South Africa as countries with a similar level of economic development as the PRC, and in which the production of the product concerned was known to take place. All those countries were classified by the World Bank as ‘upper-middle income’ countries on a gross national income (‘GNI’) basis, similarly to the PRC.

(139) In its comments on the First Note, Chengxi Shipyard claimed that GNI p.c. was not an appropriate indicator to assess the level of economic development of a country. Instead, the Commission should have had based its findings on the gross domestic product per capita in purchasing power parity (‘GDP p.c. in PPP’). In this respect, the company submitted that India would be a more suitable representative country since in terms of GDP p.c. in PPP in 2019, India was closer to the PRC than Turkey, the country proposed in the complaint. In addition, India was more similar to the PRC when comparing GDP p.c. in PPP per employed person thus taking into account the productivity in the three countries. Vestas also claimed that India was a suitable representative country at the same level of development as the PRC.

(140) In the Second Note, the Commission noted in this respect that the basic Regulation established that the representative country should have a similar level of development as the exporting country. It, however, did not contain any further requirement for the selection of the appropriate representative country. The Commission decided that the appropriate source for this information was the World Bank database. This database allowed the Commission to have a sufficient number of potentially appropriate representative countries with a similar level of development to choose the most suitable source of undistorted costs and prices. Furthermore, it is a ranking based on an objective criterion and used consistently in all anti-dumping cases where the determination of the normal value is based on the provisions of Article 2(6a) of the basic Regulation, which ensures uniformity and equal treatment throughout different proceedings.

(141) Furthermore, GNI is used by the World Bank in its classification of economies into income groupings as it follows the methodology of the operational lending policy of the World Bank. Since it recognises all income that goes into a national economy, regardless of its origin, it adequately reflects the total economic activity of a country. In any event, Chengxi Shipyard did not elaborate as to how and why GDP p.c. in PPP rather than GNI p.c. would be more appropriate to reflect the similar level of development than the source used by the Commission, nor did it substantiate or submit evidence for its claim in any other way.

(142) Since India was not included in the same category of the World Bank classification during the investigation period, it could not be considered to meet the criterion laid down in Article 2(6a)(a) first indent of the basic Regulation. Thus, the Commission rejected the claim.

(143) In its comments on the Second Note, Chengxi Shipyard reiterated its views that GNI p.c. was not a suitable indicator of economic development. First, the company argued that GNI included income from foreign activities, which were irrelevant for the assessment of economic development. Second, the company submitted that an indicator, whether GNI or GDP, expressed in USD for the purpose of comparison of the various countries was unsuitable for the assessment of the economic development. Such assessment would be distorted by the price levels in countries with otherwise similar volume of output, as well as by the fluctuation of exchange rates. The company also acknowledged that the effects of changes in price levels (inflation) and exchange rate fluctuations were partially mitigated by the Atlas method used by the World Bank when producing the Country and Lending Groups classification. Finally, the company submitted that taking into account the above-mentioned comments, India was more similar to the PRC than Turkey in terms of economic development.

(144) In its comments on final disclosure, Chengxi Shipyard reiterated its view that GDP p.c. in PPP would be a suitable indicator to assess the economic similarity between countries in terms of economic development level and thus India could be an appropriate representative country.

(145) The Commission explained that while the representative country should have a level of development similar to the exporting country, there was no obligation to select a representative country that was the closest to the exporting country in terms of economic development whether measured in GNI p.c. or GDP p.c. in PPP. In addition, the Commission noted that both GNI p.c. and GDP p.c. in PPP, as well as several others, are recognised indicators for measuring the economic development of countries. In this respect, the Commission underlined that the country classification produced by the World Bank provided a pool of potential representative countries, which was regularly updated and created on the basis of objective criteria and a consistent methodology. Finally, the Commission reiterated that the World Bank’s country classification was an appropriate source of information ensuring uniformity and equal treatment throughout different proceedings. Since India was not classified as an upper-middle income country during the investigation period and following the above considerations, the Commission rejected the claim by Chengxi Shipyard.

(146) In the comments on the Second Note, CCCME and Suzhou Titan argued that India should be considered as a potential representative country although it was not classified as an upper-middle income country by the World Bank. In this respect, the parties referred to the expiry review of anti-dumping measures imposed on imports of sulphanilic acid originating in the PRC where the Commission used India as a representative country. CCCME reiterated those claims in its comments and hearing after the provisional stage.

(147) The Commission noted that in the quoted expiry review, the investigation established that sulphanilic acid was only produced in four economies around the world (India, the PRC, the Union, and the United States of America). Since there was no production of sulphanilic acid in any upper-middle income country, the Commission decided to use India to source corresponding undistorted prices or benchmarks in accordance with Article 2(6a)(a) of the basic Regulation. The situation was different in the present case. The Commission was able to identify a sufficient number of producers in countries with a similar level of economic development as the PRC. Therefore, there was no need to search beyond the group of upper-middle income countries to source undistorted prices or benchmarks. Consequently, the Commission rejected the claim.

3.2.2.3. Production of the product under investigation

(148) In the complaint, the complainant identified production of the product under investigation in Turkey.

(149) The Commission analysed other countries at the same level of development as the PRC and identified SWT producers in four more countries, namely in Brazil, Malaysia, Mexico, and South Africa.

(150) In the First Note, the Commission informed the interested parties of those findings.

(151) In its comments on the First Note, Chengxi Shipyard identified five SWT producers in India. As explained in recitals (140) to (142) and (145), India was found not to be at the same level of development as the PRC and thus not suitable as a representative country. Therefore, the Commission did not analyse either the activities of the alleged SWT producers in India or the availability and quality of their financial information.

3.2.2.4. Availability of relevant public data in the representative country

(152) The Commission examined the availability and quality of the relevant public data in the five potential representative countries where production of the product under investigation was identified. This analysis focused on the availability and quality of financial information and on the availability and quality of data on the factors of production.

(153) With regard to the financial information used to determine the SG&A and profit for the construction of the normal value, the Commission carried out an analysis of the available information. In particular, it examined whether the financial information was of a recent period, whether the financial information was audited or not, whether it was available in individual or consolidated form, and whether the companies were profitable.

(154) With regard to the data on the factors of production, the Commission examined the availability of the import data, the share of imports originating in the PRC and in countries not member to the WTO, and the existence of distortions that could have affected the price of the factors of production. The analysis focused on the most important factors of production.

(a) Financial information

(155) In the First Note, the Commission found that the potentially suitable financial information of the SWT producers was publicly available only in Mexico, South Africa, and Turkey. The Commission further found that the financial information of all identified SWT producers in Brazil and Malaysia and some of the SWT producers in Turkey was either not available for the investigation period, i.e. was outdated, or the companies were lossmaking. In this respect, the Commission further analysed the availability and quality of the financial information of the SWT producers in Mexico, South Africa, and Turkey taking into account the comments on the First Note by the interested parties listed in recital (50).

(156) In its comments on the First Note, CCCME and Suzhou Titan claimed that the Commission should not exclude data of a lossmaking company if such situation is reasonable and