Commission Decision No 841/2002/ECSC

of 21 May 2002

amending Decision No 283/2000/ECSC imposing a definitive anti-dumping duty on imports of certain flat rolled products of iron or non-alloy steel, of a width of 600 mm or more, not clad, plated or coated, in coils, not further worked than hot-rolled, originating, inter alia, in India and accepting an undertaking

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission Decision No 2277/96/ECSC of 28 November 1996 on protection against dumped imports from countries not members of the European Coal and Steel Community(1) ("the basic Decision"), as last amended by Decision No 435/2001/ECSC(2), and in particular Article 11(4) thereof,

After consulting the Advisory Committee,

Whereas:

A. PREVIOUS PROCEDURE

(1) By Decision No 283/2000/ECSC(3), ("the definitive Decision"), as corrected by Decision No 2009/2000/ECSC(4), the Commission imposed, inter alia, a definitive anti-dumping duty of 10,7 % on imports of hot-rolled coils ("product concerned") originating in India, with the exception of imports from several Indian companies specifically mentioned, which are either subject to a lesser rate of duty or to no duty at all.

B. CURRENT PROCEDURE

(2) The Commission subsequently received an application to initiate a "new exporter" review of the definitive Decision, pursuant to Article 11(4) of the basic Decision, from the Indian exporting producer Ispat Industries Ltd. ("the company"). This company claimed that it was not related to any of the exporting producers in India subject to the anti-dumping measures in force with regard to the product concerned. Furthermore, it claimed that it had not exported the product concerned during the original period of investigation (1 January 1998 to 31 December 1998), but had exported the product concerned to the Community since then.

(3) The product covered by the current review is the same product as the one under consideration in the definitive Decision.

(4) The Commission examined the evidence submitted by the company and considered it sufficient to justify the initiation of a review in accordance with the provisions of Article 11(4) of the basic Decision. After consultation of the Advisory Committee and after the Community industry concerned had been given the opportunity to comment, the Commission initiated, by Decision No 2113/2000/ECSC(5), a review of the definitive Decision pursuant to Article 11(4) of the basic Decision with regard to the company and commenced its investigation.

(5) By the Decision initiating the review, the Commission also repealed the anti-dumping duty imposed by the definitive Decision with regard to imports of the product concerned produced and exported to the Community by the company and directed customs authorities, pursuant to Article 14(5) of the basic Decision, to take appropriate steps to register such imports.

(6) The Commission informed the company and the representatives of the exporting country. Furthermore, it gave other parties directly concerned the opportunity to make their views known in writing and to request a hearing. However, no such request was received by the Commission.

(7) The Commission sent a questionnaire to the company and received a reply within the deadline. The Commission also sought and verified all the information deemed necessary for the determination of dumping. A verification visit was carried out at the premises of the company.

(8) The investigation of dumping covered the period from 1 July 1999 to 30 June 2000 ("the investigation period").

C. RESULTS OF THE INVESTIGATION

1. New exporter qualification

(9) The investigation confirmed that the company had not exported the product concerned during the original period of investigation and that it had begun exporting to the Community after this period.

(10) Furthermore, the company was able to satisfactorily demonstrate that it did not have any links, direct or indirect, with any of the Indian exporting producers subject to the anti-dumping measures in force with regard to the product concerned.

(11) Accordingly, it is confirmed that the company should be considered a new exporter in accordance with Article 11(4) of the basic Decision, and thus an individual dumping margin should be determined for it.

2. DUMPING

Normal value

(12) As far as the determination of normal value is concerned, the Commission first established, for the company, whether its total domestic sales of hot-rolled coils were representative in comparison with its total export sales to the Community. In accordance with Article 2(2) of the basic Decision, domestic sales were considered representative since the total domestic sales volume of the exporting producer was at least 5 % of its total export sales volume to the Community.

(13) The Commission subsequently identified those types of hot-rolled coils sold domestically by the company that were identical or directly comparable to the types sold for export to the Community. The investigation showed that the grades and dimensions of the product concerned exported into the Community by the company are identical or comparable to the products sold on the domestic market.

(14) For each type sold for export to the Community by the exporting producer and found to be directly comparable to the type sold on its domestic market, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Decision. Domestic sales of all types were considered sufficiently representative.

(15) An examination was also made as to whether the domestic sales of each type could be regarded as having been made in the ordinary course of trade, by establishing the proportion of profitable sales to independent customers of the type in question. In cases where the sales volume of the product concerned sold at a net sales price equal to or above the calculated cost of production ("profitable sales") represented 80 % or more of the total sales volume and where the weighted average price of that type was equal to or above cost of production, normal value was based on the actual domestic price, calculated as a weighted average of the prices of all domestic sales made during the investigation period, irrespective of whether all these sales were profitable or not. In cases where the volume of profitable sales of the product concerned represented less than 80 % but 10 % or more of the total sales volume, normal value was based on the actual domestic price, calculated as a weighted average of profitable sales only.

(16) In cases where the volume of profitable sales of any type of the product concerned represented less than 10 % of the total sales volume, it was considered that this particular type was sold in insufficient quantities for the domestic price to provide an appropriate basis for the establishment of the normal value.

(17) Wherever domestic prices of a particular type sold by the company could not be used, constructed normal value had to be used in preference to domestic prices of other exporting producers or to domestic prices of other similar types. Due to the fact that only one company is concerned by this investigation, the former option was not available. As to the use of similar types, the number of different types and the variety of factors affecting them, would have meant in this case making numerous adjustments, most of which would have had to be based on estimates. It was therefore considered that the constructed value of the company formed a more appropriate basis to establish normal value.

(18) As a result of the above tests, for 33 types normal value calculations were based on the actual domestic sales prices of hot-rolled coils whilst for all other types (1006) normal value had to be calculated, in accordance with Article 2(3) of the basic Decision, on the basis of a constructed value that was determined by adding to the manufacturing costs of the exported models, a reasonable percentage for selling, general and administrative expenses (SG & A) and reasonable profit margin.

(19) To this end, the Commission examined whether the SG & A incurred and the profit realised by the company on the domestic market constituted reliable data. Actual domestic SG & A expenses were considered reliable since the domestic sales volume of the company concerned could be regarded as representative when compared to the volume of export sales to the Community. The domestic profit margin was determined on the basis of domestic sales made in the ordinary course of trade.

(20) The company has claimed an adjustment to its cost of production for start-up costs because of low capacity utilisation rate, pursuant to Article 2(5) of the basic Decision.

(21) It was found that the company's costs for the investigation period were affected by the use of new production facilities that required a very substantial investment and that were characterised by low capacity utilisation rates. It was also established that these low capacity utilisation rates were partially due to start-up operations. Consequently, pursuant to Article 2(5) of the basic Decision, the Commission has adjusted the company's cost of production for the entire investigation period to reflect the actual costs incurred during the last three months thereof, which corresponded to the moment when the company was considered as commercially put to use pursuant to the applicable Indian law.

Export price

(22) Since all export sales to the Community were made to independent customers in the Community, the export price was established in accordance with Article 2(8) of the Basic Decision, namely on the basis of export prices actually paid or payable.

Comparison

(23) For the purpose of ensuring a fair comparison between normal value and export price, due allowance in the form of adjustments was made for differences affecting price comparability in accordance with Article 2(10) of the basic Decision.

(24) All of the export sales allowances with the exception of that for commissions, which was double accounted, could be accepted. These relate to inland freight, other freight, bank charges, other charges and packing.

(25) All the domestic sales allowances claimed by the company with the exception of that for duty drawback could be accepted.

(26) The duty drawback allowance that was claimed was calculated on the basis of the credits gained on the basis of the Duty Entitlement Passbook Scheme (DEPB) scheme described in recital 40 of Commission Decision No 284/2000/ECSC(6), as corrected by Decision No 2071/2000/ECSC(7), that imposed a definitive countervailing duty on imports of the product concerned originating in India. This scheme depends on the export sales quantities irrespective of whether or not any import duties have been paid or whether any raw materials have actually been imported at all. Since the company only imported negligible quantities of raw materials, it could not demonstrate that the imported materials were physically incorporated in the final product when sold on the domestic market of the exporting producer. This allowance cannot therefore be granted as it does not satisfy the requirements of the basic Decision.

Dumping margin

(27) According to Article 2(11) of the basic Decision, the dumping margin was established on the basis of a comparison between the weighted average normal value by type and the weighted average export price.

(28) This weighted average dumping margin established for the company, expressed as a percentage of the free-at-Community-frontier price, amounts to 46,5 %.

D. AMENDMENT OF THE MEASURES BEING REVIEWED

(29) In the light of the foregoing, it is considered that a definitive anti-dumping duty should be imposed at the level of the dumping margin found, but, in accordance with Article 9(4) of the basic Decision should not be higher than the countrywide injury margin established for India by the definitive Decision in the original anti-dumping investigation.

(30) No individual injury margin can be established in a new exporter review since the investigation, pursuant to Article 11(4) of the basic Decision, is limited to the examination of the individual dumping margin.

(31) In accordance with Article 24(1) of Commission Decision No 1889/98/ECSC(8) and Article 14(1) of the basic Decision, no product shall be subject to both anti-dumping and countervailing duties for the purposes of dealing with one and the same situation arising from dumping or from export subsidisation. As anti-dumping duties should be imposed on imports of the product concerned it is necessary to determine whether, and to what extent, the subsidy and the dumping margin arise from the same situation.

(32) In the case in question the schemes investigated in India have been found to constitute export subsidies within the meaning of Article 3(4)(a) of the above Decision No 1889/98/ECSC. As such, the subsidies can affect the export prices of the Indian exporting producers, thus leading to increased margins of dumping. In other words, the dumping margin established is wholly or partly due to the existence of export subsidies. In these circumstances the anti-dumping duty needs to be adjusted to reflect the actual dumping margin remaining after the imposition of the countervailing duties offsetting the effect of the export subsidies.

E. ADJUSTMENT OF THE ANTI-DUMPING DUTY APPLICABLE TO JINDAL VIJAYANAGAR STEEL LTD

(33) Jindal Vijayanagar Steel Ltd applied for an accelerated review pursuant to Article 20 of Decision No 1889/98/ECSC, but did not apply, at the initiation of this review, for a review of the anti-dumping duty applicable to it. Following the initiation of a review(9) an individual countervailing duty rate was established at 5,7 % for this company. Given that pursuant to recital 255 of Decision No 283/2000/ECSC the anti-dumping duty is determined as the difference between the injury margin and the export subsidy established, the anti-dumping duty applicable has to be adjusted. The injury margin attributed to Jindal Vijayanagar Steel Ltd is the residual injury margin of 23,8 %. Consequently, the anti-dumping duty applicable to products exported to the Community by this company has to be fixed at 18,1 %.

(34) Accordingly, the rate of duty applicable to the free-at-Community-frontier price, before duty and taking into account the results of the parallel anti-subsidy proceeding, shall be:

>TABLE>

(35) Meanwhile, Jindal Vijayanagar Steel Ltd has requested a review of the anti-dumping duty applicable to it. This review was initiated by Commission Decision No 1699/2001/ECSC(10) which shall remain in force.

F. RETROACTIVE LEVYING OF THE ANTI-DUMPING DUTY

(36) As the review has resulted in a determination of dumping in respect of the company Ispat Industries Ltd, the anti-dumping duty applicable to this company shall also be levied retroactively from the date of initiation of this review on imports which have been made subject to registration pursuant to Article 3 of Decision No 2113/2000/ECSC.

G. UNDERTAKING

(37) The company, Ispat Industries Ltd, offered a price undertaking concerning its exports of the product concerned to the Community, in accordance with Article 8(1) of the basic Decision.

(38) After examination of the offer, the Commission considered the undertaking as acceptable since it would eliminate the injurious effects of dumping pursuant to Article 8(1) of the basic Decision. Moreover, the regular and detailed reports which the company undertook to provide to the Commission will allow effective monitoring. Furthermore, the nature of the product and the sales structure of the company is such that the Commission considers that the risk of circumvention is limited.

(39) In order to ensure the effective respect and monitoring of the undertaking, when the request for release for free circulation pursuant to the undertaking is presented, exemption from the duty is conditional upon presentation to the customs service of the Member State concerned a valid "Commercial invoice" issued by Ispat Industries Ltd and containing the information listed in the Annex. Where no such invoice is presented, or when it does not correspond to the product presented to customs, the appropriate rate of anti-dumping duty should be payable in order to ensure the effective application of the undertaking.

(40) The information requested pursuant to the Annex has been updated. In order to ensure consistency in the monitoring of undertakings this revised Annex should apply also to all the companies referred to in Article 2(1) of Decision No 283/2000/ECSC.

(41) In the event of a breach or withdrawal of the undertaking an anti-dumping duty may be imposed, pursuant to Article 8(9) and (10) of the basic Decision.

H. REPEAL OF COMMISSION DECISION No 1357/2001/ECSC(11)

(42) Decision No 1357/2001/ECSC contained certain errors and should consequently be repealed and replaced with effect from the date of its entry into force by the present Decision. Any anti-dumping and countervailing duties collected in excess of the country-wide injury margin of 23,8 % for India should therefore be reimbursed.

I. DISCLOSURE AND DURATION OF THE MEASURES

(43) The companies were informed of the facts and considerations on the basis of which it was intended to impose the amended definitive anti-dumping duty on their exports to the Community.

(44) This review does not affect the date on which Decision No 283/2000/ECSC will expire pursuant to Article 11(2) of the basic Decision,

HAS ADOPTED THIS DECISION:

Article 1

Decision No 1357/2001/ECSC is hereby repealed.

Article 2

Decision No 283/2000/ECSC is amended as follows:

1. In the table in Article 1(2) the section headed "India" is replaced by the following: ">TABLE>"

2. In the table in Article 2(1), the following row is inserted: ">TABLE>"

3. In Article 2(2), the reference to an "undertaking invoice" is replaced by "Commercial Invoice".

Article 3

The Annex to Decision No 283/2000/ECSC is replaced by the Annex to this Decision.

Article 4

Where a countervailing duty was collected pursuant to Decision No 284/2000/ECSC in addition to the anti-dumping duty imposed by Decision No 283/2000/ECSC on either:

(a) goods produced by Ispat Industries Ltd, which were imported between 7 October 2000 and the date of publication of this Decision, and

(b) goods produced by Jindal Vijayanagar Steel Ltd, which were imported between 6 July 2001 and the date of publication of this Decision,

the amount of anti-dumping duty collected which exceeded the combined duty of 23,8 % shall be reimbursed.

Article 5

Decision No 1699/2001/ECSC, initiating a "new exporter" review of Decision No 283/2000/ECSC in respect of Jindal Vijayanagar Steel Ltd, continues to apply.

Article 6

1. This Decision shall enter into force on the day following its publication in the Official Journal of the European Communities.

2. Article 2(2) shall apply from 6 July 2001.

This Decision shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 21 May 2002.

For the Commission

Pascal Lamy

Member of the Commission

(1) OJ L 308, 29.11.1996, p. 11.

(2) OJ L 63, 3.3.2001, p. 14.

(3) OJ L 31, 5.2.2000, p. 15.

(4) OJ L 240, 23.9.2000, p. 12.

(5) OJ L 252, 6.10.2000, p. 3.

(6) OJ L 31, 5.2.2000, p. 44.

(7) OJ L 246, 30.4.2000, p. 32.

(8) OJ L 245, 4.9.1998, p. 3.

(9) OJ C 201, 14.7.2000, p. 2.

(10) OJ L 231, 29.8.2001, p. 3.

(11) OJ L 182, 5.7.2001, p. 27.

ANNEX

Information necessary for commercial invoices accompanying sales made subject to the undertaking (Article 2(2))

1. The heading "COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING".

2. The name of the company issuing the commercial invoice.

3. The commercial invoice number.

4. The date of issue of the commercial invoice.

5. The TARIC additional code under which the goods on the invoice are to be customs-cleared at the Community frontier (as specified in the Decision).

6. The exact description of the goods, including:

- the company product code number (CPC) (if applicable),

- the product code number (PCN) (as established in the undertaking offered by the producing exporter in question),

- the technical specification of the PCN,

- CN code,

- quantity (to be given in tonnes).

7. The description of the terms of the sale, including:

- price per tonne,

- the applicable payment terms,

- the applicable delivery terms,

- total discounts and rebates.

8. Name of the first buyer acting as an importer to which the invoice is issued directly by the company.

9. The name of the official of the company that has issued the commercial invoice and the following signed declaration: "I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by this invoice is being made within the scope and under the terms of the undertaking offered by ... (name of company), and accepted by the European Commission through Decision No 841/2002/ECSC. I declare that the information provided in this invoice is complete and correct."