28.12.90 OfficialJournaloftheEuropeanCommunities NoL365/25
COMMISSION REGULATION (EEC)No3798/90
of21December 1990
imposingaprovisional anti-dumping dutyonimportsofespadrilles originating
inthePeople'sRepublic ofChina
THECOMMISSION OFTHEEUROPEAN COMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropean
Economic Community ,
I
HavingregardtoCouncilRegulation (EEC)No2423/88
of11July1988onprotection againstdumpedorsubsi­
dizedimportsfromcountriesnotmembersoftheEuro­
peanEconomic Community ,(')andinparticularArticle
11thereof,
Afterconsultations withintheAdvisoryCommittee as
providedforbytheabovementioned Regulation ,
Whereas :
A.PROCEDUREviewsinwritingandrequested ahearing,whichthe
Commission granted.
Thecomplaint indicatedthattheremightbesmall­
scaleproduction ofbeachslippersinGreece.Follo­
wingdiscussions withtheHellenicAssociation of
FootwearManufacturers andExporters ,aquestion­
nairewassenttoaGreekproducerbutnoreply
wasreceived bytheCommission fromthat
producernorfromanyotherGreekproducer .The
viewwasaccordingly takenthatitwasnotpossible
toconfirmtheexistenceofanyGreekproduction
oftheproductinquestion .
(4)ThreeChineseexporters (theZhejiangArtsand
CraftsImportandExportCorporation ,theFujian
Footwear andHeadgear Corporation andthe
Shanghai ArtsandCraftsImportandExport
Corporation )repliedtothequestionnaires within
thetimeprescribed .Inaddition,theprincipalorga­
nizationinthePeople'sRepublicofChinawith
responsibility fortradeinfootwear,theChina
ChamberofCommerce forImportandExportof
LightIndustrial ProductsandArts-Crafts ,here­
inafterreferredtoasthe'ChineseChamber of
Commerce ',madeknowninwritingtheviewsof
Chineseexporterstakenasawhole.Thatorganiza­
tionlikewisesoughtahearingandthiswasgranted
bytheCommission .
Itbecameapparentinthecourseoftheinvestiga­
tionthatthethreeChineseexporterswhichcoope­
ratedaccounted forapproximately onequarterof
theexportsofbeachslippersfromthePeople's
RepublicofChinatotheCommunity andthatno
information wasavailableregarding exportsby
otherChineseexporters .
SincethePeople'sRepublicofChinaisnota
marketeconomycountrywithinthemeaningof
Article2(5)ofRegulation (EEC)No2423/88and
sincethecomments madebytheChineseexporters
weresubmitted enblocandnotalltheChinese
exporterswereidentified ,theCommission tookthe
viewthat,forthepurposesoftheproceeding ,all
theChineseexportsshouldbetakenintoaccount
collectively .
(5)TheCommission sentquestionnaires totheeighty
importerslistedinthecomplaint .Itbecameclear
that,firstly,eightofthemhadnotimportedbeach
slippersfromthePeople'sRepublicofChina,at
leastnotduringthereferenceperiod,and,secondly,
eightothershadchangedtheiraddressandcould
notbecontacted .(1)InJuly1989acomplaint waslodgedinwriting
withtheCommission bytheFrenchNational
,FootwearIndustryFederation ,theSpanishFoot­
wearIndustryFederation andEtchandy Portugal
(thesolePortuguese producer)onbehalfofprodu­
cersaccounting forthebulkofCommunity
production ofespadrilles (beachslippers).
Thecomplaintcontainedevidenceofdumpingand
resultantinjurywhichwasconsidered sufficientto
warranttheinitiation ofaproceeding .
TheCommission accordingly announced ,ina
noticepublished intheOfficialJournalofthe
European Communities ,(2)theinitiation ofan
anti-dumping proceeding concerning importsinto
theCommunity ofbeachslippersfallingwithin
CNcodesex64041990or64052099,originating
inthePeople'sRepublicofChina,
(2)TheCommission officiallynotifiedtheexporters
andimportersknowntobeconcerned ,therepre­
sentatives oftheexporting countryandthe
complainants .
Itrequestedthepartiesconcerned toreplytothe
questionnaires whichhadbeensenttothemand
gavethemtheopportunity tomakeknowntheir
viewsinwritingandtorequestahearing.
(3)Mostofthecomplainant Community producers
repliedtothequestionnaires ,madeknowntheir
(')OJNoL209,2.8.1988,p.1.
(2)OJNoC314,14.12.1989,p.15.

28.12.90 NoL365/26 OfficialJournaloftheEuropeanCommunities
selectedbecausemostoftheproducers anda
numberoftheCommunity importers weresmall
firms.TheCommission accordingly considered
thatitwasreasonable thatthereferenceperiod
shouldcoincidewiththelastfullaccounting year,
sincethefinalizedandauditedresultsforthatyear
werethemostrecentavailablewhenthecompanies
concerned wererequiredtocompletethequestion­
naires.
B.THEPRODUCT INQUESTION ,LIKE
PRODUCTS AND THE COMMUNITY
INDUSTRYInaddition,fiveimporters ,ofwhichtheCommis­
sionwasnotawarewhentheproceeding
commenced ,madethemselves knowntothe
Commission withintheperiodspecifiedinthe
noticeofinitiation .
Ofthesixty-nine importers thuscontacted and
whocouldhavecooperated ,onlytwosentthe
Commission completerepliestothequestionnaires
withintheperiodsstipulated orgranted.
Lastly,threeimporters'associations madetheir
viewsknowninwritingandrequested andwere
grantedhearings .
(6)Asaresult,inthecaseofthosepartieswhichfailed
toreplyorwhichfailedtomakerepresentations in
anyotherway,findingsweremade,pursuantto
Article7(7)(b)ofRegulation (EEC)No2423/88,
onthebasisofthefactsavailable,thatistosay,in
thiscase,theinformation obtained fromthe
complainant andtheofficialstatisticsofthe
Community .
(7)TheCommission soughtandverifiedalltheinfor­
mationitconsidered necessary forapreliminary
determination ofdumpingandresultantinjuryas
regardsthosepartieswhichagreedtocooperate .To
thatend,itcarriedouton-the-spot checksatthe
premisesofthefollowing :(a)productinquestion
(9)Theproductswhicharethesubjectofthenotice
initiatingtheproceeding arebeachslipperswith
plaitedfibresoles,whetherornotstrengthened
withrubberorplasticsoveravariablesurface,
fallingwithinCNcodesex64041990orex
64052099.
Beachslippersareclassifiedwithinoneorotherof
thosetwoCNcodesaccording totherespective
percentage ofropeorrubber(orplastics)which
constitutes thesurfaceoftheoutersoleincontact
withtheground :
—upto50%rubber(orplastics);inthiscasethe
slippersfallwithinCNcodeex64052099,
hereinafter referredtoas'TypeA';
—morethan50%andupto100%rubber(or
plastics);inthisc?setheslippersfallwithin
CNcodeex64041990,hereinafter referredto
as'TypeB\
(10)Theinvestigation showedthatthesetwoCNcodes,
thepurposeofwhichistoenableadistinction to
bemadewhenapplyingthecustomstariffonthe
basisofthecriterionindicatedabove,corresponded ,
infact,tobasicallythreetypesofslipper:
—thosewithasolecoatedatthreepoints,all
belonging toTypeA,
—thosewitha'grid'sole,whichcanbeeither
TypeAorTypeB,
—thosewithafullycoatedsole,whichallbelong
toTypeB.
Theinvestigation coveredbeachslippersofthese
threetypeswithasoleofuniformthicknessnot
exceeding 2,5cm.
Insofarasalltheseproductshavethesamebasic
physicalortechnicalcharacteristics andareused
forthesamepurpose,theCommission tookthe
viewthatallbeachslippersconstituted theproduct
inquestioninthisRegulation ,irrespective ofthe
amountofcoatingonthesole,oncondition that
thesolewasofuniformthicknessnotexceeding 2,5
cm.(a)Community producers
—Berasategui ,Hendaye ,France
—EtsCallian,StPaullesDax,France
—EtsCausseque ,Monte-de-Marsan ,France
—EtsEtchandy ,Mauleon,Frane
—Manufacture Luzienne ,Urrugne ,France
—PeeLaborde,Aramits,France
—EtsTauzin,Mauleon ,France
—CalzadosPuertaSA,Arnedo,Spain
—DosegaSA,Arnedo,Spain
—EtchandyPortugal,Covilha,Portugal (sincethe
accounting documents relatingtothisproducer
hadbeentransferred ,forthepurposesofthe
investigation ,totheregistered officeofits
parentcompanyinFrance,therelevantchecks
werecarriedoutatthesametimeasthosethat
werecarriedoutatthepremisesoftheFrench
producerinquestion ,EtsEtchandy ,Mauleon).
(b)Community importers
—NetteretCie,Paris,France
—MoritzL.Chrambach GmbH&Co.Hamburg ,
Germany
(8)Thedumpinginvestigation coveredtheperiod 1
Januaryto31December 1988.Thisperiodwas

28.12.90 OfficialJournaloftheEuropeanCommunities NoL365/27
C.DUMPING(b)Likeproducts
(11)Withregardtothedefinition oflikeproducts,the
Commission established thattherewerenosignifi­
cantphysicaldifferences betweentheslippers
exportedtotheCommunity bytheChineseexpor­
tersandthecorresponding productssoldby
Community producers .
Inthisregard,theargumentputbytheChina
Chamber ofCommerce andbytheCommunity
importers'associations ,thatthebeachslippers
producedinChinawerenotcomparable fromthe
standpoint ofqualitytothosemanufactured inthe
Community couldnotbeaccepted .(a)Normalvalue
(13)Inordertoestablishthatimportsofbeachslippers
originating inthePeople'sRepublicofChinawere
beingdumped,theCommission wasobligedto
takeintoaccountthefactthatChinaisnota
marketeconomycountryand,accordingly ,tobase
itscalculations onthenormalvalueoftheproduct
inquestioninamarketeconomycountry.Tothat
end,thecomplainant hadproposed apricewhich
corresponded toanofferfromaproducerin
Uruguay .
Thatproposalhadbeenregardeda£acceptable in
thecontextofthecomplaint andinorderto
initiatetheinvestigation butthesaidreferenceto
anoffercouldnotberegardedasadequateforthe
purposesofestablishing thenormalvalue.
(14)TheCommission accordingly carriedoutasurvey
ofthevariousthirdcountryproducers ofbeach
slippersthatmightprovideasuitablereferenceand
foundthat:
—therehadbeensomeverysmall-scale produc­
tioninTunisiaandinIsrael,althoughno
evidence wasavailable astowhetheritwas
continuing ;
—production hadrecentlycommenced inBangla­
deshbutitappearedtobetoorecenttoprovide
asuitablereferenceforthepurposesofthis
investigation ;TheCommission foundthatthedifferences
claimed(essentially thequalityofthefabricofthe
upperandthequalityofthefibreusedtomanufac­
turethesole),firstly,werenotdiscernible inevery
caseand,secondly,wheretheycouldbediscerned ,
weresominimal asnottoaffectthebasiccharacte­
risticsoftheproductorthepurposeforwhichitis
intended .
Inaddition,theCommission wasabletoconfirm
thattheChinesebeachslippersweresoldonan
entirelycompetitive basiswithCommunity slip­
pers,aswitnessedbythefactthatinthemajorityof
sellingoutletsChineseproductsandCommunity
productsaresoldtogether .
Onthesebases,theCommission tooktheview
that,firstly,beachslippersproduced inthe
Community ,takenasawhole,and,secondly ,beach
slippersexportedfromthePeople'sRepublicof
ChinatotheCommunity ,takenasawhole,arelike
productswithinthemeaningofArticle2(12)of
Regulation (EEC)No2423/88.
(c)Community industry—therehadbeensizeableproduction ofbeach
slippersinSouthAmericaforalmostacentury.
TheywereproducedbySAFabricaUruguaya
deAlpargatas ,Montevideo ,UruguayandIndus­
triaChilenadeAlpargatas SA('Inchal'),
Santiago,Chile,whichhadagreedtocooperate
withtheCommission .AsecondChilean
producerhadstatedthatitwasunabletocoope­
rateonpracticalgrounds .
(15)TheCommission carriedoutinvestigations atthe
premises ofthetwoabovementioned South
American producers andfoundthat:
—theUruguayan producerwasafullyintegrated
company ,i.e.itmanufactured thebraidforthe
solesandthecottonfabricfortheuppersitself,
produced approximately 1,4millionpairsof
beachslippersayearbutdidnotvulcanizethe
soles(unliketheChineseandCommunity
producers ).Thisproducer'smanufacturing
processwasefficient ,modemandcosteffec­
tive:(12)TheCommission foundthattheproducers on
whosebehalfthecomplaint waslodged,which
cooperated withtheCommission andwhichmanu­
facturedbeachslippersduringtheinvestigation
period,accounted forthebulkofCommunity
production oflikeproductsduringthatperiod.
Asaresult,theCommission tooktheviewthat
theyconstitutetheCommunity industrywithinthe
meaningofArticle4(5)ofRegulation (EEC)No
2423/88.

28.12.90 NoL365/28 OfficialJournaloftheEuropeanCommunities
—theChileanproducerwhichhadagreedto
cooperatewiththeCommission wasarecently­
established companyanditsproduction had
notyetattainedalevelthatenableditto
operateundereconomically optimumcondi­
tions.Asaresult,itscostsandpriceswere
higherthanthoseoftheUruguyan producer.
Ontheotherhand,itpossessedefficientplant
withwhichitvulcanized thesoles.
TheCommission accordingly tooktheviewthatit
wasreasonable toestablishthenormalvalueonthe
basisoftheinformation obtained andverifiedat
thepremisesoftheUruguayan producerandto
makeasuitableadjustment totakeaccountofthe
costofvulcanization .
(16)Inestablishing thenormalvalueinUruguay ,the
Commission tookaccountofthefactthatonthe
marketofUruguayimportedbeachslippersare
subjecttoasystemof'referenceprices'whichare
intendedtoprotectthelocalindustryfromcheap
imports.
Insofarasthatsystemmightinfluence the
domesticsellingpricesoftheUruguayan producer
andsinceitsexportstobothNorthandSouth
Americawerenegligible compared withitstotal
production ,itappearednecessary tocalculatethe
normalvalueonthebasisoftheconstructed value
ofthelikeproductinUruguay .Theconstructed
valuewasdetermined byaddingthecostofproduc­
tionofthebeachslippersandareasonable margin
ofprofit.
Thecostofproduction wascalculated byadding
togetherallcosts,bothfixedandvariable,relating
to:
—materials ,
—manufacture ,inthecountryoforigin,ofmedi­
um-sized beachslippers (corresponding to
ladies'sizes,whichgenerallyconstitutemostof
thetrade).
Tothosecostswereaddedsellingandadministra­
tiveexpensesandotheroverheads ,whichwere
determined byreferencetothesalesofbeachslip­
persmadebytheUruguayan producer onits
domesticmarketduringtheinvestigation period.
Thosecosts,unliketheprofitmargin,couldnotbe
influenced bythesystemofreference pricesin
forceinUruguayinregardtoimportedproducts .
(17)Forallcalculations ,theeffectsofinflationin
Uruguaywereneutralized bythesystemusedby
thecompany whichconsisted ofdrawingup
accountsusing'ajustesparainflationoperativa'
fixedbytheUruguayan authorities .(18)TheCommission tooktheviewthattheprofit
marginhadtobesufficienttoensureaminimum
returnonsalesatdifferentmarketing stages,inclu­
dingsalestowholesalers .TheCommission took
theviewthataminimum returnmustmeanalevel
ofprofitwhich:
—enabledtheproducerinquestiontomakesuch
investments aswereessentialtomaintaining its
plantatthehighleveloftechnicalefficiency
whichtheyhadalreadyattainedatthetimeof
theon-the-spot investigation ;
—ensuredanacceptable returnonthecapital
invested .
Underthoseconditions ,theprofitmarginwasesta­
blishedat7%oftheconstructed normalvalue.
(19)Withregardtoquality,theCommission foundthat
thebeachslippersmanufactured inUruguaywere
generallystrongerthantheChineselikeproduct
but,ontheotherhand,theywerenotalwaysas
elaborate (lackofinnersoles,lackofembroidery ,
thatwereusuallytobefoundinthecaseofthe
articlesimportedfromChina).Inthesecircum­
stancestheviewwastakethattherewasabalance
betweenthevalueattachingtothesaidcharacteris­
ticsandthat,therefore,noupwardordownward
adjustment waswarranted onaccountofdifferences
inquality.
(20)Thecostsofvulcanization werecalculated fromthe
information obtainedduringtheinvestigation
carriedoutatthepremisesoftheCommunity
producers andinthecourseoftheinvestigation
carriedoutinChile.Itappearedthatthecostsof
theChileanproducerwerethelowest.Therefore ,
thecostsofthatproducer ,limitedtothecostof
materialsandproduction costs,established onthe
basisofaweightedaverageforthe'TypeA'and
'TypeB'beachslippers,plusthesame7%profit
margin,wereaddedtotheconstructed valueesta­
blishedinUruguay .
(21)Therepresentatives oftheChinaChamber of
Commerce andtheimporters'associations objected
tothechoiceofreferencecountryontheground
thatthebeachslippersoriginating inUruguaywere
notexportedtotheCommunity .Theysuggested
thatBangladesh shouldbeusedasthereference
countryand,tothatend,proposedthatthenormal
valuebebasedonanofferandapurchasefrom
thatcountry,whichtookplacein1990.
TheCommission considersthattheargumentput
forwardisnotvalidsincethenormalvaluemustbe
ascloseaspossibletopricesprevailing inthe
referencecountry.Therefore ,thefactthatUruguay
didnotexportbeachslipperstotheCommunity is
irrelevant .

28.12.90 OfficialJournaloftheEuropeanCommunitiesNoL365/29
D.COMPARISONWithregardtoBangladesh ,asstatedatpoint14
above,according totheinformation obtainedby
theCommission ,itsproduction istoorecentto
constitute asuitablereferencewithinthecontextof
thisinvestigation .
(22)Asaresult,theCommission concluded thatitwas
appropriate andreasonable toestablishthenormal
valueonthebasisoftheconstructed valuein
Uruguay,adjustedsoastotakeaccountofallthe
differences affectingpricecomparability andparti­
cularlywithregardtothephysicalcharacteristics ,
addingthecostsinvolvedinvulcanizing thesoles.(24)Initscomparison ofnormalvalueandexport
prices,theCommission tookaccount,inaccor­
dancewithArticle2"(9)and(10)ofRegulation
(EEC)No2423/88,ofdifferences affectingprice
comparability .
Thecomparison wasmadeattheex-worksstageon
anoverallbasisforthewholeofthereference
period.Thenecessaryadjustments weremade:
—inthecaseofthenormalvalue,onthebasisof
thedataobtainedinthecourseoftheinvestiga­
tioninUruguayrelating,interalia,toinland
transport,thecostsofinsurance ,handlingand
packaging ,financing costsandselling
expenses ;
—inthecaseoftheexportprices,andinthe
absenceofdatafromtheChineseexporters ,on
thebasisofthedataavailablerelating,inter
alia,tofreightrates,insurance ,handling,
inlandtransportandpackaging costs,financing
costsandsellingexpenses .(b)Exportprices
(23)Exportpriceswereestablished onthebasisofthe
pricesactuallypaidorpayableforproducts
exportedtotheCommunity .
Inthisregard,theCommission established thatthe
pricesindicatedbythetwoimporterswhichcoope­
ratedintheinvestigation couldnotberegarded ,on
theirown,assignificant becauseofthesmallquan­
titiesinvolved (onlyabout3%oftotalimports).E.DUMPING MARGIN
TheCommission accordingly considered that,in
ordertodetermine theexportpricesofthebeach
slippers,itwasappropriate tocalculateaweighted
averageofthepricespayableasstatedbythe
Chineseexporters (whichmadenodistinction
betweenthe'TypeA'andtheTypeB'slippers)and
thepricespaidasindicatedbytheimporterswhich
cooperated intheinvestigation .(25)Thepreliminary examination ofthefactsshows
thatexportsofbeachslipperseffectedbythe
Chineseexportersarebeingdumped.Thedumping
marginisequaltothedifference betweenthe
normalvalueestablished formedium-sized beach
slippersandthepriceonexporttotheCommunity ,
andamounts,onaweighted averagebasis,to
93,3%ofthefreeatfrontiervalueattheCommu­
nityfrontierofimportsoftheproductinquestion
originating inthePeople'sRepublicofChina,for
theChineseexporterstakenasawhole.
Althoughthevolumeofbeachslippersthustaken
intoaccountrepresents onlyabout30%oftotal
imports,thesaiddatawaspreferredtothefigures
shownintheofficialstatisticsoftheCommunity in
sofarasthelattercombinethedatarelatingto
beachslipperswiththatrelatingtootherfootwear
whichcannotberegardedaslikeproducts .F.INJURY
(a)Volumeandpriceofimports
(i)Volumeofdumpedimports
(26)Asindicatedabove(atpoints9and23)thereisno
specificCNcodeforbeachslippers(hencethe'ex'
headings).Eurostatsthereforeaggregatebeachslip­
perswithotherfootwearandtheresultantdata
mustbequalified .Withtheassistance ofthe
MemberStates,thesestatisticswererectifiedandit
waspossibletobringthemmoreinlinewiththe
actuallevelofbeachslipperimports.Inaddition,Inaddition,theCommission tooktheviewthat
establishing aweightedaveragethatwasvalidfor
bothtypesofbeachslipperwasasuitableand
reasonable methodsincemostoftheavailable data
madenodistinction between'TypeA'and'TypeB'
slippers.Asfarassizeswereconcerned ,the
invoicesexaminedatthepremisesoftheimporters
whichcooperated showedthatmostofthetrade
wasinmedium-sized slippersandthatthesaiddata
was,accordingly ,compatible withthatobtainedin
ordertoestablish thenormalvalue.

28.12.90 NoL365/30 OfficialJournaloftheEuropeanCommunities
theChinaChamber ofCommerce communicated
totheCommission theChineseexportstatistics
withwhichitwaspossibletoconfirm,atleastin
part,therectifications made.
(27)OnthebasisoftherawdatashownintheEuros­
tats,importsoriginating inthePeople'sRepublicof
Chinamorethandoubledbetween 1985and1988
(risingfrom29,25millionpairsin1985to35,98
millionpairsin1986,69,21millionpairsin1987
and68,83millionpairsin1988).otherthirdcountries ,wereimported intothe
Community between1985and1988.
According totheinformation obtainedbythe
Commission ,thequantities inquestiondonot
generally relatetosalesofbeachslippersbut
mainlytosuppliesofotherfootwear(forexample,
slipperswithrubbersoles).
OnthisbasisChinacanbeconsidered asbyfarthe
majorifnotstrictlyspeakingthesolethirdcountry
supplying beachslipperstotheCommunity .The
Commission therefore feltthatotherthirdcoun­
trieswereresponsible forsuchsmallquantities (as
canbeseenfromFrenchstatisticswhichdrawa
distinction between'beachslippers'and'otherfoot­
wear')thattheycanbedisregarded .
TheCommission therefore considered thatarea­
sonablebasisforcalculating totalsalesofthe
productinquestionontheCommunity marketwas
toaddupChineseimportsandCommunity produ­
cers'sales.TherectifiedEurostatsfigures,whichareavailable
for1986,1987and1988only,alsoshowthat
importsfromChinaincreased substantially ,but
slightlylessso,from28,56millionpairsin1986to
59,27millionpairsin1987and56,34millionpairs
in1988.
(iii)Marketshareofdumpedimports
(29)Onthebasisindicatedintheaboveparagraph ,it
transpiresthattheChineseexporters'marketshare
hasrisensubstantially ,from64%in1985to84%
in1988.
Thisincreaseofover30%intheChineseexpor­
ters'marketsharebetween1985and1988must
alsobelookedatinthelightoftheincreaseofover
50%inCommunity consumption inthesame
period.Thelatterfiguresarepartiallyconfirmed bythe
ChineseexportstatisticswhichshowthatChinese
deliveriesrosefrom21,89millionpairsin1985to
28,19millionpairsin1986,54,30millionpairsin
1987and36,85millionpairsin1988.
Theonlysignificant discrepancy betweenthe
ChinesestatisticsandtherectifiedEurostatsfigures
relatesto1987and1988.Thereasonforthismay
lieintheintervalbetweentheshipments (in1987)
andthecollection ofdatarelatingtoimportsinto
theCommunity (in1988).However,thisdiscre­
pancydoesnotcallinquestionthegeneraltrend
broughttolight.
TheCommission therefore considers thatareaso­
nableestimateoftheincreaseinvolumeofimports
ofbeachslippersoriginating inthePeople'sRepu­
blicofChinaisasfollows :
—fortheperiod1985-88 :approximately 70%
(onthebasisofthestatisticssuppliedbythe
ChineseChamber ofCommerce );
—fortheperiod1986-88 :approximately 65%
(midwaybetweenthepercentage resultingfrom
theexportfiguresofthePeople'sRepublicof
Chinaandthatresultingfromtherectified
Eurostatsfigures).
Inbothcasestherateofincrease issubstantial .(IV)Prices
(30)Duringtheinvestigation itbecameclearthata
distinction shouldbedrawnbetweentwotypesof
beachslippers,soldontheCommunity marketat
verydifferentprices:
(a)thetraditional orstandardbeachslipper(with
anuppermadeofplaincanvasorwithsimple
wovenorprinteddecorations suchascoloured
patternsorstripes),accounting forover90%of
Community production andanevenhigher
percentage ofCommunity consumption ;
(b)amoreelaborateproduct,hereaftercalled'fancy
beachslippers'(withanuppermadeofaspecial
weaveand/ormadeofamorespecialfabric
thancottoncanvas,whichmayalsohavedeco­
rationssuchaslaces,elasticorinsetorembroi­
deredpatterns)accounting forlessthan10%of
Community production andanevensmaller
percentage ofCommunity consumption .(ii)Volumeofimportsoriginating inotherthird
countries
(28)EurostatsindicatedthatproductsfallingwithinCN
codes64041990and64052099,originating in

28.12.90 OfficialJournaloftheEuropeanCommunities NoL365/31
Community producers itemerged,however,that
capacitiescouldbereasonably established .
(35)Overall,Community producers stillinbusinessat
thetimeoftheinvestigation ,slightlyincreased
theirproduction capacitybetween1985and1988,
becauseofimprovements ininstallations or,ina
fewcases,becauseofpurchasing machines from
otherCommunity producerswhohadshutdown.
Calculated onthebasisofthecapacityactually
availableeachyearfrom1985-88,Community
producers'rateofcapacityutilization fellsteadily
between1985and1988,from71%in1985to
64%in1986,67%in1987and43%in1988.Although theChineseexporters representatives
admittedthattheyalsosuppliedtheCommunity
marketwithfancybeachslippers,theysaidthatthe
marketsharewasminimal (whichdidnotjustify
theirbeingtakenintoaccountincalculating the
marginofdumping ,besideswhichtheChinese
exportershadprovidednopreciseinformation
aboutthem).TheCommission thereforedecided
thatforpricecomparison purposes ,salesoffancy
beachslippersbyCommunity producersshouldbe
disregarded .
(31)Duringtheperiod1985to1988Chineseexporters
takenoverallreducedtheirsellingpricesbyabout
35%.
(32)Tocalculatethedifferences insellingpricesinthe
Community betweenbeachslippersfromChina
andthoseproduced intheCommunity ,the
Commission compared theaveragepriceof
productsimportedfromChina(freeatCommunity
frontier,clearedthroughcustoms)andtheweighted
averagepriceofstandardbeachslipperssoldto
wholesalers byCommunity producers .Thismethod
wasdeemedappropriate asChineseexporterssell
toimporterswhoactaswholesalers onthemarket.
Thiscomparison showedthattheCommunity
producershadbeenunabletofollowthepricesset
bytheChineseexporterssincepriceundercutting
duringthereferenceperiodhadreached181%.(iii)Stocks
(36)Asbeachslippersareseasonalproducts,generally
soldtowholesalers andretailersatthebeginning of
theyear,theCommission sawnothingunusualin
stocksbeinggenerallyhighattheendofeach
accounting yearandfeltthatthesizeofthese
stocksshouldtherefore notbetakenintoconside­
ration.
(b)Othereconomic factorstobeconsidered(iv)Sales
(37)Community producers'salesontheCommunity
marketwereasfollows:usingtheindex1985=
100asabasis,saleswentfrom98in1986to105in
1987and72in1988.Thistrend(afallof28%
between1985and1988)concernsonlythose
manufacturers stillinbusiness atthetimeofthe
investigation .Theoveralllosswouldthereforebe
bothgreaterandsteadier(40%between1985and
1988)ifthesalesofproducers whowentoutof
businessduringtheperiod1985-88werealsotaken
intoconsideration .
(v)Marketshare
(38)Calculated onthesamebasisasforChina,
Community producers'marketsharefellfrom
36%to29%in1986,17%in1987and16%
duringthereferenceperiod,whilethevolumeof
transactions intheCommunity rosebetween1984
and1988.(i)Production
(33)TheCommission foundthatCommunity produc­
tionofbeachslippershaddeveloped asfollows:
usingtheindex1985=100asabasis,production
reached94in1986,103in1987and67in1988.
Thesefigures,basedsolelyontheproduction
figuresofthosebeachslippermanufacturers stillin
businessatthetimeoftheinvestigation ,reveal:
—atemporary improvement inproduction in
1987,owingtoanincreaseindemand,followed
byamajordropin1988;
—adropofabout30%between1985and1988.
(ii)Capacityutilization
(34)Thecomplaint indicated thattheconceptof
production capacitycouldnotbeappliedtothe
sectorinquestion .Duringon-the-spot checksof(vi)Prices
(39)Havingseentheirmarketsharefallsteadily
between1985and1988,Community producers
gaveuptryingtomatchthepriceschargedbythe
Chineseexportersinordertoavoidsufferingirre­
versiblefinancial losses.

NoL365/32 OfficialJournaloftheEuropeanCommunities 28.12.90
G.CAUSALLINKBETWEEN THEINJURYAND
THEDUMPED IMPORTSTheydid,however,trytomakestandardbeachslip­
persmoreattractive (forexamplebydeveloping
newfabrics).Asaresultoftheseefforts,they
managedtomaintain orslightlyincreasetheir
pricesduringtheperiod1985-88.
(40)Usingtheindex1985=100asabasis,thepriceof
standardbeachslipperswas106in1986,102in
1987and106in1988.Thisincreasewasvery
moderateconsidering theriseinthepriceofraw
materialsduringthesameperiod.(45)TheCommission examined theextenttowhichthe
injurytotheCommunity industryhadbeencaused
bytheeffectsofdumping .Itemergedthatthedrop
intheCommunity industry'smarketsharesand
profitmarginshadcoincided withtheincreasein
thevolumeofimportsofbeachslippersfrom
China.Sincepricesareanimportant factorinsales
oftheseproducts,theconsiderable priceundercut­
tingbytheChineseproductshadadirecteffecton
theCommunity industry'svolumeofsales.(vii)Profits
(41)TheCommission foundthatthefinancialresults
achievedbyCommunity industry,whichoverall
showedaveryslightprofitbetween1985and1987,
hadseriouslydeteriorated in1988,ayearinwhich
thesectorsufferedlosses.Theselosseswerecaused
bythemajordropinsalessustainedduringthe
referenceperiod.(46)withregardtotheclosuresreferredtoatpoint42,
theCommission considers thatshut-downs which
tookplacebetween1985and1988arenotstrictly
speakinglinkedwiththemarketsituationcreated
byimportsofChinesebeachslippers.Although
information availableisincomplete itappearsthat
anequallysignificant factorintheclosureswasthe
restructuring andmodernization ofthesectorin
the1980s.
TheCommission is,however,oftheopinionthat
thejoblossesincurredbyproducerswhoremained
inbusinessweredue,atleastpartially,tothedrop
intheirsales,whichitselfcanbeattributed to
massiveimportsofChinesebeachslipperssoldat
dumpedprices.(viii)Activityandemployment
(42)Thecomplaint referredtotheclosureofseveral
firmsandclaimedthattheseshut-downs werea
sourceofinjury.
(43)Withregardtotheemployment situationofprodu­
cersstillinbusinessatthetimeoftheinvestiga­
tion,theCommission foundthatthestaffthey
employed hadbeencutbyover20%duringthe
period1985-88,andtheyhadalsobeenobligedto
introduce occasional short-time working.
TheCommission isoftheopinionthatevenif
someofthesestaffcutsarelinkedwithimproved
productivity ,theyaretoalargeextentduetothe
fallinproduction andsales.(47)OnlytheChineseexportersgainedbytheincrease
inconsumption seenintheCommunity from1985
to1988becauseofthepricesatwhichtheysold
theirbeachslippers.AtthesametimeCommunity
producers'salesvolumeandmarketsharedimi­
nishedwhichmeantthattheywerenotonly
prevented fromtakingadvantage oftheexpansion
ofthemarketbuttheyalsolostmarketsharesthat
theyhadheldforseveralyears.
(48)Importsofbeachslippersfromotherthirdcoun­
triesareunlikelytoberesponsible fortheinjury
sustained bytheCommunity industryasthe
volumeofimportsismarginal ,ofnocomparison
withthequantities exportedbyChina,andhas
virtuallynoeffectonthemarket.(c)Conclusion
(44)Onthebasisoftheinformation examined the
Commission isoftheopinionthattheCommunity
industryisinaverybadstate,mainlybecauseof
theconsiderable dropinproduction andintherate
ofcapacityutilization andthesignificant reduction
inthevolumeofsalesandmarketshare.
(49)TheChinese .ChamberofCommerce andCommu­
nityimporters'associations claimedthatanother
causeofinjurylayinthecompetition exertedby
certainsubstitute products,salesofwhichrose
duringtheperiod1985-88 .Although ithasmanaged tomaintain itsprice
levels,theCommunity industryhassufferedlosses
andisthereforesustaining majorinjury.

28.12.90 OfficialJournaloftheEuropeanCommunities NoL365/33
(53)Theimporters associations putforwardtwomain
arguments withregardtoCommunity interest.
Thefirstwasthatmaintaining asourceoflow­
pricedsupplieswasintheconsumers'interest.
Thestrengthofthisargument iscalledintoques­
tionbytheCommission 'sfindingsaccording to
whichthebenefitsoflow-priced importswerenot
necessarily passedontothefinalconsumers but
oftenwentnofurtherthanthetradersthemselves .
Itshouldalsobeborneinmindthattherecent
priceadvantages thatconsumers haveoccasionally
enjoyedaretheresultofunfaircommercial prac­
ticesandthereisnojustification forallowingthem
tocontinue .Inthisconnection theCommission wouldpoint
outthattheconsumption ofbeachslippersnot
onlydidnotdropbutonthecontraryincreasedin
theperiod1985-88 .
Inthesecircumstances theCommission cannot
reasonably accepttheargument wherebythe
increaseinsalesofotherfootwear,possiblesubsti­
tutesforbeachslippers,butnotlikeproducts,had
causedinjurytotheCommunity beachslipper
industry .
Inanyevent,theCommission considersthateven
ifpartoftheinjurysufferedbytheCommunity
industrycouldbeattributedtosubstituteproducts,
thedumpingfoundwouldstillberesponsible for
injury,whichisitselfconsiderable .
(50)Nolikelycauseoftheinjury,otherthanthe
dumpedimports,hasbeenputforward.
(51)TheCommission therefore concludes thatthe
seriousinjurysustained bytheCommunity
industrywascausedbydumpedimportsofbeach
slippersoriginating inthePeople'sRepublicof
China.
H.COMMUNITY INTERESTThepriceofChinesebeachslippershasfallen
dramatically overthelastfewyearsandtheslight
increasebroughtaboutbyanti-dumping measures
willatmostbringpricesuptotheirpreviouslevel.
Inanyevent,Chineseproductswillremainalot
cheaperthanthoseproducedintheCommunity
andtheywillnotbeprevented accesstothe
Community market.
Themeasures inquestionwillnot,therefore ,
preventimportsfromplayingtheirbeneficialrole
forconsumers .Onthecontrarysuchmeasures
shouldresultinincreasedproduction andcapacity
utilization bytheCommunity industrywhich,asa
resultoflowercosts,willbeabletolimititsprice
increasesorevenreduceitssellingprices.
(54)Thesecondargumentputforwardbytheimporters
wasthatCommunity producers didnothavethe
capacitytosatisfymarketdemand .
TheCommission wouldpointoutthatthiscapacity
wasreduced,atleastinpart,becauseofunfair
imports .
Thiscapacitycanthereforebeboostedifdistortions
ofcompetition causedbyunfaircommercial prac­
ticesareeliminated .
(55)InassessingCommunity interest,theCommission
alsotookaccountofthefactthatbeachslippers
originating inChinaaresubjecttoregionalquanti­
tativelimits.TheCommission considered that
neitherCommunity lawnorinternational rules
prevented theimposition ofanti-dumping duties
whereregionalquantitative limitsexisted,provided
thatitwasestablished thatinjuryhadbeencaused
despitetheserestrictions .(52)Thepurposeofanti-dumping dutiesis,ingeneral,
tostopdistortion ofcompetition arisingfrom
unfaircommercial practicesandthustore-establish
openandfaircompetition ontheCommunity
market,whichisfundamentally inthegeneral
Community interest.
Withregardtothisproceeding ,theCommission
considers thatwithout measures tocorrectthe
effectsofdumpedChineseimports,thosefirmsstill
producing beachslippersmaybeforcedtoshut
downcompletely .Itisworthunderlining thatthe
firmsinquestionaregenerallysoundandcompeti­
tivefollowing adecadeofradicalrestructuring and
modernization .
TheCommission feelsthatitwouldnotbeinthe
Community 'sinteresttoabandonastructurally
soundindustryatatimewhen,facedbyunfair
competition ,itissustaining seriousinjurywhichis
jeopardizing itsshort-term viability.

28.12.90 NoL365/34 OfficialJournaloftheEuropeanCommunities
Theanti-dumping dutytobeimposedshould
thereforecorrespond tothemarginofdumping
established .TheCommission notedthatthequantitative limits
inquestion,whichconcerned theFrench,Spanish
andUnitedKingdommarkets,hadhadalimited
effectandhadmadenoimpactonprices,norhad
anyeffectonunfaircommercial practicesinthe
restoftheCommunity ,whichisamajormarketfor
theproductsinquestion .
(56)Inthelightoftheabove,theCommission
concluded thatitwasintheCommunity interestto
adoptmeasurestoeliminatetheinjurycausedto
Community production byimportsofbeachslip­
persoriginating inthePeople'sRepublicofChina.
Inordertopreventfurtherinjurybeingcaused
beforetheendoftheproceeding ,themeasures
shouldtaketheformofaprovisional anti-dumping
duty.(b)Formofduty
(58)Inthelightoftheeconomicstructureoftheexpor­
tersandpricevariations forverysimilarmodels,
theCommission considersthatthedutyshould
taketheformofavariabledutyequaltothedif­
ferencebetweenpriceperpairnet,freeatCommu­
nityfrontier,notclearedthroughcustoms,anda
floorpriceestablished onthebasisofthenormal
value,whichhadoriginallybeensetforaverage
sizes.However,inordertoavoid:
—creatingadisadvantage forsmallersizes,
—imposingcomplicated calculations onimpor­
tersandtheauthorities inchargeofcontroland
recovery ,
thisnormalvaluewasloweredtothelevelofthe
smallestsizes,namelyECU1,15perpair,freeat
Community frontier,notclearedthroughcustoms.
Thisminimum priceofECU1,15willtherefore
constitutethebasisforcalculating thevariableduty
andwillapplytoallsizes.I.PROVISIONAL DUTY
J.FINALPROVISIONS
(59)Intheinterestsofpropermanagement ,areason­
ableperiodshouldbefixedwithinwhich
concerned partiesmaymakeknowntheirviewsin
writingandrequestahearingfromtheCommis­
sion,
HASADOPTED THISREGULATION :(a)Levelofduty
(57)Inordertodetermine theleveloftheprovisional
dutytheCommission tookaccountofthemargin
ofdumpingandtheamountofdutyneededto
eliminatetheinjury.
Tothisenditcompared theweighted average
sellingpriceofChinesebeachslippersduringthe
referenceperiod(onafree-at-Community frontier
basis,pluscustomsdutiesandclearancecharges)
withtheaverageweightedproduction costofstan­
dardbeachslippersproduced duringthesame
periodbyCommunity manufacturers whichhad
beenthesubjectofon-the-spot checks,plusa
reasonable profitmargin.
7%ofthetargetpricethusestablished wasconsi­
deredareasonable profitmargin,whichappeared
tobetheminimum neededtoallowabeach
slipperproducer tokeephisplantworkingin
acceptable technicalconditions andgivehimarate
ofreturnoninvestedcapitalclosetothatgenerally
requiredinthesectorinquestion .
OnthisbasistheCommission foundaconsiderable
pricedifference .Expressed asapercentage ofthe
free-at-Community frontierprice,notcleared
throughcustoms,thispricedifferenceamounted to
221%.
Itthereforetranspiresthatthemarginofdumping
established ,alsoexpressed asapercentage ofthe
free-at-Community-frontier price,notcleared
throughcustoms,ismuchlowerthanthepercen­
tageneededtoeliminate theinjury.Article 1
1.Aprovisional anti-dumping dutyisherebyimposed
onimportsofespadrilles (beachslippers)originating in
thePeople'sRepublicofChinafallingwithinCNcodes
ex64041990(Tariccode64041990*10)andex
64052099(Tariccode64052099*10).
2.Theamountofthedutyshallbeequaltothedif­
ferencebetweenthesumofECU1,15perpairandthe
priceperpairnet,freeatCommunity frontier,notcleared
throughcustoms.
Thefree-at-Community-frontier priceshallbenetifthe
effectiveconditions ofpaymentaresuchthatpaymentis
madeinthe30daysfollowingthedateofarrivalofthe
goodsinthecustomsterritoryoftheCommunity .Itshall
bereducedby1%foreachextramonth'sdelayin
payment .

28.12.90 OfficialJournaloftheEuropeanCommunities NoL365/35
pointofviewinwritingandrequestahearingfromthe
Commission withinonemonthofthisRegulation enter­
ingintoforce.3.ForthepurposesofthisRegulation footwearwith
plaitedfibresoles,whetherornotstrengthened with
rubberorplasticsoveravariablesurface,withasoleof
uniformthicknessnotexceeding 2,5cm,shaltbeconsi­
deredasbeachslippers.
4.Theprovisions inforcewithregardtocustoms
dutiesshallapply.
5.Thereleaseforfreecirculation intheCommunity of
thegoodsmentioned inparagraph 1shallbeconditional
onthedepositofasecurityequivalent totheamountof
theprovisional duty.
Article2
WithoutprejudicetoArticle7(4)(b)ofRegulation (EEC)
No2423/88,concerned partiesmaymakeknowntheirArticle3
ThisRegulation shallenterintoforceonthedayfollo­
wingthatofitspublication intheOfficialJournalofthe
European Communities .
SubjecttoArticles11,12and14ofRegulation (EEC)No
2423/88,itshallapplyforfourmonthsunlesstheCouncil
adoptsdefinitive measuresbeforetheexpiryofthis
period.
ThisRegulation shallbebindinginitsentiretyanddirectlyapplicable inallMember
States.
DoneatBrussels,21December 1990.
FortheCommission
FransANDRIESSEN
Vice-President