COMMISSION IMPLEMENTING REGULATION (EU) 2020/104

of 23 January 2020

making imports of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China, Taiwan and Indonesia subject to registration

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) (‘the basic Regulation’), and in particular Article 14(5) thereof,

After informing the Member States,

Whereas:

(1) On 12 August 2019, the European Commission (‘the Commission’) announced, by a notice published in the Official Journal of the European Union (2) (‘the notice of initiation’), the initiation of an anti-dumping proceeding (‘the proceeding’) with regard to imports into the Union of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China (‘the PRC’), Taiwan and Indonesia following a complaint lodged on 28 June 2019 by Eurofer, the European Steel Association (‘the complainant’) on behalf of four Union producers representing the entirety of Union production of certain hot rolled stainless steel sheets and coils.

(2) On 10 October 2019, the Commission announced the initiation of an anti-subsidy proceeding with regard to imports into the Union of the same product originating in the PRC and Indonesia (3) (‘the parallel anti-subsidy proceeding’), pursuant to Article 10 of Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (4) (‘the basic anti-subsidy Regulation’).

1. PRODUCT CONCERNED AND LIKE PRODUCT

(3) The product subject to registration (‘the product concerned’) is flat-rolled products of stainless steel, whether or not in coils (including products cut-to-length and narrow strip), not further worked than hot-rolled and excluding products, not in coils, of a width of 600 mm or more and of a thickness exceeding 10 mm. These products are currently falling under HS codes 7219 11, 7219 12, 7219 13, 7219 14, 7219 22, 7219 23, 7219 24, 7220 11 and 7220 12. These HS codes are given for information only.

2. REQUEST

(4) The complainant already requested in its complaint the registration of imports. On 31 October 2019, the complainant submitted a separate registration request, with regard to the imports which are subject to this proceeding pursuant to Article 14(5) of the basic Regulation. The complainant requested that imports of the product concerned be made subject to registration so that measures may subsequently be applied against those imports from the date of such registration. Further communication in support of this request was submitted on 22 November and 10 December 2019.

(5) On 14 November 2019, Marcegaglia Specialties (‘Marcegaglia’), a user of the product concerned, which is cooperating with the anti-dumping proceeding, submitted comments in relation to the complainant’s request for registration of imports.

3. GROUNDS FOR REGISTRATION

(6) According to Article 14(5) of the basic Regulation, the Commission may direct the customs authorities to take the appropriate steps to register imports, so that measures may subsequently be applied against those imports from the date of such registration. Imports may be made subject to registration following a request from the Union industry, which contains sufficient evidence to justify such action.

(7) According to the complainant registration is justified as the product concerned originating in the PRC, Taiwan and Indonesia is being dumped. It argued that significant injury to the Union industry is being caused by an acceleration of low-priced imports which will undermine the remedial effect of potential definitive duties by allowing stockpiling.

(8) The Commission examined the request in the light of Article 10(4) of the basic Regulation. The Commission verified whether importers were aware, or should have been aware, of the dumping as regards the extent of the dumping and the injury alleged or found. It also analysed whether there was a further substantial rise in imports which, in the light of its timing and volume and other circumstances, is likely to seriously undermine the remedial effect of the definitive anti-dumping duty to be applied.

3.1. Awareness of the importers of the dumping, the extent thereof and the alleged injury

(9) The Notice of Initiation for this proceeding published on 12 August 2019 highlighted that the dumping margins calculated are significant for all countries. As a whole, and given the extent of the alleged dumping margins ranging from 15,1 % to 54,3 %, the evidence in the complaint provides sufficient support at this stage that the exporting producers practice dumping.

(10) The complaint also provided sufficient evidence of alleged injury to the Union industry, including a decline in market share and a negative development of other key performance indicators of the Union industry.

(11) By its publication in the Official Journal of the European Union, the Notice of Initiation is a public document accessible to all importers. Furthermore, as interested parties in the investigation, importers have access to the non-confidential version of the complaint and the non-confidential file. Therefore, the Commission considered that, on this basis, importers, who are experienced professionals, were aware, or should have been aware, of the alleged dumping practices, the extent thereof and the alleged injury. (5)

(12) It thus concluded that the first criterion for registration was met.

3.2. Further substantial rise in imports

(13) The Commission analysed this criterion on the basis of statistical data available in the Surveillance 2 database, pursuant to the information collected for the product concerned. When analysing import volumes in view of the registration request, complete statistical data were available up to and including November 2019. The Commission considered that the level of imports as from August 2019, the month in which the investigation was initiated, until the most recent period, i.e. November 2019 should be considered and that those volumes should be compared with the volumes of imports during the investigation period. To compare the level of imports during the period August 2019 to November 2019 with the level of imports during the same months in the preceding year was considered inappropriate, as there were no indications on the file that imports of certain hot rolled stainless steel sheets and coils are subject to seasonal fluctuations. Imports from the countries concerned developed as follows: Import volumes from the countries concerned (tonnes) Origin Investigation Period (IP) Monthly average Post-initiation (*1) Monthly Average Δ IP – post-initiation PRC 220 705 18 392 110 568 27 642 +50 % Indonesia 107 107 8 926 9 011 2 253 -75 % Taiwan 36 542 3 045 13 932 3 483 +14 % Countries Concerned 364 354 30 363 133 511 33 378 +10 %

(14) On the basis of these statistical data, the Commission found that the average monthly volume of imports of certain hot rolled stainless steel sheets and coils from the countries concerned to the Union in the period from September 2019 to November 2019, i.e. after initiation of the case, was 10 % higher than the average monthly volume of imports to the Union during the investigation period.

(15) In investigations involving more than one country concerned, whether or not imports from these countries will be cumulated for the purpose of the analysis described in the recitals above, will depend on whether the Commission decides to cumulate these imports in the underlying investigation. The Commission also noted that, in its judgment in Stemcor, the General Court ruled that the ‘further substantial rise in imports’ within the meaning of Article 10(4)(d) of the basic regulation must be assessed as a whole, in order to determine whether the imports, taken as a whole, are likely to seriously undermine the remedial effect of the definitive duties and thus create additional injury for the Union industry, without considering the individual and subjective position of the importers in question (6). As the above table shows, there is no question as to whether the cumulated imports from the countries concerned have shown a further substantial rise.

(16) Marcegaglia argued that a further substantial rise in imports was not evidenced in the complainant’s submission and was unlikely to occur because the applicable safeguard tariff quotas (‘the quotas’) on certain steel products (7), which, inter alia, cover the product concerned, are set at levels, for each of the countries concerned, significantly below the export volumes observed during the investigation period. Any quantity imported in excess of the quotas will be subject to a safeguard duty of 25 %. Therefore, imports of the product concerned are, according to Marcegaglia, likely to decrease to the level set by the quotas, which is 25 % below the import volume observed in the investigation period. Marcegaglia added that although in July and August 2019, or, in general, in any given month, the volume of imports (could) exceed these monthly averages, this should not warrant the conclusion that imports are likely to increase.

(17) The Commission recalls that the quotas in question are tariff quotas, which provide that any import made beyond the threshold set by them is not prohibited but is subject to an additional ad valorem duty rate of 25 %. This means that importers are allowed to import volumes well beyond the applicable thresholds, subject to the payment of the safeguard duty. In any event, the fact that the product concerned is subject to tariff-rate quotas is linked to the need to avoid serious injury for the Union industry to materialise. The same increase in imports after the initiation of the current investigation may lead to the need for retroactive collection of the eventual duties because of the material injury found and the need for an effective remedy. Moreover, in view of the dumping and injury margins that have been estimated by the complainant (see recital (30) below), the 25 % safeguard duty may not be sufficient to remedy the full extent of dumping and injury. Subsequently, a duty of 25 % will in all likelihood not deter importers from importing additional volumes.

(18) Further in response to Marcegaglia’s comments, the Commission also recalls that the present Regulation concerns the registration of imports and is without prejudice to the decision as to whether or not anti-dumping duties will be collected, which is only taken at the stage of any definitive measures.

(19) Therefore, in view of the further substantial rise in imports from the countries concerned, the Commission concluded that the second criterion for registration was also met.

3.3. Undermining of the remedial effect of the duty

(20) The Commission has at its disposal sufficient evidence at this stage that additional injury has already been caused by the continuing rise in imports at further decreasing prices.

(21) As established in recitals (14) and (15), there is sufficient evidence of a substantial rise in imports of the product concerned.

(22) In addition, there is no evidence on the file that import prices have gone up since the initiation of the investigation. To the contrary, according to the publicly available Surveillance 2 database, the average unit value of the product concerned of imports from the countries concerned was 1 % lower in the period August to November 2019 when compared to the investigation period.

(23) Furthermore, in its request for registration, the complainant pointed at the fact that the swiftly deteriorating situation of the Union industry observed in the complaint during the second half of 2018 continued in the first half of 2019, with a further decrease in production levels and increased undercutting by the imports. In the request it also provided evidence showing that the situation had gone from bad to worse since then, inter alia, pointing at four major announcements of restructuring of different kinds by the various Union manufacturers since July 2019, affecting the jobs of hundreds of their staff.

(24) On that basis, the timing of the further substantial rise of imports as explained in recitals (14) and (15) is already seriously undermining the remedial effect of any definitive duty, unless such duty would be applied retroactively.

(25) The Commission therefore concluded that the third criterion for registration for the dumping part of the request was also met.

4. PROCEDURE

(26) Therefore, the Commission has concluded that there is sufficient evidence to justify making the imports of the product concerned subject to registration in accordance with Article 14(5) of the basic Regulation.

(27) All interested parties are invited to make their views known in writing and to provide supporting evidence. Furthermore, the Commission may hear interested parties, provided that they make a request in writing and show that there are particular reasons why they should be heard.

5. REGISTRATION

(28) Pursuant to Article 14(5) of the basic Regulation imports of the product concerned should be made subject to registration for the purpose of ensuring that, should the investigation result in findings leading to the imposition of anti-dumping and/or countervailing duties, those duties can, if the necessary conditions are fulfilled, be levied retroactively on the registered imports in accordance with the applicable legal provisions.

(29) Any future liability would emanate from the findings of this investigation. At this stage, it is not possible to estimate the amount of potential liability.

(30) With regard to imports from the PRC, the allegations in the complaint requesting the initiation of an anti-dumping investigation estimate an average dumping margin of 54,3 % and an average underselling margin of 29,1 % for the product concerned. The amount of possible future liability could be set at the lower of those levels, namely 29,1 % as a proportion of the CIF import value of the product concerned. However, should the Commission find that the conditions of Article 7(2a) and 7(2b) of the basic Regulation are met, namely the dumping margin could be considered to reflect the injury suffered by the Union industry, the amount of possible future liability could be set at the level of the dumping margin of 54,3 %, in accordance with Article 9(4) of the basic Regulation. With regard to imports from Indonesia, the allegations in the complaint requesting the initiation of an anti-dumping investigation estimate an average dumping margin of 32,2 % and an average underselling margin of 39,8 % for the product concerned. The amount of possible future liability is set at the lower of those levels, namely 32,2 % as a proportion of the CIF import value of the product concerned. Should the Commission find that the conditions of Article 7(2a) and 7(2b) of the basic Regulation are met, namely that the dumping margin could be considered to reflect the injury suffered by the Union industry, the amount of possible future liability could be set at the level of the dumping margin. With regard to imports from Taiwan, the allegations in the complaint requesting the initiation of an anti-dumping investigation estimate an average dumping margin of 15,1 % and an average underselling margin of 20,7 % for the product concerned. The amount of possible future liability is set at the lower of those levels, namely 15,1 % as a proportion of the CIF import value of the product concerned.

6. PROCESSING OF PERSONAL DATA

(31) Any personal data collected in the context of this registration will be treated in accordance with Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (8),

HAS ADOPTED THIS REGULATION:

Article 1 The customs authorities are hereby directed, pursuant to Article 14(5) of Regulation (EU) 2016/1036, to take the appropriate steps to register imports into the Union of flat-rolled products of stainless steel, whether or not in coils (including products cut-to-length and narrow strip), not further worked than hot-rolled and excluding products, not in coils, of a width of 600 mm or more and of a thickness exceeding 10 mm, currently falling under HS codes 7219 11, 7219 12, 7219 13, 7219 14, 7219 22, 7219 23, 7219 24, 7220 11 and 7220 12 and originating in the People’s Republic of China, Taiwan and Indonesia. Registration shall expire nine months following the date of entry into force of this Regulation. All interested parties are invited to make their views known in writing, to provide supporting evidence or to request to be heard within 21 days from the date of publication of this Regulation.

Article 2 This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 23 January 2020. For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) Notice of initiation of an anti-dumping proceeding concerning imports of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China, Taiwan and Indonesia (2019/C 269 I/01) (OJ C 269 I, 12.8.2019, p. 1).

(3) Notice of initiation of an anti-subsidy proceeding concerning imports of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China and Indonesia (2019/C 342/09) (OJ C 342, 10.10.2019, p. 18).

(4) OJ L 176, 30.6.2016, p. 55.

(5) See judgment of the General Court (Second Chamber) of 8 May 2019 in T-749/16, Stemcor vs European Commission, paragraph 56.

(*1) August 2019 – November 2019

Source: Surveillance 2 database

(6) Judgment of the General Court (Second Chamber) of 8 May 2019 in T-749/16, Stemcor vs European Commission, paragraph 86.

(7) Commission Implementing Regulation (EU) 2019/159 of 31 January 2019 imposing definitive safeguard measures against imports of certain steel products (OJ L 31, 1.2.2019, p. 27), as amended by Commission Implementing Regulation (EU) 2019/1590 (OJ L 248, 27.9.2019, p. 28).

(8) OJ L 295, 21.11.2018, p. 39.