COMMISSION IMPLEMENTING REGULATION (EU) 2021/546

of 29 March 2021

imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of aluminium extrusions 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) (the ‘basic Regulation’) and in particular Article 9(4) thereof,

Whereas:

1. PROCEDURE

1.1. Initiation

(1) On 14 February 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of aluminium extrusions originating in the People’s Republic of China (‘China’ or the ‘country concerned’) on the basis of Article 5 of the basic Regulation.

(2) The Commission initiated the investigation following a complaint lodged on 3 January 2020 (the ‘complaint’) by the association European Aluminium (the ‘complainant’). The complainant represented more than 25 % of the total Union production of aluminium extrusions. The complaint contained evidence of dumping and of resulting material injury.

1.2. Registration

(3) Following a request from the complainant supported by the required evidence, the Commission made imports of the product concerned subject to registration under Article 14(5) of the basic Regulation by Commission Implementing Regulation (EU) 2020/1215 (2). The registration of imports ceased with the entry into force of the provisional measures referred to in recital (5).

1.3. Provisional measures

(4) In accordance with Article 19a of the basic Regulation, on 22 September 2020, the Commission provided parties with a summary of the proposed duties and details about the calculation of the dumping margins and the margins adequate to remove the injury to the Union industry. Interested parties were invited to comment on the accuracy of the calculations within three working days.

(5) On 12 October 2020, the Commission imposed a provisional anti-dumping duty on imports of aluminium extrusions originating in China by Commission Implementing Regulation (EU) 2020/1428 (3) (‘the provisional Regulation’).

(6) As stated in recital (29) of the provisional Regulation, the investigation of dumping and injury covered the period from 1 January 2019 to 31 December 2019 (‘the investigation period’ or ‘IP’) and the examination of trends relevant for the assessment of injury covered the period from 1 January 2016 to the end of the investigation period (‘the period considered’).

1.4. Subsequent procedure

(7) Following the disclosure of the essential facts and considerations on the basis of which a provisional anti-dumping duty was imposed (‘provisional disclosure’), the complainant, several users and importers of the product concerned, several suppliers of raw material to the Union industry, the Government of the People’s Republic of China (the ‘GOC’) and seven Chinese exporting producers filed written submissions making their views known on the provisional findings within the deadline provided by Article 2(1) of the provisional Regulation.

(8) The points raised by the interested parties are summarised in this Regulation to the extent possible. Indeed, several points raised were unclear and it could not always be established to which Article of the basic Regulation they related. Interested parties were invited to clarify any arguments they consider relevant, to the extent they have not been addressed in the final disclosure.

(9) Following provisional disclosure, two more importers came forward, when the sampling exercise was already concluded. Their input was taken into consideration insofar as possible given the procedural stage of the investigation.

(10) Following the imposition of provisional measures, the interested parties who so requested were granted an opportunity to be heard. Hearings took place with Decora S.A., Vis Promotex d.o.o., Alstom S. A., O. Wilms GmbH & Co, Airoldi Metalli S.p.A (joined by O. Wilms GmbH, Kastens & Knauer GmbH & Co. International KG and Alpha Metall GmbH), Haomei Group (Guangdong Haomei New Materials Co., Ltd. and Guangdong King Metal Light Alloy Technology Co., Ltd.) and PMI Group (Press Metal International Ltd. and Press Metal International Technology Ltd.).

(11) Airoldi Metalli S.p.A (Airoldi) requested a meeting with the Union industry in accordance with Article 6(6) of the basic Regulation, which was not accepted by the latter. It further held a hearing with the Hearing Officer of the Directorate-General for Trade (‘DG TRADE’), who dismissed the company’s argument that insufficient information disclosed to it in the frame of the pre-disclosure provided for by Article 19a of the basic Regulation breached its rights of defence for the reasons explained in the dedicated Hearing Officer’s report.

(12) Following final disclosure Airoldi contested the Hearing Officer’s interpretation of Article 19a of the basic Regulation, claiming that a specific reading of that provision was necessary. However, bearing in mind that Airoldi did not specify any further issue to support its point, and the explicit requirement of the said Article to respect the confidentiality obligations contained in Article 19, the Commission maintained its position on the matter.

(13) As further detailed below, following the imposition of provisional measures, two additional remote cross-checks were held with Alstom S.A. and Airoldi to ascertain salient issues in the context of a definitive determination. The Commission also intended to hold an additional remote cross-check for another importer, which was not possible due to the latter’s constraints.

(14) 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 aluminium extrusions originating in China (‘final disclosure’). All parties were granted a period within which they could make comments on the final disclosure.

(15) The Commission received comments from a number of parties, including the Government of China, Chinese exporting producers, Union importers, users, Union producers, their suppliers and various representative associations.

(16) Following final disclosure certain interested parties were granted an opportunity to be heard according to the provisions in point 5.7 of the Notice of initiation. Hearings took place with Decora S.A., Airoldi (joined by O. Wilms GmbH, Amari Metals BV and Alpha Metall GmbH), Bash-tec GmbH, STAKO Sp. z o.o. and Haomei Group. In addition a hearing was organised by the DG Trade Hearing Officer to hear points raised by Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd.

(17) In support of an additional extension for replying to final disclosure Airoldi requested a copy of the General Disclosure Document in Italian, and claimed that failure to supply the document in Italian language constituted a breach of Regulation No 1/1958 (4) read in conjunction with Article 21, 22 and 41 of the Charter of Fundamental Rights. The Commission disagreed with this interpretation, replying in writing that Airoldi had raised this matter only at a very late stage of the investigation, and that up to that stage, both Airoldi and its lawyers had used English successfully, and at length, in both written and verbal communications (5). This was further demonstrated in extensive contacts with the Commission throughout the case. The Commission recalled the nature of that document, which is not an implementing Regulation, and confirmed its position. Nonetheless, the Commission provided an additional extension to Airoldi, on the basis of its approach to make all use of the provisions of the Notice of initiation of the case which is compatible with the completion of the investigation while respecting statutory deadlines. Following the additional final disclosure, Airoldi requested a translation of this document in Italian. This request, which did not show how Airoldi’s right of defence was affected, could not be accepted for the same reasons mentioned above.

(18) On 8 February 2021 the Commission made an additional final disclosure to interested parties in order to reflect the fact that the EU-28 had become the EU-27. The Commission informed all interested parties of the essential facts and considerations on the basis of which it intended to revise the case findings including the definitive anti-dumping duty to reflect this change (‘additional final disclosure’). All parties were granted a period within which they could make comments on the additional final disclosure. Comments were received from Haomei Group, Airoldi and Euranimi, which made itself known as an interested party after final disclosure.

(19) Following the additional final disclosure certain interested parties were granted an opportunity to be heard according to the provisions in point 5.7 of the Notice of initiation. Hearings took place with Haomei Group, Airoldi and Euranimi. In addition, on 18 February 2021, a hearing was organised by the Hearing Officer to hear points raised by Airoldi. At that occasion, the Commission services reiterated that the specific approach followed in this investigation was appropriate in view of the lack of impact of removing the UK from the findings (an issue further confirmed by the Union industry and not disputed by any interested party). It was further confirmed that the additional final disclosure contained the necessary explanations for interested parties to defend themselves.

1.5. Sampling

(20) In the absence of comments concerning sampling, recitals (8) to (20) of the provisional Regulation were confirmed.

(21) In recital (19) of the provisional Regulation, the Commission referred to the initially selected sample of three cooperating groups of exporting producers representing 28,1 % of total exports. In recital (24) of the provisional Regulation, the Commission referred to the final sample of two groups of exporting producers, following the fact that the Liaoning Zhongwang Group did not submit any reply to the questionnaire. That sample of two groups represented 20,9 % of total exports.

(22) In recitals (206) to (210) of this Regulation, the Commission explains how it established the amended level of total imports from China for the IP. Following this change, the estimated level of imports of aluminium extrusions from China decreased. Consequently, the initially selected sample of three cooperating groups of exporting producers represented 45,3 %, and the final sample of two groups of exporting producers represented 33,7 % of the newly estimated imports.

(23) Two additional exporting producers duly substantiated their claims to be included in the list of cooperating exporting producers.

(24) After taking into account their comments, the Commission updated the Annex to the provisional Regulation accordingly and added the two entities to the list of cooperating exporting producers in the Annex to this Regulation.

(25) A cooperating exporting producer commented that it was too small to be selected to the sample. It claimed that because of its size, it was punished by being subject to the highest duty.

(26) The Commission noted that this exporting producer was not subject to the highest duty. The highest duty applies to companies that did not cooperate in the initial stage of the investigation and therefore were not listed in the Annex as cooperating companies. The duty for non-sampled cooperating companies, like the exporting producer making the claim, is in fact lower than a duty of one of the sampled exporting producers as it was calculated as a weighted average of the dumping margins established for the sampled exporting producers. Finally, the sample of exporting producers was selected in line with the requirements under the basic Regulation. The Commission therefore rejected this claim.

1.6. Requests for additional information and analysis after final disclosure

(27) Following final disclosure Airoldi commented that its rights of defence had been affected by the fact that details of the Remote Cross-Checks (‘RCC’) at the Union producers had not been made available to them. However, the details referred to by Airoldi are business confidential. In the same way the Union producers did not get access to business confidential details of the RCC performed with other interested parties. Furthermore, a version ‘open to interested parties’ of these RCCs was made available to Airoldi on the case file. The Commission maintains, therefore, that Airoldi’s rights of defence have been fully respected.

(28) Some interested parties raised new elements after the deadline to submit factual information given in the Notice of initiation, and the deadline to submit comments to final disclosure, which had already been extended to parties requesting an extension by up to 7 days.

(29) In particular, Airoldi submitted a post-hearing briefing with certain claims concerning the alleged impact on the investigation of the withdrawal of the United Kingdom of Great Britain and Northern Ireland (‘UK’) from the European Union and the end of the transition period. These claims had not been made during the hearing.

(30) This briefing was submitted both after the deadline to submit factual information given in the Notice of initiation, and the deadline to submit comments to final disclosure, which was already extended to Airoldi by seven days. It is recalled that neither hearings nor post-hearing briefings can be used to present factual information or elements not yet on file, and therefore do not extend the deadline to submit further views. The company made several additional submissions which were equally beyond the required deadlines and thus could not be considered.

(31) The same applies to Haomei Group, which submitted two sets of comments after the required deadline, one of which concerns the alleged impact on the investigation of the withdrawal of the United Kingdom of Great Britain and Northern Ireland (‘UK’) from the European Union and the end of the transition period.

(32) In addition, Euranimi submitted comments beyond the required deadlines for replying to disclosures and thus they could not be considered beyond aspects referring to the additional final disclosure.

(33) As regards those elements raised outside the timeframe for the Commission to properly conduct this investigation, the Commission notes that the findings made at provisional stage as well as in the final disclosure were made on the basis of EU-28 data since they were made before 1 January 2021. The deadline to submit factual information given in the Notice of initiation expired on 28 October 2020, that is well before the end of the transition period of the withdrawal of the UK those findings were made. This underpins the validity of those findings.

(34) In addition, no claims have been made by any party within the breadth of the periods afforded by the investigation stating (and much less demonstrating) that the measures would (or even could) have been significantly different if they had been based on information excluding the UK.

(35) That being said, the Commission has reviewed the information on file to assess whether findings made on the basis of EU-28 would remain applicable in an EU-27 context. For aspects of the investigation not mentioned hereunder, EU-28 findings are confirmed to be appropriate also for EU-27, since the Commission assured itself that the information obtained during the investigation was still representative of the Union on an EU-27 basis, the impact, if any, being minimal.

(36) Following the additional final disclosure, Airoldi claimed that its comments regarding the withdrawal of the United Kingdom from the Union arrived in good time, since the end of the transition period and the final definition of the commercial relations with the United Kingdom constituted a ‘new fact’. This is difficult to reconcile with the company’s own stated view that ‘it was well known that Brexit and final withdrawal of the UK was to take place on 1 January 2021’. At any rate, the company was in a position to fully exercise its legal rights to comment on this matter by 11 January 2021, the deadline by which comments to final disclosure were due. The fact that the Commission, in an exercise of procedural flexibility, had extended this deadline by 7 days provided additional opportunity for the company to do so. Yet this was not the case, as comments requesting the re-examination of the investigation on an EU-27 basis arrived only on 20 January – well after the extended deadline. Therefore, the claim cannot be accepted. In any event, the Commission re-examined the matter, as described above.

(37) Following the additional final disclosure Haomei submitted a late request after the extended deadline for comments reiterating comments previously submitted. The late submission is therefore not admissible. The comments contained therein are in any case already addressed in recitals (196), (259) and (270).

1.7. Individual examination

(38) Two exporting producers, Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd. commented, with regard to the fact that the Commission did not individually examine those two companies, in spite that they have requested it and submitted the questionnaire replies. Both companies claimed that they should be granted 0 % duty rate resulting from their questionnaire reply.

(39) At the stage of provisional Regulation, the Commission stated that it would decide whether to grant individual examination at the definitive stage of the investigation. However, it turned out that the examination of these requests would have been burdensome and would not have allowed the completion of the investigation within the time period established in the basic Regulation. Furthermore, the additional period of time between the provisional and definitive phases was not sufficient to allow the Commission to properly consider these requests. The Commission therefore confirmed its decision not to grant any requests for individual examination.

(40) Following final disclosure, the same two exporting producers, Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd. reiterated their comments concerning not being granted individual examination and commented on the explanation provided by the Commission in recital (39). In particular, they argued that two requests for individual examination cannot be considered as very large number of exporters which unduly burdensome the charge of the Commission and would prevent the completion of the investigation in good time.

(41) Concerning the examination of additional requests to be burdensome and not allowing the completion of the investigation in time, the Commission wants to underline that in the process of examining the sampled producers, Haomei Group and the PMI Group the Commission, as mentioned in recital (22) of the provisional Regulation, it examined four exporting producers: Guangdong Haomei New Materials Co., Ltd.; Guangdong King Metal Light Alloy Technology Co., Ltd; Press Metal International Ltd. and Press Metal International Technology Ltd.

(42) In addition, the assessment of how burdensome the examination of the additional exporting producers includes all aspects of this very complex case and takes into account the restrictions imposed by the COVID-19 pandemic. The report of the hearing of 13 January 2021 by the Hearing Officer available on the case file provides more details in this regard.

(43) Comments also made reference to Article 9(6) of the basic Regulation stating that anti-dumping duty applied to cooperating exporting producers shall not exceed the weighted average margin of dumping, established with respect to the parties in the sample. In this regard, the Commission confirmed that this is the case, and it is the reason for which the anti-dumping duty applied to cooperating exporting producers is lower than the level of anti-dumping duty of one of the two sampled exporting producers.

1.8. Claim for the suspension of the investigation

(44) An importer, Airoldi, returned to the issue of suspension of the investigation as discussed in recitals (27) and (28) of the provisional Regulation, which was also the subject of a complaint to the European Ombudsman and dismissed by the latter. The importer claimed that the basic Regulation was in breach of fundamental rights of the parties (most notably the right to be heard, the right to good administration, the principle of equality and the right to health protection), as it did not prescribe for a suspension of the investigation in cases of emergency such as the current pandemic.

(45) Moreover, Airoldi claimed that the basic Regulation, interpreted in the light of the WTO Anti-dumping agreement (‘ADA’), should have provided for longer time-frames for completing the investigation in the light of the circumstances. According to the party, the basic Regulation is an implementing measure of the ADA and since Article 5(10) of the ADA allows for investigations to be concluded within the maximum time-frame of 18 months, the European Union would be entitled to derogate to the investigation deadlines and apply the time limits mentioned in the ADA. According to the proposed reasoning, the DG TRADE, in application of Article 57 of the Vienna Convention on the law of the treaties (‘Suspension of the operation of a Treaty under its provisions or by consent of the parties’), should also have requested the relevant Chinese authorities for their agreement for a suspension of the investigation given the circumstances.

(46) The suggested approach was, however, not legally possible because the current investigation was performed in the exercise of the implementing powers granted to the Commission by the basic Regulation. For this reason, the Commission cannot deviate from the deadlines prescribed therein. Moreover, according to the European courts’ case law, the ADA can only be given direct effect in very limited circumstances which were not shown in this case and, therefore, cannot, in this case, take precedence over the basic Regulation.

(47) In response, the interested party claims that a legislative amendment was not needed to change the deadlines of the investigation, and in support of this claim it mentions the Commission Delegated Regulation (EU) 2020/1173 (6), which amends the basic Regulation in changing the duration of the pre-disclosure from three to four weeks. However, this precedent is not appropriate because the Commission adopted Regulation (EU) 2020/1173 in the exercise and within the limits of the powers delegated to it by Article 7(1) fourth paragraph of the basic Regulation. In the absence of such a specific empowerment, the specific provisions of the basic Regulation as regards mandatory deadlines to complete the investigation cannot be changed or derogated from.

(48) Moreover, with respect to this claim, the request for a suspension was in any case considered disproportionate in the present circumstances, since the Commission services were able to perform the investigation, and the parties to participate in it in a meaningful way despite the restrictions imposed by the COVID-19 pandemic. These alleged breaches of the fundamental rights were also submitted by Airoldi in the form of complaint to the European Ombudsman, who noted that the Commission had extended the deadlines to the maximum possible amount in order to take into account the challenges posed by the COVID-19 crisis. The European Ombudsman also noted that extending the deadlines further could have undermined the ability of the Commission to meet its obligations to complete the anti-dumping investigation within the legal deadlines that were binding on it. Therefore, the European Ombudsman found that the Commission acted reasonably and closed the case with a finding of no maladministration (7).

(49) Following final disclosure Airoldi reiterated that the Commission was wrong to have rejected its request to suspend the investigation. However, bearing in mind that no new arguments were raised, the Commission confirms that the claim cannot be accepted.

(50) The importer further requested access to some internal Commission documents, in accordance with Regulation (EC) No 1049/2001 of the European Parliament and of the Council (8). The request and the reply thereto follow the provisions of that Regulation and therefore do not form part of this investigation.

(51) Following final disclosure Haomei Group indicated that the Commission has announced the conclusion in principle of negotiations for the EU-China Comprehensive Agreement on Investment (‘CAI’). They argued that the investigation should be postponed to allow parties involved in the proceeding to acquire broader information on the CAI and to deliver a proper written contribution on its effects on the pending procedure. This argument is irrelevant, the CAI being an agreement covering investment matters that does not alter or affect in any way the application of trade defence instruments, and is thus not accepted.

(52) Following additional final disclosure Haomei Group reiterated and expanded on their arguments to postpone the investigation, but these arguments did not alter the conclusion indicated in recital (51) that the arguments are irrelevant. Furthermore, Haomei Group’s reiteration of the point had no relevance to the additional final disclosure and was therefore outside the required deadlines.

(53) Following additional final disclosure Haomei Group also claimed that the investigation should be closed because of the strength of their arguments concerning dumping, injury and causation. However, as these arguments have been rejected in this Regulation, the Commission confirmed that there are no grounds to close the investigation.

1.9. Investigation period and period considered

(54) In the absence of comments concerning the investigation period and period considered, recital (29) of the provisional Regulation was confirmed.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Claims regarding the product scope

(55) One exporting producer suggested to carry out dumping and injury assessment per market segment.

(56) As explained in the provisional Regulation, inter alia, in recitals (43) to (47), and in this Section, these aluminium products commonly referred to as aluminium extrusions have the same basic physical, technical and chemical characteristics and therefore all belong to the product concerned. Although specific extrusions might be used only for a specific application, this is the result of the fact that these products are bespoke and produced expressly for their intended use. The commercial practice introduced a number of distinctions, including between hard and soft alloys, medium and large size profiles, standard and special profiles and extrusions to be used for a specific application. The investigation has shown that while many producers are present in several of these categories, they produce according to the technical characteristics of their machines and on the basis of the requirements of their various customers. Moreover, concerning the alloys, the investigation proved that a number of aluminium alloys exist, and different alloys may be appropriate for a certain application. Furthermore, as explained in recital (197) of this Regulation, different parties claimed that the market should be differentiated using the above mentioned criteria. Despite that, given the absence of a clear dividing line or distinguishing criterion between the different products, the assessment of dumping and injury should be made for the Union industry as a whole, ensuring due comparability of products. This claim regarding segmentation was therefore dismissed.

(57) One importer (Airoldi) claimed that the definition and scope of CN code 7610 90 90 was imprecise, and that the Commission erred in including imports falling under this code in the import statistics for the product concerned.

(58) Firstly, the definition of a CN code, and products included therein, is not within the scope of this investigation, nor of trade defence legislation, but follows EU classification rules. Concerning instead the inclusion of products falling under CN code 7610 90 90 in the present investigation, as explained in the provisional Regulation in recitals (218) to (223), the Commission had already indicated that the proportion of product concerned included in this code could be lower than that initially estimated by the complainants. This does not impinge upon the fact that the product concerned currently falls notably under the aforementioned code as a matter of customs classification. The final determination on this matter is contained in the analysis and conclusions reported in recitals (206) to (210) of this Regulation.

(59) Airoldi returned to the issue mentioned in the previous recital following final disclosure. They reiterated their arguments and mentioned that numerous BTIs exist under the CN code in question. However, the existence of such BTIs does not imply that certain imports under the code do not fall under the product concerned. This issue is further considered in chapter 4.3 ‘Imports from the country concerned’.

(60) Following provisional disclosure, one user (Alstom) claimed that the Commission, in rejecting their product exclusion claim, failed to grasp the complexity of the characteristics of the products they imported, as railway aluminium extrusions constitute a product with different basic characteristics than the other aluminium products falling under the scope of the proceedings. They follow specific standards and must satisfy the demanding characteristics required for their intended use, including tolerance, microstructure, choice of usable alloys, fatigue requirements, thickness, testing, conformity of mechanical properties and soundness of extrusion seams, with a direct impact on the product to ensure the passengers’ ultimate safety. This would be contrary to other on-demand products, where the bespoke character would relate only to requests concerning characteristics affecting the appearance of the product such as its length, width, weight or finishing (e.g. cut-to-length, polished, etc.), and not affecting the products’ intrinsic characteristics. Compliance with the different product requirements would entail a dividing line between railway-specific products and products for other uses. Finally, the user claimed that in previous cases the Commission excluded products from an investigation on the basis of their use and production process (in particular, the party refers to the measures on certain castings (9) and the recently opened investigation on flat-rolled aluminium products originating in China (10)).

(61) Even if these claims were to be sufficiently substantiated, the Commission does not dispute the complexity of many aluminium extrusions, including those of the railway sector, nor the fact that different product types can have different specific characteristics, uses or production process; that they can follow different product standards; or that interchangeability may not be universal amongst each and every one of such types. However, within its margin of discretion, the Commission has to examine each case on its specific merits and in particular as to the key criterion of whether different types share the same basic physical, chemical and technical characteristics. In this case, the information provided regarding type-related specificities did not disprove the fact that the types at hand share the basic characteristics described in the provisional Regulation, regardless of the sector in which they are used. Besides, both the exporting producers and the Union industry produce and sell aluminium extrusions to serve the railway sector. Aluminium extrusions for the railway sector therefore belong within the scope of the investigation for which dumping, injury and Union interest considerations were assessed. Therefore, the claims could not be accepted.

(62) With respect to extrusions for the railway sector, two exporting producers (Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd.) also requested the exclusion of these products from the product scope. The arguments brought forward by these producers concerned the existence of specific and more demanding standards and production processes than for general applications. As explained above, the products included in the product scope, namely those mentioned at recitals (38) to (41) of the provisional Regulation, share the same basic characteristics despite their additional compliance with standards applicable to certain applications or sectors.

(63) Following final disclosure one Union association (UNIFE), one user (Alstom) and two exporting producers (Jilin Qixing and Shandong Nollvetec) reiterated the points they made to support the exclusion of extrusions in the railway sector.

(64) Alstom also claimed that the Commission had not adequately considered whether a competitive relationship existed between the products in its assessment of the product exclusion request. However, as mentioned at recital (61) both the exporting producers and the Union industry produce and sell aluminium extrusions to serve the railway sector. Therefore they are in competition with each other. The investigation has further confirmed the impact of unfair trading practices on the production of additional product types for the sector, and the Union’s ability to do so in the context of fair trading conditions. This claim was therefore rejected.

(65) Alstom further claimed that the Commission had not considered the case law appropriately. In respect of the case regarding certain castings, Alstom claimed that the existence of an EN norm was part of the justification for an exclusion of products. In the current case, Alstom argued that the Commission has not elaborated on why the existence of an EN norm was not a relevant factor. As indicated in recital (61) the Commission does not dispute that each user industry purchases products with specific characteristics. However, this kind of differentiation applies to all user sectors and relates to the technical requirements of the sector. Again the existence of EN norms in the railway sector does not impinge upon the fact that the extrusions covered by the norm have the same basic characteristics as products for other applications. In respect of the footwear case (11), certain products were excluded from the scope of the investigation not least because basic characteristics of those products were not the same. This is not the case here, as the basic characteristics are the same. To illustrate one example, in the footwear case, such differences resulted in different import and price trends – no claim has even been made in this regard. In sum, it is confirmed that this argument could not be accepted.

(66) Another user (Carl Prinz), a manufacturer of technological solutions for floor coverings, claimed that, because of the standards in place and the reduced tolerances required, as well as the need for specific presses and other manufacturing tools in the production, the products they import could not be compared with more standard imported products and should therefore be excluded from the investigation.

(67) Similarly as for the previous user, this argument could not be accepted. Firstly, the exporting producers and the Union industry both sold a large variety of products; however, the division by product types ensured that the price comparison was made on comparable products. Secondly, regardless of the technical requirements that make a certain product and its use very specific, it still shares the basic characteristics of the product concerned.

(68) One exporting producer (Fuyao) requested that the extrusions for automobile related accessory products should be excluded from the investigation. The exporting producer claimed that the Commission did not consider that these extrusions were different from other extrusions used, for example, in the construction sector. In support of its claim, the exporting producer stated that according to the case law of the Court of Justice, the Commission may take into account a ‘number of factors, such as, inter alia, the physical, technical and chemical characteristics of the products, their use, interchangeability, consumer perception, distribution channels, manufacturing process, costs of production and quality’ (12). For this reason, the exporting producer claimed that the products it exported should be excluded as they serve a different end-use than the other ones subject to the measures. Furthermore, in support of its claim, the exporting producer also mentioned that the Commission, at recital (41) of the provisional Regulation, excluded without giving reasons a series of products from the investigation (such as subassemblies, welded tubes and pipes and finished goods kits).

(69) With respect to these claims, as noted in recital (56), although specific extrusions might be used only in a given sector of the market for a specific application, this is the result of the fact that these products are bespoke and produced expressly for their intended use. The investigation has shown that there is not a clear dividing line or distinguishing criterion between the different products, which would justify a segment analysis. Rather, the Commission concluded that the most appropriate approach for the assessment of dumping and injury to the Union industry is to consider all product types together, while ensuring the comparability of all products being compared. As regards the exclusions mentioned at recital (41) of the provisional Regulation, these are defined by the complainants in their choice of the appropriate product scope which suffered the effects of injurious dumping. These claims were therefore dismissed.

(70) One user (Stako Sp. z o.o.) importing aluminium tubes under the autonomous tariff suspension for use in the manufacture of high pressure vessels claimed that the existence of the said tariff suspension would require the exclusion of the products from the scope of the measures. This claim was submitted significantly after the deadline to submit such requests i.e. 10 days following the date of the Notice of initiation. This company claimed that, because of the absence of production of the imported products in the Union, these imports by definition could not have caused injury to the Union industry and therefore should be excluded.

(71) In addition, the complainant identified one Union producer who they indicated would be able and willing to produce and supply the product.

(72) Following final disclosure, this user commented that the flow formed tubes concerned could not be supplied by the referred Union producer or by any other Union producer and they could only be obtained from China. The user requested the Commission, therefore, to exempt these types of tubes.

(73) European Aluminium then commented that another Union producer using a comparable process is able to supply a suitable product and indicated that Union producers are capable of producing any extrusion product.

(74) The Commission noted that Stako came forward late in the investigation and it was not possible for them to conclude on the usefulness of the comparable process within the remaining time. Additionally, at the hearing with Stako it was confirmed that the flow forming process is carried out in the Union.

(75) Moreover, the products subject to the tariff suspension share the same basic characteristics as the product concerned.

(76) For these reasons, the request for exclusion was not accepted.

(77) One user (Bi Silque S.A.) is importing hollow profiles under the autonomous tariff suspension for use in frames also requested the exclusion of these products from the scope of the measures, albeit significantly after the deadline to submit such requests. This company claimed that there was a lack of supply on the Union market and therefore these imports should be excluded from the product scope. An unrelated importer also commented on this matter and supported the claim.

(78) However, the complainant identified four Union producers who are able and willing to produce and supply such products. In the present case, the products imported by this user appear to have the same basic characteristics as the product concerned and, for this reason, the request for exclusion should be rejected.

(79) A Union user (Forest Group Nederland B.V.) claimed that its Chinese supplier or the product it sells should be excluded from the investigation as they were sold at non-dumped prices. This claim was submitted significantly after the deadline to submit such requests. In any case, the claim seems to come from a misunderstanding of anti-dumping proceedings. Even when one exporting producer is found not to be dumping (which is not the case here as the exporting producer in question did not cooperate with the investigation), this would not constitute a reason for exclusion of a product from the scope of the investigation. Therefore, the claim had to be rejected.

(80) A request for exemption from the anti-dumping duties was received on behalf of an exporting producer (Match Foshan Sanshui Hardware Products Company Ltd.) on the basis that the company is highly reliant on their exports for their economic viability and that it could not prove that it was not dumping as it had not been sampled. This claim was submitted significantly after the deadline to submit such requests. As these elements do not constitute grounds for an exclusion, the request should be rejected.

(81) One importer (O. Wilms GmbH & Co) requested that the product it imports should be excluded from the product scope as it requires a special finish, lengthy approval processes, and is sold to the Union at high prices. This claim was submitted significantly after the deadline to submit such requests. As these elements do not constitute grounds for an exclusion and the product shares the same basic characteristics as the product concerned, the request should be rejected.

(82) A company using the product concerned to produce picture frames in the Union (Mavanti B.V.) claimed that as a result of the measures it will suffer an increase in cost which will put its company at a competitive disadvantage with the finished products (i.e. picture frames) from China, which will not be subject to anti-dumping duties. This user therefore proposed to extend the product scope to cover other finished products such as picture frames. This claim was submitted significantly after the deadline to submit such requests. As the product scope excludes finished products and it would not be appropriate to extend the product scope after the initiation of the investigation, this request cannot be accepted either.

(83) In conclusion, the Commission determined that no grounds existed to exclude the products subject to the above requests from the product scope of the investigation.

(84) Following final disclosure two other users (Decora and Bash tec) indicated that the products they import should be excluded from the investigation because of their specific characteristics, a lack or absence of supply by Union producers or high prices from Union producers.

(85) These users provided details of initial discussions they had held with Union producers in order to try to source aluminium extrusions from them.

(86) European Aluminium reiterated that users should not expect to continue to benefit from injurious dumping as they had in the past. They also pointed out that extrusions are made to order and that the Union industry has spare capacity. European Aluminium identified Union producers able to meet the specifications required.

(87) The Commission noted that these users were at the early stages of discussions with potential Union suppliers and that the users are in the process of adapting to the existence of the measures. Therefore, it cannot be concluded that there is lack of ability or willingness to supply the aforementioned product types on the part of the Union industry.

(88) The Commission, therefore, maintains its position that the product exclusion requests of these users cannot be accepted.

(89) One user (Mat-Inter) claimed that the product definition was unclear and that it would risk its products being classified as product concerned. Despite the fact that the user did not provide a clear argument about the features of its products and the reasons for their uncertain classification (including the fact that it mentioned in its reasoning Sub Chapter 7904 of the combined nomenclature which is outside the scope of the investigation), it should be recalled that the product definition is also reported in the operative part of this Regulation and that the practical implementation of it is the competence of the Customs authorities of the Member State where the import takes place.

2.2. Further details regarding product scope

(90) Several parties posed questions as to whether their exports fell under the product concerned. To furnish clarification and mitigate the risk of misclassification, the Commission provides further details regarding the exclusions to the product scope, specifically the ‘subassemblies’ and ‘finished goods kits’, as described in recital (41) of the provisional Regulation.

(91) Products attached (e.g. by welding or fasteners) to form ‘subassemblies’ are not part of the product scope. Products are typically presented in subassemblies only where the subassembly is designed to be assembled into a bigger entity such as a final product or an assembly, and where sufficient economic justification exists to sell products in this fashion.

(92) Equally, there must be sufficient economic justification to sell products in ‘finished goods kits’, which comprise all essential characteristics of the finished product resulting from assembly of the ‘kit’, and are directly ready and complete for their final intended use (assembly of this final product).

(93) To facilitate the classification of such products and customs control, specific TARIC codes will be created for both exclusions.

(94) All other aspects of the provisional Regulation regarding the product under investigation, the product concerned, the like product and the product scope are confirmed.

3. DUMPING

3.1. Normal value

(95) Several interested parties and GOC commented on the lack of significant distortions in China.

(96) In their comments concerning the provisional Regulation, Haomei Group argued that they provided evidence justifying the application of Article 2(1) of the basic Regulation for the calculation of normal value. Particularly, Haomei Group rejected the existence of significant distortions for their companies and insisted that they had provided sufficient evidence showing that they meet the conditions laid down in Article 2(6a) of the basic Regulation, in particular proving the lack of distortions in the field of labour costs, credit and energy.

(97) As explained in detail at recital (77) and (79) and following of the provisional Regulation, the Commission reiterated that under Article 2(6a)(b) it considers the potential impact of one or more of the elements listed in that provision, including but not limited to labour costs, credit and energy. As also clarified in the same recitals, the starting point is the existence of significant distortions and their impact on prices and costs is established at a country-wide level rather than for each company. At the same time, as stated at recital (81) of the provisional Regulation, the sources to construct normal value when applying the methodology under Article 2(6a), subparagraph (2), third dash may include domestic costs, but only to the extent that they are positively established not to be distorted, on the basis of accurate and appropriate evidence. Therefore, even if the evidence submitted showed that these parties were not affected by distortions in the field of labour costs, credit costs, and energy – quod non – this did not affect the application of the methodology under Article 2(6a) as such. In any event, as explained at recitals (82) to (83) of the provisional Regulation, and in the absence of the additional relevant evidence at country-wide level, the claims of Haomei Group on the lack of distortions were not substantiated with any factual evidence and thus the conclusions at recital (77), (79), (81) and (83) of the provisional Regulation are confirmed.

(98) Secondly, Haomei Group observed that the provisional Regulation criticises the Chinese economic system, makes general statements about the Chinese Governments’ influence on the major industries, and implies that the planning made by the central and provincial authorities leads to financial easing for Chinese companies via the banking system. Firstly, Haomei Group underlined that the European Governments also grant benefits to the European producers, which should be taken into consideration. Secondly, Haomei Group noted that none of the factors listed in Article 2(6a)(b) of the basic Regulation and quoted in point (70) of the provisional Regulation applied to them, because Haomei Group is fully privately owned, not subject to any form of control or directive from the Chinese Government and/or from the Chinese Communist Party (‘CCP’). Furthermore, no members of the aforementioned institutions were seated in the boards of Haomei Group.

(99) Concerning the first argument, the Commission noted at recital (71) of the provisional Regulation that according to Article 2(6a)(b) of the basic Regulation the potential impact of one or more of the distortive elements listed in that provision is analysed with regard to prices and costs in the exporting country. The cost structure and price formation mechanisms in other markets, including matters related to generic and unsubstantiated financial support, such as the alleged generic support granted in the EU, do not bear any relevance whatsoever in the context of this proceeding (13). Secondly, as explained at recitals (77) and following, and at recital (103) of the provisional Regulation, both exporting producers were eligible for different forms of support, irrespective of their being private or public entities.

(100) In addition, the Commission observes that the argument of Haomei Group that both companies are free from any government or party influence does not correspond to reality. The Commission first recalls the substantial body of evidence and the conclusions contained at recitals (86) to (90), and in Sections 3.2.1.3 – 3.2.1.5 of the provisional Regulation, which show the extent and pervasiveness of the influence of the government and of the CCP in the Chinese economy, including the aluminium sector. Neither Haomei Group, nor any other interested party has provided any evidence rebutting or undermining these findings. This would already be sufficient to dismiss even from a substantive point of view these arguments. In any event, according to research carried out by the Commission, it is advertised on the website of Haomei Group that the company is involved into party building activities, such as educational activities for employees concerning ‘Xi Jinping’s thoughts on Socialism with Chinese Characteristics in the New Era, from the Constitution, Party Constitution and Regulations, the spirit of the 19th National Congress of the Communist Party of China, the spirit of the Fourth Plenary Session of the 19th Central Committee of the Party, the spirit of Xi Jinping’s important instructions concerning Guangdong […].’ (14) Furthermore, the company presents itself as ‘an enterprise with high-quality development guided by Party building’ on the Foshan Nanhai Aluminium Profile Industry Association’s website, where Haomei Group is further described in the following way: ‘Haomei New Materials has kept being guided for a long time by Xi Jinping’s thoughts of Socialism with Chinese Characteristics in the New Era, has kept deeply studying and implementing the spirit of the 19th National Congress of the Communist Party of China, armed with theory; has kept promoting the company’s Party building work, and transforming the advantages of Party building work into advantages for the enterprise’s development.’ (15) Seen in the context of the Chinese government and party influence as thoroughly described in the mentioned recitals and sections of the provisional Regulation, this evidence further undermines the argument put forward by this party.

(101) Third, the exporting producers consider that the legality principle (16) is violated by the findings in recital (77) of the provisional Regulation, where the Commission stated that both producers were eligible for financial support, even if they received none. According to Haomei Group, by this statement the Commission reverses the burden proof and implied liability for acts of another person. With regard to the state financing, that is to be fully rejected because Haomei Group would be considered liable for the mere fact of being Chinese companies, even though they were never granted public financing and/or subsidies.

(102) The Commission recalls that Article 2(6a)(b) states that, when assessing the existence of significant distortions, the Commission must consider the ‘potential impact’ of the elements listed in that Article. The findings in section 3.2.1.8 in connection with section 3.2.1.5 of the provisional Regulation show that the Chinese aluminium producers do have preferential access to state financing and that there are countrywide distortions with regard to access to finance. Therefore, even if Haomei Group did not actually receive any state financing themselves, the presence of such distortions in the sector is relevant for the assessment of the existence of distortions under Article 2(6a)(b). The Commission further recalls that regardless of the exporting producers actually receiving state financing, their suppliers or other actors involved in the upstream or downstream markets of the production of the product concerned may have benefited from the preferential access to finance, which is an additional indicator that prices or costs are not the result of free market forces. On this basis, the claims of these companies could already be rejected.

(103) Nevertheless, the Commission went further to research the accuracy of the claims made by Haomei Group with regard to their situation. Contrary to what Haomei Group claimed, according to public information it appeared that both companies actually benefitted from loans extended by, among others, State-owned banks, including loans from Bank of Communications and Guangfa Bank (17). In addition, Haomei is located in the Qingyuan High-tech Zone, which according to the official website of the government of Qingyuan city offers support to companies located therein: ‘In recent years, Qingyuan High-tech Zone has vigorously supported the listing of enterprises located in the zone, meeting the enterprises’ development needs through multiple channels such as policy support and financing guarantees, and shortening the time for enterprises to go public. Afterwards, it will continue to cultivate and expand the enterprises within its jurisdiction, take multiple measures to promote these enterprises’ transformation and upgrading, improve their competitiveness, and accelerate the pace of their development.’ (18)

(104) The Commission also found that Haomei is recognised as National Enterprise Technology Centre (19), a status linked to certain benefits such as one time financial rewards (20), and preferential tax policies to support technological innovation in accordance with relevant national regulations (21). Furthermore, according to the Management Measures for the Recognition as National Enterprise Technology Centre published by the GOC, a close relationship persists between the State and the enterprises recognised as National Enterprise Technology Centres. Article 1 of that document states: ‘The present measures are set out in accordance with the Chinese Law on Science and Technology Progress, in order […] to further strengthen the key position of enterprises in technological innovation […].’ According to Article 3 of the same document: ‘The State encourages and supports enterprises building Technology Centres, involves enterprises in technological innovation as key players and builds a comprehensive institutional mechanism for industry technology and R & D led by enterprises. […] the State […] grants policy support, as well as encourages and guides backbone enterprises to raise their capacity to drive industry technology progress and innovation.’ (22) On the basis of all these elements, which supplement the findings of subsidies granted to Haomei Group as detailed at recital (103) of the provisional Regulation, it is clear that the company benefited from preferential policies, access to finance and subsidies, which all contradict the company’s claims of not being affected by the relevant elements proving the significant distortions. Therefore, these claims must be rejected also as not corresponding to reality.

(105) Fourth, Haomei Group argued that there have been no accurate confutations of the evidence provided during the investigation concerning the lack of distortions. The exporting producers claim that Sections 3.2.1.1 to 3.2.1.10 of the Regulation assessed China globally, without specific references to Haomei Group. This, according to Haomei Group violates their defensive rights as per Article 6 ECHR on right to a fair trial and Article 47 of the Charter of Fundamental Rights of the European Union on right to an effective remedy and to a fair trial and constitutes a severe lack of motivation as per the general principle of effectiveness and Article 19 of the Treaty on European Union.

(106) The Commission recalled that, contrary to these claims, the findings of distortions are based on a substantial body of evidence and legal assessment as detailed in the entire Section 3.2.1 of the provisional Regulation. The exporting producers and all parties had ample opportunity since the initiation of the proceeding to provide arguments and evidence concerning the existence or impact of significant distortions in China country-wide, and/or that their domestic costs are not distorted in accordance with Article 2(6a)(a), second subparagraph, third dash. Both exporting producers did avail themselves of this possibility by making representations on these issues, which are being object of this assessment. As explained in this section, apart from general unsubstantiated or untrue statements, they failed to present any substantial evidence concerning the absence of distortions country-wide and/or that one or more specific factors of production were not distorted in their case. Therefore, this claim was rejected.

(107) Fifth, the same two exporting producers argued that the reported subsidies covered at recital (103) of the provisional Regulation were rewards to Haomei Group for implementing ecological and technological improvements. They further claimed that their amounts were negligible when compared to the companies’ revenues, namely around EUR 1 million contribution against roughly EUR 330 million of revenues. Haomei Group reiterated that the rewards granted to them not only must be assessed taking into consideration their limited amount but, above all, must be put into relation with similar incentives granted to the European industries, within a comparative analysis aiming to evaluate whether they should be considered significant distortion or not. Additionally, the statement from the Initial Public Offering (‘IPO’) prospectus that the lack of subsidies would constitute an impact on the enterprise’s cash flow and operating results, as quoted in recital (103) of the provisional Regulation, represents a standard clause that Chinese companies undertaking an IPO must include in the documents directed to potential subscribers as per Chinese laws and regulations.

(108) The Commission recalled that, as already explained in recital (102), Article 2(6a) is applicable in case the Commission establishes the existence and impact of distortions in the exporting country at a country-wide level. Therefore, this claim could already be dismissed on this basis. Nevertheless, the Commission notes that the additional elements as detailed in recital (103) and (104) of this Regulation show that this company benefits from preferential policies and access to finance, and hence the claim is also not reflecting the truth. As to the magnitude of the benefit, there is no requirement that the Commission investigates the scale of the financial benefits listed by the exporting producers. In any event, as detailed at recital (103) of the provisional Regulation these transfers amount to an appreciable percentage of the company’s profit, and by the company’s own admission, the absence of governmental subsidies in the future might have an impact on the company’s cash flow and operating results. Therefore, this claim is unfounded also as not corresponding to the reality of the situation. Lastly, as also explained at recital (99) of this Regulation, the comparison with the situation of the European companies is completely irrelevant from a legal point of view in light of Article 2(6a) of the basic Regulation, in addition to being generic and not substantiated by any evidence.

(109) The GOC submitted a number of comments to the provisional Regulation. First, with regard to the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China (23) (hereafter ‘Report’), the GOC argued that a staff working document was not adequate for the purpose of proving distortions. This is because, Article 2(6a) of the basic Regulation required the Commission to produce a report regarding the existence of significant distortions in a certain country or a certain sector in that country. However, according to GOC, a staff working document did not meet such requirement, as there was no evidence indicating that the document was approved or endorsed by the Commission at or after the publication. Therefore, the GOC claimed that there were serious doubts regarding whether such document could be regarded as the official position of the Commission and whether its legal status met the requirement of basic Regulation 2(6a) of the Commission making, publishing and updating reports. The GOC further reminded that the reply of the Commission to a similar question in the anti-dumping case on hot-rolled stainless steel sheets did not specify whether such working document could represent the official position of the EU and did not clarify its legal nature.

(110) The Commission noted 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 is 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.

(111) The Commission further noted that the objective sources of information contained in the Report may be used as relevant evidence in the Commission findings in anti-dumping investigations in the context of the application of Article 2(6a) of the basic Regulation, together with any other relevant elements and evidence not contained in the Report. The existence of a report covering a country or a sector is not a legal requirement for the application of Article 2(6a) of the basic Regulation. What counts in this respect is the existence of reliable evidence, whether contained in a country or sectoral Report or elsewhere, as long as it is relevant for the findings concerning the existence of significant distortions. Therefore, also from this point of view the nature and the form of the Report is not relevant for the actual findings on the significant distortions under Article 2(6a) of the basic Regulation.

(112) In this investigation, the report, including the evidence contained therein, is part of the evidence on file justifying the application of Article 2(6a). The Commission has used substantial additional evidence specific to the investigation and the claims put forward by the parties not included in the report. More importantly, the GOC has not provided any evidence that the information in the report was not valid or inapplicable for this investigation. In any event, the Commission recalls that the existence of a country report is not a necessary condition for the application of Article 2(6a). What counts for the application of the methodology under Article 2(6a) of the basic Regulation are the findings that the significant distortions are relevant in the case at hand, as is the case in this investigation. Therefore this claim was rejected.

(113) Secondly, the GOC submitted that the content of the China report and the ways it is used had serious factual and legal flaws. According to the GOC, the content was misrepresentative, one-sided, and out of touch with reality. The working document treated the legitimate competitive advantages of Chinese companies and the normal institutional differences between China and Europe as the basis for the determination of significant market distortion. Furthermore, the GOC claimed that by accepting the investigation application submitted by the domestic industries based on the country report, the Commission provided its industry with unfair advantages, which equalled to making judgments before trial. Additionally, the GOC claimed that replacing investigations with reports did not conform to the fundamental legal spirit of fairness and justice.

(114) In reply to the claim on factual flaws in the country report, the Commission noted that the country 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. It was made publicly available since December 2017 so that any interested party would have ample opportunity to rebut, supplement or comment on it and the evidence on which it is based. The GOC has refrained from providing any such rebuttal or comment on the substance and evidence contained in the report ever since its release in December 2017.

(115) Regarding the argument of the GOC suggesting the issuing of a country report replaced the actual investigation, the Commission recalled that according to Article 2(6a)(e), if the Commission deems the evidence submitted by the complainant on the significant distortions sufficient, it can initiate the investigation on this basis. However, the determination on the actual existence and impact of significant distortions and the consequent use of the methodology prescribed by Article 2(6a)(a) occurs at the time of the provisional and/or final disclosure as result of an investigation. The existence and impact of the significant distortions are not confirmed at initiation stage as claimed by the GOC, but only after an in-depth investigation, hence this argument is rejected.

(116) Third, the GOC commented that the Commission only issued staff working documents for a few selected countries, which was enough to raise concerns about most-favoured nation treatment and national treatment (‘NT’). In terms of most-favoured nation, regardless of whether the staff of the Commission was considering drafting similar documents for other countries, up to this point, the Commission staff only drafted the documents regarding Chinese and Russian market. In addition, the GOC claimed that the Commission never published a clear and predictable standard for choosing the countries or sectors to publish reports.

(117) 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 certain country or sector in that country. Upon approval 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 and does not exclude that other reports will follow. Since the majority of trade defence investigation (‘TDI’) cases concerned China and since there were serious indications of distortions in that country, it was the first country for which the Commission drafted a report. Russia is the country with the second most TDI cases, hence there were objective reasons for the Commission to prepare reports on those two countries in this order.

(118) Furthermore, as stated above, the reports are not mandatory to apply Article 2(6a). Article 2(6a)(c) describe the conditions for the Commission to issue country reports, however according to Article 2(6a)(d) the complainants are not obliged to use the report nor, following Article 2(6a)(e), is the existence of a country report a condition to initiate an investigation under Article 2(6a). In fact, according to Article 2(6a)(e), sufficient evidence proving significant distortions in any country brought by the complainants fulfilling the criteria of Article 2(6a)(b) is enough to initiate the investigation on that basis. Therefore, the rules concerning country-specific significant distortions apply to all countries without any distinction, irrespective of the existence of the country report. Therefore, by definition the rules concerning country distortions do not violate the most favoured nation treatment. Therefore, the Commission rejected these claims.

(119) The GOC added that in terms of NT, the concept of market distortions or corresponding standards did not exist in the EU’s legislation regarding internal market or competition apart from the basic Regulation. Therefore, the GOC argued that the Commission had no authority in terms of international law nor any legislation and practices under its exclusive competence in the internal market or competition regulation to investigate the distortions in China.

(120) The Commission based its methodology in this investigation on the provision of Article 2(6a) of the basic anti-dumping Regulation. As each regulation, once formally approved by the European Parliament and the Council, it is legally binding and the Commission is obliged to apply it in its entirety as it forms part of the acquis. It is legally irrelevant that other European laws do not use the concept of significant distortions, since it is specific to the area of anti-dumping. Therefore, this claim was rejected.

(121) Furthermore, the GOC commented that the Commission applied discriminative rules and standards against Chinese companies when they were in similar situations as the EU companies, including but not limited to unfair standards of evidence and burden of proof. At the same time, the Commission did not evaluate whether the EU or the Member States had market distortions. This set of practices seriously affected the reliability and legitimacy of the Commission’s analysis and conclusions on the core issues in anti-dumping investigations regarding dumping and injury calculation. Thus, it is enough to raise concerns about a potential breach of national treatment obligations under WTO rules.

(122) The GOC did not provide any evidence showing that the EU companies would be subject to distortions comparable to those of their Chinese competitors and would thus be in a similar situation. In any event, the concept of significant distortions is relevant in the context of the determination of normal value for the determination of dumping, whereas this concept is legally irrelevant for the Union industry in the specific context of anti-dumping investigations. Therefore this claim was considered unsubstantiated and legally irrelevant.

(123) Sixth, the GOC submitted that provisions of Article 2(6a) of the basic Regulation is inconsistent with Article 2.2 of the ADA, which provides an exhaustive list of situations where the normal value can be constructed and significant distortions are not included therein. The GOC further claimed that the use of data from an appropriate representative country or international prices to construct normal value according to Article 2(6a) was also inconsistent with GATT Article 6.1(b) and Article 2.2 of the ADA, especially Article 2.2.1.1. The GOC further argued that the WTO rules required using the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits when constructing normal value. However, Article 2(6a) of the basic Regulation broadened the scope of data source to include the costs of production and sale in an appropriate representative country, or international prices, costs or benchmarks. This was beyond the scope of WTO rules according to the GOC. Therefore, no matter whether the EU basic Regulation 2(5) is in line with the WTO rules or not, the Commission should not construct normal value when there is so-called ‘market distortion’ based on the authorization of the basic Regulation Article 2(6a).

(124) The Commission considers that the provision of Article 2(6a) is consistent with the European Union’s WTO obligations. It is the Commission’s view that, as clarified in DS473 EU-Biodiesel (Argentina), the provisions of the basic Regulation that apply generally with respect to all WTO Members, in particular Article 2(5), second subparagraph, permit the use of data from a third country, duly adjusted when such adjustment is necessary and substantiated. Therefore, the Commission rejected this claim.

(125) The GOC submitted that in this case, the Commission directly disregarded the records of the Chinese exporters, which was inconsistent with Article 2.2.1.1 of ADA. The GOC argued that the Appellate Body in EU-Biodiesel (Argentina) (DS473) and the panel in EU-Cost Adjustment Methodologies II (Russia) (DS494) asserted that according to Article 2.2.1.1 of the Anti-Dumping Agreement, as long as the records kept by the exporter or producer under investigation corresponded – 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 investigation, the investigation authority should use such record to determine the production cost of the investigated producers.

(126) The Commission recalled that the disputes DS473 and DS494 did not concern the application of Article 2(6a) of the basic Regulation, which is the relevant legal basis for the determination of normal value in this investigation. These disputes also concerned different factual situations than the factual situation concerning the existence of significant distortions. Therefore, this claim was rejected.

(127) Eight, the GOC submitted that the investigation conducted by the Commission based on Article 2(6a) of the basic Regulation in this case had double standards. According to the GOC, the Commission refused to accept the cost data of Chinese exporters on grounds that there were significant market distortions in the Chinese market, but it accepted the representative country’s data and used it to replace the Chinese producers’ data without any evaluation of whether there may be market distortions affecting these replacing data. This, according to the GOC, is a proof of ‘double standards’. The GOC submitted that this approach failed to guarantee the reliability of the relevant costs in the selected representative country. Moreover, it was impossible to truly reflect the cost of the producers in the country of origin.

(128) The Commission recalled that during the investigation the Commission considers whether there are elements on file pointing to the existence of any distortions present in the representative countries, also namely with regard to the main raw materials used for the production of the product concerned, for example whether they are subject to export restrictions. Furthermore, during the investigation there is ample opportunity for all parties to argue on the appropriateness of the potential representative countries considered by the Commission. In particular, the Commission publishes two notes to the file on the appropriateness of the possible representative countries and a preliminary choice of an appropriate country for the investigation. These notes are made available to all parties for their comments. Also in this case, the GOC and all other parties had the possibility to prove that the possible representative countries considered were affected by significant distortions and were thus not suitable for the investigation. Therefore, this claim was unfounded and was rejected.

(129) In reaction to the submission by the GOC, Airoldi subsequently submitted comments on the submission by the GOC. Airoldi underlined its endorsement concerning China’s arguments concerning the legality of the staff working document. First, Airoldi submitted that Article 2(6a)(c) of the basic Regulation set the requirement that the document at issue must be a report and must be adopted formally by the European Commission. They further argued that the report needed to be made public and updated. Therefore, according to Airoldi, the document relied upon in the present investigation and published on the internet Site of DG TRADE, was not updated, and was a simple Commission’s staff working document, lacked the formal and substantive characteristics for being considered a formal European Commission report. Furthermore, as a matter of EU Institutional law, such a report needed to be published in all official languages of the European Union in the Official Journal of the European Union. Additionally, Airoldi requested that DG TRADE provided it with an Italian version of this document and the issue of the Official Journal of the European Union where it was published. At the same time, Airoldi noted that the China report was published on DG TRADE’s internet Site in the English language only. Therefore, the China report needed to be disregarded and the provisional regulation based on the report should be repealed. Furthermore, Airoldi made a specific request for disclosure in the present anti-dumping proceeding for all preparatory documents in whatever form related to the internal procedure followed within the European Commission to adopt the China report.

(130) As already explained in particular at recitals (110) to (112) about the value of the China report, the provisions of Article 2(6a)(c) do not prescribe a specific format in which a country report needs to be published, nor its channel of publication. Therefore the publication of the China report as a staff working document, a type of document which does not require translation into all European languages, nor formal publication in the Official Journal of the European Union, complies with the relevant rules. In reply to these claims, the Commission notes that the report has been publicly available since December 2017 so that any interested party would have ample opportunity to rebut, supplement or comment on it and the evidence on which it is based. No evidence was provided by Airoldi, or any other interested party, which would have shown that the report is outdated. Therefore, this argument is rejected. With regard to the request for disclosure of the preparatory documents, the Commission refers to recital (50) above.

(131) Second, Airoldi submitted that as a consequence of the above arguments (the fact that the China report is a staff working document, published on DG TRADE website in the English language only), the China report was an unlawful document. Therefore, Airoldi argued that such evidence shall be disregarded and the complaint needed to be declared unfounded. Furthermore, the provisional Regulation which relied on China report had to be immediately repealed.

(132) This argument is a reiteration of GOCs comments in recital (109). The Commission replied to this comment in recitals (110) to (112).

(133) Following final disclosure, Haomei Group submitted a set of comments concerning the existence of significant distortions mainly reiterating the arguments made before during the investigation. First, Haomei Group reiterated, that they do not agree that the country Report is a comprehensive enough and a sufficient evidence of the existence of distortions. Furthermore, Haomei Group reiterated that they were not subject to any government intervention, received loans at undistorted interest rate and that the subsidy received was of minor value. Additionally, the Haomei Group argued that they were not affected by beneficial lending terms and other financial incentives provided by the government and added Commission’s findings concerning credits were generic and not applicable to Haomei Group.

(134) With regard to the objectivity of the report and its suitability as evidence, the Commission notes, as already explained in recital (114), that the country 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.

(135) On benefits, such as cheaper loans and subsidies, the Commission reiterates, as already stated in recitals (97), (99) and (102) of this regulation and in recitals (77) and (79) and following of the provisional Regulation, that in accordance with Article 2(6a)(b), in assessing the existence of significant distortions regard shall be had, inter alia, the potential impact of one or more of the elements listed in that provision. Therefore, it is crucial to assess whether the producers of aluminium extrusions have, at least potentially, access to cheaper financing and more favourable conditions than their counterparts elsewhere. Since the aluminium industry is subject to numerous plans and directive by the government, the Commission found in recitals (77) and (79) and following of the provisional Regulation, that the producers of aluminium extrusions, including Haomei Group, are at least potentially affected by the distortions in the aluminium extrusions sector in China.

(136) Secondly, Haomei Group argued that the party building activities mentioned by the Commission in recital (100) of this Regulation are cultural facts but do not amount to an evidence of political distortion.

(137) The Commission quoted some examples of party building activities exercised by Haomei Group in response to their comment in recital (98), in which Haomei Group claimed to be free from interference from party or the government. As quoted in recital (100) of this Regulation, Haomei Group clearly states that they are guided by the ‘Party building’, as well as guided by ‘Xi Jinping’s thoughts of Socialism with Chinese Characteristics in the New Era, […] implementing the spirit of the 19th National Congress of the Communist Party of China’. Even if, as claimed by Haomei Group, there are no CCP members in the board of directors of the two companies of the Haomei Group, it is under influence of the government and, as stated above, actively present itself as implementing the policy of the government and following its official agenda. No evidence was adduced to the contrary.

(138) Haomei Group submitted that its prices were not distorted, which is proven by the fact that its prices were aligned with the European prices.

(139) The Commission recalls that according to Article 2(6a)(a) of the basic Regulation, if it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions, the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks. In the case at hand, the Commission found existence of significant distortions in the sector of aluminium extrusions in China, as explained in section 3.2.1 of the provisional Regulation. Therefore, the level of prices of Chinese exporting producers is not relevant in this case.

(140) Following the final disclosure, Haomei Group submitted that they were considered responsible not for their own behaviour but for features of the Chinese economy assessed in a generic way.

(141) The specific findings of dumping and companies’ rates reflect the data submitted by the companies themselves, calculated in accordance with the provisions of the basic Regulation, in particular Article 2(6a). As explained in recital (106), the existence of significant distortions is country-wide and, once distortions are demonstrated, that methodology applies in principle to all companies. Neither of the companies has demonstrated that the distortions found by the Commission do not affect their costs. Therefore, the final margins of dumping reflect the behaviour of the companies, taking into account the existence of significant distortions in China, where they operate.

3.2. Representative country

(142) In the provisional Regulation, the Commission selected Turkey as the representative country in accordance with Article 2(6a) of the basic Regulation.

(143) The GOC claimed that the Commission incorrectly replaced the producers’ data without any evaluation of whether there may be market distortions affecting these replaced data.

(144) The Commission invited comments of interested parties on the selection of Turkey as the representative country in a transparent process involving two notes on the sources for the determination of the normal value (of 16 March 2020 and of 25 June 2020). The Commission eliminated a number of other potential representative countries. Since the Commission did not find market distortions in Turkey that would make it not suitable as a representative country, it concluded that Turkey was the most appropriate representative country.

(145) Airoldi repeated its comment concerning the choice of Turkey as the representative country with regard to differentiation between hard and soft alloys. As explained in recital (164) of the provisional Regulation, product types are not determinant for the selection of an appropriate representative country. The Commission therefore maintained that Turkey was the most appropriate representative country in this case.

(146) Following final disclosure, Airoldi repeated its comment concerning the choice of Turkey as a representative country. Airoldi added new elements in their comments against the choice of Turkey that concerned two main arguments: the Turkey’s Customs Union with the Union, and that Turkey did not fulfil social and environmental protection standards.

(147) Airoldi failed to explain why the Customs Union would make Turkey an inappropriate representative country. As explained in the Regulation, the Commission took into account customs duties in order to establish the value for each factors of production. This is done in order to arrive at the price of the factor of production in the representative country. The fact that there is a customs union is irrelevant for the determination of this price. Even if Airoldi’s argument was correct, quod non, the normal value would be underestimated and, as a result, the dumping margin would be lower, therefore benefiting rather than in detriment of the importer. As for social and environmental standards, as explained in the Second Note on the Sources for the Determination of the Normal Value of 25 June 2020, Turkey was found to be the most appropriate representative country in this case on the basis of availability and quality of data. In the absence of any claim that would invalidate that finding, an analysis of those standards was not warranted.

(148) Following final disclosure, Haomei Group contested the normal value ‘construed according to the Turkish parameters, especially in the light of the values taken into consideration as a benchmark, that are neither actual (they are from 2016), nor accurate […]’.

(149) The only factor of production based on data from 2016 used in the calculation was labour costs. This was clearly explained in the Note of 16 March 2020. The 2016 value was ‘adjusted for inflation using the domestic producer price index (24) published by the Turkish statistical institute’. Therefore not only all the other factors were based on recent available data, but the only one that Haomei Group appears to refer to in the comments was in fact adjusted. Therefore Haomei Group’s comment was dismissed as factually incorrect.

(150) Haomei Group also submitted that Turkey was not an appropriate choice of representative country due to a difference of its population compared to China.

(151) In this regard, the Commission notes that the level of development and not the size of the population is fundamental in the choice of representative country. Turkey has the same level of development of China according to the World Bank classification (upper middle income) and therefore is an appropriate representative country for the purpose of Article 2(6a) of the basic Regulation. Therefore, Haomei Group’s claim was rejected.

(152) Therefore, for the reasons explained in the provisional Regulation, the Commission confirms its selection of Turkey as the representative country as no compelling arguments were put forward against the choice of Turkey following the adoption of the provisional Regulation.

3.3. Sources used to establish undistorted costs

(153) As explained in recitals (166) to (184) of the provisional Regulation, the Commission identified the following sources to establish undistorted costs: the Global Trade Atlas, national statistics including the Turkish Statistical Institute to establish labour costs, electricity costs and gas costs and OECD for diesel prices. Following the disclosure of the provisional findings, the Commission did not receive any substantiated claims on market distortions affecting the data and the sources used.

(154) In the absence of further comments with respect to the sources used to establish undistorted costs the Commission maintains those sources listed the provisional Regulation.

3.4. Manufacturing overheads costs, SG&A and profit

(155) The combined level of SG&A and profit used in the provisional Regulation was based on data for the year 2018. The Commission checked the availability of more recent data for SG&A and profit in the representative country for 2019. This data showed that the combined level of SG&A and profits increased only very marginally in 2019. This would not have a noticeable impact on calculations. In light of this, and in the absence of any comments by interested parties with respect to manufacturing overheads costs, SG&A and profit levels listed in the provisional Regulation, the Commission maintained those levels.

(156) Following final disclosure Haomei Group challenged that the ‘price charged’ by Turkish companies ‘could be an element of comparison’. The Commission explained in detail the way of calculating the dumping margin in the exporting producer individual disclosure, but also in the two notes on the sources for the determination of the normal value made available to all parties in the case file. In none of those documents the Commission made any reference to prices charged by any of the Turkish companies to be used at any step of determination of the Normal Value. Turkish companies were used only as the source of SG&A and profit values. Thus, Haomei Group’s claim is factually incorrect.

(157) Following final disclosure, the complainant repeated its claim that the Commission should exclude from the calculation of the average profit margin the two Turkish companies with the lowest profit, as these were far from the 16 % profit margin that was made by one EU producer in the absence of dumped imports.

(158) As explained in recital (171) of the provisional Regulation, the Commission excluded those companies that did not report any profit. All profitable companies were taken into account, irrespective of their profit level, as long as they were not loss making. The level of profitability achieved by one of the Union producers is not relevant when determining the appropriate profit level for the construction of the normal value on the basis of undistorted data in the representative country. The Commission therefore rejected this claim.

3.5. Calculation of the Normal Value

(159) The Commission received comments from an exporting producer, PMI Group, concerning the changes in VAT rates during the IP. The Commission adjusted the calculation of the Normal Value following this comment, as described in more detail in recitals (185) to (187). Other than that, all other calculations regarding the normal value in the provisional Regulation are confirmed.

(160) Following final disclosure, Haomei Group submitted an unclear claim which seems to challenge the level of the interest rate applied as allowances for export sales of Haomei Group. The Commission notes that the rates applied as the allowance were based on interest rates provided by Haomei Group itself and checked during the RCC.

(161) Haomei Group reiterated that the method of calculating the average price concerning European extrusions was allegedly flawed because it placed ‘in the same basket heterogeneous products in terms of characteristics and price’.

(162) Following additional final disclosure, Haomei Group repeated its comment that due to distinction based on different alloys, fabrications, specifications the Commission must not consider the product under investigation as one single product.

(163) As explained in detail in recitals (232) to (234) of the provisional Regulation, the referred price comparisons were made on a type-by-type transaction level, where detailed product control numbers ensured fair comparison. The reason for it was precisely to make the comparison of similar products, and this was the aim for the product control number to include elements like shapes and form, alloy series, length, maximum cross-sectional dimension, type of finishes, type of fabrication and drawing. The allegation made by Haomei Group was unjustified and therefore rejected.

3.6. Export price

(164) As described in recital (196) of the provisional Regulation, the Commission made an adjustment under Article 2(9) of the basic Regulation for the export sales through related traders to independent customers in the Union.

(165) PMI Group commented that the importer profit margin used to construct the export price for indirect sales via related importers was too high, and questioned whether it had been adequately checked. The Commission confirmed that the margin used at the provisional stage was correct based on information available at the time, and that it originated from the sampled importers. In any event, after remote cross checking this margin was increased slightly and details of the revised data used were made available to the company concerned. This revised margin was also used to recalculate the undercutting and injury elimination level shown below.

(166) The Commission thus adjusted the calculation of the dumping margin for one of the exporting producer groups as the result of the above revision. All other calculations regarding export price in the provisional Regulation are confirmed.

(167) Following final disclosure, Haomei Group submitted that the Commission wrongly used cost of shipping that ‘as of today’ were significantly more expensive. The Commission recalls that all calculations are based on the investigation period. With regard to dumping, calculations are based on actual costs provided by Haomei Group. The fact that the costs of shipping, according to Haomei Group, increased by 300 % after the investigation period is not relevant; just like for all other costs, the cost of shipping during the investigation period is what must be used.

3.7. Undertaking offers

(168) Prior to final disclosure, one Chinese exporting producer expressed interest in submitting a voluntary undertaking offer, but did not do so in the terms which are permissible under Article 8 of the basic Regulation.

(169) Following final disclosure, within the deadline specified in Article 8(2) of the basic Regulation, three exporting producers submitted offers for a price undertaking: Haomei Group, Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd.

(170) According to Article 8 of the basic anti-dumping Regulation, the price undertaking offers must be adequate to eliminate the injurious effect of dumping and their acceptance must not be considered impractical. The Commission assessed offers in view of these criteria and considered that its acceptance would be impractical for the following reasons.

(171) The offer put forward by Haomei Group would not, if accepted, eliminate the injurious effect of dumping. Furthermore the offer did not contain the essential element of an undertaking: a minimum import price (‘MIP’) below which it commits not to sell. The offer is thus incompatible with the underlying principles of an undertaking.

(172) Haomei Group has a number of related companies directly involved in production or sales of the product under investigation. Haomei Group sells the product directly and indirectly.

(173) Such a complex group structure bears high risks of cross-compensation. The Commission would not be able to monitor and ensure compliance with the undertaking of the indirect sales via the related company in Hong Kong and possibly via the other related companies. This, on its own, would make the offer impractical.

(174) Shandong Nollvetec Lightweight Equipment Co., Ltd. and Jilin Qixing Aluminium Industries Co., Ltd. offered a MIP subject to an indexation.

(175) Both companies produce and sell various product types with significant differences in prices. The weighted average injury margin used for minimum import price calculation would be below the non-injurious price for the majority of product types exported to the Union by those companies. Therefore, the level of MIP proposed was not sufficient to remove the injurious effect of dumping.

(176) In addition, Shandong Nollvetec Lightweight Equipment Co., Ltd. has a high number of related companies in China, many of which are directly involved in the production and sale of the product under investigation on the domestic market. The company structure increases the risks of circumvention.

(177) Aluminium extrusion types and models cannot be easily distinguished from