COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(92) 157 final 
Brussels, 30 April 1992 
Proposal for a 
COUNCIL REGULATION (EEC) 
amending Regulation (EEC) No 1768/89 relating to a 
definitive anti-dumping duty on imports of video 
cassettes originating in Hong Kong 
(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
(1) By Regulation (EEC) No 1768/89, the Council imposed a definitive 
anti-dumping duty of 21.9% on imports of VHS video tape in cassettes 
originating in Hong Kong. In this Regulation, the Council indicated 
that the Commission will review this duty, should a newcoming 
exporter make a substantiated request in this respect. 
(2) By a notice published in the Official Journal on the 11 January 1991 
the Commission initiated such a review of Regulation (EEC) No 
1768/89 as it concerned a Hong Kong company, Wai Shing. 
(3) The investigation showed that Wai Shing had begun to export own 
produced video cassettes to the European Community after the entry 
into force of the above Regulation. 
(4) Normal value was determined on the basis of constructed value of the 
models concerned. Export price was based on the actual price paid or 
payable for export. The dumping margin established was 13.8%. 
(5) Given the specific economic circumstances of this case, the anti­
dumping duty to be imposed should be a variable duty equal to the 
difference between the normal value and the net price free-at-the-
Community-frontier. 
(6) In conclusion, it is proposed that the Council amends its Regulation 
(EEC) No 1768/89, and impose on VHS video tapes in cassettes 
manufactured by Wai Shing and originating in Hong Kong the above 
variable duty for the models exported to the Community. 
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Proposal for a 
COUNCIL REGULATION (EEC) 
amending Regulation (EEC) No 1768/89 relating to a 
definitive anti-dumping duty on imports of video 
cassettes originating in Hong Kong 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on 
protection against dumped or subsidized imports from countries not 
members of the European Economic Community(^), and in particular 
Article 14 thereof, 
Having regard to the proposal submitted by the Commission after 
consultation within the Advisory Committee as provided for under the 
above Regulation, 
Whereas: 
I - PREVIOUS PROCEDURE 
(1) In Regulation (EEC) No 1768/89(2), the Council imposed in 
particular a definitive anti-dumping duty of 21.9% on imports of VHS 
video tape in cassettes falling within CN code ex 8523 13 00 
originating in Hong Kong, with the exception of imports from several 
exporters specifically mentioned which were subject to a lesser rate 
of duty or no duty at all. 
(1) OJ No L 209, 2.8.1988, p. 1. 
(2) OJ No L 174, 22.6.1989, p. 1 
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(2) In recital 43 of Regulation (EEC) No 1768/89, concerning companies 
which started or will start exporting own-produced cassettes to the 
Community after the investigation period (newcomers), the Council 
noted that the Commission was ready to initiate without delay a 
review proceeding if the exporting company could show the 
Commission, and supply to that effect sufficient evidence, that it 
did not export the products concerned to the Community during the 
period of investigation. The company also had to demonstrate that 
it only started those exports after the said period and that it is 
not related to or associated with any of the companies subject to 
the investigation. 
II - REVIEW PROCEDURE 
(3) By a notice published on 11 January 1991 (3), the Commission, after 
consultation with the Advisory Committee and in accordance with 
Article 14 of Regulation (EEC) No 2423/88 initiated a review of 
Regulation (EEC) No 1768/89 as it concerned a Hong Kong company, Wai 
Shing. This company had submitted that it did not export the 
products subject to the anti-dumping duty during the previous period 
of investigation (1 January - 30 November 1987). In addition, it 
submitted that it was not related to any of the companies subject 
to the previous investigation for which dumping was found and 
provided substantiated evidence that it just had begun to export 
video cassettes to the Community. Accordingly, the Commission 
commenced an investigation in order to verify that Wai Shing could 
be considered as a newcomer and to establish a dumping margin, if 
any, for this company. 
(3) OJ Ho C 7, 11.1.1991, p. 2. 
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III - RESULTS OF THE INVESTIGATION 
1. Newcomer 
(4) The investigation showed that Wai Shing began to export own-produced 
video cassettes to the Community after the previous investigation 
period mentioned in recital 3. In addition, it was found that this 
company had no link of any sort with the exporters involved in the 
previous procedure and for which dumping was found. The Council 
confirms that it should accordingly be considered as a newcomer and 
that a partial review of Regulation (CEE) No 1768/89 as it concerned 
Wai Shing was warranted. 
2. Normal value 
(5) Since Wai Shing did not sell any video cassettes on the domestic 
market during the investigation period for this review, normal value 
was determined on the basis of the constructed value of the models 
concerned in accordance with Article 2(3)(b) of Regulation (EEC) No 
2423/88. This constructed value was computed on the basis of all 
costs, both fixed and variable, in the country of origin, of 
materials and manufacture for the models exported to the Community 
plus a reasonable amount for selling, administrative, other general 
expenses and profit. 
(6) As far as selling, administrative and general expenses were 
concerned, they were calculated by reference to such expenses 
incurred by another Hong Kong manufacturer for its sales of video 
cassettes on the domestic market, since it was verified that these 
expenses corresponded to such costs as they were stated in the 
audited accounts of Wai Shing. 
As far as profit was concerned, it was found appropriate to apply a 
profit rate of 8% on turnover; this rate was used in Regulation 
(EEC) No 1768/89 for the Hong Kong exporters and, according to the 
information available to the Commission, can still be regarded as 
the profit that Hong Kong companies can normally achieve on their 
domestic market. The Council confirms the foregoing findings. 
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(7) On this basis, normal value was established for the models exported 
to the Community and for the three qualities of tapes used by Wai 
Shing , namely normal grade, high grade and super high grade. 
3. Export price 
(8) Export prices were determined on the basis of the prices, net of all 
rebates, actually paid or payable for the video cassettes sold for 
export by Wai Shing to the Community. Indeed, since exports were 
made directly to independent importers in the Community, these 
export prices were found to be reliable. 
The Council confirms this finding. 
4. Comparison 
(9) For the purpose of a fair comparison between normal value and export 
price, the Commission took account of differences affecting price 
comparability in accordance with Article 2(9) and (10) of Regulation 
(EEC) No 2423/88. All comparisons were made at ex-works level, at 
the same level of trade and, for the export price, on a 
transaction by transaction basis. 
The examination of the facts shows the existence of dumping, the 
margin of dumping being equal to the amount by which normal value 
exceeds the price for export to the Community, which, as expressed 
as a percentage of total c.i.f. value, was 13.8%. 
The Council confirms the above findings. 
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IV - AMENDMENT OF THE REVIEWED MEASURES 
(10) No new investigation was carried out as regards injury since this 
was not requested. In addition, the Commission considers that the 
injury findings established in Regulation (EEC) No 1768/89 are still 
valid. Therefore, since the price increase which would be required 
to eliminate the injury level exceeds the dumping margin found for 
the company concerned, as established in Regulation (EEC) No 1768/89 
(recital 71), the duty to be imposed should correspond to the 
dumping margin. 
(11) The complainants and Wai Shing were informed of the essential facts 
and considerations on the basis of which it was intended to propose 
the replacement of the duty imposed by Regulation (EEC) No 1768/89 
in respect of Wai Shing by an anti-dumping duty established on the 
basis of the above and were given every opportunity to comment. 
After this disclosure, Wai Shing offered a price undertaking. 
However, in the light of the economic structure of the exporter, in 
particular the fact that it supplies and exports to the Community 
video cassettes of various origins, and given the evolution of the 
flows of trade for this product from Hong Kong, the monitoring of 
such undertaking would not be manageable. Therefore, the Commission 
considered, after consultation, that the undertaking offer submitted 
by Wai Shing was not acceptable. 
(12) In addition, the Commission found that the prices of video cassettes 
originating in Hong Kong were subject to a high volatility. The 
Commission thus considered that, for the models investigated, the 
duty should take the form of a variable duty equal to the difference 
between price per cassette net, free-at-Community-frontier, not 
cleared through customs, and a floor price established on the basis 
of the normal value for each individual model. Since it cannot be 
excluded that the exporter will also export models which were not 
covered by the investigation, it appears appropriate to establish an 
ad valorem duty at the level of the dumping margin found for all 
other video cassettes exported to the Community by this company.The 
Council confirms the above findings. 
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(13) Accordingly, it is considered appropriate that Regulation (EEC) No 
1768/89 should be amended in respect of Wai Shing and that, until 
the Regulation's expiry, a definitive anti-dumping duty shall be 
imposed on VHS video tapes in cassettes manufactured by Wai Shing 
and originating in Hong Kong in respect of the models E-30, E-60, E-
90, E-120, E-180, E-195 and E-240, either normal grade, or high 
grade or super high grade. This duty shall be equal to the 
difference between a floor price based on this normal value and 
their net price free-at-the-Community-frontier not cleared through 
customs, payable by the first importer. All other models of video 
cassettes manufactured by Wai Shing and originating in Hong Kong 
shall be subject to a duty of 13.8% ad valorem, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The following subparagraph is added to Article 1(3) of Regulation (EEC) 
No 1768/89: 
"The duty specified in paragraph 2(b) shall not apply to models of video 
tape in cassettes E-30, E-60, E-90, E-120, E-180, E-195 and E-240 in 
quality normal grade (NG), high grade (HG) or super high grade (SHG) as 
specified hereafter and manufactured and sold for export to the Community 
by Wai Shing (Hong Kong) (TARIC additional Code 8255); these models shall 
instead be subject to a duty equal to the difference between the price 
mentioned hereunder for each of the models concerned and their net price, 
free-at-Community-frontier before duty: 
ECU Additional Taric Code 
E-30 SHG 0,55 8626 
E-60 SHG 0,68 8627 
HG 0,66 8628 
E-90 SHG 0,81 8629 
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E-120 SHG 
HG 
E-180 SHG 
HG 
NG 
E-195 SHG 
HG 
E-240 SHG 
HG 0,94 8630 
0,85 8631 
1,20 8632 
1,13 8633 
1,10 8634 
1,27 8635 
1,20 8636 
1,47 8637 
1,36 8638 
For all other video tapes in cassettes produced by Wai Shing the duty 
shall be 13.8% of their net price, free-at-Community-frontier before 
duty." 
Article 2 
This Regulation shall enter into force on the day following that of its 
publication in the Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable 
in all Member States. 
Done at Brussels, For the Council, 

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ISSN 0254-1475 
COM(92) 157 final 
DOCUMENTS 
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ISBN 92-77-43474-0 
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