COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 01.08.1995 
COM(95) 386 final 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing a definitive anti-dumping duty on imports of plain paper 
photocopiers originating in Japan 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. In August 1992, the Commission initiated a review under Articles 14 and 15 of 
Counci Regulation (EEC) No 2423/88(,), as last amended by Regulation (EC) 
No 522/94* \ of the definitive anti-dumping measures introduced in February 1987 on 
imports of plain paper photocopiers (PPCs) originating in Japan. 
2. The review found that the existing anti-dumping duty has been effective in 
significantly reducing the volume of PPC imports from Japan. On the other hand, the 
remaining import volume still represented 26% of the Community market in the 
investigation period. Those imports were, on average, highly dumped and sold at 
prices in the Community that significantly undercut the prices of the Community 
industry for comparable models. Furthermore, the dumped imports have become 
particularly injurious in that they now consist, to a much larger degree than before, 
of large PPCs, which used to be sold mainly, and profitably, by the Community 
industry. The degree of undercutting on large PPCs was twice that of small PPCs. As 
a result, the Community industry lost a large part of its market share of large PPCs 
to the dumped imports from Japan, and profitability declined considerably. On the 
whole, the Community industry could not be said to be in a better position than at the 
time of the original investigation, when the Council determined that material injury 
existed. 
3. The Commission proposes that the Council maintains the existing anti-dumping duty, 
at its current rates (which vary between 7.2% and 20%), for a new period of three 
years, until August 1998, and that it enlarges the product scope of the duty to include 
PPCs capable of operating at a speed of more than 75 copies per minute of A4 size 
paper. The maintenance of measures at their existing level and their extension to PPCs 
over 75 copies per minute is deemed necessary, but also sufficient, to counteract the 
injurious effects of dumping, especially on large PPCs. The limitation of the new 
measures to three years instead of the usual five years is considered justified by the 
exceptional length of the investigation, during which period the existing duty has 
remained in force. 
(1) OJ NoL 209, 2.8.1988, p. 1. 
(2) OJNoL 66, 10.3.1994, p. 10. 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing a definitive anti-dumping duty on imports of plain paper 
photocopiers originating in Japan 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on protection 
against dumped imports from countries not members of the European Community(1), as last 
amended by Regulation (EC) No 1251/95(2), and in particular Article 23 thereof, 
Having regard to Council Regulation (EEC) No 2423/88, of 11 July 1988 on protection 
against dumped or subsidised imports from countries not members of the European Economic 
Community^, as last amended by Regulation (EC) No 522/94(4), and in particular Articles 12, 
14 and 15 thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas : 
A. PROCEDURE 
(1) On 2 August 1985, the Commission announced the initiation of an anti-dumping 
proceeding concerning imports of photo-copying apparatus originating in Japan( \ A 
provisional anti-dumping duty was imposed on 26 August 1986 by Commission 
Regulation (EEC) No 2640/86(6). On 24 February 1987, by Regulation (EEC) 
No 535/87(7), the Council imposed a definitive anti-dumping duty on imports of plain 
paper photocopiers (hereinafter referred to as MPPCs") originating in Japan . At the 
same time, an undertaking was accepted(8) from one exporter, Kyocera, which had 
discontinued the production of PPCs, to give advance notice to the Commission should 
it decide to recommence exports to the Community. 
(i) 
(2) 
(3) 
(4) 
(5) 
(6) 
(7) 
(8) OJNoL349, 31.12.1994, p. 1. 
OJNoL 122, 2.6.1995, p. 1. 
OJNoL209, 2.8.1988, p. 1. 
OJN0L66, 10.3.1994, p. 10. 
OJNoC 194, 2.8.1985, p. 5. 
OJNoL239, 26.8.1986, p. 5. 
OJNoL 54, 24.2.1987, p. 12. 
Commission Decision 87/135/EEC, OJ No L 54, 24.2.1987, p. 36. 
(2) Following the introduction of these measures, a number of investigations were initiated 
under Article 13(10) of Regulation (EEC) No 2423/88 in respect of the production or 
assembly of PPCs in the Community by Japanese exporters. These investigations 
resulted in undertakings being accepted by the Commission from exporters whose PPC 
models, produced or assembled in the Community, had originally been found to have 
a weighted average value of parts or materials of Japanese origin of more than 60% 
of the total value of all parts or materials(9). 
(3) Following the publication in August 1991 of a notice(10) of the impending expiry of 
the measures in force in respect of imports from Japan, the Commission received a 
request for a review lodged by the Committee of European Copier Manufacturers 
(CECOM) allegedly on behalf of producers representing a major proportion of the 
total Community production of PPCs. This review request was limited to PPCs with 
a capacity to operate at a speed of up to 75 copies per minute of A4 size paper. In 
accordance with Article 15(3) of Regulation (EEC) No 2423/88, it contained evidence 
purporting to show that the expiry of the anti-dumping measures in force would again 
lead to injury or threat thereof. The review request also covered the undertakings 
given under Article 13(10) of Regulation (EEC) No 2423/88. 
On 16 July 1992, CECOM submitted a supplement to its review request, asking for 
the inclusion in the review of PPCs capable of operating at a speed of more than 
75 copies per minute of A4 size paper. This supplementary request contained evidence 
purporting to show that such PPCs originating in Japan were being dumped and were, 
through the effect of dumping, causing injury to the Community industry. 
(4) On 14 August 1992, in a notice published in the Official Journal of the 
European Communities(ll), the Commission announced the initiation of a review 
investigation in accordance with Articles 14 and 15 of Regulation (EEC) No 2423/88. 
(5) The Commission notified the exporters and importers known to be concerned, the 
representatives of the exporting country and known producers in the Community, and 
gave the parties directly concerned the opportunity to make their views known in 
writing and to request a hearing. 
(6) All complainant producers in the Community replied to the questionnaire and made 
their views known in writing. In addition, some information was received from 
Kodak Ltd, Hemel Hempstead, United Kingdom. Almost all exporters together with 
their related importers and production facilities in the Community replied to the 
questionnaire and made their views known in writing. The only known exporter in 
Japan that did not reply to the questionnaire was Sanyo Electric Co., Osaka. Two other 
Japanese companies, Kyocera Corp., Kyoto, and Fuji Xerox Co., Tokyo, declared they 
had not exported PPCs to the Community during the investigation period of the 
review. Kyocera Corp. indicated that it had not produced PPCs since 1986 and asked 
to be relieved of its undertaking to give the Commission sufficient notice should 
it recommence exports to the Community(,2). One Japanese trading company, 
(9) 
(10) 
(11) 
(12) See Council Regulation (EEC) No 3205/88, OJ No L 284, 19.10.1988, p. 36; 
Commission Decision 88/519/EEC, OJ No L 284 of 19.10.1988, p. 60; Commission 
Decision 88/638/EEC, OJ No L 355, 23.12.88, p. 66; Council Regulation (EEC) 
No 4017/88, OJ No L 355, 23.12.1988, p. 1; Commission Decision 89/116/EEC, 
OJ No L 43, 15.2.1989, p. 54; Council Regulation (EEC) No 359/89, OJ No L 43, 
15.2.1989, p. 1; Commission Decision 89/309/EEC, OJ No L 126, 9.5.1989, p. 38; 
Commission Decision 90/47/EEC, OJ No L 34, 6.2.1990, p. 28. 
OJNoC 222, 27.8.1991, p. 2. 
OJNoC 207, 14.8.1992, p. 16. 
See footnote 8. 
Mitsui Co Ltd., Tokyo, also replied to the questionnaire. Three unrelated importers, 
Agfa Gevaert N.V., Mortsel, Belgium, Infotech Europe B.V., 's-Hertogenbosch, the 
Netherlands, and Lanier Europe B.V., Sassenheim, the Netherlands, replied to the 
questionnaire and made their views known in writing. All parties who so requested 
were granted a hearing. 
(7) The Commission sought and verified all information it deemed necessary for the 
purpose of a determination and visited the premises of the following companies: 
- complainant producers in the Community: 
Océ Nederland B.V., with headquarters and factory in Venlo, 
the Netherlands, 
Olivetti-Canon Industriale S.p.A., with headquarters and factory in Ivrea, 
Italy, 
Rank Xerox Ltd. with headquarters in Marlow, United Kingdom, and 
factories in Mitcheldean, United Kingdom, Venray, the Netherlands, and 
Lille, France; 
producers/exporters in Japan: 
Canon Inc., Tokyo, 
Copyer Co. Ltd, Tokyo, 
Konica Corp., Tokyo, 
Matsushita Electric Industrial Corp., Osaka, 
Minolta Camera Co. Ltd. (since re-named Minolta Co. Ltd.), Osaka, 
Mita Industrial Co., Osaka, 
Ricoh Co. Ltd., Tokyo, 
Sharp Corp., Osaka, 
Toshiba Corp., Tokyo; 
- related importers in the Community: 
Canon Deutschland GmbH, Neuss, Germany, 
Canon France S.A., Le Blanc Mesnil, France, 
Canon (UK) Ltd., Wallington, United Kingdom, 
Develop Dr. Eisbein GmbH & Co., Gerlingen, Germany, 
Gestetner Holdings PLC, London, United Kingdom, 
Konica Bureautique S.A., Nanterre, France, 
Konica Business Machines International GmbH, Hamburg, Germany, 
Matsushita Business Machines (Europe) GmbH, Neumtinster, Germany, 
Minolta France S.A., Carrières-sur-Seine, France, 
Minolta GmbH Business Equipment Operation, Langenhagen, Germany, 
Minolta Italia s.r.l., Buccinasco, Italy, 
Minolta UK Ltd., Milton Keynes, United Kingdom, 
Mita Deutschland GmbH, Steinbach, Germany, 
Mita Europe B.V., Hoofddorp, the Netherlands, 
Mita Italia S.p.A., Agrate, Italy, 
NRG Italia S.p.A, Milano, Italy, 
NRG-Nashua France S.A., Créteil, France, 
Panasonic Deutschland GmbH, Germany, 
Panasonic Europe Ltd., Uxbridge, United Kingdom, 
Panasonic Italia S.p.A., Milano, Italy, 
Panasonic U.K. Ltd., Bracknell, United Kingdom, 
Ricoh Deutschland GmbH, Eschborn, Germany, 
Ricoh Europe B.V., Amstelveen, the Netherlands, 
Ricoh France S.A., Neuilly-sur-Seine, France, 
Ricoh Italia, S.p.A., Verona, Italy, 
Selex Europe B.V., Amstelveen, the Netherlands, 
Selex Italia S.p.A., Milano, Italy, 
Selex (UK) Ltd., Croydon, United Kingdom, 
Sharp Electronics (Europe) GmbH, Hamburg, Germany, 
Sharp Electronics (UK) Ltd., Manchester, United Kingdom, 
Toshiba Europa GmbH, Neuss, Germany, 
Toshiba Informationssysteme (Deutschland) GmbH, Neuss, Germany, 
Toshiba Information Systems (UK) Ltd., Weybridge, United Kingdom, 
Toshiba Systèmes (France) S.A., Puteaux, France; 
unrelated importers in the Community: 
Agfa Gevaert N.V., Mortsel, Belgium. 
(8) The investigation of dumping covered the period from 1 July 1991 to 30 June 1992 
(investigation period). 
(9) Owing to the unusual complexity of a number of legal, technical and policy issues 
dealt with by the investigation, and the very large volume of data and submissions 
received from parties concerned, often requiring time limits to be extended, the 
investigation significantly exceeded the period of one year recommended for 
investigations in Article 7(9) (a) of Regulation (EEC) No 2423/88. For similar reasons, 
it had also already taken the Commission close to six months following the end of the 
five-year period of operation of the original measures, 24 February 1992, to initiate 
this review investigation. In accordance with Article 15(3) of Regulation (EEC) 
No 2423/88, the original measures have remained in force during this entire period. 
(10) All parties concerned were informed of the essential facts and considerations on the 
basis of which it was intended to recommend the imposition of definitive measures. 
They were also granted a period within which to make representations subsequent to 
these disclosures. 
B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
1. Product concerned 
(11) In accordance with Article 7(9)(b) of Regulation (EEC) No 2423/88, the anti-dumping 
proceeding which was initiated on 2 August 1985 concerning imports of photocopying 
apparatus originating in Japan, continues as long as the measures have not expired or 
been repealed or terminated. There is therefore no change in the product concerned 
by the proceeding. The product was defined as "photo-copying apparatus incorporating 
an optical system", "formed by four basic elements, i.e. image processing, photo­
conducting or developing, transfer or fixing and paper transport system"(13), or in short 
as "plain paper photocopiers (PPCs)"(14). 
(12) As the name indicates, such copiers use plain paper instead of coated paper to make 
copies. PPCs have now almost entirely replaced coated paper copiers for normal 
applications. Whereas coated paper copiers use a direct process to transfer the image 
of an original document onto a chemically treated sheet of paper, PPCs are based on 
an indirect process, whereby the optical system (comprising mainly a light source, a 
condenser, lenses, mirrors, prisms or an array of optical fibres) projects the image of 
the original document onto a light-sensitive surface (usually a drum or plate). The 
image is then developed (often by means of a powdered dye), transferred onto 
ordinary paper (normally by an electrostatic field) and fixed thereon (by heat and/or 
pressure). Coated paper or direct process copiers, falling within CN code 9009 11 00, 
are therefore a product different from the PPCs which are the subject of this 
proceeding. 
PPCs often consist of several separate modules, which are assembled only at the 
customer's premises. In such cases, all those modules are part of the PPC, whether 
imported together or separately, unless they qualify as truly optional equipment not 
included in the standard configuration of the PPC. 
(13) The above product description of PPCs entails that digital copiers (black and white or 
full colour) do not fall within the scope of the product which is the subject of the 
proceeding. Even if the scanner used by a digital copier to read the original document 
could be considered an "optical system", a digital copier does not "project" an image 
onto a light-sensitive' surface, but rather re-composes the original image, after it has 
been transformed by the image processor into digital signals, into a new image, with 
or without changes to the original image. It is this new image which is transmitted by 
(13) See notice of initiation of the proceeding (footnote 5). 
(,4) Recital 1 of Regulation (EEC) No 2640/86, see footote 6.. 
a laser onto a light-sensitive surface. When digital copiers are connected to computers, 
they are not even dependent on an original document for their input. 
2. Product investigated 
(14) In terms of its product scope, a review investigation may cover the entire product 
concerned by the proceeding. For the purpose of this review it was, however, not 
considered necessary to investigate a number of product types which had already been 
exempted from the original measures and which the Community industry did not 
request to be included in the review. These comprised analogue full-colour copiers, 
aperture card reader printers and microfilm printers, whiteboard copiers and 
large-format copiers capable of making copies of A2 size and larger from originals 
larger than A2 size(15). This means that highlight PPCs, which reproduce only a few 
colours to draw attention to certain segments of a document, and A2 PPCs, capable 
of making A2 size copies (but not larger) from A2 size originals or larger, were 
included in the review investigation. 
(15) PPCs capable of operating at a speed of more than 75 copies per minute of A4 size 
paper were included in the review investigation, as requested by the Community 
industry. These products are clearly PPCs as defined in the product description of the 
proceeding*16). The only reason for their exclusion from the original measures was that 
at the time of the original investigation segments(17) 5 and 6 were not imported from 
Japan and segment 6 was not produced by the Community industry. In its 
supplementary request for a review, CECOM submitted sufficient evidence that 
segment 5 PPCs had since been imported from Japan at dumped prices and were 
causing injury to the complainant Community industry, producing in the adjacent 
segments 4 and 6, warranting the inclusion of PPCs with a capacity of over 75 copies 
per minute of A4 size paper within the scope of the review investigation. 
This inclusion was commented on by several exporters and importers. They contested 
the view that the product scope of an Article 15 review can be as large as the product 
definition of the proceeding and considered that such a review should be limited to the 
product types covered by the measures. However, the design, production and 
marketing of particular product types often evolves over time, with new types still 
being essentially the same product. For PPCs, for instance, the market trend has been 
towards more productive, larger and faster types of PPCs, the essential characteristics 
of which are, however, still the same. If the Commission were prevented from 
investigating new types of the same product in an Article 15 review, simply because 
those types were not yet produced at the time of the original investigation, a new 
proceeding would have to be opened. 
(,5) See the product descriptions in Article 1(4) of Regulation (EEC) No 535/87 
(,6) See for instance the first indent of Article 1 (4) of Regulation (EEC) No 535/87, which 
refers to them as being part of "those products defined in paragraph 1", paragraph 1 
covering "plain paper photocopiers incorporating an optical element". 
(17) The segmentations used for this review are the generally accepted Dataquest 
segmentations in force in July 1992, as follows: 
personal copier up to 12 copies per minute, minimally featured 
segment 1 up to 20 copies per minute, with features such as 
reduction/enlargement, zoom 
segment 2 from 21 to 30 copies per minute 
segment 3 from 31 to 44 copies per minute 
segment 4 from 45 to 59 copies per minute 
segment 5 from 70 to 90 copies per minute 
segment 6 91 and more copies per minute. 
8 
Conducting two separate proceedings on the same product originating from the same 
country would be illogical, contrary to the system envisaged by Regulation (EEC) 
No 2423/88, and conducive to incongruous results. In the case of PPCs from Japan, 
the review of the existing measures under Article 15 was opened and conducted in 
accordance with Article 14 as well, based on the view that Article 15 should, indeed 
can only, be read in conjunction with Article 14. Reviews of existing measures under 
these provisions may lead to the amendment of those measures. If, following a review, 
existing measures could not be amended to include within the scope of those measures 
new types of the same product, the effectiveness of those measures would be impaired. 
Several exporters also commented that the Commission had not re-consulted the 
Advisory Committee during the time between CECOMs supplement to its review 
request and the initiation of the review. However, the proceeding on imports of PPCs 
from Japan covers all types of PPCs, irrespective of their copy speed, and the 
Advisory Committee was duly consulted on the basic Commission proposal to initiate 
an Article 15 review in respect of this proceeding. The precise parameters of the 
investigation were not, at that time, a matter of discussion, but were clearly indicated 
in the notice of initiation, and the inclusion of PPCs over 75 copies per minute was 
subsequently discussed in the Advisory Committee on several occasions before any 
conclusions on the scope of possible measures were drawn. Private parties have their 
own extensive procedural rights, and all comments made by them in the course of the 
investigation on the types of product covered by the investigation and by possible 
measures were carefully considered before any conclusions were drawn. 
3. Like product 
(16) With respect to the question whether the PPCs sold by the Japanese producers and 
exporters concerned on the Japanese market and in the Community constitute a like 
product with the PPCs sold in the Community by the Community industry, it was 
established in the course of the review investigation that the basic technical 
characteristics (as described in recitals 11 and 12) of all PPCs investigated were 
identical or closely resembled one another within the meaning of Article 2(12) of 
Regulation (EEC) No 2423/88. Furthermore, in terms of their application, at least - but 
not necessarily only - PPCs in adjoining segments compete with each other for the 
same users and should be considered like products. 
(17) Japanese segment 5 PPCs, which were not produced by the Community industry 
during the investigation period, were, on the above analysis, considered to be like 
products to the segment 4 and segment 6 models which the Community industry did 
produce. One exporter in particular argued that there was no competition between 
Japanese segment 5 PPCs and the segment 4 and segment 6 PPCs produced by the 
Community industry, based notably on alleged differences in copy speed, copy volume 
and usage. However, it was found in the course of the investigation that the actual 
monthly copy volumes of segment 4 PPCs of the Community industry were frequently 
similar to those of Japanese segment 5 PPCs. Also, the copy speed of the latter was 
often not much higher in complex applications such as duplex copying than that of the 
segment 4 PPCs of the Community industry. As for usage, no fundamental difference 
was observed between segment 4 models of the Community industry and Japanese 
segment 5 models. With respect to the Community industry's segment 6 PPCs, it may 
be true that those PPCs are more economical than Japanese segment 5 PPCs when 
used in central reproduction departments with high copy volumes. But no convincing 
evidence was supplied that Japanese segment 5 PPCs cannot also be used, even though 
perhaps less efficiently, for processing of high copy volumes, whether centralized in 
a reproduction department or decentralized in office corridors. Certainly for customers 
with a copy volume in between high and very high, there is thus a real choice between 
a segment 5 and a segment 6 PPC. Furthermore, evidence was submitted by another 
Japanese exporter that in fact fierce competition existed, especially in the context of 
large bids and tenders, between a "centralized" hardware package, including segment 6 
PPCs, offered by the Community industry to fulfil the client's copying needs and a 
"de-centralized" hardware package, including segment 5 and segment 4 PPCs, offered 
by Japanese companies to fulfil exactly the same copying needs. In this sense, 
competition between PPCs even extends beyond adjoining segments. On the whole, 
therefore, the strong growth in sales of segment 5 PPCs has been at least partly at the 
expense of sales of segment 4 and segment 6 PPCs, in the sense that in the absence 
of segment 5 models, customers with the need for such a significant copy volume 
could not normally have foregone buying a PPC and would have had to buy either a 
segment 4 or a segment 6 model. 
As for Japanese segment 6 PPCs, one Japanese company had already started exporting 
a segment 6 model from Japan to the Community and had commenced marketing it 
here during the investigation period of the review. These imports competed, on the 
above analysis, with the Community industry's PPCs in segments 6 and 4. 
(18) Japanese personal copiers, the smallest PPCs on the market, which were not produced 
by the Community industry in the investigation period, should be considered a like 
product to the segment 1 PPCs produced by the Community industry. These two 
segments overlap in terms of copy speed, the remaining difference between them 
merely being that segment 1 PPCs tend to have more features, for example the 
possibility for reduction and enlargement, and sometimes a larger copy volume 
capacity. When technical differences are so small, customer choice depends heavily 
on pricing. 
C. COMMUNITY INDUSTRY 
1. Introduction 
(19) The question whether a Community industry existed and, if so, which producers were 
part thereof, was important in this review for two reasons: Procedurally, interested 
parties requesting a review under Article 15 of Regulation (EEC) No 2423/88 must, 
under paragraph 3 of that Article, show that the expiry of the measures would lead 
again to injury or threat of injury to a Community industry. Substantively, the 
likelihood of recurrence of injury or threat thereof must, in the review investigation, 
be assessed in relation to the Community industry, as defined in Article 4(5) of 
Regulation (EEC) No 2423/88. Some exporters and importers questioned whether the 
complainant requesting the review represented Community producers whose collective 
output of PPCs constituted a major proportion of the total Community production of 
PPCs, within the meaning of Article 4(5), and whether therefore the injury assessment 
should be limited to those producers. 
2. The Community industry in the original investigation 
(20) When the proceeding on PPCs was launched in August 1985, the Community industry 
consisted of 5 producers: Develop Dr. Eisbein GmbH, Germany, Océ Nederland B V, 
the Netherlands, Ing. C. Olivetti & C. S.p.A, Italy, Rank Xerox Ltd, United Kingdom 
and the Netherlands, and Tétras S.A., France. Together they constituted CECOM 
In May 1986, a majority of the shares in Develop was acquired by one of the 
Japanese exporters, and Develop was excluded from the Community industry for the 
purpose of the injury determination of the original investigation. Japanese subsidiary 
companies producing photocopiers in the Community were also excluded118) 
In November 1986, another Japanese exporter took a minority share in Tétras, which 
did not prevent Tétras from remaining part of the Community industry09*. Since then, 
however, Tétras has stopped producing or selling PPCs. 
(18) 
(19) Recital 62 of Regulation (EEC) No 2640/86, see footnote 6. 
Recital 68 of Regulation (EEC) No 535/87, see footnote 7. 
10 
The decision in the original investigation to accept Rank Xerox, Océ and Olivetti as 
part of the Community industry was reached notwithstanding the fact that all three of 
them imported part of their range of PPC models from Japan. In addition, Rank Xerox 
had a 50% share holding in one of the Japanese exporters, and had a relatively low 
percentage of EC added value for its production of small PPCs in the UK. The 
Council's conclusions on Community industry in the original investigation, both in 
respect of retaining the complaining companies as part of the Community industry and 
of excluding Japanese subsidiaries producing in the Community from the Community 
industry, were upheld by the European Court of Justice(20). In doing so, the Court 
emphasized that the Community authorities exercise a margin of appreciation in this 
respect, on a case-by-case basis, by reference to all the relevant facts. 
3. The Community industry in the review investigation 
(21) The request for the review was submitted on behalf of the three remaining members 
of CECOM, Rank Xerox, Océ and Olivetti. 
(22) Rank Xerox's claim to be part of the Community industry has strengthened since the 
original investigation. It neither imported nor sold PPCs from Japan in the Community 
during the investigation period of the review. It significantly increased the percentage 
of Community added value for its production of small PPCs in the United Kingdom. 
Its company-wide Community added value, including production of high-speed PPCs 
in France, was also substantially higher than in the original investigation, at such a 
level that its Community origin is beyond any doubt. Rank Xerox is therefore still to 
be regarded as part of the Community industry. 
(23) Following the original investigation, Océ has maintained a significant level of 
production in the higher speed segments, with a very high Community added value, 
guaranteeing Community origin. But it did not succeed in extending its own-
manufactured product range into the lower speed segments, where it continues to be 
supplied on the basis of an OEM (original equipment manufacturing) arrangement with 
a Japanese company. These OEM PPCs represent a minor, although not insignificant, 
part of Océ's PPC turnover in the Community. However, it was observed during the 
review investigation that it is now quite common for producers, including producers 
in Japan, to buy part of the extensive model range required by consumers from other 
producers. In addition, during the investigation period of the review the large majority 
of Océ's OEM PPCs were no longer supplied from Japan, but from a third country not 
subject to the review (the correct origin of which was confirmed). Thus, the number 
of PPCs which Océ imports from Japan has sharply decreased since the original 
investigation. Océ could, therefore, as in the original investigation, be regarded as part 
of the Community industry. 
(24) In 1987, Olivetti shifted its entire PPC production to a newly-created joint venture 
with Canon, Olivetti-Canon Industriale (OCI), established at the old Olivetti premises 
in Ivrea, Italy. In this joint venture Olivetti holds half of the shares plus one. Olivetti's 
position as a member of CECOM was clarified by a letter from OCI of 15 October 
1992, in which it was confirmed that OCI, by a decision of its Board of Directors of 
22 June 1992, delegated to Olivetti the right to represent OCI for the purpose of this 
anti-dumping proceeding. OCI produces PPCs in segment 1, which are sold through 
the Olivetti and Canon sales channels. The Community added value of these PPCs is 
sufficient to ensure Community origin. 
(20) See for instance Case C-156/87, Gestetner Holdings PLC v Council and Commission. 
[1990] ECR 1-781, paras. 41-61. 
11 
The review investigation showed that OCI, rather than Olivetti, should be considered 
as a "producer" of PPCs within the meaning of Article 4(5) of Regulation EEC 
No 2423/88. OCI is an independent legal entity in charge of the actual manufacturing 
of PPCs. Olivetti is a major, but not dominant, shareholder in this company. It is one 
of OCI's two sales outlets, and is its legal representative for the purpose of the review. 
But Olivetti does not itself "produce" PPCs. 
It was considered that there was no need to exclude OCI from the Community 
industry. It is true that 50% of the shares minus one in OCI are owned by Canon, one 
of the companies exporting the PPCs from Japan that were investigated in the review 
But there was no reason to believe that OCI, which is jointly controlled by Canon and 
Olivetti, which claimed the protection offered by Regulation (EEC) No 2423/88 
against imports of PPCs from Japan, which did not import any PPCs from Japan, and 
which granted full cooperation to the review investigation, behaved in a way that was 
different from that of Rank Xerox or Océ, or in any way that would be liable to 
render the findings of the investigation incorrect or unreliable. 
It was, however, necessary to limit the injury determination for OCI to the production 
for and sales made through the Olivetti sales channel. This was because Canon did not 
provide the information necessary to permit the Commission to investigate OCFs sales 
through the Canon sales channel, and because sales information from Canon, one of 
the exporters of PPCs from Japan, could in any case not be taken into account in this 
review for the purpose of determining injury to the Community industry. As for 
Olivetti, although the majority of the PPCs it sold in the Community in the 
investigation period were sourced from Canon, in accordance with the normal 
commercial strategy of offering a complete range of models, these PPCs did not 
originate in Japan. In any case, sales transactions between OCI and Olivetti were 
ignored as being transfers between related parties and data on cost of production and 
sales of OCl-produced PPCs by Olivetti to unrelated customers were established 
through verifications. 
(25) Following the introduction of definitive anti-dumping duties on imports of PPCs from 
Japan in 1987, almost all Japanese exporters established or expanded production 
facilities in the Community (in France, the United Kingdom and Germany) 
As opposed to OCI, all of these production facilities in the Community are 100% or 
majority owned by exporters of PPCs from Japan, and none of them joined the review 
request. It was considered that, as the review concerned imports from Japan, these 
production facilities, the commercial behaviour of which was determined by the parent 
companies in Japan under investigation and which did not support the review request, 
had to be excluded from the Community industry, as their behaviour was shown to be 
different from that of producers in the Community that were not related to Japanese 
exporters. 
4. Conclusion on the Community industry 
(26) In conclusion, for the purpose of this review, the Community industry consisted of 
Océ, OCI and Rank Xerox. The output of these Community producers, limited for OCI 
to the portion produced for and.sold through Olivetti, represented the near totality of 
Community production of the like product, given that the production facilities 
majority-owned by Japanese exporters had, for the purpose of this review, to be 
excluded from Community industry. This exclusion entailed that their PPC production 
in the Community, whether or not having sufficient Community added value to be of 
Community origin, did not qualify as Community production, nor did they qualify as 
Community producers, within the meaning of Article 4(5) of Regulation (EEC) 
No 2423/88, for the purpose of this review. Community production was the production 
of the Community industry and of other producers in the Community that were not 
excluded, but that chose not to support the review. The only other possible 
Community producer in this review was Kodak, with a factory in Germany. AJthough 
Kodak supplied information in response to the Commission's questionnaire, it did not 
12 
participate in the investigation as part of the Community industry, and it is uncertain 
whether its limited PPC operations in the Community would qualify as production. 
The volume of PPCs involved was, in any case, quite small. 
D. THE PRESENT SITUATION IN THE COMMUNITY MARKET 
1. Introduction 
(27) In order to establish whether the expiry of the measures in force would lead again to 
dumping and injury or threat of injury, it was first necessary to examine the present 
economic situation of the Community industry. This analysis consists of three parts. 
The first part briefly recollects the economic situation of the Community industry at 
the time of the original investigation. In a second part, developments in that situation 
between 1988 and the end of the investigation period are analysed in detail. Finally, 
those recent developments are compared with the situation at the time of the original 
investigation and a conclusion is drawn on the state of the present economic situation 
of the Community industry. 
2. Situation of the Community industry at the time of the 
original investigation 
(28) In the original investigation period (1 January 1985 to 31 July 1985), the Community 
market share of the Community industry for its own-manufactured PPCs had dropped 
from 21% in 1981 to 11.2%. Price undercutting in the form of the sale of more 
highly-featured models imported from Japan at prices comparable to or below those 
of lesser-featured Community industry models was found. Price depression was taking 
place. The PPC hardware profitability of the Community industry had decreased from 
8% net profit before tax in 1983 to 4% in the investigation period, while the target 
profit for the Community industry had been determined at 12%. Taking these elements 
into account, the Council considered that material injury to the Community industry 
existed. 
3. Current situation of the Community industry 
Introduction 
(29) The indicators for the Community industry analysed below relate to the period from 
1988 to the end of the investigation period of the review (1 July 1991 to 30 June 
1992). They pertain to the own-manufactured PPCs of the Community industry. 
Refurbishing (the re-working of existing models taken back from the field with a view 
to placing them again in the market) was included in the data. Data for OCI were 
limited to production for and sales via Olivetti. 
Production, production capacity, utilization of capacity, stocks 
(30) Production of the Community industry decreased by 16% from 226 480 units in 1988 
to 190 375 units in the investigation period. Over the same period, the Community 
industry decreased production capacity by 29%. As a result of this, capacity utilization 
improved 13% to a level of 81% in the investigation period, based on one work shift 
of 8 hours. Stocks increased by 7%. 
13 
Employment, investments. R&D expenses 
(31) The number of manufacturing personnel employed by the Community industry 
increased by 13%, reflecting a gradual shift to the manufacturing of larger and more 
complex PPCs and environmental concerns resulting in an increasing level of activity 
in refurbishing existing models, a procedure which is relatively labour-intensive The 
overall level of employment increased by 4%, to a total of 16 549 people in the 
investigation period (excluding suppliers to the Community industry). The level of 
investment of the Community industry decreased from 3% of turnover in 1988 to 
2.7% of turnover in the investigation period. Over the same period, R&D expenses 
increased from 5.3% of turnover to 5.4% of turnover. 
Sales volume and market share 
(32) The number of placements made by the Community industry decreased 1%, from 
141 477 units to 140 186 units, in a Community market which expanded by 24% The 
market share of the Community industry consequently decreased by a fifth, from 
15.4% to 12.4%, measured in units. Weighting the number of units placed on the 
market by their copy volume, which takes account of differences between small and 
large PPCs, the market share of the Community industry was still 29% in the 
investigation period, but down by a sixth from 34.4% in 1988. Particularly notable 
was the decrease in the Community market share of the Community industry for 
medium-large PPCs, in which it used to have a strong market position and which 
formed a major source of profits. In segment 4, for instance, the market share of the 
Community industry decreased from 64.4% in 1988 to 42.1% in the investigation 
period, a dramatic drop of a third. 
Price development 
(33) The measurement of PPC price developments in the Community over time is to some 
extent necessarily speculative, due to the lack of information on actual sales prices 
(as opposed to list prices) for the years prior to the investigation period, the rapid 
succession of PPC models, with changes in features, and the need to take account of 
developments in production costs, inflation and exchange rates. What can be observed, 
however, is that between 1988 and the investigation period, there were a number of 
instances where Japanese companies introduced new models with more features, or 
more advanced features, at list prices below those of the old models In other cases, 
list prices were kept stable for several years, despite inflation and appreciation of the 
yen. As for the Community industry, one company registered decreases in its list 
prices of between 21 and 29% for the period between 1988 and the investigation 
period, and another decreases in revenues for cost per copy contracts of 24%, as 
adjusted for inflation. The third Community producer showed a mixture of list price 
decreases and increases, with the decreases centred more on lower segment models 
All in all, therefore, there appears to have been a downward price spiral, in which 
most if not all companies participated, leading to price depression 
Profitability 
(34) This price depression is reflected in the development of the profitability of the 
Community industry. While Community industry's turnover on own-manufactured 
PPCs increased by 3% from 1988 to the investigation period, its return on those sales 
decreased by 76%, from a weighted average level of 11.1% in 1988 to 2.7% in the 
investigation period. The profitability of the entire photocopier business of the 
Community industry, including service, consumables, spare parts, and financing, 
decreased by 42% from a weighted average level of 11.1% in 1988 to a level of 6.4% 
in the investigation period. These figures demonstrate that, starting from the same 
level of profitability in 1988, sales of own-manufactured PPC hardware have become 
much less profitable than the accompanying sales of maintenance contracts, financing 
14 
contracts, paper, toner, etc. This suggests that price competition on sales of PPC 
hardware has become especially fierce. 
Some exporters argued that the profitability of the Community industry should be 
evaluated on the basis of their overall photocopier business, and not just on sales of 
PPCs. Several observations should be made in this respect First, the other elements 
involved in the overall photocopier business, such as the servicing, consumables, spare 
parts and financing elements mentioned above, are not the subject of this investigation. 
Secondly, the profit figures used for normal value are based on sales of PPCs only, 
and might have been higher, leading to a finding of more dumping, had they been 
based on the overall photocopier business. Indeed, in the original investigation, several 
exporters insisted that the Commission should base profitability for normal value on 
sales of PPC hardware only. The Commission then adopted this approach at their 
request, and, with a view to consistency, applied it also for the injury determination. 
The same approach was duly maintained in the review investigation. Finally, if the 
Community industry were not allowed to expect a reasonable return on the investment 
it has made to produce PPCs, it would have no incentive to continue manufacturing. 
Instead, the Community producers would probably become OEM distributors, merely 
selling and servicing PPCs produced by Japanese companies. It was therefore 
considered that a reasonable return should be available on the manufacture and sale 
of PPCs as such. 
Some exporters and importers also argued that the profitability of the Community 
industry had improved after the end of the investigation period to such an extent that 
the Community industry was no longer in a precarious situation. Events after the end 
of the investigation period are not normally taken into account, as the investigation 
would otherwise never end. However, given the unusual length of the investigation, 
this particular claim was, exceptionally, checked. It was found that while the overall 
profitability of the Community industry had improved somewhat, in line with the 
general improvement in the economy in the Community, profitability on sales of PPCs 
continued to lag far behind. The findings for the investigation period therefore still 
provided a reliable basis for the conclusion drawn below. 
4. Conclusion on the current situation of the Community industry 
(35) Several key indicators of the economic performance of the Community industry 
deteriorated significantly from 1988 to the end of the investigation period, such as 
production (down 16%), market share (down from 15.4% to 12.4%), and PPC 
hardware profitability (down from 11.1% to 2.7%). 
Comparing the injury data of the original investigation period with those of the review 
investigation period, it was observed, first, that the size of the Community market 
expanded over this period by 75% from 53 913 units placed per month (in ten 
Member States) to 94 286 units placed per month (in twelve Member States) In 
comparison with this market expansion, the sales in the Community of Community 
industry's own-manufactured PPCs increased by 94%, from 6 016 units per month to 
11 682 units per month. The market share in the Community of the Community 
industry for its own-manufactured PPCs consequently increased from 11.2% to 12 4%, 
measured in units. However, this gain in market share was won at the expense of a 
reduction in profits, down from 4% net profit before tax on PPC hardware in the 
original investigation period to 2.7% in the review investigation period. 
15 
In this capital-intensive industry which is currently developing major new successor 
products to PPCs such as digital copiers and multi-purpose office machines, both 
reasonable profits and significant market shares are important to ensure that the 
necessary investments in R&D and production facilities can be made in order to 
remain viable in the medium term. Comparing the original investigation period, when 
the Council determined that material injury existed, with the investigation period of 
the review, it could not, on the whole, be said that the Community industry had come 
to be in a better position. 
E. THE BEHAVIOUR OF THE EXPORTERS CONCERNED 
1. Introduction 
(36) It was also necessary to examine the behaviour of the exporters concerned In this 
respect, one exporter argued that for the purpose of determining whether the expiry 
of the measures in force would lead again to dumping and injury or threat of injury, 
its allegedly small and not well-known exports should not be cumulated with those of 
the other exporters. It must be observed, however, that, in principle, anti-dumping 
proceedings apply to imports from countries and not to individual exporters. Also, the 
impact of the dumped imports from the exporters concerned on the Community 
industry should be assessed globally, as every sale lost by Community industry to 
dumped imports hurts Community industry equally, whether it was lost to a small 
exporter or a large one. This particular exporter, whose sales to Community customers 
in any case represent as much as around 10% of total Community sales of Japanese-
origin PPCs, would thus be unfairly favoured if it were treated differently from the 
other Japanese exporters. 
2. Volume of imports from Japan 
(37) The situation was found to be as follows: 
In absolute terms 
Between 1988 and the investigation period, the volume of imports from Japan 
decreased 16%, from 351 970 units to 294 195 units per year. 
Relative to consumption 
During the same period, the total number of placements of PPCs in the Community 
per year is estimated to have increased by 24% from 919 580 units to 1 137 910 units 
The market share of imports from Japan thus decreased from 38.3% in 1988 to 25 9% 
in the investigation period. 
Relative to total production in the Community 
Between 1988 and the investigation period, total production in the Community 
increased 30% from 640 263 units to 834 094 units per year, including Japanese 
production facilities in the Community. Imports from Japan thus represented 55% of 
total production in the Community in 1988, and 35.3% in the investigation period. 
Relative to the production of the Community industry 
The production of the Community industry decreased by 16% from 226 480 units in 
1988 to 190 375 units in the investigation period. Imports from Japan thus represented 
155.4% of production of the Community industry in 1988, and 154.5% in the 
investigation period. 
16 
Conclusion on volume of imports 
(38) The introduction of the definitive anti-dumping duty in February 1987 was followed 
by a substantial decrease in the volume of imports from Japan. This trend has become 
even stronger recently, in line with the appreciation of the yen. At the same time, 
Japanese exporters have significantly increased production in the Community, up by 
56% from 413 783 units in 1988 to 643 719 units per year in the investigation period 
They have also increased imports into the Community from factories established in 
third countries, up by 37.7% from 106 012 units in 1988 to 145 978 units per year in 
the investigation period. 
Nevertheless, the volume of imports from Japan during the investigation period still 
amounted to almost 300 000 units per year, representing 26% of the Community 
market, measured in units, and more than one and a half times the production volume 
in units of the Community industry. It also appeared that over time a larger part of the 
imports from Japan has come to consist of medium-large to large PPCs, putting extra 
pressure on the traditionally strong market position of the Community industry for 
such PPCs. On the whole, therefore, imports from Japan in the investigation period 
were still capable of having a very significant effect on Community industry, 
depending in particular on the price level at which they were sold. 
3. Prices of imports from Japan 
Methodology to examine price undercutting 
(39) The extent to which the weighted average sales prices of imports from Japan in the 
investigation period in the Community market undercut the weighted average sales 
prices of the Community industry during the investigation period was examined for 
the German, French, Italian and UK markets, which were considered representative 
for the Community market as a whole, as they represented the large majority of sales 
on the Community market, both by the Community industry and imported from Japan. 
As opposed to Japanese subsidiaries in the Community, who placed PPCs mainly with 
dealers for outright sale, the Community industry placed PPCs mainly with end-users, 
on leases, cost-per-copy contracts and rentals. To permit a fair price comparison, the 
Commission used only the outright sales and leases of the Community industry. To 
"unbundle" the latter type of contracts into a hardware element to be used for the price 
comparison, setting aside the financial element, companies' normal internal accounting 
rules, based on generally accepted accounting practices, were used. The weighted 
average PPC hardware price thus calculated for each model was then compared with 
the corresponding weighted average Japanese outright sales prices. Pure rentals, 
i.e contracts that do not qualify as sales under normal accounting rules, were excluded 
from the comparison. So were cost-per-copy contracts, whether or not qualifying as 
sales-type contracts, because of the difficulty of objectively "unbundling" them. As for 
the calculation of sales prices, these were net of directly linked discounts and rebates 
In this respect, trade-in discounts were not regarded as a discount on the sale of the 
new machine, in the same way as for the dumping calculation. 
Only newly-manufactured models were compared, as the use of re-furbished or re-
manufactured models on one side of the equation might have distorted the price 
comparisons. Given the technical complexity of comparing the models of the 
Community industry with those of Japanese exporters, price undercutting was 
examined on the basis of a representative sample of 7 own-manufactured models of 
the Community industry, out of a total of 30. These models were selected to represent 
a broad range of PPC models, covering those product segments where the Community 
industry sold almost all of its own-manufactured models, i.e. segments 1 to 4. 
Together these models amounted to around 30% of the Community industry's PPC 
turnover in the Community in the investigation period, with each of them having a 
significant volume of sales. The total number of units sold of the 7 Community 
17 
industry models in the four Member States concerned was around 15,000, and the 
distribution between outright sales and leases roughly 50/50. For each of these 
representative Community industry models a comparable imported model of each 
Japanese exporter was selected whenever available. Almost all of these models were 
also sold in substantial quantities. As for the few imported models that were sold only 
in small quantities, their prices were not observed to be significantly out of line with 
other, more frequently sold models. In any case, when calculating the weighted 
average undercutting margin for each exporter, small quantities carried little weight 
Two product segments not covered in the undercutting exercise were personal copiers, 
the smallest PPCs, and segment 6, the latest PPCs. Personal copiers competed with 
the segment 1 PPCs of the Community industry, just as Japanese segment 5 PPCs 
competed with the Community industry segment 6 models. However, in order to arrive 
at the most reliable price comparisons, with the smallest adjustments for differences 
in technical characteristics, Japanese segment 1 models were compared with the 
Community industry segment 1 models, and Japanese segment 5 models were 
compared with the Community industry segment 4 models. This does not mean that 
Japanese personal copiers were not undercutting the Community industry's segment 
1 models or that Japanese segment 5 models were not undercutting the Community 
industry's segment 6 models, as properly adjusted for differences in technical 
characteristics. It merely means that it was not considered necessary to include such 
comparisons in the undercutting exercise, as price comparisons based on more similar 
product segments, covering by far the largest part of Community production, were 
available. 
(40) Where necessary, appropriate adjustments were made both for differences in technical 
characteristics and for differences in trade levels. 
Regarding adjustments for technical differences, the number of criteria used was 
substantial and differed according to product segment The adjustments were 
determined by the Commission on the basis of input from both the Community 
industry and exporters. In general, adjustments were made for the presence or absence 
of features, not for any alleged differences in quality for the same features. Such 
differences were considered too subjective and difficult to estimate to permit reliable 
quantification. The value of features was, in principle, calculated as the ratio between 
the list price of the feature concerned and the list price of the basic model without that 
feature, as determined for a number of other models in the same product segment The 
value of minor features was sometimes estimated as a percentage of the value of more 
important comparable features. The value of options, which often had to be added to 
Japanese models to make them comparable to the models of the Community industry, 
was calculated as the ratio of their list price to that of the basic Japanese model. The 
resulting percentage was then added to the actual sales price of the basic model, based 
on the assumption that the percentage discount on the list price of the option was 
similar to the percentage discount on the basic model. 
Following claims by exporters, the Commission examined whether an adjustment 
should be made for the generally higher weight of the Community industry models in 
comparison with Japanese models, especially in the higher copy speed range In this 
respect, it was considered that greater weight in itself does not have any value in the 
eyes of consumers. If anything, the opposite was more likely to be true. More 
importantly, as a measure for greater productivity or durability, the weight criterion 
was found to be inaccurate, as the actual and target monthly copy volumes of the 
Japanese models used in the sample, and their actual and target operational life, were 
in fact not significantly different from those of the Community industry models in the 
sample, both in absolute terms and relative to copy speed. With respect to durability, 
it was also found that lease periods with customers were generally comparable in 
length, meaning that customers write off PPCs after the same length of time, whether 
it concerns a Japanese model or an Community industry model. Leasing has overtaken 
renting as the normal mode of placement of the Community industry. As for a claimed 
18 
second or third operational life of the Community industry models, Japanese models 
were also frequently sold second hand. Furthermore, the capacity of a model to be re-
manufactured or re-furbished and then sold again does not affect its operational value 
in the eyes of the first-time user. No adjustment for weight or alleged differences in 
productivity/durability was therefore granted. 
Some exporters also argued that an adjustment should be made for the allegedly higher 
quality and greater length of the warranty provided by Rank Xerox and Océ. It was 
found, however, that those warranties are provided only to customers that conclude a 
maintenance contract, and are financed from the proceeds thereof. The Community 
industry's warranties without maintenance contracts were comparable to those of the 
Japanese exporters. 
(41) Regarding levels of trade, sales were compared at the same level of trade whenever 
such sales were made in sufficient quantities. In this respect, Olivetti sales to end-users 
and Océ sales to dealers had been made in insufficient quantities and were 
disregarded. Sales of certain models by Rank Xerox to dealers in certain 
Member States were also disregarded as being too small in volume. Almost all 
Japanese companies sold in sufficient quantities at dealer level but only some at end-
user level. Where the Community industry end-user sales nad to be compared with 
Japanese dealer sales, the former were brought to the dealer level. This adjustment was 
calculated based on the actual difference in price between the two levels of 
Rank Xerox (for models sold in sufficient quantities), the sales structure of which was 
considered comparable to Océ for this purpose. Japanese sales at distributor level were 
also adjusted to bring them to dealer level, based on price differences of 
Japanese companies between these two levels. All brand sales were thus compared at 
dealer level, or at end-user level if sufficient volumes had been sold by both sides. 
As for Japanese sales to OEM importers, these were compared as adjusted to CIF 
Community frontier level, customs and anti-dumping duties and customs clearance 
charges added, with prices of the Community industry adjusted from end-user or 
dealer level to ex-factory level. For this latter purpose, the percentage reduction in cost 
for selling ex-factory, based on the Community industry's own cost structure, was 
deducted from their actual sales prices. 
Results 
(42) On this basis, the weighted average undercutting margin per exporter, for all of its 
imported models in the sample together, ranged from 7% to 36%. The weighted 
average degree of undercutting of all exporters together was 26%. The weighted 
average degree of undercutting for segments 4 and 5 was twice that for segments 1 
to 3 (38% compared to 19%). The weighted average degree of undercutting was higher 
in Germany and the UK than in France and Italy, but it was high in the latter two 
Member States as well. These figures show that, despite the existence of the 
antidumping measures in force, Japanese exporters were still selling their PPCs on the 
Community market at prices significantly below those of the Community industry. 
Underselling 
(43) The same methodology as described above for undercutting was used to examine the 
price increase necessary at the CIF free-at-Community frontier duty unpaid level to 
raise the actual sales prices of the imported models in the sample to a level at which 
the Community industry would be able to sell at a profit permitting a reasonable return 
on investment. The weighted average actual sales prices of each exporter as calculated 
in the examination of undercutting were set against the target prices of the models of 
the Community industry. The absolute amounts by which they fell short of those target 
prices were then transformed, on a weighted average basis for each exporter, into the 
underselling margin at the level of CIF free-at-Community frontier duty unpaid For 
this purpose, in order to bring sales by related importers to first independent buyers 
19 
in the Community back to the Community frontier, duty unpaid level, the existing 
anti-dumping and customs duties were deducted. For PPCs over 75 copies per minute, 
no anti-dumping duty was in force and no such deduction was made. On this basis, 
the weighted average underselling margin for each exporter ranged from 44% to 
141%. The weighted average degree of underselling of all exporters together at this 
level was 113%. 
(44) The target profit margin for the Community industry used in this examination was 
calculated before tax as a percentage of actual turnover in the investigation period 
sufficient to deliver a return on equity before tax of 18%, which was considered 
reasonable for publicly-quoted companies with a respectable financial status in this 
business sector. This 18% consisted of a market interest rate of 8% during the 
investigation period of the review, a premium of 4% required to compensate 
shareholders for the risks incurred in investing, and an average tax rate applicable to 
the Community industry of 35%. The turnover and assets used for this calculation 
covered the entire copier business of the Community industry, as it was not possible 
to reliably identify separately the assets used for PPC hardware sales. It was 
considered, in any case, that the return on equity for the PPC hardware part of the 
copier business should not be lower than for the other parts. The Community 
industry's sales outside the Community, but produced in the Community, were 
included in the turnover used. The resulting target return on sales was 9.4% on a 
weighted average basis for the Community industry as a whole. 
(45) Given that the weighted average actual profit before tax of the Community industry 
on PPC hardware was 2.7% in the investigation period, sales prices of the Community 
industry models in the sample were increased by an extra 6 7% profit on turnover 
This method, which is based on the weighted average actual profit of all Community 
industry own-manufactured models together rather than the actual profit or loss 
achieved on just the models in the sample, takes account of the higher profit rates 
achieved by the Community industry on segment 6 models, which were not included 
in the comparison table. For this reason, this method was preferred over the more 
common method of adding a 9.4% profit margin on turnover to the cost of production 
of each model in the comparison table 
4. Conclusion 
(46) Following the introduction of the original anti-dumping measures, PPC imports from 
Japan showed a significant fall in volume. The remaining volume of these imports 
was, however, still quite significant. The imports from Japan also showed a shift 
toward larger PPCs. The degree of undercutting found in the Community market for 
Japanese imports was high all around, and especially high for the larger PPCs. Given 
this strong price pressure exerted by substantial import volumes from Japan, it was 
considered necessary to examine whether dumping was occurring which contributed 
to the situation of the Community industry described above and whether the expiry of 
the anti-dumping measures in force would lead to a recurrence of dumping and injury 
F. RECURRENCE OF DUMPING 
1. General 
(47) Dumping calculations, both for normal value and export price, were based on verified 
outright sales of PPCs only. Leases, rentals and cost-per-copy contracts were excluded 
in order to facilitate the calculations and render them more reliable. Since these types 
of contracts represented only a small percentage of total transactions for the Japanese 
companies, both in the Community and Japan, it was assumed that the results would 
not be significantly affected. 
20 
(48) Dumping margins were initially established separately for brand sales and OEM sales 
and combined to a single weighted average dumping margin for each exporter only 
in the last stage of the calculation. OEM sales, whether in the domestic market or for 
export to the Community, could generally be distinguished from brand sales by several 
factors: significantly lower sales, advertising, service and other costs were incurred for 
OEM sales than for brand sales; the OEM PPCs were re-sold to final customers under 
a brand name not owned by the exporter; and the relationship between the producer 
and the OEM purchaser was at arm's length. 
(49) The OEM importer Agfa Gevaert requested to have its own dumping margin and duty, 
arguing that there was less dumping on its imports from Japan, that it had not 
contributed to the dumping, and that it deserved special treatment because of the 
allegedly large contribution it made to the design and development of the PPCs it 
purchased in Japan. It was established in the investigation that the imports of 
Agfa Gevaert were dumped, albeit less so than the brand sales of its Japanese 
suppliers. As for the contribution of Agfa Gevaert to the PPCs it purchased from 
Japan, the value added was limited and focused on the outside appearance of the PPC 
and the lay-out and software of its control panel, rather than on the functioning of the 
PPC inside. It was clear, therefore, that Agfa Gevaert could not be considered the 
producer of its Japanese-sourced PPCs, but that it was an OEM importer. It is not 
possible under the legal framework established by Regulation (EEC) No 2423/88 to 
impose separate duties on individual importers, whether OEM or brand-sale, as 
opposed to exporters. Separate duties for importers could easily lead to selective 
dumping by the exporters concerned. Article 2 of Regulation (EEC) No 2423/88 
stipulates that an anti-dumping duty may be applied to any dumped "product" whose 
release for free circulation in the Community causes injury, where a product shall be 
considered to have been dumped if its "export price" to the Community is less than 
the normal value of the like product. For the calculation of this export price, the 
exports to all Community importers of all different types of the product concerned 
should be cumulated, in accordance with Article 2(8) of Regulation (EEC) 
No 2423/88. Article 13(2) of that Regulation confirms that regulations imposing anti 
dumping duties shall indicate the product covered, the country of origin or export and, 
if practicable, the name of the supplier. No provision is made for indicating the name 
of the importer. 
(50) So-called trade-in discounts were considered as representing the value of the traded-in 
PPC or, when such PPCs were destroyed, the value of preventing a second-hand 
market from overtaking sales of newly produced PPCs. Not being considered true 
discounts, they were not deducted from the sales price of the new machine, either for 
normal value or for export price. Such expenses were considered part of SGA costs. 
The fact that these expenses could be linked by some exporters to the sale of new 
PPCs is not surprising, since the old PPC is only traded in when a new one is 
purchased. This does not, however, mean that the money paid by the supplier for the 
traded-in PPC is a discount on the sale of the new PPC. Also, the fact that some 
exporters treated these expenses as deductions from gross turnover in their accounting 
records is not determinative for the legal interpretation of the concept of a discount 
in Article 2 (3) (a) of Regulation (EEC) No 2423/88. The same approach was followed 
in respect of the practice of paying off the remaining lease term of a PPC in the field 
in order to sell a new one, which is a scheme similar to a trade-in discount. The 
methodology was the same as that used in the original investigation, which has been 
accepted by the European Court of Justice(21). 
(21) See for instance Case C-174/87, Ricoh Company Ltd v Council. [1992] ECR 1-1335, 
paras. 19, 20 and 21. 
21 
(51) Ordinary financial expenses were taken into account as a cost both for normal value 
and for export prices. Offsetting financial revenues resulting from the normal operation 
of the business were accepted, up to the level where they completely annulled the 
financial expenses. The argument of some exporters that financial revenues should be 
allowed to further offset other SGA costs was not accepted, as an excess of financial 
income should not be allowed to eliminate SGA expenses that were actually incurred 
Credit granted by suppliers was, in accordance with normal Commission practice, not 
regarded as an offsetting financial revenue, but as a potential cost not incurred, for 
which no allowance can be made. Extraordinary income and expenses were 
disregarded in all cases. 
(52) Also, in respect of both normal value and export price, the expenses and revenues 
involved in PPC service centres were included in certain cases in the calculation of 
SGA percentages applicable to sales of PPCs, namely when it was established in the 
course of verification that these centres provided certain benefits without charge to 
buyers of PPCs, for instance by giving technical training to dealers or providing free 
spare parts, the costs of which could not be identified separately. Since these centres 
were also involved in the conclusion and operation of maintenance contracts, the 
turnover produced thereby was, in those cases, included as well. 
2. Normal value 
Links between legally separate companies 
(53) Such links were the subject of discussion in two respects. First, the question arose 
whether two of the exporters did not, in reality, form a single economic entity. One 
of these two companies (company A) is majority-owned by the other (company B) and 
is included in the latter's consolidated accounts, even though it is a legal entity in its 
own right, listed separately on the stock exchange. Company A assembles, on the basis 
of a sub-contracting agreement, a large quantity of PPCs for company B. For this 
purpose, the latter supplies the results of its R&D, the technical designs, and a 
majority of the parts. Company B, which should be considered the producer of these 
PPCs, sells these and other PPCs both in Japan and for export to the Community 
A joint selling company of companies A and B sells, in Japan, PPCs of company B's 
brand. However, company A also produces - partially different - PPCs for its own 
account, with some R&D of its own and with royalty payments to company B for the 
remainder. Company A sells these PPCs for export to the Community (but not in 
Japan), partly to OEM purchasers and partly under its own brand name, for which it 
has set up a distribution network of its own. In this respect, company A exerts the 
complete functions of producer/exporter, and it is in this respect, therefore, that it 
should be considered a separate economic entity from company B, although it is 
clearly related. In the absence of domestic sales of own-manufactured PPCs, whether 
brand sales or OEM sales, normal value for company A was constructed, based partly 
on costs verified at the premises of company A, company B and their joint selling 
company, and partly on the weighted average cost and profit of other producers. 
(54) The above situation where two companies operate at the same horizontal level and 
exert the same functions, even though one is majority-owned by and partly dependent 
on the other, should be distinguished from the situation where a division of production 
and sales activities is made within a group made up of legally distinct companies, with 
one company producing and the other company selling. Two companies operating such 
a vertical distribution of tasks, each incomplete in itself, do constitute a single 
economic entity, as confirmed by the European Court of Justice on many occasions. 
Thus, the Commission could not accept the claim made by certain exporters that the 
export prices and normal value used were not comparable within the meaning of 
Article 2 (3) of Regulation (EEC) No 2423/88. Both domestic and export prices were 
in fact compared ex-warehouse of the producer, with domestic sales subsidiaries 
forming part of the economic entity "producer", as they fulfilled tasks which are 
normally the responsibility of an internal sales department of the producer. Sales by 
22 
such domestic subsidiaries have thus been properly compared with the sales made by 
the producer's export department for export to the Community Appropriate allowances 
for differences affecting price comparability were subsequently made in accordance 
with Article 2(9) and 1(10) of Regulation (EEC) No 2423/88. 
Selective normal value 
(55) Two exporters claimed that they operated a separate sales channel for sales to 
unrelated distributors, that these sales were at a different level of trade than their sales 
to other types of clients, and that this level of trade should be used to establish normal 
value for comparison with export prices, to the exclusion of their sales to other clients. 
The Commission investigated these claims. For both exporters it was found, based on 
a representative sample of models, that the prices of their individual transactions with 
the claimed distributors overlapped to a considerable degree with the prices of 
individual transactions with other types of clients, whether dealers or end-users. With 
respect to quantities sold to the claimed distributors, whether model-by-model or in 
total, there was also significant overlap with quantities sold to other types of clients, 
whether dealers or end-users. The claimed distributors of one exporter were, 
furthermore, found to sell partly to end-users, meaning that in this respect they were 
exercising the same functions as dealers. As for the other exporter, it reported its sales 
to the claimed distributors as taking place through the same sales channel as its sales 
to large end-users, implying a similar cost structure for both types of clients. Finally, 
for both exporters the total of sales to claimed unrelated distributors by volume was 
very small in relation to the volume of their domestic sales and less than 5% of their 
export sales. Under these conditions, it was considered that the exporters had not 
demonstrated that the claimed sales channels of unrelated distributors were consistently 
distinguishable from sales to other types of clients in terms of costs, quantities, prices, 
and functions of buyer, and that the exporters had thus failed to prove why the 
claimed distributor channel should be used to the exclusion of other sales channels for 
the comparison with export prices. 
There was, furthermore, no reason to exclude sales to end-users, as requested by one 
of the above exporters, as the prices of individual transactions with end-users, 
especially large ones, overlapped to a great extent with the prices of individual 
transactions with dealers. 
Normal value for brand sales based on actual prices 
(56) In the investigation period, all but one of the exporters visited had a volume of 
domestic PPC sales which exceeded 5% of their export sales to the Community. 
Normal value for this one exporter was constructed. For the other exporters, it was 
considered that their domestic PPC sales, taken as a whole, were sufficiently 
representative to serve as the basis for the determination of normal value. For those 
exporters, transactions covering at least 70% of domestic PPC turnover were the 
subject of verification. Some transactions that were, at the request of exporters, not 
used for the calculations pertained to sales channels with a very small turnover or to 
sales made by very small related sales subsidiaries. 
For these exporters, domestic PPC models that were comparable with models exported 
to the Community were identified, adjustments being made where necessary and 
feasible for differences in technical characteristics to the domestic models. For a 
number of export models, closely resembling domestic models were not found. Normal 
value for those models was constructed. 
For each comparable domestic model, the volume of domestic sales was compared 
with the volume of export sales to the Community of the export model. Where 
domestic sales did not exceed 5% of export sales in volume, those domestic sales were 
not considered representative for the model in question, and normal value for that 
model was constructed. 
23 
(57) For each remaining comparable model, the number of units sold domestically at a 
profit was calculated, by comparing the net invoice value - after directly related 
rebates and discounts - of each transaction with the cost of production, calculated in 
the manner indicated further below. Where profitable sales exceeded 80% in volume 
of total domestic sales of the model concerned, normal value was calculated as the 
weighted average sales price of all transactions, including those at a loss Where 
profitable sales represented between 20 and 80% in volume of total domestic sales of 
the model concerned, normal value was calculated as the weighted average sales price 
of profitable transactions only. Where profitable sales represented less than 20% in 
volume of total domestic sales of the model concerned, normal value for that model 
was constructed, as it was then considered not to have been sold in the ordinary 
course of trade, within the meaning of Article 2 (4) of Regulation (EEC) No 2423/88. 
Constructed normal value for brand sales 
(58) Where, in accordance with the above methodology, normal value had to be 
constructed, the cost of manufacturing of the export models was calculated. Amounts 
for depreciation of molds were based on normal Japanese accounting and tax practices, 
resulting in full depreciation over two years. In some cases where statements of 
manufacturing costs submitted by exporters were found to be significantly out of line 
with audited figures for cost of goods sold and stocks, corrections were made 
(59) The reasonable amount for selling, general and administrative expenses to be added 
to arrive at the full cost of production was, for all producers, based on their own cost 
structure, including sales subsidiaries, in accordance with the single economic entity 
concept. This includes the one producer which did not sell PPCs of its own brand 
domestically, as in that case the SGA costs were taken which it incurred in selling, 
through its joint domestic sales subsidiary with another producer, PPCs of that other 
producer's brand. The same approach had been followed in the original investigation 
This producer argued that if it had sold its own brand PPCs domestically, it would 
have sold them in small quantities only and in a more direct manner with fewer costs 
However, this producer did have a domestic sales structure and there was no reason 
to assume, without any evidence, that it would not have sold its own brand PPCs 
through that structure. Furthermore, since the SGA was calculated as a percentage of 
turnover, the argument that a smaller quantity of sales, even through a different, 
simpler type of sales channel, would necessarily have led to a lower cost allocation, 
is flawed. Finally, that this producer's own brand would be less well known is already 
taken into account by the fact that its domestic sales structure, on which SGA costs 
were based, incurred few advertising expenses for the PPCs of the other producer's 
brand. 
SGA expenses were calculated specifically for PPCs, and separately for each sales 
channel, whenever the available accounting information permitted this. 
R&D expenses were normally based on those allocated, under internal company 
accounting rules, to the copier division as a whole (including digital and full colour 
copiers). Where a separate identification of the copier division was not possible, or 
where the company's allocation of R&D costs to the copier division did not take 
account of basic R&D that is not product-specific, the R&D costs for the company as 
a whole were taken, calculated as a percentage of the company's total cost of 
manufacturing for all products. The argument that R&D costs should be limited to 
those strictly incurred for PPCs was rejected: R&D expenses are general expenses, 
which have to be borne by the company on a current accounting basis and which must 
therefore be entered in the accounts for the financial year in which they are incurred 
on the turnover of similar products or, in the case of R&D that is not product-specific, 
on all products. Royalty income was allowed to offset R&D expenses. 
24 
(60) In cases where exporters had a sufficient volume of profitable sales, the reasonable 
profit margin was the weighted average profit of their own sales, i.e. all sales if more 
than 80% in volume was sold at a profit and profitable sales only if between 20 and 
80% in volume was sold at a profit. In other cases, the weighted average profit margin 
of all other producers with a sufficient volume of profitable sales was applied. 
Although some exporters criticized this approach as leading to high profit margins, 
this approach results directly from the ordinary course of trade test described in recital 
57. Its correctness is confirmed by Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88, 
which states clearly that the profit used in constructed normal value should be based 
on profitable sales. 
Normal value for OEM sales 
(61) The general methodology applied to establish normal value for OEM sales was 
identical to that outlined above for brand sales. In contrast to the situation at the time 
of the original investigation, several producers now made OEM sales in the domestic 
market. Where such sales represented more than 5% in volume of OEM export sales 
to the Community, both overall and for each comparable model, normal value for 
OEM sales was established on the basis of prices actually paid, whenever such sales 
were made at a profit in sufficient volumes. In other cases, the OEM normal value 
was constructed, based on the producer's own cost and profit structure when possible, 
and on those of the OEM sales of other producers when necessary. In this latter case, 
given the availability of usable cost and profit data of other producers for domestic 
OEM sales of PPCs, the request of one exporter to use costs and profit incurred in its 
OEM sales of other products in the same business sector could not be granted, taking 
account of the order laid down in Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88. 
(62) When normal values had to be constructed on the basis of the SGA expenses of other 
companies, R&D expenses were considered as part of the cost of manufacturing, so 
that each company's own R&D figures were used, together with the weighted average 
SGA expenses (excluding R&D) of other companies. This approach was considered 
to be more reliable than using other companies' R&D figures. 
3. Export price 
General 
(63) Export prices were verified for around 70% of each exporter's total export sales to the 
Community. All sales to OEM importers were verified, either at the premises of the 
exporters or of their subsidiaries in the Community concerned with OEM sales. As for 
brand sales, which were sold almost exclusively via subsidiaries established in most 
of the Member States of the Community, it was deemed necessary to verify only a 
representative portion, based on the largest Member States. A correcting weighting 
factor was accordingly used in the final dumping calculation to re-establish the 
original ratio between brand sales and OEM sales. 
(64) Where models were sold in several different configurations, standard configurations 
were agreed with exporters, which were normally the most basic version of the model 
concerned. This standard configuration was then compared with domestic models, and, 
where necessary and feasible, appropriate adjustments were made to the normal value 
of tiie comparable domestic model. 
25 
Status of importers 
(65) Three importers which had claimed to be unrelated to an exporter were found in fact 
to be related. 
The first case concerned an importer, in which one of the Japanese exporters had 
acquired a significant minority share in September 1991. This shareholding was 
substantial and appeared to allow the exporter to exert considerable influence over the 
importer, the exporter's acquisition being accompanied by a structural programme to 
increase cooperation between the two companies. During the remainder of the 
investigation period of the review, this cooperation, as verified at the premises of the 
importer, appeared to be inconsistent with a normal arm's length commercial 
relationship. A particularly notable aspect of this cooperation related to the pricing of 
PPCs from the exporter to the importer, which, at least in one case, appeared to vary 
according to whether or not the PPCs were subject to anti-dumping duty, thus raising 
the suspicion of absorption of the anti-dumping duty. Under these circumstances, it 
was considered that the criteria of Article 2(8)(b) of Regulation (EEC) No 2423/88 
had been met, in the sense that both an association and a compensatory arrangement 
appeared to exist which rendered the prices paid or payable between the exporter and 
the importer concerned unreliable. This importer and its subsidiaries in the Community 
were consequently treated as related importers within the meaning of Article 2(8)(b). 
(66) The same factual circumstances, and the consequent qualification as a related importer, 
also prevented this importer from being treated as an OEM importer. An essential 
characteristic of sales to OEM importers is that exporters incur significantly lower 
costs in respect of such sales, as marketing, distribution, and maintenance is all done 
by the OEM importer under the latter's own brand name and for its own account The 
exporter can therefore charge lower prices, resulting in the claim that genuine OEM 
export prices are at a different level of trade from brand sales and should, for the 
purpose of a fair comparison, be compared with a similar level of trade on the 
domestic market. In this respect, this importer did sell the PPCs imported from the 
exporter concerned under its own brand names in the Community However, this is 
not in itself sufficient to qualify as an OEM importer. If it were, it would be very 
simple indeed for exporters to have their subsidiaries in the Community qualify for 
the status of OEM importer, simply by having them sell under a different brand name, 
as some exporters were found to have done in this review. In order for export sales 
to qualify as having been made at the level of trade of an OEM importer, the 
information regarding sales prices between exporter and importer and the costs borne 
by each must be reliable. This criterion is, by definition, not met between related 
parties within the meaning of Article 2(8)(b). 
These conclusions were contested by the importer and exporter concerned. They 
argued that at least purchases ordered before the exporter's acquisition of its share 
holding should still be treated as unrelated. However, as described above, from the 
moment of that acquisition, the entire relationship between exporter and importer 
changed to a degree where the prices actually paid for all subsequent imports, whether 
ordered before or after the shareholding, became unreliable. The same applies to the 
costs. The fact that the Commission verified these costs and used them, with some 
corrections, to construct the export price, does not necessarily mean that these costs 
were accepted as entirely reliable. 
(67) The same considerations applied even more strongly to a second importer. During the 
investigation period of the review, a majority of the capital of this importer was 
owned by one of the Japanese exporters. Given the exporter's majority share in the 
company, prices between exporter and importer and the costs incurred by each were 
considered unreliable. Although the importer sold the PPCs which it imported from 
the exporter concerned under the importer's brand name in the Community, that brand 
name is in fact owned and controlled by the exporter concerned. This importer could, 
therefore, not be treated as an OEM importer. 
26 
(68) In September 1991, the European headquarters of one of the Japanese exporters took 
a significant minority shareholding in a third importer, the name of which was 
changed in line with the brand name of the exporter concerned. As in the case of the 
first importer, this shareholding was so large as to make it likely, in the Commission's 
view, that the exporter was in a position to exercise restraint or direction over the 
importer. During the verification visit to this importer it was also found that 
advertising support was received from the exporter. It was therefore considered that 
also in this case an association or compensatory arrangement within the meaning of 
Article 2(8) b) of Regulation (EEC) No 2423/88 appeared to exist, which rendered the 
sales prices and distribution of costs between this importer and the exporter concerned 
unreliable. 
Facts available 
(69) A planned visit to a European subsidiary of one of the Japanese exporters could not 
take place, as the company did not supply necessary information regarding its cost 
structure in time. As a consequence, the Commission was not able to determine the 
costs incurred by this company in respect of sales made to first independent buyers 
by the other subsidiaries of the same group that had been visited. Based on the scarce 
information available to the Commission, it appeared, however, that the company 
clearly did perform functions that were of benefit to those other subsidiaries, such as 
collecting and disseminating marketing information, providing marketing assistance, 
standardising accounting practices, giving legal assistance, undertaking pan-European 
advertising, providing services in the financial area, assisting in product development 
and product adaptation to the market, etc. In the absence of better, verified 
information, facts available had to be used, in accordance with Article 7(7)(b) of 
Regulation (EEC) No 2423/88, in casu the SGA costs in the audited accounts of this 
company, to establish the costs incurred in providing the above - and possibly other -
services. 
Export price for related importers 
(70) For related importers, export prices were constructed from the sales prices to the first 
independent buyers in the Community, minus discounts and rebates directly linked 
(including items free of charge), by deducting all costs incurred between importation 
and resale and a reasonable profit margin of 5%. The profit levels found for unrelated 
importers could not be used to establish an appropriate profit margin, for two reasons. 
First, few unrelated importers replied to the questionnaire. Of these, the profit margin 
of one unrelated importer was verified, representing only a small percentage of total 
imports from Japan. Secondly, it was found that the profit margins of unrelated 
importers were artificially depressed, in line with the general price depression analysed 
further below for PPCs in the Community, as a result of having to compete with 
dumped Japanese brand sale imports sold through related subsidiaries in the 
Community. In the absence of reliable profit figures of unrelated importers, the 
Commission considered a 5% profit margin a reasonable minimum in the ordinary 
course of trade, taking account of Commission practice in other cases, including in the 
original investigation. As requested by exporters, a single profit margin, always of 5%, 
was used irrespective of the number of subsidiaries actually involved in the sales 
chain. 
(71) PPCs sold to dealers at a lower price for demonstration purposes were included in the 
transactions used to calculate dumping, as the cost of demonstration should normally 
be borne by the dealer himself. Depreciation of stock, covering missing or stolen 
products or damaged or obsolete products destined for disposal, was considered as a 
cost incurred between importation and resale. Where old stocks of PPCs were not 
depreciated but sold, these transactions were included in the dumping calculation. 
27 
Export price for unrelated importers 
(72) Export prices to unrelated importers, normally OEM purchasers, were calculated based 
on the actual prices for these transactions, minus discounts and rebates directly linked 
(including items free of charge). Compensations paid to OEM purchasers for 
disadvantageous exchange rate fluctuations in connection with the sale of PPCs were 
considered as discounts. Where exporters' subsidiaries in the Community incurred 
costs in respect of these sales, by carrying out certain activities that would normally 
have been undertaken by the importer (for instance the provision of advertising 
support) or by performing a role similar to that of a re-invoicing agent, the costs 
involved and a reasonable profit margin were deducted, in accordance with 
Article 2(8)(b) of Regulation (EEC) No 2423/88. In this respect, the same 5% profit 
margin was applied as for all sales through related importers, based on the method of 
using the same profit margin irrespective of the number of subsidiaries involved. 
While one exporter commented that this percentage was relatively high in the case of 
sales to OEM importers, it was precisely this exporter which had insisted, in the 
original investigation, that one and the same profit percentage should be used 
irrespective of the number of subsidiaries involved in the sales channel. It was 
considered that the 5% deduction by the Commission for reasonable profit was low 
in respect of sales in Member Sates in which two or sometimes even three related 
subsidiaries were involved, as well as in respect of sales to end-users, which implied 
an integrated chain of distribution, and that, therefore, the approach followed was 
reasonable. 
4. Comparison 
(73) Export prices and normal value were compared at the same level of trade. OEM 
export sales were compared with the weighted average normal value of OEM domestic 
sales. As for the own-brand export sales, which had to be constructed in almost all 
cases, these were compared with the weighted average normal value of all domestic 
own-brand sales channels, given that these were not consistently distinguishable from 
each other, and that therefore insufficient evidence existed that one type of sales 
channel would be better comparable to the export sales than another. 
(74) Where sufficient evidence was submitted, appropriate adjustments were made in 
respect of differences in physical characteristics and selling expenses. No adjustments 
were claimed for any difference in import charges and indirect taxes. With respect to 
salesmen's salaries, only the salaries paid to personnel wholly engaged in direct PPC 
selling activities were deducted, to the exclusion of staff that partly or entirely 
exercised management functions, and to the exclusion of service and sales support 
personnel. This approach was based on Article 2(10)(c)(v) of Regulation (EEC) 
No 2423/88, which states that an allowance can be granted only for personnel wholly 
engaged in direct selling activities. Where PPC salesmen were found to be selling 
other products or services as well, the turnover concerned was included for the 
purpose of calculating the percentage deduction for PPCs. 
The total allowances for normal value were calculated as an absolute amount per 
model per unit sold. This absolute amount, representing the allowable cost per unit 
actually incurred, was then deducted from the normal value calculated for the model 
in question. 
28 
5. Dumping margins 
(75) Dumping margins were calculated as the total absolute amount of dumping on verified 
import sales divided by the total CIF value as declared to customs of all verified 
imports, whether or not dumped. The dumping margins for brand sales (only partly 
verified) and OEM sales (all verified) were weighted to take account of the actual 
ratio in terms of CIF value between these two types of export sales. In this respect, 
dumping found for the verified part of the brand sales was considered representative 
of all brand sales. 
(76) In the case of related importers, the existing anti-dumping duty was deducted as a cost 
between importation and resale, in accordance with Article 2(8)(b) of Regulation 
(EEC) No 2423/88. For PPCs over 75 copies per minute, no anti-dumping duty was 
in force and thus no anti-dumping duty was deducted. On this basis, the dumping 
margins found varied between 21.5% and 83.9%. They were significantly higher for 
each exporter concerned than the rate of the original anti-dumping duty pertaining to 
that exporter. The weighted average dumping margin was 41.0%. 
(77) The effect of this high degree of dumping on the Community market place was far 
from being completely offset by the existing anti-dumping duty. When, in order to 
evaluate tiie effectiveness of the original anti-dumping duty, this duty was not 
deducted as a cost in the case of related importers, and added to the export price in 
the case of unrelated importers, the weighted average effect of the dumping on the 
Community market was still as high as 28.8%, with individual rates varying between 
13.5% and 74.4%. 
(78) In conclusion, the review showed that the existing anti-dumping duty has not led 
exporters to revise their pricing to an extent that dumping was eliminated, nor has it 
offset the effect of the dumping on the Community market. Given the high dumping 
margins found in the review investigation, it is considered that if the existing duty 
were allowed to lapse, dumping would be likely to continue at the same or even 
higher margins. The abolition of the anti-dumping duty can, if anything, only further 
increase the level of dumping to the extent that the lower costs for exporters selling 
in the Community through related importers could result in further price decreases 
G. RECURRENCE OF INJURY 
1. Effect of dumped imports from Japan 
(79) Despite the existing anti-dumping duty, Japanese exporters, selling mostly through 
related importers, were, in the investigation period of the review, undercutting the 
prices of the Community industry in the Community market place with their PPCs 
imported from Japan by a weighted average of 26%, with a sales volume that, 
although significantly declining, still represented 26% of units placed in the 
Community. As PPCs are a mature product, with relatively limited technical 
differences among producers and with price thus playing an important role in the 
customer's choice, it is clear that such a large volume of imports at such low prices 
could not fail to have a significant negative impact on the economic performance of 
the Community industry, showing itself in insufficient profitability and declining 
market shares and production volumes for that industry. 
(80) Any reduction in injury that might be derived from the decrease over time in the 
Community market share of Japanese PPCs, has been offset by the fact that in terms 
of models, those imports have become especially injurious. In the original 
investigation, the large bulk of imports from Japan consisted of small PPCs. These 
gave the Japanese exporters a large markiet share measured in units, but their injurious 
effect was limited by the fact that Océ afod Rank Xerox had traditionally focused on 
the more important large PPCs and continued to have a strong technical and market 
i 
29 \ 
V 
position and adequate profitability on those large models. Since then, however, almost 
all of the Japanese exporters have shifted a large part of their production of small 
PPCs (in particular mature models of relative simplicity) to the Community or to other 
third countries and have concentrated on exporting to the Community the more 
sophisticated segment 4, 5 and 6 models they have come to produce in Japan. In view 
of the fact that a weighted average degree of undercutting was determined for 
segments 4 and 5 which was twice the level of undercutting for segments 1 to 3 
(38% compared to 19%), the imports from Japan exerted very strong downward 
pressure on the prices, profitability and market share of the Community industry in 
these segments. For instance, in segment 4 (PPCs capable of making 45 to 59 copies 
per minute), Community industry's market share in the Community decreased from 
64.4% in 1988 to 42.1% in the investigation period of the review, a dramatic fall of 
22.3%. Most of the segment 4 PPCs and all segment 5 PPCs competing with the 
segment 4 PPCs of the Community industry in the investigation period of the review 
were produced in Japan. 
(81) Given the pricing aggressiveness of the Japanese exporters already found with the 
existing anti-dumping duty in force, it is considered that undercutting and price 
depression caused by dumped imports from Japan could only deteriorate if the duty 
were allowed to lapse, as Japanese exporters would be likely to use at least part of the 
cost reduction resulting for their related importers from an expiry of the anti-dumping 
duty to decrease further resale prices in the Community. This likelihood is considered 
all the greater as the introduction of lower prices by just one major player in the PPC 
market would, for such a price-sensitive product, put great pressure on the other 
players to follow suit, leading to an even more ruinous price war than already exists 
The consequences of any further price decrease for the Community industry would be 
serious, as PPCs are for each producer the mainstay of their business, which should 
provide the profits necessary to make the investments required to remain viable in the 
medium term. Any of these firms could decide to stop production and become a mere 
OEM purchaser, deriving revenues from service and supplies only, as other 
Community producers have already been forced to do in past years. They could also 
replace part of their range of own-manufactured models with OEM purchases. The 
experience of recent years has shown that parts of the Community industry's own 
production, especially in the lower segments, had to be sacrificed when losses became 
too great. The aggressiveness of Japanese exporters' pricing in the higher segments 
means that danger could now arise even for the higher segments. 
(82) With respect to volumes of imports, during the investigation period of the review, the 
economic situation in Japan deteriorated, demand stagnated, and stocks increased by 
65% to a level of 300 000 units, more than the annual volume of exports to the 
Community during the investigation period. Capacity utilization was also decreasing 
If duties were allowed to lapse, the incentive to increase exports from Japan to the 
Community, at prices covering variable costs of production at most, would be great, 
quite possibly even to the extent of closing Japanese PPC factories in the Community 
in order to improve capacity utilization in Japan. The existing trend towards 
decreasing volumes of imports from Japan could thus be stopped or even reversed if 
duties were allowed to lapse. This would be even more likely if the yen were to 
depreciate in the coming years against the European currencies. With the behaviour 
of currencies being as volatile as it is, this development cannot be excluded. 
2. Other allegedly injurious factors 
(83) The Commission examined whether a fall in demand for PPCs in the Community 
market could have caused the precarious situation of the Community industry This 
was not the case. Between 1988 and the investigation period of the review the 
Community market for PPCs expanded by 24%. However, the Community industry's 
sales in the Community declined by 1% over the same period, leading to a decrease 
in their market share in the Community from 15.4% to 12.4%. 
30 
(84) The argument by some exporters that a period of economic recession in the 
Community was the cause of the precarious situation of the Community industry in 
the investigation period of the review, is also considered unfounded The economic 
recession in the Community began, except in the United Kingdom, only in the second 
half of 1992, after the end of the investigation period. Thus, while total PPC 
consumption has decreased by around 10% following the end of the investigation 
period, it had still been climbing strongly between 1988 and the investigation period 
and remained stable during the investigation period itself. To the extent that demand 
may have shifted somewhat towards second-hand PPCs, the Community industry did 
not suffer from this, as it is strongly represented in this market (as are the dealers of 
the Japanese producers). Furthermore, while the profitability of the Community 
industry in the Community for its products and services other than PPCs declined from 
an index of 100 in 1988 to 76 in the investigation period of the review, Community 
industry's profitability on PPC hardware sales in the Community dropped much more 
steeply from an index of 100 in 1988 to 24 in the investigation period of the review. 
This suggests that sales of PPCs by the Community industry were under severe 
additional pressure from sources other than the general economic conditions Some 
exporters commented that the relatively better performance of overall profitability 
could be due to customers postponing the replacement of their PPC and spending more 
on maintaining their existing PPC. However, as mentioned above, between 1988 and 
the investigation period, sales of PPCs in the Community increased by 24%, which 
contradicts the argument that customers had postponed purchases of new machines. 
(85) It was suggested by certain exporters that PPCs produced by Japanese companies in 
the Community and in third countries had also been causing injury to the Community 
industry, and that the Commission should quantify what part of the injury should be 
attributed to each. It may be observed, in this respect, that neither of these two other 
sources of sales in the Community was the object of the present review, so that the 
possibility for the Commission to obtain relevant information was limited. 
Furthermore, none of the Japanese exporters volunteered any information on the 
degree to which their PPCs produced in third countries other than Japan and in the 
Community were alleged to cause injury to the Community industry. Nevertheless, it 
was considered reasonable to assume that the prices of PPCs which Japanese 
companies produce in the Community and which they produce in and import from 
third countries other than Japan are not likely to be significantly out of line with the 
prices of PPCs imported from Japan, as major price differences in the Community 
between similar PPCs produced by the same company probably could not be sustained 
In this sense, it was considered likely that PPCs sold by Japanese companies from 
these other sources than Japan likewise contributed to the injury suffered by the 
Community industry. It was also noted that the relative importance in the Community 
market of PPCs from these other sources had increased continuously, to a market 
share of 61.8% in the investigation period of the review (consisting of 12.8% imports 
from third countries other than Japan and 49% estimated EC sales of PPCs produced 
by Japanese companies in the Community). 
Nevertheless, the market share of 26% held by the imports from Japan, combined with 
the undercutting level of 26% found for those imports, is considered to be in itself a 
significant cause of the poor economic situation of the Community industry. In order 
to defend its market share against such a large volume of unfairly low-priced imports, 
the Community industry was forced to lower its own sales prices to levels that resulted 
in an important shortfall of profitability on their sales of PPCs. That PPCs of Japanese 
companies from other sources were probably sold at similarly low prices, does not 
change the fact that even in their absence the Community industry would still have 
had no choice but to follow the price lead of the imports from Japan, sold as they 
were in such important volumes. Those imports were, therefore, taken in isolation, 
sufficient to cause price depression and a significant shortfall in profitability for the 
Community industry. As mentioned before, they were also the main cause of the 
dramatic loss of market share of the Community industry in segment 4 PPCs and the 
only cause of sales lost by the Community industry in segment 6, since all segment 5 
31 
and segment 6 PPCs and the large majority of segment 4 PPCs introduced by Japanese 
companies on the Community market in the investigation period of the review 
originated in Japan. For the other segments, imports from Japan probably combined 
with PPCs from other sources to cause loss of market share and lack of profitability 
to the Community industry. 
Although Article 4(1) of Regulation (EEC) No 2423/88 requires the 
Community authorities not to attribute to dumped imports injuries caused by other 
factors, this requirement is satisfied where it is shown, as described above, that 
dumped imports, taken in isolation, have been an independent cause of the poor 
economic situation of the Community industry, even if other factors may also have 
contributed to that situation. Thus, even if it were assumed that imports from other 
third countries and sales from Japanese production facilities in the Community have 
contributed to the precarious situation of the Community industry, this would not alter 
the fact that dumped imports from Japan, taken in isolation, caused the poor economic 
situation of the Community industry. 
(86) As for the argument that the Community industry inflicted injury upon itself by 
importing and selling in the EC PPCs originating in Japan, it has already been 
mentioned that the number of PPCs imported from Japan by the Community industry 
and sold in the Community in the investigation period of the review declined 
dramatically in comparison with the original investigation. The percentage of PPCs 
imported by the Community industry from Japan and sold in the Community in the 
investigation period of the review represented less than 1% of its production of PPCs. 
Any negative impact of such imports on the situation of the Community industry can 
therefore be ignored. 
Not only was the quantity of PPCs imported from Japan by the Community industry 
very small, the fact of buying part of one's product range from other producers is now 
a common and normal business strategy even among Japanese producers. Selling 
dumped PPCs from Japan in the Community, as practised by Océ, but not by the other 
two Community producers, may be seen as a legitimate act of self-defence in view of 
the need to sell in the Community market in competition with other dumped PPCs 
from Japan. Indeed, had Océ failed to do this, the injury on its own-manufactured 
PPCs would in all likelihood have been larger still, as it would then have lost a 
number of customers needing an assortment of PPCs ranging from small to large. 
3. Conclusion 
(87) The above considerations, and in particular the finding that notwithstanding the 
existing anti-dumping duty, significant volumes of highly dumped imports from Japan 
were sold on the Community market at very low prices, causing serious detriment to 
the Community industry, lead to the conclusion that if the anti-dumping duty in force 
were allowed to lapse, material injury caused by dumped imports from Japan would 
recur. 
H. COMMUNITY INTEREST 
1. General 
(88) The general purpose of anti-dumping measures is to eliminate trade-distorting effects 
of dumping practices and thus to restore effective competition on the Community 
market. Effective competition is fundamentally in the Community interest, both as a 
general policy objective and in terms of the interests of Community producers and 
consumers. 
32 
2. Original findings 
(89) With respect to the specific case of dumped PPC imports from Japan, the interests of 
producers, consumers and unrelated (mainly OEM) importers, such as Agfa Gevaert, 
in the Community had already been examined extensively in the original investigation 
At that time, it was concluded that the Community's interest in maintaining a viable 
Community PPC manufacturing industry capable of competing with imports from 
Japan on fair terms outweighed the short-term interest of consumers in profiting from 
unfairly low prices, for as long as they would last, as well as the interests of 
OEM importers, who profited from distributing, under their own brand, dumped 
imports from Japan at the expense of sales of PPCs produced by Community industry 
Regarding OEM importers it was considered, in particular, that the Community interest 
in a Community industry which both produces and distributes PPCs is, other things 
being equal, greater than in European companies which essentially distribute under 
their own brand PPCs produced in Japan 
3. Findings in the review 
Community interest in PPC production 
(90) With respect to the Community's interest in maintaining a viable PPC industry in the 
Community, this has, if anything, increased from the time of the original investigation 
It is estimated that close to 23 000 people are employed full-time in the Community 
to manufacture, distribute, service and sell the PPCs produced by the Community 
industry, of which 12 000 are employed in manufacturing (including those working 
full-time at Community companies supplying parts and sub-assemblies for Community 
PPC producers). While PPC technology has become mature, it is still a highly 
complex and sophisticated process, combining chemical, optical, electronic, mechanical 
and software know-how. The PPC of today also forms an important technological 
starting point not only for the production of digital copiers, printers and faxes, but also 
for a whole new generation of multi-purpose, networked office products to be 
introduced in the years to come. 
(91) Furthermore, after anti-dumping measures were introduced in 1986, almost all 
Japanese producers established or expanded PPC production facilities in the 
Community. As a result, Japanese PPC production in the Community, which had been 
less than 50 000 units in 1984, increased to 643 719 units in the investigation period 
of the review. Although the anti-dumping duties may not have been the only reason 
for this strongly increased Japanese production in the Community, it can hardly be 
doubted that they did significantly influence this development. In the wake of these 
factories, a strong supplier industry also developed within the Community, 
representing, in all likelihood, more employment than the Japanese factories in the 
Community themselves or than the 6 000 workers involved full-time in supplying the 
Community industry. 
As already mentioned, if duties were to lapse, there would be an incentive for the 
Japanese exporters to cut production in the Community to reduce the significant stocks 
existing in Japan and to improve capacity utilization there. This rationale would apply 
especially to the larger PPCs, which could be supplied world-wide from a single 
source, Japan. In addition, the lapsing of the duties in the face of high dumping would 
probably be interpreted by the Japanese producers as meaning that the Community 
authorities no longer attached importance to maintaining a photocopier industry in the 
Community. As a result, the economic advantages of producing small and relatively 
simple PPCs in third countries with low labour costs, rather than in the Community 
where most Japanese companies produce them now, would become more alluring 
There will be a point where cost^enefit considerations will outweigh even strategic 
considerations relating to maintaining a manufacturing presence in the main global 
markets, especially since at least one other Japanese producer has no production 
facilities at all in the Community and competes strongly on the Community market 
33 
with PPCs made with low labour costs in a third country. If this trend were followed, 
the final result could be a severely limited Japanese PPC manufacturing presence in 
the Community. If the production of several if not all of the Japanese production 
facilities were to be closed or switched to other products, this would be serious in 
itself. However, probably the biggest disadvantage would be that a myriad of small 
and medium-sized Community suppliers now providing the Japanese assembly 
facilities with parts, would be without clients. It is precisely this strong reliance by the 
Japanese assembly facilities on outside suppliers, entailing minimal capital investment 
in assembly plants, that would limit their shutdown costs if they decided to cease 
assembly in the Community. 
Interest of importers 
(92) Certain importers claimed that they suffered from the anti-dumping duty in that they 
were unable, whether partially or entirely, to pass this cost on to consumers, leading 
to reduced profitability and loss of employment in their companies. It is evident that 
the imposition of an anti-dumping duty is not to the advantage of importers, which 
have to pay the anti-dumping duty and which are therefore less able than before to 
undercut the prices of the Community industry with dumped imports. However, it is 
precisely the intention of the introduction of an anti-dumping duty that the sales 
prospects for the Community industry be improved in relation to those of importers 
selling dumped products. In addition, it was noted that this claim was made by 
importers, such as Agfa Gevaert, which sell the PPCs which they purchase in Japan 
under their own brand in the Community. The profitability of such companies is likely 
to have been affected at least as much by the tendency of their Japanese PPC suppliers 
gradually to expand their own brand sales network in the Community at the expense 
of sales under the importer's brand. While some employment in sales and service 
activities may have shifted from these importers to the Community industry or to 
Japanese sales subsidiaries in the Community, this employment remained in the 
Community. This situation should be distinguished from the net loss of manufacturing 
employment which, as described above, is at stake for the Community if duties were 
allowed to lapse. 
The importer Agfa Gevaert also made the argument that the anti-dumping measures 
on PPCs from Japan endangered its direct investments in PPCs in Japan. Upon 
verification, however, it was found that such no direct investments existed. 
Interest of Community consumers 
(93) It was estimated that an amount of around ECU 500 million was collected in anti­
dumping duties on PPC imports from Japan from their introduction in August 1986 
to the end of the investigation period. However, given the continued effect of dumping 
on the Community market and the high undercutting margins found, it would appear 
that a large part of this amount was not charged to Community consumers. 
(94) If duties were allowed to expire, consumers would benefit to the extent that the 
Japanese exporters and unrelated importers decided to use their reduced costs to 
further decrease resale prices in the Community of PPCs imported from Japan. If 
maintaining the duty led to no price movement, the situation would continue as 
mentioned in recital 93. If maintaining the duty led to a price increase to consumers 
with the full amount of the anti-dumping duty, if imports continued at the same level 
as presently, and if PPCs not imported from Japan did not increase in price, the 
estimated cost to Community consumers of a continuation of the measures would be 
ECU 42.5 million per year. This figure is based on a weighted average anti-dumping 
duty of 16.3% for the exporters investigated, multiplied by a total customs value of 
PPCs imported from Japan in 1994 of ECU 260.8 million. Such a price increase on 
PPCs imported from Japan would, however, be quite unlikely, given that the duty 
would remain at the same level as before. Even if a price increase of PPCs from Japan 
did take place, it would be likely to lead to their partial or complete replacement by 
34 
PPCs from other sources, whether sales by the Community industry or sales of PPCs 
produced by the Japanese companies in the Community or in other third countries. 
The Community industry would probably want to use part of the breathing space 
created to increase sales volumes rather than increase prices up to the full margin 
possible. As for the Japanese producers, there is no reason why they would change the 
pricing strategy of their PPCs not imported from Japan, especially because they 
compete among themselves and are still subject to competition from low-priced 
imports from third countries other than Japan. A general price increase of all PPCs 
sold in the Community is therefore extremely unlikely. In general, in a competitive 
market for a mature product such as photocopiers, it takes only one or a few large 
sellers to force the general price level down, but it takes a general cost increase or the 
participation of all or most large sellers to get the general price level up. If one 
company increases its prices in isolation, it would be forced to rethink this strategy 
very quickly. 
(95) It is in the long-term interest of consumers to maintain a variety of sources of supply 
and competition. Two of the smaller Japanese exporters observed that their continued 
operation might be endangered if the anti-dumping duty on PPC imports from Japan 
were maintained, which would reduce competition. However, of these two companies 
one was already majority-owned by one of the largest Japanese companies, while the 
other exported the bulk of its PPCs to the Community from a third country. The 
Community authorities were, therefore, more concerned about the reduction in sources 
and variety of supply which could result from the disappearance of one or more of the 
remaining Community producers. Around 85% of the Community market measured 
in units (and around 70% measured in units weighted by copy volume) was already 
in the hands of the nine Japanese exporters investigated, whether exporting from 
Japan, from third countries, or producing in the Community, even though, as 
mentioned above, these Japanese companies did compete among themselves during the 
investigation period of the review. 
(96) Some exporters and one importer pointed to the strong position in terms of market 
share of the Community industry in segment 6 to argue that this segment, or part of 
it, should be excluded from the duties. However, given that Rank Xerox, Océ and 
Kodak sell in segment 6 and compete between themselves, and that anti-dumping 
duties will not prevent Japanese exporters from exporting segment 5 or segment 6 
PPCs to the Community (or from producing them in the Community or third 
countries), but merely from selling them at unfairly low prices, it was considered that 
this alleged risk to competition in segment 6 was outweighed by the Community 
industry's interest in receiving protection from dumped imports. This is the more so 
as segment 6 should not be considered as a product in itself, but merely as a small 
part of a product, PPCs, in which Japanese companies have a very strong market 
position in the Community. 
4. Conclusion 
(97) It was considered that, on balance, it is in the overall Community interest that anti­
dumping measures on PPC imports from Japan should not be allowed to expire at this 
time. 
I. MEASURES 
1. General 
(98) The question governing this review was, in accordance with Article 15(3) of 
Regulation (EEC) No 2423/88, whether the expiry of the measures in force would lead 
again to injury or threat of injury. Based on the above analysis, this question must be 
answered in the affirmative. Taking account of the Community interest, the Council 
concluded that anti-dumping measures should be maintained. 
35 
2. Product scope 
(99) When the anti-dumping measures on PPCs from Japan were first introduced, PPCs 
capable of operating at a speed of more than 75 copies per minute of A4 size paper 
were excluded from the scope of the measures, as there were, at that time, no imports 
from Japan of those copiers. Since then, however, such imports, at dumped prices, 
have increased strongly and were shown to be especially injurious to the Community 
industry. It was therefore deemed necessary now to include such PPCs in the scope 
of the measures. 
The new measures will thus cover the entire product investigated, i.e. PPCs ranging 
from personal copiers to segment 6. Personal copiers, although not produced by the 
Community industry, compete with segment 1 PPCs that were produced by the 
Community industry during the investigation period, and their continued inclusion is 
therefore justified. For segment 6 PPCs, already one Japanese exporter had started 
importing such PPCs into the Community, while there is also competition with 
segment 5, which is dominated by the Japanese exporters. If either personal copiers 
or segment 6 copiers were excluded from the measures, not only would dumped 
imports in these segments continue to injure the Community industry, but the risk of 
circumvention of the anti-dumping measures on segments 1 and 5 would be 
considerable, as it would be possible for exporters to change the copy speed or 
features of the PPC in such a manner as to fall within the adjoining segment, without 
essentially changing the model. 
These considerations are not invalidated by the fact that on a weighted average basis, 
the Community industry obtained an adequate return on sales of segment 6 PPCs 
during the investigation period. First, the operating results for individual Community 
producers on segment 6 PPCs differed substantially, with one of the two Community 
producers suffering losses in that segment. Secondly, injury was determined for the 
like product as a whole, in accordance with Article 4(4) of Regulation (EEC) 
No 2423/88. The profitability of the Community industry, one of the key injury 
criteria, would have been worse if segment 6 had been excluded. Thirdly, in contrast 
to the situation prevailing in the original investigation period, segment 6 is now both 
produced in the Community and imported from Japan. It would be inappropriate to 
identify injury for each product segment or each model separately and to exclude from 
the measures segments or models that happened to be commercially more successful 
during the investigation period. 
3. Rates of the duty 
(100) It was considered that the existing anti-dumping duty has been effective in 
significantly reducing the volume of PPC imports from Japan, and that other factors, 
notably the prices and volumes of PPCs sold in the Community and produced by 
Japanese companies in the Community and in third countries other than Japan, were 
likely to be contributing to the precarious situation of the Community industry 
On balance, therefore, the Council considered that confirming the existing duty at its 
current levels should give adequate protection to the Community industry, given the 
continuous downward trend in PPC imports from Japan and the fact that the measures 
will now cover PPCs capable of operating at a speed of more than 75 copies 
per minute of A4 size paper. 
(101) Some exporters and the Community industry argued that the rate of the new anti­
dumping duty should be amended for each exporter based on the lower of its dumping 
and underselling margins. They noted that the review investigation had been initiated 
not only on the basis of Article 15 of Regulation (EEC) No 2423/88, but also of 
Article 14 of that Regulation, and that Article 14(3) provided for the amendment, 
where warranted, of the measures in force. They claimed that discrimination occurred 
between exporters, as lower duty rates were applied to some than others whilst they 
36 
had similar dumping or underselling margins, and the same duty rate was applied to 
other exporters even though they had different dumping or underselling margins 
In this respect, the following observations should be made: First, Articles 14 and 
15 appear together under the heading "review" in Regulation (EEC) No 2423/88 
Article 15 should, therefore, be read in conjunction with Article 14, especially the 
procedural provisions thereof. Secondly, the word "confirmed" in Article 15(1) would 
serve no purpose if the new measures always had to be based on the lower of the 
dumping and underselling margins, since it is highly unlikely that the duty rates 
derived from such a calculation would, for each exporter, be identical to the existing 
rates, resulting in the existing duties being "confirmed" by the review investigation 
The Community authorities nevertheless clearly have the right under Article 15(1) to 
"confirm" the existing measures. Thirdly, the confirmation of existing measures is 
especially appropriate where they have had some beneficial effect, as in this case 
through the significant reduction of the volume of imports, but not yet enough to 
permit their expiry. In the present case, it is considered that maintaining the duty rates 
at their current level will in fact provide adequate protection to the Community 
industry, and that it is therefore simply not necessary to increase the duty rates 
Finally, with respect to the claim of discrimination between exporters, it should be 
noted that the existing rates now confirmed by the Council are, for each exporter, 
significantly lower than its dumping and underselling margins found in the review, 
calculated in the manner indicated above. While the difference in benefit is larger for 
some exporters than for others, the same result is inherent in the "lesser duty" rule laid 
down in Article 13(3) of Regulation (EEC) No 2423/88, under which the same duty 
rate based on injury may be applied to all exporters, even though some have higher 
dumping margins than others. In the original investigation, for instance, the duty rate 
based on a global injury assessment was 20% for all exporters (except those with 
lower dumping margins), even though the dumping margin of those exporters varied 
between 22 and 60%. The degree to which the three exporters with lower duty rates 
now benefit, compared to the lower of their dumping and underselling margins, is not 
necessarily larger than the degree of benefit of exporters to which a 20% duty rate is 
applied, as compared to the lower of their dumping and underselling margins. 
(102) The exporter Ricoh claimed that it was the only exporter whose dumping margin had 
decreased and that it should be rewarded for this is in the sense that the existing anti­
dumping duty should not be deducted to calculate its new dumping margin On that 
basis, it claimed a lower duty than 20%. It was found that Ricoh was correct in 
claiming that it was the only exporter whose dumping had decreased since the original 
investigation. This circumstance cannot, however, lead to the non-deduction of the 
existing anti-dumping duty for the determination of the duty to be applied, since 
Article 2(8)(b) of Regulation (EEC) No 2423/88 clearly provides that anti-dumping 
duties should be deducted as a cost for related importers in the calculation of the 
export price. In terms of injury, the reduction in this exporter's dumping margin could 
just as well have been due to a decrease in its normal value. The undercutting margin 
for this exporter, which was just below the weighted average for all exporters, 
supports this hypothesis and indicates that its export prices contributed to the poor 
economic situation of the Community industry. Its claim for a reduced duty was 
therefore not considered justified or possible under Regulation (EEC) No 2423/88 
4. Period of operation 
(103) With respect to the period of operation of the measures, the Council noted that, due 
to the unusual complexity of a number of aspects of this case, significant delays were 
incurred in its treatment. First, nearly six months elapsed between the notice of the 
Commission's intention to carry out a review of the measures and the actual initiation 
of that review. Then, the review investigation itself, which was initiated on 14 August 
1992, took more than two and a half years to complete. In accordance with 
Article 15(3) of Regulation (EEC) No 2423/88, the original anti-dumping duty on PPC 
imports from Japan remained in force during this entire period. The Council therefore 
considers it reasonable that, in these exceptional circumstances, the period of operation 
37 
of the new measures should be limited, to expire on 14 August 1998, subject to the 
applicable provisions on reviews. 
(104) Some exporters and importers commented that the Community industry had already 
had eight years of protection through anti-dumping measures, that this was long 
enough, and that the measures should now be allowed to lapse However, there is no 
statutory time limit to the period of operation of anti-dumping measures other than the 
five-year period mentioned in Article 15(1) of Regulation (EEC) No 2423/88. As that 
Article itself makes clear, a review held at the end of this time limit can, where 
warranted, lead to the confirmation, as in this case, of the existing measures for a new 
period. Also, while the existing anti-dumping measures have been in force for eight 
years, this review has shown that their effectiveness in protecting the Community 
industry has been limited by the fact that due to the behaviour of the Japanese 
exporters the effect of dumping on the Community market, manifested by price 
depression and undercutting, remains substantial. 
5. Residual duty 
(105) The verification visits to cooperating exporters covered the near totality of PPC 
exports from Japan to the Community during the investigation period. It was 
considered appropriate that for those companies which did not cooperate in this 
review, the residual duty be set at the highest of the individual duty rates for the 
exporters investigated, i.e. at 20%, in the absence of any information justifying a 
higher or lower level. The same rate should apply for those companies which did not 
export to the Community during the investigation period. However, for the latter 
companies, this is subject to the possibility of a newcomer review pursuant to 
Article 11(4) of Regulation (EC) No 3283/94. 
6. Undertakings 
(106) It was considered that the undertaking of Kyocera Corporation, Tokyo, under which 
it was committed to giving the Commission sufficient advance notice if it were to 
recommence exports to the Community, should be allowed to lapse. 
(107) As regards the undertakings given under Article 13(10) of Regulation (EEC) 
No 2423/88, the Commission has received regular information enabling it to verify the 
undertakings given. The weighted average value of parts and materials of Japanese 
origin used in the assembly or production of PPCs in the Community has remained 
at less than 60% of the total value of all parts and materials. The undertakings will 
lapse at the end of the investigation, 
HAS ADOPTED THIS REGULATION: 
Article 1 
A definitive anti-dumping duty is hereby imposed on imports of plain paper 
photocopiers falling within CN codes (ex) 9009 12 00 (Taric code: 9009 12 00*19) 
and (ex) 9009 21 00 (Taric code: 9009 21 00*19), originating in Japan. 
For the purpose of this Regulation, plain paper photocopiers shall be understood to 
mean analogue, indirect-process copiers incorporating an optical system, irrespective 
of their copy speed and whether imported as a whole or in modules. Such copiers are 
formed by four basic elements, i.e. imaging, photo-conducting or developing, transfer 
or fixing and paper transport system. Digital copiers, which use a scanner and an 
image processor to transform an original image into a digital signal and then 
recompose that signal, with or without changes, into a copy, are not part of this 
proceeding and are thus not subject to the duty. In addition, the following products 
shall not be subject to the duty: 
38 
analogue full-colour copiers (machines which have the capacity to make full 
colour copies automatically from corresponding coloured originals in one copying 
cycle by means of a polychromatic process), 
aperture card reader printers and microfilm printers (machines which have the 
capacity to read images from and make enlarged copies of microfilms, 
microfiches and aperture cards), 
whiteboard copiers (machines which have the capacity to make copies from 
information displayed on screens), and 
large format copiers (machines capable of making copies of A2 size and larger 
from originals larger than A2 size) 
For the avoidance of doubt, highlight PPCs (PPCs which reproduce only a few colours 
to draw attention to certain segments of a document) and A2 size PPCs (PPCs capable 
of making A2 size paper copies - but not larger - from A2 size paper originals or 
larger) are subject to the duty. 
3. The rate of the duty shall be 20% of the net free-at-Community frontier price before 
duty (Taric additional code: 8841), with the exception of imports which are 
manufactured by the following companies, which shall be subject to the following 
rates of duty: 
Copyer Company Limited, Tokyo 7.2% (Taric additional code: 8838), 
Mita Industrial Company, Osaka 12.6% (Taric additional code: 8839), 
- Toshiba Corporation, Tokyo 10% (Taric additional code: 8840) 
Article 2 
Regulation (EEC) No 535/87 is repealed. 
Article 3 
This Regulation shall enter into force on the day following that of its publication in the 
Official Journal of the European Communities. 
It shall expire on 14 August 1998, save that should any review of the measures adopted by 
this Regulation be pending on that date, it shall remain in force until that review is concluded. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at Brussels, For the Council 
The President 
39 

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