COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 24.10.1997 
COM(97) 551 final. 
Amended proposal for a 
COUNCIL REGULATION (EC) 
imposing a definitive anti-dumping duty on imports of certain footwear with textile 
uppers originating in the People's Republic of China and Indonesia 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
(1) The Commission, by Regulation (EC) No 165/97l , imposed provisional anti­
dumping duties on imports into the Community of certain footwear with textile 
uppers originating in the People's Republic of China and Indonesia. 
(2) Certain interested parties, Community producers, exporters, as well as importers 
submitted comments in writing. Those parties who so requested were granted an 
opportunity to be heard by the Commission. The Commission considered all the 
views expressed before drawing its final conclusions. 
(3) The Commission accepted the claim by one Indonesian exporter regarding the 
omission in the dumping calculation of a factor affecting price comparability, and 
consequently revised downwards its calculations of normal value and dumping for 
both Indonesia and for China since Indonesia was used as the analogue country for 
the purpose of calculating normal value in respect of China. 
(4) It was further considered, with the complainants' consent, that slippers as well as 
beach shoes should be excluded from the proceeding, the scope of which was thus 
limited to the majority of imports, i.e. those of outdoor footwear. 
(5) In addition, following the submissions received and a further analysis of the data 
available, the Commission considered that the adjustment used at provisional stage 
to take into account the difference of level of trade between the CIF imports and the 
Community producers' delivered sales in the calculation of the injury elimination 
levels ought to increased. 
1 OJ No L 29, 31.1.1997, p.3. 
(6) Subsequent to the imposition of provisional measures, the Commission -further 
examined matters deemed relevant in analysing the issue of Community interest. 
Having examined a wide variety of aspects and the various interests involved, no 
compelling reasons have come into light which would lead to the conclusion that 
the imposition of definitive measures would not be in the interest of the 
Community. 
(7) In the light of the above, the Commission confirmed its provisional conclusions to 
the effect that the footwear concerned originating in Indonesia and the People's 
Republic of China was being dumped in the Community and was causing material 
injury to the Community industry, and concluded that it is in the Community 
interest to take protective measures in the form of definitive anti-dumping duties 
and to collect definitively the provisional duties at the duty rate definitively 
imposed. 
(8) The exclusions and adjustments in the calculations presented above affect the 
provisional findings, to the effect that the individual duty rates for the cooperating 
Indonesian companies are reduced to a range from 0% to 14.1%, as well as the 
residual injury elimination levels which amount to 14.1% for Indonesia and 49.2% 
for the People's Republic of China. 
(9) In accordance with Article 9 of Council Regulation (EC) No 384/96, the 
Commission therefore proposes that the Council impose definitive anti-dumping 
duties on imports of certain footwear with textile uppers originating in the People's 
Republic of China and Indonesia. In the light of the extent of the injury, it is also 
recommended that the Council collect the provisional anti-dumping duties to the 
extent of the amount of the definitive duties imposed. 
^hjL, 
Amended proposal for a 
COI JNCIL REGI JLATION (EC) 
imposing a definitive anti-dumping duty on imports of certain footwear with textile 
uppers originating in the People's Republic of China and Indonesia 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community^ and in particular Article 9(4) thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
A. PROVISIONAL MEASURES 
(1.) By Commission Regulation (EC) No 165/97(2> (hereinafter referred to as 'the 
provisional duty Regulation') provisional anti-dumping duties were imposed on 
imports into the Community of certain footwear with textile uppers falling within 
Combined Nomenclature (CN) codes 6404 19 10 and ex 6404 19 90 originating in 
the People's Republic of China and Indonesia. 
1 OJ No L 56, 6.3.1996, p. 1 Regulation as amended by Regulation (EC) No 2331/96 (OJNoL317, 
6.12.1996, p. 1). 
2 OJ No L 29, 31.1.1997, p.3. 
B. SUBSEQUENT PROCEDURE 
(2) Following the imposition of the provisional anti-dumping measures, certain 
interested parties submitted comments in writing. 
(3) Those parties who so requested were granted an opportunity to be heard by the 
Commission. 
(4) The Commission continued to seek and verify all information deemed necessary for 
its definitive findings. 
(5) Parties were informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of definitive anti-dumping 
duties and the definitive collection of amounts secured by way of provisional 
duties. They were also granted a period within which to make representations 
subsequent to this disclosure. 
(6) The oral and written comments submitted by the interested parties were considered, 
and, where deemed appropriate, taken into account in the Commission's definitive 
findings. 
C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
1. Product under consideration 
(7) For the purpose of its preliminary findings, the Commission considered "non-
sports" footwear with outer soles of rubber or plastics and uppers of textile 
materials, intended for use either indoor or outdoor (falling within CN codes 
6404 19 10 and ex 6404 19 90), as one single category of products. In this regard, 
certain interested parties claimed that slippers and outdoor footwear were too 
different, in particular in terms of use, to belong to the same category of products. 
In particular, the parties concerned have stressed that an assessment of whether 
indoor and outdoor footwear can be regarded as one single category of products 
should entail that a twofold "interchangeability test" be carried out: firstly whether 
an outdoor shoe can replace an indoor shoe, secondly whether an indoor shoe can 
replace an outdoor shoe. 
(8) As regards the first question, it is worth noting that some light outdoor shoes of the 
kind under consideration can replace slippers for indoor use. Conversely, slippers, 
due to their usual flimsiness, do no appear to be suitable for most outdoor uses. 
This also appears to be confirmed by the consumers' perception of both products. 
It has therefore to be concluded that the second "interchangeability test", i.e. 
whether an indoor shoe can replace an outdoor shoe, is not satisfied and 
accordingly that slippers and outdoor footwear of the kind under consideration 
cannot be regarded as one single category of products. Such a conclusion also 
meant that the results of the investigation would have to distinguish between 
slippers and outdoor footwear. 
Informed of this conclusion, the representatives of the complaining Community 
industry, while indicating that they did not fully share the above views, did not 
oppose the withdrawal of slippers from the proceeding. 
(9) Reffering to the exclusion, at the provisional stage, of certain types_ of footwear 
sometimes known as "espadrilles", several interested parties have requested, on 
various grounds, the further exclusion of certain allegedly very specific products 
from the scope of the proceeding. These claims are analysed below. 
a) Neoprene shoes 
(10) Several importers requested the exclusion of certain types of footwear sometimes 
known as "diving boots", made of neoprene and used for certain water sports such 
as diving. Indeed, neoprene is a material which is generally strengthened with a 
textile coating when used for manufacturing footwear, with the result that the 
constituent material of the upper having the greatest external surface area is the 
textile material, and thus the footwear concerned classifiable under the CN heading 
6404. In addition, since certain water sports, such as diving, are not considered 
expressly as a "sporting activity" within the meaning of the Combined 
Nomenclature, the neoprene shoes concerned were, it was claimed, classifiable 
under CN code 6404 19 90, although such a specific product would not belong to 
the single category of products under consideration. 
(11) Having investigated this issue in more detail the Commission found that the 
neoprene shoes in question are sold in water sport equipment stores and not in 
footwear stores and clearly belong to a distinct market. Their physical 
characteristics and the use which they are intended for, make them, in the 
consumer's perception, a clearly distinct product from those belonging to the single 
category of "non-sports footwear with textile uppers" under consideration. 
(12) Asked to react on this issue, the representatives of the complaining Community 
industry raised no objections but indicated that, should an exclusion be granted, 
their main concern would be that the description of the footwear concerned be 
sufficiently precise in order to avoid any circumvention of duties. 
(13) For all the above reasons and in consideration of the fact that the footwear 
concerned is clearly identifiable by the customs authorities, it is considered that the 
neoprene shoes sometimes known as "diving boots" or "water sports boots" should 
be excluded from the scope of the proceeding. 
b) " Trekking shoes " 
(14) Within the meaning of the Combined Nomenclature, "trekking" is not considered 
as a sporting activity and therefore trekking shoes with textile uppers generally fall 
within CN code 6404 19 90. Certain parties requested that this product be excluded 
from the scope of the proceeding, on two grounds. The first ground was based on 
the fact that the product in question was sold at a high, non dumped, price. 
Moreover, certain importers claimed that they could have legitimately expected that 
trekking shoes would not be subjected to measures because the Spanish version of 
the notice of initiation^) had translated, in the list of exclusions contained therein, 
the words "cross-country ski footwear" by "botas de senderismo", the Spanish 
equivalent of "trekking shoes". 
OJNoC45, 22.2.1995, p. 2. 
(15) As to the first ground, it has to be noted that the information made, available by 
cooperating exporters and used by the Commission for the investigation of 
dumping did not confirm the absence of dumping on this type of footwear. 
(16) As regards the second ground, i.e. the allegedly legitimate expectation of certain 
importers that trekking shoes would not be subjected to measures (stemming from 
the fact that the Spanish version of the notice of initiation had mis-translated the 
words "cross-country ski footwear"), this argument cannot be accepted for the 
following reasons: 
Reference should first be made to the Court of Justice's jurisprudence (CASE 
250/80, Anklagemyndigheden v. Schumacher and others, Judgment of 27 October 
1981), according to which it is appropriate, where there is a disparity between 
various language versions of provisions, to interpret them in their context and and 
with particular regard to their objectives. 
It has been a long standing approach of Community institutions to set up a closed 
list of so-called "sporting activities" within the framework of the Combined 
Nomenclature. More specifically, it was quite clear that the wording of the notice 
of initiation was a mere quotation of the provisions of subheading note 1 (b) of 
Chapter 64 of the Combined Nomenclature, in the Spanish version of which the 
words "ski-boots and cross-country ski footwear" are translated by the words 
"calzado para esquiar" and not by the words "botas de esquî, senderismo". 
(17) Finally, it must be stressed that the footwear with textile uppers of the type-called 
"trekking shoes" is widely produced in the EC, was within the scope of the 
complaint and clearly fell within the scope of the investigation. Indeed, most of 
these products may also be used, and are actually used, for other purposes than the 
"technical" one which they are supposed to be intended for, which confirms their 
belonging to the single category of product under consideration. 
Accordingly, it is considered that the so-called "trekking shoes" should remain 
within the scope of the proceeding. 
c) Medical shoes 
(18) Orthopaedic shoes, i.e. intended to correct a specific and permanent disability or 
physical abnormality, belong to chapter 90 of the Combined Nomenclature and are 
not covered by the present investigation. The product, falling within CN code 
6404 19 90, for which an exclusion was claimed is a medical footwear of the type 
sold in chemists' stores, not per pair but per "foot", and which is not specifically 
adapted to a given person but is intended for anybody having for instance a 
sprained or broken ankle. This claim was made on the grounds that such a specific 
product could not belong to the single category of products under consideration. 
(19) It is clear that the medical shoes in question belong to a different market (they are 
not sold in footwear stores but by chemists). In addition, they are marketed in a 
very specific way (per "foot" and not per pair, and in specific shapes in order to fit a 
plaster rather than a foot), which makes them, in the consumer's perception, a 
clearly distinct product from those belonging to the single category of product 
under consideration. 
(20) Asked to react on this issue, the representatives of the complaining-Community 
industry argued that some production of medical footwear exists in the Community 
but did not oppose the conclusion that the shoes in question were sufficiently 
specific, in terms of physical characteristics and uses, for them to fall outside the 
single category of "non-sports footwear with textile uppers" under consideration. 
(21) For all the above reasons (and in consideration of the fact that such a specific 
product is clearly identifiable by the customs authorities), it is considered that the 
medical footwear of the type sold in chemists' stores, not per pair but per "foot", 
should be excluded from the scope of the proceeding. 
d) "Beach shoes " 
(22) "Beach shoes" are shoes the upper of which is limited to a stripe of textile material, 
this upper being attached on both sides of a thick, lightweight alveolar plastic, sole. 
Certain interested parties claimed that such a product should vbe excluded from the 
scope of the present proceeding on the ground that it is a product which is too 
specific to belong to the single category of products under consideration. It was 
also claimed that such a product is no longer produced in the Community. 
(23) Asked to comment on this issue, the representatives of the complaining Community 
industry conceded that, whilst production of such footwear still exists in the 
Community, it is nevertheless of marginal importance. Moreover, the 
representatives of the Community industry agreed that, provided that such an 
exemption is limited to a product which cannot be used for walking beyond areas 
such as a beach or swimming pool, and given that it can be distinguished from 
other types of footwear, it could be excluded from the scope of the present 
proceeding. 
(24) For the above reasons, it is considered that the so-called "beach slippers" should be 
excluded from the scope of the proceeding. 
2. Like product 
a) Arguments based on the existence of different production methods 
(25) The question of vulcanised footwear, already raised at provisional stage (see recital 
18 of the provisional duty Regulation), has again been addressed by certain 
interested parties. In particular, allegations were reiterated that the Community 
industry did not produce shoes with vulcanised soles in sufficient quantities and 
that its production is rather concentrated on injection moulding. The results of the 
further examination carried out are as follows. 
(26) Whilst it is clear that the vulcanisation process is different to that of injection 
moulding, it should be recalled that the main relevant criteria in the determination 
of the "like product" are based on the general technical or physical characteristics 
and the use or functions of products and not the method used for their production. 
In this context, minor differences resulting from different production processes are 
generally disregarded. 
(27) As to the technical arguments raised by various parties, namely the fact that 
vulcanisation means rubber while injection means inter alia PVC, thus differences 
of access to the raw material, visual differences (PVC is more "shiny" than rubber) 
and smell (rubber has a typical smell but PVC has none) and different dissolving 
and melting properties, it cannot be denied that there are differences between the 
chemical and physical reactions which take place during the manufacturing process 
of these types of footwear. However, it should be kept in mind that synthetic 
rubber is generally used in the manufacture of vulcanised footwear. Thus, 
irrespective of the production process, the raw materials involved in these 
processes, i.e. synthetic rubber and PVC, are all petrochemical derivatives. 
(28) Synthetic rubber is indeed available in all parts of the world, one of the main 
applications being the tyre industry. The argument that producers of vulcanised 
footwear in developing countries enjoy better access to the raw materials cannot 
therefore be considered as relevant; this may make the manufacturing process more 
cost effective but it has no impact on the fact that the product concerned is alike to 
the Community product. It should also be noted that, to differentiate the shoes in 
question, the parties had to invoke criteria which go far beyond the usual criteria. If 
PVC, unlike rubber, does indeed melt, it only does so above 80°C, well above the 
temperatures that might be encountered under normal conditions of use. Similarly, 
customers would not, under normal conditions, perform a dissolving test before 
buying. 
10 
(29) As regards the alleged decline in the production of vulcanised footwear -in -the 
Community, it has to be stressed that this argument was raised by certain importers 
only at a very advanced stage of the proceeding. However, the evidence received 
shows that this production process is still used in the Community (for instance in 
Spain where a number of producers have declared that they could still produce a 
total of 22 million pairs/year of this type of shoe) and that there are numerous 
producers in the Community willing and able to produce vulcanised footwear. 
The investigation has also shown that, contrary to allegations made by a number of 
parties, vulcanised footwear imported from the People's Republic of China and 
Indonesia is sometimes sold as a branded product, packed in a cardboard box and 
sold in specialised shoe shops whilst Community produced injection moulded 
footwear can be sold as a non-branded product, in plastic bags and in discount 
stores. 
(30) The conclusion to be drawn from the above is that notwithstanding technical 
differences in the manufacturing process used, vulcanised footwear is in direct 
competition with injection moulded footwear. Indeed, these types of footwear are 
so similar in all respects that the average consumer would not be able to 
differentiate them. 
H 
There is thus no reason to consider that vulcanised footwear produced-in-the 
People's Republic of China and Indonesia and exported to the Community is not a 
like product to injection moulded footwear produced in the Community, within the 
meaning of Article 1(4) of Regulation (EC) No 384/96 (hereinafter referred to as 
'the Basic Regulation'). 
b) Arguments based on the alleged existence of different "product segments " 
(31) Certain parties have reiterated that imported and Community produced footwear 
belong to different product segments which do not compete with each other. They 
claimed that footwear, imported at a price higher than the average, would not be 
alike, within the meaning of Article 1(4) of the Basic Regulation, to footwear 
imported below or at the average price. 
(32) This issue has been the source of repeated and seemingly contradictory statements 
by importers, some of them claiming that they import low quality footwear that they 
simply could not find in the Community, while others claimed that they order in the 
People's Republic of China or in Indonesia sophisticated products manufactured in 
accordance with their own specifications, design and sometimes raw materials. 
This contradiction simply shows that the People's Republic of China and Indonesia 
are in fact capable of producing, and do indeed produce and export to the 
Community, the full range of products on offer in the market. This is not apparent 
from import statistics because the average prices are driven by the bulk of imports 
which indeed comprises low-priced footwear. The imports in question and the 
products manufactured by the Community industry are therefore alike within the 
meaning of Article 1(4) of the Basic Regulation. 
12 
c) Conclusion 
(33) In the light of the above, it is confirmed that footwear subject to this proceeding 
produced in the People's Republic of China and Indonesia and exported to the 
Community is a like product to footwear produced in the Community within the 
meaning of Article 1(4) of the Basic Regulation. Similarly, footwear subject to the 
current investigation produced in Indonesia is a like product to the footwear 
produced and exported from the People's Republic of China to the Community. 
D. DUMPING 
1. Indonesia 
(a) Normal value 
(34) The Indonesian exporters contested the Commission's use, in constructing normal 
value, of a profit margin established on the basis of one company's profitable 
domestic sales of a product other than the product concerned, in this case footwear 
with leather or plastic uppers. They alleged that this profit margin was excessive 
and not representative of the industry. 
In addition, as the profit margin had been used in the construction of normal value 
for all companies in the sample for Indonesia, the normal values and by extension 
the dumping margins were allegedly excessive and unfair. They contended that the 
use of the profit margin of 7% deemed acceptable by the Commission in the case of 
the Community industry should have been used. 
13 
(35) This argument could not be accepted. Firstly, Article 2 (6) (b) of the-Basic 
Regulation provides that where there are no domestic sales of the product 
concerned, the SG&A and profit used in the construction of normal value can be 
established on the basis of the actual amounts applicable to production and sales of 
the same general category of products for the exporter or producer in question in 
the domestic market of the country of origin. This was the methodology applied in 
the case of the company referred to at recital 34 of the present Regulation. 
In the case of two of the sampled companies which had neither domestic sales of 
the product concerned nor of the same general category of product, normal value 
had to be established in accordance with. Article 2 (6) (c) of the Basic Regulation 
i.e. any other reasonable method. It was held that in the circumstances of this 
investigation the most reasonable method was to use the SG&A and profit found 
for the company referred to at recital 34 of the present Regulation. 
Secondly, the 7% profit margin used in the calculation of a non-injurious price for 
the Community industry is the minimum that the Commission considers necessary 
to remove the injury suffered by the Community industry and has thus nothing to 
do with the profit margin used in the construction of normal value, which has to be 
based on the actual profit achieved on the Indonesian market. In this regard, it 
should be noted that the European Court of Justice has consistently indicated that 
preference should be given to the use of actual profit margins in the construction of 
normal value. 
14 
(36) One of the Indonesian companies included in the sample contended that- in 
calculating its normal values, the Commission should have used the cost estimates 
which they had submitted during the on the spot verification. In this context, it 
should be pointed out that the company concerned did not have a cost accounting 
system, and had only cost estimates which had been used to make price offers to 
potential customers. The latter were the costs reported in their response to the 
questionnaire. ,_ 
This claim had to be rejected since the company was unable to demonstrate the 
correctness of the cost estimates. Furthermore, for some of the models, no 
information at all regarding cost was available. Moreover, no information beyond 
direct material cost was available for any of the models. Therefore, the approach 
adopted in the provisional duty Regulation, i.e. to recalculate costs by reallocating 
the total cost of sales, exclusive of SG&A and profit, over the models concerned 
using the turnover in the company's own accounts is confirmed, as this was deemed 
to be the most appropriate method for establishing the costs of each model of 
footwear. 
(b) Export price 
(37) In the absence of any comments on the establishment of export prices the 
provisional determinations are hereby confirmed. 
15 
(c) Comparison 
(38) The Indonesian exporter whose profitable domestic sales were used in the 
construction of normal value for Indonesia and referred to in recital 34 of the 
present Regulation claimed that the Commission omitted to take account of a factor 
affecting price comparability as provided for in Article 2 (10) of the Basic 
Regulation by not granting an allowance to normal value for credit costs. As the 
Commission established that this adjustment was indeed omitted, it has now 
reviewed its calculations accordingly. As the SG&A of this company was used in 
the construction of normal value for the other Indonesian companies in the sample, 
a reduction of their normal value was also required to reflect the allowance granted. 
All dumping calculations have been adjusted accordingly. 
(39) The company referred to at recital 36 of the present Regulation contended that the 
dumping margin had been created by averaging the costs of individual models and 
the application of an artificially high profit margin in the construction of normal 
value. It claimed that the use of averaging meant that normal values were inflated 
and all low priced exports dumped. It further contended that the use of the 
individual normal values it had submitted and the application of a reasonable profit 
would have led to a finding of no dumping. 
In view of the circumstances outlined in recital 36 of the present Regulation, the 
Commission considered that, in order to arrive at a reasonably accurate calculation 
of costs it had no alternative other than to recalculate the costs using the company's 
own accounting records and to reallocate the total cost of sales, exclusive of SG&A 
and profit, over the models concerned. 
16 
(d) Dumping margins 
(40) The methodologies used to calculate definitive dumping margins are the same as 
those used for the calculation of the provisional dumping margins. However, 
dumping margins have been amended in order to take account of the allowance to 
normal value now granted as described in recital 38 of the present Regulation. 
(i) Cooperating companies in the sample 
(41) The margins thus established and expressed as a percentage of the cif price at 
Community frontier are the following: 
- P.T. Dragon 4.0% 
- P.T. Emperor Footwear 0.0% 
- P.T. Sindoll Pratama 24.9%. 
(ii) Cooperating producers/exporters not investigated 
(42) In view of the above changes in the dumping margins of the cooperating companies 
in the sample, the margin established for the two cooperating companies not 
investigated, expressed as a percentage of the cif price at Community frontier, is 
now definitively established at 14.2%. 
(iii) Residual dumping margin 
(43) In view of the above changes in the dumping margins of the cooperating companies 
in the sample, due account being given to the restriction in the product coverage 
mentioned in recital 8, the margin established for definitive determinations, 
expressed as a percentage of the cif price at Community frontier, is now 39.7%. 
17 
2. People's Republic of China 
(a) Individual treatment 
(44) The Chinese exporters argued that the Commission did not sufficiently motivate its 
rejection of the requests for individual treatment by the cooperating Chinese 
exporters. They insisted that individual treatment be granted for definitive 
determinations. 
It should be reiterated that it is the Commission's policy to calculate a country-wide 
duty for non-market economy countries except in those cases where companies can 
demonstrate independence from the State. However, none of the companies 
concerned were able to adequately demonstrate such independence since they all 
had links to the Chinese State, either directly or via Provincial or municipal 
authorities. In the absence of any further information on this issue, the provisional 
findings with regard to the non-acceptance of the requests for individual treatment 
are hereby confirmed. 
(b) Normal value 
(45) The Chinese exporters alleged that they received insufficient information by the 
Commission regarding the Indonesian shoes used for comparison with the exported 
Chinese models. They alleged, in particular, that insufficient information was 
disclosed to them concerning raw materials used and production processes 
employed in the production of the Indonesian shoes to enable them to claim 
adjustments for differences in physical characteristics. 
18 
In this regard, it should be pointed out that, in an effort to come up with the fairest 
model comparison, the Commission made repeated efforts to get information from 
the Chinese exporters concerning the design and make up of, and material used in, 
the models which they exported to the Community. Despite this, the Chinese 
exporters only supplied very partial information. Accordingly, the Commission had 
to make its assessment of comparability on the basis of the information available 
and as was the case for provisional measures, the Indonesian models used were 
those found to be similar or, in the absence of similar models, those most closely 
resembling the Chinese models exported to the Community by the Chinese 
companies in the sample. All the information upon which the comparison was 
based was made available to the Chinese exporters. 
(c). Export price 
(46) In the absence of any comments on the establishment of export prices the 
provisional determinations are hereby confirmed. 
(d) Comparison 
(47) Since Indonesia was the analogue country used to establish the normal value for the 
People's Republic of China, the single margin for the People's Republic of China 
was also adjusted downwards to reflect the granting of the allowance for credit 
costs, to Indonesian normal values referred to in recitals 38 and 40 of the present 
Regulation. 
19 
(e) Dumping margin 
(48) The Chinese exporters questioned, in some instances, the Commission's 
comparison of weighted average normal values to Chinese export prices of 
individual export transactions to the Community. They claimed that export prices 
did not sufficiently differ amongst different purchasers, regions or time periods and 
that consequently, in accordance with Article 2 (11) of the Basic Regulation, both 
export price and normal value should be compared on a weighted average basis. 
Having reviewed its calculations, the Commission found that the differences in 
prices were small and that for the purposes of definitive determinations weighted 
average normal values should indeed be compared with weighted average export 
prices. 
On that basis, withdue account being given to the restriction in the product 
coverage mentioned in recital 8, the single dumping margin calculated for the 
People's Republic of China, expressed as a percentage of the cif price at 
Community frontier, was found to be 133.2%. 
E. COMMUNITY INDUSTRY 
(49) Certain parties have reiterated and expanded their allegations that the Commission 
has failed to establish the representative nature of the Community industry 
providing evidence of injury. This was based on the alleged non reliability of the 
"total Community production" figure used and entailed a criticism of the sampling 
technique applied by the Commission. The justification of the "anonymous 
treatment" granted to certain Community producers was also questioned. 
20 
1. Total Community production 
(50) It should be recalled that the level of support for the complaint was checked before 
initiation. The total estimated EC production volume of the like product on which 
the standing of the 68 complaining Community producers was assessed, was 
subsequently re-examined (in respect of 1991 until 1994) at the premises of 
national footwear federations and confirmed to be accurate. 
Moreover, it has to be stressed that the "total production" figure of the like product 
on which the standing was assessed, was set at the maximum possible production in 
the Community. Indeed, due to the lack of reliable data, no examination could be 
carried out in order to determine, in accordance with the provisions of 
Article 4 (1) (a) of the Basic Regulation, whether the production volume of certain 
non^complaining producers should have been excluded from the "total production" 
figure, on the grounds that their core business is importing rather than producing 
within the EC. 
Such would-be Community producers, of which some are known to have made 
considerable imports, are also known to produce a relatively large number of pairs 
in the EC. Had sufficient information in this respect been made available, it is 
likely that part of this Community-produced volume would have been excluded 
from the total production figure. Conversely, the "core business" test was carried 
out vis-à-vis the 28 companies in the "first group" as defined at recital 6 of the 
provisional duty Regulation and all were found (as explained at recital 55 of the 
provisional duty Regulation) to have their core business in the Community. 
(51) The representative nature of the investigated Community industry, assessed in a 
reasonable way and on the basis of fully accurate figures, is therefore confirmed. 
21 
2. Sampling 
(a) Initial investigation 
(52) In this respect, it should be recalled that given the very large number of potential 
parties to the proceeding, the notice of initiation of the present proceeding 
mentioned that the investigation might have recourse to sampling. As a result, 
from the beginning of the investigation, cooperation was sought (via national 
federations) from a limited number of Community producers selected amongst the 
68 companies supporting the complaint. 
Meaningful replies were received from 28 producers, amongst which, for 
verification purposes, 9 were selected and their replies subjected to in depth on-spot 
verifications (this latter group of producers is referred to as "the verification 
sample" in the provisional duty Regulation). 
The 28 companies in the first group do account for slightly more than 25% of 
Community output of the like product, thus qualifying, in the absence of declared 
opposition to the complaint, as the Community industry.. 
22 
(b) Subsequent developments 
(53) As has been mentioned in recital 8 of the present Regulation, it was decided to 
restrict the scope of the present proceeding to footwear intended for outdoor use 
and to exclude slippers. A separate examination of information relating exclusively 
to outdoor footwear covered by the present proceeding was thus deemed necessary. 
This examination has shown that 17 out of the above mentioned 28 Community 
producers in the first group and 8 out of the 9 Community producers in the 
verification sample produce footwear intended for outdoor use. It was established 
that, in line with the criteria used in assessing the representativity of the first group 
(see recital 59 of the provisional duty Regulation), the 17 producers mentioned are 
equally representative of the Community industry producing outdoor footwear. The 
fact that these 17 Community producers were found to represent 22,3% of 
Community output of the like product, the definition of which had been resticted in 
the course of the present investigation, does not alter the above mentioned 
conclusion on the representativity of the Community industry. Indeed, in a situation 
such as the present, where the number of Community producers is such as to justify 
the recourse to sampling, it is almost inevitable that the sample selected, whilst 
being representative of the Community industry, will not reach the 25% threshold. 
(54) Concerning the representativity of the investigated Community industry, it has to be 
stressed that the injury findings were based on verified information collected from 
various appropriate sources, all representative of the Community industry: 
23 
• Production, sales, market share and employment in the Community, were 
established at the level of each national footwear federation and thus cover the 
entire Community production of the like product. This fact clearly contradicts the 
allegation made by an interested party further to the final disclosure according to 
which figures relating to the Italian footwear federation had been omitted when 
overall injury indicators were established; 
• General trends concerning prices, costs and profitability were established at the 
level of the cooperating producers in the first group; 
• Undercutting and underselling exercises were carried out on the basis of fully 
verified price and cost data collected from the companies in the verification sample, 
which are representative in terms of size and product range as well as located in 
major producing Member States. 
3. Anonymous treatment of the companies in the verification sample 
(55) Certain parties have reiterated and expanded their allegations that the Commission 
was unjustified in granting "anonymous treatment" to the companies in the 
verification sample. These parties have claimed that complaining domestic 
industries should be prepared to face any kind of "commercial retaliation" and have 
requested that at least the names of the companies in the first group be disclosed. 
24 
(56) In this respect, it has to be stressed again that the anonymous treatment was granted 
because the threat exerted went far beyond what could be considered as "normal" in 
commercial relations. The limited protection so granted was moreover considered 
particularly appropriate in the context of a sampling exercise, where a few selected 
companies are particularly exposed, although they represent, and act for the benefit 
of, a much larger group. 
(57) As regards the companies in the first group, the company names on the non­
confidential questionnaire responses were generally replaced by an identification 
symbol and most national footwear federations (which transmitted the answers) 
listed separately the names of the companies having replied, without of course 
disclosing the correspondence between the identification symbols and the names in 
the list. It should thus be stressed that all interested parties have had access to the 
non-confidential data provided by both the producers in the first group and, in a 
separate file, to the verified and confirmed data of the companies in the verification 
sample. 
(58) Given that the questionnaire responses of the companies in the first group as well as 
the lists established by federations was made accessible to all parties before the 
Commission became aware of the above pressures, it was considered that the files 
in question, which permitted the identification of most companies, could not be 
made anonymous ex post and should thus continue to be accessible in an unaltered 
form. Under these circumstances, it was considered appropriate to include, in the 
final disclosure sent to all parties, the list of companies in the first group, whilst the 
name of the companies in the verification sample was kept undisclosed. 
25 
F. INJURY 
1. Cumulative assessment of the effects of the dumped imports 
(59) Certain parties have claimed that the impact of Indonesian and Chinese imports 
should not be cumulatively assessed. In particular, it has been alleged that two 
conditions, which ought to be fulfilled to make cumulation possible, were not met: 
(60) Firstly, it has been argued that in order to determine, for the purpose of applying 
Article 3 (4) of the Basic Regulation, whether the margin of dumping established in 
relation to the imports from each country (for which cumulation with others is 
considered) was more than de minimis, the Institutions should not take account of 
residual margins but should rather rely on the margins found for cooperating 
exporters. This assertion cannot be accepted, in particular in consideration of the 
low level of cooperation obtained from Indonesian exporters. In addition, it is also 
worth noting that the margins of dumping established in respect of two Indonesian 
cooperating exporters (out of three selected in the sample) were more than de 
minimis. 
(61) Secondly, it has been argued that certain differences in conditions of competition 
(allegedly evidenced by average import prices per pair, said to be markedly higher 
in the case of Indonesia when compared to the People's Republic of China) were 
such as to make cumulation unwarranted. In this respect, although the alleged 
differences are somewhat confirmed at Eurostat level, it was considered that: 
26 
' - these differences are not such as to allow a clear distinction to be made between 
the Indonesian and Chinese pricing policies, (in particular when the average prices 
of both Indonesia and the People's Republic of China are compared to the average 
price of the other third countries supplying the Community market, which is much 
higher than the average prices of both countries under investigation); 
- a detailed examination of the available information shows that imports from 
Indonesia, as well as those from the People's Republic of China, cover the full 
range of prices; and 
- on the basis of the information available, the most plausible explanation of the 
existing difference is a slightly different product mix rather than a clearly different 
pricing policy. 
(62) Further to the exclusion of slippers from the single category of products under 
consideration, the conclusions as to whether the cumulative assessment of imports 
from both countries was warranted were reexamined. In 1994, the volume of 
footwear imported under CN code 6404 19 90 originating in the People's Republic 
of China stood at 101.1 million pairs, .id that originating in Indonesia at 24 million 
pairs. The market shares of these dumped imports for the same period stood at 
50.5% and 12% respectively. 
Moreover, substantial dumping margins have been confirmed in respect of these 
products, and the conclusions set out in recital 68 of the provisional duty 
Regulation as regards the conditions of competition on the market could be 
confirmed after the exclusion of slippers from the proceeding. On this basis, it was 
considered that the cumulative assessment of the effects of the dumped imports of 
outdoor footwear from the two countries concerned was warranted. Accordingly, 
the provisional findings in this respect (as set out in recital 64 to 69 of the 
provisional duty Regulation) should be confirmed in respect of the restricted 
category of outdoor footwear. 
(63) The total volume of imports of outdoor, footwear from the People's Republic of 
China and from Indonesia taken together increased from 65.4 million pairs in 1991 
to 125.1 million pairs in 1994, a significant increase of more than 90%. This 
corresponds to an increase in combined market share from 40.5% in 1991 to 62.4% 
in 1994. 
2. Undercutting calculation 
(64) It has been alleged that undercutting was not always practised, if at all, at the level 
indicated in the provisional duty Regulation. During the hearings certain parties 
have shown samples of allegedly comparable models where imported models 
(generally manufactured in accordance with the importer's own specifications and 
design) were more expensive than Community-produced ones. 
28 
Although these claims may be true in some particular cases, it has to be stressed 
that they were not confirmed on a broader basis by the investigation into both the 
exporters' prices for certain models and Eurostat prices. In these circumstances, the 
Commission considered it appropriate, for the purpose of establishing definitive 
findings, to continue to rely exclusively on the detailed and/or global information 
collected (and verified to the maximum extent possible) in the course of the 
investigation, on the basis of which the existence of price undercutting has been 
positively established. 
(65) It has been claimed that the adjustment for differences in level of trade was 
insufficient and ought to be revised. In particular, evidence was provided showing 
that the 13% adjustment granted at provisional stage to take account of differences 
in the level of trade between importers and Community producers' clients, only 
covered intra EC transport and other ancillary costs. 
A further analysis was carried out, concentrating on the importers for which 
corroborated data relating to this adjustment had been provided, i.e. the five 
cooperating importers named in the provisional duty Regulation. These importers 
had been the subject of a verification visit and together represented 12.5% of the 
import volume concerned during the investigation period. 
29 
It could be verified that three of them had not sourced the product concerned in a 
significant way from Community producers during the investigation period, but had 
rather the same customers as the Community producers. It was therefore concluded 
that, to be compared in a fair way, import prices had to be adjusted for the costs 
incurred between the importation and the point when the products actually reached 
the customers, and for a reasonable profit. For this purpose, all costs which could 
be allocated to the product concerned were taken into account, with the exception 
of those which appeared to be part of the production costs (such as raw materials 
provided by the importer to the producer in the exporting country) and thus to have 
been included in the customs value of the goods as reported in Eurostat. 
Conversely, two of the five importers appeared to be customers of the Community 
producers, and thus only their costs from CIF to delivered duty paid at their 
warehouse level (DDP) were taken into account, as this corresponded to the level of 
trade where the Community producers' prices and costs had been established. 
For each importer, the relation between the average import price for the product 
concerned and the costs mentioned above was examined. It resulted from this 
analysis that, to adjust the CIF price to a level of trade comparable to that of the 
Community producers' deliveries, two elements had to be taken into account. 
Indeed, although a part of the costs can be considered as proportional to the value 
of the goods, an adequate adjustment was found to require also a fixed amount per 
pair, to reflect the costs incurred inevitably by any importation, independently from 
the goods' value. 
30 
(66) On the basis of the evidence examined it was found that, in order to be compared in 
a fair way to the Community producers' prices and costs, the CIF import price for 
the product concerned had to be adjusted 20% upwards and then increased by an 
amount of 0.2 ECU per pair, plus the normal customs duty rate. 
(67) Calculations have been amended accordingly, resulting in the confirmation of the 
existence of the undercutting practices established in the provisional duty 
Regulation. On the basis of Eurostat, as for the cooperating exporters subject to a 
provisional anti-dumping duty, average undercutting margins, expressed as a 
percentage of the Community industry's prices, were found to be in excess of 7% 
for Indonesia and 18% for the People's Republic of China. 
3. General injury factors 
(68) Since no new representations were made by any interested parties as regards the 
provisional assessment of general injury factors (such as, inter alia, consumption 
on the Community market, production, sales, profitability, and employment of the 
Community industry), no re-examination of the findings concerned was undertaken. 
31 
(69) However, given the exclusion of slippers from the single category, of products 
under consideration, the main findings relating to the market and the Community 
industry manufacturing outdoor footwear, which were not detailled in the 
provisional duty Regulation, are outlined below: 
• the total Community consumption increased from 161.3 million pairs in 1991 
to 200.4 million pairs in 1994. 
• the production decreased from 40.4 million pairs in 1991 to 30.8 million pairs 
in 1994, a 24% drop. 
• the sales experienced a decrease of 45% in volume terms and 32% in value 
terms over the same period, corresponding to a fall in market share from 
20.8% to 9.2%. 
• the profitability on sales of outdoor footwear for companies in the first group 
experienced a decrease from 12.3% in 1991 to 2.8% in 1994, this downward 
trend being confirmed by that established in relation with the companies in 
the control sample. 
• As far as employment and company closures are concerned, due to the ability 
of most companies in the sector to produce both indoor and outdoor footwear, 
no absolute figures limited to outdoor footwear production were established 
in the course of the investigation. In view, however, of the indicators 
presented above, when compared to those established in the provisional duty 
Regulation, the negative trend of employment and the significant number of 
company closures could be confirmed in respect of the Community industry 
manufacturing outdoor footwear. 
32 
4. Conclusion on injury 
(70) In the light of the above and in the absence of other arguments, it is confirmed that, 
as was established in recital 84 of the provisional duty Regulation for the 
Community industry producing both outdoor and indoor footwear, the Community 
industry producing outdoor footwear has suffered material injury within the 
meaning of Article 3 of the Basic Regulation. 
G. CAUSATION 
(71) Most exporters and importers again raisecj the case of imports from Vietnam as 
being a cause of the injury suffered by the Community industry. In this respect, it 
has to be stressed that at the time of the lodging of the complaint Vietnam's known 
share of the outdoor footwear market was relatively limited. The increase which 
took place afterwards was already noticeable during the investigation period, where 
the market share held by the products originating in Vietnam was, however, much 
more limited than that of Chinese products. It follows from the above that the 
effects of Vietnamese imports could not have broken the causal link established 
between the imports subject to the current investigation and the injury suffered by 
the Community industry. 
(72) Since no other potential cause of injury has been put forward with substantiated 
evidence, the provisional findings in this respect as set out at recitals 85 to 95 of the 
provisional duty Regulation are therefore confirmed. Furthermore, in view of the 
above trends, it is considered that the above conclusion applies equally to outdoor 
footwear. 
33 
H. COMMUNITY INTEREST 
1. Impact on consumers 
(73) Although no representations have been received either from consumers or 
consumer organisations following the publication of the provisional duty 
Regulation, some parties have argued that anti-dumping measures would seriously 
affect the Community consumers and, among these, in particular those with the 
lowest income. 
This argument concerning the foreseeable impact of measures on the consumers' 
buying price has been examined in detail. The results of this examination are as 
follows: 
(a) Impact in absolute terms 
(74) Firstly, as far as footwear prices to distributors are concerned, it is likely that the 
Community industry, with a 9.2% market share and a 5.1 ECU per pair average 
price, would not be able to increase its prices above the 4.2% necessary to reach the 
reasonable profit as defined in the provisional duty Regulation (recital 106) without 
running the risk of worsening its current strong downward trend in terms of market 
share. In addition, imports from countries not concerned by this proceeding 
represent 28.4% of the market for the product concerned and it is expected that 
producers in these third countries will not be willing or able to command 
significant price increases. 
34 
As for Indonesia, it should be recalled that the injury elimination level foreseen.for 
this country is considerably lower than for the People's Republic of China, the 
average price of the imports being 2.57 ECU per pair. The market share of 
footwear originating in the People's Republic of China being 50.5%, (with an 
average price of 1.83 ECU per pair) and in view of the duty rate proposed, the 
average maximum foreseeable impact of the measures proposed on the market of 
the footwear concerned as a whole amounts to 0.5 ECU per pair. 
Thus, only if distribution chooses to keep its margins unchanged and charges the 
entirety of its increased costs to the consumers, would the latter have in turn to pay 
the corresponding amount of 0.5 ECU per pair. Since the average per head 
consumption of the footwear concerned in the Community is below one pair per 
person per year, the impact of the proposed measures for the consumer remains 
clearly marginal. 
(b) Impact in relative terms, effect of price on consumption 
(75) In relative terms, the basis of the calculations was the average price of the footwear 
concerned at delivered-warehouse distributor level, namely 3.6 ECU per pair, 
which takes into account, for the imports, the adjustment for differences in level of 
trade referred to in recital 66 of the present Regulation. Using the lowest mark-up 
found among the distribution channels analysed below, i.e. 125%, it is estimated 
that the average price for the consumer of the product concerned is above 8.1 ECU 
per pair. As a consequence, the impact on the consumer price of fully reflected 
duties would be below 6.5%. 
35 
This percentage should, as explained above, be examined in light both .of.the 
absolute value of the increase (0.5 ECU per pair) and the general evolution of 
prices. Indeed, over the four years examined, and due to the penetration of the 
dumped imports, the average market price at delivered-warehouse distributor level 
decreased of more than 16% when corrected from the general inflation rate. 
(76) In the absence of any other element or reaction from consumer organisations, it was 
therefore concluded that the impact pf the proposed measures on the consumer of 
the footwear concerned was likely to be minimal. It could as a consequence be 
concluded that no significant contraction in demand was to be foreseen as a result 
from a possible full reflection of the duty on the consumer price. 
2. Impact on the distribution 
(a) Impact on the distribution as a whole 
(77) It has been argued that the imposition of measures would have a strong negative 
impact on the importers. More globally, diverging views have been expressed on 
the situation of the whole distribution chain which, it has been argued, was an 
activity with a far greater significance in the Community than the footwear 
production, in terms of both turnover and employment. 
36 
It should be recalled first that, by its very nature, for a given quantity_of footwear, 
the distribution chain will have a higher turnover than the manufacturing companies 
it buys from, simply by virtue of its distribution margin. Secondly, the employment 
figures for the footwear distribution in general, where all types of footwear are sold, 
cannot be compared with those of the Community production of the product 
concerned only. 
As consumers do not buy shoes in significant quantities outside the Community, 
negative consequences of anti-dumping duties for the distribution as a whole could 
only result from a significant reduction of consumption and therefore of turnover, 
or a downward pressure on distribution margins in order to minimise an increase in 
consumer prices (and a decrease in consumption). 
As explained above, in the light of the foreseeable impact of possible measures on 
the consumers of the product concerned, it can be considered as highly unlikely that 
consumption of the product concerned would drop significantly, even if the 
distribution sector were to maintain its current margins. 
37 
Taken as a whole, it can therefore be concluded that the effects of possible 
measures on the distribution chain will be very limited. Care was however taken to 
make an in-depth analysis in the light of the structure of footwear distribution in the 
Community. 
(b) Structure of the footwear distribution in the Community 
(78) Among the footwear distribution in the EC, four different channels of sale to the 
end customer are generally identified. These are the branded chains, the 
independent retailers, the non-specialised supermarkets, and, as a fourth category, 
the other types of generally non-specialised distribution (clothing and general stores 
for example). 
(i) The independent retailers 
(79) The traditional distribution channel consists of independent retailers, generally 
buying from wholesalers. In the evolution of the distribution however, wholesalers 
tend to disappear as retailers enter into a closer relationship with a more limited 
number of producers, or tend to group in purchase associations while keeping their 
independence. 
38 
As far as the retailers themselves are concerned, they face an adverse competitive 
situation due to both their individual lack of price control on suppliers and the high 
margins they require to cover the fairly high costs of the city centres retail outlets 
from which they predominantly operate (150% to 200%). In fact, they have lost 
ground in certain Member States to more recently developed forms of distribution 
falling within the other three categories, in particular the branded chains. 
However, as a consequence of their strong presence in some other Member States 
and their situation at the upper end of the market where they maintain a continuous 
commercial relationship with their customers, it should be noted that independent 
retailers are still, at least in terms of value added and employment (over 250 000 
persons), the most important distribution channel in the Community, although 
probably not the first one in terms of market share (in volume). 
(ii) The branded chains 
(80) These chains, which are sometimes involved in production activity in the 
Community, are generally owned by one or two large companies in each country, 
which own several brands and operate across the whole market range. They 
operate from out-of-town super or discount stores, which, because of their sales 
volume, prices and specialisation, can resist the non-specialised supermarkets' 
pressure. 
39 
The branded chains also sell through in-town shops replacing the_ independent 
retailers with less costly, standardised shops which accomodate the need, on the 
part of some customers' for an alternative retail buying environment to discount 
halls. Due to their purchasing power, their access to world supply (they import on 
their own account) and the relatively low margins they operate with, generally 
around 25% of the cost of sales for the central trading arm and 100% on average for 
the shops, they are able to gain market share rapidly once they enter a market and to 
achieve growth rates in excess of 5% per year. 
(iii) The non-specialised supermarkets 
(81) Important in terms of volume, but less in terms of value on the total footwear 
market due to the low average price of their sales, non-specialised supermarkets 
have a strong influence at the lower end of the market. Although they sometimes 
buy directly from suppliers located outside the Community, they usually rely on 
specialised importers for their imports, which constitute an important part of their 
footwear sales. Their traditional mark-up is around 100%, but it can range from 
around 60% on promotional operations to over 130% on some Community 
productions. Due to the supplementary step of the importer and the fixed part of 
the costs incurred, imports from the countries concerned through this sales channel 
usually reach the consumer at a price 3 times higher than the CIF level. 
40 
(iv) Other sales channels 
(82) Other sales channels, such as mail order companies or garment stores, gained a 
significance in certain Member States but none of these has individually acquired 
an importance on a Community-wide basis. In certain Member States, specialised 
mail-order firms have a cost structure similar to the branded chains. Community-
wide apparel chains of "small" shops also introduce footwear in their stores as a 
fashion branded item, generally with higher margins than on their usual articles. 
Due to the fashion aspect of these sales, they are in competition with the branded 
chains, although to a lesser extent than the large general city centre stores. 
(c) Specific impact of the proposed measures on the various sales channels 
(83) As regards the independent retailers, which still constitute the largest source of 
employment in the Community footwear distribution, the general conclusion 
presented in recital 77 of the present Regulation is strengthened by the fact that they 
usually have a low proportion of their supplies of the product concerned originating 
in Indonesia or the People's Republic of China. It should be added that they are 
grouped in a confederation representing 8 Member States on a representative level, 
and that no submission opposing the possible imposition of anti-dumping measures 
was received from this source or any other. 
41 
(84) The companies owning branded chains have contested the need for the imposition 
of anti-dumping duties. Although the general conclusion is also applicable to them, 
the fact that some of them rely more than the independent retailers on the dumped 
imports for the supply of the product concerned explains why, within the 
distribution, they could fear a negative effect of the measures on their comparative 
competitive situation. 
The direct effect of possible measures on the financial situation of these companies 
will be negligible if the amount of the duty were to be fully passed on to the 
consumer. Indirect financial effects could only be expected if, due to this price 
increase, consumers would significantly reduce their purchases of the product 
concerned. However, should this happen, it would be only to a limited extent, as 
explained in recital 76. 
Moreover, the product concerned is never sold separately in specialised shops and 
due to its particularly low prices, represents less than 10% of the turnover of the 
cooperating companies operating branded chains. In this perspective, even a small 
contraction in the demand for the product concerned, which appears unlikely, 
would have a negligible impact on the companies as a whole, in particular if the 
demand is at least partly reoriented to footwear with a higher price, with probably a 
higher margin in absolute terms. 
(85) As far as non specialised supermarkets or other non-specialised stores are 
concerned, in view of the even more limited extent to which their sales rely on the 
product concerned, their situation should not be affected by the imposition of 
measures even in the case of the market evolution envisaged above. 
42 
(86) The situation of the importers supplying these non-specialised distribution channels 
was examined, as they imported in some cases a more important portion of their 
turnover from the countries concerned than their clients. These companies are 
generally run with a very limited and flexible structure allowing them to sell only 
when the trading margin they foresee covers the costs incurred. Their expertise on 
the market and their ability to design and sell are not affected by the country of 
origin of the goods. The anti-dumping measures having an impact on the footwear 
distribution as a whole, these importers will be able to benefit from any market 
situation, and continue to supply their clients with Chinese or Indonesian imports, 
or any non-dumped product, as well as Community-produced ones. 
(87) In conclusion, it could not be established that the imposition of anti-dumping 
measures on the footwear concerned would be such as to affect significantly the 
financial situation of either the footwear distribution chain as a whole or of a part of 
it. 
3 Impact on the Community industry and its suppliers - * 
(88) The argument according to which the measures would have no positive effect on 
the situation of the Community industry due to the shift of supply to other third 
countries has been presented again. It has been argued moreover that the situation 
of the textile footwear industry in this respect was comparable to that of the 
synthetic handbags manufacturers and that accordingly the Council should also in 
the present case refrain from taking measures4. 
4 See recitals 105 and 106 of Council Regulation (EC) No. 1567/97 (OJ No L208, 2.8.1997, p.31.) 
43 
Shift of supply between various countries has been an important factor-on-the 
footwear market for a number of years. In this regard, it should be noted that the 
Community industry has been able, by its automation and rationalisation, to partly 
compensate, by its own increase in exports, for the constant change of country from 
which varying volumes were imported in the Community. This could however not 
be the case for the massive surge in dumped imports from the two countries 
concerned in the present proceeding. As far as the alleged parallelism between the 
present proceeding and the synthetic handbags case is concerned, it should be 
stressed that the significant market share still held by the complainant Community 
industry in this case, the nature of the capital holders in most exporting companies, 
as well as the important industrial investment necessary to produce footwear, 
clearly exclude any reasonable and meaningful comparison between the two 
industries. The Council cannot accept therefore that for the sake of consistency, it 
should refrain from taking measures in the present case. 
(89) It has been argued again that, should measures be imposed, this would have 
negative consequences on the footwear machine manufacturers which would be 
limited in their sales to Indonesia and the People's Republic of China. 
As far as the machine suppliers are concerned, it should be noted that the 
Community industry is clearly investing in automation, and in the injection process 
in particular. This automation is linked with investments in machines and in 
moulds produced in the Community, which continue to create a virtuous circle of 
technological improvement. No evidence has been received on the other hand 
showing that exporters in Indonesia or the People's Republic of China are main 
clients of the Community equipment manufacturers. 
44 
(90) No new evidence having been submitted in respect of these arguments, - the 
conclusions presented in recitals 99 and 104 of the provisional duty Regulation are 
accordingly confirmed. 
4. Conclusion concerning Community interest 
(91) As a conclusion, and having examined all the various interests involved, it is 
considered that there are no compelling reasons not to take action against the 
dumped imports in question. The conclusions set out in recital 105 of the 
provisional duty Regulation are therefore confirmed. 
45 
I. ANTI-DUMPING MEASURES 
1. Injury elimination level 
(a) General considerations 
(92) It should be recalled that the calculations used to establish the injury elimination 
level at the provisional stage were based on two different sets of price comparisons. 
As far as the cooperating exporters were concerned, the prices of the most exported 
models were compared to the Community industry's corresponding non-injurious 
prices on the basis of a grouping into 16 so-called families of footwear, of which 
13, relating to outdoor footwear, were considered for the purpose of the definitive 
determination. For the vast majority of imports, however, in the absence of 
cooperation from any exporters, the injury elimination level had to be calculated on 
an average basis for the CN code concerned, this approach having been called the 
category comparison. 
(93) It has been argued that, in performing these comparisons, the Commission failed to 
take into account the alleged differences between vulcanised and injected footwear. 
Further to what has been explained at recitals 26 to 30 of the present Regulation, it 
is considered that there are no differences between vulcanised and injected 
footwear which are such as to significantly affect global price comparisons. 
Indeed, the difference in the manufacturing processes used for the production of the 
soles of two comparable models does not result in a different consumer perception. 
As far as the cooperating exporters are concerned, in the case where imported 
vulcanised models were compared to Community-produced injected footwear 
because these were the most similar models found, the exporters were given the 
opportunity to comment on the basis of the documents and non-confidential files 
available to them, and none of them contested the comparison made. 
46 
(94) Exporters from the People's Republic of China claimed that the descriptive 
elements of the Community produced models used for comparison purposes were 
insufficient. In this respect, it should be recalled that the exporters were provided 
with copies of the non-confidential files where photographs of the Community-
produced models used as a reference in each family were provided. This was done 
in addition to the written explanations given and the calculation sheets included in 
the disclosure. 
(95) Following the claim made by importers, and in order to perform the price 
comparisons in the calculation of the injury elimination level, CIF import prices 
were adjusted to the duty-paid, customer-delivered price level by using the 
adjustment methodology used for the undercutting assessment, as presented at 
recital 66 of the present Regulation. 
(96) It was argued by certain importers that, even if it could be admitted that injurious 
dumping in respect of footwear with an import price below three US dollars was 
taking place, this was not the case for more sophisticated footwear. The latter 
category, according to the importers in question, should be attributed a 0% injury 
elimination level. 
In this respect, it should be recalled that, although huge volumes of outdoor 
footwear are indeed imported below 2.5 ECU (equivalent to 3 US dollars), these 
imports covered, in the sample of the importers' transactions examined, only 45% 
of the value of the imports concerned. The fact that a majority of the import 
turnover was above the alleged price break shows that, in reality, the imports of the 
product concerned, though made at extremely low prices when compared to what 
they would be if normal competitive conditions prevailed, are spread over a wide 
price range. 
47 
Moreover, the non-injurious price levels established for the- investigated 
Community producers were also both below and above the alleged price break, 
adjusted to the appropriate customer-delivered level (3.7 ECU), depending on the 
shoe type. In the absence of any other evidence relating to this aspect of the 
market, this claim should therefore be rejected. 
(97) No other remarks having been submitted, the general injury elimination level 
methodology, as established in recitals 106 to 112 of the provisional duty 
Regulation, are therefore confirmed. 
The reduction in the product coverage of the proceeding and the change in the level 
of trade adjustment, however, affect the provisional findings, as set out below. 
(b) Indonesia 
(98) In conformity with the methodology set out in the provisional duty Regulation, the 
revised injury elimination levels for the cooperating companies in the sample for 
Indonesia, expressed as a percentage of the CIF import price, ranged from 0 to 
31.5%, with an average to be applied to cooperating companies outside the sample 
of 14.1%. As regards the calculation of the residual injury elimination margin, it 
was considered that, in the case of a market economy country such as Indonesia, the 
most reasonable basis was to use the average level found on the basis of verified 
data established in respect of the cooperating exporters in the sample, i.e. 14.1%. 
(c) People's Republic of China 
(99) In accordance with the methodology set out in the provisional duty Regulation, the 
revised single injury elimination level for the People's Republic of China was 
found to be 49.2%. 
48 
2. Duty 
(100) One of the cooperating Indonesian companies not included in the sample objected 
to the fact that it had been attributed a duty based on the weighted average dumping 
margin found for the sample. 
This argument could not be accepted since Article 9(6) of the Basic Regulation 
provides that, where the Commission has limited its examination in accordance 
with Article 17, any anti-dumping duty imposed on cooperating companies not 
included in the sample shall not exceed the weighted average margin of dumping 
established for the parties in the sample. Moreover, it will be recalled from recital 
23 of the provisional duty Regulation that the Indonesian companies concerned had 
agreed to this methodology. 
(101) Since the residual injury elimination level for Indonesia and the People's Republic 
of China, as well as the individual level for PT Sindoll Pratama, is lower than the 
corresponding dumping margins, the anti-dumping duty should be based on these 
levels. For the other cooperating exporters in Indonesia, the anti-dumping duty 
should be based on the dumping margins established above. 
(102) The anti-dumping duty rates, applicable to the net, free at Community frontier price 
before duty should therefore be as follows: 
Country Manufacturer and exporter Rate of duty 
PEOPLE'S REPUBLIC OF CHINA All companies • 49.2% 
INDONESIA PT Dragon 4X)% 
PT Emperor Footwear Indonesia 0% 
PT Sindoll Pratama 0% 
PT Bosaeng Jaya 14.1% 
PT Volmacarol 14.1% 
All other companies 14.1 % 
49 
J. COLLECTION OF THE PROVISIONAL DUTIES . 
(103) In view of the magnitude of the dumping margins found for the exporting producers 
and countries, and in the light of the seriousness of the injury caused to the 
Community industry, it is considered necessary that the amounts secured by way of 
provisional anti-dumping duty under Regulation (EC) No 165/97 should be 
definitively collected at the rate of the duty definitively imposed. However, to the 
extent to which it can be established, to the satisfaction of the customs authorities, 
that imports related to footwear falling within CN Code 6404 19 10 (slippers) or 
shoes excluded from the scope of the present proceeding, as described under Article 
1 (3) (b), (c) and (d) of the present Regulation, the amounts secured of provisional 
anti-dumping duty should be released in their totality, 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. A definitive anti-dumping duty is hereby imposed on imports of footwear falling 
within CN code ex 6404 19 90 (Taric code 6404 19 90*90), originating in the 
People's Republic of China and Indonesia, except as regards the footwear described 
in paragraph 3, 
2. The rate of the definitive anti-dumping duty on the basis of the net, free-at-
Community-frontier price, before duty, shall be: 
50 
Country 
People's Republic of 
China 
Indonesia Products manufactured 
by 
All companies 
All companies 
with the exception of: % 
P.T. Dragon 
P.T. Emperor Footwearlndonesia 
P.T. Sindoll Pratama rate of 
duty 
(%) 
49.2% 
14.1% 
4.0% 
0.0% 
0.0% Taric 
Additiona 
1 
Codes 
-
8900 
8941 
8942 
8942 
3. The duty shall not apply to: 
a) shoes sometimes known as "espadrilles", which, for the purpose of the present 
Regulation, are shoes with canvas uppers and unheeled plaited fibre soles, whether 
or not strengthened with rubber or plastics over a variable surface, which are not 
thicker than 2.5 cm (Taric code 6404 19 90 * 10); 
b) shoes sometimes known as "diving boots" or "water sports boots", which, for the 
purpose of the present Regulation, are shoes with an upper made of neoprene, 
whether laminated on one or both sides with textile material, where the neoprene 
thickness is of 2.5mm or more, covering the entirety of the foot, with an abrasion-
resistant sole , and designed for certain water sports such as diving (Taric code 
6404 19 90*20); 
51 
c) shoes sometimes known as "medical shoes", which, for the purpose, of. the 
present Regulation, are shoes which, although not manufactured according to the 
individual medical need of one person, are designed for easing the recovery during 
or after a therapy or a medical operation, as for example shoes to walk while having 
a plastered or bandaged foot. These shoes do not cover the foot entirely and have a 
wide opening which enables even a banded foot to fit inside. They are sold not per 
pair, but individually, and show at the same time more than one of the following 
characteristics: 
- The closing device can be adjusted to the bandage or plaster size 
- Special internal soles or pads can be inserted for medical purposes 
- The design of the sole is such that it prevents certain harmful contacts from the 
foot with the ground, but at the same time bans a non medical use of the shoe 
- The design is functional and does not include decorations or other fashionable 
accessories 
(Taric code 6404 19 90* 30); 
d) shoes sometimes known as "beach shoes", which, for the purpose of the present 
Regulation, are shoes the upper of which is limited to a stripe of textile material, 
this upper being attached on both sides of a thick, lightweight alveolar plastic sole, 
in contact both with the foot and the ground. This textile stripe leaves the front as 
well as the rear part of the foot uncovered, and its width does not exceed one third 
of the shoe's length. As the back of the foot is not enclosed by the shoe, the wearer's 
heel lifts from the sole when walking. Beach shoes are designed to be worn with 
wet or sandy feet on the beach or around swimming pools, and their design 
excludes any practical use for walking over a longer distance. (Taric code 
6404 19 90*40). 
52 
•^{bv. 
4. Unless otherwise specified, the provisions in force concerning duties and other 
customs practices shall apply. 
Article 2 y 
1. The amounts secured by way of provisional anti-dumping duty under Regulation 
(EC) No 165/97 shall be definitively collected at the rate of the duty definitively 
imposed, with the exception of the amounts for which it can be established, to the 
satisfaction of the customs authorities, that they related to imports of footwear 
falling within CN code 6404 19 10 or shoes described in Article 1 (3) (b), (c) and 
(d), which amounts shall be released. 
2. Amounts secured in excess of the definitive rate of anti-dumping duty shall be 
released. 
Article 3 
This Regulation shall enter into force on the day of its publication in the Official Journal 
of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at Brussels, 
For the Council 
The President 
53 


ISSN 0254-1475 
COM(97) 551 final 
DOCUMENTS 
EN 02 11 
Catalogue number : CB-CO-97-569-EN-C 
ISBN 92-78-26275-7 
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