COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 08.12.1997 
COM(97)672 final 
Proposal for a 
COUNCIL REGULATION (EC) 
extending the definitive anti-dumping duty imposed by Regulation (EC) No 1490/96 
on polyester staple fibre originating in Belarus to imports of polyester filament tow 
from Belarus and levying the extended duty on the latter imports as registered 
under Commission Regulation (EC) No 693/97 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. Attached is a proposal for a Council Regulation extending definitive anti­
dumping duties in force with respect to imports of polyester staple fibre 
(hereafter "fibre") originating in Belarus1 to imports of polyester filament tow 
(hereafter "tow") from the same country, in accordance with Article 13 of 
Council Regulation (EC) No 384/96 of 22 December 1995 on protection 
against dumped imports from countries not members of the European 
Community (hereafter "the Basic Regulation")2. 
The proposed regulation also provides for the levying of the extended duty on 
imports of tow from Belarus which entered the Community under registration 
imposed by Commission Regulation (EC) No 693/97 of 18 April 1997.3 This 
levy of the extended duty on the registered product is a mandatory corollary of 
the extended duty, pursuant to Article 13 (3) of the Basic Regulation. 
2. The proposed regulation is based on an investigation by the Commission 
services, commenced by the aforesaid Commission Regulation (EC) No 
693/97, which has revealed that the anti-dumping measures in force with 
respect to fibre originating in Belarus were being circumvented, in accordance 
with the criteria laid down in Article 13 (1) of the Basic Regulation, by imports 
of tow from Belarus subsequently processed into fibre in the Community. 
3. The investigation has shown in particular that tow and fibre imported from 
Belarus are like products which share the same basic characteristics in terms of 
chemical properties and performance, as the only difference between the two 
products consists of the simple, mechanical cutting of tow into fibre. 
In addition, the investigation has established that, following the imposition of 
anti-dumping duties on fibre originating in Belarus, a change in the pattern of 
trade took place as imports of fibre from Belarus were largely substituted by 
imports of tow from that country. The investigation has moreover shown that 
no sufficient due cause or economic justification, other than avoiding the 
payment of the anti-dumping duties in force, exists for the importation and 
cutting of tow in the Community rather than the importation of fibre already 
cut in Belarus, the exporting country. 
../.. 
Council Regulation (EC) No 1490/96 of 23 July 1996, OJNo L 189, 30.7.1996, p. 13. 
OJNoL56, 6.3.1996, p. 1. 
OJNoL 102, 19.4.1997, p. 14. 
A 
Finally, it was determined that imports of tow were undermining the remedial 
effects of the anti-dumping duty in terms of quantities and prices and that there 
was evidence of dumping in relation to the normal values previously 
established. 
As the Commission services have thus found that all conditions of Article 13 
(1) of the Basic Regulation establishing circumvention are met in the present 
case, it is proposed that the anti-dumping measures in force with respect to 
imports of fibre originating in Belarus be extended to imports of tow from that 
country. 
In accordance with Article 13 (3) of the Basic Regulation, the Council 
regulation extending the anti-dumping measures in force should be adopted and 
published not later than 9 months after the initiation of the investigation, i.e. in 
the present case not later than 16 January 1998. 
^) <X 
Council Regulation (EC) No 
of 
extending the definitive anti-dumping duty imposed by Regulation (EC) No 1490/96 
on polyester staple fibre originating in Belarus to imports of polyester filament tow 
from Belarus and levying the extended duty on the latter imports as registered 
under Commission Regulation (EC) No 693/97 
THE COUNCIL OF THE EUROPEAN UNION, 
c 
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 
Community1 (hereafter the "Basic Regulation"), as amended by Council Regulation (EC) 
No 2331/962, and in particular Article 13 (3) thereof, 
Having regard to the proposal submitted by the Commission after consulting the Advisory 
Committee, 
Whereas: 
'OJNoL56, 6. 3 1996, p. 1. 
2OJNoL317, 6.12.1996, p. 1. 
A Kr e, 
A. PROCEDURE 
(1) On 19 April 1997, by Regulation (EC) No 693/973, the Commission initiated an 
investigation, pursuant to Article 13 of the Basic Regulation, concerning the 
alleged circumvention of the anti-dumping duties imposed by Council Regulation 
(EC) No 1490/964 (hereafter the "original investigation") on imports of polyester 
staple fibre originating in Belarus, by imports of polyester filament tow originating 
in that country which are subsequently converted into PSF in the Community and 
directed customs authorities, pursuant to Article 13 (3) of the Basic Regulation, to 
register imports of such PFT. The investigation was initiated following a 
complaint lodged on 4 March 1997 by the International Committee of Rayon and 
Synthetic Fibres (C.I.F.R.S) on behalf of Community producers whose output is 
considered to represent over 90 % of the total Community production of PSF. 
(2) The product concerned by this investigation is polyester filament tow (hereafter 
"PFT"), falling under CN code 5501 20 00, used for conversion in the Community 
into polyester staple fibre (hereafter "PSF"), the latter product being currently 
classifiable under CN code 5503 20 00. 
3OJNoL98, 19.4. 1997, p. 3. 
4OJNoL 189, 30.7.1996, p. 1. 
(3) The Commission officially advised the authorities of Belarus about the initiation of 
the investigation and sent questionnaires to the Community companies concerned 
mentioned in the complaint. No additional companies made themselves known 
within the prescribed time limit. 
(4) The investigation covered the period 1 January 1996 to 31 March 1997 (hereafter 
"the investigation period"). 
(5) The Commission received complete replies from the following companies: 
(a) Germany 
- Barnet Europe W. Barnet GmbH & Co. KG 
- Rheinische Faser<jmbH 
- Kemokomplex GmbH 
(b) Italy 
- SALT & Co. Snc 
- TA.SFI Snc 
- S.I.M.P. Sri (formerly CO.FI.S SpA) 
The Commission requested and examined all information it deemed necessary and 
carried out verification visits at the premises of the companies located in Italy and 
of one company located in Germany (Barnet). 
(6) All companies mentioned above made their views known in writing and requested 
and were granted a hearing by the Commission. 
B. SCOPE OF THE INVESTIGATION 
(7) Article 13 (1), first sentence of the Basic Regulation provides that, if certain 
conditions establishing circumvention are met, anti-dumping measures in force 
may be extended to imports of like products or parts thereof from a third country. 
The scope of the present investigation was to examine whether anti-dumping 
measures on imports of PSF originating in Belarus are being circumvented by 
means of imports of PFT originating in that country which are used in conversion 
operations in the Community. 
(8) The importers and converters have argued that the present investigation could not 
be initiated under Article 13 of the Basic Regulation because an investigation 
under this provision would only be possible with regard to a "third country", 
which would exclude the exporting country in respect of which thé anti-dumping 
measures were imposed. This argument is rejected because the term "third 
country", as used in Article 13 (1) of the Basic Regulation is, also in view of its 
legislative history, a broad term which simply refers to any country outside the 
European Community as opposed to trade between two or more Member States of 
the Community. 
(9) It was considered that the alleged circumvention practice had to be assessed on the 
basis of the second sentence of Article 13 (1) of the Basic Regulation. The 
objective of the investigation was in particular to examine whether the operation 
described above fulfilled all conditions set out in that provision, so that anti­
dumping measures in force with respect to PSF could be extended to PFT 
pursuant to Article 13 (1), first sentence of the Basic Regulation. 
In this respect, it should be noted that PFT and PSF share the same basic physical 
and chemical characteristics. Indeed, the only difference between PFT and PSF 
results from a simple cutting process. The imported PFT has therefore to be 
viewed as a product which has been slightly altered in order to avoid the anti­
dumping measures currently applicable to PSF. Differences of this nature, which 
can be created or eliminated by minor alterations, cannot put into question the fact 
that PSF and PFT are essentially the same product. Such differences are therefore 
not sufficient to avoid payment of anti-dumping duties on PFT. As far as the uses 
of PFT and PSF are concerned, the investigation has also shown that all PFT 
imported from Belarus was used for cutting into PSF rather than for worsted 
spinning to produce tops, the other recognised application of PFT. Worsted 
spinning is a considerably more complex process requiring special technology. 
Tops are sold in a small and relatively stable niche market commanding a price 
premium. 
In any event, it should be borne in mind that, as in the case of parts destined for 
assembly, the imports of PFT ultimately end up as a product which is not only 
alike but identical to the imports subject to the original investigation, i.e. PSF. 
Thus, although the alteration process from PFT into PSF is not as such an 
assembly operation, it is of such a nature that it has to be considered as a practice 
which is carried out to avoid the measures in force. 
It follows from the foregoing that PFT and PSF are alike within the meaning of 
Article 1 (4) of the Basic Regulation. 
C. RESULTS 
1. Nature of the circumvention operation 
(10) The investigation has established that all the PFT concerned is produced by a 
single company in Belarus and exported to the Community mainly via two 
channels. A first channel concerns a German trader which purchases the PFT from 
the Belarus exporter and sells it, for the major part, to an Italian importer. The 
PFT thus imported is subsequently processed into PSF by Italian sub-contractors 
and thereafter sold by the Italian importer in the Community, mainly on the Italian 
market. A second channel involves a Swiss trader which sells the PFT it purchases 
from the Belarus exporter to a German importer. The German importer itself 
processes the PFT into PSF and sells the PSF in the Community, mainly on the 
German market. 
(11) The question as to whether Belarus can be considered as a "third country" in terms 
of Article 13 (1) of the Basic Regulation has already been addressed in recital 8. 
The question of whether PSF and PFT can be considered to be like products has 
been addressed in recital 9. 
2. Conditions of Article 13 (1), second sentence 
(a) Circumvention 
Change in the pattern of trade 
(12) Immediately following the imposition in March 1996 of a provisional anti-dumping 
duty of 43,5 % on PSF originating in Belarus by Commission Regulation (EC) No 
394/96 of 4 March 19965, imports of PSF from Belarus were almost entirely 
substituted by imports of PFT from that country. While in the period subsequent 
to the initiation of the original anti-dumping investigation (August 1994) PFT 
imports from Belarus only represented at most 1 % of combined PFT-PSF imports 
from that country, the PFT-PSF mix changed radically and abruptly immediately 
following the imposition of provisional anti-dumping measures in March 1996: in 
the period April to June 1996, PSF accounted for 3,02 % only while PFT 
represented 96,98 %. This marked change in the pattern of trade continued and 
even increased throughout the entire 15 month investigation period as volumes of 
PFT were increasing rapidly ana PSF imports were further phased out. At the end 
of the investigation period (period January-March 1997), PFT accounted for 
99,27 % and PSF merely for 0,73 % of the PSF-PFT mix. 
OJNoL54, 5.3.1996, p. 10. 
In addition, import levels of PFT from Belarus as such increased rapidly and 
reached significant levels: while imports of PFT from Belarus in 1995 amounted to 
merely 169 tonnes, such imports rose to 13 619 tonnes in the 12-month period 
following the imposition of the provisional anti-dumping measures on PSF from 
Belarus. 
The companies involved have argued that no change in the pattern of trade 
occurred because PFT imports have not substituted for imports of PSF at the same 
import levels of PSF in 1994 and 1995. This argument is to be rejected. It is not 
required that the substitution is found to have attained the highest import levels 
which the substituted product ever reached in a particular segment in the 
benchmark period - i.e. since or just prior to the initiation of the original anti­
dumping investigation (August 1994) - provided, as was found to be the case in 
the present investigation, that there is a clear and consistent trend of substitution 
over an extended period. In this respect, it should be noted that a particularly long 
investigation period of 15 months was deliberately selected so as to increase its 
representativity. 
10 
Insufficient due cause or economic justification 
(13) The above-mentioned substitution of PSF by PFT following the imposition of a 
significant provisional anti-dumping duty (see recital 12) must reasonably be 
considered to have stemmed from the anti-dumping measures rather than from any 
other sufficient due cause or economic justification within the meaning of Article 
13 (1), second sentence of the Basic Regulation. 
If there were to exist a sufficient due cause or economic justification - other than 
the anti-dumping measures in force - for importing PFT and cutting it into PSF in 
the Community rather than directly importing PSF already cut in the exporting 
country, then it might be expected that at least some PFT would have been 
imported for conversion in the Community prior to imposition of the provisional 
measures. However, as imports of PFT originating in Belarus prior to imposition 
of the provisional measures were negligible, it must be concluded that the 
substitution of PSF by PFT and the strong increase of PFT imports stem from a 
practice lacking sufficient due cause or economic justification and were in fact 
primarily prompted by the imposition of anti-dumping measures. 
11 
This inference would be displaced if a new significant factor - other than the anti­
dumping measures - arising around the time when the substitution took place, 
could be identified, which is not the case and no interested party has put forward 
any such claim. 
(14) This conclusion is corroborated by the following findings. Importing PFT for 
conversion in the Community into PSF, as opposed to directly importing PSF 
already cut in a continuous, integrated operation - as is standard practice - in the 
exporting country, generates a number of extra costs in terms of packaging and 
labour which are not offset by any significant cost savings or price premiums but 
which are even compounded by the higher hourly labour cost in the Community, if 
compared with that in Taiwan, selected in the original investigation as analogue 
country to calculate normal value. In addition, exports of PFT were found to be 
targeting the Community since other export markets continued to be supplied with 
PSF by the Belarus exporter concerned, which shows a lack of economic 
justification because, if the practice were economically justified, it might 
reasonably be expected that it would also have occurred in other industrialised 
markets similar to the Community. 
12 
(15) The importers and converters have argued that there is sufficient due cause or 
economic justification for the importation for conversion in the Community of PFT 
rather than direct importation of PSF already cut in the exporting country because 
this entails certain cost savings in terms of stock keeping and allows for greater 
flexibility to meet customer demand for various sizes and small orders of PSF. 
(16) This argument was rejected as such benefits were not quantified by the importers 
and even if such benefits do exist, they would appear not to outweigh the 
additional cost in terms of packaging and labour referred to above. In any event, 
such alleged benefits would also have existed prior to the imposition of the anti­
dumping measures and, if significant, it could reasonably be expected that some 
operators in the Community or in other comparable markets would have availed 
themselves, at least to some extent, of this opportunity prior to the imposition of 
the anti-dumping measures. As this was found not to be the case (PFT imports 
from Belarus prior to the imposition of the provisional anti-dumping measures 
were statistically negligible), it must be concluded that the benefits claimed are, at 
most, of secondary importance only. 
13 
(17) The converters and importers also submitted that it was economically justifiable 
for them to convert PFT imported from Belarus since the necessary cutting 
capacity did already exist in the Community so that no special, new investments 
were required (absence of "opportunity cost"). It was also argued that the fact 
that PFT from sources other than Belarus was converted prior to the initiation of 
the anti-dumping investigation showed that importation of PFT from Belarus for 
conversion in the Community was also justifiable. This argument was rejected for 
the following reasons. 
Except for a limited trial production during the first three months of 1996, the 
particular circumvention practice under investigation (importation of PFT from 
Belarus for conversion into PSF in the EU) only began after the imposition of the 
provisional anti-dumping measures in March 1996. It follows that it can 
reasonably be concluded that prior to imposition of the anti-dumping measures it 
• was not considered justifiable to use this cutting capacity to convert PFT imported 
from Belarus rather than directly importing PSF. 
14 
In addition, imports of PFT from countries other than Belarus have been small and 
even declining. It would also appear that such imports concern, to a large extent, 
PFT used to produce tops - which, as stated above (see recital 9) is a stable and 
small niche market requiring more complex processing and commanding a price 
premium - rather than PFT for cutting into PSF, which is a commodity product. In 
this respect, it should be noted that imports of PFT from other countries remained 
stable but were dwarfed in relative terms by the massive influx of PFT from 
Belarus which in itself accounted for 70 % of all PFT imports in 1996. 
In any event, the argument is factually flawed since it was established during the 
verifications that at least one converter in Italy specifically invested in additional 
cutting equipment in order to meet growing supplies of PFT from Belarus. This 
contradicts the alleged absence of opportunity cost mentioned above. 
15 
(b) Undermining of the remedial effects of the duty and evidence of dumping 
Undermining 
(18) The Commission first determined whether the remedial effects of the duty are 
being undermined in terms of prices. To that end, a comparison was made 
between the average sales price in the Community of PSF cut from PFT 
originating in Belarus during the investigation period, and the "undumped" export 
price to the Community of PSF originating from Belarus as established in the 
original investigation period. 
The "undumped" export price of PSF was calculated at a CIF Community border 
level on the basis of the export price as established in the initial investigation. To 
this price customs duties (5,5 %) and anti-dumping duties (43,5 %) were added to 
arrive at an "undumped" level. 
16 
A weighted average price ex-converter was determined for PSF cut frofn PFT 
originating in Belarus. Adjustments to this price ("netbacking") were made in 
order to ensure that a comparison was established at the, same level (CIF 
Community border). To this aim, discounts, SG&A and intra-EC transport cost 
(not included in SG&A) were deducted. Subsequently, it was established to which 
extent the average price of PSF converted from PFT originating in Belarus has 
undercut the "undumped" export price thus undermining the remedial effects of 
the duties. 
The total undermining amounts were expressed as a percentage of the total CIF 
Community border value of imports of PSF at the "undumped" price level. The 
comparison showed that the average sales price of PSF converted from PFT 
originating in Belarus has undercut the "undumped" export price of PSF imported 
from Belarus by 19,45 %. 
The Commission has also verified whether the remedial effects of the duty are 
being undermined in terms of quantities. As explained in detail above (see recital 
12), PSF imports from Belarus were nearly totally substituted by imports of PFT 
from that country immediately after imposition of provisional anti-dumping duties 
on PSF from Belarus. 
17 
In the light of the foregoing, it must be concluded that the sales of PSF converted 
from PFT originating in Belarus have undermined the remedial effect of the anti­
dumping duties both in terms of prices and quantities. 
Evidence of Dumping 
(19) In order to determine whether evidence of dumping could be found with respect to 
the PFT imported in the Community for conversion into PSF during the 
investigation period, the following methodology was followed. 
Delivered duty unpaid purchase prices charged to the importers for PFT from 
Belarus were used as a point of departure. In order to increase the comparability 
of this price with the normal value established for PSF during the original anti­
dumping investigation, the conversion cost in the Community established in the 
present investigation was added so as to effectively construct a PSF price. From 
this price, intra-EC freight/handling costs and credit costs were then deducted to 
calculate a CIF Community border price for PSF. 
18 
This CIF price was then netted back to FOB Belarus level by deducting freight and 
handling cost from Belarus to the EU border and by deducting the respective 
mark-up of intermediary trading houses. The difference between this FOB Belarus 
price and the FOB Taiwan normal value as established in the original anti-dumping 
investigation - Taiwan having been selected in the original investigation as 
analogue country to calculate normal value - was then expressed as a percentage 
of the CIF Community border price for PSF. 
The aggregated, weighted average dumping margin thus established was found to 
be 12,31 %. It is therefore concluded that there is evidence of dumping in relation 
to the normal value previously established. 
19 
D. PROPOSED MEASURES 
1. Nature of the measures: extension of the duty 
(20) In view of the above findings and considerations, the anti-dumping duty in force 
with respect to PSF originating in Belarus should be extended to PFT originating 
in that country. 
2. Levy of the extended duty on imports entered under registration 
(21) The extended duty should be levied on the PFT which entered the Community 
under registration, as described in recital (1). 
E. PROCEDURE 
(22) Interested parties were informed of the essential facts and considerations on the 
basis of which the Commission intended to propose the extension of the definitive 
anti-dumping duty in force to the PFT concerned and have been given the 
opportunity to comment and their comments have been duly considered. 
20 
HAS ADOPTED THIS REGULATION 
Article 1 
1. The definitive anti-dumping duty imposed by Regulation (EC) No 1490/96 on 
imports of polyester staple fibre falling within CN code 5503 20 00 originating in Belarus 
is hereby extended to imports of polyester filament tow falling within CN code 
5501 20 00 originating in Belarus. 
2. The duty extended by paragraph 1 of the present article shall also apply to imports 
of polyester filament tow originating in Belarus which have been registered in accordance 
with Article 2 of Commission Regulation (EC) No 693/97 and Articles 13 (3) and 14 (5) 
of Regulation (EC) No 384/96. 
Article 2 
Customs authorities are hereby directed to discontinue registration of polyester filament 
tow originating in Belarus and classifiable within CN code 5$01 20 00 pursuant to 
Article 2 of Commission Regulation (EC) No 693/91. 
21 
Article 3 
This Regulation shall enter into force on the day following 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, . 1998 
For the Council 
The President 
22 

ISSN 0254-1475 
COM(97) 672 final 
DOCUMENTS 
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Catalogue number : CB-CO-97-694-EN-C 
ISBN 92-78-28918-3 
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23