'•«SffW! 
COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 16.12.1996 
COM(96)689 final 
Proposal for a 
COUNCIL REGULATION HEC) 
extending the defimtive anti-dumping duty imposed by Council Regulation (EEC) 
No 2474/93 on bicycles originating in the People's Republic of China to imports of 
certain bicycle parts from the People's Republic of China, and levying the extended 
duty on such imports registered under Regulation (EC) No 703/96 
(presented by the Commission) 

Explanatory Memorandum 
1. The Commission, by Regulation (EC) No 703/96, initiated an investigation 
into the circumvention of the anti-dumping duties imposed on imports of bicycles 
originating in the People's Republic of China by imports of bicycle parts originating 
in that country and used in the assembly of bicycles in the European Community. 
2. The Commission carried out investigations on the premises of 7 companies, 
two of which turned out to be Community producers and 5 of them circumventing 
assemblers. Non-co-operation was substantial. 
3. Following the on-the-spot investigation, it was established that the assemblers 
concerned fulfilled the conditions of Article 13 as follows: 
-their assembly operations started or substantially increased since the initiation 
of the original anti-dumping investigation, 
-60% or more of the total value of the parts of the assembled product were 
concluded to be of Chinese origin, 
-the value added to the parts brought in for these assembly operations was 
found to be below 25 %, 
-there was evidence that the remedial effects of the duty were undermined (the 
sales prices of the assembled bicycles were found to undercut the non-dumped 
export prices of Chinese bicycles in the original investigation period by 14.5% 
on average) and, 
- there was evidence of dumping in relation to the normal values established in 
the original investigation (the dumping margins were found to range from 16 
to 53%). 
4. The Commission informed interested parties of the essential facts and 
considerations on the basis of which it was intended to recommend the extension of 
the original anti-dumping duty. 
U 
5. The oral and written comments by the parties were considered and where 
appropriate, the Commission's findings were modified to take account of them. 
6. The Commission, in accordance with Articles 13, 14 and 15 of the basic 
Regulation and after consultation with the Advisory Committee is now proposing to 
extend the anti-dumping duty imposed on imports of bicycles originating in China 
(30.6%) to essential bicycle parts originating in or consigned from China when the 
non-Chinese origin of the parts cannot be proven. 
7. The essential bicycle parts are finished frames and forks, sets of gears, sets of 
brakes, pre-assembled handlebars and complete wheels. 
8. It is also foreseen to exempt imports which do not constitute circumvention 
from the extension of the measure. 
/a 
Council Regulation (EC) No 
of 
extending the definitive anti-dumping duty imposed by Council Regulation (EEC) 
No 2474/93 on bicycles originating in the People's Republic of China to imports of 
certain bicycle parts from the People's Republic of China, and levying the extended 
duty on such imports registered under Regulation (EC) No 703/96 
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 
Community1, and in particular Articles 13 and 14 thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
OJ No L 56, 6. 3 1996, p. 1 | , 
A. PROCEDURE 
(1) By Regulation (EC) No 703/962 the Commission initiated an investigation into 
the circumvention of the anti-dumping duties imposed by Council Regulation (EEC) No 
2474/93 of 8 September 19933 on imports of bicycles originating in the People's Republic 
of China by imports of parts originating in that country which are used in the assembly of 
bicycles in the Community, and directed customs authorities, pursuant to Article 14 (5) of 
Regulation (EC) No 384/96, to register imports of bicycle frames, forks, rims and hubs, 
which constitute the principal components of a bicycle. 
(2) The products concerned by this investigation are bicycle parts and accessories 
from the People's Republic of China which are used in the assembly of bicycles in the 
European Community. These products are currently classifiable within the CN codes 
ranging from 8714 91 10 to 8714 99 90. 
(3) The Commission officially advised the representatives of the People's Republic 
of China about the initiation of the investigation and sent questionnaires to the EC 
companies concerned mentioned in the complaint and to other EC companies which 
made themselves known to the Commission or were named by the complainant at a later 
stage. 
2 OJ No L 98, 19. 4. 1996, p. 3 
3 OJ No L 228, 9. 9. 1993, p. 1 
(4) The investigation covered the period 1 April 1995 to 31 March 1996. 
(5) Of the companies mentioned in the complaint, or subsequently named by the 
complainant and those which made themselves known within the 40 days set by 
Regulation (EC) No 703/96, the Commission received complete replies from the 
following: 
-Helmig, Overath, Germany 
-Moore Large & Co, Derby, United Kingdom 
-One + One, Oostvoorne, The Netherlands 
-Promiles, Villeneuve d' Ascq, France 
-Reece, Birmingham, United Kingdom 
-Splendor, Naninne, Belgium 
-Starway, Luynes, France 
-Tandem, Brigg, United Kingdom 
The Commission sought and verified all information it deemed to be necessary and 
carried out investigations at the premises of the above companies. Of these companies, 
Tandem and Promiles were found to be genuine Community producers and Helmig was 
found to be an importer. 
(6) Companies which requested to be heard within the time limit set by Regulation 
(EC) No 703/96 were granted a hearing. 
(7) The following Community producers requested a certificate of non-circumvention 
pursuant to Article 13 (4) of the Basic Regulation: 
-Batavus, the Netherlands 
-BH, Spain 
-Cycleurope, France 
-Dawes, UK 
-Promiles, France 
-Hercules, Germany 
-Mercier, France 
-MICMO, France 
-Raleigh, UK 
-Tandem, UK 
(8) The following companies came forward outside the 40 days set by Regulation 
(EC) No 703/96 and also requested a certificate of non-circumvention: 
-Buchel, Germany 
-Horlacher, Germany 
-Monark Crescent, Sweden 
-Pantherwerke, Germany 
-Quantum, France 
-PRO-FIT Sportartikel GmbH, Germany 
-Tekno Cycles, France 
-TNT, Spain 
B. SCOPE OF THE INVESTIGATION 
(9) As regards parts used in circumvention operations, Article 13 (1) and (2) provide 
for anti-dumping duties in force to be extended to imports of parts from the country 
subject to the measures, i.e. they can either originate in or be consigned from that 
country.Interested parties importing the concerned parts from China were therefore 
offered, for those parts consigned from China, the possibility to prove an eventual non-
Chinese origin. 
The scope of the investigation covered bicycle parts imported into the European 
Community from China which are assembled into finished bicycles for sale in the 
European Community under conditions which, according to the complainant's 
allegations, fulfil the criteria set out in Article 13 (1) and (2) (a), (b) and (c) of the Basic 
Regulation: 
C. RESULTS OF THE INVESTIGATION 
1. Nature of the circumvention practice 
(10) The investigation has established that of the 8 companies identified in recital (5) 
above 4 assemblers ordered during the investigation period almost complete bicycles in a 
disassembled form from the producers in China. For the corresponding shipments to 
Europe the suppliers ensured that parts destined for the same assembler were spread 
across different containers, sent on different dates and sometimes unloaded at different 
ports. By this practice which is rather costly and implies important additional logistical 
constraints, the assemblers avoided that the imported parts were classified in accordance 
with Rule 2 (a) of the General Rules for the Interpretation of the Nomenclature of the 
Common Customs Tariff (hereafter CCT) as finished bicycles which would have been 
subject to the anti-dumping duty. 
One of the companies mentioned in recital (5) applied the above described modus 
operandi for about 75 per cent of its total assembly of bicycles during the investigation 
period. However, during that period it changed its sourcing pattern and started towards 
the end of that period to assemble these bicycles by using more than 40% of parts 
originating in non-Chinese countries, which it purchased either directly from 
manufacturers located in those countries or from subsidiaries of these manufacturers 
located in the Community (see recital 17). 
In order to ensure that certain imported subassemblies of bicycle parts would not be 
classified in accordance with Rule 3 (b) of the General Rules for the Interpretation of the 
Nomenclature of the CCT as finished bicycles, some assemblers have asked for and 
received from national Customs authorities binding tariff information classifying these 
assemblies as parts and thus obtaining official assurance that the anti-dumping duty 
would not be applied to these subassemblies. 
2. Conditions of Article 13 
(i) Change in the pattern of trade 
(11) Between 1992 and the investigation period, imports of bicycles (in. units) from 
China into the Community decreased by more than 98%, which represents a decrease of 
1.5 million units, whereas, for example, imports of finished bicycle frames, the main 
bicycle part imported by assembly operations, increased by more than 146% (in units) in 
the same period, which represents an increase of about 521.000 units. This substitution 
effect is corroborated by the data gathered during the on-the-spot investigation: the output 
of bicycles assembled from sets from the People's Republic of China by the five 
investigated companies -based on the practice described above at recital (10)- increased 
by 80%, which represents for these assemblers alone an increase of about 110.000 units 
between 1992 and the investigation period. 
(ii) Insufficient due cause or economic justification 
(12) Two of the investigated companies argued that they started assembling bicycles in 
the Community due to the end of year suspension of the preferential rates for import 
duties for bicycles originating in China under the General System of Preferences for 
developing countries in 1991 and 1992 and not because of the imposition of anti­
dumping duties. However this argument is not convincing. The shipping arrangements as 
described in recital (10) are costly and imply important additional logistical constraints 
which, in themselves, were not, on economic grounds, needed to benefit from the GSP as 
long as not suspended. On the contrary, it is reasonable to conclude that in the view of the 
high dumping margins relevant to these operations, their timing, volume of output, the 
purchasing arrangements and the small degree of value added, these operations, as well as 
the three others, had, within the meaning of Article 13 of the basic Regulation, 
insufficient due cause or economic justification other than the imposition of an anti­
dumping duty.. 
(iii) Start or substantial increase of operations 
(13) For all 5 companies concerned, their assembly operations, or their imports of 
bicycle parts from China with a view to bicycle assembly, started in or substantially 
increased since 1992-93, when the original investigation was taking place/ 
(iv) 60% of the total value of the parts constituting the assembled product 
(14) It has been established for the five assemblers which ordered almost complete 
bicycle sets in the People's Republic of China, that all the parts for these sets were 
consigned from China. Three of these companies admitted as it had been declared to 
customs that all parts imported from China were of Chinese origin. 
The two other assemblers alleged that more than 40 per cent of the parts used in the 
assembly of bicycles based on these sets were originating in other countries. It has 
however been established that the parts sets ordered by these two companies were 
consigned from China and that parts of EC origin were only used to a limited - in fact 
negligible - extent in the assembly of bicycles out of these sets. 
(15) For some of the parts consigned from China, these two assemblers presented 
Chinese certificates of origin (Form A) to the Customs in order to benefit from 
preferential treatment for the Chinese goods falling under the GSP while the rest of the 
goods consigned from China were declared as being of non-Chinese origin and were thus 
subject to the normal third country duty. As regards the parts claimed to be of non-
Chinese origin -but which were consigned from China- it should be noted that the 
assemblers were unable to prove to the Commission the non-Chinese origin of these 
parts. These two companies, however, although having been given extended deadlines for 
collecting authentic documentation like certificates of origin, invoices of producers and 
transport documents, were unable to give sufficient evidence during the on-spot 
verifications which could have proven the origin of the non-Chinese parts, as declared on 
the invoices by their Chinese supplier, the said origin having been declared to customs on 
importation of these parts. The verification on the premises of these two companies 
revealed that they had imported complete wheels which were assembled in the People's 
Republic of China. These wheels, however, appeared on the suppliers invoice as tyres, 
tubes, rims, hubs, freewheel etc. with different origins and were accordingly declared to 
customs at importation as individual parts with a specific origin for each part. 
The Commission services could only conclude therefore that in the absence of evidence 
to the contrary, all parts which were consigned from China were of Chinese origin and 
that, under these circumstances, 60% or more of the total value of the parts used in the 
assembly of bicycles out of these parts were of Chinese origin. 
(16) Furthermore, it was established during the on-spot verification that the value of 
identical parts of sets consigned from China which these two companies had declared to 
customs authorities on importation varied from one shipment to another for no apparent 
reason. This "erratic pricing" has prevented the exact determination of the value of the 
parts concerned. 
(17) One assembler, which used during the investigation period sets ordered in China 
for about 75 % of its output of bicycles, could show that it used for the assembly of the 
remaining 25 % of its output more than 40 % of parts originating in other countries than 
China. By the end of the investigation period (March 1996) this company started to 
assemble bicycles, which were previously ordered as sets from China, using parts of non-
Chinese origin which were directly purchased from the manufacturers or their 
Community subsidiaries (see recital 10). For these bicycles the assembler was finally able 
to demonstrate during the on-spot verification that the models assembled in this way 
between March and October 1996 contained more than 40 % of parts originating in 
countries other than the People's Republic of China. The Commission services, therefore, 
established that this assembler, even though 75 % of its output during the investigation 
period contained initially more than 60 % of parts originating in the People's Republic of 
China, had reduced since March 1996 its share of Chinese parts below 60 % of the total 
value of parts of the assembled product due to the changed circumstances in the purchase 
of the non-Chinese parts. 
(v) 25% rule on the added value to the parts brought in 
(18) For all 5 companies concerned, the value added in the European Community on a 
per model basis to the parts brought in was found to vary between only 10 and 16 % of 
the manufacturing cost of a complete bicycle, and was therefore clearly below the 25% 
threshold set by Article 13 (2) (b). 
10 
3. Undermining of the remedial effects of the duty and evidence of dumping 
(i) Undermining 
(19) In order to determine whether the remedial effects of the anti-dumping duty had 
been undermined in terms of sales prices, a comparison was made of the sales prices of 
bicycles assembled in the Community from Chinese parts, and sold in the Community in 
the investigation period by the co-operating assemblers ("assembled bicycles"), with the 
"non-dumped" export prices of Chinese bicycles in the original investigation period (i.e. 
actual export prices, duty paid, plus anti-dumping duty). 
(20) Following exactly the method applied in the original investigation, the 
comparison was made between identical or comparable groups of bicycles. Weighted 
average prices were determined for each group and adjustments to these prices were 
made, in order to ensure that the comparison was made at the same level of trade, on the 
same net price basis, and with comparable delivery terms. Subsequently, it was 
determined for each group, whether the sales prices of assembled bicycles have undercut 
the non-dumped export prices of Chinese bicycles in the original investigation period. In 
order to determine an average margin, the sum of the undermining margins for those 
groups for which undermining was established was expressed as a percentage of the total 
non-dumped import value (CIF Community border) of Chinese bicycles, as established in 
the original investigation, for all groups which were included in the comparison. 
11 
With respect to the groups of bicycles used in the comparison, 77 % of the total sales 
volume of the assemblers concerned were found to be models equivalent to those o*f the 
original investigation period, and were consequently used for the comparison. More than 
90 % of the sales used for the comparison were found to have undercut the non-dumped 
export prices in the original investigation period. 
(21) Overall, the comparison showed that the sales prices of assembled bicycles have 
undercut the non-dumped export prices of Chinese bicycles in the original investigation 
period by on average 14.5 %. 
(22) The existence of undermining in terms of sales quantities flows directly from the 
finding that the import volume of Chinese bicycles in the original investigation period 
has largely been replaced, in terms of quantities, by the imports of bicycle frames of 
Chinese origin, as determined in recital (11). 
In this context, it should be noted that due to the considerable level of non-co-operation 
from the assemblers, (see recital (25)) there was no direct information available 
concerning the total sales quantity of bicycles assembled in the Community. However, 
the Commission found that the volume of bicycles sold by the small number of co­
operating assemblers alone in the investigation period actually amounted to 24 % of the 
sales of comparable Chinese bicycles in the original investigation period, whereas these 
co-operating assemblers accounted for only 13 % of the total imports of frames of 
Chinese origin in the investigation period of the circumvention investigation. Thus the 
figures available from the co-operating assemblers fully support the conclusion that the 
sales of bicycles assembled in the Community from Chinese parts have largely replaced 
imports of finished Chinese bicycles. 
12 
(23) In the light of the foregoing, it is determined that the sales of bicycles assembled 
in the Community from parts originating in or consigned from China have undermined 
the remedial effects of the anti-dumping measures in question, both in terms of sales 
prices and quantities. 
(ii) Evidence of Dumping 
(24) Dumping was calculated on the basis of most popular models of assembled 
bicycles for each company, which represented from 50 to 100% of their turnover4. These 
models were compared to the normal values previously established (Taiwan being the 
reference country in the original investigation), using the same 8 criteria (i.e. category of 
the bicycle, material of the frame, number of gears, dérailleurs, crank-gear, gear levers, 
brake sets and hubs) in a manner as reasonable as possible. 
In view of the fact that normal values had been established at FOB Taiwan level for the 
exporters concerned, resale prices in the EC had to be made comparable to this level. The 
actual comparison was thus made FOB China/ FOB Taiwan. 
Dumping was found to range from 16 to 53% for the companies concerned. 
4. Non-co-operating assembly operations 
(25) In view of the significant change in the pattern of trade described in recital (11) 
above and in the absence of co-operation by many undertakings, there is no reason to 
believe that the non-co-operating companies have contributed to the circumvention of the 
anti-dumping duties in force to any lesser extent than the co-operating companies. 
4 For one of the companies, the comparison was based on the turnover of assembled models sold to 
unrelated companies only since this company did not succeed in giving the Commission sufficiently 
accurate information to link related transactions to final sales in a reliable manner. 
13 
The anti-dumping duty should therefore not only be extended to co-operators but also to 
non-co-operators. Any other treatment would actually give a premium to non-co-
operators, a paradox even more unacceptable in the field of circumvention than in a 
conventional dumping case. However, the measures taken will have to be designed in 
such a way as to affect only the imports of parts used in assembly operations by 
circumventing assemblers. 
D. PROPOSED MEASURES 
1. Nature of the measures: Extension of the duty 
(26) In view of the findings made, the anti-dumping duty in force on complete bicycles 
(30.6%) should be extended to certain bicycle parts originating in or consigned from 
China with the exception of those parts of proven non-Chinese origin. 
The investigation has shown that the imports of pre-assembled, pre-treated or pre-painted 
parts is typical of assembly operations. Community producers do, by and large, treat or 
paint the parts they import and do not import pre-assembled bicycle. A case in point is 
the example of complete wheels, as opposed to the imports of rims and hubs for example. 
14 
(27) Therefore, in order to minimise the risk of affecting imports which do not 
constitute circumvention, in particular imports of non-essential parts, the extension" of the 
duty should be limited to essential parts (see column I of the table below), i.e. 
-painted or anodised or polished and/or lacquered frames (including when brakes and 
gears are attached) 
- painted or anodised or polished and/or lacquered forks (including when brakes are 
attached) 
- pre-assembled wheels (with or without tubes, tyres and sprocket) 
-pre-assembled handlebars (when they are presented with a stem, brake and/or gear lever 
attached) 
-complete sets of gears (i.e. rear and front dérailleurs, crank gear and freewheel) 
-complete sets of brakes (i.e. brakes and brake levers) 
15 
Product 
Frames 
Forks 
Rims 
Hubs 
Sets of Gears: 
8714 99 50 
8714 96 30 
8714 93 90 
Sets of Brakes: 
8714 94 30 
8714 94 90 
Complete wheels 
Handlebars CN Code 
8714 91 10 
painted or anodised 
or polished and/or 
lacquered 
other 
8714 9130 
painted or anodised 
or polished and/or 
lacquered 
other 
8714 92 10 
8714 93 10 
ex 8714 99 50 
ex 8714 94 30 
ex 8714 99 90 
ex 8714 99 10 Extension of 
measures 
I 
X 
X 
X 
x 
X 
x Initial 
Registration 
II 
X 
X 
x 
x Subsequent 
Collection 
III 
x 
x 
16 
2. Collection of the duty on imports entered under registration 
(28) The collection of the duty on imports under Registration as per Cornmission 
Regulation (EC) N°703/96 should only be made on those parts which are also described 
in recital (27) above. 
(29) Companies which are exempted from the application of the extended anti­
dumping duty as indicated in recital (32) below should also be exempted from the 
collection of the duty on imports under registration. 
E. EXEMPTION FROM THE EXTENSION OF THE DUTY 
(30) Article 13 (4) of the basic Regulation provides that products shall be exempted 
from the measure where they are accompanied by a certificate of non-circumvention. 
Where an authorization was granted during the circumvention investigation the duty on 
imports which have been registered in accordance with Article 2 of Regulation (EC) No 
703/96 should not be collected. 
(31) The issue of certificates requires prior authorisation by the Commission, or by the 
Council if granted when extending the measure. An authorisation can only be granted 
following a thorough appraisal of the facts. 
17 
(32) The Commission has received applications for such certificates from the 
companies mentioned in recital (7) which contacted the Commission following the 
initiation of the investigation. These applications were received before the deadline set in 
Regulation 703/96 for parties to make themselves known. Most of these applicants are 
Community producers which were part of the Community industry in the previous 
investigations. The others which had not participated in the original proceeding, could be 
identified as Community producers on the basis of their replies to the questionnaire, 
which were verified on-the-spot. The anti-dumping duty on bicycles from China should, 
therefore, not be extended to imports of essential bicycle parts used in the operations of 
these companies. 
In addition, the Commission considered it also appropriate not to extend the anti­
dumping duty on bicycles from China to the parts used in the operations of the company 
which has reduced since March 1996 its share of Chinese parts below 60 % (see recitals 
10, 17) since this company could not be considered to be circumventing the anti-dumping 
duty in force from this time on. 
(33) Further applications were made by the parties mentioned in recital (8), which 
approached the Commission after the deadline set in Regulation 703/96 for parties to 
make themselves known. It is noted, that no deadline is set by Article 13(4) for 
applications for certificates of non-circumvention. 
The Commission sent questionnaires to these companies immediately upon receipt of 
their applications. The Commission has however not yet been able to verify whether 
these parties are assemblers or importers, and whether the operations in which the 
imported goods are used fall within Article 13 (2) of the basic Regulation. Furthermore, it 
cannot be excluded that, in the present case, more companies might apply for a certificate 
of non-circumvention once the measure has been extended. 
(34) In order to ensure therefore that, notwithstanding late application by the 
companies concerned, parties not circumventing the duty are duly exempted from the 
extension of the duty to imports of parts, the adoption of this Regulation should not 
prevent the Commission from investigating pending or future requests with a view to 
authorising the exemption of imports from the extended duty. Where a company applied 
for a certificate of non-circumvention during the investigation, an eventual exemption 
should take effect as from the date of initiation of the present circumvention 
investigation. Where a company applies for a certificate after the extension of the duty an 
eventual exemption should only take effect from the date of the request. On the other 
hand, it must be ensured that where, after examination of an operation, circumvention is 
found to take place, the extended duties due can be effectively collected (see recital 43). 
(35) The operation of the system for granting an authorisation and for the subsequent 
issue of certificates is not fully set out in Article 13 (4) of the basic Regulation. It is 
therefore appropriate to provide for detailed rules on the implementation of the 
exemption system to be adopted by a Commission Regulation. In this respect the 
following should be noted: 
(36) The granting of an authorisation depends on the goods not being used in an 
assembly operation which constitutes circumvention, as laid down in Article 13 (2) of the 
basic Regulation. Therefore, where assemblers do not import directly, a procedure must 
be devised permitting to ascertain whether or not imports of essential bicycle parts are 
used for circumvention purposes. 
19 
(37) To this end, it is appropriate to use the exisiting mechanism of end-use control 
according to customs law, i.e. Article 82 of Regulation (EEC) No 2913/925 (Community 
Customs Code) and Articles 291 et seq. of Regulation (EEC) No 2454/936 (Implementing 
provisions) and to apply it mutatis mutandis within the framework of the anti-
circumvention legislation to the issue of authorisations for certificates of non-
circumvention in accordance with Article 13 (4) of the basic Regulation. 
(38) The end-use by reason of which imports should benefit from an exemption from 
the anti-dumping duty shall be defined by reference, (i) to assembly operations found not 
to be circumventing, and (ii), by reference to the use of essential bicycle parts in small 
quantities by small scale operators, notably for replacement purposes, which should be 
presumed not to constitute circumvention. In the latter case, imports of essential bicycles 
parts will have a rather limited economic significance, and will be unlikely to undermine 
the effect of the existing duty in terms of the quantities of bicycles that might be 
produced from such imported parts(Article 13(2)(c) of the basic Regulation). 
In order to allow intermediaries, which do not import essential bicycle parts directly, to 
purchase these parts from importers and to resell them to non-circumventing assembly 
operations, such transactions should also be monitored under the end-use control system. 
5OJNoL302, 19.10.1992, p. 1 
6OJNoL253, 11.10.1993, p. 1 
20 
(39) Finally, the system should also allow to exempt direct imports by non-
circumventing assembly operations from the extended duty. 
(40) In order to achieve the necessary flexibility to adjust the exemption system where 
needed, it is appropriate to entrust to the Commission the setting up and the operation of 
such system within a framework set by the Council, and after consulting the advisory 
Committee. 
(41) In this respect, and with a view to pending or future applications, the Commission 
should be charged to establish within such a system lists of companies exempted from the 
extended duty, after having examined, pending or new requests for certificates of non-
circumvention. 
(42) In order to create an incentive to abstain from circumventing practices, the 
management of the exemption system has to provide for the possibility of reviewing the 
situation of those companies which have been found circumventing, but which have 
changed their operation to the extent that the conditions of circumvention are no longer 
fulfilled. Similarly, it must be possible to revoke exemptions which are no longer 
justified. Finally, any new operation should also have the possibility to request an 
investigation by the Commission with a view to an exemption from the duty. 
21 
(43) Provision should be made for the possibility, if appropriate, of imports to be 
conditionally exempted from the extended duty while the operations in which they are to 
be used are under examination. However, in order to ensure that, where an operation is 
found circumventing, the extended duty can be effectively collected, customs authorities 
shall be enabled to require the provision of a security if necessary. 
(44) Since this is the first case in which anti-dumping measures are being extended and 
where exemptions are being granted pursuant to Article 13 (4) of the basic Regulation, 
provision has also to be made that the Commission may adapt the exemption system 
where necessary to take account of experience gained with the operation of that system. 
F. PROCEDURE 
(45) Interested parties were informed of the essential facts and considerations on the 
basis of which the Commission intended to extend the definitive anti-dumping duty in 
force to the parts concerned and have been given the opportunity to comment. 
Interested parties have also been informed about the main features of the exemption 
system which will be established (see recital 37). 
22 
HAS ADOPTED THIS REGULATION 
Article 1 
'Essential bicycle parts' within the meaning of this Regulation are: 
Painted, anodised, polished and/or lacquered bicycle frames currently classifiable 
under CN code ex 8714 91 10, 
Painted, anodised, polished and/or lacquered bicycle forks currently classifiable 
under CN code ex 8714 91 30, 
Sets of gears consisting of 
rear and front dérailleurs (CN code 8714 99 50), 
a crank gear (CN code 8714 96 30), and 
a free-wheel (CN code 8714 93 90), 
whether or not presented together, and currently classifiable under CN code 
ex 8714 99 50, 
Sets of brakes consisting of 
brakes (CN code 8714 94 30), and 
brake levers (CN code 8714 94 90), 
whether or not presented together, and currently classifiable under CN code 
ex 8714 94 30 
Complete wheels with or without tubes, tyres and sprockets currently classifiable 
under CN code 8714 99 90, also if presented as parts, and 
Pre-assembled handlebars currently classifiable under CN code 8714 99 10, 
whether or not presented with a stem, brake and/or gear levers attached. 
23 
Article 2 
1. The definitive anti-dumping duty imposed by Regulation (EC) No 2474/93 on 
imports of bicycles falling within CN code 8712 00 and originating in the People's 
Republic of China is hereby extended to imports of essential bicycle parts originating in 
the People's Republic of China. 
2. Essential bicycle parts which are consigned from the People's Republic of China 
shall be considered to originate in that country unless it can be proven by production of 
an origin certificate issued in accordance with the origin provisions in force in the 
Community that the parts in question originate in another specific country. 
Where essential bicycle parts are consigned from a country other than the People's 
Republic of China, customs authorities may, in the event of serious doubts concerning 
their origin, require production of an origin certificate issued in accordance with the 
origin provisions in force in the Community certifying that the parts in question originate 
in a country other than the People's Republic of China. 
3. The duty extended by Paragraph 1 shall be collected on imports of essential 
bicycle parts originating in the People's Republic of China registered in accordance with 
Article 2 of Regulation (EC) No 703/96 and Article 14 (5) of Regulation (EC) No 
384/96. 
4. Unless otherwise specified, the provisions in force concerning customs duties 
shall apply. 
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Article 3 
1. The Commission shall, after consulting the Advisory Committee, adopt by 
Regulation the necessary measures to authorise the exemption of imports of essential 
bicycle parts which do not circumvent the anti-dumping duty imposed by Regulation 
(EEC) No 2474/93 from the duty extended by Article 2. 
2. The Commission Regulation shall, in particular, provide for: 
authorisation of the exemption and control of imports of essential bicycle parts 
used by companies whose assembly operations are not circumventing, 
authorisation of the exemption and control of other imports of essential bicycle 
parts, in particular by companies which do not circumvent, or with regard to 
imports which can be presumed not to circumvent, . 
rules governing the functioning of such exemptions in accordance with the 
relevant customs provisions, and 
exchanges of information between customs authorities and the Commission 
concerning the operation of such exemptions. 
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3. The Commission Regulation shall also provide for: 
a) the examination of whether the conditions of non-circumvention are fulfilled, in 
particular in case of requests by: 
assembly operations by parties which made themselves known during the 
investigation but after the time-limit set out in Article 3 of Regulation (EC) No 
703/96, 
assembly operations which started using essential bicycle parts for the production 
or assembly of bicycles only after the investigation period set out in Regulation 
(EC) No 703/96, 
assembly operations which had been found to be circumventing during the 
investigation, 
other assembly operations using essential bicycle parts for the production or 
assembly of bicycles by parties which had not made themselves known during the 
investigation, and 
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b) the necessary procedural provisions for such examination, and in particular the 
conditions under which future requests for an examination will be accepted. To this end, 
where essential bicycle parts are declared for free circulation by an assembly operation in 
respect of which an examination by the Commission is pending, the Commission 
Regulation shall also make provision that: 
the payment of the customs debt incurred for the anti-dumping duty extended or 
to be collected pursuant to Article 2 be suspended pending the outcome of the 
examination by the Commission, 
where upon examination the operation is found to be non-circumventing, the 
customs debt arising pursuant to Article 2 be extinguished, and 
in other cases, the suspension of the customs debt be lifted. 
The Commission may also provide that customs authorities may require the provision of 
a security when considered necessary to ensure the effective payment of the customs debt 
in case the suspension is being lifted. 
4. Following an examination, under paragraph 3 the Commission may decide, where 
justified, after consulting the Advisory Committee, to authorise the exemption of the 
operation concerned from the extension of the measures provided for by Article 2. 
5. Authorisation for exemptions granted pursuant to the Commission Regulation 
shall have retroactive effect to the date of initiation of the present circumvention 
investigation, provided the party concerned made itself known during that investigation. 
It shall have retroactive effect to the date of the request for an authorisation in other 
cases. 
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6. The Commission shall also take the necessary steps to to revoke an authorisation 
for exemption, where justified and after consulting the Advisory Committee. 
7. The Commission may amend, after consulting the Advisory Committee, the 
Regulation adopted pursuant to Paragraph 1 in the light of experience with its operation. 
Article 4 
Customs authorities are hereby directed to discontinue registration pursuant to Article 2 
of Regulation (EC) No 703/96 and Article 14 (5) of Regulation (EC) No 384/96 of 
bicycle frames, forks, rims and hubs falling within CN codes 8714 91 10, 8714 91 30, 
8714 92 10 and 8714 93 10 respectively. 
Article 5 
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, 
For the Council 
The President 
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ISSN 0254-1475 
COM(96) 689 final 
DOCUMENTS 
EN 02 n 
Catalogue number : CB-CO-96-700-EN-C 
ISBN 92-78-13705-7 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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