COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 12.02.1998 
COM(1998) 59 final 
98/ 0032 (ACC) 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing a definitive anti-dumping duty on imports of certain footwear with 
uppers of leather or plastics originating in the People's Republic of China, 
Indonesia and Thailand 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. The Commission, by way of a Notice published in the Official Journal of the 
European Communities on the 22 February 1995, initiated a proceeding concerning 
imports of certain footwear with uppers of leather or plastics originating in the 
People's Republic of China, Indonesia and Thailand and commenced and 
investigation. 
2. Investigations were carried out at the premises of the exporting producers, importers in 
the Community and the Community producers. The first results of these 
investigations, communicated to the Advisory Committee in September 1996., showed 
the existence of dumping and resultant injury to the Community industry. The 
investigations, taking into account all the interests involved, with particular regards to 
the interests of the distributors, also led to the conclusion that it was in the Community 
interest to take measures. 
3. However, in the light of the fact that Council Regulation (EC) No 519/941 had 
introduced quantitative restrictions on certain types of footwear originating in the 
People's Republic of China, including those concerned by the present proceeding, and 
after information of the Advisory Committee, it was considered that an analysis of the 
effects of the quota on the imports concerned was necessary. 
4. The additional analysis established that, although the quota had in 1995 and 1996 the 
foreseeable effect of limiting the volume of imports concerned originating in the 
People's Republic of China, no significant evolution of the corresponding import price 
could be noted. In view of the persistence of the injurious price practices, it was 
concluded that the taking of measures was warranted. 
5. The measures proposed are in the form of a variable duty based on a minimum price. 
The level of the measures corresponds to the injury elimination margins, as these were 
found to be lower than the dumping margins. The minimum price- amounts to ECU 5.7 
per pair for the three countries concerned. 
6. The attached proposal for a Council Regulation contains more detailed information as 
regards the data on the basis of which the calculations of the proposed minimum price 
have been established. 
7. The interested parties were informed of the essential facts and considerations on the 
basis of which the Commission might decide to propose to the Council the imposition 
of anti-dumping duties, and were given an opportunity to comment. The comments 
were taken into account, where appropriate. 
8. 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 uppers of leather or plastics originating in the People's 
Republic of China, Indonesia and Thailand. 
OJ L67, 10.3.1994, p 89. 
Proposal for a 
COUNCIL REGULATION (EC) No /98 
of 
imposing a definitive anti-dumping duty on imports of certain footwear with 
uppers of leather or plastics originating in the People's Republic of China, 
Indonesia and Thailand 
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 Article 9 (4) thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
A. PROCEDURE 
(1) On 22 February 1995, the Commission announced by means of a notice 
published in the Official Journal of the European Communities2\ the initiation 
of an anti-dumping proceeding with regard to imports into the Community of 
certain footwear with uppers of leather or plastics originating in the People's 
Republic of China, Indonesia and Thailand and commenced an investigation. 
OJ L 56, 6.3.1996, p. 1. Regulation as amended by Regulation (EC) No 2331/96 (OJ L 317, 
6.12.r996, p. 1). 
OJC45, 22.2.1995, p. 2. 
c*_~ 
(2) The proceeding was initiated as a result of a complaint lodged by the European 
Confederation of the Footwear Industry (CEC) on behalf of national footwear 
federations whose complainant members (188 in total) accounted for a major 
proportion (namely 53%) of the Community production of the footwear subject 
to this investigation. The complaint contained evidence of dumping of the said 
product and of material injury resulting therefrom which was considered 
sufficient to justify the initiation of a proceeding. 
(3) The Commission officially notified the exporters and importers known to be 
concerned and their representative associations, as well as the representatives of 
the exporting countries involved, of the initiation of the proceeding. All parties 
directly concerned were given the opportunity to make their views known in 
writing and to request a hearing within the time-limit set out in the notice of 
initiation. 
(4) The authorities of the exporting countries concerned as well as a number of 
exporters, Community importers, their representative associations and trade 
associations made their views known in writing. All parties who so requested 
within the time limit were granted a hearing. 
(5) In view of the large number of Community producers which were party to the 
complaint, and in conformity with Article 17 of Council Regulation (EC) No 
384/963 (hereinafter referred to as "the Basic Regulation"), it was considered 
appropriate to limit the investigation to a number of these producers which 
could reasonably be investigated within the time available. In this context, the 
questionnaires used to collect data and thus permit an evaluation of any injury to 
the Community industry, were addressed to the national producers' federations 
in the Community and to 89 of the 188 Community producers expressly 
supporting the complaint. Of these 89 Community producers, 87.submitted 
complete and meaningful replies. For verification purposes, given the difficulty 
in carrying out detailed on-the-spot investigations in respect of the above 
mentioned 87 Community producers (hereinafter referred to as "the first 
group"), 15 of those Community producers (hereinafter referred to as "the 
verification sample") were selected and their responses subjected to in-depth, 
on-the-spot verifications. 
(6) The Commission also sent questionnaires to the following: 
- the Chinese, Indonesian and Thai producers/exporters listed in the complaint, 
- the Hong Kong exporters listed in the complaint, 
- the authorities of the exporting countries concerned, 
- the exporters who, while not listed in the complaint, made themselves known 
and requested a questionnaire. 
OJ L 56, 6.3.1996, p. 1. Regulation as amended by Regulation (EC) No 2331/96 (OJ L 317, 
6.12.1996, p. 1). 
In total, 13 replies to the questionnaire were received from producers/exporters 
in Indonesia, 17 from producers/exporters in the People's Republic of China and 
three from producers/exporters in Thailand. 
(7) In view of this number of replies, 33 in total, the Commission proposed, in 
accordance with Article 17 of the Basic Regulation, to limit its investigation to a 
reasonable number of cooperating producers/exporters representing the largest 
representative volume of production which could reasonably be investigated 
within the time available. Agreement was reached with the cooperating 
producers/exporters on the selection of a sample of four producers'/exporters 
from the People's Republic of China and seven from Indonesia. Given that, in 
total, only three producers/exporters from Thailand cooperated, all three were 
investigated. 
(8) In addition, the Commission sent questionnaires to all known importers. 
Replies were received from 14 such importers. 
(9) The Commission sought and verified all the information it deemed necessary for 
the purpose of a determination of dumping and injury, and carried out 
investigations at the premises of the following companies: 
(a) Community producers 
(10) The verification sample referred to in recital 5, consisted of a total of 15 
Community producers situated in France, Italy, Portugal, Spain and the United 
Kingdom, which are all Member States with a significant production of the 
footwear under investigation. Together these Member States accounted for 89% 
of total Community production of the product in question in 1994, i.e. the 
investigation period as defined in recital 13. 
The 15 Community producers in the verification sample requested that their 
identities be kept confidential on the grounds that some of them had been 
threatened with commercial retaliation by certain customers who were at the 
same time importers and major retailers in the Community. The investigation 
confirmed that certain Community producers had been subjected to severe 
commercial pressure to stop cooperating in the investigation and to withdraw 
their support for the complaint. Accordingly, it was considered appropriate not 
to disclose the names of these 15 Community producers. 
The representatives of certain exporters and importers have criticised the 
granting of such anonymity on the grounds that complaining domestic industries 
should be prepared to face any kind of "commercial retaliation". In this respect, 
it has to be stressed 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 Community producers are particularly exposed as they represent, 
and act for the benefit of, a much larger group. The identities of the 87 
Community producers in the first group were, however, disclosed to the parties 
having so requested. 
(b) Unrelated importers/distributors 
- Atlex SA, Rouen (F), 
British Shoe Corporation Ltd, Leicester (UK), 
Chausseurop SA, Le Havre (F), 
Groupe André SA, Paris (F), 
Intermedium BV, Hoofddorp (NL). 
(c) Related importer 
Nick's Sports and Leisure Footwear Ltd, Warrington (UK). 
(d) Exporters/producers in Indonesia 
PT Dragon, 
PT Emperor Footwear Indonesia, 
PT Fortune Mate, 
PT Golden Adishoes, 
PT Indosepamas Anggun / PT Primashoes Ciptakreasi, 
PT Kingherlindo. 
(e) Exporters/producers in Thailand 
Bangkok Rubber, 
- CK Shoes, 
PSR Footwear. 
(f) Exporter in Hong Kong 
Grosby (China) Ltd. 
(11) 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. They were also granted a period within which to make representations 
subsequent to the disclosure. 
(12) The parties' representations were considered, and the Commission altered its 
conclusions where appropriate. 
(13) The investigation of dumping covered the period from 1 January 1994 to 31 
December 1994 (hereinafter referred to as "the investigation period"). The 
examination of injury covered the period from 1991 to the investigation period. 
In addition, for the purpose of the additional examination referred to in recitals 
138 to 143, certain developments occurred in 1995 and 1996 were also taken 
into account. 
The geographical scope of the investigation was the Community as constituted 
at the time of initiation of the proceeding, that is to say all 15 Member States. 
(14) Owing to the volume and complexity of the information gathered from many 
different sources and, in particular, in the light of the numerous types of 
footwear covered by the investigation and the need to carry out an additional 
examination to evaluate the effects of the Community-wide quota imposed in 
the course of the investigation period on imports of the footwear concerned 
originating in the People's Republic of China, the investigation exceeded the 
normal duration provided for in Article 6 (9) of the Basic Regulation. Pursuant 
to Article 24 of the Basic Regulation this investigation is indeed not subject to 
the mandatory time limits provided for in Article 6 (9). 
B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
1. Description of the product under consideration 
(15) The product under consideration in this proceeding is "non-sports" footwear, not 
covering the ankle, with insoles of a length of 24 cm or more: 
• with outer soles of rubber, plastics or composition leather and uppers of 
leather, falling within CN codes ex 6403 99 93 (if not identifiable as men's 
or women's footwear), ex 6403 99 96 (if for men) and ex 6403 99 98 (if for 
women), 
• with outer soles of rubber or plastics and uppers of plastics, for women 
(falling within CN code ex 6402 99 98). 
It should be noted that no footwear for use in sporting activities, with a single or 
multi-layer non injected moulded sole, manufactured from synthetic materials 
specially designed to absorb the impact of vertical or lateral movements and 
with technical features such as hermetic pads containing gas or fluid, 
mechanical components which absorb or neutralise impact or materials such as 
low-density polymers, which can be classified for customs purposes in all the 
above mentioned CN codes, is covered by this proceeding. 
(16) For practical purposes and in order to appropriately gather and handle the data 
collected, each of the above mentioned CN codes was considered as one 
"category". Four categories were thus formulated as follows: 
Category 1 : CN code ex 6403 99 93 (i.e. "unisex" adults - leather uppers) 
Category 2: CN code ex 6403 99 96 (i.e. men's - leather uppers) 
Category 3: CN code ex 6403 99 98 (i.e. women's - leather uppers) 
Category 4: CN code ex 6402 99 98 (i.e. women's - plastic uppers) 
(17) Although the footwear falling within any of the above categories can cover a 
wide range of styles and types, as well as be produced by different production 
methods, their essential characteristics, their uses and consumer perception 
thereof remain basically the same. Therefore, for the purposes of this 
proceeding and in accordance with consistent Community practice, they were 
regarded as forming one product. 
2. Like product 
(18) As regards the footwear produced and sold domestically in Indonesia and 
Thailand, where such sales had taken place and information in that respect had 
been made available, the investigation showed that such products were either 
alike in all respects to, or closely resembling, those exported to the Community 
from the countries in question. 
(19) Similarly, footwear subject to the current investigation produced in Indonesia 
and exported to the Community was considered to be a like product to the 
footwear produced and exported from the People's Republic of China to the 
Community. This is particularly relevant in the light of the fact that Indonesia 
has been used as the analogue country for the determination of normal value for 
the People's Republic of China as set out in recitals 42 and 43. 
(20) The investigation also established that the footwear produced in the Community 
and that imported from the three countries concerned were similar as far as their 
overall design, general characteristics and uses are concerned. While there may 
be some minor differences between the product imported from the countries 
concerned and the Community production, these differences do not affect the 
substantial characteristics, properties, perception and uses of the product. 
(21) In this respect, certain parties have claimed that imported and Community-
produced footwear belong to different product segments which do not compete 
with each other. They argued 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. 
10 
(22) 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 other claimed 
that they order in the People's Republic of China, Indonesia or Thailand 
sophisticated products manufactured in accordance with their own 
specifications, design and sometimes raw materials. This contradiction shows 
that the People's Republic of China, Indonesia and Thailand are in fact capable 
of producing, and do indeed produce and export to the Community, the full 
range of products on offer on the market. The argument that footwear iniported 
from the three countries concerned and Community-produced one would belong 
to different product segments cannot therefore be accepted. 
(23) Accordingly, footwear subject to this proceeding produced in the People's 
Republic of China, Indonesia and Thailand and exported to the Community was 
considered to be a like product to footwear produced in the Community within 
the meaning of Article 1 (4) of the Basic Regulation. 
C. DUMPING 
1. General 
(24) It has been the consistent practice of the Institutions to consider related 
producers/exporters, or producers/exporters within the same group, as one 
economic entity and to establish a single dumping margin (and, where 
appropriate, a single duty) for those producers/exporters. This practice has been 
adhered to in this proceeding. Calculating individual dumping margins and 
anti-dumping duty rates in such circumstances might encourage circumvention 
of any anti-dumping measures by enabling related producers/exporters to 
channel their exports to the Community through the related producer/exporter 
(or the producer/exporter within the same group) with the lowest duty. 
2. Indonesia 
(a) Sampling 
(25) As mentioned in recital 7, sampling as provided for in Article 17 of the Basic 
Regulation was used and seven Indonesian producers/exporters were selected as 
the sample, in agreement with the cooperating producers/exporters. 
(26) In accordance with Article 9 (6) of the Basic Regulation it was agreed with the 
other Indonesian producers/exporters which cooperated with the investigation 
but which were not included in the sample, that they would be attributed the 
weighted average dumping margin established for the producers/exporters in the 
sample. 
12 
(27) The producers/exporters selected in the sample and which fully cooperated with 
the investigation were informed that they would be given their own dumping 
margin (and, where appropriate, their own individual duty rate). 
(b) Normal value 
(28) In order to establish normal value for each of the seven Indonesian 
producers/exporters in the sample, it was first determined whether the total 
domestic sales of the footwear concerned by each producer were representative 
when compared to their total sales of the footwear concerned exported to the 
Community. In accordance with Article 2 (2) of the Basic Regulation, domestic 
sales are normally considered representative when the total domestic sales 
volume of the like product sold by each producer represents at least 5% of its 
sales volume of the product under consideration exported to the Community. A 
further representativity test was then carried out on a model by model basis. 
(29) Only one of the cooperating Indonesian producers/exporters in the sample had 
sufficient domestic sales of two models of the like product in the ordinary 
course of trade in the investigation period within the meaning of 
Article 2 (2) and (4) of the Basic Regulation to enable normal value to be 
calculated on such a basis. Given that all these sales were profitable, normal 
value was therefore calculated on the basis of the prices paid or payable on the 
domestic market for all these sales. Normal value for this company's other 
models was constructed, in accordance with article 2 (3) and (6) of the Basic 
Regulation, by adding to their manufacturing costs, the selling general and 
administrative expenses (hereinafter referred to as "SG&A") and profit found 
for the two models referred to immediately above. 
(30) The other six Indonesian producers/exporters in the sample did not have 
sufficient domestic sales of the footwear concerned during the investigation 
period within the meaning of Article 2 (2) of the Basic Regulation. It was 
therefore considered appropriate to construct normal value on the basis of 
Article 2 (3) of the Basic Regulation by adding to the manufacturing cost of 
each model exported to the Community a reasonable amount for SG&A and for 
profit. In this respect, it was considered, in accordance with Article 2 (6) (a) of 
the Basic Regulation, that the amounts of SG&A and profit of the 
producer/exporter which did have sufficient domestic sales (see preceding 
recital) should be used to construct normal value for the six other Indonesian 
producers/exporters in the sample. 
(31) One producer/exporter which had agreed to be included in the sample, did not 
provide costs by model, despite several requests to do so. Since it was therefore 
impossible to calculate domestic profitability and constructed normal values for 
this producer/exporter, facts available as set out in recital 41 were applied in 
establishing the dumping margin for this producer/exporter in accordance with 
Article 18 of the Basic Regulation. 
(c) Export price 
(32) Exports for six of the seven producers/exporters included in the sample were 
made directly to independent importers in the Community. The export prices of 
these producers/exporters were established by reference to the prices paid or 
payable for the footwear sold, in accordance with Article 2 (8) of the Basic 
Regulation. The export price of one Indonesian producer/exporter included in 
the sample, which sold via a related company in Taiwan, had to be adjusted (see 
recital 36). 
14 
(d) Comparison 
(33) For the purpose of ensuring a fair comparison between normal value and the 
export prices of the producers/exporters in the sample, due allowance in the 
form of adjustments was made in accordance with Article 2(10) of the Basic 
Regulation for differences affecting price comparability, whenever these were 
claimed and duly justified. In consequence, adjustments were made, where 
appropriate, for differences in transport, insurance, handling, loading and 
ancillary costs, credit costs, bank charges, guarantees/warranties and levels of 
trade. 
(34) In the case of one of the Indonesian producers/exporters in the sample, a level of 
trade allowance was claimed. The producer/exporter contended that such an 
allowance was warranted because its export sales to the Community were made 
in large quantities to distributors and wholesalers, whilst its domestic sales were 
allegedly made in small quantities to retailers and traders. Upon further 
examination during the on-the-spot investigation, it was established that the 
domestic purchasers were in fact also distributors and wholesalers. 
Consequently, this claim was rejected, since normal value and export price were 
at the same level of trade and no adjustment was therefore required or 
warranted. 
15 
(35) An allowance was also claimed by two of the Indonesian producers/exporters in 
the sample as their export sales were, in contrast with their domestic sales, 
allegedly made on an OEM brand basis. This was verified in detail by the 
Commission during the on-the-spot investigations and it was clearly established 
that, for export sales, there were distinct sales channels with consistently lower 
prices for OEM customers. Since the difference in level of trade for OEM 
customers could not be quantified because of the absence of the same sales 
channels on the domestic market in Indonesia, a special adjustment has been 
granted, in accordance with Article 2 (10) (d) (ii) of the Basic Regulation, by 
deducting from the own brand constructed normal values, an amount 
corresponding to 10% of the gross profit margin. 
(36) One Indonesian producer/exporter sold footwear for export to the Community 
through a related trading company located in Taiwan. It has been determined 
that because of the relationship between the two companies, the prices charged 
by the producing company to the trading company are not reliable. To establish 
a reliable export price to the Community from Indonesia, the price charged from 
Taiwan to the Community was adjusted to an ex-Indonesia level. As the related 
trader's functions can be considered similar to those of a trader acting on a 
commission basis, an adjustment of 5%. based on information supplied by the 
company itself, was therefore deducted from the prices charged by the related 
company to independent customers in the Community. This figure was 
considered reasonable given the degree of the related trader's involvement in the 
selling activities of the exporter. No information was provided which would 
indicate that the use of this figure is inappropriate. Thus, the export prices were 
adjusted accordingly. 
16 
(e) Dumping margins 
(37) To calculate the dumping margin of each Indonesian producer/exporter in the 
sample, a comparison was made between weighted average normal values and 
the weighted average export prices of the producers/exporters, since it was 
clearly established that there was no pattern of export prices which varied 
significantly between either different purchasers, regions or time periods, in 
accordance with Article 2(11) of the Basic Regulation. 
(38) The comparison showed the existence of dumping of the footwear concerned 
during the investigation period by all of the producers/exporters included in the 
sample. Because of the relationship between P.T. Indosepamas Anggun and 
P.T. Primashoes Ciptakreasi, these producers/exporters were treated as one 
company and a single margin calculated therefor, in accordance with the 
Institutions' established practice as set out in recital 24. 
The individual dumping margins for these producers/exporters, thus established 
and expressed as a percentage of the CIF price at Community frontier are: 
P.T. Dragon 5.9% 
P.T. Emperor Footwear 2.0% 
P.T. Fortune Mate 14.9% 
P.T. Golden Adishoes '.. 18.6% 
P.T. Indosepamas Anggun/P.T. Primashoes Ciptakreasi 12.7% 
17 
(39) The dumping margin for the cooperating producers/exporters which were not 
selected was based on the weighted average margin of the individual dumping 
margins established for each producer/exporter in the sample, with the exception 
of the producer/exporter referred to in recital 31 (P.T. Kingherlindo) for which 
facts available were applied. This company's dumping margin was disregarded 
in establishing the weighted average margin for the sample in accordance with 
Article 9 (6) of the Basic Regulation. The dumping margin thus established and 
expressed as a percentage of the CIF price at Community frontier was 12.3%. 
The producers/exporters to which this margin applies are: 
• P.T. Bosaeng Java 
• P.T. Karet Murni Jelita 
• P.T. Koryo International 
• P.T. Lintas Adhikrida 
• P.T. Universal Wisesa 
• P.T. Volmacarol 
(40) For those producers/exporters in Indonesia which neither replied to the 
Commission's questionnaire nor made themselves known, the dumping margin 
has, in accordance with Article 18 of the Basic Regulation, been determined on 
the basis of the facts available. In view of the unusually high degree of non-
cooperation in this case on the part of Indonesian producers/exporters (more 
than 74%o), the absence of other reliable information from independent sources 
and in order to avoid rewarding non-cooperation, it was considered appropriate 
to base the residual dumping margin on the highest margin of dumping alleged 
in the complaint, i.e. 50%. 
(41) In determining the dumping margin for the producer/exporter referred to in 
recital 31 (P.T. Kingherlindo), it was considered that the partial cooperation it 
had shown should be distinguished from the total non-cooperation of the 
producers/exporters referred to in recital 40. Accordingly, it was decided that 
the margin calculated for this producer/exporter should be lower than the margin 
calculated for the non-cooperating producers/exporters. Its margin was 
therefore based on the arithmetic average of the residual margin and the 
weighted average margin calculated for the sample, i.e. 31.1%. 
3. People's Republic of China 
(a) Choice of analogue country 
(42) In accordance with Article 2 (7) of the Basic Regulation, normal value was 
based on data collected from producers in a market economy country (the 
"analogue country"). 
(43) In the complaint, Thailand was proposed as the most appropriate analogue 
country. However, the choice of this country was opposed by a number of 
importers as well as the Chinese producers/exporters on the grounds that the 
levels of economic development in the People's Republic of China and Thailand 
were dissimilar. Two trade bodies, the Foreign Trade Association (FTA) and 
the Federation of the European Sporting Goods Industry (FESI) put forward 
Indonesia, as did the Chinese producers/exporters. A number of other countries 
were also proposed at various stages of the proceeding by certain interested 
parties without, however, providing evidence justifying why any of these 
countries should be given preference to another. 
Having examined the information available in respect of all the countries 
suggested, it was finally considered that, in accordance with Article 2 (7) of the 
Basic Regulation, Indonesia was a reasonable choice of analogue country as 
there appeared to be a large number of suppliers in that market and a certain 
degree of similarity between the production processes employed there and in the 
People's Republic of China. Furthermore, no significant differences were 
apparent as regards the access to raw materials. In addition, sales on the 
Indonesian domestic market were also representative when compared to exports 
from the People's Republic of China to the Community. Moreover, Indonesia 
had been proposed by the Chinese producers/exporters themselves and no 
objection was raised by the Community producers on the Commission's 
intention in this respect. 
(b) Individual treatment 
(44) In accordance with Article 9 (5) of the Basic Regulation, it is the Institutions' 
policy to calculate country-wide dumping margins for non market-economy 
countries, except for those producers/exporters who can demonstrate that they 
should be granted individual treatment, i.e. that their export prices should be 
established separately and their dumping margin be calculated individually. 
20 
(45) All of the Chinese producers/exporters which replied to the Commission's 
questionnaire requested individual treatment. In examining the merits of these 
claims, the Commission sought to verify whether the producers/exporters which 
cooperated in this proceeding enjoyed a degree of legal and factual 
independence from the State, comparable to that which would prevail in a 
market economy country and which would justify a departure from the principle 
of determining a single country-wide dumping margin. To this end, detailed 
questions regarding the ownership, management, control, determination of 
commercial and business policies were addressed to the producers/exporters. 
None of the responding producers/exporters, with the sole exception of Grosby 
(China) Limited, were able to show, to the satisfaction of the Commission, that 
their operations were sufficiently independent from the Chinese Authorities to 
qualify for individual treatment. Their requests were consequently rejected and 
the producers/exporters informed accordingly. 
(46) Grosby (China) Limited was a legal entity incorporated under Hong Kong law 
but manufacturing the like product m a production facility in the People's 
Republic of China. No legal entity existed in the People's Republic of China 
but the capital goods physically present there were included as assets in the 
accounts of the Hong Kong company. 
21 
The Commission carried out on-the-spot verifications at the premises of the 
company in Hong Kong in order to examine the circumstances under which it 
operated and its relations with the Chinese State. In particular the company 
concerned was able to show, to the satisfaction of the Commission, that the 
management and control of the factory, both in terms of production and 
marketing, was clearly in their hands and that their operations were sufficiently 
independent from the Chinese Authorities. It was also established that the 
export prices to the Community and the marketing policies were determined by 
the Hong Kong company without any interference from the Chinese State. 
In view of the above, it was considered possible to grant individual treatment to 
Grosby (China) Limited and, consequently, to calculate a separate dumping 
margin as an exception to the principle of calculating country-wide dumping 
margins in respect of non-market economy countries as required by Article 9 (5) 
of the Basic Regulation. 
(c) Country-wide dumping margin for the People 's Republic of China 
(47) In total, 17 exporters in the People's Republic of China replied to the 
Commission's questionnaire. The producers/exporters concerned however 
represented only 14.3% of total exports from the People's Republic of China 
and it was consequently decided, in view of the particularly high level of non-
cooperation, to establish the margin of dumping for the People's Republic of 
China on the basis of Article 18 of the Basic Regulation, i.e. on the basis of the 
facts available. 
22 
In order to calculate the single country-wide margin of dumping for the People's 
Republic of China, the Commission first calculated, the dumping margin of the 
16 cooperating producers/exporters to which individual treatment was not 
granted (see (i) below). Secondly, the Commission established the dumping 
margin for the non-cooperating producers/exporters (see (ii) below). 
The country-wide dumping margin for the People's Republic of China was then 
calculated as the average of these two dumping margins (see (iii) below). 
(i) dumping margin for cooperating producers/exporters 
Sampling 
(48) As mentioned in recital 7, sampling, as provided for in Article 17 of the Basic 
Regulation, was used in respect of the 17 cooperating producers/exporters in the 
People's Republic of China. Four producers/exporters were selected, in 
agreement with the cooperating producers/exporters concerned. 
However, as one of these producers/exporters, Grosby (China) Limited, was 
subsequently granted individual treatment, it was removed from this sample (see 
recital 46). 
Accordingly, the three remaining producers/exporters included in the sample for 
the People's Republic of China are: 
• Fujian Footwear and Headgear Import & Export Corporation 
• Zhejiang Animal By-Products Import & Export Corporation 
• Zhangjiang Yitai. 
23 
Normal value 
(49) Normal value for the Chinese producers/exporters included in the sample was 
calculated on the basis of the domestic prices in Indonesia and on constructed 
normal values established for the producers/exporters included in the sample for 
Indonesia, in accordance with Article 2 (7) of the Basic Regulation. 
It should be noted that the three Chinese producers/exporters concerned had 
been requested to give detailed specifications of the footwear exported to the 
Community. Only limited information was provided by the producers/exporters 
and the Commission consequently had to establish, on the basis of the facts 
available, which Indonesian models were identical or, in the absence of identical 
models, those Indonesian models which most closely resembled the Chinese 
models exported to the Community. On this basis, the Commission was able to 
find comparable models for models representing 34.7 % of the total exports 
from the three producers/exporters concerned. For these models, the normal 
values established for the purpose of determining the Indonesian dumping 
margins could therefore be used. 
(50) For those Chinese exported models for which there was no like domestically 
sold Indonesian model, the constructed value was established by adding a 
reasonable amount for SG&A expenses and profit to the manufacturing cost of 
comparable exported Indonesian models. The SG&A and profit margin were 
established on the basis described in recitals 29 and 30. 
24 
Export price - calculation of export price 
(51) The investigation showed that the exports of the three Chinese 
producers/exporters in the sample were made directly to independent customers 
in the Community. It was, therefore, possible to establish export prices on the 
basis of prices actually paid or payable, in accordance with Article 2 (8) of the 
Basic Regulation. 
Comparison 
(52) For the purpose of ensuring a fair comparison between normal value and the 
export prices of the producers/exporters in the sample, allowance in the form of 
adjustments was made in accordance with Article 2(10) of the Basic Regulation 
for duly justified differences affecting price comparability. Consequently, 
adjustments were made for differences in physical characteristics, transport, 
insurance, handling, loading and ancillary costs, packing and credit costs. 
Dumping margin 
(53) The Commission first calculated a dumping margin for each of the three 
producers/exporters in the sample. For this purpose, the Commission made a 
comparison between normal value at ex-works level and the export prices of the 
cooperating Chinese producers/exporters at FOB level, ex-Chinese frontier. 
This comparison was based on the weighted average selling price of each model 
of footwear manufactured by the producers/exporters in the sample and exported 
to the Community during the investigation period for which a comparable 
model of footwear could be found. 
25 
(54) In the absence of any significant variations in export prices either by region, 
purchaser or time period, the normal value was compared with the export price 
on a weighted average basis in accordance with Article 2 (11) of the Basic 
Regulation. 
The comparison showed the existence of dumping of the footwear concerned 
originating in the People's Republic of China and exported by the 
producers/exporters in the sample to the Community during the investigation 
period. The weighted average dumping margin, expressed as a percentage of 
the CIF Community frontier price, amounts to AS.2%. 
(ii) Dumping margin for non-cooperating producers/exporters. 
(55) The dumping margin for the non-cooperating producers/exporters was 
established on the basis of the facts available in accordance with Article 18 of 
the Basic Regulation. In this particular case, given the unusually high level of 
non-cooperation and in the absence of other reliable information from 
independent sources, the most appropriate facts available have been considered 
to be the highest dumping margin alleged in the complaint. The dumping 
margin established on this basis was 50%) of the CIF Community frontier price. 
(iii) Country-wide dumping margin for the People's Republic of 
China 
(56) As indicated in recital 47, a single dumping margin was calculated for the 
People's Republic of China by using the weighted average of the margins 
established for the cooperating producers/exporters (i.e. 45.2%), see recital 54) 
and the non-cooperating producers/exporters (i.e. 50%, see recital 55). 
The dumping margin thus established for all producers/exporters in the People's 
Republic of China, except Grosby (China) Limited., expressed as a percentage 
of the CIF Community frontier price, was 47.6%. 
(d) Dumping margin for Grosby (China) Limited 
(i) Normal value 
(57) As far as Grosby (China) Limited was concerned, it should be noted that normal 
value was calculated in the same way as that of the other cooperating 
producers/exporters in the People's Republic of China, i.e. on the basis of prices 
or constructed values of comparable models produced in the analogue country, 
i.e. Indonesia. 
27 
(ii) Export price 
(58) Since Grosby (China) Limited made its export sales via a related importer, 
Nick's Sports and Leisure Footwear Ltd (UK), the export price was constructed 
pursuant to Article 2 (9) of the Basic Regulation, i.e. on the basis of the price at 
which the imported products were first resold to an independent buyer. 
Adjustments were made for all costs incurred between importation and resale 
and for profits accruing, in order to establish a reliable export price, at the 
Community frontier level. A profit margin of 5% was used since this-was the 
profit margin found for the independent importer which had the most similar 
trading structure to that of Nick's Sports and Leisure Footwear Ltd (UK) and 
had been the subject of an on-the-spot verification visit. 
(iii) Comparison 
(59) For the purpose of ensuring a fair comparison between normal value and export 
price, an allowance in the form of adjustments was made, in accordance with 
Article 2(10) of the Basic Regulation for differences in transport and insurance. 
(iv) Dumping margin 
(60) In the absence of any significant variations in export prices either by region, 
purchases or time period, the normal value was compared with the export price 
on a weighted average basis, in accordance with Article 2 (11) of the Basic 
Regulation. On this basis, the dumping margin for Grosby (China) Limited was 
found to be 1.3%. 
28 
4. Thailand 
». 
(i) dumping margin for cooperating producers/exporters 
(a) Normal value 
(61) In order to establish normal value for each of the three co-operating Thai 
producers/exporters, it was first determined whether the total domestic sales of 
•the footwear concerned by each producer/exporter were representative when 
compared to their total sales of the footwear concerned exported to the 
Community. In accordance with Article 2 (2) of the Basic Regulation, domestic 
sales are normally considered representative when the total domestic sales 
volume of the like product sold by each producer represents at least 5%> of its 
sales volume of the product under consideration exported to the Community. 
(62) None of the producers/exporters had sufficient domestic sales of the footwear 
concerned during the investigation period within the meaning of Article 2 (2) of 
the Basic Regulation. It was consequently considered appropriate to construct 
normal value on the basis of Article 2 (3) of the Basic Regulation by adding to 
the manufacturing cost of each model exported to the Community a reasonable 
amount for SG&A and for profit. Two of the producers/exporters were related 
and one of these two related producers/exporters sold sports shoes and sports 
wear, i.e. the same general category of products, on the Thai domestic market. 
The SG&A and profit for these two producers/exporters was established by 
reference to the domestic sales of these products in accordance with Article 
2 (6) (b) of the Basic Regulation. In the absence of any domestic sales of the 
product concerned, or the same general category of products by the third 
cooperating Thai producer/exporter, their SG&A and profit was, in accordance 
with Article 2 (6) (c) established on any other reasonable basis, in this case the 
SG&A and profit established for the other two cooperating producers/exporters 
referred to immediately above. 
29 
(63) One of the three cooperating Thai producers/exporters produced and exported 
shoes partly made from raw materials which it obtained free of charge from its 
customers in the Community. Because the prices of the raw materials were not 
divulged to the producer/exporter, it was unable to report them in its 
manufacturing costs. As the producer/exporter had no domestic sales, normal 
value had to be constructed. In the absence of a full information on raw 
material costs the Commission constructed normal value by using the available 
company's manufacturing costs and the SG&A and profit as established in the 
preceding recital. Since both the constructed value and the export price-reported 
by this producer/exporter excluded the same raw material costs, both were 
directly comparable. 
(b) Export price 
(64) The investigation showed that, except in the case referred to in recital 67, 
exports were made directly to independent customers in the Community. 
Export prices were consequently established on the basis of the prices actually 
paid or payable. 
(c) Comparison 
(65) For the purpose of ensuring a fair comparison between normal value and the 
export prices of the producers/exporters, due allowance in the form of 
adjustments was made in accordance with Article 2 (10) of the Basic Regulation 
for differences affecting price comparability, whenever these were claimed and 
duly justified. In consequence, adjustments were made, where appropriate, for 
differences in transport, insurance, handling, loading and ancillary costs, credit 
costs, bank charges, guarantees/warranties and levels of trade. 
30 
(66) An allowance was also claimed by one of the Thai producers/exporters as their 
export sales were, in contrast to their domestic sales, allegedly made on an OEM 
brand basis. During the investigation it was clearly established that export sales 
were made at a different level of trade than domestic sales. An allowance was 
consequently granted by deducting from the own brand constructed normal 
values, an amount corresponding to 10% of the gross profit margin in 
accordance with Article 2(10) (d) (ii) of the Basic Regulation. 
(67) One Thai producer/exporter sold footwear for export to the Community through 
a related trading company located in the USA. It has been determined that 
tjecause of the relationship between the two companies, the prices charged by 
the Thai producing company to the US company were not reliable. To establish 
a reliable export price to the Community from Thailand, the price charged to the 
Community was adjusted to an ex-Thailand level. As the related company's 
functions can be considered similar to those of a trader acting on a commission 
basis, an adjustment of 5% was deducted from the prices charged by the related 
company to independent customers in the Community. This figure was 
considered reasonable given the degree of the related trader's involvement in the 
selling activities of the exporter. No information was provided which would 
indicate that this figure is inappropriate. Thus, the export prices were adjusted 
accordingly. 
31 
(d) dumping margins 
(68) To calculate the dumping margin of each cooperating Thai producer/exporter, 
the Commission made, in accordance with Article 2(11) of the Basic 
Regulation, a comparison between weighted average normal values and the 
weighted average export prices of the producers/exporters since it was clearly 
established that there was no pattern of export prices which varied significantly 
between different purchasers, regions or time periods. 
(69) The comparison showed the existence of dumping of the footwear .concerned 
during the investigation period by one of the three cooperating 
producers/exporters. The margin thus established and expressed as a percentage 
of the CIF price at Community frontier is: 
• CK Shoes 1.4% 
The investigation revealed that the two other cooperating Thai 
producers/exporters were related, one producer/exporter holding shares of the 
other. In addition, shares of one of these producers/exporters were held by a 
company in the USA. Both producers/exporters exported the product concerned 
to the Community during the investigation period. 
Although these producers/exporters maintained separate production facilities 
only one dumping margin was calculated therefor in line with the Institutions' 
established practice as set out in recital 24. 
The margin thus established was : 
• PSR Footwear/Bangkok Rubber Company 0%. 
32 
(ii) dumping margin for non-cooperating producers/exporters 
(70) For those producers in Thailand which neither replied to the Commission's 
questionnaire nor made themselves known, the dumping margin has, in 
accordance with Article 18 of the Basic Regulation, been determined on the 
basis of the facts available. In view of the unusually high degree of non-
cooperation in this case on the part of Thai producers/exporters (99%), the 
absence of other reliable information from independent sources and in order to 
avoid rewarding non-cooperation, it was considered appropriate to base the 
residual dumping margin on the highest margin of dumping alleged in the 
complaint, i.e. 50%. 
D. COMMUNITY INDUSTRY 
(71 ) As mentioned in recital 5, in view of the large number of Community producers 
which were party to the complaint, it was considered appropriate to collect data 
concerning the Community industry from three sources, namely the national 
producers' federations in the Community, the 87 Community producers in the 
first group and the 15 Community producers in the verification sample. Injury 
indicators were then considered at the most appropriate level (i.e. on the widest 
basis for general indicators and on a narrower basis for those which could only 
be collected from individual companies). 
Accordingly: 
• 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; 
• General trends concerning prices, costs and profitability were established at 
the level of the 87 Community producers in the first group, which were selected 
with a view to covering, in as balanced a way as possible, the four categories of 
product under consideration, as well as reflecting the various company sizes and 
production structures in the main producer Member States; 
• Price undercutting and injury-elimination level calculations were earned out 
on the basis of fully verified price and cost data collected from the 15 
Community producers in the verification sample, which are representative in 
terms of size and product range as well as location (they are all located in the 
major producing Member States). 
(72) Certain parties have claimed that the above methodology was deficient on the 
grounds that it would depart from the provisions of both Article 5 (4) and 4(1) 
of the Basic Regulation, according to which the representative nature of the 
investigated Community industry would have necessarily to be established on 
the basis of the "major proportion" test, and thus any evidence of injury would 
have to be based on data provided by producers representing at least 25% of 
total Community production of the like product. In particular, it was argued that 
the "total Community production" figure used for assessing the representativity 
of the 188 complaining Community producers would not be reliable. 
The sampling exercise carried out by the Commission was. also questioned on 
the alleged grounds that the decision to resort to sampling was taken at an 
advanced stage, in response to an insufficient cooperation from the complaining 
industry during the initial stages of the investigation. 
34 
1. Total Community production 
(73) it should first be stressed that the level of support for the complaint was 
established before initiation of the investigation. During the course of the 
investigation it was established that the 188 complaining Community producers 
continued to represent more than 25%) of total Community output (namely 
53%>). Therefore, the complaining Community producers represent a major 
proportion of total Community output of the like product within the meaning of 
Article 4(1) of the Basic Regulation. 
Moreover, it has also to be stressed that the "total Community production" 
figure of the like product was set at the maximum possible level. Indeed, due to 
the lack of reliable data, no examination could be carried out in order to 
determine whether, in accordance with the provisions of Article 4 (1) (a) of the 
Basic Regulation, the production volume of certain non-complaining producers 
should have been excluded from the "total production" figure, on the grounds 
that their core business would be importing rather than producing within the 
Community. 
Such would-be Community producers, some of which are known to have made 
considerable imports, are also known to produce relatively large quantities in 
the Community. Had sufficient information in this respect been made available, 
it is likely that part of this "total Community production" would have been 
excluded. Such reduction would have increased the share of Community 
production of the complaining Community producers. Conversely, the 
investigation established that out of the 188 complaining Community producers, 
87 (i.e. the Community producers in the "first group" as defined at recital 5) 
were neither related to any producers/exporters nor themselves significantly 
importing the product covered by this investigation. 
35 
2. Sampling 
(74) In this respect, it has to be recalled that given the very large number of potential 
parties to the proceeding, the notice of initiation of this proceeding explicitly 
mentioned the fact that the investigation could be conducted by means of 
sampling. As a result, from the initial stages of the investigation, cooperation 
was sought (via national federations) from 89 Community producers selected 
amongst the 188 Community producers supporting the complaint. 
Meaningful replies were received from 87 producers (referred to as. "the first 
group" in recital 5), from which, for verification purposes, 15 were selected and 
their replies subjected to in-depth on-the-spot verifications (this latter group of 
producers is referred to as "the verification sample" in recital 5). 
It should be noted that the provisions of the Basic Regulation do not require in 
the case of sampling that relevant data be collected from Community producers 
representing a major proportion of total Community production as defined in 
Articles 4(1) and 5 (4) of the Basic Regulation. Rather, Article 17(1) of the 
Basic Regulation provides for the possibility of collecting data from a sample 
which is representative of the Community industry. The very purpose of such 
sampling provisions is to allow for a situation in which the share of production 
represented by such sampled Community producers could, depending on the 
circumstances, be substantially less than 25% of total Community production. 
In any event, the 87 Community producers in the first group alone were found to 
account for 25.7%) of Community output of the like product, thus qualifying, in 
the absence of declared opposition to the complaint, as the Community industry. 
36 
3. Conclusion 
(75) In the light of the above, it is concluded that the representative nature of the 
investigated Community industry was assessed in a reasonable way and in 
conformity with the relevant provisions of the Basic Regulation. 
E. INJURY 
1. General remark 
(76) To the extent possible, all Eurostat figures used in the calculations "detailed 
below (relating to import volumes, values and thus prices per pair) were 
corrected on the basis of data available (provided by the Taric database), in 
order to exclude footwear involving special technology (none of which, as 
explained in recital 15, is covered by this proceeding). 
2. Consumption in the Community 
(77) In calculating the total Community consumption of footwear subject to this 
investigation, the following data were added together: 
• the total sales volume in the Community of all Community producers of the 
product concerned (using information obtained from the Community 
footwear producers' national federations in combination with data for 
exports outside the Community as per Eurostat), and 
• the total imports into the Community of the product concerned from third 
countries including the People's Republic of China, Indonesia and Thailand. 
37 
On this basis, Community consumption of the product concerned was found to 
have declined from 327 million pairs in 1991 to 307 million pairs in the 
investigation period, a decrease of approximately 6%. 
3. Volume and market share of dumped imports during the investigation 
period 
(78) The total volume of imports for the footwear subject to the present investigation 
originating in the People's Republic of China was 28.6 million pairs in the 
investigation period. 
The total volume of imports for the product concerned originating in Indonesia 
stood at 15.9 million pairs in the investigation period whilst the corresponding 
figure for Thailand was 11.8 million pairs. 
Calculated on the basis of Community consumption (see preceding recital), the 
share of the Community market held, during the investigation period, by 
Chinese imports was 9.3%) whilst that of Indonesia was 5.2%) and Thailand 
3.9%. 
4. Cumulation 
(79) In accordance with Article 3 (4) of the Basic Regulation, an examination was 
made as to whether or not the effect of the dumped imports from the three 
countries concerned should be assessed cumulatively. 
As can be seen from the preceding recital, the individual volume of imports 
from the People's Republic of China and Indonesia and their market shares in 
the Community (9.3%) and 5.2% respectively) were not negligible during the 
investigation period. Furthermore, dumping margins which were more than de 
minimis were established for both countries (see recitals 56 and 38 to 41). 
Similarly, although not as large as that of the other two countries concerned by 
this investigation and in spite of a slight decline over the period 1991 to 1994, 
the Thai market share in the Community was 3.9%), i.e. more than de minimis, 
as was the residual dumping margin of 50% established for this country (see 
recital 70). 
(80) The investigation also showed that the conditions of competition on the 
Community market for the footwear imported from the People's Republic of 
China, Indonesia and Thailand are similar. Indeed, the Chinese, Indonesian, 
Thai and Community products are: 
interchangeable from the consumer's point of view 
offered for sale in the same geographical areas of the Community 
sold through the same distribution channels 
simultaneously present on the Community market 
generally aimed at the same segment of the Community footwear market 
(i.e. the low to lower-middle priced part of the market). 
In addition, the Chinese, Indonesian and Thai products are sold at prices found 
to undercut the Community industry's prices (see recital 86). 
39 
(81) On this basis, it is considered that cumulation is warranted and, accordingly, the 
effect of the dumped imports from all three countries should be assessed jointly 
for the purpose of injury analysis. 
5. Cumulated volume, cumulated market share and developments of dumped 
imports 
(82) The total volume of imports from the People's Republic of China, Indonesia and 
Thailand taken together rose from 38.6 million pairs in 1991 to 56.3 million 
pairs during the investigation period, a significant increase of more than 45%. 
This corresponds to an increase in combined market share from 11.8% in 1991 
to 18.4%) during the investigation period. 
6. Prices of dumped imports and undercutting 
(83) Given the different product mixes which can occur within each of the four CN 
codes in question (see recital 17), any general examination of the evolution of 
the import prices of dumped imports between 1991 and 1994 using only the 
corresponding categories of footwear should be viewed with caution. To this 
end, using information received from importers and importers' organisations, the 
investigation showed that there had been a gradual shift to more sophisticated, 
up-market types of footwear being imported, with a corresponding overall 
increase in import prices. 
(84) As regards price undercutting, comparisons were first made on a category-by-
category basis between the CIF import price (as reported by Eurostat, after 
correction in order to exclude footwear involving special technology as 
explained in recital 76), adjusted to duty paid, customer-delivered levels and the 
selling prices in the Community of the Community producers at the same level 
of trade (i.e. to distributors/wholesalers). 
40 
A second undercutting exercise was also carried out by selecting those Chinese, 
Indonesian and Thai models exported to the Community in the greatest volumes 
by the three Thai cooperating producers/exporters and the Chinese and 
Indonesian producers/exporters in the dumping samples (grouped into 17 
representative so-called "families" of footwear, for example: men's lace up town 
shoes) and comparing their adjusted, customer-delivered price levels within the 
Community to those of identical or comparable models produced by the 
Community producers in the verification sample. 
(85) In adjusting import prices to the duty paid, customer-delivered level, account 
was taken of the normal duty rate or the duty rate applicable under the GSP (as 
appropriate), as well as a margin for all unloading, transport and other ancillary 
costs incurred specifically in relation with the imports, together with the profits 
achieved by the importers. On the basis of the evidence examined in respect of 
the product concerned 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 2% upwards, reflecting the variable costs incurred, 
and then increased by an amount of ECU 0.96 per pair, reflecting the average 
fixed amount of costs incurred, plus the customs duty. 
(86) The two methods used to determine undercuting described in recital 84 resulted 
in the establishment of average undercutting margins (expressed as a percentage 
of the Community industry's prices) in excess of 25%o for the People's Republic 
of China and of 10%> for both Indonesia and Thailand. 
41 
7. Conclusion concerning the volume of dumped imports and their effect on 
prices in the Community 
(87) As has been shown above, there was a significant increase of more than 45%) in 
the combined volume of dumped imports from the three countries in question 
between 1991 and the investigation period. Consumption, however, declined by 
about 6% over the same time scale. 
Even though certain increases in import prices which reflected the evolution of 
the product-mix were observed over the four year period under examination, 
these prices were nevertheless at highly dumped levels which significantly 
undercut the prices of the Community producers. 
8. Situation of the Community industry 
Preliminary remark 
(88) As concerns the type of data given below, it should be noted that not all 
economic factors collected at the level of individual Community producers in 
the first group and the verification sample were found to have a bearing on the 
state of the Community footwear industry for the determination of injury. For 
example, because production takes place to order, stocks were usually not held 
and consequently were found to have very little meaning in the injury analysis, 
as was the case with capacity and capacity utilisation (since idle capacity cannot 
be strictly allocated only to the like product). Thus, in accordance with 
Article 3 (5) of the Basic Regulation, in the analysis of the situation of the 
Community industry, only those economic factors which were found to have a 
bearing on the state of this particular industry were taken into consideration. 
42 
Production 
(89) The information received from the national federations showed that production 
in the Community fell from approximately 259 million pairs in 1991 to 224 
million pairs in the investigation period, a drop of 14%. 
Sales volume 
(90) The data obtained from the national federations and Eurostat showed a massive 
decline in sales volume of 22% between 1991 and the investigation period 
(calculated using total production in the Community minus exports outside the 
Community). 
Turnover 
(91) The decline in sales value of the product concerned was found to be 16%> 
between 1991 and the investigation period. Such a decline, although less 
marked than in terms of volume, was nevertheless significant. 
Market share 
(92) On the basis of consumption figures as determined in recital 77 and using data 
obtained from national federations and Eurostat, it was found that the market 
share of the Community producers on the Community market went down from 
64.5%) in 1991 to 53.3%) during the investigation period. 
43 
Prices of the Community producers 
(93) As explained in recital 83 concerning the prices of imports, it is considered that 
given the different product mixes which can occur within each of the four CN 
codes in question, any general examination of the evolution of the import prices 
of dumped imports between 1991 and 1994 using only the categories of 
footwear should be viewed with caution. This also applies when analysing on 
this aggregate level data relating to the Community industry. 
On a category basis, the investigation did, however, show certain trends in the 
Community producers' prices since it was found that only the Community 
producers' weighted average selling price of the product belonging to category 1 
("unisex" footwear) went up by a significant amount between 1991 and the 
investigation period. This price increase is likely to result from the fact that this 
category includes a very large proportion of fashion footwear, very popular with 
young people, which have been very much in demand during recent years. 
On the other hand, the prices of the products belonging to the other categories 
either remained stable or only went up slightly, but in any case this increase has 
been below the average level of inflation for the period under consideration and 
does not reflect the increase in the production costs. The conclusion can 
therefore be drawn that prices have been suppressed. 
44 
Profitability 
(94) The profitability (in relation to turnover) on sales in the Community of the like 
product for the Community producers in the first group increased slightly from 
+6.8%o in 1991 to +13% during the investigation period. The Community 
producers in the verification sample also confirmed this relatively stable trend 
with margins going up from +8.1% to +8.2%>. The Community producers' 
capacity to maintain their profitability in the face of the above mentioned price 
suppression is the result of a considerable effort of rationalisation and cost 
reduction on the part of the surviving Community producers. 
More importantly, the cost structure of this particular industry explains that its 
operating businesses are either profitable or do disappear. Indeed, with direct 
expenses (raw materials and labour etc.) representing up to 80% of the cost of a 
shoe, footwear is only made to order, after a direct costing showing a sufficient 
profit for each order. In this situation, no company can show losses for more 
than a few months without being forced to close down. This explains why the 
Community producers in the first group and the verification sample were, on 
average, not loss making. 
This cost structure together with the increasing leverage of a number of large 
retailers-importers who are able to select and change their source of supply for 
any order on the sole basis of price (in the case of the People's Republic of 
China, Indonesia and Thailand dumped prices) is a key element and explains the 
extreme vulnerability of this labour intensive industry which has no means, over 
an extended period of time, to resist sustained pressure from low-priced, 
dumped imports. 
45 
The Community industry had therefore no choice but to try to maintain 
profitability at the expense of market share. This was still feasible and 
profitability remained stable at around 7%> over the period covered since, despite 
a fall of more than 11 percentage points in their market share since 1991, the 
Community producers still held 53% of the Community market in 1994. 
Employment and company closures 
(95) In the light of the above, the analysis of employment developments and 
company closures appeared to be particularly relevant. Information received 
from the national federations showed that employment in the sector producing 
the footwear under investigation declined from about 127,250 people in 1991 to 
114,000 people in the investigation period, a drop of approximately 10%>. 
As concerns the number of Community producers manufacturing the footwear 
subject to the current investigation which ceased produotion between 1991 and 
1994, details of the closure of 67 factories in seven Member States (Belgium, 
France, Italy, the Netherlands, Portugal, Spain and the United Kingdom) were 
received from national producers' federations. Given that some Member States 
do not keep detailed statistics for very small companies, the true figure on 
company closures may have been much higher. 
9. Conclusions on injury 
(96) All of the economic indicators mentioned above, based on information supplied 
by the national footwear producers federations clearly show that the Community 
producers' situation has deteriorated between 1991 and the investigation period 
(i.e. as regards production, sales volume, market share, employment and 
company closures). 
46 
(97) Figures from individual companies (such as those relating to profitability), 
examined at the end of the injury analysis period, relate to "survivors" and thus 
the most resilient producers. It follows that such data understate the level of 
injury as a whole as far as the entire Community production of the footwear 
under investigation is concerned. It is only when the global situation is 
examined that the disappearance of producers, the reduction in production, sales 
and employment and thus the full extent of the injury becomes evident. 
In addition, any apparent "well-being" of the Community producers belonging 
to the first group or the verification sample may also have come about due to 
their taking over of part of the market share previously held by the Community 
producers which went out of business during the four year period under 
examination. These Community producers have also been obliged to shift their 
production towards certain types of footwear which, up until the present time, 
have been less subject to the pressure exerted by dumped imports (e.g. fashion 
footwear which has formed one of the "niches" on the market). 
In this respect, it has been claimed by a number of interested parties that the 
Community producers have very successfully engaged in a strategy of 
specialisation in up-market fashion products. The result of this is alleged to be 
that the Community producers no longer have the capacity to make large 
volumes of low-cost product of the type produced in the exporting countries 
concerned by this proceeding. 
47 
It is true, that, given the advantages of their geographical proximity to the 
Community markets and their ability to make quick delivery to meet rising, and 
very often short-lived, consumer demand for fashion footwear, it is to this sector 
that many of the Community producers have retreated with all or part of their 
output. Some producers have had to relinquish altogether production of less • 
fashionable, cheaper and less value-added but high volume lines to the imports 
from outside the Community, whilst others have tried to produce a mixture of 
fashion footwear and high volume, "classic" lines. These "classic" lines are 
indeed the only ones generating the volumes required for maintaining an 
industrial and commercial structure of a viable size. 
(98) It was therefore concluded that, overall, the Community producers of the 
footwear under investigation have suffered injury which is sufficient for it to be 
classified as material. 
F. CAUSATION 
(99) In accordance with Article 3 of the Basic Regulation, it was examined whether 
the material injury suffered by the Community industry was caused by the 
Chinese, Indonesian and Thai dumped imports, or whether other factors had 
caused or contributed to that injury. 
48 
1. Effect of the dumped imports 
(100) In examining the effects of the dumped imports, it has to be borne in mind that, 
because of the nature of the products concerned and the leverage of certain large 
distributors, the Community footwear market is, at least at wholesale level, 
transparent and price sensitive. Moreover, as mentioned in recital 80, the 
imports of dumped products from the countries concerned are affecting mainly 
the lower to lower-middle end of the market, which is generally recognised as 
being the most sensitive to price variations and, consequently, the segment 
where sales at low prices have inevitably substitution effects. 
In addition, it should be recalled that the footwear subject to this proceeding 
which is produced in the Community and the equivalent footwear imported 
from the People's Republic of China, Indonesia and Thailand are in direct 
competition with each other since they are sold through the same sales channels 
and there are very often, for the consumer, few perceptible or significant 
differences in quality between the imported products and the products produced 
in the Community. 
( 101 ) In this context it was found that the increasing volume and market share of those 
imports, in conjunction with the significant undercutting found, coincided with 
the loss of market share and general decline of the Community industry. 
It was accordingly concluded that the low-priced, dumped imports from the 
countries concerned are linked to the deteriorating situation of the Community 
industry. 
49 
2. Effect of other factors 
(102) Consideration has also been given to the question of whether factors other than 
the dumped imports from the People's Republic of China, Indonesia and 
Thailand might have caused, or contributed to, the material injury suffered by 
the Community industry in order to ensure that any injury caused by other 
factors is not attributed to the dumped imports. 
(a) Imports from other third countries 
(103) The question whether imports from-countries other than the three currently 
under investigation may have contributed to the material injury suffered by the 
Community industry was firstly examined. In this respect, particular reference 
was made by certain interested parties to imports into the Community from 
Vietnam. Eurostat data showed (after correction in order to exclude footwear 
involving special technology as explained in recital 76) that the volume of 
imports in the Community of the products concerned from Vietnam increased 
very significantly from approximately 30,000 pairs in 1991 to 15.9 million pairs 
in 1994. 
Given the surge in the volume of imports from Vietnam, it cannot be denied that 
these imports may also have had a detrimental effect on the situation of the 
Community industry. However, as concerns the prices of these imports, given 
the lack of information on the product mix, it was not. possible to establish 
reasonable data upon which conclusions could be drawn. It was therefore 
considered that the evidence produced to date concerning the pricing of 
Vietnamese exports to the Community was insufficient to warrant extending the 
scope of the current investigation to Vietnam. 
50 
( 104) Moreover, it should be noted that the Community market share of all third 
countries including Vietnam, but excluding the People's Republic of China, 
Indonesia and Thailand, increased by 12%> between 1991 and 1994, whereas the 
market share of the three countries concerned by this investigation increased 
more substantially, i.e. by 46%>, during the same period. 
(105) It is therefore concluded that, even if imports from other third countries may 
have contributed to the injury suffered by the Community industry, their impact 
cannot be considered as such as having broken the causal link between the 
dumped imports from the three countries concerned and the material injury 
suffered by the Community industry. 
(b) Intra-Community competition 
(106) It has been argued by several interested parties that there was significant internal 
competition in the Community between producers in Italy, Portugal and Spain 
and producers in the other Member States and it was for this reason that certain 
Community producers found themselves in an adverse economic situation. The 
competitive devaluations of some Member States' currencies and the 
Commission's decision not to allow the payment of a State aid to the Italian 
footwear industry4 on the ground, inter alia, of its good health, have also been 
cited as further indication that any injury the Community industry might have 
suffered has been largely self-inflicted. 
(107) In'addressing the above arguments, however, a distinction should be made 
between fair competition and unfair competition and it should be recalled that, 
within the framework of a single market, there are mechanisms to ensure that 
competition between Community producers remains equitable. 
4 By Commission Decision 96/542/EC (OJ L231, 12.9.1996, p. 23). 
5! 
In addition, in the assessment of the injury suffered by the Community industry, 
the situation of the Community producers of the products in question in all 
Member States where these types of footwear are produced in significant 
quantities has been considered. The results of this assessment reflect the 
situation of the Community industry as a whole. Accordingly, the aggregated 
data used for the injury assessment would compensate for internal differences, if 
any, in the Community industry's performance. In this respect, it is, for 
instance, worth noting that if internal competition had been the only driving 
force on the market, the Community industry's market share would hot have 
experienced a decline from 64.5% in 1991 to 53.3% in 1994 as the loss of 
market share by some would have been the gain of the others. 
The investigation has shown that the diminishing production, market share, and 
employment of producers in some Member States have in no way been 
compensated by an improvement of the situation of producers in other Member 
States, as a number of interested parties have argued. 
It must also be stressed that the Commission's decision not to allow the granting 
of a State aid to the Italian footwear industry was based on an assessment of this 
industry as a whole, as opposed to the segment of the market concerned by the 
present investigation. Furthermore, this decision was based on the impact that 
such a measure might have had on the functioning of the internal market and 
specifically acknowledges, inter alia, the difficult situation of employment in 
this sector in all Member States. 
52 
(108) Further to the final disclosure, certain interested parties have argued that, in 
view of the fact that certain Community producers reported strongly negative 
developments in recent years while others maintained their turnover, the injury 
suffered by the Community industry might result from disparities in the quality 
of the companies' management, and not from the impact of the dumped imports 
concerned. 
(109) In this respect, it should be stressed that, due to differences in their product 
range, it is normal that not all companies are as acutely confronted with the 
competition from the low-priced, dumped imports. It is also normal that, in a 
competitive market, some companies perform better than others and it is 
precisely the number of Community producers which ensures that competition 
exits. Moreover, no evidence of mis-management (relating for instance to 
investment or employment policies) was found in the course of the 
investigation. As stated above, internal competition cannot, in particular, be the 
cause of the overall decrease in market share of the Community industry and 
therefore considered as a factor breaking the causal link between the dumped 
imports and the injury suffered by the Community industry. 
(c) Recourse to subcontracting of labour intensive operations 
(110) In addition, it was also argued that a number of Community producers have 
transferred some of their more labour intensive operations to third countries 
with low labour costs, thereby contributing to the overall injury suffered by the 
Community industry, particularly with regard to employment. In this regard, it 
is considered that the fact that some producers have had to resort to such a 
course of action, which is a defensive step taken in order to keep costs at levels 
which enable them to compete with the low-priced imports, is additional 
evidence of the pressure exerted by the dumped imports. 
3. Conclusions on causation 
(111) Although certain factors other than dumped imports from the countries 
concerned may have contributed to the injury suffered by the Community 
industry, it is nevertheless concluded that a causal link exists between low-
priced, dumped imports from the People's Republic of China, Indonesia and 
Thailand, taken in isolation, and the material injury suffered by the Community 
industry. This conclusion is based on the various elements set out above and in 
particular the level of price undercutting, the significant market share gained by 
these countries (and the corresponding loss in market share suffered by the 
Community industry) and the huge increase in the quantities concerned which 
resulted in a great number of producers situated in the Community being forced 
to close. This conclusion is moreover strengthened by the fact that the overall 
efficiency of the Community footwear industry producing the products 
concerned is not in question, as evidenced, inter alia, by the achievements of the 
Community producers on export markets outside the Community (exports in 
volume by the Community industry indeed rose by 25% between 1991 and 
1994). 
54 
G. COMMUNITY INTEREST 
(112) On the basis of all evidence submitted, an examination was made of whether, 
despite the conclusion on dumping and injury caused thereby, compelling 
reasons existed which would lead to the conclusion that it was not in the 
Community interest to impose measures in this particular case. For this 
purpose, and pursuant to Article 21 (1) of the Basic Regulation, the impact of 
possible measures for all parties concerned as well as the consequences of not 
taking measures were examined. 
In making such an appreciation, the need to eliminate the trade distorting effects 
of injurious dumping and to restore effective competition was given special 
consideration. 
1. Impact on the Community industry and its suppliers 
(a) Interest of the Community industry 
(113) Without measures to correct the effect of the dumped Chinese. Indonesian and 
Thai imports, it is considered inevitable that the position of the Community 
producers would further deteriorate. More Community producers, and finally 
the Community industry as a whole, would begin to incur financial losses, with 
the result that there would be further factory closures and considerable job 
losses in addition to those resulting from rationalisation and technological 
improvements. It should also be borne in mind that if fewer producers are 
present on the Community market, competition may be reduced 
commensurately. 
55 
(114) Certain interested parties argued that, given the mobility of the footwear 
industry world-wide, anti-dumping measures against the People's Republic of 
China, Indonesia and Thailand would have no positive effect on the situation of 
. the Community industry due to a likely shift of supply to other cheap labour 
third countries such as Bangladesh, India or Vietnam. It has been argued 
moreover that the situation of the industry producing footwear with uppers of 
leather or plastics was comparable in this respect to that of the synthetic 
handbags manufacturers and that accordingly the Council should also in the 
present case refrain from taking measures'. 
(115) 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 for the importer's constant search of countries with the 
lowest labour costs. This could however not be the case in the face of the surge 
in dumped imports from the three countries concerned by this proceeding. As 
far as the alleged parallelism between the present proceeding and the synthetic 
handbags case is concerned, it should be stressed that the substantial 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. 
5 See recitals 105 and 106 of Council Regulation (EC) No 1567/97 (OJ L 208, 2.8.1997, p. 31). 
56 
In addition, the fact that producers/exporters could transfer their production 
facilities to other countries in order to avoid payment of anti-dumping duties is 
not, in itself, a sufficient reason for the Council not to impose measures in a 
case where exports have been found to have been dumped on the Community 
market and to have caused material injury to the Community industry. Were 
such a situation to arise, the Community industry could lodge a complaint 
requesting, for instance, the initiation of an anti-dumping proceeding against 
such imports or the initiation of circumvention investigation in accordance with 
Article 13 of the Basic Regulation. 
(116) It was further argued that if measures were to be imposed, Chinese, Indonesian 
and Thai producers/exporters would switch to the production of those types of 
footwear where the Community producers have a technological and fashion-
related advantage, thereby causing further injury to the Community industry. 
Leaving aside the fact that this type of argument cannot lead to the conclusion 
that the Council should refrain from adopting measures in the presence of 
injurious dumping, there is nothing to suggest that, even in the absence of 
measures, producers/exporters in the above mentioned countries will not, in the 
future, decide to expand the range of footwear which they manufacture and 
export. Indeed, a number of submissions by importers pointed out that a trend 
towards higher quality imported goods, with correspondingly higher prices had 
been observed. As has been mentioned previously, this'" trend had already 
started before the investigation period. 
57 
(b) Interest of companies supplying the Community industry (with raw 
•> materials and machinery) 
(117) It has been a notable feature of this investigation that the Community producers 
(and their raw material or component suppliers etc.) in many Member States 
tend to be grouped together geographically. The closure of one factory can 
therefore have an adverse knock-on effect on other companies in the area in 
particular with regard to employment. 
(118) It has been argued that, should measures be imposed, this would jeopardise 
Community footwear machinery producers' sales to the People's Republic of 
China, Indonesia and Thailand. 
As far as the suppliers of footwear production machinery are concerned, no 
evidence has been received showing that producers/exporters in the People's 
Republic of China, Indonesia or Thailand are the main or most important clients 
of the Community equipment manufacturers. 
In any event, it should be noted that the Community industry is clearly investing 
in automation, and in the injection process in particular. This automation, 
which contributes to the technological improvement of the footwear 
manufacturing process in the Community, is linked with investments in 
machines and moulds produced in the Community. 
2. Impact on consumers 
(119) Although no representations were received from consumer organisations 
following the publication of the notice of initiation of this proceeding, some 
parties have argued that anti-dumping measures would seriously affect 
Community consumers, particularly those with the lowest income. 
58 
This argument concerning the foreseeable impact of measures on the 
consumers' buying price has been examined in detail. The results of this 
examination, which has been based on the information available, are as follows: 
(a) Impact in absolute terms 
(120) Firstly, as far as footwear prices to distributors are concerned, it is likely that, 
given the level of competition and the number of suppliers either in the 
Community (where the Community industry still has a 53.3% market share), or 
in third countries not concerned by this proceeding (imports from which total a 
28.3% market share), these suppliers would not be able to significantly increase 
their prices without running the risk of losing market share. 
As for Indonesia and Thailand, it should be borne in mind that the injury-
elimination levels established for these countries are considerably lower than for 
the People's Republic of China, their average import price being during the 
investigation period ECU 6.97 and ECU 7.16 per pair respectively. Given that 
the market share of footwear originating in the People's Republic of China is 
9.3%), (with an average price of ECU 5.47 per pair during the investigation 
period) and in view of the duty level proposed, the average maximum 
foreseeable impact of the measures proposed on the price of the footwear 
concerned as a whole amounts to ECU 0.4 per pair. 
59 
Thus, consumers would only have to pay an additional amount of ECU 0.4 per 
pair if distributors decide to keep their margins unchanged and pass the 
increased costs on to the consumer. Since the average consumption of the 
footwear concerned in the Community is below one pair per person per year, the 
impact of the proposed measures on the average consumer's annual budget 
would be clearly marginal. 
(b) Impact in relative terms, effect of price on consumption 
(121) In relative terms, the basis of the calculations was the average price of the 
footwear concerned at delivered-warehouse distributor level, namely ECU 13.5 
per pair, which takes into account, for the imports, the adjustment for 
differences in level of trade referred to in recital 85 of this 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 ECU 30 per pair; including all costs and duties incurred 
between importation and sale to the final customer. As a consequence, the 
impact of the anti-dumping duties on the price to the consumer would amount to 
approximately 1.3%. 
This percentage should, as explained above, be examined in the light both of the 
absolute value of the increase (ECU 0.4 per pair) and the general evolution of 
prices over the injury investigation period. 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 in absolute terms, this 
decrease being of more than 10% when adjusted in order to take into 
consideration the general inflation rate. 
60 
( 122) It should be added that, even if consumers do compare the prices which are 
simultaneously offered in different shops, they are generally less sensitive, as 
regards the product under investigation, to developments in the general level of 
prices. Indeed, the above mentioned decrease in prices did not prevent the 
global consumption of the product concerned to decrease by 6%. 
This can be explained by a certain saturation which can be observed for 
products which are consistently sold at such low prices that consumers are 
unlikely to react to a limited overall change in the level of prices. It is therefore 
doubtful that the full reflection of the duty, i.e. a maximum price increase of 
1.3%, will have any significant impact on the current trends of demand on the 
Community market. 
(123) In the absence of any other element or reaction from consumer organisations, it 
was concluded that the impact of the proposed measures on the consumer of the 
footwear concerned was likely to be minimal. 
3. Impact on distribution 
(a) Impact on distribution as a whole 
(124) It has been argued that the imposition of measures would also have a strong 
negative impact on importers. More generally, diverging views have been 
expressed on the situation of the whole footwear distribution chain which, it has 
been argued, is an activity with a far greater significance in the Community than 
footwear production, in terms of both turnover and employment. 
It should first be pointed out 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 footwear distribution in general, 
which include sales of all types of footwear, cannot be compared with those of 
the Community production of the product concerned only. 
As final consumers in the Community do not buy shoes in significant quantities 
outside the Community, negative consequences of anti-dumping duties for 
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 as 
a result of anti-dumping measures, even if the distribution sector were to 
maintain its current margins. 
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. 
62 
(b) Structure of footwear distribution in the Community 
(125) Footwear distribution in the Community comprises four different channels of 
sale to the end customer: branded retail chains, independent retailers, non-
specialised supermarkets and other types of generally non-specialised 
distribution, for example clothing stores. ' 
(i) Independent retailers 
(126) The traditional distribution channel consists of independent retailers, generally 
buying from wholesalers. In the evolution of 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 purchasing associations while retaining 
their independence. 
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 of between 150% to 200% that are required to 
cover the fairly high costs of operating in urban, often upmarket, areas. In fact, 
they have lost ground in a certain number of Member States to more recent 
forms of distribution falling within the other three categories and in particular 
the branded chains. 
63 
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 largest one in terms of market share in 
volume. 
(ii) Branded retail chains 
(127) These chains, which are sometimes also involved in production in the 
Community, are generally owned by one or two large companies in each 
country, which in turn 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. 
The branded retail chains also sell through town centre shops replacing the 
independent retailers with less costly, standardised premises which 
accommodate the need, on the part of some customers for an alternative retail 
buying environment to discount stores. Due to their leverage, their access to 
world supply since they import on their own account and the relatively low 
margins with which they operate, generally around 25% of the cost of sales for 
the central trading arm and 100% on average for the shops, branded retail chains 
are able to gain market share- rapidly once they enter a market and to achieve 
growth rates in excess of 5% per year. 
64 
(iii) Non-specialised supermarkets 
(128) 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 products. Due to the additional level 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 which is three 
times higher than the CIF level. 
(iv) Other sales channels 
(129) Other sales channels, such as mail order companies or garment stores, have 
gained significance in certain Member States but none of these has individually 
acquired 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 accessory, generally with higher margins than 
on their usual clothing 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. 
65 
(c) Specific impact of the proposed measures on the various sales channels 
(130) As regards the independent retailers, which still constitute the largest source of 
employment in Community footwear distribution, the general conclusion 
presented in recital 124 of this Regulation is strengthened by the fact that a low 
proportion of their supplies of the product concerned usually originates in the 
People's Republic of China, Indonesia or Thailand. It should be added that they 
are grouped in a confederation representing eight 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 on their 
behalf. 
(131) 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 on the dumped imports for 
the supply of the product concerned more than the independent retailers explains 
why, within the distribution chain, 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 would be negligible if the amount of the duty were to be fully passed 
on to the consumer. Indirect adverse financial effects could only be expected if, 
due to this price increase, consumers were to significantly reduce their 
purchases of the product concerned. However, should this happen, it would 
only be to a limited extent, as explained in recital 122. 
66 
Moreover, the product concerned is never the sole source of revenue for these 
specialised shops and, due to its particularly low prices, represents less than 
12%o 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 re-oriented to 
footwear with a higher price, with probably a higher margin in absolute terms. 
(132) 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. 
(133) The situation of the importers supplying these non-specialised distribution 
channels was examined, as the portion of their turnover based on products 
imported from the countries concerned was found to be significant. 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 footwear distribution as a whole, these importers will be able to 
benefit from any market situation, and continue to supply their clients with 
Chinese, Indonesian or Thai imports, or any non-dumped products, as well as 
Community-produced ones. 
67 
(134) 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. 
4. Conclusion concerning Community interest 
(135) Having examined all the various interests involved, it is considered that positive 
reasons exist for taking measures and that there are no compelling reasons not to 
take action against the dumped imports in question. Indeed, leaving the 
Community industry without adequate protection against the injurious dumping 
would add to the difficulties of this industry and could lead to its disappearance 
or relocation outside the Community. The limited price increase resulting for 
consumers from the imposition of anti-dumping measures can by no means be 
considered to be of the same magnitude as the cost of the total disappearance of 
« 
a major Community industry. 
Finally, in view of, inter alia, the time which has elapsed since the completion 
of the investigation of dumping and injury, it is considered appropriate that 
definitive anti-dumping duties on the imports of the product concerned be 
directly imposed, i.e. without resorting to the intermediate step of provisional 
duties. 
6 S 
H. DEFINITIVE DUTY 
1. Simultaneous application of anti-dumping measures and quantitative 
restrictions 
(a) Legal aspects 
(136) Certain interested parties argued that no anti-dumping measures should be 
imposed on imports of the products subject to the present investigation 
originating in the People's Republic of China since they are already subject to a 
Community-wide quantitative quota imposed by Council Regulation (EC) 
No 519/946, i.e. during the investigation period. 
(137) The Community Institutions cannot subscribe to this point of view which, they 
consider, is based on an incorrect interpretation of the rationale of the above 
mentioned Regulation. That Regulation introduced a new trade regime which 
led to the abolition of some 4,617 national restrictions provided for under the 
previous regime vis-à-vis non market economy countries, almost all of which 
concerned the People's Republic of China. These restrictions were replaced by 
Community quotas for seven Chinese products and Community surveillance for 
26 other products. 
Overall, these autonomous quotas, restricted to few particularly sensitive 
products, cannot be considered as an exception to some hypothetical liberal 
trading regime with the People's Republic of China but are part of the means of 
achieving the goal of a more liberal and, above all, more uniform trading regime 
with the People's Republic of China, while any action under the Basic 
Regulation is directed against injurious dumping. 
6 OJ L67, 10.3.1994, p. 89. 
69 
Accordingly, the injury which the imposition of anti-dumping measures would 
attempt to remedy has not been addressed by means of another commercial 
defence instrument. Therefore, following an anti-dumping investigation which 
has shown that measures are warranted with a view to remedying injurious 
dumping, the imposition of such measures may be considered, irrespective of 
the existence of any quantitative restrictions which may be applicable to the 
products in question. This conclusion had however to be subjected to a further 
analysis, from an economic angle. 
(b) Economic aspects (impact of the quotas on import trends) 
(138) Data available when preliminary findings were established (restricted to 1995) 
were showing that, after the end of the investigation period, import volume from 
the People's Republic of China had decreased significantly, while prices 
appeared to have increased. 
These circumstances were considered as sufficiently exceptional to warrant an 
additional examination, on the basis of the most recent data available, of the 
trends in imports which occurred after the investigation period. During the time 
needed to cany out this additional examination, it was considered appropriate 
not to impose any provisional measures. 
(139) In order to examine the import trends for the product concerned in the two years 
following the imposition of the quota, consideration was given to some 
methodological points: 
70 
First, since the quota is allocated on an annual basis and for calendar years, 
estimates on the basis of partial data corresponding to only some months of 
1996 were considered as insufficiently accurate. Accordingly, the analysis 
detailed below was carried out on the basis of full-year data concerning both 
1995 and 1996 and could only be completed when such data were available for 
1996. 
Secondly, Regulation (EC) No 519/94, as amended, while imposing quantitative 
restrictions on certain footwear falling within the same nomenclature 
subheadings as those concerned by the present proceeding, excluded from these 
restrictions footwear involving "special technology", which is by definition 
sold at least at ECU 9 (originally ECU 12) per pair at CIF level. As explained 
in recital 15, footwear intended for the same use and with the same 
characteristics as footwear involving special technology, but irrespective of its 
price, was excluded from the present anti-dumping investigation. 
(140) For the years 1995 and 1996, footwear involving special technology was 
excluded from the total imports reported under the CN codes concerned, on the 
basis of TARIC data, in order to establish the import volumes and values for the 
product concerned. In the absence of complete TARIC statistics before 1995, 
corrections were made for previous years, taking that year as a reference. When 
comparing figures concerning imports from the People's Republic of China in 
1995 and 1996 with those referring to the years prior to thé imposition of the 
quota, two conclusions can be drawn: 
71 
As foreseen, the quota had an obvious impact on import volumes from the 
People's Republic of China, which declined most noticeably between 1994 and 
1995 from 28.6 to 16.1 million pairs. More in detail, import volumes decreased 
for all four categories of the product concerned, corresponding to the four CN 
codes, between 1994 and 1995. However, the volumes imported increased 
again between 1995 and 1996, where they reached 19.1 million pairs. 
Furthermore, and more significantly in the context of an anti-dumping 
proceeding, prices were not found to have increased as a consequence of the 
implementation of the quota. Although one could have expected prices to rise 
in parallel to the decrease in import volumes imposed by the quota, no such 
thing happened. Indeed, the average import price remained stable since the 
imposition of the quota, ranging from ECU 5.75 per pair in 1993, peak year for 
the volumes, to ECU 5.69 per pair in 1996. For none of the four categories 
concerned could a change in the trend of the import price from the People's 
Republic of China be observed. It should also be noted that, of the exporting 
countries concerned, the Chinese price levels are, by far, the lowest. 
(141) Within the four CN codes analysed, it could not be established either that a 
progressive shift to footwear involving special technology, which was excluded 
from the investigation and highly priced, had taken place, which could have 
explained the stagnation of the import price for the remaining products. Indeed, 
the proportion of footwear involving special technology in the total imports of 
the codes concerned remained stable between 1995 and 1996 both in volume 
and value terms. 
72 
(142) As far as Thailand and Indonesia are concerned, no significant change in the 
overall trends of their imports and of the competitive conditions on the market 
could be established which would contradict the findings detailed in recitals 78 
to 87. 
(143) In the light of the above, it has been concluded that the impact on import trends 
of the quantitative restrictions applicable to imports of the footwear concerned 
originating in the People's Republic of China is not such as to justify a global 
reconsideration of the conclusion that, in the present case, anti-dumping 
measures are warranted. However, as explained below, it is considered 
appropriate that, for the determination of the form for the measures, the above 
described trends be taken into account. 
2. Injury elimination level 
(a) Methodology 
(144) In accordance with Article 9 (4) of the Basic Regulation, an examination was 
carried out with a view to determining the level of duty which would be 
adequate to remove the injury suffered by the Community industry as a 
consequence of dumping. 
Accordingly, it was considered that the export price of dumped imports should 
be increased to a non-injurious price level corresponding to the Community 
industry's cost of production and a reasonable profit (hereinafter referred to as 
the "non-injurious price"). 
As far as the cost of production is concerned, it was considered appropriate to 
take as a reference the cost of production of the Community producers in the 
verification sample. 
As far as the profit margin is concerned, it was considered that a margin of 7% 
on turnover could be regarded as an appropriate minimum, taking into account 
the need for long-term investment and, more particularly, the amount which the 
Community industry itself was able to maintain as a minimum during the four 
year period under examination (1991-1994), at the expense of its market share. 
(145) As explained in recital 16, at the outset of the investigation it was considered 
appropriate to divide the product in question into categories, and perform price 
comparisons on the basis of these categories. However, as mentioned in 
recital 84, during the course of the investigation it appeared that, as far as the 
cooperating producers/exporters were concerned, greater certainty in the product 
matching could be achieved by using an even more detailed product split. To 
this end, the most exported models of the Chinese and Indonesian 
producers/exporters in the samples and the most exported models of the 
cooperating Thai producers/exporters were selected and separated into 17 
families of footwear. 
74 
In order to calculate the injury-elimination margin, the CIF import price, 
adjusted to duty paid, customer-delivered levels was compared to the non-
injurious price of the Community producers at the same level of trade. Given 
the high level of non-cooperation from all three countries concerned, this 
calculation was carried out on a category-by-category basis and, only for 
cooperating producers/exporters, on a family-by-family basis whenever the 
greater precision conferred a benefit to them for their cooperation. It should be 
noted that import prices were adjusted to the duty paid, customer-delivered level 
by using the adjustment methodology used for the undercutting assessment, as 
presented at recital 85. 
(b) People's Republic of China 
(146) Since the dumping margin established for Grosby (China) Limited was de 
minimis (1.3%) and should thus result in any definitive anti-dumping duty for 
this company to be set at 0%, no injury-elimination level calculation was carried 
out for Grosby (China) Limited. 
(147) As far as other exports from the People's Republic of China are concerned, the 
residual injury-elimination margin was found to be 46.0%), which is lower than 
the established dumping margin and should therefore, in accordance with 
Article 9 (4) of the Basic Regulation, constitute the basis for the definitive anti­
dumping duty for all other imports originating in the People's Republic of 
China. 
75 
(c) Indonesia 
(148) Individual injury-elimination margins for cooperating producers/exporters in the 
sample for Indonesia, expressed as a percentage of CIF price, were found to 
range from 0% to 99.5%, with an average to be applied to the cooperating 
producers/exporters outside the sample of 33.6%. 
For the producers/exporters in the sample, these margins were found to be, in all 
cases except two (P.T. Golden Adishoes and P.T. Indosepamas Anggun / P.T. 
Primashoes Ciptakreasi), higher than the respective dumping margins 
established. In accordance with Article 9 (4) of the Basic Regulation, the level 
of the definitive anti-dumping duty for all cooperating producers/exporters in 
Indonesia should therefore be based on the dumping margins established, with 
the exception of: 
- P.T. Golden Adishoes, whose injury-elimination margin, lower than its 
dumping margin, was found to be nil and should thus result in any definitive 
anti-dumping duty for this company to be set at 0%>, 
and 
- P.T. Indosepamas Anggun / P.T. Primashoes Ciptakreasi, whose common 
injury-elimination margin (2.6%) was lower than their dumping margin and 
should thus constitute the basis for the definitive anti-dumping duty 
applicable to both producers/exporters as explained in recital 24. 
76 
(149) As regards the producer/exporter referred to in recital 31 (P.T. Kingherlindo) for 
which facts available had to be applied, it was also considered in this context 
that the partial cooperation it had shown would have to be distinguished from 
the total non-cooperation of those producers in Indonesia which neither replied 
' to the Commission's questionnaire nor made themselves known. However, 
since a calculation based on the same methodology as the one used for dumping 
calculations (see recital 40) would have resulted in the injury-elimination 
margin applicable to the company to amount to 26.9%, i.e. to be higher than the 
one found for non-cooperating producers/exporters, it was considered 
appropriate to align P.T. Kingherlindo's injury-elimination margin on the 
residual injury-elimination margin, which, as explained in the following recital, 
amounted to 20.3%. 
(150) The injury-elimination margin for non-cooperating producers/exporters in 
Indonesia was found to be 20.3% and therefore lower than the residual dumping 
margin of 50% established for this country. Accordingly, the residual anti­
dumping duty for imports originating in Indonesia should be established on the 
basis of this injury-elimination margin. 
(c) Thailand 
(151) Since the dumping margin established for the three cooperating Thai 
producers/exporters (namely CK Shoes and PSR Footwear/Bangkok Rubber 
Company) were found to be either nil or de minimis and should thus result in 
any definitive anti-dumping duties for these producers/exporters to be set at 0%, 
no injury-elimination level calculations were carried out for the 
producers/exporters concerned. 
77 
(152) For Thai non-cooperating producers/exporters, the injury-elimination margin 
was found to be 24.7%, i.e. lower than the residual dumping margin of 50%> 
established for this country. Accordingly, the residual anti-dumping duty for 
imports originating in Thailand should be established on the basis of this injury-
elimination margin. 
3. Form of definitive duties 
(153) On the basis of the analysis detailed in recitals 138 to 143, it appeared that while 
the imposition of the quota had the obvious desired effect of limiting- import 
volumes of the product concerned originating in the People's Republic of China 
and thus the cumulated volumes originating in the three countries concerned, it 
had no apparent effect on the prices of the imports in question, which can 
therefore be assumed to have remained injurious. This effect arises mainly from 
the concentration of imports on the low to lower-middle end of the range. 
(154) In these circumstances, it was considered that an ad-valorem duty would 
disproportionately affect relatively expensive footwear, while having a lesser 
effect on the low to lower-middle end sector. Conversely, a variable duty, based 
on a minimum price, would precisely target the injurious price element left 
unremedied by the quota. Accordingly, it was considered that the definitive 
anti-dumping duty should take the form of a variable duty based on a minimum 
price. 
78 
Such a measure will indeed encourage price increases relating to the bulk of 
imports, which are concentrated at the low to lower-middle end sector. The 
expected price increase will thus take place in the product range most affected 
by the dumped imports, while at the same time minimizing the effect on the 
price of the least injurious imports of more sophisticated footwear. Therefore, 
while the quota has obviously created a safety net against sudden and potentially 
injurious surges in imports of the product concerned, a variable duty appears to 
be particularly appropriate as a complementary safety net against the injurious 
prices of these imports. 
(155) As far as the level of the minimum price is concerned, the following 
considerations were taken into account: 
On the Community industry side, it was considered that the effects of the 
proposed measures should allow the average import price, when adjusted to the 
delivered importer warehouse level (in accordance with the methodology 
presented in recital 85), to be equal to the average non-injurious price 
established for the calculation of the injury elimination level for the product 
concerned as explained in recitals 144 and 145, which amounted, on a weighted 
average basis for the four categories concerned, to ECU 9.6 per pair on a 
delivered basis. 
79 
(156) As regards the imported products and their price breakdown, Eurostat 
information on both import volumes and average prices was analysed in greater 
detail in the light of data relating to individual export transactions provided by 
cooperating producers/exporters and importers. On this basis it was established 
that, by setting the minimum price at ECU 5.7 per pair on a CIF basis, the price 
breakdown of imports would be changed to the effect that the foreseeable 
average import price for products originating in the People's Republic of China 
would be ECU 7.5 per pair at CIF level, equivalent to the non injurious price of 
ECU 9.6 per pair at a delivered-warehouse-importer level. 
Indeed, both in volume and value terms, a majority of the total imports and a 
part of the imports in each category took place under the proposed minimum 
price. The increase in the price of these predominant imports resulting from the 
imposition of the variable duty is thus expected to have a strong influence on the 
average foreseeable import price. In doing this analysis, care was taken to 
ensure that the effect of the quotas on the import volumes, as presented in recital 
140, be reflected in an appropriate way. 
(157) The data available in relation with products originating in Indonesia and 
Thailand were for certain categories too limited to be considered as 
representative of the total imports from these countries. However, the general 
conclusions presented in the preceding recital could be confirmed to the effect 
that some imports originating in these countries did in fact take place during the 
investigation period below the level foreseen for the minimum price. It could 
also be confirmed that the setting of the minimum price at ECU 5.7 per pair for 
Indonesia and Thailand would, in line with the conclusions drawn in recitals 
150 and 152, ensure that imports be made, on average, at non-injurious price 
levels. 
80 
(158) As regards producers/exporters for which individual duty rates were foreseen, it 
is considered that the duty applicable should be the one based on the minimum 
price, if such a duty is lower than the one resulting from their individual ad 
valorem duty rate. 
For all those producers/exporters for which a dumping margin of less than 2%, 
i.e. de minimis, was established, no duty shall apply thereto in accordance with 
Article 9 (3) of the Basic Regulation. 
(159) Further to the final disclosure, certain interested parties, while opposing any 
measures, have questioned the appropriateness of a duty based on a single 
minimum price applicable to all four categories of footwear concerned and 
claimed that, in order to reflect price differences, at least two different minimum 
prices, one for the category of footwear with uppers of plastics, the other for the 
three categories of footwear with leather uppers, should be set. Conversely, in 
the knowledge of .the above claim, other interested parties have beforehand 
opposed any split mainly on the ground that it would result in an increase of the 
minimum price applicable to footwear with leather uppers. 
( 160) It cannot be denied in this respect that average import prices relating to footwear 
with uppers of plastics are lower than those relating to footwear with leather 
uppers. However, it should be stressed that imports of both types also spread 
over wide and overlapping price ranges. Moreover, they are one like product 
and it is often beyond the consumer's perception capacity to differentiate plastic 
material from leather. In this context, it can be expected that the measure will 
have a very limited impact, if any, on the usual hierarchy of prices amongst the 
four footwear categories concerned. It is therefore considered that a variable 
duty based on a single minimum price constitute an appropriate and reasonable 
way to obtain the expected average price increase for all footwear categories 
concerned. 
(161) The representatives of the complaining Community industry expressed concern 
about the remedial effect one could expect from an anti-dumping duty based on 
a minimum price in the case of imports which are spread over a wide price 
range. They accordingly requested that an ad valorem duty be considered 
instead. 
(162) The Council cannot agree with this line of reasoning and confirm that the 
various considerations detailed in recitals 153 to 157 should have an influence 
on the form of the measures and will be appropriately taken into account by the 
setting up of a variable anti-dumping duty based on a minimum price. Such a 
measure will indeed not lead to the automatic collection of a duty but should 
nevertheless result, for imports originating in the three countries concerned, in 
average price increases which are consistent with the conclusions of the injury-
elimination level calculations. 
82 
(163) The definitive anti-dumping duty should therefore be calculated as follows: 
a) People's Republic of China: for all producers/exporters, with the exception of 
Grosby (China) Limited, for which a de minimis dumping margin was found, 
the duty should be equal to the difference between the minimum price of ECU 
5.7 per pair and the net, free at Community frontier, before duty, price per pair. 
b) Indonesia: for all producers/exporters, with the exception of P.T. Golden 
Adishoes, whose exports were found to have been sold at prices above the 
injury-elimination level, the duty should be equal to the difference between the 
minimum price of ECU 5.7 per pair and the net, free at Community frontier, 
before duty, price per pair. 
For the following cooperating Indonesian producers/exporters, the duty should 
be equal to the following rates or to the difference between the minimum price 
of ECU 5.7 per pair and the net, free at Community frontier, before duty, price 
per pair, whichever is the lowest: 
P.T. Emperor Footwear 2.0%) 
P.T. Indosepamas Anggun 2.6% 
P.T. Primashoes Ciptakreasi 2.6%> 
P.T. Dragon 5.9% 
P.T. Fortune Mate 14.9% 
P.T. Bosaeng Jaya 12.3% 
P.T. Karet Murni Jelita 12.3% 
P.T. Koryo International 12.3% 
P.T. Lintas Adhikrida 12.3% 
P.T. Universal Wisesa 12.3% 
P.T. Volmacarol 12.3% 
P.T. Kingherlindo 20.3% 
83 
c) Thailand: for all producers/exporters, with the exception of Bangkok Rubber, 
CK Shoes and PSR Footwear, for which no or de minimis dumping margins 
were found, the duty should be equal to the difference between the minimum 
price of ECU 5.7 per pair and the net, free at Community frontier, before duty, 
price per pair. 
I. NEW EXPORTING PRODUCERS 
(164) Pursuant to Article 11 (4) of the Basic Regulation, a new exporter's review to 
determine individual dumping margins cannot be initiated in this proceeding 
with regard to Indonesia as sampling was used in the original investigation. 
However, in order to ensure equal treatment between any new exporting 
producers and the producers/exporters cooperating in this investigation but not 
selected in the sample, it is considered that provision should be made for the 
weighted average, ad valorem, duty rate (12.3%) applicable, as an alternative to 
the variable duty, to the latter producers/exporters to be applicable to any new 
exporting producers which would otherwise be entitled to a review pursuant to 
Article 11 (4), 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. A definitive anti-dumping duty is hereby imposed on imports of footwear 
falling within CN codes ex 6402 99 98 (Taric code 6402 99 98 * 90), ex 
6403 99 93 (Taric code 6403 99 93 * 90), ex 6403 99 96 (Taric code 
6403 99 96 * 90) and ex 6403 99 98 (Taric code 6403 99 98 * 90), originating 
in the People's Republic of China, Indonesia and Thailand, except as regards the 
footwear described in paragraph 3. 
84 
2. The definitive anti-dumping duty shall be: 
Country 
People's 
Republic of 
China Products manufactured by 
All producers/exporters 
with the exception of: 
Grosby (China) Limited Variable or ad valorem duty Taric 
Additional 
Codes 
equal to the difference between a 8900 
minimum price of ECU 5.7 per pair 
and the net, free at Community 
frontier price per pair, before duty 
0% 8759 
Indonesia AH producers/exporters 
with the exception of: 
P.T. Golden Adishoes 
and of the following 
producers/exporters: 
P.T. Emperor Footwear 
P.T. Indosepamas Anggun 
P.T. Primashoes Ciptakreasi 
P.T. Dragon 
P.T. Fortune Mate 
P.T. Bosaeng Jaya 
P.T. Karet Murni Jelita 
P.T. Koryo International 
P.T. Lintas Adhikrida 
P.T. Universal Wisesa 
P.T. Volmacarol 
P.T. Kinsherlindo equal to the difference between a 
minimum price of ECU 5.7 per pair 
and the net, free at Community 
frontier price per pair, before duty 
0% 
equal to the following rates or to the 
difference between a minimum price 
of ECU 5.7 per pair and the net, free 
at Community frontier price per pair, 
before duty, whichever is the lowest: 
2.0% 
2.6% 
2.6% 
5.9% 
14.9% 
12.3% 
12.3% 
12.3% 
12.3% 
12.3% 
12.3% 
20.3% 8900 
8759 
8760 
8761 
8761 
8763 
8764 
8765 
8765 
8765 
8765 
8765 
8765 
8762 
Thailand All producers/exporters 
with the exception of 
Bangkok Rubber 
CK Shoes 
PSR Footwear equal to the difference between a 
minimum price of ECU 5.7 per pair 
and the net. free at Community 
frontier price per pair, before duty, 
0% 
0% 
0% 8900 
8766 
8766 
8766 
3. The duty shall not apply to footwear for use in sporting activities, with a single 
or multi-layer moulded, not injected sole, manufactured from synthetic 
materials specially designed to absorb the impact of vertical or lateral 
movements and with technical features such as hermetic pads containing gas or 
fluid, mechanical components which absorb or neutralise impact or materials 
such as low-density polymers (Taric codes 6402 99 98 * 11 and 
6402 99 98 * 19, 6403 99 93 * 11 and 6403 99 93 * 19, 6403 99 96 * 11 and 
6403 99 96 * 19 and 6403 99 98 * 11 and 6403 99 98 * 19). 
4. Where any Indonesian party provides sufficient evidence to the Commission 
that it did not export the goods described in paragraph 1 to the Community 
during the investigation period, that it is not related to any exporter or producer 
subject to the measures imposed by this Regulation and that it has exported the 
goods concerned to the Community after the investigation period, or that it has 
entered into an irrevocable contractual obligation to export a significant quantity 
to the Community, then the Council, acting by simple majority on a proposal 
submitted by the Commission, after consulting the Advisory Committee, may 
amend paragraph 2 by attributing that party, as an alternative to the variable 
duty, the ad valorem duty rate applicable to cooperating exporting producers not 
in the sample, i.e. 12.3%. 
86 
5. Unless otherwise specified, the provisions in force concerning duties and other 
customs practices shall apply. 
Article 2 
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 
87 

ISSN 0254-1475 
COM(98) 59 final 
DOCUMENTS 
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Catalogue number : CB-CO-98-062-EN-C 
ISBN 92-78-30833-1 
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