COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels,14.03.1996 
COM(%) 112 final 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing definitive anti-dumping duties 
on imports of bicycles originating in Indonesia, Malaysia and Thailand and 
collecting definitively the provisional duties imposed 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. By Regulation (EC) No 2414/95C), the Commission imposed provisional 
anti-dumping duties on imports into the Community of bicycles originating in 
Indonesia, Malaysia and Thailand, falling within CN code 8712 00. 
2. By Regulation (EC) No 245/96Q, the Council extended the validity of 
these duties for a period of two months until 14 April 1996. 
3. Subsequent to the imposition of provisional anti-dumping duties, certain 
parties requested and were granted hearings, and presented written comments 
which were taken into account where appropriate. 
4. The definitive determination confirmed the existence of dumping. 
Changes in the individual dumping margins compared to the provisional 
findings are due to the reassessment of certain adjustments. 
5. The conclusion that the Community industry suffered material injury is 
also confirmed. For the purpose of the determination of material injury, the 
imports from the countries concerned were analyzed cumulatively because it was 
found that the import volumes for each country were not negligible and the 
imported products competed with each other and with the like Community 
products. 
6. From 1990 to 1993, total imports from Indonesia, Malaysia and Thailand 
increased by 190.6%. Market share held by these countries increased by 4.4 
percentage points, reaching a market share of 6.8% in 1993. Imports from these 
countries undercut prices of the Community industry by 18.2% to 41.4%. While 
it cannot be excluded that other factors may have contributed to the difficult 
state of the Community industry, the considerable increase of the dumped 
(1)OJNoL248, 14.10.95, p.12 
(2)OJNoL32, 10.02.96, p;l 
Z 
imports and their significantly low prices which led to the conclusion that these 
imports caused the material injury suffered by the Community industry. 
7. Given the need to eliminate the trade-distorting effects of injurious 
dumping and to restore effective competition, the fact that a continuation of low 
priced imports would jeopardize the adjustment efforts of the Community 
industry, and would have a negative effect on the level of employment in the 
Community industry, with additional repercussions in the European bicycle parts 
industry, and in view of the limited effect for consumers, it is considered in the 
Community interest that definitive duties should be imposed. 
8. In accordance with the 'lesser duty rule', the level at which the definitive 
duties should be set was determined by the dumping margins found which were 
lower than the injury elimination margins. The dumping margins ranged from 
21.9% to 28.4% for exports from Indonesia, from 23.1% to 37.3% for those 
from Malaysia, and from 13.0% to 38.9% for those from Thailand, which are the 
levels at which it is proposed to set the duty rates. 
9. Malaysian companies indicated their readiness to discuss the terms of 
undertakings, but made a specific offer only for a quantitative undertaking. The 
Commission considered that it would be impractical and unrealistic to accept 
price undertakings in the present case because of the enormous number of 
different bicycle models and the frequent changes of specifications which would 
render monitoring such undertaking impossible. With regard to quantitative 
undertakings, irrespective of concerns which could arise as regards their effects 
on competition between exporting countries, the Commission considers that, in 
the present case, such undertakings would be difficult to monitor because 
bicycles do not normally bear a mark of origin. 
10. It is therefore proposed that the Council adopts the draft Regulation 
annexed imposing definitive anti-dumping duties on imports of bicycles 
originating in Indonesia, Malaysia and Thailand and collecting definitively the 
amounts secured by way of the provisional duties. 
COUNCIL REGULATION (EC) No ..../96 imposing definitive anti-dumping duties 
on imports of bicycles originating in Indonesia, Malaysia and Thailand and 
collecting definitively the provisional duties imposed 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on 
protection against dumped imports from countries not members of the European 
Community (l% as last amended by Regulation (EC) No 1251/95 of 1995 (2), and in 
particular Article 23 thereof, 
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection 
against dumped or subsidized imports from countries not members of the European 
Economic Community (3), as last amended by Regulation (EC) No 522/94 (4), and in 
particular Article 12 thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
WHEREAS: 
('jOJ No L 349, 31.12.94, p.l 
(2)OJNoL 122, 2.6.95, p. 1 
(3) OJ No L 209, 2.8.1988, p.2. 
(4)OJNoL66, 10.3.1994, p. 10 
4 
A.PROVISIONAL MEASURES 
(1) The Commission, by Regulation (EC) No 2414/95(5), hereinafter referred to as 
'the provisional duty Regulation', imposed provisional anti-dumping duties on 
imports into the Community of bicycles originating in Indonesia, Malaysia and 
Thailand. 
By Council Regulation (EC) No 245/96(6), the validity of these duties were 
extended by a period not exceeding two months expiring not later than 14 April 
1996. 
B. SUBSEQUENT PROCEDURE 
(2) Immediately after the imposition of provisional measures, the interested parties 
were informed of the essential facts and considerations on the basis of which 
provisional measures had been adopted. 
(3) Most of the Malaysian and Thai exporters had requested that they be informed of 
the essential facts and considerations resulting from the investigation before the 
imposition of provisional measures. The Malaysian exporters claimed that such 
prior disclosure was necessary in order to allow them to exercise their 
fundamental right to be heard. However, Regulation (EEC) No 2423/88, the 
applicable Regulation in this proceeding, (hereinafter referred to as 'the basic 
Regulation') already reflects and transposes into the field of anti-dumping the 
general principle of law of a right to a fair hearing as defined by th^ 
jurisprudence of the Court of Justice of the European Communities, and does not 
require that disclosure take place before the imposition of provisional measures 
but before definitive measures. Accordingly, the Commission did not disclose 
the essential facts and considerations before the imposition of provisional 
measures. 
(5)OJNoL248, 14.10.95, p. 12 
(6)OJNoL32, 10.02.96, p. 1 
(4) Comments in writing were received from the following interested parties within 
the time limit set: 
1. Producers and producer's association in Indonesia 
PT Jawa Perdana Bicycle Industry 
PT Wijaya Indonesia Makmur Bicycle Industries 
The Association of Indonesian Bicycle Industry 
2. Producers in Malaysia 
Akoko Sdn. Bhd. 
Berjaya Cycles Sdn Bhd 
Greenworld Systems Sdn Bhd 
Lerun Group Industries Berhad 
Rolls Rally Sdn Bhd 
3. Producers in Thailand 
Bangkok Cycle Industrial Co. Ltd 
Siam Cycles MFG. Co. Ltd 
Thai Bicycle Industry Co. Ltd 
Victory Cycle Co. Ltd 
4. Importers 
Universal Cycles pic. 
(5) Parties who so requested were granted an opportunity to be heard by the 
Commission. 
(6) Parties were informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of a definitive anti-dumping 
duty and the definitive collection of amounts secured by way of a provisional 
duty. They were also granted a period within which to make representations 
subsequent to the disclosure. 
(7) The parties' oral and written comments were considered, and where appropriate 
the conclusions were modified to take account of them. 
(8) Owing to the complexity of the case, in particular the number of exporting 
countries and parties involved, and the variety of technical specifications, the 
proceeding overran the normal duration of one year as provided for in Article 
7 (9) of the basic Regulation. 
(9) After imposition of provisional duties, the Association of Indonesian Bicycle 
Industry (hereinafter 'the AIPI') claimed that the proceeding was discriminatory 
insofar as other exporting countries, such as India and Vietnam, were not 
included. 
At the time of initiation of the current proceeding in early 1994, there were no 
allegations or indications that imports from India or Vietnam were also dumped. 
The proceeding was initiated on the basis of a complaint concerning imports of 
bicycles originating in Indonesia, Malaysia and Thailand, which contained 
sufficient evidence of dumping and of material injury resulting therefrom 
(recitals 1 and 2 of the provisional duty Regulation). At later stages of the 
investigation, when the actual development of imports from these countries 
starting in 1993 became apparent, no additional complaint was received from the 
Community industry. In the absence of such a complaint and of any prima facie 
evidence of injurious dumping from the countries concerned, the Commission 
had no reason to extend the proceeding to these other countries. 
C. LIKE PRODUCT 
(10) It was concluded at the provisional stage (recitals 13 and 14 of the provisional 
duty Regulation) that all types of bicycles originating in Indonesia, Malaysia and 
Thailand and sold in the Community form one single product and that bicycles 
produced by the Community industry and sold on the Community market, as 
well as bicycles produced in Indonesia, Malaysia and Thailand and sold on those 
markets, are a like product within the meaning of Article 2 (12) of the basic 
Regulation. 
(11) After imposition of the provisional duty, two Malaysian companies argued that 
bicycles produced and sold on the Malaysian domestic market are not a like 
product to the bicycles produced and sold for export to the Community. They 
did not substantiate, however, why those bicycles would not be alike in all 
respects to bicycles exported to the Community. 
(12) The investigation has established that bicycles produced and sold in Malaysia 
cover a similar model range and their basic technical and physical characteristics 
are identical to those of bicycles exported to the Community. No valid 
comments which would affect these conclusions have been raised. The mere fact 
that the only co-operating Malaysian company selling bicycles on the domestic 
market manufactures them in a factory which is separate from that in which 
export models are produced does not in itself support the claim that products are 
different within the meaning of Article 2 (12) of the basic Regulation. Therefore, 
the findings and conclusions set out in recital 14 of the provisional duty 
Regulation are confirmed. 
D. DUMPING 
1. Normal Value 
a) Indonesia 
(13) For two Indonesian companies the provisional dumping findings were based on 
the facts available in accordance with Article 7(7)(b) of the basic Regulation 
because it was not possible to obtain or verify the necessary information 
requested in the questionnaire (recital 28 of the provisional duty Regulation). 
For the other three Indonesian companies, in those cases where normal value had 
to be constructed, it was determined by adding to the manufacturing costs of the 
exported models reasonable SG&A and profit margins which were based on 
actual figures for the companies concerned (recitals 25 and 27 of the provisional 
duty Regulation). 
(14) One Indonesian company purchased some bicycle parts for its production 
through a related trading company which charged a commission on such 
purchases. The company requested that such commission should not be included 
in the cost of manufacturing, as was done for the provisional determinations. 
However, it appeared that the commission was actually incurred by the 
B 
Indonesian company for the purchase of parts and that it would hear similar 
costs if it directly purchased those parts from unrelated suppliers. Therefore, the 
commission charged had to be considered as an integral part of the cost of the 
materials in question. 
(15) One company argued that interest expenses, which in the provisional 
determinations were included in the selling, general and administrative expenses 
(SG&A), should be deducted as public accounting principles in Indonesia 
exclude interests from operating expenses which are not directly related to the 
production and sales of the goods concerned. The investigation showed that the 
only activity of the company concerned was production and sale of bicycles and 
bicycle parts. Therefore, these interest expenses have to be included in the 
SG&A because they were incurred by this company as a result of the actual 
finance structure necessary for running its bicycle and bicycle parts operations. 
(16) Two Indonesian exporters and the AIPI claimed that the allocation of SG&A 
expenses should have been made on the basis of quantities sold. One Indonesian 
producer raised the same argument with regard to the allocation of SG&A 
expenses between export and domestic sales, and, in particular, the allocation of 
financing costs. However, neither of these companies normally allocated SG&A 
expenses to single bicycle models for their internal reporting purposes. It cannot 
be claimed, therefore, that an allocation key based on quantities sold, as was 
proposed by these companies, was historically utilized. Consequently, there is no 
reason to deviate from the principle in Article 2 (11) of the basic Regulation that 
the allocation of such costs is normally done in proportion to the turnover. 
(17) The profit ratio applied in constructing normal value was based on the domestic 
sales of each company where these sales were made in the ordinary course of 
trade (recital 26 of the provisional duty Regulation). Two companies argued that 
the resulting profit margins were too high. However, since these companies did 
not substantiate their claims, the methodology which was applied in the 
provisional determinations for the purpose of calculating a reliable profit margin 
in accordance with Article 2 (3) (b) (ii) of the basic Regulation is confirmed. 
(18) The Indonesian exporters made additional claims (concerning namely the 
determination of the domestic sales turnover, the allocation of manufacturing 
costs, details of individual sales transactions, the application of the SG&A ratio 
to the manufacturing costs, and the exchange rates applied) which could not be 
taken into account, because they could not be verified at the late stage of the 
procedure when they were made, are not supported by direct evidence or, after 
double checking, turned out to be factually unfounded. 
(19) Consequently, the determination of normal value for Indonesian producers as set 
out in recitals 15 to 27 of the provisional duty Regulation is confirmed. 
(20) In the case of one Indonesian company, the AIPI argued that this company faced 
more rigid deadlines for submitting the response to the questionnaire than those 
given to Community producers. 
In fact, the same deadline of 37 days was set for all interested parties for 
responding to the questionnaires. Extensions to this deadline were granted to 
Community and non-Community companies based on the merits of each 
application. No extension was ever requested by the company concerned. The 
AIPI's claim that Community producers received a more favourable treatment 
appears to be based on a misunderstanding. The questionnaires to Community 
producers could only be sent after the sample had been selected (recital 73 of the 
provisional duty Regulation and recital 56 of this Regulation). This explains why 
in spite of the fact that the deadlines were the same as for Indonesian producers, 
the responses of the Community industry arrived later. 
The findings set out in recital 28 of the provisional duty Regulation are therefore 
confirmed. 
b) Malaysia 
(21) In the provisional duty Regulation, two Malaysian companies belonging to the 
same group of companies were considered as one single company. One of them 
exported bicycles to the Community during the investigation period but did not 
sell any on the domestic market. The other, on the contrary sold substantial 
quantities on the domestic market but had no export sales to the Community. 
7o 
These two companies requested not to be treated as a single producing exporter 
and to be assigned individual dumping margins. 
However, it has been the consistent practice of the Community Institutions to 
establish one single dumping margin for related companies. The different 
approach followed exceptionally in the Photocopiers case (Regulation (EC) No 
2380/95(7)) which was invoked by the Malaysian companies to support their 
request was due to the very specific circumstances found in that investigation 
which are not present in this case. 
Consequently, the approach followed in recital 29 of the provisional duty 
Regulation is confirmed. 
(22) In the provisional determinations, it was found that only one co-operating 
Malaysian exporter had representative domestic sales of the like product during 
the investigation period, i.e. the domestic sales volume was higher than 5% of 
total export sales (recitals 19 and 30 of the provisional duty Regulation). Since 
bicycle models sold by this company domestically did not permit a proper 
comparison or were not made in the ordinary course of trade (they were 
technically too different, not sold in sufficient quantities, or sold at a loss), for 
models sold by this company the normal value had to be calculated in 
accordance with Article 2(3)(b)(ii) of the basic Regulation, on the basis of a 
constructed value which was established by adding to the manufacturing costs 
the company's domestic SG&A and profit margins. The other Malaysian 
exporters had no domestic sales and therefore a constructed normal value also 
had to be established in accordance with Article 2(3)(b)(ii) of the basic 
Regulation. The SG&A incurred and profit realised by the only producer with 
representative domestic sales were the only data available in Malaysia for this 
purpose. These figures were considered reliable, and therefore the constructed 
value of all models sold for export to the Community by Malaysian companies 
was established by adding to the manufacturing costs of the exported models the 
(7) OJ No L 244, 12.10.95, p. 1, recitals 53, 54 
11 
SG&A and profit figures of the only producing exporter with domestic sales 
(recitals 30-35 of the provisional duty Regulation). 
(23) At the provisional stage, the Commission found that the primary material costs 
of one Malaysian exporter were substantially understated and accordingly 
adjusted these costs upwards. The company concerned later argued that the 
Commission's findings and conclusions were based on inaccurate assumptions 
and consequently objected to the adjustment. 
It was found that while the cost to turnover ratios for all other cost items (such as 
direct labour, factory overhead and SG&A) were stable, the ratio for primary 
material costs differed significantly in the investigation period (the calendar year 
1993) as compared to the financial years 1993 and 1992. A similar disproportion 
was found in the profitability for the investigation period as compared to the 
financial year 1993, even though the investigation period and the financial year 
1993 overlapped by 8 month. 
The determination of the cost of manufacturing for this company is therefore 
confirmed, including the adjustment above. 
(24) Some Malaysian companies questioned whether packing costs (inclusive of 
packaging labour expenses) have not been double counted by treating them as an 
element of cost of manufacturing for each individual exporter while at the same 
time considering them as part of the SG&A costs of the domestic producer used 
for the construction of normal values. 
For all Malaysian producers, packing costs have been considered solely as part 
of the manufacturing costs, and have not been included in the SG&A expenses 
incurred for the domestic sales made by the domestic producer. Packing costs 
were therefore not double counted. 
(25) For the determination of the SG&A and profit ratio for the only co-operating 
producing exporter with representative domestic sales, the Commission excluded 
inter-company sales. The company concerned argued that such an approach is 
inconsistent with the fact that the Commission included inter-company costs 
such as financing costs. It argued, therefore, that inter-company sales should also 
i-c 
have been included in the company's domestic sales turnover for the 
determination of the SG&A and profit ratios. In addition, it alleged that the 
financing costs concerned had no link with the production or sale of bicycles and 
therefore should have been excluded from the SG&A. 
As far as the determination of the SG&A and profit margins are concerned it 
should be noted that the company in question did not report that some sales were 
inter-company sales, a fact which only came to light during the verification. As 
the prices reported are transfer prices, these sales could not be considered as 
made in the ordinary course of trade (Article 2 (7) of the basic Regulation) and 
the transactions concerned had to be disregarded for the purpose of calculating 
the domestic profit margin. 
Concerning the calculation of the SG&A ratio, it was considered in the 
provisional findings that for sales to related companies, none or only marginal 
SG&A costs are incurred and, consequently, SG&A expenses need not be 
allocated to turnover to related companies. After the provisional determination, 
the situation was re-examined and it was found that the allocation of SG&A 
expenses to turnover to unrelated companies should be limited only in respect of 
selling costs which are not incurred for sales to related companies. By contrast, 
the ratios for financing and administration costs which can also be incurred for 
inter-company sales are now based on the total turnover including sales to 
related parties. The calculations have been revised accordingly. 
As regards interest paid to a related company, excluding these costs would 
ignore the fact that they were incurred by the company concerned as a result of 
its actual finance structure required for running its operations. It is irrelevant 
who actually provides the necessary resources as long as the terms of the loan 
are in the ordinary course of trade (Article 2 (3) (b) (ii) of the basic Regulation). 
Claims that the loan was intended for purposes other than the company's 
activities were not substantiated. Therefore, in accordance with Article 2 (3) (b) 
(ii) of the basic Regulation, these interest expenses have to be included in the 
SG&A. 
H 
(26) The SG&A margin of the only co-operating producing exporter with domestic 
sales was considered reliable because these sales were sufficiently 
representative, i.e. the domestic sales volume represented more than 5% of the 
export sales volume. The profit margin was considered reliable because this 
company had a sufficient number of profitable domestic sales (recital 33, 34 of 
the provisional duty Regulation). The Malaysian exporters argued that the 
SG&A and profit margins of that company are too high and cannot be 
considered reliable because it had no export sales and should have been treated 
distinctly from its related company specializing in export and because it had a 
monopoly position on the domestic market which renders its data unreliable. 
It is the opinion of the Council, that there are no reasons for treating the only co­
operating company with domestic sales separately from its related exporter 
(recital 21 of this Regulation). Even if such request for separate treatment were 
to be followed, the information obtained from the only co-operating company 
selling on the domestic market would still constitute the basis for the SG&A and 
profit margins to be applied for the other Malaysian exporters in accordance with 
Article 2 (3) (b) (ii) of the basic Regulation. With regard to the alleged 
monopolistic position of the only co-operating producer/exporter, it was found 
that there was at least one more Malaysian company which had substantial 
domestic sales. No evidence was provided showing that sales in Malaysia did 
not permit a proper comparison. Data on domestic sales in Malaysia were 
therefore considered to be reliable and the selling prices and cost data were 
based on the actual conditions prevailing on the market of the country 
concerned, i.e. conditions which are generally available to all actual and 
potential customers or suppliers. 
Consequently the Council confirms the calculation of normal values as based on 
the SG&A and profit ratios found for the only Malaysian co-operating company 
with domestic sales. 
(27) The Malaysian exporters made additional claims (concerning namely the 
calculation of the cost of manufacturing, the classification of SG&A expenses, 
the treatment of discounts, the comparability of bicycle models, the calculation 
of manufacturing overheads,) which could not be taken into account, because 
'W 
they could not be verified, were not supported by direct evidence, were 
contradicted by the companies own information, or, after double checking, 
turned out to be factually unfounded. 
c) Thailand 
(28) Four Thai companies co-operated in the proceeding. For the majority of bicycle 
models exported by three of these Thai companies, normal value was 
constructed (recitals 36, 38, 39 of the provisional duty Regulation). For the 
fourth company, normal value could be based on actual domestic prices (recital 
37 of the provisional duty Regulation). In those cases where normal value had to 
be constructed, it was determined by adding to the manufacturing costs of the 
exported models reasonable SG&A and profit margins (recitals 40 - 42 of the 
provisional duty Regulation). 
For the company which had no domestic sales, normal value was constructed by 
adding to the cost of manufacture the weighted average SG&A figure of the 
three other companies and the weighted average profit margin of the two 
companies with reliable profit figures. For another company, its own SG&A 
margin and the weighted average profit margins of the two companies with 
reliable profit margins were added to the manufacturing costs. For the third 
company, its actual figures were used. 
(29) For one Thai company, the verification of the manufacturing costs allocated to 
similar bicycle models revealed substantial discrepancies in the value of certain 
materials used which the company was unable to explain. Since the company's 
accounting system did not provide a breakdown of material costs for specific 
bicycle models, it was decided at the stage of provisional findings to allocate 
manufacturing costs in proportion to the turnover in accordance with Article 2 
(11) of the basic Regulation. The company claimed that applying a turnover 
allocation key is unfair because exports of comparable models to third countries 
were made at half of the average unit price charged for exports to the 
Community. 
1f 
The accounting system of the company concerned does not distinguish between 
manufacturing costs incurred for export to the Community and for export to 
other third countries, thus, not permitting a global adjustment for the alleged 
differences. Thus the provisional findings and the use of the turnover as basis for 
the allocation of the manufacturing costs is confirmed. 
(30) Another Thai company had fully allocated a major SG&A item to export sales. 
The company failed satisfactorily to explain the nature of the expenses in 
question, despite the fact that detailed explanations had been requested both 
prior to and during the verification. Consequently, for the purpose of provisional 
determinations, the expenses in question were allocated to export and domestic 
sales on a turnover basis in accordance with Article 2 (11) of the basic 
Regulation. The company claimed that explanations were provided and that the 
appropriateness of the allocation could have been verified. 
In the view of the Council, the company did not provide a proper explanation. 
On the basis of available verified information, it is impossible to clarify the 
correctness or otherwise of the explanations given. Consequently, the allocation 
of the expenses in question on the basis of the turnover to export and domestic 
sales is confirmed. 
(31) For the provisional determination, domestic profits were considered reliable 
when the number of bicycles sold at a price above the calculated cost of 
production constituted more than 10% of total domestic sales. This was not the 
case for one of the Thai companies with representative domestic sales, i.e. with a 
domestic sales volume which was higher than 5% of total export sales. 
Whenever normal values had to be constructed for this company, the weighted 
average profit margin of the two other Thai companies with domestic sales was 
consequently applied. This company claimed that the methodology applied here 
is not in line with the basic Regulation. 
Pursuant to Article 2 (3) (b) (ii) of the basic Regulation, the profit margin used 
for constructing normal value should be based on the profit realized on the 
profitable domestic sales, if such data is inter alia reliable. After having 
excluded domestic sales which did not permit a proper comparison or which 
1£ 
were not made in the ordinary course of trade (recitals 38 and 22 of the 
provisional duty Regulation), the remaining profitable sales might be so few that 
the profits realized on these sales might not constitute a reliable basis to 
calculate a profit margin for use in the constructed normal value. This is why the 
Commission also verified that the remaining profitable sales were sufficient to 
constitute a reliable basis for the determination of the profit margin. 
This was considered to be the case if the remaining profitable domestic sales 
represented not less than 10 % of the domestic sales volume which could be 
used as a basis for the profitability test, whereby the proportion of profitable 
sales was determined by comparing net sales prices to the calculated cost of 
production (recitals 21, 22 and 31 of the provisional duty Regulation). The ratio 
is the same as was applied to determine whether sales of particular bicycle 
models were made in the ordinary course of trade (recital 22 of the provisional 
duty Regulation). Since the profits realized on the domestic market depend on 
the prices charged for domestic sales, it is appropriate and consistent to apply the 
same threshold used to determine whether such prices constitute an appropriate 
basis for the normal value. A similar approach was adopted by the Community 
institutions in earlier cases. 
Consequently, the Council confirms that the profit margin of the company 
concerned was not reliable and that constructed normal value had to be 
calculated by applying the weighted average profit margin of the two other Thai 
producers for which a reliable profit realized on profitable domestic sales was 
found. 
(32) Finally, one Thai exporter made an additional claim (concerning namely the 
calculation of manufacturing overheads) which could not be taken into account, 
because it could not be verified, and was not supported by direct evidence. 
"n 
2. Export price 
a) Indonesia 
(33) One Indonesian exporter made comments concerning adjustments to the export 
price which cannot be taken into account, because they are not supported by 
direct evidence. 
The determination of export price for Indonesia (recital 43 of the provisional 
duty Regulation) is therefore confirmed. 
b) Malaysia 
(34) It was found during the verification visit to one Malaysian company that part of 
the export sales which had been reported by this company as direct sales to 
independent importers in the Community were in fact sales to a related company 
in Taiwan which subsequently re-sold the products to the importers concerned. 
Since, this company had clearly supplied misleading information in respect of 
these transactions -which, in addition, happened to reflect a transfer between 
related companies- the prices reported for such transactions were disregarded 
and the highest dumping margin found for a model sold by this company to 
unrelated customers was attributed to those sales in accordance with Article 
7(7)(b) of the basic Regulation (recitals 46, 47 of the provisional duty 
Regulation). 
This company argued that the actual link with the Taiwanese company had no 
impact on prices, and that it was treated in a discriminatory manner vis-à-vis the 
two Indonesian exporters to which Article 7 (7) (b) of the basic Regulation was 
also applied. In addition it claimed that the sales in question were made directly 
to the customers in the Community and provided copies of invoices as new 
evidence. 
It was only after publication of the provisional duty Regulation that the company 
concerned claimed that the sales in question were actually made directly to 
customers in the Community. This claim contradicts the findings of the 
verification which were not disputed by the company at the time. Any differing 
n 
presentation cannot be verified at this stage of the proceeding and therefore 
cannot be taken into account. 
The relationship with the Taiwanese company was first denied by the Malaysian 
company and was only established during the verification on the basis of direct 
and conclusive evidence. This clearly impeded the factual investigation by the 
Commission. In view of this dissimulation of information by the Malaysian 
company, it is unlikely that the relationship had no impact on prices; anyway, at 
this stage of the procedure, the question could not be further investigated and 
applying article 7 (7) (b) in the above described manner is fully justified. 
As regards the comparison with the two Indonesian companies to which Article 
7 (7) (b) of the basic Regulation was also applied (recitals 28, 68 of the 
provisional duty Regulation), there is no serious ground to complain of 
discriminatory treatment. The application of Article 7 (7) (b) of the basic 
Regulation was based on the merits of each case, thereby reflecting the degree of 
co-operation and the degree to which necessary information was not provided or 
could not be verified or the extent to which misleading information was 
submitted. 
(35) One Malaysian company argued that for establishing the free-at-Community-
frontier price for its export sales to the Community, the Commission should 
have included a mark-up added by its sales agent. That company never 
substantiated its claim. However, the agent for the company concerned already 
received a commission fee which was taken into consideration and it remained 
unclear which transactions were made via the agent, since sales were also 
directly invoiced to customers in the Community. Therefore, the calculation of 
the free-at-Community-frontier price for the exports of the company concerned 
is confirmed. 
(36) The Malaysian exporters made additional claims (concerning namely the nature 
of certain deductions, the treatment of certain bank charges and letters of credit 
charges) which could not be taken into account, because they and were not 
supported by direct evidence. 
19 
c) Thailand 
(37) In its questionnaire response one Thai company stated that it was not providing 
any guarantee/warranty to its customers in the Community. It was discovered 
during the verification that it agreed with one of its customers that spare parts 
equivalent to 1% of the invoice value were shipped with each order free of 
charge. It was also found that a significant number of major customers also 
received spare parts free of charge. Such discounts were given in lieu of a 
guarantee. 
Since such sales conditions are a determining factor for the export prices, [the 
actual value of the spare parts shipped is irrelevant. Having received misleading 
information, the Commission had to determine the deduction for agreed 
discounts on the basis of the facts available. The most tangible and reasonable 
basis being the agreed terms identified above, a 1% adjustment for agreed 
discounts was deducted from the export price. 
The company argued that this adjustment was made without any apparent 
justification, since the Commission received a summary listing of all cases 
where spare parts were given free of charge to customers in the Community, on 
the basis of which a negligible adjustment would have been required. 
Although a listing of customers and corresponding 'warranty' amounts was 
provided by the company, this was done only towards the end of the verification 
when a satisfactory clarification of the complete situation was no longer 
possible. Since no other direct evidence supports the company's claim, it is 
confirmed that, having received misleading information, the deduction for 
agreed discounts was correctly determined on the basis of the facts available 
(Article 7 (7) (b) of the basic Regulation). Any lower deduction would constitute 
a premium for non co-operation. 
The adjustment made for agreed discounts is therefore confirmed. 
(38) Some Thai exporters made claims (concerning namely the allocation of 
transportation costs, the calculation of packing costs, ) which either could not be 
taken into account, because they could not be verified and were not supported by 
zo 
direct evidence, or which are contradicted by direct evidence provided by the 
company concerned. 
3. Comparison 
a) Indonesia 
(39) One Indonesian company sold bicycles for export to the Community through a 
related trading company located in Japan. In the provisional determinations, 
export prices for that exporter were established by reference to the prices 
actually paid or payable to the related trading company in Japan, while the 
Community investigating authorities indicated their intention to review the 
appropriateness of that approach (recital 44 of the provisional duty Regulation). 
(40) 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 Japan 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 6%, based on 
the companies own SG&A rate and a reasonable amount for profits, 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 of the selling activities of the exporter. 
No information was provided which would indicate that this figure is 
inappropriate. Thus, for the purpose of definitive determinations, the export 
prices were adjusted accordingly. 
(41) In the provisional determinations (recital 56 of the provisional duty Regulation), 
some adjustments were disregarded in view of their insignificant character. 
Upon request of the companies concerned, the Commission reconsidered its 
appreciation. It appeared that in some cases, the insignificant character of the 
respective adjustments had been determined in relation to the export price or the 
normal value separately. However, in accordance with previous practice, it 
appears to be more appropriate to consider adjustments to be de minimis only if 
f) 
the difference between the percentages to be deducted from the export price and 
the normal value respectively is less than 0.5 %. On this basis, certain 
adjustments which were considered as insignificant at the provisional stage were 
now taken into account. The calculations were revised accordingly. 
(42) In its provisional determinations (recital 53 of the provisional duty Regulation), 
the Commission rejected requests for adjustments for credit costs on the grounds 
that no evidence was provided that the credit granted was part of the sales terms 
agreed with the buyers of the goods at the date of sale and therefore could have 
affected the price paid or payable on the domestic market. 
Two Indonesian companies and the AIPI reiterated their request for such an 
adjustment and stated that credit terms of 90 to 120 days are commonly accepted 
business conditions in Indonesia which therefore do not need to be explicitly 
included in the terms of sale. However, the only evidence presented to support 
this claim was a reference to the accounts receivable of the companies concerned 
which did not show such a clear pattern. Thus, it is not proven that prices were 
set on the basis of such alleged commonly accepted business conditions. 
Consequently, it is confirmed by the Council that an adjustment for credit costs 
is not warranted. 
(43) In the provisional duty Regulation (recital 55) requests for adjustments for 
advertising and promotion expenses were rejected because such promotion and 
advertising costs belong to the category of overheads and general expenses, for 
which allowances are not generally made. Two companies reiterated their 
request for an adjustment for advertising and promotion expenses. They claimed 
that these cost differences between export and domestic sales are effectively 
allowable as OEM or level of trade adjustments. 
As regards an adjustment for sales made on an OEM basis, such claim was not 
explicitly made in the responses to the questionnaire submitted by the companies 
concerned, nor was it substantiated despite specific instructions in the 
questionnaire to claim and substantiate any request for deductions if applicable. 
Furthermore, the substantive requirements for such an adjustment are not met: 
ze 
none of the export sales of the Indonesian exporters concerned were made at a 
level which would constitute an OEM sale, i.e. normally a level between 
manufacture and distribution.. These sales were made at a level on the 
Community market the function of which is, in substance, only that of 
distribution. Thus, no appropriate (OEM) adjustment is required in this respect. 
In examining this OEM claim, it was found that the substantive requirements 
for a level of trade adjustment were not met, as sales appeared to be made to a 
similar mix of customers on both the export and the domestic market. In any 
event, the Indonesian exporters concerned did not make any distinction between 
sales at different levels of trade. In fact, no significant differences appeared 
during the investigation in the levels of trade at which export and domestic sales 
were made. Therefore, no level of trade adjustment is necessary on the basis of 
the information available. 
(44) The Indonesian exporters made some additional claims (concerning namely 
allowances made to account for differences in physical characteristics, the rate 
applied for an allowance for duty draw back and the deduction of an amount for 
duty draw back in the case of constructed normal value) which could not be 
taken into account, because they could not be verified, were not supported by 
direct evidence, or, after double checking, turned out to be unsubstantiated. 
b) Malaysia 
(45) In the provisional determination it was found that the domestic SG&A figure 
used for the construction of normal value included direct selling expenses for 
which adjustments had to be made. However, no such deduction was sufficiently 
substantiated (recital 57 of the provisional duty Regulation) and, therefore, 
claims for adjustment to the normal value for direct selling expenses were 
rejected. However, adjustments to the export price were made, where necessary, 
for one or several of the following selling expenses: transport, insurance, 
handling, loading and ancillary costs, credit costs and bank charges, guarantees, 
commissions paid to agents and salaries paid to salesmen. 
zi> 
(46) The other Malaysian exporters considered that the comparison was unfair since 
they were deprived of otherwise justifiable adjustments (such as for direct 
selling expenses) because the only co-operating Malaysian producer with 
domestic sales was not sufficiently motivated to provide a proper reply to the 
questionnaire and to ensure the necessary co-operation during the verification. 
The Malaysian producer in question actually replied to the questionnaire, agreed 
to and was subject to a verification. Being directly related to an exporter of 
bicycles to the Community, it had a clear incentive to co-operate properly with 
the verification. However, this company failed to provide supporting evidence 
for its claims or gave contradictory explanations. In addition, some information 
which was not reported in the response to the questionnaire was discovered only 
during the verification. 
The Council nevertheless recognises that given the very special circumstances of 
this case, it is appropriate to deduct a reasonable amount from the constructed 
normal values of those three Malaysian exporters who are not related to the 
domestic producer/seller in question. The calculations have been revised 
accordingly. As regards the related export and domestic producers, it was the 
responsibility of these two companies to provide the necessary and verifiable 
information and supporting evidence which they failed to do. Therefore, no such 
additional adjustment can be made to the constructed normal value of the related 
exporter. 
(47) In the provisional determination, no adjustment was made to normal value to 
account for credit costs (recital 57 of the provisional duty Regulation). 
Malaysian exporters requested such adjustment on similar grounds as those 
invoked in relation to the adjustment for direct selling expenses. However, there 
is no evidence that, apart from a discount scheme which was taken into account, 
additional credit was granted as part of the sales terms agreed with the buyers of 
the goods at the date of sale. Therefore there is no valid ground for an 
adjustment to normal value for credit costs. 
(48) In the provisional determination, no adjustment was made to the normal value to 
account for differences in the level of trade. In their comments at disclosure after 
2V 
the provisional duty Regulation was published, the Malaysian exporters 
requested to be granted an 'OEM-adjustment' in the form of a reduced profit 
margin for the calculation of the constructed normal value. 
Such claim was not made in the response to the questionnaire nor was it 
substantiated despite specific instructions in the questionnaire to claim and 
substantiate any request for deductions if applicable. Furthermore, the 
substantive requirements for such an adjustment are not met: the majority of the 
export sales of the Malaysian exporters were not made at a level which would 
constitue an OEM sale, i.e. normally a level between manufacture and 
distribution. These sales were made to a level on the Community market the 
function of which is, in substance, only that of distribution. From the 
information available, no clear and distinct pricing pattern existed for export 
transactions to the manufacturer concerned as compared with sales to 
distributors in the Community. Thus, no appropriate (OEM) adjustment is 
required in this respect. 
In examining this OEM claim, it was it was found that the substantive 
requirements for a level of trade adjustment were not met as sales appeared to be 
made to a similar mix of customers in both the export and the domestic market. 
In any event, the Malaysian domestic seller did not make any distinction 
between sales to wholesalers and retailers. Furthermore, no significant 
differences appeared during the investigation in the levels of trade to which 
export and domestic sales were made. Therefore no level of trade adjustment is 
necessary on the basis of the information available. 
(49) The Malaysian exporters made additional claims (concerning namely the nature 
of 'technical assistance' fees, the treatment of certain commission interests, 
double counting of certain commissions, adjustment for forwarding costs, a 
rounding difference, the allocation of packaging costs) which either could not be 
taken into account, because they could not be verified, were not supported by 
direct evidence, or, after double checking, were taken into account. The 
calculations were revised accordingly. 
àS 
c) Thailand 
(50) In the provisional determination, no adjustment was made to the normal value to 
account for differences in the level of trade. In their comments at disclosure after 
the provisional duty Regulation was published, Thai exporters requested to be 
granted an 'OEM-adjustment' and claimed that they had requested such 
adjustment from the beginning of the proceeding. 
In a covering letter which accompanied the questionnaire responses of three Thai 
companies, these producers requested in imprecise terms an OEM adjustment. 
Such claim was not explicitly made in the response to the questionnaire nor was 
it substantiated despite specific instructions in the questionnaire to claim and 
substantiate any request for deductions if applicable. Furthermore, the 
substantive requirements for such an adjustment are not met: the majority of the 
export sales of the Thai exporters were not made at a level which would 
constitute an OEM sale, i.e. normally a level between manufacture and 
distribution. These sales were made to a level on the Community market the 
function of which is, in substance, only that of distribution. From the 
information available to the Commission, it appears that no clear and distinct 
pricing pattern existed between exports to the manufacturer concerned as 
compared with sales to distributors in the Community. Thus, no appropriate 
(OEM) adjustment is required in this respect. 
In examining the OEM claim, it was it was found that the substantive 
requirements for a level of trade adjustment are not met as sales appeared to be 
made to a similar mix of customers on both the export and the domestic market. 
In any event, the Thai exporters concerned did not make any distinction between 
sales to different levels of trade. Furthermore, no significant differences 
appeared during the investigation in the levels of trade, namely distributors and 
retailers, to which export and domestic sales were made. Where domestic sales 
were made directly to end-users this had no apparent effect on prices. Therefore, 
no level of trade adjustment is necessary on the basis of the information 
available to the Commission. 
z& 
(51) For the provisional determinations, the Commission partially rejected a request 
by one Thai company for an adjustment to the normal value for the salaries paid 
to its salesmen because of misleading information and lack of supporting 
evidence. The company reiterated its request for the full adjustment and gave 
new explanations. 
However, the company did not submit supporting evidence for its new 
explanations. Since there was no direct evidence available to support the 
company's claim either, the partial rejection of its request is confirmed by the 
Council. 
(52) In the provisional duty Regulation (recital 65) it was stated that a number of 
claims for adjustments of various types were disregarded in view of their 
insignificant character (namely adjustments with an ad valorem effect of less 
than 0.5%). Some Thai companies claimed that, in fact, not all insignificant 
adjustments were to be disregarded. The Commission re-examined the situation 
and found that, in this particular case, export prices are compared with 
constructed normal values which include weighted average SG&A and profit 
margins. When calculating these SG&A and profit ratios it had to be taken into 
account that adjustments for the same cost items were sometimes either 
insignificant or significant depending on the respective company. In this 
particular case, it was found administratively more practicable to deduct all 
justified adjustments whether significant or not. The calculations were 
accordingly re-examined and where necessary revised. The global value of these 
adjustments was between 0.37% and 4.45%% according to the company 
concerned. 
(53) The Thai exporters made additional claims (concerning e.g. adjustments for 
credit costs, deduction of certain export expenses, calculation of an adjustment 
for salesmen's salaries,) which either could not be taken into account, because 
they could not be verified and were not supported by direct evidence, or, after 
double checking, were taken into account. Insofar as these claims could be taken 
into account, the calculations were accordingly revised. 
2} 
4. Dumping margin 
(54) Like the weighted average dumping margins which were provisionally 
established (recital 66), definitive dumping margins for each producer were 
expressed as a percentage of the free-at-Community-frontier price. 
(55) Applying the same methodology as explained in the provisional duty Regulation 
(recital 66 of the said Regulation) and after having made the necessary revisions 
to the dumping calculations, the weighted average dumping margins for the fully 
co-operating producers are: 
a) Indonesia 
PT Insera Sena 0.4% 
PT Jawa Perdana Bicycle Industry 27.7% 
PT Wijaya Indonesia Makmur Bicycle Industries 21.9% 
b) Malaysia 
Akoko Sdn. Bhd. 23.1% 
Berjaya Cycles Sdn Bhd 37.3% 
Greenworld Systems Sdn Bhd 27.7% 
Lerun Group Industries Berhad 37.3% 
Rolls Rally Sdn Bhd 25.3% 
c) Thailand 
Bangkok Cycle Industrial Co. Ltd 17.7% 
- . Siam Cycles MFG. Co. Ltd 38.9% 
Thai Bicycle Industry Co. Ltd 13.0% 
Victory Cycle Co. Ltd 13.3% 
(56) For the two Indonesian companies which did not sufficiently co-operate with the 
investigation, the methodology applied in the provisional duty Regulation 
(recital 68) is confirmed: the dumping margin for the two companies concerned 
is based on the arithmetical average between the highest margin found for a fully 
co-operating Indonesian producer and the residual duty. The resulting dumping 
margins are: 
2% 
PT Federal Cycle Mustika 28.4 % 
PT Toyo Asahi Bicycle Industries 28.4 % 
E. COMMUNITY INDUSTRY 
(57) The AIPI and Thai producers questioned the correctness of the level of support 
calculated by the Commission. 
The Council notes that those producers which expressly supported the complaint 
account for 55.3% of the Community production of bicycles, and therefore 
represent a major proportion of the Community industry within the meaning of 
Article 4 (5) of the basic Regulation (recital 72 of the provisional duty 
• Regulation). Those producers which were selected for a sample which was 
necessary in view of the large number of producers and which fully co-operated 
represented 36.5% of the'Community's bicycles production. 
The AIPI also argued that companies which, in their opinion, did not suffer 
injury should not be considered as complainants. In response to this argument, it 
has been noted that the question of whether individual Community producers 
have been injured is irrelevant when examining whether such producers qualify 
as part of the Community industry within the meaning of Article 4 (5) of the 
basic Regulation. Furthermore, it should be recalled that injury has to be 
determined on a global basis, i.e. for the Community industry as a whole or a 
major proportion thereof and not for individual Community producers. 
(58) The AIPI questioned both the legality of the use of a sampling technique and the 
actual selection of the sample. In particular, it has been claimed that the use of 
production and sales data led to a flawed sample because sales and production 
trends are also the basis for the injury determination (recitals 88 - 90 of the 
provisional duty Regulation). 
The Council notes that the basic Regulation does not explicitly provide for the 
use of sampling techniques for the purpose of injury determinations. However, it 
does not require the Commission to investigate each complaining Community 
producer either (Article 4). In accordance with previous practice and for the 
23 
reasons already indicated, it was decided to select a sample of Community 
producers on which injury determinations were based. The Council notes that 
the sample was selected exclusively according to the size and geographic 
location of the companies concerned. The number of companies selected from 
each of the Member States thus reflects the size of bicycle production in that 
Member State. No trends or financial data were taken into consideration in the 
selection which was exclusively based on the volume of production of the 
companies concerned during the investigation period. 
Therefore, it is concluded that the Commission was entitled to use a sampling 
technique, which yielded a representative selection of Community producers. 
The findings and conclusions set out in recitals 72 to 74 of the provisional duty 
Regulation are therefore confirmed. 
F. INJURY 
1. Cumulation 
(59) As no comments were received concerning cumulation, the findings and 
conclusions set out in recitals 75 to 79 of the provisional duty Regulation are 
confirmed. 
2. Prices of dumped imports 
(60) The AIPI claimed that Indonesian bicycles were not undercutting prices of 
Community industry bicycles. 
These claims are contradicted by the detailed price comparisons made by the 
Commission (recitals 82 - 86 of the provisional duty Regulation) in respect of 
which the following comments were made after the imposition of provisional 
measures: 
(61) One Indonesian producer argued that model comparisons should have been 
based on the full set of specifications. However, it did not indicate in which 
respect the methodology applied by the Commission yielded unreliable results 
nor why a different approach would have been more reliable. 
5 0 
(62) One Malaysian company argued that the methodology applied was unreliable 
because the value of the parts used for comparing different bicycle models 
account for only 10-20% of the total value of the bicycle and it leads to 
significant fluctuations in the undercutting margins found for two comparable 
bicycle groups. However, it has not been demonstrated that bicycle models 
classified in the respective groups were actually not comparable and that a 
different methodology would yield significantly different results. Fluctuations in 
undercutting margins as such may simply indicate variable pricing patterns and 
therefore do not prove that the comparison and grouping of certain bicycles was 
not justified. 
(63) As a result of the foregoing, the methodology set out in the provisional duty 
Regulation (recitals 82-86) is confirmed. 
(64) Some technical adjustments were made to the undercutting calculation upon the 
request of another Malaysian company and proprio motu by the Commission. 
(65) The resulting individual undercutting margins for the fully co-operating 
producing exporters expressed as a percentage of the Community producers 
prices, undelivered to distributors, vary from 18.2% to 41.4% for producing 
exporters in Indonesia, from 29.7% to 38.4% for those in Malaysia, and from 
15.3% to 30.7% for those in Thailand. 
G. SITUATION OF THE COMMUNITY INDUSTRY 
(66) No further comments were received concerning the injury sustained by the 
Community industry. The findings and conclusions set out in the provisional 
duty Regulation (recitals 87-96) that the Community industry has been suffering 
material injury within the meaning of Article 4 of the basic Regulation, are 
therefore confirmed. 
H. CAUSATION 
(67) Thai exporters claimed that the precarious profitability situation of the 
Community industry cannot be related to dumped imports but was caused by 
51 
high investments by the Community industry made during the investigation 
period (recital 94 of the provisional duty Regulation). 
The increase of investments by 125% in the investigation period as compared to 
1992 can, to a large extent, be attributed to two Community producers which 
either built new production facilities or improved existing ones. Even if these 
two producers were excluded from the profitability determination, the average 
profitability figure for the investigation period would only change marginally. 
(68) As indicated in the provisional duty Regulation (recital 101), it was found that 
bicycle imports reported in EUROSTAT as coming from Vietnam are actually 
other imports originating in the People's Republic of China. Indonesian 
exporters claimed that this fact did not preclude such imports from having had 
an injurious effect. Imports of bicycles declared as originating in Vietnam had a 
smaller total volume in 1993 than the imports under consideration. Furthermore, 
no indication was found that these bicycles were sold at prices as low as those 
for bicycles from the countries under investigation. Price information available 
in EUROSTAT cannot be referred to since the statistics only distinguishes two 
subheadings which do not reflect the variety and heterogeneity of bicycle 
specifications and accordingly prices. In these circumstances, no clear 
assessment of a possible injurious impact of the imports allegedly coming from 
Vietnam can be made. Although these imports could have contributed to the 
difficult state of the Community industry, this does not affect the conclusion 
made in the provisional duty Regulation that imports of bicycles originating in 
Indonesia, Malaysia and Thailand caused material injury to the Community 
industry. 
(69) Since no other new arguments were submitted in this respect, on the basis of the 
findings made and conclusions reached in recitals 97 to 109 of the provisional 
duty Regulation it is definitively concluded that the aggregate dumped imports 
from the three countries in question, given the substantial increase in import 
volumes and considerable degree of price undercutting, taken in isolation, have 
caused material injury to the Community industry. 
3 c 
I. COMMUNITY INTEREST 
(70) Neither new evidence nor new arguments were submitted as to whether the 
Community interest call for intervention. 
In this respect the Council notes that without measures against the dumped 
imports and the resulting unfair competition on the Community market, there is 
an imminent danger that even more Community producer will face the prospect 
of closure. Consumers will therefore without measures have at least in the 
medium term less sources of supply. Although consumer prices of the imported 
products will increase, the global effects on the consumer will be limited since 
there is still a variety of suppliers who are not subject to any anti-dumping 
measures. In this respect it should be noted that no comments or submissions 
were received from consumer organizations. 
In view of these considerations and for the reasons mentioned in recitals 110 to 
117 of the provisional duty Regulation, no compelling aspects concerning the 
Community interest were found on the basis of which the Council could clearly 
conclude that it is not in the Community interest to apply measures. 
J. DUTY CALCULATION 
(71) The AIPI claimed that individual duty rates should have been established for 
different types of bicycles. It argued that the application of weighted average 
rates as established in the provisional duty Regulation (recitals 66 and 119) has 
the effect of setting the duty rates at a level above the dumping or injury margins 
for some bicycle models in breach of Article 13 (3) of the basic Regulation. 
It is the normal practice of the Community institutions, in accordance with the 
basic Regulation, to establish a single duty rate for the like product concerned. It 
has not been disputed in the present case that all types of bicycles originating in 
Indonesia, Malaysia and Thailand and sold in the Community do form one 
single like product (recital 12). There is therefore no reason to deviate from the 
approach followed at the provisional stage. The ad valorem duty rates are thus 
based on a weighted average of the dumping margins established for the bicycle 
33 
models sold for export to the Community and expressed as a percentage of the 
free-at-Community-frontier price. The duty amount collected for a particular 
bicycle model may be higher or lower than the dumping margin, but on an 
overall basis, the duty rates reflect exactly the dumping margins found for the 
like product in strict accordance with Article 13 (3) of the basic Regulation. In 
addition, given the uncertainties for clearly defining types or categories of 
bicycles (recital 12 of the provisional duty Regulation), setting separate duty 
rates for types or categories would render the enforcement of the measures 
administratively impossible. 
(72) For the purpose of establishing the level of definitive duty, and in applying the 
same methodology already applied at the provisional stage, account was taken of 
the dumping margins found and the level of duty necessary to eliminate the 
injury sustained by the Community industry. 
(73^ It was confirmed at the definitive stage that for all companies the undercutting 
margin was higher than the dumping margin found, both being expressed as a 
percentage of the CIF Community frontier price, and that given the precarious 
financial situation of the Community industry, even higher rates of duty would 
be required to fully eliminate injury (recital 119 of the provisional duty 
Regulation). Consequently, in accordance with Article 13 (3) of the basic 
Regulation, the level of the duty rates should be based on the level of the 
dumping margins. 
(74) With regard to one Indonesian company, it is confirmed that the dumping 
margin established is de minimis and this company should consequently be 
excluded from the scope of the duty imposed on imports originating in 
Indonesia. 
(75) It is also confirmed that for producers in the three countries concerned who 
neither replied to the Commission's questionnaire nor otherwise made 
themselves known, it is appropriate, for the reasons outlined in recitals (69) to 
(71) of the provisional duty Regulation to establish the level of definitive duty at 
the weighted average of the highest dumping margins found for bicycle models 
exported to the Community in representative quantities. 
*[ 
K. DEVELOPMENTS AFTER THE INVESTIGATION PERIOD 
(76) In the provisional duty Regulation (recitals 122-125), the Commission rejected 
requests from Indonesian, Malaysian and Thai companies and from 
representatives of these countries, that import developments after the 
investigation period should be taken into account. 
All Malaysian and Thai producers reiterated their claim that up-to-date trends of 
import volumes after the investigation period should have been taken into 
account. They contend that the basic Regulation does not prevent the 
Community Institutions from doing so, and that such extended assessment is 
necessary to show the actual and persisting causation of injury through dumped 
imports. In addition, Thai exporters claimed that in past investigations the 
Community institutions have accepted to take into consideration developments 
after the investigation period. 
It is the Community institutions' constant practice, as now laid down in Article 6 
(1) of Regulation (EC) No 3283/94, to limit findings to the investigation period 
unless the effects of new circumstances are manifest, undisputed, lasting, and not 
open to manipulation or do not stem from deliberate action of interested parties. 
Concerning the alleged decrease of import volumes after the investigation 
period, this may stem from deliberate strategies of the economic operators in the 
exporting countries and in the Community In addition, there is no assurance that 
imports volumes will remain at such levels. Reference was also made to a 
change in the GSP preferential duty rate applying to the imports in question 
which occurred in 1995. However, the possible effects which the changes in the 
GSP system may have on prices in the Community is completely unknown. 
For these reasons it is confirmed that in the present case the definitive 
determination should be based on the findings relating to the investigation 
period. 
3J" 
L. GATT REQUIREMENTS CONCERNING DEVELOPING COUNTRIES 
AND UNDERTAKINGS 
(77) Malaysian exporters claim that a more lenient treatment in the application of 
anti-dumping rules should have been granted to them because they are located in 
a developing country. In this connection, the Malaysian and Thai companies 
refer to Article 15 of the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994 ('1994 AD-Agreement': 'It is 
recognized that special regard must be given by developed country Members to 
the special situation of developing country Members when considering the 
application of anti-dumping measures under this Agreement. Possibilities of 
constructive remedies provided for by this Agreement shall be explored before 
applying anti-dumping duties where they would affect the essential interests of 
developing country Members. ') and complain that this Article was not respected. 
The Malaysian exporters referred in this respect to a Report of the GATT 
Working Party on 'Acceptance of the Anti-dumping Code' (Report adopted on 
31 November 1975, 22S/27, 28, para 4) and to a Decision adopted by the GATT 
Committee on Anti-dumping Practices (ADP/2, Decision of 5 May 1980, 
27S/16, 17). 
It follows from Article 18.3 of the 1994 AD-Agreement that Article 15 of the 
1994 AD-Agreement is not applicable to the present proceeding. In any event, 
Article 15 by no means entails an obligation for the Community to change 
calculation methods as was confirmed in the recent Cotton Yarn Panel for the 
former Article 13 of the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1979 (1979 AD-Code) which is 
similarly worded as Article 15 of the 1994 AD-Agreement. 
As also confirmed in the Cotton Yarn Panel, the said Decision of the GATT 
Committee on Anti-dumping Practices cannot change the content of Article 13 
of the 1979 AD-Code. The report mentioned by the Malaysian exporters is a 
preparatory document which has no intrinsic legal value and thus does not 
provide any guidance in the present case. 
3£ 
According to Article 15 of the 1994 AD-Agreement, constructive remedies are 
those provided for 'by this Agreement' which, in practice, are undertakings. 
Actually no undertakings were offered by Indonesian or Thai companies. 
Malaysian companies indicated their readyness to discuss the terms of 
undertakings, but made a specific offer only for a quantitative undertaking. 
As regards price undertakings, it would be impractical and unrealistic to accept 
these undertakings in the present case because of the enormous number of 
different bicycle models and the frequent changes of specifications which would 
render monitoring undertakings impossible. 
As to quantitative undertakings, it was examined in the present case whether the 
quantitative undertaking offered could remedy the injurious effect of dumping 
and could be satisfactorily monitored. The co-operating Malaysian exporters 
argued that a non injurious volume could be determined by reference to the 
criteria contained in Article 5.8 of the 1994 AD-Agreement, namely the 3% 
threshold as in relation to the total imports into the Community of the like 
product, an offer which, it is claimed, would reduce imports from Malaysia to a 
negligible volume. However, this approach ignores tha fact that the injurious 
effect of dumped bicycle imports from Indonesia, Malaysia and Thailand was 
assessed cumulatively. Furthermore, the undertaking was offered on behalf of 
Malaysian exporters which do not account for the totality of Malaysian bicycle 
exports to the Community. In these circumstances, it is impossible to determine 
which import volume to be allocated to the exporters in question could 
effectively remedy the injurious effects of dumping and it is doubtful whether 
such undertaking could be satisfactorily monitored. 
Therefore, the Commission considers neither price nor quantitative undertakings 
acceptable in this case. Finally, it should be recalled that the Community would 
not be obliged under Article 15 to pursue this option in the circumstances of the 
present case, since it was not demonstrated that applying anti-dumping duties 
would affect the essential interests of the exporting countries. 
34 
M. COLLECTION OF THE PROVISIONAL DUTY 
(78) In the light of the seriousness of the injury, and in view of the high level of 
dumping, the Council considers that the provisional duty should be definitively 
collected at the level of the definitive duties. 
HAS ADOPTED THIS REGULATION: 
Article J 
1. A definitive anti-dumping duty is hereby imposed on imports of bicycles falling 
within CN code 8712 00 and originating in Indonesia, Malaysia and Thailand. 
2. The rates of anti-dumping duty applicable to the net-free-at-Community-frontier 
price, before duty, shall be as follows: 
2£ 
Country 
Indonesia: 
Malaysia: 
Thailand: Products manufactured by 
- P.T. Federal Cycle Mustika 
- P.T. Jawa Perdana Bicycle Industry, Tangerang 
- P.T. Toyo Asahi Bicycle Industries, Jakarta 
- P.T. Wijaya Indonesia Makmur Bicycle 
Industries, Surabaya 
- other companies 
- Akoko Sdn Bhd, Klang 
- Berjaya Cycles Sdn Bhd, Kulim 
- Greenworld Systems Sdn Bhd, Kuala Lumpur 
(previously Fairly Toraya Sdn Bhd) 
- Lerun Group Industries Berhad, Petaling Jaya 
- Rolls Rally Sdn Bhd, Pelabuhan Kelang 
- other companies 
- Bangkok Cycle Industrial Co. Ltd., Bangkok 
- Siam Cycle MFG. Co. Ltd., Samuthprakarn 
- Thai Bicycle Industry Co. Ltd., Samuthprakarn 
- Victory Cycle Co. Ltd., Samuthprakarn 
- other companies Rate of 
duty 
28.4% 
27.7% 
28.4% 
21.9% 
29.1% 
23.1% 
37.3% 
27.7% 
37.3% 
25.3% 
39.4% 
17.7% 
38.9% 
13.0% 
13.2% 
39.2% Taric 
additional 
code 
8859 
8861 
8859 
8862 
8863 
8864 
8865 
8866 
8865 
8867 
8868 
8869 
8870 
8871 
8883 
8872 
3. The duties shall not apply to imports of the product specified in paragraph 1, 
manufactured by P.T. Insera Sena, Sidoarjo, (Taric additional code 8860) 
4. Unless otherwise specified, the provisions in force concerning customs duties 
shall apply. 
Article 2 
The amounts secured by way of provisional anti-dumping duty under Regulation (EC) 
No 2414/95 shall be definitively collected at the duty rate definitively imposed. 
Amounts secured in excess of the definitive rate of anti-dumping duty shall be released. 
^ 
Article 3 
This Regulation shall enter into force on the day 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, 
M-° 
ISSN 0254-1475 
- COM(96) 112 final 
DOCUMENTS 
EN 02 ii 
Catalogue number : CB-CO-96-122-EN-C 
ISBN 92-78-01732-9 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
V-7