ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(82)878
Vol.1982/0268

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COMMISSION OFTHEEUROPEAN COMMUNITIES
r
s
(
COM(82)878 final
Brussels,22December1982
Proposalfora
COUNCILDECISION
terminating theanti-dumping proceeding concerning imports
ofcodeineanditssaltsoriginating inCzechoslovakia ,
Hungary,PolandandYugoslavia
(submittedtotheCouncilbytheCommission )
C0M(82)878final

EXPLANATORY MEMORANDUM
Atthebeginningof1981theCommissionreceivedanapplicationalleging
thatimportsofcodeineanditssaltsoriginatinginYugoslaviaandcertain
EasternEuropeancountriesweredumpedandcausinginjurytotheindustry
inquestion.Thisapplication waslodgedbythetwoGermanproducersof
theproductconcerned.
Thetradeofcodeineisgovernedbythe"SingleConvention"of1961which
submitsthetradeofnarcoticstoastrictcontrol.Basedonthis
convention mostMemberStateswhichproducecodeinerestrictorexclude
importsofcodeineanditssaltsintotheirterritory.TheFederal
RepublicofGermanydoesnot,however,imposeanyquantitative Limits
onimportsofcodeine.
On1April1981theCommissionopenedananti-dumping investigation
againstimportsofcodeineanditssaltsoriginating inCzechoslovakia ,
Hungary,PolandandYugoslavia .Thepreliminary investigation
carriedoutbytheCommission showedthatimportsfromallexportingcountries
concernedweredumped.Thisinvestigation alsoshowedinjurybeing
causedtotheGermanindustry.
TheCommissionfound,however,thatnotonlyimportsfromthefour
countriesconcerned,bfotalsoimportsoriginating inotherMemberStates
havecaused injurytotheGermanindustry.Pricesofimports
originating inotherMemberStatesareasloworevenlowerthanprices
ofimportsfromthefourexportingcountriesconcerned.Whilein1980
themarketshareheldbythesefourcountriesinGermanyhasbeen17,2%,the
marketshareheldbyimportsfromotherMemberStateswas46,4%.Moreovera
detailedanalysisoftheGermanimportstatisticsoftheperiod1977to1980
showsthatadecreaseofimportsfromthefourcountriescoveredbythis
investigation iscloselylinkedtoanincreaseofimportsfromother
MemberStates.

MeanwhiletheCommission hasdecidedtoopenaprocedureunder
Art.169oftheEECTreatyagainstthreeMemberStateswhichrestrict
intraCommunitytradeofcodeine.Thisprocedurehasnotresultedin
anychangeofthesituationyet.
Underthesecircumstances theCommissionisoftheviewthatitisnotin
theCommunity'sinterestatthistimetointroduceprotective measures
againstimportsofcodeineanditssaltsfromYugoslavia andthreeEastern
Europeancountriesandthattheanti-dumping proceedings shouldbe
terminated .TheCommissionbelievesthatimportsfromthesesourceswouldbe
immediately replacedbyequallydamagingimportsfromotherMemberStates
andthatanti-dumping measureswouldnotgiverelieftothecomplainants .
TheAdvisoryCommitteesetupunderArt.6ofCouncilRegulation (EEC)
No3017/79hasbeenconsultedonthisquestion.NineMemberStateshave
agreedthatthisprocedureshouldbeterminated .Therepresentative of
theFederalRepublicofGermany,however,hasraisedobjectionsagainst
thetermination oftheprocedure.TheCommissionsubmits,therefore,
inaccoraancewithArt.9(1)ofRegulation (EEC)No3017/79,aproposal
totheCouncilthattheproceedings beterminated .

Proposalfora
COUNCILDECISION
terminatingtheanti-dumping proceedinaconcerningimportsofcodeine
anditssaltsoriginating inCzechoslovakia ,Hungary,PolandandYugoslavia
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropean .EconomicCommunity,
HavingregardtoCouncilRegulation (EEC)No3017/79of20December1979
onprotectionagainstdumpedorsubsidizedimportsfromcountriesnot
membersoftheEuropeanEconomicCommunityd),asamendedbyRegulation
(2)
(EEC)No1580/82, andinparticularArticle9thereof,
HavingregardtotheproposaloftheCommissionsubmittedafterconsultations
withintheAdvisoryCommitteeprovidedforbytheabovementionedRegulation;
WhereastheCommissionreceivedacomplaintlodgedbythetwomajorGerman
manufacturers which,atthattime,accountedforalargeproportion
ofthetotalCommunityoutputofcodeineanditssalts;whereasthe
complaintcontainedevidenceoftheexistenceofdumpinginrespectof
likeproductsoriginating inCzechoslovakia ,Hungary,Polandandin
Yugoslavia andofmaterialinjuryresultingtherefrom;
Whereas,sincethesaidevidencewassufficienttojustifyinitiating
aproceeding,theCommissionaccordingly announced,byanoticepublished
intheOfficialJournaloftheEuropeanCommunities(3 ),theinitiationof
aproceedingconcerningimportsofsuchproductsoriginating inthesaid
countriesandcommencedaninvestigation atCommunitylevel;
WhereastheCommissionofficiallysoadvisedtheexportersandimporters
knowntobeconcernedaswellastherepresentatives oftheexporting
countriesandthecomplainants ;
(1)0JNoL339,31.12.1979,p.1
(2)0JNoL178,22.6.1982,p.9
(3)0JNoC71,1.4.1981,p.2

WhereastheCommissiongavethepartiesdirectlyconcernedthe -2-
opportunity tomakeknowntheirviewsinwritingandtobeheard
orally;whereasallexpoitersandimportersknowntobeconcerned
havetakenthisopportunity ;
Whereas,inordertoarriveatapreliminary determination of
dumpingandinjury,theCommissionsoughttoobtainandverifyall
information whichitdeemedtobenecessary;whereastheCommission had
alsototakeintoconsideration thefactthattradeincodeineandits
saltsissubjecttointernational controlunderthe1961Single
Convention andthat,owingtotheimportrestrictions appliedonthis
basisbytheotherMemberStates,theFederalRepublicofGermanyisthe
onlyimportantCommunitymarketonwhichthesaidgoodscanbefreelyimported;
WhereastheCommissioncarriedoutinspections atthepremisesofthesold
Yugoslavian producerAlkaloid,Skopjeandatthepremisesofthetwo
complainants EMerck,DarmstadtandBoehringerIngelheim;
Whereas,foritsdetermination ofdumpingtheCommission hadtotakeaccount
ofthefactthatCzechoslovakia ,HungaryandPolandarenotmarket
economycountries;
Whereasforthatreason,theCommission hadtobaseitscalculations on
thenormalvalueinamarketeconomycountry;whereas,inthatconnection,
complaintsuggestedthedomesticpriceinYugoslavia;whereastheHungarian
exporterdisputedthechoiceoftheYugoslavian domesticpriceasabasis
forthedetermination ofnormalvalueandallegedthattheprotectionofthe
Yugoslavian marketledtointernalpriceswhichwereartificially high;whereas
asanalternative theHungarianexportersuggestedthatanormalvalue
beestablished byusingtheexportpriceofanothermarket
economythirdcountrytoGermany;whereastheCommissionconsidered
thattheadditionaladministrative burdenwhichwouldbeimposed
onitbycarryingoutinvestigations inafurthermarketeconomy
countrywouldbeunjustifiedunlessitcouldbedemonstrated thatit
wouldbemanifestly moreappropriate andreasonabletouseanother
thirdcountry'snormalvalueratherthantousepricesorcostsin
Yugoslavia;whereas,inviewofthefactthatpracticallyall
countriesproducingcodeineprotecttheirhomemarket,theCommission
consideredthechoiceofathirdcountry'sexportpricetobe
inappropriate becauseitwasalwayslikelytobedumpedandbecause
therewasnojustification fordiscriminating betweenYugoslavia and
theotherthreecountriesconcernedbybasingthenormalvalueinone
caseonallegedlyartificially highinternalpricesandintheother
Casesonalowerandthereforedumpedexportprice;whereasthe
Commissionhasconsequently,sincenootherobjectionsagainst
trie:L^o--av"anpricewerebroughtforward,based

-3-
itspreliminarydeterminations ofnormalvalueonthedomesticpricein
Yugoslaviaduringtheperiod1January1980to31March1981;
WhereasexpertpricesfortheCzechoslovakianexporterChemapol,the
HungarianexporterMedimpex,thePolishexporterCiechandtheYugoslavian
exporterAlkaloidwereestablished onthebasisoftheinformation
obtainedfromthesecompanies;whereas'inthecase1ofAlkaloidthis
information wasverifiedonthespot,whileinrespectoftheotherexporting
companiestheCIFpriceswerecheckedbyreferencetotheofficialGerman
importstatistics;
WhereasthenormaIvaluewascomparedwiththeexportpricesofthefourexporting
companies;whereasthesecomparisons weremadeattheex-factorylevel
forsalesmadeduringtheperiod1January1980to31March1981;
Whereasthispreliminaryinvestigation ofdumpingshoweddumpingmarginsof
93,6%forAlkaloid,94,3%forChemapol,99,8%forMedimpexand87,5%forCiech;
Whereas,withregardtoinjurycausedbythedumpedimportstothe
Communityindustry,theevidenceavailabletotheCommissionduringthe
preliminary investigation showsthatimportsfromPolandintotheFederal .
RepublicofGermanyhaveincreasedfrom500kgsin1978to2645kgsin1980;
whereasduringthesameperiodimportsfromCzechoslovakia haveincreasedfrom
400kgsto620kgsandthosefromHungaryfrom0kgto200kgsafterreaching
apeakof650kgin1979;whereasimportsfromYugoslavia increasedfrom
275kgsin1978to3164kgsin1979anddroppedto450kgsin1980;
Whereasin1980Polishexportsheldashareof11,6%andCzechoslovakian
exportsashareof2,7%oftheGermanmarket;whereasthemarketshare
ofHungarianexportsdroppedfrom3,2%in1979to0,9%in1980and
duringthesameperiodtheYugoslavianmarketsharedroppedfrom15,4%to
2,0%;
Whereasthepricesofthedumpedimportsweresignificantly belowthe
priceschargedbythetwocomplainingGermanproducers;whereas
in1980Polishimportprices,onaverage,undercutthedomestic

-L-
sellingpricesofthetwoGermanproducersbymorethan41%;whereasthe
corresponding figuresfortheotherexportersconcernedwere32%inthecase
ofCzechoslovakia ^43%inthecaseofHungarianand34%inthecaseof
Yugoslavian exports;
Whereastheconsequent impactontheGermanindustryhascontributed to
adramaticdropinthemarketshareheldbythecomplainants from23%in
1978to6,3%in1980,adropinsalesvolumeofupto90%andanincrease
intheaveragestoringtimeatthepremisesofthecomplainants fromaround
150daysin1978toupto960daysin1980;whereasbothcomplainants,due
tothedepressedpricelevels,sufferedseriouslossesin1979and1980
andwereforcedtostoptheirproduction andtoreducetheir
workforceby50%;
WhereastheCommissionhasalsoconsideredwhetherinjuryhasbeencaused
byotherfactorssuchasvolumeandpricesofimportsfromothercountries,
whichindividually orincombinationarealsoadverselyaffectingthe
complainantindustry;whereasimportsintoGermanyfromotherMemberStates
alsoincreasedfrom6-946,5kgsin1978to10572kgsin1980;whereas
duringthesameperiodthemarketshareheldbytheseimports increased
from35,7%to46,4%;whereasin1980theaveragepriceoftheseimportswas
morethan39%belowtheaveragedomesticsellingpricesofthetwoGerman
firms;
Whereas,inaddition,in1977importpricesoftheproductsconcerned
originating inthecountriessubjecttothisproceedingwere
wellabovethecomparablepriceoftheproductsoriginating inother
MemberStates;whereas,in1978,whilethedifferential betweenthe
pricelevelsofthevariousimportswas,ingeneral,maintained,asharpdrop
inpricesofimportsfromallsourcescoincidedwithanincreasein
themarketshareofimportsoriginating inMemberStatesfrom31,9%
to35,7%;
Whereas,underthesecircumstances ,itappearsthattheimportsfromother
MemberStateshavebeentheprincipalcauseofinjuryanditisdifficultto
establish whethertheimportsfromCzechoslovakia ,Hungary,Polandand
Yugoslavia,takeninisolation,havecausedmaterialinjurytotheCommunity
industryconcerned.
$
£

-5-
Whereas,furthermore, theinterestsoftheCommunity
donotcallforCommunityintervention againstthedumpedimports
asLongasotherMemberStates,whilemaintaining importrestrictions,
continuetoexportLowpricedcodeinetotheFederalRepublicof
Germany;whereasanyrestriction ontheimportsfromthefourcountriesconcerned
wouldprobablyonlyresultinthairbeingreplacedbylow-priced
importsfromtherestoftheCommunityashappenedbetween1979and
1980.whenanincreaseof7.3%inimportsofCommunityorigincoincided
withadropof8.9%inimportsfromthefourcountriesconcerned;
WhereastheCommission'sviewisthat,onthebasisoftheforegoing,theproceeding
shouldbeterminated;whereas,however,oneMemberStatehasraised
anobjectionintheAdvisoryCommittee;whereastheCommission has
thereforereferredthemattertotheCouncil;
Whereasonthebasisoftheabovefindingsithasbeendeterminedthatanyaction
takenagainsttheimportsfoundtobedumpedwouldnotgivereliefto
thecomplainantindustryandthatitis,therefore,notintheCommunity's
interestsatthistimetotakeprotectivemeasuresagainstthesedumped
imports;whereas,inthesecircumstances theprocedureconcerningimports
ofcodeineanditssaltsfromCzechoslovakia ,Hungary,Polandand
Yugoslaviashouldbeterminated,
HASDECIDED ASFOLLOWS:
SoleArticle
Theanti-dumping proceedingconcerningimportsofcodeineanditssalts
originatinginCzechoslovakia ,Hungary,PolandandYugoslaviais
herebyterminated.
DoneatBrussels, FortheCouncil