COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 28.05.1997 
COM(97) 244 final 
Proposal for a 
COUNCIL REGULATION (EC) 
terminating the anti-dumping proceeding concerning imports of outer rings 
of tapered roller bearings originating in Japan and repealing the anti­
dumping measures imposed on such imports 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
Subject: anti-dumping proceeding concerning imports of outer rings of 
tapered roller bearings originating in Japan 
1. Please find herewith a proposal for a Council regulation terminating the anti­
dumping proceeding concerning imports of outer rings of tapered roller 
bearings originating in Japan and repealing the anti-dumping measures 
imposed on such imports. 
2. The enclosed proposal is the result of a review of the anti-dumping measures 
in force with regard to the imports in question which was requested by the 
Community industry and initiated by the Commission in October 1994. 
3. Further to the investigation of the Commission's services, it was found that 
although the Community industry is still in a precarious situation, the imports 
in question did not in isolation have a materially injurious impact on the 
situation of the Community industry. The allegations set forth in the request 
for an interim review submitted by the Community industry that the measures 
in force were insufficient to offset increased injury are therefore refuted. 
Indeed, it is the opinion of the Commission's services that the precarious 
situation of the Community industry may rather stem from imports from other 
third countries. 
4. In addition, the Commission's services found that it is not likely that the repeal 
of the anti-dumping measures currently in force would create a situation in 
which a materially injurious impact of these imports would recur. 
Given the above findings, it is considered that the result of the review of the anti­
dumping measures in force with respect to imports of the product under 
consideration originating in Japan is that the anti-dumping proceeding 
concerning the above-mentioned imports should be terminated and that the anti­
dumping measures in force should be repealed. 
Proposal for a 
COUNCIL REGULATION (EC) 
terminating the anti-dumping proceeding concerning imports of outer rings 
of tapered roller bearings originating in Japan and repealing the anti­
dumping measures imposed on such imports 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) N° 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community,(1) and in particular Article 9 and Article 11 paragraph 3 thereof, 
Having regard to the proposal of the Commission following consultation of the 
Advisory Committee, 
M> OJ N° L 56, 6.3.1996, p. 1, amended by Council Regulation (EC) N° 2331/96, OJ N° L 
317, 6.12.1996, p. 1. 
cu 
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Whereas: 
A. PROCEDURE 
(1.) In June 1994, the Commission received a request for an interim review of 
the definitive anti-dumping measures on imports of outer rings of tapered roller 
bearings (hereafter referred to as 'Cups') originating in Japan imposed by 
Council Regulation (EEC) N° 55/93.(2) This request was lodged by the Federation 
of European Bearing Manufacturers' Associations (FEBMA) on behalf of 
Community producers whose collective output was stated to constitute a major 
proportion of total Community production of Cups. 
(2.) The request asserted that the anti-dumping measures in force are not or no 
longer sufficient to counteract the dumping which is causing injury as both 
dumping and injury resulting therefrom were alleged to have increased. 
(2) OJN°L9, 15.1.1993, p. 7. 
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(3.) Considering that there was sufficient evidence to warrant the initiation of an 
interim' review under Article 11 (3) of Council Regulation (EC) N° 3283/94 on 
protection against dumped imports from countries not members of the European 
Community(3) the Commission published on 20 October 1994 a notice of 
initiation of a review of the anti-dumping measure applicable to imports of 
Cups.(4) 
(4.) The Commission officially advised the Community producers, the importers 
and the Japanese producers/exporters known to be concerned as well as the 
representatives of Japan of the opening of the investigation and gave the parties 
concerned the opportunity to make known their views in writing and to request a 
hearing. 
(3) OJ N° L 349, 31.12.1994, p. 1, replaced by Council Regulation (EC) N° 384/96. 
(4) OJ N° C 292, 20.10.1994, p. 5. 
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(5.) The Commission sought and verified all information it deemed to be 
necessary for the purpose of its determination. 
(6.) The investigation period applied in the present proceeding for establishing 
whether dumping and undercutting existed was from 1 October 1993 to 30 June 
1994. For the analysis of the trends of the factors analysed for the purposes of 
establishing whether the Community industry suffered injury caused by the 
imports in question the period from 1 January 1991 to 30 June 1994 was used. 
In order to ensure comparability of the data relating to the investigation period 
with that relating to the previous calendar years, this was extrapolated to reflect 
the situation in a twelve months' period. Since the present interim review was 
initiated before the accession of Sweden, Austria and Finland, meaning that the 
investigation period ended before that accession, the investigation of injury is 
based on an analysis of facts pertaining to the Community of twelve. 
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(7.) The investigation has exceeded the normal time period because of the 
complexity of the assessment of the injury and causality aspects of the 
proceeding, which were mainly caused by the high number and degree of 
diversity of the types within the product investigated. 
(8.) The complainant, FEBMA, lodged the.request for an interim review on 
behalf of the following producers: 
FAG Kugelfischer Georg Schàfer KGaA (Germany); 
SKF GmbH (Germany); 
SKF Industrie SpA (Italy); 
SKF Espagnola S.A. (Spain); 
Timken France (France) 
British Timken (United Kingdom); and 
Société Nouvelle de Roulements (France). 
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(9.) During the investigation period, the following companies exported Cups from 
Japan to the Community: 
Koyo Seiko Co. Ltd. (Osaka); and 
NTN Corporation (Osaka). 
(10.) Both of these companies co-operated in the investigation by submitting a 
response to the Commission's questionnaire and on the spot verification visits 
were carried out on their premises by the Commission's services. 
(11.) No unrelated importers co-operated with the Commission in the present 
investigation. 
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(12.) In addition, numerous end-users submitted their comments which were 
taken into account when they were substantiated by supporting evidence. 
B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
(13.) The product under consideration is outer rings of tapered roller bearings 
which is a component of tapered roller bearings. 
(14.) In Japan and in the Community, Cups are mainly sold to two categories of 
customers, namely industrial users and distributors. 
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(15.) It should be noted that complete tapered roller bearings include the 
following components: (1-) an inner ring, being a cone-shaped ring, made of the 
same material as the outer ring (the inner and outer ring are often stamped from 
the same piece of material); (2) tapered anti-friction rollers, fitted on the inner 
ring and which allow it to move in relation to the outer ring; (3) a cage, which 
holds the rollers in place on the inner ring; and (4) an outer ring or cup which is 
the female part into which the male part, the cone (consisting of the inner ring, 
rollers and cage), is assembled in order to produce a complete tapered roller 
bearing. 
(16.) In connection with the present investigation, FEBMA and certain Japanese 
producers submitted arguments in favour of the Commission regarding complete 
tapered roller bearings and Cups as one like product and thus merging the 
present review investigation with the investigation concerning imports of 
complete tapered roller bearings originating in Japan.(5) 
(5) Commission Decision of 3 December 1996 terminating the anti-dumping proceeding 
concerning imports of tapered roller bearings originating in Japan. OJ N° L 10,14.1.1997, 
p. 34. 
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(17.) The above interested parties have stated that Cups, just as cones, the 
latter being covered by the proceeding concerning complete tapered roller 
bearings, are merely a component of the finished product and are only sold 
separately when delivered in conjunction with the other constituent components 
of tapered roller bearings in order to be assembled into a complete tapered roller 
bearing at the premises of the final customer. 
(18.) However, in line with the reasoning set forth by the Court of First Instance 
of the European Community,(6) it is considered that tapered roller bearings and 
Cups constitute separate products, each of which can legally be the subject of a 
separate anti-dumping proceeding. 
(6) Case T-166/94 Koyo Seiko Co. Ltd. v Council of the European Union. Judgment of 14 
July 1995. 
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(19.) It was found that Cups produced in Japan, sold domestically and exported 
to the Community and Cups produced by the Community producers and sold on 
the Community market are alike in their physical characteristics and uses. They 
were therefore considered as a like product in accordance with Article 1(4) of 
Council Regulation (EC) N° 384/96. 
C. DEFINITION OF THE COMMUNITY INDUSTRY 
(20.) One Japanese owned companies produced tapered roller bearings and 
components thereof, including Cups, in the Community during the period under 
consideration. This, company, however, was not considered part of the 
Community industry within the meaning of Article 4(1 )(a) of Regulation (EC) N° 
384/96. This approach was considered justified as the company is related to an 
exporter from Japan of the product under investigation. The company sell all its 
production to the sales subsidiaries located in the Community and equally 
related to the exporter from Japan and which are also involved in selling 
imported Cups originating in Japan. It is considered that in those circumstances 
the producing company located in the Community might therefore benefit from 
any unfair business practices. In such circumstances, the producer was not 
considered to be behaving as a normal Community producer, but rather as a 
complementary source of supply for an exporter accused of practising dumping. 
•' -11 -
(21.) One of the Community producers mentioned in recital 8 did not submit a 
response to the Commission's questionnaire within the deadline set by the 
Commission. In view of this non-cooperation on the part of the company in 
question, it was excluded from the definition of Community industry for the 
purpose of the injury determination in connection with the present investigation. 
Consequently, for the remainder of this analysis, the term Community industry 
refers to the cooperating Community producers which supported the complaint, 
whose collective output of Cups constitutes a major proportion of total 
Community production within the meaning of Article 4(1) of Regulation (EC) No. 
384/96. 
D. INJURY 
(22.) In view of the fact that the product under investigation in the present review 
is a component of tapered roller bearings, the majority of the Community 
producers could, in certain instances, not distinguish in their internal accounts 
between data relating to complete tapered roller bearings and Cups respectively. 
Thus, where necessary, it was considered appropriate to resort to an application 
of Article 3(8) of Council Regulation (EC) N° 384/96 which provides that, "if [...] 
separate identification of [the production, sales and profits of the product under 
investigation] is not possible, the effects of the dumped imports shall be 
assessed by examination of the production of the narrowest group or range of 
products, which includes the like product, for which necessary information can 
be provided". 
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(23.) In the present review, the narrowest group of products for which the 
Community producers could provide the necessary information on the above 
factors is complete tapered roller bearings. Whenever the above-mentioned 
principle of estimation has been applied in the analysis below, this has been 
clearly indicated. 
(24.) Also, as in the initial investigation, accurate officially compiled statistics are 
not available since the combined nomenclature heading under which Cups are 
classified covers more than just that product. The injury analysis is therefore 
based on data provided by the Community producers and the Japanese 
exporters and on estimated data based on information submitted by the parties 
concerned. 
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Community consumption 
(25.) Between 1991 and the investigation period, the estimated consumption of 
Cups in the Community (of twelve) decreased by 4.2 percent. The above 
decrease of the market is the result of the general evolution of the business 
cycle on the Cup market whose size varies according to the general level of 
activity on the part of the users of Cups. 
Volume, sales and market share of imports 
(26.) It is considered that, in this specific case, only sales of Japanese Cups on 
the open market to independent purchasers, i.e. sales of Cups released as such 
for free circulation in the Community, are relevant for the injury determination 
since only such sales are in direct competition with the sales of the Community 
industry. 
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(27.) Between 1991 and the investigation period sales of imported Cups 
originating in Japan to independent purchasers in the Community (expressed in 
pieces) decreased by 35 percent. In line with this decrease in sales and contrary 
to the allegations by the Community industry, the resulting market share of the 
imports under consideration decreased steadily from a market share of 6.6 
percent in 1991 to a market share of 4.5 percent in the investigation period. 
Prices of imports 
(28.) The prices charged by the Japanese producers were compared with the 
prices charged for identical types by the Community producers which could 
provide transaction by transaction data for Cups sold separately by channel in 
the four most important Member States (Germany, the UK, France and Italy 
which, in view of the volumes of sales made in those Member States, were 
considered as being representative of the situation in the entire Community). 
Based on this analysis, it was found that undercutting on the part of the 
Japanese producers did occur during the investigation period. 
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(29.) However, no pertinent conclusions can be drawn from this analysis due to 
the fact that the Japanese companies involved sell only a limited number of 
types which are identical or directly comparable to those manufactured by the 
Community producers in sufficient quantities to render meaningful a comparison 
with European producers. Under these conditions, no individual margins for price 
undercutting have been established for each company involved. 
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Situation of the Community industry 
Sales and market shares 
(30.) The quantity of Cups manufactured and sold in the Community by the 
Community industry (expressed in pieces) decreased by 16.5 percent during the 
period under consideration. The resulting market share of the Community 
industry decreased in the same period from around 84 percent in 1991 to around 
74 percent at the end of the investigation period. 
(31.) The market share of imported Cups, sold separately, manufactured by the 
Community producers outside the Community of twelve (in Austria and the 
United States) at long-established manufacturing facilities increased from 3.6 
percent to 7.3 percent. In addition, the market share of imports from other third 
countries increased from 5.5 percent in 1991 to 11.8 percent in the investigation 
period. 
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Production. capacity and capacity utilisation 
(32.) For the reasons given above in recitals 21 and 22, the analysis of the 
evolution of production, capacity and capacity utilisation is based on data 
regarding complete tapered roller bearings. 
(33.) As to production, between 1991 and the investigation period, production of 
the Community industry decreased by 10.8 percent. 
(34.) In the same period the production capacity of the Community industry 
decreased by 9.3 percent whilst its capacity utilisation decreased from 88.8 
percent to 86.6 percent. 
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Prices and profitability 
(35.) The evolution of prices between 1991 and the end of the investigation 
period in the Community of the Cups sold separately by the Community 
producers was investigated. In view of the argument by the Community 
producers that the Japanese pricing policy affected the prices applied by the 
Community producers, this irrespective of whether the types sold by the 
Japanese producers were identical to those sold by the Community producers or 
not, the analysis of the evolution of the prices applied by the Community 
producers comprised all types sold by these producers during the investigation 
period and not only those which were considered as identical to those sold by 
the Japanese producers. 
(36.) This analysis was made for the prices charged by the Community 
producers (all sales channels) in Germany, the UK, France and Italy. On this 
basis, it was found that the prices in the Community of Cups remained stable 
over the period investigated. Indeed, the prices of the types sold by the 
Community industry during the investigation period, on a weighted average basis 
(comprised of the prices of all the Community producers for their sales to all 
categories of customers) increased by 1.88 percent. 
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(37.) In this respect, it should be noted that, indeed, the return on sales of the 
Community producers specifically relating to complete tapered roller bearings 
during the period under consideration developed from a loss of around 11 
percent in 1991 to a loss of around 17 percent in 1993. Between 1993 and the 
end of the investigation period, the situation of the Community industry 
improved, however, to a loss of around 7 percent, thus showing a certain 
recovery. 
Employment 
(38.) Between 1991 and the investigation period, in the Community industry 
employment, relating to the manufacture of complete tapered roller bearings, 
decreased by 27.4 percent. 
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Conclusion on injury 
(39.) Based on the above analysis, it is concluded that, during the period under 
investigation, the Community industry suffered certain difficulties but improved 
its financial situation. 
E. CAUSALITY 
(40.) In accordance with the provisions of Regulation (EC) N° 384/96, the 
Commission therefore investigated whether the volumes and prices of the 
imports concerned were responsible for the situation of the Community industry 
and had an impact thereon to a degree which enables it to be classified as 
material within the meaning of Article 3(6) of Regulation (EC) N° 384/96. In this 
investigation, care was taken to ensure that any impact on the Community 
industry caused by other factors was not attributed to the imports concerned. 
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(41.) The imports from Japan and their market shares in the Community have 
been falling over the period examined for the analysis of injury. The market 
share of own-imports on the part of the Community producers from countries in 
which it has long-established manufacturing facilities and imports from other 
third country imports have increased by a rate which more than compensates for 
the registered decrease in the Community industry's market share. 
(42.) As to prices, the Community industry has claimed that the undercutting or 
lower price offers on the part of the Japanese exporters has had the effect of 
imposing pressure on prices which forced the Community Cup producers to 
follow the prices downwards in order to defend their market shares at great 
financial expense. It is considered that the analysis of the evolution of the prices 
applied by the Community producers refutes the conclusion submitted by the 
Community producers that the imports had the effect of depressing or 
suppressing prices applied by the Community producers during the period under 
consideration to an extent which may be characterised as material within the 
meaning of Article 3(3) of Council Regulation (EC) N° 384/96. With regard to the 
submission of the Community industry that it was prevented from increasing its 
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prices due to Japanese price undercutting, in particular for major high volume 
customers, it is considered that if such price suppression took place in order to 
maintain volumes and market shares which in fact to a large extent was 
accomplished, the result would have been increased financial losses. However, 
the above-mentioned findings of the investigation demonstrate the opposite. The 
statements on the part of the Community industry, that prices are highly 
depressed or suppressed to a material degree, are not substantiated especially 
in view of the fact that the period in question was characterised by a recession. 
No price depression was found and the price increase found cover a substantial 
part of the general cost increases registered in the industry. 
(43.) As regards the Community industry's reduction in capacity, the Community 
industry has argued that it had to reduce its capacity and investment during the 
reference period in order to lower the break-even point of the industry and thus 
to reduce its losses. This leads to a situation where Community producers were 
not able to meet customer requests during the year 1995, which was after the 
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investigation period, but during which the consumption of Cups improved. In 
order to invest in new capacity, the Community producers claim that they should 
reach a substantially higher return on sales that what was registered during the 
investigation period. 
(44.) While information relating to a period subsequent to the investigation 
period normally cannot be taken into account, it is acknowledged that in 1995 
demand for complete tapered roller bearings and components thereof boomed. 
For this reason also, the Community industry published excellent results (also 
financial) for 1995. It is acknowledged that there have been shortages in supply 
from the Community producers' manufacturing facilities in the Community during 
this year. However, it is considered that it is normal business behaviour to 
reduce costs and this the more so when the industry is in an economic 
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recession. On the other hand, during a booming market, it may also be normal to 
increase capacity and to finance this by normal financial resources. This 
capacity restriction should therefore not be attributed to the imports in question 
and this the more so as the volume of these imports decreased more than the 
capacity restriction of the Community industry. In addition, this capacity 
restriction must be seen in conjunction with the apparent shift of production on 
the part of the Community industry to long established manufacturing facilities in 
countries outside the Community of twelve. 
(45.) As to the decrease in employment, during the period in question, the 
Community industry shifted capacity within their global manufacturing structure 
and undertook important restructuring efforts to improve productivity in general 
which have been reflected in a decrease in employment which cannot be 
attributed to the imports in question. 
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Conclusion 
(46.) Given the above findings, it is concluded that the imports in question did 
not, in isolation, have a materially injurious impact on the situation of the 
Community industry and the allegations set forth in the request for an interim 
review submitted by the Community industry that the measures in force were 
insufficient to offset increased injury are therefore refuted. The precarious 
situation of the Community industry may rather stem from other factors such as 
other third country imports and the recession which prevailed during the 
investigation period. Thus, the measure under review did have the desired 
effects, i.e. to reduce the impact of the imports in question below the degree of 
material within the meaning of Article 3(6) of Council Regulation (EC) N° 384/96. 
(47.) The question is then whether the removal of this measure would reverse 
this situation. 
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F. LIKELY EFFECTS OF THE REPEAL OF THE MEASURES IN FORCE 
(48.) As was demonstrated above, the facts established show that the measures 
under review have reduced the injurious impact of the imports in question below 
the degree of material within the meaning of Article 3(6) of Regulation (EC) N° 
384/96. 
(49.) The Community industry has submitted that if the measure currently in 
force would be repealed it is likely that material injury caused by the imports in 
question would recur. 
(50.) It is considered that it is not likely that the removal of the anti-dumping 
measure under review would create a situation in which a materially injurious 
impact of these imports would recur. This position is based on an analysis of the 
trend of the Japanese market shares, the lack of any material effect thereof on 
the Community producers' pricing and the significant increase in imports from 
sources other than Japan including from facilities related to the Community 
producers. 
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(51.) Other elements should also be high-lighted in this regard, such as the high 
market share held by the Community industry, the fact that its sales are, to a 
significant extent, regulated by long term contracts with large industrial users and 
the fact that the Community. industry, both presently and historically has 
constituted a secure source of supply for the Community user industry due to its 
proximity and high level of quality and service levels. 
(52.) In addition, official statistics demonstrate that production capacity for 
bearings in Japan has remained stable since 1990 until 1994 and increased 
subsequently in line with the recovery of demand world-wide. However, further to 
an analysis of exports from Japan to countries other than the Community, it 
would appear that there is no sufficiently disposable capacity in Japan to 
produce substantially increased quantities for export to the Community. 
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(53.) Finally, it should be stressed that the situation described above for the 
Community industry during the investigation period has shown a certain recovery 
in the market for tapered roller bearings and components thereof. This 
development was sustained and further improved after the investigation period 
as illustrated by general results of the major Community producers published for 
1995. It is not considered as likely that this situation would change as a result of 
the lapse of the current measures due to the immaterially injurious impact of the 
imports in question on the situation of the Community producers as 
demonstrated above. 
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G. DUMPING 
(54.) In view of the above conclusion, it was not considered necessary to 
analyse whether the imports in question were dumped, and if so, if the dumping 
margin thereof had increased or not since this would not have any relevance on 
the above analysis and would consequently not alter the conclusions reached. 
H. CONCLUSION 
(55.) Given the above findings, it is considered that the result of the interim 
review of the anti-dumping measures in force with respect to imports of Cups 
originating in Japan is that the anti-dumping proceeding concerning these 
imports should be terminated and that the anti-dumping measures in force 
should be repealed. 
(56.) The Commission informed the interested parties, including the Community 
industry, of its findings. After having been informed by the Commission of the 
above facts, findings and conclusions, representatives of the Community 
industry made further representations, both in writing and orally, concerning the 
impact of the Japanese imports in question on the Community industry. 
However, it is considered that these representations could not, after 
examination, reverse the above conclusions. Certain Member States raised 
objections to this course of action. 
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HAS ADOPTED THE FOLLOWING REGULATION: 
Article 1 
The anti-dumping proceeding concerning imports of outer rings of tapered roller 
bearings falling within with CN Code N° ex 84829900 originating in Japan is 
terminated and the anti-dumping measures imposed Council Regulation (EEC) 
N° 55/93 on such imports are hereby repealed. 
Article 2 
This Regulation shall enter into force on the day following that of 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 


ISSN 0254-1475 
COM(97) 244 final 
DOCUMENTS 
EN 02 11 
Catalogue number : CB-CO-97-236-EN-C 
ISBN 92-78-20120-0 
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