COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.07.1998 
COM(1998) 487 final 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing a definitive anti-dumping duty on imports of certain unbleached cotton 
fabrics originating in the People's Republic of China, Egypt, India, Indonesia and 
Pakistan, definitively collecting the provisional duty imposed and terminating the 
anti-dumping proceeding in respect of imports of these fabrics originating in 
Turkey 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
Subject: Anti-dumping proceeding concerning imports of unbleached cotton 
fabrics originating in the People's Republic of China, India, Indonesia, 
Pakistan, Egypt and Turkey 
Proposal for definitive measures 
(1) The Commission, by Regulation (EC) No 773/98 imposed provisional anti-dumping 
duties on imports into the Community of certain unbleached cotton fabrics 
originating in the above-mentioned countries. 
(2) Subsequent to the imposition of the provisional anti-dumping duties, the interested 
parties who so requested were granted an opportunity to be heard and to submit 
observations in writing. 
(3) The Commission's services have considered all the arguments and they have taken 
them into account where appropriate. 
(4) The further investigation has established that the imports originating in Turkey 
should not be cumulatively assessed with the imports from the other countries 
concerned. This conclusion has been reached in view of differences in the conditions 
of competition between imports from Turkey and those of the other five countries, i.e. 
continuous decline in the volume of imports, low price undercutting and a share of 
total imports from third countries that in the 12-months before the opening of the 
investigation was below the 3% threshold established in Article 5.8 of the WTO Anti­
dumping Agreement, which would require the immediate termination of a 
proceeding. 
Furthermore, when taken in isolation, it was found that these imports do not 
contribute in any material way to the injury suffered by the Community industry. 
Therefore, it is proposed that the proceeding concerning imports of the product 
concerned originating in Turkey be terminated. 
(5) With respect to the imports originating in the other five countries concerned, the 
provisional findings regarding the existence of injurious dumping and the 
Community interest aspects were confirmed. 
(6) The Commission's services suggested undertakings to the exporters from the 
countries concerned. 
• These undertakings would apply to a limited number of constructions (i.e. 
models), which represent the bulk of the imports from each of the five countries 
concerned (around 50%). y 
• The undertaking would consist in minimum prices based on the average import 
prices, increased by the dumping/injury margins of the sampled exporters, as 
appropriate. 
•i CK 
• In order to avoid circumvention through constructions not covered by the 
undertaking, a country-wide quantitative ceiling would be set per construction. 
Once this quantitative ceiling reached, the applicable ad valorem duty will enter 
into force. 
• Within the undertaking, for unbleached fabrics weighing less than 100 gr./m2, 
which represent a small percentage of total imports (around 5%), a specific 
minimum price would be established, without a quantitative ceiling. Those 
fabrics represent a marginal segments of the market and enjoy specific product 
characteristics. 
• The undertakings signed by exporters would be underpinned by agreements 
concluded with the associations/authorities in the countries concerned in order to 
assist to monitor the prices and quantities specified in the undertakings. 
• Monitoring: the classical monitoring (i.e. reporting by the exporters) will be 
reinforced by the SIGL, an on-line computer program which is used by the 
Commission in co-ordination with national agencies to manage the existing 
textile quotas. 
(7) Discussion are currently being held with the exporters concerned which are likely to 
continue until the month of September. Should the undertakings be accepted by the 
Commission, this shall be reported to the Council and will be an integral part of the 
definitive solution of this case. 
(8) For the rest of the fabrics, for exporters not signing the undertakings and for the best-
selling constructions exceeding the quantitative ceilings, it is proposed to adopt ad 
valorem anti-dumping duties, as a complement to the system of undertakings as 
described above. 
(9) On this basis, it is proposed that the Council adopts the attached proposal for a 
Council Regulation to impose definitive anti-dumping duties on imports of 
unbleached cotton fabrics originating in the People's Republic of China, India, 
Indonesia, Pakistan and Egypt and to terminate the proceeding as concerns Turkey. 
1b 
Commission Declaration to the minutes of the Council 
In the framework of the present investigation, the Commission has come to the 
conclusion that the proceeding should be terminated as regards imports of unbleached 
cotton fabrics originating in Turkey. This decision was taken, inter alia, in view of the 
low and declining volume of imports from Turkey and its low share of the 
Community market. 
Should these trends be reversed in the coming years, and should a duly substantiated 
complaint be lQdged by the Community industry, showing the existence of injurious 
dumping of imports from Turkey, the Commission will expeditiously examine this 
complaint. 
ic 
Proposal for a 
COUNCIL REGULATION (EC) NO /98 
imposing a definitive anti-dumping duty on imports of certain unbleached cotton 
fabrics originating in the People's Republic of China, Egypt, India, Indonesia and 
Pakistan, definitively collecting the provisional duty imposed and terminating the 
anti-dumping proceeding in respect of imports of these fabrics originating in 
Turkey 
THE COUNCIL OF THE EUROPEAN UNION, < 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community1, as amended by Regulation (EC) No 2331/96 2 and by Regulation (EC) No 
905/983, and in particular Articles 8,9 and 10(2) thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
A. PROVISIONAL MEASURES 
(1) By Regulation (EC) No 773/98 (hereinafter referred to as the "provisional duty 
Regulation") the Commission imposed provisional anti-dumping duties on imports 
into the Community of certain unbleached cotton fabrics originating in the People's 
1 OJ No L 56, 6.3.1996, p. 1. 
2 OJNoL 317, 6.12.1996, p.l. 
3 OJ No L 128, 30.04.1998, p. 18. 
1 cL 
Republic of China (hereinafter referred to as "the PRC"), Egypt, India, Indonesia, 
Pakistan and Turkey. 
B. SUBSEQUENT PROCEDURE 
(2) Subsequent to the imposition of provisional anti-dumping duties, the interested 
parties who so requested were granted an opportunity to be heard by the 
Commission's services. Parties were informed of the essential facts and 
considerations on the basis of which it was intended to recommend the imposition of 
definitive anti-dumping duties and the definitive collection, at the level of these 
duties, of amounts secures by way of provisional duties. They were also granted a 
period within which to make representations subsequent to this disclosure. 
(3) The oral and written comments submitted by the interested parties were analysed and, 
where deemed appropriate, taken into account for the definitive findings. 
(4) Some producers/exporters have argued that the opening of the proceeding is illegal, 
since the publication took place 46 days after the lodging of the complaint, thus 
contravening Article 5(9) of Regulation (EC) No 384/96 (hereinafter referred to as the 
"basic Regulation"). 
(5) The objective of the time limit of the 45 days is to give the complaining Community 
industry the benefit of an expeditious examination of its complaint and, should the 
necessary requirements be fulfilled, for the Commission to initiate a proceeding 
without undue delay. In this respect it would not appear that any interested party is 
prejudiced by the initiation one day later than the 45 days time limit. The Community 
industry has not objected about the date of initiation of the proceeding. 
(6) Some producers/exporters have further argued that the opening of the proceeding 
contravened the principle non bis in idem, since a former proceeding concerning the 
same product had not been formally closed.4 
This proceeding was opened by a Notice of Initiation published in the OJ No C50, 21.02.1996. 
Provisional anti-dumping duties were imposed by Commission Regulation (EC) No 2208/96, OJ No L 
295, 20.11.1996, p.3. 
(7) In the former proceeding, the Council declined to adopt the proposal of the 
Commission to impose definitive measures within the statutory time limits, i.e. 15 
months from the initiation of the proceeding, without setting out formal reasons for 
this refusal. 
(8) In this respect, firstly and by comparison to the previous proceeding, it should be 
noted that in the current proceeding, the investigation relates to economic data 
stemming from a different investigation period and to a product concerned which is 
somewhat different from that covered by the past proceeding. This as such precludes 
any possible contravention against the principle non bis in idem. Secondly, according 
to Article 5(9) of the basic Regulation, if there is sufficient prima facie evidence of 
injurious dumping to justify initiating a proceeding, the Commission is obliged to do 
so. Since this was the case in the present proceeding, the Commission opened a new 
investigation. Thirdly, Article 6(9) provides that an investigation shall be concluded 
within 15 months of initiation. While no mechanism is provided for by the basic 
Regulation for the formal termination of a proceeding, once this period has passed 
without imposition of measures, since no measures can thereafter be imposed, a 
proceeding must in such circumstances be deemed to be terminated by operation of 
law. 
For these reasons, the above argument concerning the illegality of the proceeding has 
to be rejected. 
(9) Some parties have argued that the Commission has failed to demonstrate the 
existence of a clear separation between the captive and the non-captive market and 
that, therefore, the representativity of the Community industry and the analysis of 
injury should relate to both the captive and the non-captive market. 
Furthermore, some parties have argued that even if such a clear separation existed, the 
standing of the complainants should always be assessed by reference to the 
Community production destined for both the non-captive and the captive market. 
(10)The Commission further examined both markets in the light of the evidence 
submitted by all interested parties. The analysis has focused on the interrelations 
between sales of unbleached cotton fabrics from downstream integrated weavers 
(captive weavers) operating in the captive market, from non-captive weavers and 
imported fabrics. 
(ll)Regardless of the producers, unbleached cotton fabrics are an intermediate product 
subject to further manufacturing steps. The structure of the textile industry is such 
that the unbleached fabrics are either produced by a downstream integrated company 
which after weaving finishes the fabrics without putting them on sale, or they are 
produced by non-integrated weavers and sold on the non-captive market. 
(12)The investigation has shown that, based on the situation of the complainant 
Community producers, around 92% of the unbleached cotton fabrics sold on the non-
captive market are produced by non-integrated weavers. These weavers operate 
exclusively in the non-captive market. An additional 3% of the sales in the non-
captive market is produced by a company which belongs to a group that is active in 
the downstream markets (finishing and making-up). However, this company acts 
independently in the non-captive market and not in the captive market. It has also 
been found that the complainant Community producers represent around 90% of total 
non-captive Community production. Furthermore, no information is available that 
could indicate that the situation for the non-complainant non-integrated producers 
differs from the one of the complainant industry. In view of the above mentioned 
considerations, it can be estimated that not more than around 5% of total non-
integrated Community production of unbleached cotton fabrics is sold in the non-
captive market by downstream integrated producers who mainly operate in and 
produce for the captive market. This limited amount is generally accounted for by 
remnants of fabrics initially produced to be transformed in their downstream activity 
and is therefore not representative of the main activity of these companies. 
(13)In this respect it is also worth nothing that unbleached cotton fabrics in the captive 
market are generally sold at transfer prices within the company, excluding a 
profitability element. In addition, a number of these integrated companies do not even 
have a separate corporate structure for the company divisions carrying out the 
different activities, but are divided into departments within the same company. A 
price difference between markets is not sufficient to change the source of supply. 
(14)As to the sales of unbleached fabrics from the sampled Community producers in the 
non-captive market, these have been found to be generally destined for finishers, 
converters and/or makers-up. 
(15)Furthermore, the cooperating producers/exporters have been found to export the great 
majority of their fabrics through importers and traders in the Community and not 
directly to integrated weavers. 
(16)In view of the above mentioned it is concluded that fabrics produced by the 
complaining Community producers and sold on the non-captive market are not 
generally in competition with fabrics produced and transformed internally by 
downstream integrated weavers. Since a clear separation exists between the captive 
and the non-captive market, and since the captive market is not directly supplied to 
any significant extent by the imports concerned, the assessment of injury to the 
Community industry has been carried out by reference to the non-captive market 
only. 
(17)Furthermore, since the analysis of injury relates to the Community industry as 
defined according to Article 4(1) of the basic Regulation, and since Article 4(1) refers 
to Article 5(4) which establishes the rules on standing, the requirements of standing 
should also be assessed by reference to the production of the non-integrated 
producers. 
Even if the standing of the complainants were to be assessed with reference to the 
total Community production, i.e. that destined for the captive and for the non-captive 
market, the complainant Community producers still represent more than the 25% of 
total Community production, thus fulfilling the requirements of Article 5(4) of the 
basic Regulation. 
(18) Therefore, the above arguments had to be rejected. 
C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
1. Request for exclusions from the product under consideration 
(19)In the provisional duty Regulation, it was provisionally decided to exclude grey 
handloom fabrics from the scope of the proceeding and to exempt those fabrics from 
the payment of the duties if accompanied by a certificate of handloom origin issued 
by the appropriate authorities of the exporting countries. In view of the absence of 
substantiated comments against the exclusion of handloom fabrics, the provisional 
findings are hereby confirmed. 
(20)Following the disclosure of provisional findings, several requests were presented or 
repeated for the exclusion of specific types of grey cotton fabrics from the scope of 
the proceeding. 
(a) Fabrics for industrial applications (industrial fabrics) 
(21)One exporter claimed that industrial fabrics should be excluded from the scope of the 
proceeding, since they had different physical characteristics as compared to the other 
unbleached cotton fabrics. These differences allegedly rendered the industrial fabrics 
unsuitable for applications other than industrial ones. The different characteristics and 
uses allegedly resulted in a different consumer perception. The distribution channels 
were alleged to be different, and it was furthermore claimed that there was no 
Community production of those fabrics. 
It has been found that fabrics for industrial applications are produced in a wide variety 
of constructions, widths, qualities and weight, depending on their intended use. No 
clear dividing line was found between industrial fabrics and other fabrics. Even if 
some of the constructions of industrial fabrics are only used for certain applications, 
the general physical characteristics of the fabrics, overall, remain the same as those of 
fabrics for other uses (e.g. furniture). The distributors of industrial fabrics also trade 
in fabrics for other uses and applications. The exclusion of industrial fabrics from the 
scope of the proceeding cannot, therefore, be accepted. 
(b) Stretch fabrics 
(22)One exporter repeated the request for exclusion of stretch unbleached cotton fabrics. 
These are fabrics woven with a yarn incorporating an elastic filament that gives 
elasticity to the woven fabric. The exporter claimed that those fabrics are produced 
with different production methods, that they were sold at relatively high prices and 
that they had a different consumer perception, since the end-use of the fabric was 
limited to clothing. 
The Commission found that stretch fabrics are manufactured according to the same 
production methods used to manufacture the other fabrics concerned. In any event, 
neither differences in production methods nor a different pricing policy are elements 
that determine per se the existence of a different product. Furthermore, it has been 
found that despite the differences between stretch fabrics and non-stretch fabrics 
which are the result of the use of elastic yarn, the essential physical characteristics 
and uses remain the same as those of other unbleached cotton fabrics concerned. 
Furthermore, the consumer perception of those fabrics remain basically the same as in 
other unbleached cotton fabrics. Therefore, the exclusion of stretch fabrics from the 
scope of this proceeding cannot be granted. 
(c) Unbleached cotton fabric used for embroidery and fabrics weighing under 
100gr/m2 
(23)As announced in the provisional duty Regulation, the Commission further 
investigated the issue of fabrics used for embroidery and those weighing under 100 
gr/m2. In this respect, it is concluded that since their.essential physical characteristics 
and uses remain similar to those of the other fabrics concerned, no exclusion from the 
scope of the proceeding can be granted. 
2. Like product 
(24)Some parties have argued that unbleached cotton fabrics manufactured in the 
Community are not like products to imported unbleached cotton fabrics, in view of 
the differences in production methods, quality and constructions. 
Firstly, it is the practice of the Community institutions, to consider that quality and 
production methods are not elements that determine the existence of a different 
product. Indeed, the determination of a like product is based on the essential 
chemical, technical and/or physical characteristics, the use or functions and the 
consumer's perception of the product. In the current case, the differences in 
production methods and quality do not detract from the validity the observation that 
imported unbleached cotton fabrics are interchangeable with Community produced 
ones. 
As to differences in constructions, it should be noted that cotton fabric is 
manufactured in a great variety of constructions, defined by a combination of two 
pairs of numbers (count of yarn in warp and weft and number of threads in warp and 
weft). The constructions manufactured in the Community by the complainant 
Community producers closely resemble the imported constructions, thus fulfilling the 
requirements of Article 1(4) of the basic Regulation. Indeed, the producers/exporters 
concentrate on a limited number of constructions representing the bulk of their 
exports and export smaller quantities of many other constructions. It is worth noting 
that both the best selling constructions and the rest of the constructions are not 
necessarily the same for the different countries concerned. 
Furthermore, the investigation has shown that there is a high degree of 
interchangeability between adjacent constructions which are manufactured by the 
Community industry. For these reasons, the argument cannot be accepted. 
(25)The provisional conclusions reached by the Commission on this point are therefore 
confirmed. 
D. DUMPING 
1. Indonesia 
(a) General 
(26)The four companies selected in the sample were found to have provided information 
which did not satisfy the Commission at the provisional stage. However, comments 
made following disclosure of the provisional findings led the Commission to consider 
that although the information submitted by these companies was not ideal in all 
respects, it should nevertheless not be disregarded for three out of four companies, 
since the deficiencies were not such that no reasonably accurate findings could be 
reached at the definitive stage. Only PT Daya Manunggal did not come forward with 
sufficient explanations, leaving too much of the information received from that 
company unsatisfactory. Consequently, the findings for this company continue to be 
based on facts available, in accordance with Article 18 of the basic Regulation, as 
described in more detail in recital (68) of the provisional duty Regulation. 
(b) Allowance for domestic credit costs 
(27)For the provisional determinations, the domestic allowance for credit costs was based 
on the interest rates mentioned in the audited accounts rather than the percentage 
presented by the companies concerned. 
(28)Two companies claimed that the interest rates on short-term loans mentioned in the 
audited accounts are not appropriate since credit costs are an opportunity cost and not 
a real cost and that accordingly the interest rates indicated in the questionnaire 
responses should be applied. 
The claim was rejected as an adjustment for credit costs could only be granted at the 
level of the normal bank rates applicable during the investigation period. The interest 
rates mentioned in the audited accounts were considered to be a reliable source to 
establish the market rate prevailing during the investigation period. 
c) Cost of manufacturing 
(29)In the case of one company, manufacturing costs were allocated for raw materials at 
the provisional stage on an average cost basis. 
The company expressed its concerns about the allocation of raw material costs and 
provided satisfactory explanations for its claim. The allocation of raw material costs 
was amended accordingly for definitive determinations. 
(d) Dumping margins 
(30)Concerning the companies forming part of the same group, the methodology set out 
in recitals (44) and (45) of the provisional duty Regulation was used. For the 
producers/exporters or groups of companies in the sample, the definitive dumping 
margins expressed as a percentage of the CIF import price at the Community border 
are: 
• Group Argo Pantes (P.T. Argo Pantes+ P.T. Daya Manunggal): 13.7% 
• P.T. Apac: 11.8% 
• P.T. Eratex Djaja: 12.7% 
The definitive dumping margin for cooperating producers/exporters which were not 
investigated was based on the weighted aVerage of the sample. Expressed as a 
percentage of the CIF import price at the Community border, the margin is 12.2%. 
It should be noted that the level of cooperation of Indonesian companies was very 
high (the cooperating • exporters accounted for practically 100% of exports to the 
Community during the investigation period). Furthermore, the cotton fabric sector is 
of an unusually dynamic character which makes it very likely that there will be in 
future a continuous and substantial number of new exporters. It was therefore decided 
to depart from the approach outlined in the provisional duty Regulation according to 
which the residual dumping margin was set at the level of the highest dumping 
margin found. Instead, the residual dumping margin was established at the same level 
as for cooperating companies not in the sample, i.e. at 12.2% 
2. Turkey 
(a) General 
(31) It was found at a provisional stage that one of the selected companies, Sôktas, did 
not fully cooperate in the proceeding, because the conversion factor used for 
determining the quantities manufactured and exported had proved erroneous. The 
matter was further investigated and it was found that the mistake was due to a clerical 
error. The Commission corrected that mistake and was therefore able to reach 
reasonably accurate findings at the definitive stage. 
The Commission revised its position towards Sôktas, and determined an individual 
dumping margin for this company. The dumping margin for cooperating companies 
not in the sample was definitively established by also taking into account the margin 
for Sôktas. 
Although the overall level of cooperation in Turkey remained the lowest among the 
countries concerned, the representativeness of the sample was considered satisfactory 
as it covered 46% of the volume exported by Turkey during the investigation period. 
10 
(b) Allowances 
(i) Transport cost 
(32)One company contested the transport cost found on export sales, which was 
calculated to be 4.31% of the value of the product. It was later discovered that the 
basis for this calculation was erroneous. This resulted in a reduction of the inland 
transport cost to a level of 0.6% of the value of the exports. 
(ii) Credit cost 
(3 3)At the provisional stage, the Commission concluded that for one company, domestic 
sales were made on the basis of an open account system and that this system did not 
allow the Commission to determine that prices were also a function of payment terms. 
However, comments received on the provisional disclosure highlighted the fact that 
payment terms were stated on the invoice and a due date was agreed with the 
customer. If that payment term was not respected, the price to be paid was modified 
on the basis of the number of days between the due date and the actual payment date. 
On this basis, it was considered that an allowance for the credit cost should be granted 
according to the number of days stated on the invoice. 
(c) Dumping 
(34)For the producers/exporters selected in the sample the definitive dumping margins, 
expressed as a percentage of the CIF import price at the Community border, are thé 
following: 
• Teksmobili: 1.6% 
• Birlik Mensucat Ticaret ve Sanayi Isletmesi AS Kayseri': 9.5% 
• Sôktas: 12.8% 
• Tureks: 7.1% 
Cooperating companies not selected in the sample receive the weighted average 
dumping margin of the sample. Expressed as a percentage of the CIF import price at 
the Community border, the margin is 10.8%. 
11 
By considering Sôktas as a cooperating party, the level of cooperation with regard to 
imports from Turkey increased to 53%, which was still much lower than the level of 
cooperation of the other countries concerned, which were all close to 100%. As a 
consequence, the method for establishing the residual dumping margin for Turkey 
should remain the same as in the provisional duty Regulation , i.e. based on the 
highest dumping margin for a model with representative sales, i.e. 13.7%. 
3. Egypt 
(a) Normal value 
(35) When constructing the normal value at provisional stage, the Commission had 
included all costs incurred, including financing costs as they appeared in the records 
of the company. One company claimed however that long-term loans, totally devoted 
to activities not related to production or sales of cotton fabrics, should not have been 
included in the Selling General and Administrative expenses (hereafter SGA) when 
constructing the normal value and provided sufficient evidence to this effect. 
Therefore, it was decided to correct the SGA and to decrease the normal value 
accordingly. 
(b) Dumping 
(36)The methodology set out in recital (64) of the provisional duty Regulation is hereby 
confirmed. 
(37)The definitive dumping margin for Egypt, expressed as a percentage of the CIF 
import price at the Community border, is 18.5%. 
4. Pakistan 
(a) Normal value: inclusion of stretch fabrics in the determination of the 
domestic profit 
(38)One exporter producing stretch fabrics argued that, should stretch fabric be 
considered as a like product, sales of this type should not be accounted for in the 
determination of the domestic profit margin because the characteristics of this type of 
fabric meant that they were commanding a higher profit margin than the usual cotton 
12 
fabrics. In addition, it was claimed that since stretch fabrics were only sold 
domestically, they could not have injured the Community industry. 
As explained above, it was found that stretch fabrics belong to the product under 
consideration. In accordance with Article 2(6) of the basic Regulation, the amount for 
profit has to be determined on the basis of all domestic sales of the like product made 
in the ordinary course of trade. Therefore, the fact that stretch fabrics were not 
exported during the investigation period is not relevant in this context. 
(b) Cost of production 
(i) cost of yarn 
(39)At the provisional stage, it was decided for one company not to rely on the monthly 
costs statements specially prepared for the investigation because these reports could 
not be linked with the audited accounts of that company. Instead, the company's 
normal cost sheets were used. On the spot, the company did not clarify that the cost 
sheet provided only referred, as far as yarn costs are concerned, to those of the month 
of September while all other cost items contained yearly averages. The company 
claimed after the provisional disclosure that the cost of production should be 
corrected and that the cost of the yarn prevailing in the month of sale should be used 
instead of those contained in the cost sheet, i.e. those prevailing in September. The 
request was found to be justified and the cost of production was corrected 
accordingly. 
The company also claimed that the yarn costs used for the purpose of determining 
cost of production wrongly included the mark-up of the spinning department 
belonging to the same company. The Commission based itself on the cost of the yarn 
found in the cost sheets of the company. Since the company could not demonstrate on 
the spot that there was a mark-up between the spinning and the weaving department, 
no modification was made to the cost sheets of the company. 
(ii) Recovery of waste 
(40)As far as the income from waste product was concerned, several companies claimed 
that this income should be off-set against the cost of production. The treatment of 
13 
any income generated by sales of waste products was based on the accounting 
methods kept by the companies concerned. 
(c) Export price 
(i) Exchange rates used and credit costs 
(41)Some producers/exporters contested the fact that the Commission refused to accept 
each lump sum provided by the banks as a normal payment reflecting the exchange 
rate and the credit cost offered by these financial institutions. It should be noted that 
the exchange rate used by the banks was not transparent since the conversion rate 
included the fee for converting the US$ in Rupees and the discount for cashing the 
credit letter before the agreed term. Since the producers/exporters were not able to 
indicate for each transaction the actual exchange rate used by the bank, it was decided 
to use the monthly average exchange rate of the questionnaire, in accordance with the 
consistent practice of the Commission. 
The credit cost was therefore calculated on the basis of the payment terms agreed and 
the interest rate reported by the producers/exporters . 
(d) Allowances 
(i) Withholding tax 
(42)A11 Pakistani producers/exporters had to pay an 'export tax' of 0.75% which was 
deducted by the bank when payment for export sales was received. The companies 
claimed that this export tax should not be deducted from the export price since it 
could be off-set against any income tax payable. Since the companies were able to 
prove that they had indeed off-set this tax, the request was granted. 
(ii) Duty drawback 
(43)According to the Pakistani producers/exporters, the allowance made to the normal 
value for import charges should have been increased. For the purpose of the 
provisional duty Regulation , an allowance was only granted for the duty on the 
chemicals included in the sizing material. The issue was reconsidered. It was found 
that a further allowance could be granted with regard to excise duty paid on the yarn 
14 
to the extent that the actual refunding of the duty was proven during the on-the-spot 
verification. 
(e) Dumping 
(44)For the producers/exporters or groups of companies in the sample, the definitive 
dumping margins expressed as a percentage of the CIF import price at the 
Community border are: 
• Amer Fabrics Ltd and Diamond Fabrics Ltd: 3.5% 
• Nishat Fabrics Ltd and Nishat Mills Ltd: 10.5% 
• Kohinoor Group (Kohinoor Raiwind Mills Ltd, Kohinoor Weaving Mills Ltd): 9.8% 
The definitive dumping margin for cooperating producers/exporters which were not 
investigated was based on the weighted average of the sample. Expressed as a 
percentage of the CIF import price at the Community border, the margin is 9.5.%. 
For the same reasons found for Indonesia, it was decided to set the residual dumping 
margin at the same level as the cooperating companies not in the sample, i.e. 9.5% 
5. India 
(a) General 
(45) The Cotton Textiles Export Promotion, hereafter 'the Indian association', argued 
that the sample of companies for India was not representative because it did not 
reflect the variety of looms used in India and because it included a company which 
had exported its production on the basis of master contracts. Therefore no valid 
calculation of an anti-dumping duty could be based on it. However, the Commission 
had accepted the selected producers/exporters proposed by the Indian association 
itself, and had also added their largest exporter to the sample. The above arguments 
advanced by the Indian association could not, therefore, put into question the 
representativity of the sample. 
(b) Normal Value 
(i) Models used for comparison 
15 
(46)Indian producers claimed that normal value had been incorrectly determined because 
domestic sales of second quality products had not been used for the determination of 
the normal value of certain constructions. 
For the purpose of using domestic prices in comparing normal value and exports to 
the Community, the Commission had to ensure that the constructions sold both 
domestically and in the Community had identical characteristics. It was found 
however that second quality products had characteristics which made them different 
from the first quality products. 
As exports to the Community were first quality products, normal value had to be 
calculated on the basis of the comparable product in accordance with Article 2(1) of 
the basic Regulation, i.e. first quality products sold on the domestic market of the 
exporting country. The request could not, therefore, be accepted. 
(ii) Profit margin used for constructed normal value 
(47)With regard to the profit margin used in the construction of normal value, some 
producers/exporters argued that domestic profitability should have been assessed only 
on the basis of those constructions sold both domestically and on the Community 
market. 
In accordance with Article 2(6) of the basic Regulation, the amount for profit has to 
be determined on the basis of all domestic sales of the like product made in the 
ordinary course of trade. The fact, that a particular type of the like product is not sold 
for export, is consequently irrelevant in this context. Therefore, the request could not 
be accepted. 
(48)One Indian company argued that the Commission wrongly refused to use the 
company's own profit when constructing normal values. Article 2(6) of the basic 
Regulation states that the amount for profits shall be based on actual data pertaining 
to production and sales, in the ordinary course of trade, of the like product. As less 
than 10% of the company's total domestic sales of the like product were made in the 
ordinary course of trade, in accordance with Article 2(6)(a) of the basic Regulation, 
the weighted average of the actual amounts of profit determined for other exporters or 
16 
producers subject to the investigation in respect of production and sales of the like 
product in India were used. 
(c) Export price 
(49)No further comments have been received with regard to the determination of the 
export price. Therefore, the conclusions reached in the provisional duty Regulation 
are confirmed. 
(d) Allowances 
(i) Exchange rates 
(50)Four Indian companies argued that the Commission ought to have applied Article 
2(10)(j) by using the actual exchange rates utilised by them when booking their 
export sales. The general principle laid down in Article 2(10)(j) of the basic 
Regulation states that the conversion of currencies shall be made using the rate of 
exchange on the date of sale. The only exception is that, when a sale of foreign 
currency on forward markets is directly linked to the export sale involved, the rate of 
exchange in the forward sale shall be used. The investigation has shown that there 
was no such direct link between the forward sale of currencies and the export sales 
involved. Furthermore, none of the companies demonstrated that the sale of forward 
currencies had affected prices and price comparability, as required by Article 2(10) of 
the basic Regulation. 
(51)The same companies also argued that the Commission should have used the 
exchange rate prevailing on the date of sale, rather than average monthly exchange 
rates. However, it is the Institutions' consistent practice to use average monthly 
exchange rates. It would be unduly burdensome to apply daily exchange rates, which 
would in any event lead to practically the same result. 
(52)These companies also argued that, if the Commission did not accept the exchange 
rates they used, the Commission should grant an automatic allowance for currency 
conversions. Due allowance, in the form of adjustments, can, in accordance with 
Article 2(10), only be made in each case, on its merits, for differences in factors, 
which are claimed, and demonstrated, to affect prices and price comparability. As 
none of the companies has demonstrated this type of effect, the Commission did not 
17 
grant an allowance for currency conversions. Therefore, the request could not be 
accepted. 
(ii) Costs linked to the export price: Payment processing costs 
(53)All Indian companies claimed that the Commission had wrongly deducted from the 
export prices as ancillary costs, on the basis of Article 2(10)(e) of the basic 
Regulation, costs for the processing of payment documents, which they considered to 
be general costs. 
The cost for processing a letter of credit, is directly linked to each specific transaction, 
as it is a part of each sales transaction for which payment is made on that basis. 
Therefore, it was concluded that such costs should indeed be deducted from the 
export price. 
(Hi) Discounts, rebates and quantities 
(54)The Indian producers also argued that an allowance should be granted for differences 
in quantities. In this respect, it should be noted that the requests were neither properly 
quantified nor directly linked to the sales under consideration. Moreover, the claims 
were not made within the deadlines for replying to the questionnaire and therefore 
could not be accepted. 
(e) Dumping 
(i) Method 
(55)Three companies argued that the Commission incorrectly decided to compare 
average normal values to individual export prices to the Community. One company 
argued that the difference in dumping was not substantial as opposed to the result 
obtained by a comparison of a weighted average normal value with a weighted 
average export price. The second company argued that there was no pattern of 
significantly different export prices, and the third company argued that the 
Commission should have used the 'master contracts' of that company rather than the 
'dispatch invoices' for the reason that the importers calculate their mark-up on the 
basis of the average price mentioned in the master contract. 
18 
It was found for each of the three companies that there was a pattern of export prices 
which differed significantly among different purchasers, regions and time periods. It 
was also found that, taking into account the level of dumping found for each of the 
companies, the differences in dumping between a comparison of normal values and 
export prices on an average-to-average basis and on an average to a transaction-by-
transaction basis were considerable. The Commission concluded that a comparison on 
an average-to-average basis would not reflect the full degree of dumping. Therefore, 
the request to compare weighted average export prices with weighted average normal 
values could not be accepted. 
Concerning the third company, the Commission used the dispatch invoices rather than 
the master contracts because only the prices on the dispatch invoices reflected the 
amounts actually paid or payable for the product when sold for export. This is also in 
conformity with its consistent practice as mentioned in Article 2(8) of the basic 
Regulation. 
(ii) Dumping margins 
(56)For the producers/exporters selected in the sample the definitive dumping margins, 
expressed as a percentage of the CIF import price at the Community border, are : 
• Century Textiles and Industries Ltd: 14.7% 
• Coats Viyella India Ltd: 15.5% 
• Mafatlal Industries Ltd: 16.1% 
• Vardhman Spinning & General Mills Ltd: 4.1% 
• Virudhunagar Textile Mills and Thiagarajar Mills Ltd: 5.3% 
Cooperating companies not selected in the sample receive the weighted average 
dumping margin of the sample. Expressed as a percentage of the CIF import price at 
the Community border, the margin is 12.8%. 
For the same reasons given with regard to Indonesia, which were also found to apply 
for India, it was decided to set the residual dumping margin at the same level as for 
the cooperating companies, which is a margin of 12.8% 
19 
6. The People's Republic of China 
(a) Normal value 
(i) Non-market economy 
(57)Chinese producers/exporters argued that the PRC was now a market economy 
country and that therefore the use of an analogue country to determine normal value 
was inappropriate as Chinese domestic prices and/or production costs should be 
considered reliable. 
While recognising the continuing process of economic reforms in the PRC from a 
planned, fully State-controlled economy towards a market-oriented economy, the 
Commission, in accordance with Article 2(7) of the basic Regulation, could not agree 
to this request and the conclusions of recital (160) of the provisional duty Regulation 
are therefore confirmed. 
(ii) Choice of analogue country 
(58)Chinese producers/exporters argued against the choice of India as an appropriate 
analogue country because only a limited number of constructions were found to be 
comparable to Chinese exports. 
The Commission used all the Chinese products which were found to have a 
comparable construction type sold in the Indian domestic market. This provided a fair 
and reliable basis for comparison since 67.7% of total exports of the sampled Chinese 
producers/exporters had been included in the dumping calculation. It was also 
considered that this constitutes a representative portion of total Chinese exports of the 
product concerned and that therefore India, in this respect, was an appropriate 
analogue country. Moreover, no other analogue country was proposed by any Chinese 
exporter or by the Chinese authorities. 
(b) Dumping 
(59)The methodology set out in recital (168) of the provisional duty Regulation is hereby 
confirmed. 
20 
(60)The definitive dumping margin for the PRC, expressed as a percentage of the CIF 
import price at the Community border, is 10.9% 
E. INJURY 
1. Preliminary remark: the "investigation period" 
(6 l)Some parties have contested that, at the provisional stage, the Commission had 
examined trends in injury, causation and Community interest on yearly basis and that 
it has used a period covering July 1996-June 1997, (the injury investigation period, 
hereinafter referred to as "IIP") instead of the 18-month investigation period. 
Tn this respect, it is recalled that the existence of dumping, price undercutting and 
price underselling has been examined by reference to a period of 18 months covering 
1 January 1996 to 30 June 1997. For the analysis of those aspects of injury requiring 
the examination of trends, such as, inter alia, production, sales, market shares, stocks, 
profitability and employment, the period 1 January 1993-30 June 1997 has been 
examined. In this respect, and in order to enable yearly comparisons, instead of the 
18-month investigation period, a 12-month period has been used (IIP) to be compared 
with the calendar years 1993 to 1996. 
2. Cumulative assessment of the effects of the imports concerned 
(62)In the provisional duty Regulation the issue of the cumulative assessment of imports 
from all countries concerned was examined. It was provisionally decided to assess 
imports from Turkey cumulatively but to investigate the issue further. 
After the imposition of provisional measures, Pakistani producers/exporters also 
claimed that imports from Pakistan should not be cumulated with those from the other 
countries concerned. It was claimed that imports from Pakistan were made under 
different conditions of competition, because between 1993 and the IIP, imports from 
Pakistan and their share of the Community market had decreased, while prices had 
increased. 
Indonesian producers/exporters also argued that imports from Indonesia should not be 
cumulated, in view of the low share of the Community market held by these imports 
in 1996 and their decreasing trend between 1996 and the IIP, and given that prices 
21 
from Indonesia were allegedly increasing at a rate higher than the other countries 
concerned. 
(a) Turkey 
(63)Concerning Turkey, the request to exclude it from the cumulative assessment was 
provisionally rejected on the grounds of the doubts existing on the representativity of 
the sample of producers/exporters, as this might have had an impact on the 
conclusions reached. 
(64)The Commission has reassessed the cumulation of Turkish imports further to the 
reconsideration of Sôktas as cooperating company, as mentioned in recital (34). It has 
particularly assessed the conditions of competition. 
In this respect, it is recalled that Article 3(4) of the basic Regulation stems from 
Article 3(3) of the WTO Anti-dumping Agreement, which provides that "Where 
imports of a product from more than one country are simultaneously subject to anti­
dumping investigations, the investigating authorities may cumulatively assess the 
effects of such imports only if they determine that (a) [...] the volume of imports from 
each country is not negligible and (b) a cumulative assessment of the effects of the 
imports is appropriate in the light of the conditions of competition between the 
imported products and the conditions of competition between the imported products 
and the like domestic product. ". 
In addition, according to Article 5(8) of the WTO Anti-dumping Agreement, "There 
shall be immediate termination in cases where the [...] volume of dumped imports, 
actual or potential, is negligible. The volume of dumped imports shall normally be 
regarded as negligible if the volume of imports from a particular country is found to 
account for less than 3% of imports of the like product in the importing Member 
State. ". 
(65) In this respect, the Commission found that imports from Turkey sharply declined 
from around 16.500 tons in 1994 to around 9.700 tons in 1996, i.e. by 41%. Between 
1996 and the IIP, imports further decreased by 43% to around 5.500 tons. Their share 
of the Community market decreased from 5.3% in 1994 to 3.2% in 1996 and 
22 
represented the lowest market share of all countries concerned. In the IIP, the share of 
Turkish imports decreased to 1.9%. 
While during the 18-month investigation period Turkish imports represented 3.4% of 
total imports into the Community, during the IIP, Turkish imports represented only 
2.6% of total imports in to the Community. 
As to the prices of Turkish imports into the Community, they increased by 9% 
between 1993 and 1996; in 1996 the prices of Turkish imports were the highest of all 
countries concerned. As for price undercutting, the definitive average price 
undercutting found for Turkey amounts to 5.1 %. 
(66)It is the established practice of the Community institutions that, when there is clearly 
different market behaviour between the different countries concerned in terms of e.g. 
evolution of imports, market share and prices, which therefore demonstrate the 
existence of different conditions of competition, the effects that the imports have on 
the Community industry is assessed separately. 
As to the differences in market behaviour, the decrease in imports from Turkey has 
taken place over a period of around 4 years starting well before the period of 
application of provisional anti-dumping duties in the previous anti-dumping 
proceeding concerning unbleached cotton fabrics. Given this extended time period 
and the importance of the decrease, it would appear that this decrease is structural and 
not ephemeral. By contrast, the decrease in the imports from Pakistan and Indonesia 
fully coincides with the period of imposition of provisional measures in the previous 
proceeding. 
(67)This assessment is corroborated by the low level of price undercutting found for 
Turkey, the lowest of all countries concerned. 
(68)In view of all the above mentioned factors on balance, it is considered that imports 
from Turkey should be assessed separately from the other imports subjected to the 
present investigation. 
(b) Pakistan 
23 
(69)With respect to Pakistan, the Commission found that between 1993 and 1996, 
imports from Pakistan increased by 10% and their share of the Community market 
remained stable at around 8%. Between 1994 and 1996 imports from Pakistan 
increased by around 27% and their share of the Community market increased from 
around 6% to around 8%. Between 1996 and the IIP, imports from Pakistan decreased 
and their share of the Community market decreased to 5%. The decrease in the 
volume of imports and the share of the Community market observed between 1996 
and the IIP partly coincides with the period of application of provisional anti­
dumping duties in the previous anti-dumping proceeding. As to the prices of Pakistani 
imports into the Community, they increased by 24% between 1993 and 1996 and 
remained stable between 1996 and the IIP. In 1996, the prices were the lowest of all 
countries concerned. Price undercutting amounted to 9.1% in the investigation period. 
In view of the above, it is considered that there are no grounds to depart from the 
conclusions of the provisional duty Regulation, as the trends in the volume of imports 
and market share are not such as to show that the conditions of competition are 
different from the other countries concerned. The cumulative assessment made in the 
provisional duty Regulation is therefore confirmed. 
Furthermore, even if imports from Pakistan were to be assessed separately, the 
volume and price level of the dumped imports and their effect on the prices in the 
Community market are such that, taken in isolation, would have to be considered as 
to have caused material injury to the Community industry. 
(c) Indonesia 
(70)Concerning Indonesia, between 1993 and 1996 imports have continuously increased 
from around 9.200 tons to around 13.800 tons. The share of the Community market 
held by imports from Indonesia increased from 3.4% in 1993 to 4.5% in 1996. In the 
IIP it decreased to 3.7%. As concerns the prices of imports from Indonesia, they 
decreased by 15% between 1993 and 1996. Furthermore, the average price 
undercutting found for Indonesia amounts to a significant margin of 24.7%. 
In view of the above mentioned, the provisional conclusions with respect to the 
cumulation of imports from Indonesia are confirmed. In addition, even if considered 
24 
in. isolation, imports from Indonesia would have to be considered as to have caused 
material injury to the Community industry. 
3. Volume and market share of the dumped imports 
(71)In view of the separate analysis of Turkey, the volume and market share of the 
imports concerned have been assessed as follows: the PRC, Egypt, India, Indonesia 
and Pakistan (hereinafter referred to as the "five cumulated countries"), on the one 
hand, and Turkey, on the other hand. 
(a) Volume and market share of the dumped imports 
(i) Cumulated volume and market share of dumped imports 
(72)The volume of imports from the five cumulated countries increased by 13% between 
1993 and 1996, from around 108.000 tons in 1993 to around 122.000 tons in 1996. 
Between 1996 and the IIP (during part of which provisional anti-dumping measures 
were in force), imports from the five cumulated countries decreased by 22%, from 
around 122.000 tons to around 94.800 tons. 
The share of the Community market held by imports from the five cumulated 
countries remained stable between 1993 and 1996, at around 39%. In the IIP the share 
of the Community market held by imports from the five cumulated countries 
amounted to around 32%. 
(ii) Volume and market share of imports from Turkey 
(73)Imports from Turkey increased between 1993 and 1994, from around 9.200 tons in 
1993 to around 16.500 tons in 1994. Between 1994 and 1996 imports showed a sharp 
decline from around 16.500 tons to around 9.700 tons. Their share of the Community 
market decreased from 5.3% to 3.2%. 
Between 1996 and the IIP, imports from Turkey further decreased by 43%, from 
around 9.700 tons to around 5.500 tons, and their share of the Community market 
further decreased to around 1.9%. 
(b) Comments from interested parties 
25 
(74)One interested party alleged that the Commission analysis of the evolution of the 
volume of the imports from the countries concerned was flawed: 
firstly, because the Commission tried to explain the decrease in the 
volume of imports in 1997 by speculating as to the existence of a stocking policy in 
1996 followed by a destocking in 1997; 
secondly, because the above mentioned stocking/destocking behaviour 
would necessitate a degree of freedom over import volumes which does not exist in 
the current framework of quota restrictions. 
(75)On the first point, the Commission has confirmed that the decrease in the volume of 
imports in 1997 followed a stocking policy in 1996. The stocking/destocking policy 
of companies importing from the five cumulated countries has been observed at a 
total level (all five cumulated countries). Indeed, between 1995 and 1996 imports of 
the product concerned increased by 25%, whereas the maximum increase in the 
period between 1993 and 1995 amounted to 2%. Between November 1995 to May 
1996 and the same period in 1996 to 1997, (period of imposition of provisional 
measures in the previous proceeding) imports decreased by 39%, whereas the 
maximum decrease in the period between 1993 to 1995 amounted to 11%. Similarly, 
information provided by the sampled unrelated importers shows that, between 1995 
and 1996, their imports from the countries concerned increased by 26%, whereas 
between 1996 and 1997, imports decreased by an estimated 2%. It appears, thus, that 
the decrease in 1997 is partly attributable to and compensated for by the increase 
observed in 1996. 
(76)On the second point, the Commission found that the existence of quotas does not 
impede the stocking of the product concerned. Indeed quotas provide for a certain 
flexibility (annual increases, carry forwards, anticipated use of quotas). In addition, 
the quota covering the product concerned also covers other products. Therefore, a 
certain margin of flexibility exists in the allocations of the quota to the different 
products. 
(77)One interested party has claimed that the analysis of the volume of imports 
concerned and their share of the Community market carried out in the provisional 
duty Regulation is inconsistent since it diverges from the data quoted by the 
26 
Commission in Regulation No 2208/96 imposing provisional duties in the previous 
proceeding concerning unbleached cotton fabrics5 and in the complaint presented by 
Eurocoton in the current proceeding. 
(78)It, should be noted that, firstly, Commission Regulation (EC) No 2208/96 had a 
different product coverage than the present proceeding, since gauze, which was 
included in that past proceeding, is not part of the product coverage in the present 
proceeding. 
As to any difference between the volume of imports found in the investigation and 
that alleged in the complaint on which the present proceeding is based, the source of 
the data on volume of imports quoted in the provisional duty Regulation originated 
from Eurostat. These statistics are constantly updated to take into account import 
figures arriving late as well as any corrections based on rectified import declarations. 
It is therefore considered that the differences specified, which in any event are minor, 
do not invalidate the analyses of the volume of imports and their share of the 
Community market. 
(79)In view of the above, the provisional findings concerning the volume and the market 
share of the imports are therefore confirmed. 
4. Price of dumped imports 
(a) Evolution of the prices of the dumped imports 
(i) Cumulated evolution of the prices of the dumped imports 
(SO)According to information provided by Eurostat, the weighted average export prices 
from the five cumulated countries increased from 2.9 ECU/kg in 1993 to 3.2 ECU/kg 
in 1994. Prices further increased to 3.6 ECU/kg in 1995 and they decreased to 3.4 
ECU/kg in 1996. In the IIP, weighted average export prices increased to 3.5 ECU/kg. 
(ii) Evolution of prices of imports from Turkey 
Commission regulation (EC) No 2208/96 of.18 November 1996, imposing a provisional anti-dumping 
duty on imports of unbleached (grey) cotton fabrics originating in the People's Republic of China, 
Egypt, India, Indonesia, Pakistan and Turkey, OJ No L 295,20.11.96, p.3. 
27 
(81)Concerning Turkey, export prices remained stable between 1993 and 1994 at 3.3 
ECU/kg. Prices increased to 3.8 ECU/kg in 1995 and they decreased to 3.6 ECU/kg 
in 1996. In the IIP, export prices from Turkey increased to 3.7 ECU/kg. 
(b) Price undercutting 
(82)Following the comments made by interested parties with respect to the price 
undercutting margins found at the provisional stage, those have been amended where 
appropriate. The average price undercutting margins definitively found per country, 
expressed as a percentage of the Community producer's prices are as follows. 
(i) Five cumulated countries 
People's Republic of China: 22.3% 
Egypt: 29.1% 
India: 19.1% 
Indonesia: 24.5% 
Pakistan: 9.1% 
(ii) Turkey 
Turkey: 5.1% 
(c) Comments made by interested parties 
(83)Interested parties have contested the price undercutting determination. 
Firstly, because the product concerned should not have been grouped into 
categories according to the count of yarn and number of threads, but rather there 
should have been a direct comparison of each exported model with the 
corresponding model sold in the Community; 
Secondly, because the Commission did not make an adjustment for quality 
differences or for differences in the width; 
28 
Thirdly, because the Commission did not make an adjustment for the 
provisional anti-dumping duties paid in the context of the previous anti-dumping 
proceeding. 
(84)As to the first point the Commission found that the product concerned originating in 
the countries concerned is imported in many diverse constructions. For the purpose of 
the examination of price undercutting, it was provisionally considered appropriate to 
group the construction according to certain criteria having the greatest impact on the 
cost of the fabrics. This was done in view of the fact that certain imported 
constructions did not have an exact matching Community produced construction and 
because competition was found to exist between products of adjacent constructions. 
As the above approach results in a broad coverage of both the imported and 
Community produced products, it is considered that such a grouping reflects better 
the true extent of the price undercutting. 
As to the second ground, the Commission considered this claim but could not accept 
it. Indeed, account should be taken of the fact that the Commission examined price 
undercutting on the basis of constructions grouped according to the count of yarn and 
number of threads in warp and weft. Any quality or width differences within each 
product group were compensated by a price comparison carried out on an average per 
kilo basis. 
As to the third argument, it should be noted that the provisional anti-dumping duties 
imposed in the previous proceeding were not paid, since the Council never decided 
that they should be collected. They were only guaranteed temporarily and as such did 
not have a direct and immediate impact on import prices. In any event any costs borne 
by importers and relating to the guarantees are already included in the cost accounts 
of importers. When comparing the import prices and the Community producers 
prices, import prices have been adjusted upwards for level of trade to take into 
account the costs borne by importers between importation and the resale of those 
fabrics. These costs have therefore already been taken into account. 
(85)One interested party has claimed that the adjustment made for differences in level of 
trade between import prices and resale prices of the Community producers is 
insufficient. 
29 
The Commission used an adjustment upward for level of trade of 8% on the CIF 
import price duty unpaid. It includes the average profit margin of the importers as 
well as all weighted average costs incurred between importation and delivery to 
customer, that is to converters and finishers. These costs have been calculated on the 
basis of verified information submitted by the cooperating unrelated importers, 
which, account for around 13% of all imports from the countries concerned. 
For these reasons, this claim has to be rejected. 
5. Situation of the Community industry 
(86)In the provisional duty Regulation (recitals (193) to (212)) the Commission found 
that the situation of the Community industry was one of material injury. 
(87)Certain interested parties have claimed that the sample of Community producers 
selected for the analysis of the injury is not statistically valid since between 1993 and 
1996 its indicators concerning production, sales and employment have decreased 
more than those of the total Community industry. 
It is standard practice of the Commission that in cases in which sampling is applied, 
global indicators, e.g. production, sales, employment, are established for the whole 
Community industry, whereas performance indicators such as prices and profitability 
are established by reference to the sampled Community producers. In the present 
case, the investigation has confirmed that the total Community industry suffered from 
a decrease in production, sales and employment during the period 1993 to 1996. 
Between 1996 and the IIP production and sales increased. At the same time the 
sampled Community producers were found to be suffering from increasing stocks, 
price suppression and decreasing profitability. 
(88)Some interested parties have alleged that the Community industry is not suffering 
injury, since indicators concerning production, sales, stocks and profitability 
improved between 1996 and the IIP. 
It has also been alleged that the overall figures on employment relating to the 
Community industry lack validity since they relate to unbleached cotton fabrics as a 
whole and not to the product concerned by the present proceeding, i.e. unbleached 
cotton fabrics containing more than 85% cotton. 
30 
(89) In recitals (194) to (210) of the provisional duty Regulation, the Commission 
established that, on the one hand, between 1993 and 1996 the situation of the 
Community industry worsened. 
On the other hand, between 1996 and the IIP, the situation of the Community industry 
improved. However, this improvement, at a time where imports of unbleached cotton 
fabrics from the countries concerned were subjected to provisional anti-dumping 
measures, has nevertheless not prevented the Community industry from continuing to 
be in a very weak position. 
Secondly, pursuant to Article 3(8) of the basic Regulation, employment pertaining to 
the total Community industry has been calculated for the narrowest group of products 
for which information was available to the Commission's services, i.e. unbleached 
cotton fabrics containing more than 50% of cotton. 
(90)One interested party has questioned the Commission's analysis of the two main 
factors affecting the costs of the Community industry, namely, the evolution of prices 
of raw cotton and the costs arising as a result of making frequent changes in 
constructions and weaving shorter series of the same construction. Concerning the 
evolution of prices of raw cotton, this party objects to the use of the ECU to assess 
that evolution, given that world market prices of raw cotton are expressed in US$ and 
that not all European countries in which weaving companies are present were part of 
the ERM between January 1996 and June 1997. As concerns costs arising from 
frequent changes in constructions and weaving shorter series, this party claimed that, 
the constructions manufactured by the Community industry are more complicated, 
they have a higher value added and therefore command a higher price, which the 
customers are willing to pay. The same would apply to weaving shorter series. 
(91)Regarding the evolution of prices of raw cotton, it is an established practice of the 
Community institutions to use the ECU as the currency for the calculation and 
examination of all elements regarding dumping, injury and causation. The use of the 
US$ cannot, therefore, be accepted. 
As to the costs incurred by frequent changes in constructions and shorter runs thereof, 
the Commission found that the Community industry manufactures both standard and 
more specific constructions. In this respect, the pressure of the imports on certain bulk 
31 
constructions obliges the Community industry to diversify on adjacent constructions, 
with the result of an increase in the costs. As far as prices are concerned, even if 
certain constructions may command higher prices, the evolution of the prices of the 
Community industry and its profitability shows that Community producers have not 
been able to obtain such higher prices in order to cover their costs. 
(92)It is therefore concluded that the provisional findings regarding the evolution of the 
two main factors affecting the costs of Community industry should be confirmed. 
6. Conclusion 
(93)The further investigation has confirmed that the Community industry has suffered 
from a decrease in sales, production, employment and profitability and the Council 
considers that the arguments presented by the interested parties do not justify a 
departure from the provisional findings. For the reasons stated above, it is confirmed 
that the Community industry has suffered material injury within the meaning of 
Article 3(1) of the basic Regulation. 
F. CAUSATION 
1. Effects of the dumped imports from the countries concerned 
(a) Cumulated effect of imports from PRC, Egypt, India, Indonesia and Pakistan, 
(94)The increase of imports of the product concerned between 1993 and 1996 coincided 
with a deterioration of the financial situation of the Community industry, whose 
market share decreased. The substantial price undercutting found exerted a 
suppression of the prices of Community producers leading to losses. Since the market 
for unbleached cotton fabrics is highly price sensitive and transparent, the pressure 
exerted by the imports concerned in the form of price undercutting caused price 
suppression for the Community producers leading to financial losses. 
(95)It is, therefore, considered that dumped imports from the five cumulated countries 
have, taken in isolation, caused material injury to the Community industry. These 
findings are confirmed. 
(b) Effect of imports from Turkey 
32 
(96)As far as Turkey is concerned, limited price undercutting has been found. However, 
this price undercutting did not lead to an increase of the market share of Turkish 
imports. On the contrary, Turkish imports have sharply decreased and, in the IIP, only 
had a 1.9% share of the Community market. Given this decrease, the small market 
share and the fact that price undercutting is relatively small, it is considered that 
imports from Turkey have not had an impact to a degree such as to be classified as 
material, within the meaning of Articles 3(5) and 6 of the basic Regulation. 
(97)It is therefore considered that protective measures are unnecessary as regards Turkey. 
2. Effects of other factors 
(98)In the provisional duty Regulation the Commission examined factors other than the 
dumped imports in order to ensure that possible injury caused by those factors were 
not attributed to the dumped imports. The Commission found that the effects of those 
factors, if any, were not such as to break the causal link between the dumped imports 
and the material injury suffered by the Community industry. 
(99)Some interested parties have argued that any injury suffered by the Community 
industry is to be attributed to imports of the product concerned from third countries 
other than the countries concerned. In particular it was mentioned that while imports 
from other third countries have increased their share of the Community market, those 
from the countries concerned have remained stable between 1993 to 1996 and have 
decreased in the IIP. Furthermore, export prices from other third countries, e.g. 
Russia, were substantially lower than those from the countries concerned. Therefore 
those countries should also be covered by the investigation. Failure to do so would 
contravene Article 12(2) of the WTO Anti-dumping Agreement and Article 9(5) of 
the basic Regulation. 
In addition, some interested parties have also alleged that the negative economic 
situation of the Community industry is correspond to that of the textile industry as a 
whole and was thus not the result of any dumped imports. In support of these 
evidence, global figures for 1997 and corresponding to the textile industry as a whole 
have been presented. 
33 
Finally, it has been argued that imports from the countries concerned could not be the 
cause of the injury since the imported constructions and those manufactured in the 
Community were different and therefore did not compete with each other. 
(100)In this respect it should be recalled that the imports concerned do not need to be the 
sole or the principal cause of the difficult situation of the Community industry. It is 
sufficient that, taken in isolation, imports from the countries concerned have caused 
material injury. 
(lOl)The Commission, firstly, found that imports from the five cumulated countries 
increased from around 108.000 tons in 1993 to around 122.000 tons in 1996. 
Although between 1996 and the IIP, imports from the countries concerned decreased, 
account should be taken that this period coincided with the past period of imposition 
of provisional measures. The resulting market share of the five cumulated countries 
has remained stable at the significant level of 39%. Furthermore, it has been 
established that these imports were made at prices which significantly undercut those 
of the Community industry. It cannot therefore be argued that the impact of the 
imports from other countries has been such as to break the causal link between the 
imports from the five cumulated countries and the injury suffered by Community 
industry. 
Secondly, while it may be true that prices of imports from other third countries are in 
some instances lower than those from the countries concerned, no indication was 
given that they were made at a dumped level, i.e. that they were lower than the 
normal value in the respective country. 
Thirdly, while it may also be true that the recession has contributed to the difficult 
situation of the Community industry, this has not prevented the dumped imports from 
the countries concerned from causing injury to the Community industry in by further 
worsening its situation. 
(102)As to the lack of competition between imported constructions and those 
manufactured by the Community industry, the investigation has shown that, the 
imports are concentrated on a limited number of constructions. It has also been found 
that those constructions are nevertheless produced by the Community industry. In this 
respect, account should further be taken of the high degree of interchangeability 
34 
between fabric belonging to adjacent constructions. As to the rest of the imports from 
the countries concerned, they are spread over many constructions imported in small 
quantities. These constructions also compete with the corresponding ones 
manufactured by the Community industry. 
(103)Finally, the imposition of anti-dumping duties cannot be contested on the grounds 
that the imposition of duties in the present proceeding would not protect the 
Community industry against competition from imports from other third countries, 
which are not dumped. The fact that the Community industry is experiencing 
difficulties attributable in part to causes other than the dumped imports is not a reason 
for depriving that industry from the protection against the injury caused by dumping. 
It should be mentioned that between 1993 and 1996 the imports concerned increased, 
that their market share remained stable and that during the investigation period, 
substantial price undercutting was found for the producers/exporters in the five 
cumulated countries. At the same time the Community producers were found to be 
suffering injury in the form of a decrease in production, sales, market share and 
profitability. 
(104)In view of the above mentioned, the provisional findings concerning causation are 
therefore confirmed. 
G. COMMUNITY INTEREST 
1. The Community industry 
(a) Effects of the past imposition of measures on the Community industry 
(105)In the provisional duty Regulation, the Commission concluded that anti-dumping 
measures would benefit the Community industry in terms of increased production, 
sales and profitability. This had been confirmed by the developments during the past 
period of imposition of provisional measures. 
(106)Some parties have disputed the Commission's conclusions as to the effectiveness of 
the imposition of provisional measures in the previous proceeding on the following 
grounds: 
Firstly, provisional duties were not directly collected and therefore could 
not account for any improvement of the Community industry. 
35 
Secondly, the examples given in the provisional duty Regulation on the 
effectiveness of the measures lacked validity since they constituted selective 
examples. 
Finally, even if measures were to be imposed, the Community industry 
would not produce or would be unable to produce the product concerned for 
commodity types of lower specification fabrics, since it concentrated on higher 
value added fabrics. Therefore, measures would unduly burden importers, without 
benefiting the Community industry. As supporting evidence parties submitted the 
results of a survey carried out among Community producers seeking price 
quotations for certain volumes of specific constructions, which resulted in a 
number of negative responses. 
(107)Firstly, experience shows that even if provisional duties are not directly collected 
but only provisionally guaranteed, economic operators take them into account when 
deciding whether to import or to purchase from the Community industry. This 
happened also in the previous proceeding. Indeed, users of the product concerned 
increased their purchases from Community producers. This demonstrates that the 
provisional duties imposed were directly beneficial to Community producers. This 
beneficial effect was ascertained at the level of the sampled Community producers as 
well as at the level of thé Community industry as a whole (recitals (194) to (210) of 
the provisional duty Regulation). It cannot therefore be argued that the beneficial 
effects have been established by reference to certain selected companies. 
(108)As to the results of the survey carried out among a certain number of Community 
producers, it appears that this survey was cursory, and therefore cannot be considered 
as representative of the position of the Community industry. Therefore, the argument 
has to be rejected. 
(b) Import substitution: finished products 
(109)Some parties have argued that the Commission's analysis in the provisional 
Regulation of the effect of quotas on imports of finished fabrics and unbleached 
fabrics is inconsistent and therefore invalid. It has been argued that if existing quotas 
on imports of finished fabrics would prevent any significant shift towards imports of 
such fabrics from third countries, the same argument should be valid mutatis 
36 
mutandis for unbleached cotton fabrics. It has also been argued that the Commission's 
findings with regard to quota category 2 and 2a were irrelevant since this category 
also included finished fabrics, as well as fabrics containing less than 85% cotton. 
(110)Some parties have also questioned the economic analysis of the surge in imports of 
bleached fabrics during the past period of imposition of provisional measures. While 
these parties do not question the correctness of the cost of bleaching in the 
Community quoted in the provisional duty Regulation, doubts have been raised as to 
the prices quoted for bleached fabrics imported from third countries. In support of this 
position information concerning prices of bleached fabrics imported by one 
cooperating unrelated importer from Pakistan has been presented showing a price 
level, i.e. 3.8 to 3.9 ECU/kg, lower than that quoted by the Commission. 
(11 l)With respect to finished fabrics, the issue to be analysed is whether the imposition 
of duties on the product concerned could cause a surge in the volume of imports of 
finished fabrics. It is in this context that the existence of imports quotas has been 
analysed. 
(112)Concerning subquota category 2a, it covers printed and dyed fabrics as well as dyed 
yarn of both more and less than 85% cotton. However, the maximum possible margin 
of expansion of the utilisation of this quota, on the basis of the unused quantities of 
category 2a products, has been estimated at 20.000 to 25.000 tons. Given the stable 
trend in imports of fabrics made of dyed yarn coinciding with a stable consumption 
for this product in the Community, and the small share represented by finished fabrics 
of less than 85% cotton (around 7% of total imports category 2a fabrics), no further 
margin of expansion of category 2a fabrics is likely. The argument that quota 
category 2a cannot act as an effective break to a surge in imports of printed and dyed 
fabrics, on the grounds that this subcategory covers products other than the product 
concerned, must therefore be rejected. 
As to the analysis of the imports of bleached fabrics, in the provisional duty 
Regulation prices were specified on the basis of Eurostat for imports of bleached 
fabrics from third countries. These statistics correspond to the total exports of 
bleached fabrics from the all exporting countries and as such accurately reflect the 
product mix of that country. The prices of bleached fabrics imported from Pakistan, 
37 
were 4.5 ECU/kg in 1996 and in the IIP, it increased to 4.7 ECU/kg in 1997. A 
further investigation of this issue by reference to the period January-March 1998 
shows that prices of bleached fabrics further increased to 5.3 ECU/kg in the period 
January-March 1998. Average prices of bleached fabrics from India and Pakistan 
amounted to 4.7 ECU/kg in 1996,4.6 ECU/kg in the IIP, 4.8 ECU/kg in 1997 and 5.4 
ECU/kg in the period January-March 1998. 
The analysis in the provisional duty Regulation showed that it was not economically 
justified to import bleached fabrics as a means to avoid the anti-dumping duties. The 
further investigation has confirmed this analysis. 
(c) Limited capacities available in the Community 
(113)One interested party claimed that the Commission's finding that the Community 
industry had sufficient flexibility to increase capacities in order to prevent supply 
shortages was incorrect, since it was not reasonable to expect that the Community 
industry could supply 72% of the market. 
(114)The Commission, in the provisional duty Regulation, found that capacity would not 
be an impediment for Community producers to benefit from any anti-dumping 
measure imposed. Indeed, the increase in production by Community producers at the 
time where provisional measures were in place shows that a certain flexibility as 
regards the capacity of Community industry does exist. 
(d) Import substitution: made-up articles 
(115)Some parties have alleged that the imposition of duties on imports of unbleached 
cotton fabrics will not only cause a shift in imports towards finished fabrics, but will 
also ultimately result in a surge of imports of made-up articles. This would have as a 
consequence that the Community industry would ultimately not benefit from any anti­
dumping measure imposed. 
(116)The Commission examined the evolution of imports of made-up articles between 
1993 and the IIP. For the purpose of that examination a number of made-up articles, 
constituting the bulk of the made-up articles incorporating unbleached cotton fabrics 
of more than 50% cotton, were considered: curtains, bed linen, table linen and shirts. 
38 
(117)It was found that imports of curtains and bed linen have continuously increased 
since 1993, at a time where no anti-dumping measures were in place. Between 1993 
and 1996, total imports of curtains have increased by around 199%, whereas the 
increase in imports of curtains from the countries concerned was lower, at around 
136%. As regards bed linen, total imports increased by 21% between 1993 and 1996. 
Regarding imports of table linen, these remained stable between 1993 and 1995 and 
increased in 1996 (by 9.7%), whereas imports of shirts increased by 30% between 
1993 and 1996. 
Between 1996 and the IIP, partly coinciding with the past period of imposition of 
provisional measures, imports of curtains, bed linen and table linen from the countries 
concerned continued to increase, although at a lower rate: 23% with respect to 
curtains, 10% with respect to bed linen and 10% with respect to table linen. Between 
1996 and the IIP, imports of shirts decreased by 2%. 
(118)Imports of made-up articles continuously increased between 1993 and 1996. The 
imposition of provisional anti-dumping duties on unbleached cotton fabrics in 
November 1996 did not cause a surge in the imports of made-up articles. In addition, 
made-up articles are also subject to import quotas, as are the imports of the product 
concerned and of finished fabrics. Furthermore, any such surge would necessitate the 
setting-up of production facilities in the exporting countries for made-up articles 
which, since it also involves the finishing of the fabrics, would require significant 
investments. 
(119)For all these reasons, a surge in imports of made-up articles due to the imposition of 
anti-dumping measures is unlikely. 
2. Other considerations 
(120)According to Article 21 of the basic Regulation, special consideration should be 
given to the need to eliminate the trade distorting effects of injurious dumping and the 
need to restore effective competition. 
In this context, the access of Community manufactured unbleached cotton fabrics to 
the five countries subject to this investigation has been examined. 
39 
(121)Exports of the product concerned to the PRC, Egypt, India, Indonesia and Pakistan 
amounted to a mere 164 tons in 1996 and 134 tons in the IIP, compared to a total 
volume of exports of the product concerned of 13.000 tons in 1996 and 13.100 tons in 
the IIP, i.e. around 1% of total Community exports. 
The market access of Community produced unbleached cotton fabrics is rendered 
almost meaningless due to the existence of customs duties on imports of the product 
concerned manufactured in the Community amounting to the following: 19% in the 
PRC, 60% in Egypt, 40% in India, 15% in Indonesia and 45% in Pakistan where 
imports of the product concerned are not permitted without specific authorisation. 
The situation is similar as concerns finished fabrics and made-up articles. Indeed, 
exports of finished fabrics to the five countries countries concerned amounted to 
around 1% of total Community exports of those fabrics. In the case of made-up 
articles, exports to the five cumulated countries amounted to around 0.2% of total 
Community exports of those made-up articles. 
(122)It can therefore be argued that there is a significant impediment to Community 
exports of the product concerned, and of downstream products incorporating it, 
constituting therefore a trade distorting effect. 
3. Conclusion on Community Interest 
(123)Some parties have questioned the conclusions reached by the Commission in the 
provisional duty Regulation that no compelling reasons were found on Community 
interest grounds against the imposition of anti-dumping measures. These parties 
argued that the Commission analysed the likely effects of any anti-dumping measure 
in the current proceeding to the downstream industry, only by reference to the past 
period of imposition of provisional measures, six months. They argued that if 
definitive measures, lasting five years, were imposed, the negative effects on the 
downstream industry would be such as to constitute a compelling reason against the 
imposition of measures. 
(124)In the provisional duty Regulation, the effects on the downstream industry of 
imposing any anti-dumping measure was examined. While certain aspects, such as 
cost and price increases were analysed by reference to the past period of imposition of 
40 
provisional anti-dumping duties, some other more structural aspects of trade in cotton 
fabrics, such as the existence of quotas on imports of finished fabrics and made-up 
goods, the comparative advantages enjoyed by Community finishers and the low 
import penetration of finished fabrics, militated against considering that compelling 
reasons existed against the imposition of anti-dumping measures. 
(125)The arguments presented by interested parties subsequent to the imposition of 
provisional duties on the Community interest aspects of the proceeding as set forth in 
recitals (240) to (371) of the provisional duty Regulation have been examined. Since 
these arguments do not justify a departure from the assessment made in the 
provisional duty Regulation, the Council confirms that no compelling reasons have 
been found against the imposition of anti-dumping measures. 
H. ANTI-DUMPING MEASURES 
1. Injury elimination level 
(126)In accordance with the relevant provisions of the basic Regulation, it was examined 
whether the measures should be less than the dumping margins found, if such lesser 
measures would be adequate to remove the injury suffered by the Community 
industry as a consequence of dumping. 
(127)Given the injury found, in particular in the form of lack of profitability and price 
suppression, it is considered that anti-dumping measures should increase the prices of 
the dumped imports to attain a non injurious level. 
(128)In order to obtain a non injurious price level, at the provisional stage, the weighted 
average profit shortfall of the sampled Community producers during the investigation 
period, together with a minimum profit, was added to the Community producers' 
sales prices. 
(129) Several parties argued that the minimum profit margin should not be set at 8%. 
Information was provided purporting to show that even at times were the Community 
industry was profitable, such profitability was far below 8%. 
(130)The rationale of such a minimum profit margin is to reflect the profit that the 
Community industry could reasonably be expected to achieve in the absence of 
41 
injurious dumping. On the basis of the information submitted by interested parties 
this profit margin continues to be determined as being 8%. This margin reflects also 
the fact that the Community industry has to recover from the effects of past dumping. 
In addition, such a profit margin is in line with the standard practice of the 
Community Institutions for this type of industry. Furthermore, this is the profit 
margin that was considered appropriate in the context of a previous proceeding 
concerning unbleached cotton fabrics. The minimum profit margin used in the 
provisional duty Regulation is therefore confirmed. 
(131)According to Article 9(4) of the basic Regulation, where the margins of dumping 
found in respect of a particular exporting producer were below the corresponding 
increases in import prices necessary to remove injury, as calculated above, the 
definitive duties have been limited to the dumping margin established. 
These duties, expressed as a percentage of the CIF net, free-at-Community-frontier 
price, before duty amount to: 
The PRC: 
All producers/exporters: 10.9% 
Egypt: 
All producers/exporters: 18.5% 
India: 
Coats Viyella India Ltd.: 5.3% 
Vardhman Spinning & General Mills Ltd: 4.1 % 
Mafatlal Industries Limited: 16.1% 
Century Textiles and Industries Ltd: 14.7% 
Virudhunagar Textile Mills and Thiagarajar Mills Ltd: 5.3% 
Cooperating companies not in the sample: 12.8% 
Non-cooperators: 12.8% 
Indonesia: 
P.T. Apac Inti Corpora: 11.8% 
P.T. Argo Pantes+ P.T. Daya Manunggal: 13.7% 
42 
P.T. Eratex Djaja: 12.7% 
Cooperating companies not in the sample: 12.2% 
Non-cooperators: 12.2% 
Pakistan: 
Amer Fabrics Ltd and Diamond Fabrics Ltd and: 3.5% 
Nishat Fabrics Ltd and Nishat Mills Ltd: 10.5% 
Kohinoor Group (Kohinoor Raiwind Mills Ltd and Kohinoor Weaving Mills 
Ltd): 9.8% 
Cooperating companies not in the sample: 9.5% 
Non-cooperators: 9.5% 
2. Undertakings 
(132)In accordance with Article 8 of the basic Regulation, the possibility of price 
undertakings was discussed with the producers/exporters in the five cumulated 
countries. Further to these discussions, undertakings were offered by the 
producers/exporters and accepted by the Commission in Commission Decision No.... 
(133)These undertakings are based on a minimum price valid for a limited number of 
constructions (i.e. combination of pair of count of yam and number of threads in warp 
and weft), which represent a large proportion of the exports to the Community of the 
producers/exporters in each of the five cumulated countries as well as for fabrics 
weighing less than 100 gr/m2. The minimum prices have been calculated on the basis 
of the CIF net, free-at-Community-frontier price, increased by the dumping or injury 
margins, which ever is the lowest, as appropriate. 
(134)In order to avoid circumvention by the export of constructions not included within 
the undertakings, a country-wide quantitative ceiling is set per construction subject to 
the undertaking. Once this quantitative ceiling is reached, imports of these 
constructions will not be subject to the minimum prices, but will be subject to the 
applicable anti-dumping duty. 
To ensure that the quantity of imports exempted from the ad valorem duty does not 
exceed the quantitative ceilings fixed by the undertakings, the exemption should be 
conditional on the presentation to Member States' customs services of valid import 
43 
licences clearly identifying the producer, the construction concerned and the import 
volume.6 
Fabrics weighing less than 100 gr/m2 will not be subject to quantitative ceilings given 
that the risk of circumvention for those fabrics is limited: they represent a marginal 
segment of the market and are easily identifiable at customs level by their weight. 
3. Definitive duties 
(135)Notwithstanding the acceptance of the undertakings offered by the 
producers/exporters from the countries concerned, the producers/exporters not 
signatories to undertakings, the constructions not covered by the undertakings and the 
constructions subject to the undertaking but exceeding the volumes established, will 
be subject to the ad valorem anti-dumping duties on imports of the product concerned 
to the Community. This will also underpin the undertakings by discouraging their 
circumvention. 
(136)Fabrics weighing less than 100 gr/m2 constitute a marginal market segment. Such 
fabrics are imported in two distinct qualities; one woven with ordinary yarn and 
imported at low prices, the other woven using thin high quality, resistant yarn, 
imported at high prices, which are not generally a cause of injury to the Community 
industry. The specific characteristics of these fabrics mean that on the one hand, 
imposing an ad valorem duty would be disproportionate in that the high quality 
segment would be subject to high duties, whereas on the other hand a straightforward 
minimum price duty would not be appropriate in respect of the low priced segment. 
(137)It was decided therefore to set a minimum price duty, subject to the limitation that 
imports made below the minimum price will only pay the relevant ad valorem duty. 
The impact of the ad valorem duty on imports of the low quality segment should 
mean that imports of such fabrics can continue to be made at below the minimum 
price. Where the ad valorem duty would raise the price above the minimum price, the 
duty will be limited to the difference between the import price and the minimum 
price. 
6 Under Council Regulation (EEC) No 3030/93, import licences are delivered for the importation of 
unbleached cotton fabrics into the Community. This system will be used in the context of the current 
anti-dumping proceeding. 
44 
(138)In establishing minimum prices for those fabrics, it is considered that, in the 
absence of representative information available from the sampled 
producers/exporters, these minimum prices should be based on import prices as 
reported by Eurostat. Information from Eurostat reflects the product mix within 
imported fabrics weighing less than 100 gr/m2 and adding the anti-dumping duty 
applicable to the cooperating producers/exporter in each country concerned to the 
import prices per country reported by Eurostat, results in a minimum price which 
would sufficiently remove the injury to the Community industry. 
(139)The minimum prices thereby established are as follows: 
Country Minimum price ECU/kg 
ThePRC 4?7 
Egypt 6.0 
India 5.6 
Indonesia 4.9 
Pakistan 4.2 
I. COLLECTION OF PROVISIONAL DUTIES 
(140)In view of the magnitude of the dumping margins found for the exporting producers 
and countries, and in the light of the seriousness of the injury caused to the 
Community industry, it is considered necessary that the amounts secured by way of 
provisional anti-dumping duties under Regulation (EC) No 773/98 should be 
definitively collected at the rate of the duty definitively imposed. This decision also 
applies to the companies which are signatories to the undertakings. 
(141)As concerns fabrics weighing less than 100 gr/m2, the amounts secured by way of 
provisional duties shall be released. Indeed, in view of the fact that the distinction 
between fabrics weighing more and less than 100 gr/m2 has only been introduced at 
the definitive stage, the collection of the provisional duties for those fabrics appears 
inappropriate. 
(142)As concerns imports of the product concerned originating in Turkey, amounts 
secured by way of provisional anti-dumping duties should be released. 
45 
HAS ADOPTED THIS REGULATION: 
Article I 
1. A definitive anti-dumping duty is hereby imposed on imports of unbleached cotton 
fabrics, falling within ex CN codes 5208 11 90 to 5208 19 and 5209 11 to 5209 19 
(TARIC codes 5208 11 90 90, 5208 12 11 90, 5208 12 13 90, 5208 12 15 90, 5208 12 
19 90, 5208 12 91 90, 5208 12 93 90, 5208 12 95 90, 5208 12 99 90, 5208 13 00 91, 
5208 13 00 99, 5208 19 00 91, 5208 19 00 99, 5209 11 00 90, 5209 12 00 90, 5209 19 
00 90) and originating in the People's Republic of China, Egypt, India, Indonesia and 
Pakistan. 
2. Subject to paragraph 3, the rate of the anti-dumping duty applicable to the CIF net, 
free-at-Community-frontier price, before duty, shall be as follows for products 
originating in: 
Country Rate of duty Taric additional code 
The People's Republic of China 10.9% 
Egypt 18.5% 
India" : : nWo 8900 
Indonesia 12.2% 8900 
Pakistan 9.5% 8900 
3. The products manufactured and sold for export by the companies listed below shall be 
subject to the following rates of anti-dumping duty: 
Country: India Rate of duty Taric additional 
code 
Century Textiles & Industries Limited 14.7% " : 8913 
Coats Viyella India Limited 53% " 8914 
46 
Vardhman Spinning & General Mills I 4.1% I 89B 
Limited 
Mafatlal Industries Limited 16.1% 8917 
Virudhunagar Textile Mills and ' 5.3% 89l<5 
Thiagarjar Mills Ltd. 
Country: Indonesia Rate of duty Taric additional code 
Group Argo Pantes (P.T. Argo 13.7% 8919 
Pantes and PT Daya Manunggal) 
Apac Inti Corpora ! 11.8% 8918 
Eratex Djaja 12.7% 8922 
Country: Pakistan Rate of duty Taric additional code 
Amer Fabrics Ltd and Diamond 3.5% 8923 
Fabrics Ltd. 
Nishat Mills Ltd and Nishat Mills 10.5% 8928 
Ltd 
Kohinoor Group (Kohinoor 9.8% 8925 
Raiwind Mills Ltd and Kohinoor 
Weaving Mills Ltd) 
4. Unless otherwise specified, the provisions in force concerning the customs duties shall 
apply. 
Article 2 
1. Import of unbleached cotton fabrics weighing not more than 100 gr/m2 (Taric codes 
5208 11 90 90, 5208 13 00 91 and 5208 19 00 91) shall be exempt from the duty 
imposed by Article 1, when imports of such fabrics are made above the following 
minimum CIF net, free-at-Community-frontier prices, before duty: 
47 
Country Minimum price ECU/kg 
The People' Republic of China 4.7 
Egypt 6.0 
India 5.6 
Indonesia 4.9 
Pakistan 4.2 
2. Other imports of unbleached cotton fabrics weighing not more than 100 gr/m2 shall be 
subject to the relevant duty imposed by Article 1. In cases where the application of the 
relevant duty would increase the import price above the level of the relevant minimum 
price in paragraph 1, only the difference between the import price and the minimum 
price shall be imposed 
Article 3 
Imports of the product classified under the CN codes mentioned in Article 1(1) above, 
produced and sold for export to the Community by the companies which offered 
undertakings accepted by Commission Decision No , shall be exempted from the 
anti-dumping duties imposed by Articles 1 and 2, provided that such imports are made 
in conformity with the system laid down in that Decision. 
Article 4 
1. Products classified under the CN codes mentioned in Article 1(1) above and woven 
on looms operated exclusively by hand or foot are exempted from the duty imposed 
in Article 1 of this Regulation (TARIC codes 5208 11 90 10, 5208 12 1110, 5208 12 
13 10, 5208 12 15 10, 5208 12 19 10, 5208 12 91 10, 5208 12 93 10, 5208 12 95 10, 
5208 12 99 10, 5208 13 00 10, 5208 19 00 10, 5209 11 00 10, 5209 12 00 10, 5209 
19 00 10). 
2. The exemption referred to in paragraph 1 shall be granted only to products 
accompanied on their release for free circulation in the Community by either 
a) a certificate from the competent authorities of the country of origin which 
conforms to the model attached as Annex I; or 
48 
b) a certificate issued pursuant to Article 3 of Council Regulation (EEC) 3030/937. 
3. Certificates issued pursuant to paragraph 2(a) shall only be valid if the countries of 
origin have informed the Commission of the names and addresses of the 
governmental authorities situated in their territory which are empowered to issue 
these certificates, together with specimens of stamps used by those authorities and the 
names and addresses of the relevant governmental authorities responsible for the 
control of the certificates. The stamps shall be valid as from the date of receipt by the 
Commission of the specimens. 
4. Certificates issued pursuant to paragraph 2 shall only be valid if presented with 
options (b) and (c) in box 11 deleted and if they certify that the products concerned 
fulfil the description in option (a). 
The appropriate provisions implementing the Community Customs Code, and notably the 
provisions concerning administrative co-operation contained in Article 93, 93 bis and 94 
of Regulation (EEC) 2454/938, as amended in particular by Commission Regulation (EC) 
12/979, shall apply mutatis mutandis. 
Article 5 
1. As regards imports of the product described in Article 1(1) above originating in The 
People's Republic of China, Egypt, India, Indonesia and Pakistan, the amounts 
secured by way of the provisional anti-dumping duty imposed by Regulation (EC) No 
773/98 shall be collected at the rate of the duty definitively imposed. This provision 
also applies to the companies signatories of the undertakings, as regards the 
provisional duties secured. 
2. As regards imports of fabrics weighing less than 100 gr/m2 originating in The People's 
Republic of China, Egypt, India, Indonesia and Pakistan, the amounts secured by way 
of provisional duties shall be released. 
3. As regards imports of the product described in Article 1(1) above originating in 
Turkey, the amounts secured by way of provisional duties shall be released. 
7 OJ No L 275, 8.11.93, p. 1 
8 OJ No L 253, 11.10.93, p. 1 
49 
Article 6 
The proceeding is hereby terminated as concerns imports of the product described in 
Article 1(1) above originating in Turkey. 
Article 7 
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, 1998. 
9 OJNoL9,13.1.97, p. 1. 
50 
ISSN 0254-1475 
COM(98) 487 final 
DOCUMENTS 
EN 02 05 06 11 
Catalogue number : CB-CO-98-505-EN-C 
ISBN 92-78-38749-5 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
9