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DOCUMENTS "COM"
COM(81)823
Vol.1981/0231

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COMMISSION OFTHEEUROPEAN COMMUNITIES
Proposal for a
COUNCIL REGULATION (EEC)
imposing adefinitive anti-dumping duty
onphenol originatinggin theUnited States
ofAmerica
(submitted bytheCommission totheCouncil )COM (81)823 final
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iXPLANATORY MÉMORANDUM
InJuly1981/theCojwmssion imposedaprovisional anti-dumping duty
of19/9%onimportsofphenoloriginating intheUnitedStatesof
Americad)withtheexceptionofsomecompaniesforwhichtherate
pfdutywaslowerandotherswhichwereexcludedfromtheduty.The
periodofvalidityofthisprovisional dutywassubsequently extended
until18January1982byaCouncilRegulationof9November1981X2).
Thefactsasfinallyestablished showadumpingmarginof14,1%forall
export§ofphenoltotheCommunityexceptforcertaincompanieswhich
hadthefollowingdumpingmargins:
AlliedCorporation 12,2%
ICCIndustries Inc10,5%
Monsanto Company6,5A
ShellChemicalCompany0%
AsregardsinjurytotheCommunityindustrythisconsistsessentially of
anincreaseinthemarketshareheldbyU.S.phenoltothedetrimentof
Communityproducers andinseverepricedepression,particularly inthe
secondhalfof1980,whenCommunityproducers madesharplydecreased
profitsorseverelosses.
InordertoprotecttheCommunity'sinterestsitisthereforeproposed
toimposeadefinitive anti-dumping dutyof14,1%onphenolofAmerican
origin.ExclusionfromthisdutyisproposedforGeorgiaPacific
Corporation andShellChemicalCompany,whichwerefoundnottohave
dumpedandDowChemicalCompany,GeneralElectricCompanyandUnited
StatesSteelCorporation whichhavegivenundertakings astofutureexports
totheCommunitywhichtheCommission considersacceptable .
■
Itisfurtherproposedthattheamountssecuredbywayofprovisional
dutyshouldbedefinitively collecteduptotheratesdefinitively determined ,
(1)Regulation (EEC)No2017/81,0JNoL195,18.7.1981,p.22.
(2)0JNoL322,9.11.1981,p.1

COUNCILRI6UUTI0N (IIC)N8
°f
imposingadefinitive anti-dumping dutyonphenoloriginating inthe
UnitedStatesofAmerica
THECOUNCILOFTHEEUROPEAN COMMUNITIES,
I
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtoCouncilRegulation (EEC)N°3017/79of20December1979
onprotection againstdumpedorsubsidized importsfromcountriesnot
membersoftheEuropeanEconomicCommunity,andinparticularArticle12
thereof, !
HavingregardtotheproposalsubmittedbytheCommissionafterconsultation
withtheAdvisoryCommitteesetupunderArticle6ofRegulation (EEC)
N°3017/79, |
WhereastheCommissionbyRegulation(EEC)N°2017/81^imposedaprovisional
anti-dumping dutyof19.9%onimportsofphenoloriginating intheUnited
StatesofAmerica,withtheexceptionofexportsmadebythefollowing
companiesforwhichtherateofdutywas:
-AlliedCorporation ,Morristown,NewJersey: 12.2%
-ICCIndustries Inc.,NewYork,NY: 10.5%
-MonsantoCompany,StLouis,Missouri: 9.7%
-ShellChemicalCompany,Houston,Texas: 8.8%
WhereasexportsmadebyDowChemicalCompanyandGeorgiaPacific
Corporation wereexcludedfromtheprovisional anti-dumping duty;
Whereastheperiodofvalidityofthisprovisional dutywasextendedfor
aperiodnotexceedingtwomonthsbyCouncilRegulation(EEC)N°3197/81^;
0JN°L339,31.12.1979,p.1
20JN°L195,18.07.1981,p.22
30JN°L322,09.11.1981,p.1

-2-
L129/1
15.5.81Whereas,inthecourseofthesubsequentexamination ofthematter,the
interestedpartieshadtheopportunity tomakeknowntheirviewsinwriting,
tobeheardbytheCommission andtodeveloptheirviewsorally,to
inspectnon-confidential information relevanttothedefenceoftheir
interests andtobeinformedoftheessentialfactsandconsiderations on
thebasisofwhichitwasintendedtomakeafinaldetermination ;whereas
thecomplainants andmostoftheexporters andimportersconcernedavailed
themselvesofthes'epossibilities bymakingknowntheirviewsinwriting
andorally;whereastheCommission,afteracarefulanalysisofthe
information availabledecidedtocarryoutfurtherinspections atthe
premisesofAlliedCorporation (NewJersey),Shell,ChemicalCompany(Texas),
USSteelCorporation (Pennsylvania),MonsantoEuropeSA(Brussels,Belgium)
andShellInternational ChemicalCompany(London,UK);
WhereasGeorgiaPacificCorporation whichhadbeenexcludedfromthe
provisional dutybecauseitsexportsaleswereeffectedatpricesabove
normalvalueprovidedinformation showingthatnoexportstotheCommunity
hadbeenmadesinceimpositionoftheprovisional duty;whereasinthese
circumstances thepreliminary determination andtheexclusionofthisfirm
fromtheapplication ofthedutyisconfirmedbytheCommission;
WhereasDowChemicalCompany,thesecondcompanyexcludedfromtheprovisional
dutybecauseofitspriceundertaking giventotheCommission,whilst
maintaining thisundertaking,conteststhevalidityofthepreliminary
determination ofdumpingmadebytheCommission onthegroundsthatits
phenolexportstotheCommunityaremanufactured fromcumeneofCommunity
origin,whichinviewofthesmallvalueaddedtoitintheUnitedStates
ofAmericaretainsitsCommunityorigin;whereastheCommission considers
that,inaccordancewithArticle5ofRegulation(EEC)N°802/68^concerning
thecommondefinitionoftheideaoforiginofmerchandise ,thephenol
exportedbythecompanyisofAmericanoriginbecausethelastprocessby
whichitbecomesanewproducttakesplaceintheUSA;whereas,moreover,
uponenteringtheproductforconsumption intheCommunitythecompany
itselfdeclarestheproducttobeofAmericanorigin;whereas,inthese
circumstances thepreliminary determination ofdumpingisnowconsidered
bytheCommissiontobedefinitive;
0JN°L148,28.6.1968,p.2

-3-
Whereas,inseekingtodeterminetheexistenceofdumpingfortheother
companieswhoseexportshadnotbeenexcludedtheCommissioncomparedthe
exportpricestotheCommunitywiththenormalvalueoftheproductin.
question;
Whereas,theCommissiondeterminednormalvalueonthebasisofthedomestic
pricesexcluding,however,certainsalesfromthecalculationofnormal
value,suchsaleshavingbeenconsiderednottohavebeeninthenormal
courseoftradeeitherbecauseofspecialconversionarrangements orof
theparticularcompetitivesituationrelatingtoacustomer;whereasfor
thoseexporterswhodidnotsellonthedomesticmarket,normalvaluewas
determinedonthebasisofthe.weightedaveragesellingpricesoftheir
suppliers;
Whereasexportpricesweredetermined onthepriceactuallypaidforon-
specificationproductsexportedtotheCommunity,exceptforDowChemical
CompanyandMonsantoCompany,whoseexportsweremadetosubsidiarycompanies
intheCommunityandforwhichexportpriceswereconstructed onthebasis
ofthepricesatwhichtheimportedproductwasfirstresoldtoanindependent
buyer,suitablyadjustedtotakeaccountofactualcostsincurred,as
establishedduringtheinvestigation,andaprofitmarginof5%before
taxationconsideredreasonable bytheCommission;
Whereas,however,theMonsantoCompany hascontested
theprofitmarginusedbytheCommissionandhaspresentedeightdifferent
sourcesofinformationpurportingtoshowthatnormalprofitonphenol
salesislessthan5%;whereasfiveofthesesourcesarenotengagedin
dealinginphenolwhilstoneofthemisaCommunityproducerwhohasgiven
completelycontradictory informationtotheCommission;whereasthe
remainingtwocompanieswhohavesuppliedinformationarecustomersof

MonsantoCompanywhoapartfromtheirstatementsregardingprofitmargins
madetoMonsantoCompanyrefusedallcooperation withtheCommission inthe
proceeding;whereastheCommission hasitselfrequestedandreceived
information fromindependent importers andothersourceswhichindicatethat
normalprofitlevelsforimportersortradersinphenolintheCommunityf^ary
betweenV/,and102;theCommission concluded,therefore,thatin
viewofthewidelydivergentviewspresented,itisimpossibletomakea
generalestimateofprofitmarginssincetheamountdependsonspecific
circumstances ;inthiscontextthesizeandstructureofMonsanto's
operationsintheCommunity,thedegreeofcapitalinvestment,andthe
serviceswhichtheycarryouthastobeborneinmindandcomparedwiththe
lesssophisticated andmorerudimentary organization ofsmallerbrokers
ortraders;takingallthisintoaccounttheCommission considered
thattheminimumprofitlevelwhichshouldbereasonably usedwouldbe
theaverageoftherangeofmarginswhichitobtainedasaresultofits
enquiries;
WhereasinthosecaseswhereproducersdidnotselldirectlytotheCommunity
theexportpricewastakenasbeingthatatwhichtheysoldtotradersor
dealersforonwardexporttotheCommunity;
*■
Whereasthecomparisons madefortheyear1980showedthatdumpingoccurred
inbothsemestersoftheyear;whereas,however,sincethemostserious
injurywasshowntohavetakenplaceduringthelasthalfof1980,itwas
consideredthatthedumpingmarginsestablished forthisperiodshouldbe
determinant incalculating theanti-dumping dutyapplicabletothose
companieswhichexportedtotheCommunityduringthisperiod;whereas,for
thosecompanieswhichhadonlyexportedtotheCommunityduringthefirst
sixmonthsof1980thislatterperiodwasconsideredtobetheinvestigation
period;whereasaccountwastaken,whereappropriate,ofdifferences
affectingpricecomparability suchasdifferences inconditions andterms
ofsaleanddifferences .inleveloftraderelatinginparticulartotransport,
paymenttermsandsellingcosts;

-4a-
WhereasforthosecompanieswhichonlyexportedtotheCommunityduringthe
firstsemesterof1980thefollowingweightedaveragedumpingmarginswere
finallyestablished :
filledCorporation
ICCIndustries Inc
MqpsantoCompany12.2%
10.5%
6.5%
Whereasforthesecompanies whichexportedduringbothsemestersoft980
thefollowingweightedaveragedumpingmarginswerefinallyestablished :
£hellChemicalCompany
0SSteelCorporation
ïTsthalf.
1980
A.2%
6.2%2ndhalf
1980
0
14.1%

-5-
L195/22
18.7.81Whereas,forthoseexporters whoneitherrepinedtotheCommission's
questionnaire normadethemselves knownotherwiseinthecourseofthe
preliminaryinvestigations ,dumpingwasdetermined onthebasisof'the
factsavailable;whereas,inthiscontext,ithadtobeborneinmindthat
thecomplaintallegeddumpingmarginsvaryingfrom25to32%;whereas,
however,theCommissionconsideredthattheresultsofitsinvestigation
providedamoreaccuratedetermination ofthelevelofdumping;whereas,
therefore,inmakingitschoicebetweenthedifferentdumpingmargins
determined theCommission considered thatitwouldconstitute abonusfor
non-cooperation toassumethatthedumpingmarginfortheseexporterswas
anylowerthanthehighestdumpingmarginof14.1%determinedwithregard
toanexporterwhohadfullycooperated; >
Whereas,withregardtoinjurycausedbythedumpedimportstotheCommunity
industry,theCommissionhasre-examined andwherenecessaryrevisedall
therelevantdatafor1980;
WhereasimportsofphenolofUSoriginincreasedfrom50683tonnesin
1979to72173tonnesin1980;whereasitwasshownthatthemajorityof
theimportsduring1980weremadeatdumpedprices;whereastheshareof
thefree,i.e.,non-captive market,heldbyUSimportsamountedto20.5%
in^978,16.4%in1979and24.0%in1980;whereasthetotalmarketshare
of/theseimportsrosefrom6.7%in1978to8.8%in1980;
Whereasthisincreaseinimportsamountedtoapproximately ^7%-jnthefirsthalfof1980and34%inthesecondhalfof1980comparedwiththesameperiods
in1979;whereastheCommunityproducers'share
ofthefreemarketfellfrom78.1%in1979to52.5%inthefirsthalfof
1980asaresultoftheincreasedimports;whereasthisincreaseinimports
atmainlydumpedpricesledtoseverepricedepressionontheCommunity
market;whereasdespiteassertionstothecontrarybyUSSteelthe

-6-
Commissionhasestablished thatthesellingpricesofUSproducersundercut
EECproducersduringeverymonthof1980andthatundercutting wasmost
severeduringthesecondhalfof1980;whereasdespiteitsattemptsto
meetlowpricesfromUSsuppliersinthesecondhalfof1980theCommunity
industryonlyregainedpartofthefreemarketlostinthefirstsixmonths
oftheyearandfinishedtheyear1980withonly69.4%ofthismarket;
whereasasaresultoftheaboveCommunityproducerssufferedveryheavy
lossesorgreatlyreducedprofits;whereastheCommissionfoundthatfor
themajorityoftheseproducerstheaverageprofitbeforetaxofi5%oh
turnoverearnedin1979becamealossof10%onturnoverin1980;
WhereasproductionofphenolintheCommunityfellfrom944639tonnesin
1978to816781tonnesin1980andcapacityutilizationfellfrom72%to
59%duringthesameperiod;
WhereastheCommissionhasconsideredtheinjuriescausedbyotherfactors
which,individually orincombination,arealsoaffectingtheCommunity
industry;whereasithasdeterminedthatwhilsttotalconsumption inthe
Communityhasdiminished from913904tonnesin1978to820020tonnesin
1980,production hasfallenmorethancouldbeaccountedforbythe
decreaseinconsumption;whereasmeanwhilefreemarketconsumption has
increasedduringthesameperiodfrom298000tonnesto301000tonnes;
whereas,moreover,whilstimportsfromcountriesotherthanthatnamedin
thecomplainthaveincreased,from3512tonnesin1978to19950tonnes
in1980,theyhavebeenatconsiderably lowervolumethanthosefromthe
UnitedStatesofAmericaandhavebeenatpricessimilartothoseobtained
bytheCommunityindustry;whereasthevolumeofnon-dumpedimports
represented only31%oftotalimportsofphenolfor1980;
Whereastheimpactofthenon-dumpedimportsonthephenolmarketinthe
Communityandtheeffectofthecontraction indemandhavebeenisolated
fromtheimpactofthedumpedimports;whereasthesubstantial andsharp
increaseofimportsofdumpedphenolsince1978,andinparticularin1980,
andtheextremelylowpricesatwhichtheproducthasbeenofferedforsale
intheCommunityinthesecondhalfof1980byAmericanexportershasled
theCommissiontoconcludethattheinjurycausedtotheCommunityindustry
concernedbythedumpedimportstakeninisolationshouldberegardedas

-7-
Whereas,inthesecircumstances ,protectionoftheCommunity'sinterests
callfortheimpositionofadefinitive anti-dumping dutyonimportsof
phenoloriginating intheUnitedStatesofAmericawhich,havingregard
totheextentoftheinjurycaused,shouldbeequaltothedumpingmargins
established,andforthedefinitivecollection uptotheratesdefinitely
determined,oftheamountssecuredbywayofprovisional anti-dumping duty;
Whereas,priortotheintroduction oftheprovisional anti-dumping duty,
theCommission acceptedanundertaking enteredintobyDowChemicalCompany;
whereasitis,consequently ,appropriate tocontinuetoexcludeimports
oftheproductsmanufactured andexportedbythiscompanyfromthe
application oftheanti-dumping duty;
Whereas
UnitedStatesSteelCorporation meanwhile hasundertaken toceaseits
exportstotheCommunity;whereastheCommissionconsidersthisunder­
takingtobeacceptable ;whereasitisconsequently appropriate toexclude
theimportsoftheproductsmanufactured andexportedbythiscompany
fromtheapplication oftheduty;whereasanotherAmericanproducer,
GeneralElectric Co(Massachussets ),whichhasneverexportedtotheEEC,
offeredanundertaking nottoexportinthefutureatapricebelowthe
prevailing normalvalueatthetimeofexport;whereastheCommission ,
considersthisundertakjngtobeacceptable;whereasitis,consequently,
appropriate toexcludeforthefuturetheproductsmanufactured and
exportedbythiscompanyfromtheapplication oftheduty,
HASADOPTEDTHISREGULATION : I
'M
Article 1
i
1.Adefinitiveanti-dumping dutyishereby .imposedonphenolfalling
withinCommonCustomsTariffsubheading ex29.06AIandcorresponding to
NIMEXEcodeex29.06-11,originating intheUnitedStatesofAmerica.
2.Thisdutyshallnotapplytophenolmanufactured andexportedby
DowChemicalCompany,GeneralElectricCompany,GeorgiaPacificCorporation,
ShellChemicalCompanyandUnitedStatesSteelCorporation .

3.Therateofthedutyshallbe14.1/ionthebasisofthecustomsvalue
determined inaccordance withCouncilRegulation (EEC)N°1224/80of
128May1980onthevaluationofgoodsforcustomspurposes,exceptfor
exportsmadebythefollowing companiesforwhichtherateofdutyshallbe
-AlliedCorporation 12.2%
-ICCIndustries Inc 10.5A
-MonsantoCompany i6.5%
4.Theprovisions inforceconcerning customsdutiesshallapplyforthe
application ofthisduty.
Article2
Theamountssecuredbywayofprovisional dutypursuanttoRegulation (EEC)
N°2017/81shallbedefinitively collected uptotheratessetoutin
paragraph 3ofArticle 1above. ,
Article3
ThisRegulationshallenterintoforceonthedayofitspublication in
theOfficialJournaloftheEuropeanCommunities .
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicable
inallMemberStates.
DoneatBrussels, FortheCouncil