iCGMt/IISSION OF THE EUROPEAN COMMUNITIES 
COM(92) 208 final 
Brussels, 26 May 1992 
Proposal for a 
COUNCIL PF^ULATION (EEC) 
amending Regulation (EEC) No 1768/89 in respect of the definitive 
anti-dumping duty on certain Imports of video cassettes 
originating in Hong Kong 
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(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
1. By Regulation (EEC) No 1768/89, the Council imposed a definitive 
anti-dumping duty of 21.9% on imports of VHS video tape in cassettes 
originating in Hong Kong. 
2. By a notice published on 12 October 1991 the Commission initiated a 
review of the anti-dumping duty concerned as regards a Hong Kong 
company, Bico Magnetics Ltd. 
3. The investigation showed that Bico Magnetics Ltd had never exported 
own-produced video cassettes to the European Community and was about 
to begin such exports. 
4. Normal value was determined on the basis of constructed value of the 
models concerned. 
Since Bico Magnetics Ltd had not exported video cassettes to the 
Community, no export price could be established. 
5. In these circumstances, the anti-dumping duty to be imposed should 
be a variable duty equal to the difference between the normal value 
and the net price free-at-Community-frontier. 
6. In conclusion, it is proposed that the Council amend its Regulation 
(EEC) No 1768/89, exempt Bico Magnetics Ltd from the definitive 
anti-dumping duty imposed on VHS video tapes in cassettes 
originating in Hong Kong and impose instead the above variable duty 
for the models meant to be exported to the Community. 
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Proposal for a 
COUNCIL REGULATION (EEC) 
amending Regulation (EEC) No 1768/89 in respect of the definitive 
anti-dumping duty on certain imports of video cassettes 
originating in Hong Kong 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on 
protection against dumped or subsidized imports from countries not 
members of the European Economic Community1, and in particular Article 
14 thereof, 
Having regard to the proposal submitted by the Commission after 
consultation within the Advisory Committee as provided for under the 
above Regulat ion, 
Whereas: 
I - PREVIOUS PROCEDURE 
1. By Regulation (EEC) No 1768/892, as amended by Regulation (EEC) 
No 3522/903, the Council imposed a definitive anti-dumping duty of 
21.9% on imports of VHS video tape in cassettes (hereafter "video 
cassettes") falling within code ex 8523 13 00 and originating in 
Hong Kong, with the exception of imports from several exporters 
especially mentioned which were subject to a lesser rate of duty or 
exempt from duty. 
1 OJ No L 209, 2.8.1988, p. 1. 
2 0J No L 174, 22.6.1989, p. 1 
3 OJ No L 343, 7.12.1990, p. 1 
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2. In recital 43 of Regulation (EEC) No 1768/89, concerning companies 
which started or will start exporting own-produced video cassettes 
to the Community after the investigation period (newcomers), the 
Council noted that the Commission is ready to initiate without delay 
a review proceeding if the exporting company can show the 
Commission, and supply sufficient evidence, that it did not export 
the products concerned to the Community during the period of 
investigation. The company also has to demonstrate that it started 
or will start those exports after the said period and that it is not 
related to or associated with any of the companies subject to the 
invest igat ion. 
II - REVIEW 
3. By a notice published on 12 October 19914, the Commission, after 
consultation within the Advisory Committee and in accordance with 
Article 14 of Regulation (EEC) No 2423/88 initiated a review of 
Regulation (EEC) No 1768/89 as it concerned a Hong Kong company, 
Bico Magnetics Ltd. This company had submitted that it did not 
export the products subject to the anti-dumping duty during the 
previous period of investigation (1 January - 30 November 1987). 
In addition, it submitted that it was not related with any of the 
companies subject to the previous investigation for which dumping 
was found. In addition, no evidence was found that it had ever 
exported video cassettes to the Community. Accordingly, the 
Commission commenced an investigation in order to verify that Bico 
Magnetics Ltd could be considered as a newcomer and to establish a 
dumping margin, if any, for this company. 
OJ No C 266, 12.10.1991, p. 7 
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Newcomer 
4. The investigation showed that Bico Magnetics Ltd had not previously 
exported or produced video cassettes which were exported to the 
Community and was now about to begin such exports. In addition, it 
was found that this company had no link of any sort with the 
exporters involved in the previous procedure and for which dumping 
was found. The Council confirms that it should accordingly be 
considered as a newcomer and that a partial review of Regulation 
(EEC) No 1768/89, inasmuch as it concerned Bico Magnetics Ltd, was 
warranted. 
Ill - RESULTS OF THE INVESTIGATION 
1. Normal value 
5. Since Bico Magnetics Ltd did not sell any video cassettes on the 
domestic market during the investigation period for this review 
(from 1 January to 30 June 1991), normal value was determined on the 
basis of the constructed value of the product concerned in 
accordance with Article 2(3)(b) of Regulation (EEC) No 2423/88. 
This constructed value was computed on the basis of all costs, both 
fixed and variable, in the country of origin of materials and 
manufacture for the models destined for export to the Community plus 
a reasonable amount for selling, administrative, other general 
expenses and profit. 
6. As far as selling, administrative and general expenses were 
concerned, they were calculated by reference to such expenses as 
they were stated in the audited accounts of Bico. These costs 
corresponded to such costs incurred by other Hong Kong manufacturers 
for their sales of video cassettes on the domestic market, as 
established during previous investigations concerning video 
cassettes from Hong Kong. 
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As far as profit was concerned, it was found appropriate to apply a 
profit rate of 8% on turnover; this rate was used in Regulation 
(EEC) No 1768/89 for the Hong Kong video cassette manufacturers and, 
according to the information available to the Commission, can still 
be regarded as the profit which Hong Kong companies can normally 
achieve on their domestic market. The Council confirms these 
f indings. 
7. On this basis, normal value was established for the models produced 
and destined for export to the Community by Bico Magnetics Ltd, 
namely normal grade. 
2. Measures 
8. Since it was found that Bico Magnetics Ltd had not exported video 
cassettes to the Community, no export price could be established for 
the product under consideration, and no dumping margin could be 
calculated. 
9. However, it is clear that if the export prices of the various models 
of video cassettes sold for export to the Community by Bico 
Magnetics Ltd at least equal the normal value for the corresponding 
models, these products would not be dumped. 
10. In addition, this normal value is less than the target price 
determined for the Community industry in Regulation (EEC) No 
1768/89. 
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11. In these circumstances, it is considered that the measures to be 
imposed in respect of the imports to the Community of video 
cassettes produced by Bico Magnetics Ltd, should guarantee that the 
products are not sold to the Community at less than their normal 
value. 
IV - AMENDMENT OF THE REVIEWED MEASURES 
12. Accordingly, it is considered appropriate that Regulation (EEC) No 
1768/89 should be amended and that Bico Magnetics Ltd be exempted 
from the definitive anti-dumping duty imposed on VHS video tapes in 
cassettes originating in Hong Kong in respect of the models E60, 
E90, E120, E180, E195 and E240, in so far as these models will be 
subject to a duty equal to the difference between minimun price set 
out for each of these models and their net price free-at-Community-
frontier before customs clearance. The minimum price corresponds to 
the normal value duly adjusted to bring it to CIF level. 
13. Bico Magnetics Ltd was informed of the essential facts and 
considerations on the basis of which the imposition of the anti­
dumping duties were proposed, and was given an opportunity to 
comment on such proposal. No comments were made by the exporting 
producer concerned. 
14. The complainants were informed of the considerations and main facts 
on the basis of which the Council intented to amend Regulation (EEC) 
No 1768/89 and had no comment to make. 
15. Since this review is only limited to one Hong Kong producer, it does 
not prolong the validity of Regulation (EEC) No 1768/89 in regard to 
Article 15(1) of Regulation (EEC) No 2423/88, 
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HAS ADOPTED THIS REGULATION: 
Article 1 
The following subparagraph is hereby added to Article 1(3) of Regulation 
(EEC) No 1768/89: 
"The duty specified in paragraph 2(b) shall not apply to models of video 
tapes in cassettes E60-E90-E120, E180-E195-E240 in normal grade produced 
and sold for export to the Community by Bico Magnetics Ltd, Hong Kong 
(Taric additional Code 8292); these models shall be subject to an anti­
dumping duty equal to the difference between the price mentioned 
hereunder for each of the models concerned and their net price, free-at-
Community-frontier, not cleared through customs: 
E60 
ECU 0.70 E90 
ECU 0.83 E120 
ECU 0.96 E180 
ECU 1.22 E195 
ECU 1.29 E240 
ECU 1.48 
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Article 2 
This Regulation shall enter into force on the day following that of its 
publication in the Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable 
in all Member States. 
Done at Brussels, For the Council 
The President 

ISSN 0254-1475 
COM(92) 208 final 
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