COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC93) 87 final 
Brussels, 25 March 1993 
Proposal for a 
COUNCIL REGULATION (EEC) 
imposing a definitive anti-dumping duty concerning the importation 
of certain electronic weighing scales originating in Japan 
(presented by the Commission) 
- 2 -
EXPLANATORY MEMORANDUM 
1. In a notice published in Official Journal No C 50 of 26 February 
1991, the Commission announced a review, in accordance with Articles 
14 and 15 of Council Regulation (EEC) No 2423/88, of the anti-dumping 
measures imposed on imports into the Community of certain electronic 
weighing scales originating in Japan. 
2. The Commission carried out its investigation in the period between 
1 January and 31 December 1990. 
3. Normal value for all Japanese producers was based on domestic sales, 
if those sales were comparable in product type, price structure, 
quantity and category of customer with sales made during the 
investigation period to the Community market. In a few exceptional 
cases, where none of these comparable sales were made on the domestic 
market, normal value was constructed on the basis of the actual cost 
of production plus a reasonable profit margin. The comparison between 
the normal value and export price to the Community showed dumping 
margins for all Japanese producers, ranging from 15.3% to 80.7%. 
4. As far as injury is concerned, investigations sought to determine 
whether there had been any changes in the situation of the Community 
industry as a result of the behaviour of the exporters on the 
Community market since the imposition of the anti-dumping measures 
under review. Furthermore, the Commission also examined whether the 
expiry of existing anti-dumping measures would be likely to lead to 
recurrence of injury. 
It emerged from the investigation that the present situation of the 
Community industry - falling sales and financial losses - meant that 
protection was still required against dumped imports originating in 
Japan. It was found that the measures under review had not prevented 
the undercutting of Community producers' prices by the Japanese 
imports, which remained at an appreciable level. In these 
circumstances, the lifting of the anti-dumping measures in force 
could not be justified. However, the measures required amendment in 
the light of the information on dumping and injury which had emerged 
from the investigation. 
- 3 -
5. With respect to Community interests, the industry concerned not only 
requires a significant number of qualified staff, but also involves 
technologies, the loss of which would mean a general loss of 
competitive edge in the electronic sector. 
In addition, the removal of the unfair advantages gained by the 
dumping practices is designed to prevent the further decline of the 
Community industry and thus help to maintain the availability to the 
consumer of the widest possible choice of product. 
Furthermore, the Commission has also carefully considered the 
implications of anti-dumping measures for consumer prices and there 
is no evidence that they would be significantly affected by a 
continuation of such measures. 
6. That being the case, the anti-dumping measures should be maintained 
and adjusted in the light of the results of the review. 
7. In accordance with Article 13 of Council Regulation (EEC) No 2423/88 
the duty to be established for the individual Japanese exporters 
should be less than the dumping margin found, if such lesser duty 
would be adequate to remove the injury. This is the case for the 
following three Japanese exporters: 
- Tokyo Electric Co Ltd - 22.5%; 
Ishida Scales Mfg Ltd - 31.6%; 
Teraoka Seiko Co Ltd - 22.6%. 
For Yamato Scales Co Ltd, for which the injury margin established 
exceeds the dumping margin found, the duty would be 15.3%. In the 
case of companies that failed to cooperate, the Commission 
established that there was no reason to believe that, for such 
producers, the duty should be lower than the highest rate considered 
necessary to remove the injury, namely 31.6%. 
- 4 -
Proposal for a 
COUNCIL REGULATION (EEC) 
imposing a definitive anti-dumping duty concerning the importât] 
of certain electronic weighing scales originating in Japan 
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 Community (!), and in particular Articles 14 and 15 
thereof, 
Having regard to the proposal from the Commission, 
After consultations within the Advisory Committee as provided for by the 
Regulation, 
Whereas: 
A. Procedure 
(1) By Regulation (EEC) No 2865/85(2), the Commission imposed a 
provisional anti-dumping duty on imports of certain electronic 
weighing scales originating in Japan and accepted undertakings in 
respect of certain imports of such products originating in Japan. 
(2) By Regulation (EEC) No 1058/86(3), the Council imposed a definitive 
anti-dumping duty on imports of certain electronic weighing scales 
originating in Japan. 
(1) OJ No L 209, 2.8.1988, p. 1. 
(2) OJ No L 275, 16.10.1985, p. 5. 
(3) OJ No L 97, 12.4.1986, p. 1. 
- 5 -
(3) Following a subsequent investigation covering the circumvention of 
this duty, the Commission, by Decision 88/398/EEC<4), accepted an 
undertaking concerning electronic weighing scales assembled in the 
Community. 
(4) In April 1990, the Commission published a noticed) of the impending 
expiry of the undertakings mentioned in recital (1) above, in 
accordance with Article 15(2) of Regulation (EEC) No 2423/88. 
(5) In June 1990, producers, representing a major proportion of the total 
Community production of retail electronic weighing scales, submitted 
to the Commission a request for review of Regulation (EEC) No 
2865/85. 
(6) In August 1990, a request for review of the definitive anti-dumping 
duty imposed by Regulation (EEC) No 1058/86 was lodged by the same 
producers in accordance with Article 14(1) of Regulation (EEC) 
No 2423/88. 
(7) Consequently, in February 1991, the Commission, after consultation, 
announced, by a notice published in the Official Journal of the 
European Communities, the initiation of a review of both Regulation 
(EEC) No 2865/85 and Regulation (EEC) No 1058/86 pursuant to 
Articles 14 and 15 of Regulation (EEC) No 2423/88, and opened an 
investigation(6). 
(8) In March 1991, in accordance to Article 15(4) of Regulation (EEC) 
No 2423/88, the Commission published a noticed) on the continuation 
in force of the anti-dumping measures during the review proceeding. 
(9) The Commission officially notified the exporters and the Community 
importers and producers known to be concerned and gave them the 
opportunity to make known their views in writing and to request a 
hearing. 
(4) OJ No L 189, 20.7.1988, p. 27 
(5) OJ No C 106, 28.4.1990, p. 5. 
(6) OJ No C 50, 26.2.1991, p. 3. 
(7) OJ No C 81, 26.3.1990, p. 5. 
- 6 -
(10) Most of the Japanese exporters and most of the complainant Community 
producers made their views known in writing. Submissions were also 
made by a number of importers. Some of the parties directly concerned 
requested and were granted hearings. 
(11) The Commission sought and verified all the information it considered 
necessary for a preliminary determination of dumping and injury, and 
carried out investigations at the premises of the following: 
(a) Community producers 
Bizerba Werke GmbH, Balingen, Germany 
GEC Avery, Smethwick, United Kingdom 
Maatschappij van Berkels Patent N.V., Rijswijk, Netherlands 
Testut, Béthune, France 
Lutrana, Viry-Châtillon, France 
Esselte Meto E.S.T., Saint Maur, France 
Brevetti van Berkel S.p.a., Milano, Italy 
Santo Stefano S.p.a., Cassano Magnago, Italy 
Vandoni S.p.a., San Donato Milanese, Italy 
Grupo Campesa, Barcelona, Spain 
(b) Japanese exporting producers 
Ishida Scales Mfg Co Ltd, Kyoto 
Teraoka Seiko Co Ltd, Tokyo 
Tokyo Electric Co Ltd, Tokyo 
Yamato Scales Co Ltd, Akashi 
(c) Related importers 
TEC Elektronik GmbH, Ratingen, Germany 
TEC UK Ltd, Watford, United Kingdom 
(d) Unrelated importers 
Biesta BV, Leusden, Netherlands 
Carrin & Co N.V., Antwerp, Belgium 
Digi System N.V., Antwerp, Belgium 
Herbert & Sons, Suffolk, United Kingdom 
- 7 -
(12) The Commission requested and received written and oral submissions 
from the complainants, from the exporters named and from a number of 
related and unrelated importers and verified the information provided 
to the extent considered necessary. 
(13) The exporters, related importers and complaining industry were 
informed of the essential facts and considerations on the basis of 
which it was envisaged to recommend the imposition of modified anti­
dumping duties. Due account was taken of the parties' representations 
in the findings of the Commission. 
(14) The investigation into dumping practices covered the period from 
1 January 1990 to 31 December 1990 ("the investigation period"). 
(15) The investigation exceeded the normal period because of the volume 
and complexity of the data which had to be gathered and examined, and 
because the completion of the investigation required the examination 
of new issues which had arisen during the proceeding and which could 
not have been foreseen at its outset. 
B. Product 
Product description 
(16) The products under investigation are electonic weighing scales for 
use in the retail trade which incorporate a digital display of the 
weight, unit price and price to be paid (whether or not including a 
means of printing this data) covered by CN Code 8423 81 50 and 
hereinafter referred to as "R.E.W.S." (retail, electronic weighing 
scales). 
R.E.W.S. are produced with different types or levels of performance 
and technology. In this respect, the industry defines three segments 
of R.E.W.S., namely: 
- a low-range segment which comprises stand-alone R.E.W.S. without 
built-in printer and preset key system; 
- 8 -
a mid-range segment with built-in printer and an additional 
preset key system; 
a top-range segment having the additional option of being 
connected to a computer system and of being computer-related. 
(17) Although the potential use and quality of R.E.W.S. can vary, there is 
no significant difference in the basic physical characteristics or 
marketing methods within the various types of R.E.W.S. In addition, 
between these three segments there are no clear dividing lines, 
models in neighbouring segments being often interchangeable. They 
have, therefore, to be considered as one product for the purpose of 
this proceeding. 
(18) The Council confirms the above findings. 
Like product 
(19) The investigation has shown that the various R.E.W.S. sold on the 
Japanese market, despite differences in size, life-span, voltage or 
design, are identical to the R.E.W.S. exported from Japan to the 
Community, or closely resemble them, and accordingly have to be 
regarded as like products. 
Likewise, apart from minor technical differences, the Community-
produced R.E.W.S. in all three segments are alike in all respects to 
the R.E.W.S. exported from Japan to the Community. 
(20) The Council confirms those findings. 
c- Export prices 
Sales to independent importers 
(21) Where sales were made direct to independent importers in the 
Community, export prices were determined on the basis of the prices 
actually paid or payable for the product sold for export to the 
Community. The Japanese producers identified these sales as being 
- 9 -
made at the level of importer/distributor or dealer, and the 
Commission is satisfied, on the evidence presented, that such was the 
case. In accepting this claim, the Commission took account of the 
functions of both seller and buyer based on the costs incurred and 
the quantities sold, on a consistency in the prices charged at this 
particular level and, finally, on the evidence available on the 
distribution chain. 
(22) The Council confirms that conclusion. 
Sales to related importers 
(23) Where exports were made to related importers in the Community, export 
prices were constructed in accordance with Article 2(8)(b) of 
Regulation (EEC) No 2423/88, on the basis of resale prices to the 
first independent purchaser, adjusted to take account of all costs 
incurred between importation and resale together with a 5% profit 
margin which was considered reasonable in the light of the 
information available to the Commission from the unrelated importer 
which cooperated. 
The Commission, on the same grounds as those outlined above for sales 
to independent importers, accepted the Japanese producers* claims 
that the export prices, reconstructed to a CIF Community-frontier 
basis, were made at the level of importer/distributor. 
(24) The Council confirms that conclusion. 
D. Normal value 
1. Inadequate reply to the questionnaire 
(25) In the case of one of the Japanese producers concerned, the 
Commission was unable to use its reply to the questionnaire as the 
basis for establishing the normal value. The reply was deemed 
unreliable because the evidence supplied on costs was incorrect to a 
substantial degree. The true extent of the falsity or unreliability 
- 10 -
of the information presented by the company can be gauged from the 
fact that its claims for deductions from selling, general and 
administrative costs exceeded the total amount of those costs which 
the firm claimed were incurred for the product concerned. 
Consequently, the fact that the cost data could not be used meant 
that prices also had to be deemed unreliable because it could not be 
established whether they covered costs and were thus made in the 
ordinary course of trade. 
(26) In fact, new cost figures were presented during verification at its 
premises, but they diverged in important respects from those given in 
the original reply. 
(27) In that respect the Commission recalls that it is essential for 
replies to questionnaires, and significant corrections to them, to be 
submitted within the reasonable period provided for this purpose, as 
a considerable amount of preparatory work and analysis of replies 
must be carried out by the investigating authorities prior to the 
verification visit. In the present case, however, the Commission 
attempted to verify the company's revised information, presented 
during the verification visit, but the fact that it was received 
during the visit and the confusing nature of the conflicting 
information precluded an adequately accurate identification and 
verification of actual costs. Thus, the Commission considered that 
the company's reply was substantially false or misleading and 
significantly impeded the investigation process. The Commission was 
accordingly unable to establish normal value for this company on the 
basis of the information supplied and established its findings on the 
basis of the facts available in accordance to Article 7(7)(b) of 
Regulation (EEC) No 2423/88 (see recital (63)). 
(28) The Council confirms that conclusion. 
2. Normal value based on prices in the exporting country 
(29) For the remaining Japanese producers, domestic sales were considered 
sufficiently representative as a basis for normal value since the 
Commission established that domestic sales volume exceeded 5% of the 
export sales to the Community. 
- 11 
Most models were sold domestically in sufficient quantities and at 
prices which permitted the recovery of all costs reasonably allocated 
in the ordinary course of trade on the domestic market in Japan. 
Normal value was therefore for these models established on the basis 
of their weighted average domestic prices, net of all discounts and 
rebates directly related to the sales of R.E.W.S. 
Selective normal value 
(30) Three Japanese producers claimed that a distinction should be drawn 
between the several categories of their independent buyers on the 
domestic market, and that the normal value should be established 
selectively on the basis of the weighted average prices of their 
sales to one of those categories, i.e. alleged distributors or 
dealers which they claimed to be at the most appropriate level of 
trade for comparison with their export sales. They contended in 
particular that this special category of customer had different 
functions from the other unrelated customers, reflected in the scale 
and type of costs incurred, the quantities sold and the pattern of 
prices charged. 
(31) It is the Community institutions' consistent position that a specific 
level of trade can only be adequately identified if a demonstration 
is made of all relevant factors, including the functions of both 
seller and buyer and the consistency of quantities, costs and prices 
at the distribution level in question as compared with other levels. 
Another important question in identifying a specific category of 
customer is how that category stands in relation to the distribution 
system of the market concerned and whether this comparison can 
indicate that only this category should be compared to export 
customers holding a similar position in the distribution system of 
the export market. 
(32) One Japanese producer alleged that its sales were made through three 
distribution channels and that its normal value should be based on 
sales to customers alleged to have distribution functions which, this 
producer claimed, were made only through one channel. 
- 12 -
For one of the three distribution channels, a distinction in 
quantities sold, a clear difference in costs, and prices which 
reflect different functions of the category of customer within that 
channel compared with other independent customers, confirmed that 
sales in the channel in question were made at a level of trade 
different from the sales to other categories of client and different 
from the categories of customer to which export sales were made. In 
addition, the evidence available on the distribution chain for the 
market concerned supported this producer's claims on customers' 
functions. 
(33) Regarding the other two distribution channels operated by that 
exporter, the Commission found that there was no clear distinction in 
quantities, in product sales costs, or in prices charged in one 
distribution channel in relation to the other. 
The Commission therefore concluded that, with respect to sales made 
within those two channels, no specific and clearly distinguishable 
category of customers could be identified. Accordingly, the normal 
value for this producer was established selectively on the basis of 
the weighted average domestic prices of its sales in those channels 
which were considered most appropriate for comparison with export 
sales. 
(34) The Council confirms that conclusion. 
(35) With regard to the claim of one of the other Japanese producers, the 
Commission found that the information given in the reply to the 
questionnaire was misleading. In its reply the company had indicated 
that only the sales through one channel were made to 
distributors/dealers, and claimed that normal value should be based 
selectively on those sales. However, on verification it was found 
that sales through a second channel were also being made to similar 
customers. 
Therefore the claim was rejected, since normal value had to be based 
on sales made to the same category of independent customers. 
- 13 -
(36) Regarding this other channel, the company also claimed that a small 
portion of the sales were made to end-users and should be excluded, 
as they were at a different level of trade from export sales. 
However, the producer failed to establish adequately a consistency of 
quantities, costs and prices at one distribution level in relation to 
other levels. 
In fact, the evidence provided on some of these factors for the 
specific category of customer in question, showed that they were 
largely similar to other categories alleged to be different. 
(37) In those circumstances, the Commission concluded in respect of the 
producer in question that the evidence presented, which was often 
conflicting, was insufficient to demonstrate that sales were made to 
specific and clearly distinguishable categories of customer or that 
only one of those allegedly different categories was more appropriate 
than all domestic sales for comparison with the export prices. Thus, 
normal value for this producer was determined on the basis of all 
sales to independent customers. 
(38) The Council confirms that conclusion. 
(39) The third Japanese producer requested during the verification that 
normal value should be restricted to sales to distributors/dealers on 
the domestic market. This claim was not supported by any evidence 
concerning differences in costs and prices for such sales and is 
therefore rejected. 
(40) Normal value for this producer was therefore based on a weighted 
average of all sales made to independent customers in Japan. 
(41) The Council confirms that conclusion. 
Sales to related companies 
(42) One of the Japanese producers also claimed that normal value should 
be established on the basis of its sales to related sales companies -
that is, on the basis of transfer prices within the meaning of 
Article 2(7) of Regulation (EEC) No 2423/88 - and not based upon 
prices charged by those related companies to independent customers. 
14 -
(43) The Commission found that the producer in question had divided the 
tasks of marketing its production in Japan between the manufacturing 
company, selling direct to distributors or dealers, the sales 
department of the manufacturing company and two related sales 
companies which sold to end-users and over which the producer had 
financial control. The sales functions of those different parts of 
the group were not essentially different from each other. The 
division of production and sales activities as arranged within the 
group can in no way alter the fact that the group is a single 
economic entity which has thus organized activities which, in other 
cases, will be carried out by a single legal entity. 
(44) Another producer which made all domestic sales through a related 
sales company claimed that its normal value should not be based on 
prices charged by its sales company to independent customers but 
should be constructed on the basis of cost of production, excluding 
selling, general and administrative costs, incurred by the sales 
company. However, the Commission found that the latter performed 
functions falling into the category of those described in recital 43 
and therefore also formed an economic entity with the manufacturing 
company. 
(45) Consequently, in both cases, and in accordance with the Commission's 
consistent practice upheld by the Court of Justice, the activities 
and functions of the various parts of the entity were treated as a 
whole. Thus, normal value was not established on the basis of 
transfer prices or of the cost of production of the manufacturing 
company alone, but on the basis of the prices charged on sales to 
independent customers. 
(46) The Council confirms those conclusions. 
3. Normal value based on constructed value 
(47) Certain models sold domestically were similar but could not be 
directly compared to models sold for export to the Community, as a 
result of differences in technical specifications and physical 
characteristics. Those differences could not be evaluated with any 
- 15 -
precision given the different nature of the technology used and the 
variety of combinations of features and accessories which form part 
of the product. 
(48) The Commission, accordingly, refrained from establishing normal value 
for those models on the basis of domestic prices, since, in order to 
make domestic and import prices comparable to each other, this method 
would have required a great many adjustments which would have had to 
be based on estimations. Consequently, normal value was in these 
cases determined on the basis of constructed value, 
(49) The constructed values were established, in accordance with 
Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88, on the basis of 
the costs in Japan, both fixed and variable, of materials and 
manufacture for the models sold for export plus a reasonable amount 
for selling, general and administrative expenses and profit. 
As regards the selling, general and administrative expenses, the 
amounts were calculated by reference to the average expenses actually 
incurred by each producer concerned on its sales of R.E.W.S on the 
domestic market. The profit rate of each producer was calculated on a 
weighted-average basis for all domestic sales of the product 
concerned. 
(50) The Council confirms that finding. 
4. Comparison 
General 
•(51) Japanese exports were made to different Community customers at 
different prices and in different regions of the Community. 
Therefore, export prices were compared with normal value on a 
transaction-by-transaction basis. 
- 16 -
(52) Furthermore, for the purpose of a fair comparison between normal 
value and export prices, the Commission, in accordance with Article 
2(9) and (10) of Regulation (EEC) No 2423/88, took account, where 
warranted, of differences affecting price comparability wherever a 
direct relationship of those differences to the sales under 
consideration could be satisfactorily substantiated. All comparisons 
were made at the ex-works stage and at the same level of trade. 
Differences in physical characteristics 
(53) As far as differences in physical characteristics were concerned, 
normal value was adjusted by an amount corresponding to a reasonable 
estimate of the value of the differences. 
(54) The Council confirms that finding. 
Differences in selling expenses 
(55) As far as differences in selling expenses were concerned, normal 
value and export prices were adjusted in order to take account of 
differences in credit terms, warranties, commissions, salaries paid 
to sales personnel, packing, transport, insurance, handling and 
ancillary costs, wherever evidence was given that these expenses were 
directly related to the sales under consideration. 
(a) Sales staff salaries 
(56) As regards salaries for personnel involved in domestic sales, several 
Japanese producers had requested an allowance for salarial costs for 
personnel partly engaged selling R.E.W.S. and partly involved in 
activities concerning other products. An allowance was granted for 
the portion of costs incurred in selling the product concerned. 
- 17 -
Some of the salarial costs for which allowances were claimed related 
to administrative and promotional activities. The companies were, 
however, unable to relate those costs to the product concerned and 
they were therefore considered to be general overheads which did not 
affect price comparability. The Commission, consequently, rejected 
the claim for deduction of such costs. 
(57) The Council confirms that conclusion. 
(b) After-sales servicing 
(58) Some companies claimed an adjustment for after-sales servicing but 
were not in a position to link the costs directly to the particular 
sales transactions regarding the product under consideration. 
The Commission therefore concluded that the costs in question had to 
be considered general overheads for which no adjustment could be made 
under Article 2(10) of Regulation (EEC) No 2423/88. The claim was 
consequently rejected by the Commission. 
(59) The Council confirms that conclusion. 
(c) Credit terms 
(60) The Commission made adjustments for credit granted to customers, 
where it received evidence of a fixed credit period agreed with the 
buyer at the date of sale. Several exporters claimed that such 
adjustment for credit terms should also be granted where no fixed 
credit period had been agreed or where an agreed period had been 
exceeded and that the cost of credit in such cases should be 
calculated on the basis of the normal interest in Japan for short-
term borrowing. 
Those claims were examined in order to establish whether, as required 
by Article 2(9)(a) of Regulation (EEC) No 2423/88, the credit costs 
in question could be considered to have affected price comparability. 
In principle, price comparability can only be affected by factors 
known to the buyer when he decides on the purchase. Credit periods 
- 18 -
which, contrary to the usual practice in Japan, are not agreed at the 
date of sale do not fall into this category. In addition, the 
Commission found that such credit periods varied considerably from 
one customer to another. In such circumstances the Community 
institutions would normally have rejected the claims. In this case, 
however, and in conformity with the line taken in previous 
proceedings, the Commission estimated the adjustment for these sales 
on the basis of 30 days of credit. This was considered to represent 
the usual average period of credit granted to buyers of products in 
the same business sector on the Japanese market. 
(61) The Council confirms those conclusions, 
(d) "Trade-in allowance" 
(62) A Japanese producer claimed an allowance for trade-in payments made 
where a purchaser (in general, distributors or dealers) of new 
machines "traded in" old and/or used machines. It was established 
that the value of the product traded in did not appear on the 
invoiced amount. The producer, however, argued that this should not 
be considered to be relevant since trade-in operations were directly 
related to the sales under consideration and sellers were allowed 
directly to offset the value of the trade-in against the invoiced 
sales price. This producer therefore argued that its financial 
contribution to the activities of their customers should be treated 
as a rebate and should therefore be deducted from normal value. 
(63) The Commission, however, in conformity with its consistent practice 
upheld by the Court of Justice, considered that the contribution in 
question was not a rebate but in fact a payment for which a certain 
value was obtained. 
Indeed, with the removal of traded-in machines from the market, the 
demand for new machines is maintained at the highest possible level. 
This higher demand stimulates not only prices but also higher sales 
volumes and production levels which should normally result in 
increased economies of scale and commensurately higher profit levels. 
19 -
In these circumstances, the "rebates" in question, were considered to 
be the equivalent to the value which the manufacturer attaches to the 
withdrawal of the old and/or used R.E.W.S. from the market. 
The payments were therefore not deducted from the price actually paid 
or payable by the buyer, and the full domestic price was retained for 
the purpose of comparison. 
(64) The Council confirms that finding. 
5. Dumping margins 
(65) The weighted-average dumping margins for each Japanese producer 
concerned, as a percentage of free-at-Community-frontier values, 
exceeded 60% in all cases, except for Yamato Scales Co, for which the 
margin was 15.3%. 
(66) In the case of firms which failed to cooperate or where the 
Commission was unable to use the producer's submission (see recital 
(27)) above, the dumping margin should be established on the basis of 
the facts available, pursuant to Article 7(7)(b) of Regulation (EEC) 
No 2423/88. 
The Commission considered that the most reasonable elements were 
those established during the investigation and that to attribute to 
such firms a dumping margin lower than the highest established for 
the cooperating companies would act as a bonus for non-cooperation 
and could lead to circumvention of the anti-dumping measures. 
(67) The Council confirms that finding. 
E. Recurrence of injury 
(68) In the case under consideration, the Commission had to determine, in 
accordance with Article 15(3) of Regulation (EEC) No 2423/88, whether 
the expiry of the measures in force would lead again to injury or 
threat of injury. 
- 20 -
Therefore it was necessary to examine the present economic situation 
of the Community industry and the behaviour of the Japanese exporters 
on the Community market. 
1. Situation of the Community industry 
Community market 
(69) The Community market for R.E.W.S. remained stable in size, rising 
from some 135 000 units in 1988 to 140 000 units in 1989 and falling 
to 135 000 units in 1990. 
Production capacity, utilization rate, stocks 
(70) Community production of R.E.W.S. fell from 140 000 units in 1988 to 
122 000 units in 1989 and 114 000 units in 1990. Though production 
capacity also fell from 181 000 units in 1988 to 166 000 units in 
1989 and 155 000 units in 1990, the utilization rate decreased from 
77% to 73%. 
(71) Stocks remained at a continuously high level (more than 10% of the 
total Community production) between 1988 and 1990. 
Sales volume and market share 
(72) The quantity of R.E.W.S. sold in the Community by the Community 
industry fell from 113 000 units in 1988 to 105 000 units in 1989 and 
to 97 000 units in 1990. The Community industry's market share 
changed as follows: 84% in 1988, 75% in 1989 and 72% in 1990. 
Price trends 
(73) Prices of the Community industry decreased between 1988 and 1990 by 
nearly 6% on a weighted-average basis. This downward trend coincided 
with an overall price decrease on imported R.E.W.S. and considerable 
price undercutting by Japanese imports (see recitals (78) to (81)). 
- 21 -
Profits 
(74) The Commission found that, overall, the Community industry has showed 
poor financial results since 1988. In 1990, a negative return on 
sales of 5.5% on a weighted-average basis was recorded. One EC 
producer, who suffered considerable losses throughout the cited 
period, discontinued production at the end of 1990. 
Employment and investment 
(75) Between 1988 and 1990 the Community industry shed 245 jobs, 
representing 16% of its labour force; investments were cut back and 
two factories closed. 
(76) The Council confirms those findings. 
2. Exporters' behaviour on the Community market 
Volume and market shares of the dumped imports 
(77) Despite the measures in force, the volume of dumped R.E.W.S. imported 
from Japan rose from 13 000 units in 1988 to 17 000 units in 1989 and 
to approximately 19 000 units in 1990. The market share of Community 
consumption held by Japanese imports rose from 9.8% in 1988 to 12.1% 
in 1989 and to 14.6% in 1990. 
Price of dumped imports 
(78) The Commission investigated whether there was price undercutting 
practised by the Japanese exporters during the investigation period. 
To this end, the exporters' sales in six Community markets (United 
Kingdom, Germany, Netherlands, Belgium, France and Greece) were 
examined, where nearly all Japanese imports were sold. 
(79) The Commission first selected representative R.E.W.S. of the various 
segments (low-range, mid-range, high-range models) marketed by the 
Community producers. The Commission then considered the Japanese 
export models in the same segments which were directly comparable 
with the Community producers' models, so that no adjustments for 
technical differences had to be made. 
- 22 -
Prices for the models concerned were compared on the basis of sales 
made at the same level of trade (distributor/dealer level). 
(80) The comparison outlined above showed widespread and consistent price 
undercutting on the part of all exporters, ranging from 20 to 70%. 
(81) The Council confirms those findings. 
3. Conclusions 
(82) On the basis of the above, the Commission concluded that the 
Community industry is in a precarious situation. Indeed, it suffered 
substantial price erosion which provoked further financial losses and 
a reduction in sales volume and market share. 
This situation was highly influenced by the fact that the dumped 
imports were made in an open and transparent market where prices are 
very well known. Price elasticity and huge price undercutting 
therefore had a clear effect on the sales volumes and the financial 
results of the Community industry. 
For those reasons the Community industry could not take advantage of 
the anti-dumping measures in force. 
(83) The Council confirms that conclusion. 
(84) The Commission has also considered whether other factors than the 
dumped imports could have prevented the Community industry from 
regaining economic health. 
(85) In that ronpoct, one exporter alleged that the effects of the 
increase in volume and the low price of R.E.W.S. imports from other 
countries, principally Singapore, the Republic of Korea, Taiwan and 
Turkey, have been at least partly responsible for the precarious 
situation of the Community industry. 
- 23 -
(86) The Commission is presently examining the effects of the imports of 
R.E.W.S. from Singapore and Korea. However, even if these imports are 
found to have injured the Community industry, this cannot eliminate 
the fact that the dumped exports from Japan, because of their high 
volume and particularly low prices, remained an important factor 
which prevented the Community industry from improving its economic 
situation. 
As far as imports from Taiwan are concerned, the Commission found 
that such imported scales from Taiwan were mostly counting scales 
which are not comparable to the product under consideration. 
Finally, no imports from Turkey took place during the investigation 
period. 
(87) Apart from the above, the Commission did not find any other factors 
which could explain the difficult economic situation of the Community 
industry. Indeed, there were no substantial imports other than those 
mentioned above, nor was there any contraction in demand. 
(88) On the basis of the above, the Commission concludes that, while other 
imports may also have contributed to the injury, the dumped Japanese 
imports, taken in isolation, have to be considered an important cause 
of the unsatisfactory situation of the Community industry. 
4. Possible effects of expiry of the measures 
(89) In those circumstances, the Commission is of the opinion that the 
expiry of the measures would worsen the situation of the EC 
producers. 
(90) Indeed, if there are no measures, an increase in the undercutting by 
Japanese imports has to be expected. This would lead to further 
losses in market share for the Community industry and would 
negatively affect its sales and market share. 
- 24 -
(91) In that connection, two factors deserve particular attention. On the 
one hand, the Japanese producers have recently expanded their 
production capacity. On the other hand, the Community market is at 
present in a recession. This points to the conlusion that pressure 
from Japanese dumped imports is likely to increase and that the EC 
industry is now even more vulnerable to such practices than in 
previous years. 
(92) That being so, it can be clearly foreseen that the Community industry 
will suffer material injury from the dumped imports in the event of 
the expiry of the anti-dumping measures. The Commission therefore 
concludes that these measures should not be allowed to lapse but 
should be adjusted in the light of the evidence of dumping and of the 
economic situation of the Community industry. 
(93) The Council confirms those conclusions. 
F. Community interests 
(94) With respect to Community interests, the Council recalls that it had 
already concluded, in its original proceeding, that Community 
interests called for intervention in order to prevent injurious 
dumping. The Commission considers that no substantial change in this 
situation has occurred since then. This applies specifically to the 
negative influence which the disappearance of the Community industry 
would have on the supply industry. Indeed, R.E.W.S. involve 
increasingly high-level technology and any loss of technological 
know-how in the R.E.W.S. sector would mean a loss of competitive edge 
in the electronic sector as a whole. 
(95) While the Commission recognizes that maintaining anti-dumping 
measures in force will continue to affect price levels of the 
exporters concerned in the Community and may subsequently have some 
influence on the relative competitiveness of their products, those 
measures are intended to restore normal and fair market conditions. 
In addition, the removal of the unfair advantages gained by the 
dumping practices is designed to prevent the further decline of the 
Community industry and thus help to maintain the availability to the 
consumer of the widest possible choice of product. 
- 25 -
(96) Though end-users, which are all professionnals, may have to bear an 
increase in prices, the present low prices were the result of unfair 
competitive behaviour. They cannot therefore expect to continue to 
take advantage of the effect of such practices. 
(97) For these reasons, the Commission considers that the Community 
interests call for intervention in order to prevent the continuation 
of injury and a further deterioration in the economic situation of 
the Community industry. 
(98) The Council confirms that conclusion. 
G. Level of the duty 
(99) When calculating the amount of duty necessary to enable the Community 
industry to regain a healthy and non-injurious situation, the 
Commission had to bear in mind that the Community industry as a whole 
was not profitable. Accordingly, it is considered necessary for the 
measures taken to allow the Community industry to increase its prices 
so as to cover its costs of production and to obtain a reasonable 
return on sales. 
In the circumstances of the industry concerned, it was found that, 
based on normal market conditions and the industry's ongoing long-
term investment requirements, an annual return on sales of 10% before 
tax could be regarded as an appropriate minimum. 
(100) In order to establish the margin by which the prices of Japanese 
producers should be increased to allow the Community industry to 
achieve the abovementioned return on sales, the Commission classified 
the most representative R.E.W.S. produced and marketed by the 
Community producers into three segments (see recital (16)), 
calculated for each segment a weighted-average price on an ex-works 
basis (see recital (49)) and compared these prices to the prices at 
Community frontier of the similar Japanese export models, duly 
adjusted. The difference between these prices reflects the price 
increase at the Community frontier considered necessary to defeat the 
injurious effects of the dumped imports. 
- 26 
(101) Except for one company, these price increases were considerably lower 
than the dumping margins found and therefore determine the level of 
anti-dumping duties, in accordance with Article 13(3) of Regulation 
(EEC) No 2423/88. For the latter company, it is the dumping margin 
which should be imposed as a duty. 
(102) Accordingly, the following duties should be imposed: 
Tokyo Electric Co Ltd 22.5%; 
Ishida Scales Mfg Ltd 31.6%; 
Teraoka Seiko Co Ltd 22.6%; 
Yamato Scales Co Ltd 15.3%. 
(103) In the case of companies which failed to cooperate in the 
investigation, the Commission considered that the duties should be 
established on the basis of the facts available in accordance with 
Article 7(7)(b) of Regulation (EEC) No 2423/88. It was considered 
that the most reasonable elements were those established during the 
investigation and that to attribute to such firms a duty lower than 
the highest established for the cooperating companies, namely 31.6%, 
would act as a bonus for non-cooperation and could lead to 
circumvention of the anti-dumping measures. 
(104) The Council confirms those findings. 
H. Prev iou s Regu1at ions 
(105) Regulation (EEC) No 2865/85 and Regulation (EEC) No 1058/86 should 
accordingly be repealed. 
I. Anti-circumvention measure 
(106) By Decision 88/398/EEC, the Commission accepted an undertaking from 
TEC (UK) Ltd concerning certain electronic weighing scales assembled 
in the Community. 
- 27 -
(107) The Commission considers that, on the basis of the regular and 
detailed information submitted by the company concerned, no 
circumvention has taken place since the acceptance of that 
undertaking. In these circumstances, the Commission considers that 
Decision 88/398/EEC should be repealed, 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. A definitive anti-dumping duty is hereby imposed on imports of 
electronic weighing retail trade scales falling within CN code 
8423 81 50 (Taric code 84238150*10) and originating in Japan. 
2. The rate of the duty shall be 31.6% (Taric additional code 8697) of 
the net free-at-Community-frontier price before duty, with the 
exception of retail electronic weighing scales produced by the 
companies below, to which the following rates shall apply: 
Tokyo Electric Co Ltd, Tokyo 22.5% 
(Additional Taric code 8694); 
Teraoka Seiko Co Ltd, Tokyo 22.6% 
(Additional Taric code 8695); 
Yamato Scales Co Ltd, Akashi 15.3% 
(Additional Taric code 8696). 
3. Regulation (EEC) No 2865/85, Regulation (EEC) No 1058/86 and Decision 
88/398/EEC are hereby repealed. 
4. The provisions in force concerning customs duties shall apply. 
- 28 -
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 
29 -
ISSN 0254-1475 
COM(93) 87 final 
DOCUMENTS 
EN 02 il 
Catalogue number : CB-CO-93-108-EN-C 
ISBN 92-77-53521-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg