EN

|| EUROPEAN COMMISSION ||

Brussels, 16.2.2012

SWD(2012) 9 final

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

Report from the Commission to the European Parliament - 29th Annual Report from the Commission to the European Parliament on the EU's Anti-dumping, Anti-subsidy and Safeguard activities (2010)

{COM(2012) 59 final}

TABLE OF CONTENTS

Executive summary. 4

1........... Overview of the legislation. 6

1.1........ Anti-dumping and anti-subsidy. 6

1.2........ Safeguards. 7

1.3........ Anti-subsidy and unfair pricing instrument for airline services. 8

2........... Basic concepts. 9

2.1........ Anti-dumping and anti-subsidy. 9

2.2........ Safeguards. 13

3........... TDI Review.. 15

4........... Country-wide market economy status (MES) 16

4.1........ China. 17

4.2........ Vietnam.. 17

4.3........ Armenia. 17

4.4........ Kazakhstan. 18

4.5........ Mongolia. 18

4.6. ...... Belarus. 18

5........... Trade Defence Instruments – Raw Material Strategy. 18

6........... Information and Communication activities / Bilateral contacts. 18

6.1........ Small and medium sized enterprises (SMEs) 18

6.2........ Bilateral contacts/information activities – industry and third countries. 19

7........... The Hearing Officer 19

8........... General overview of anti-dumping and anti-subsidy investigations and measures. 22

8.1........ New investigations. 22

8.2........ Review investigations. 23

9........... Overview of activities in 2010. 25

9.1........ New investigations. 25

9.2........ Review investigations. 41

9.3........ Safeguard investigations. 54

10......... Enforcement of anti-dumping/countervailing measures. 55

10.1...... Follow-up of measures. 55

10.2...... Monitoring of undertakings. 56

11......... Refunds. 57

12......... Judicial review: decisions given by the Court of Justice / Court of First Instance. 57

12.1...... Overview of the judicial reviews in 2010. 57

12.2...... Cases pending. 57

12.3...... New cases. 57

12.4...... Judgments rendered and orders issued by the General Court 57

12.5...... Judgments rendered by the Court of Justice. 62

13......... Activities in the framework of the World Trade Organization (WTO) 62

13.1...... Dispute settlement in the field of anti-dumping, anti-subsidy and safeguards. 62

13.2...... Other WTO activities. 64

14......... Conclusion. 65

ANNEX A.. 68

ANNEX B.. 70

ANNEX C.. 72

ANNEX D.. 74

ANNEX E. 75

ANNEX F. 76

ANNEX G.. 77

ANNEX H.. 79

ANNEX I 81

ANNEX J. 83

ANNEX K.. 84

ANNEX L. 85

ANNEX M... 86

ANNEX N.. 87

ANNEX O.. 89

ANNEX P. 126

ANNEX Q.. 131

ANNEX R.. 132

ANNEX S. 138

ANNEX T. 141

Executive summary

This report is submitted to the European Parliament following its resolution of 16 December 1981 on the EU's anti-dumping activities[1], and the report of the European Parliament’s Committee on industry, external trade, research and energy[2].

This report, as in previous years, gives an overview of the EU legislation in force with regard to trade defence instruments, including safeguards.

The report also summarises the developments in general policy. As in previous years, the report no longer contains a commentary on each individual case. It gives an overview of all investigations together with the most essential information, such as for instance the rate of individual duty imposed.

In turn, cases which merit some special attention are treated in more detail.

Consequently, the report is more factual and condensed and covers the essential facts of the year.

The detailed annexes which cover all cases ensure that the factual content of the report remains meaningful and sufficient to provide a full overview of the activity in 2010.

2010 saw a slight decrease in the number of new cases initiated when compared to the previous year, 18 as compared to 21 in 2009. Regarding other activities, 2010 saw an increase in the number of provisional measures imposed, 13 compared to 10 the previous year while the number of investigations terminated without measures dropped slightly from 11 in 2009 to 10 in 2010. There was a drop in the number of definitive measures imposed down from 11 in 2009 to 9 in 2010.

As regards review investigations initiated, there was a slight decrease from 34 in 2009 to 31 in 2010. These included 14 expiry reviews and 12 interim reviews as well as 3 new exporter reviews and 2 anti-circumvention investigations. In the period 10 expiry reviews were concluded with confirmation of the measures and 9 interim reviews were concluded with the measures being confirmed and/or amended.

There was one new safeguard investigation opened in 2010. There were no safeguard measures in place at the start of 2010, a situation which did not change in the course of the year.

As in previous years, this report continues to provide an overview on the Court cases relating to the trade policy instruments.

In 2009, the Court of Justice (COJ) and the General Court (GC) rendered 13 judgments in total relating to the areas of anti-dumping or anti-subsidy.

2010 was the third year of activity for the Hearing Officer in DG Trade, who became operational in April 2007.

The main task of the Hearing Officer is to guarantee the full exercise of rights of defence in trade proceedings before the European Commission. In doing so the Hearing Officer also contributed to improved transparency in TDI activities.

2010 also saw the role of SMEs in trade defence investigations being examined with the results of a specially commissioned survey being finalised. This report also highlights the main finding of that study.

The European Parliament's INTA Committee continued to be informed about developments in the EU's trade defence activities.

The relevant activities in the framework of the World Trade Organisation (WTO) are also reported including dispute settlement procedures initiated against the EU. The report also addresses the continuation of the negotiations at WTO level on the Anti-dumping and Subsidies Agreements, in which the Commission continued to play an active role.

The annexes to this report provide easy access to the activities in table form.

This report is also available to the general public.

Internet Website : http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence/anti-dumping/

1. Overview of the legislation

1.1. Anti-dumping and anti-subsidy

1.1.1. The international framework

On an international level, unfair trading practices such as dumping and the granting of subsidies were identified as a threat to open markets as early as 1947, when the first GATT agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Even though, the beginning of the disciplines dates back quite some time, world trade is currently still distorted by unfair practices, making the instruments still relevant.

Since the beginning, considerable efforts have been made to harmonise the rules relating to trade instruments. During the last GATT round (the « Uruguay Round ») which led to the creation of the WTO and the detailed Anti-Dumping and Anti-Subsidy Agreements, much of the attention was focused on the procedural and material conditions to be fulfilled before measures can be adopted. The EU played an active role in the negotiation of these relevant criteria which are reflected in its own legislation. The EU's role is the more so important today as a number of new users take action without the necessary rigor and restraint, affecting negatively also EU operators. The role the EU plays as a prudent user has therefore also an exemplary function at WTO level.

1.1.2. The EU legislation

The EU’s anti-dumping and anti-subsidy legislation was first enacted in 1968 and has since been modified several times. The current basic texts, which form the legal basis of anti-dumping and anti-subsidy investigations in the EU, entered into force in March 1996 and October 1997 respectively. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. The basic texts are:

– Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European EU – Codified Version[3]

– Council Regulation (EC) No 597/2009 of 11 June 2009 on protection against subsidized imports from countries not members of the European EU – Codified Version[4].

These regulations will overall be referred to as the "basic Regulation(s)".

The EU legislation contains a number of provisions aimed at ensuring a balanced application of the EU’s Anti-Dumping and Anti-Subsidy rules on all interested parties. These provisions include the “EU interest test” and the “lesser duty rule”, which go beyond the WTO obligations.

The EU interest test is a public interest clause and provides that measures can only be taken if they are not contrary to the overall interest of the EU. This requires an analysis of all the economic interests involved, including those of the EU industry, users, consumers and traders of the product concerned. The EU interest test does not involve wider aspects such as foreign or development policy considerations.

The lesser duty rule requires the measures imposed by the EU to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the EU industry. Such a “no-injury” rate is determined by using the cost of production of the EU industry and a reasonable profit margin; it reduces the anti-dumping measures for individual exporting companies in almost half of the cases and is applied, on a world-wide level, only by the EU on a regular basis.

1.2. Safeguards

1.2.1. The international framework

The principle of liberalisation of imports was set under the GATT 1947 and strengthened under the 1994 WTO Agreements. As safeguard measures consist of the unilateral withdrawal or suspension of a tariff concession or of other trade liberalisation obligations formerly agreed, they have to be considered as an exception to this principle. Article XIX GATT 1994 and the WTO Agreement on Safeguards do not only impose strict conditions for the application of this "escape clause”, but also put in place a multilateral control mechanism under the WTO Committee on Safeguards.

Under WTO rules, safeguard action has to be viewed as a temporary defence measure that applies to all imports of the product covered by a measure, irrespective of origin. As regards non-WTO members, safeguard measures may be selective and apply to products originating in a specific country. WTO Accession Protocols may also provide for such selective safeguard mechanisms as is the case in the People's Republic of China's Protocol of Accession.

WTO safeguards should only be adopted after a comprehensive investigation which provides evidence of the existence of a) unforeseen developments leading to b) increased imports, c) the existence of a serious injury for EU producers and d) a causal link between the imports and the injury.

1.2.2. The EU legislation

The above-mentioned principles are all reflected in the relevant EU regulations, except for the “unforeseen development requirement” (which is not in the EU law but has been confirmed as a self-standing condition by WTO jurisprudence). Additionally, the adoption of measures in the EU requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. In other words, safeguard action can only be taken when it is in the EU’s interest to do so. The current EU safeguard instruments are covered by the following regulations:

– Council Regulation (EC) No 260/2009[5] on the common rules of imports – Codified Version

– Council Regulation (EC) No 519/94[6] on common rules for imports from certain third countries and repealing Regulations (EEC) Nos 1765/82, 1766/82 and 3420/83. This Regulation was amended in 2003 when a Transitional Product-Specific Safeguard Mechanism for imports originating in the People’s Republic of China was adopted[7]. This Regulation ensures that Council Regulation (EC) No 519/94 is no longer applicable to the People’s Republic of China;

– Council Regulation (EC) No 517/94[8] on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific EU import rules.

These regulations will overall be referred to as the "basic safeguard Regulation(s)".

1.3. Anti-subsidy and unfair pricing instrument for airline services

Regulation No 868/2004[9] dealing with the effect of subsidisation and unfair pricing for air services from third countries which was adopted by the EP and the Council in 2004 requested the Commission to prepare a methodology to assess unfair pricing practices. This complex work, involving different services of the Commission as well as external experts, is on-going. The resulting methodology should be both derived from the significant EU experience in trade in goods and adapted to the highly specific sector of the air-services.

2. Basic concepts

2.1. Anti-dumping and anti-subsidy

2.1.1. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties?

2.1.1.1. Dumping and subsidies

Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production, plus profit. The EU’s anti-dumping legislation defines anti-dumping as selling a product in the EU at a price below its “normal value”. This “normal value” is usually the actual sales price on the domestic market of the exporting country. Therefore, a country is selling at dumped prices if the prices in its home market are higher than its export prices (i.e. price discrimination).

Where sales in the domestic market are not representative, for instance because they have only been made in small quantities, the normal value may then be established on another basis, such as the sales prices of other producers on the domestic market or the cost of production, plus profit. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production, plus profit.

A certain segregation of the market, triggered by a variety of distortions, exists in the majority of the cases where dumping occurs on a more than incidental basis. That segregation may be caused, amongst other reasons, by government intervention. As a result, exporters are shielded, at least to a certain degree, from international competition on their domestic market.

Subsidies can have similar effects to sales at dumped prices in that they allow exporters to operate from a distorted home base. Subsidies involve a direct support from a government or a government-directed private body which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, etc.), all aimed at allowing the exporters to sell at low prices in the EU. Only subsidies which are “specific”, i.e. targeted at individual companies or certain sectors of the economy, can be subject to trade defence measures.

Both anti-dumping and anti-subsidy measures are thus only second-best solutions in the absence of internationally agreed and enforced competition rules.

2.1.1.2. Material injury and causation

For measures to be taken against these unfair trading practices, it is not sufficient that companies are exporting their products to the EU at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to EU producers.

Typical indicators of injury are that the dumped and/or subsidised import volumes increase over a certain period and import prices undercut the sales prices of the EU industry. As a consequence, the latter is forced to decrease production volumes and sales prices thus losing market shares, making losses or having to make employees redundant. In extreme cases, exporters may try to eliminate viable EU producers by using a predatory, below cost, pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the EU industry is in fact suffering “material injury”.

A further condition for the imposition of measures is the need for “a causal link”: the injury must be caused by the dumping or the subsidy. This condition is often fulfilled when the injury to the EU industry coincides with the increase in dumped and subsidised imports. It is important to note that the dumped or subsidised imports do not have to be the only cause of the injury.

2.1.1.3. EU interest

Finally, it has to be established whether there are compelling reasons according to which measures would be contrary to the overall interest of the EU. In this respect, the interests of all relevant economic operators which might be affected by the outcome of the investigation must be taken into account. These interests typically include those of the EU industry, users, consumers and traders of the product concerned and the analysis assesses the positive impact measures will have on some operators as opposed to the negative impact on others. Measures should not be imposed only if it can be clearly concluded that their negative impact would be disproportionate,.

2.1.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal, and the EU is obliged to justify its decisions in this publication. Finally, it is ensured that each case is decided on its merits and the Commission does not hesitate to terminate a case if the conditions to impose measures are not met.

Whereas each investigation is different depending on the products and countries involved, all cases follow the same procedural rules. However, certain preferential rules apply to any candidate countries. The rules relating to a new case are summarised below.

Initiation

A case normally starts with a sufficiently substantiated complaint from the EU industry manufacturing the same or a similar product to the one referred to in the complaint. Then, the Commission assesses whether the complaint contains sufficient evidence to allow for the initiation of the case. A case is opened by a notice of initiation published in the Official Journal. In this notice, all interested parties, including users, exporting country authorities in anti-subsidy investigations in particular and, where appropriate, consumer organisations are invited to participate and co-operate in the proceedings. Detailed questionnaires are sent to producers in the exporting countries, in anti-subsidy investigations also to the exporting country authorities, and in the EU to the producers, traders (in particular importers) and other interested parties, such as users. These questionnaires cover all different conditions to be fulfilled, i.e. dumping/subsidy, injury, causation and EU interest. The parties are also informed that they can request a hearing and ask for access to the non-confidential files which will help them defend their case.

The investigation up to the provisional measures

Following receipt of the replies to the questionnaire, investigations are carried out by Commission officials at the premises of the co-operating parties.

The main purpose of these visits is to verify whether the information given in the questionnaires is reliable. The verified information is subsequently used to calculate or determine the dumping margin and the injury factors, in particular the price undercutting margin and injury elimination level, as well as for the EU interest analysis. The respective calculations and analysis often involve the processing of thousands of transactions, the complex examination of production costs and the assessment of the economic situation of numerous economic operators.

The results of the calculations and other findings are summarised in a working document, on the basis of which it is decided - after consultation of the Member States in the Advisory Committee - whether to impose provisional measures, whether to continue the investigation without proposing duties or whether to terminate the proceedings. In either eventuality, at this stage the decision is the Commission's responsibility.

The investigation up to the definitive stage

Following the publication in the Official Journal of a Commission regulation imposing provisional duties, interested parties which so request receive a full disclosure which allows them to verify the Commission’s findings and to submit comments. Comments can also be made at a hearing. These provisional submissions and comments are taken into account when a second, definitive, working document is prepared by the Commission.

After final disclosure, assessment of comments of interested parties and consultation of the Member States on the basis of the second working document, the Commission makes a proposal to the Council whether or not to impose definitive measures. Another possibility is that the Commission accepts undertakings offered by exporters, which undertake to respect minimum prices. In the latter case, no duties are generally imposed on the companies from which undertakings are accepted.

As set out above, throughout the process and at various specific steps, the procedure - consisting e.g. of requests for information, hearings, access to the file and disclosure – ensures that the rights of defence of interested parties are fully respected in this quasi-judicial process.

Unless the Council decides by a simple majority not to adopt the Commission proposal for definitive measures, such measures are imposed. The regulation imposing definitive duties, and deciding on the collection of the provisional duties, is published in the Official Journal.

In view of the findings made, it may also be decided to terminate a case without the imposition of measures. The same procedure (disclosure, comments, hearing, working document) as described above applies. The termination of the case would generally be made by a Commission Decision after consultation of the Member States.

Timing

The procedure described above is subject to strict statutory time limits. A decision to impose provisional duties must be taken within nine months of the initiation and the total duration of an investigation is limited to fifteen months in anti-dumping cases and to thirteen months in anti-subsidy cases. This leads to significant time constraints, taking into account, inter alia, internal consultations and the necessity to publish regulations and decisions in all EU languages at the same time.

Anti-dumping or countervailing measures will normally remain in force for five years, and may consist of duties or undertakings concluded with exporters. Measures are taken on a countrywide basis, but individual treatment, i.e. the application of a company-specific duty, can be granted to exporters which have co-operated throughout the investigation. During the five-year period, interested parties may, under certain conditions, request a review of measures or the refund of anti-dumping duties paid. Measures may also be suspended for a certain period, subject to given criteria.

2.1.3. Review of measures

The basic Regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews.

The expiry review is initiated at the end of the five year life-time of the measures. Initiation of such a review requires a request by the EU industry evidencing that the expiry of the measures would lead to continuation or recurrence of dumping and injury. Since the amendment to the basic Regulations, expiry reviews initiated after 20 March 2004 are subject to strict deadlines, i.e. they shall normally be concluded within 12 months of the date of initiation of the review, but in all cases be concluded within 15 months.

During the five year life-time of measures, the Commission may perform an interim review. Under the latter procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. Since 20 March 2006, the deadline for concluding an interim review is set at 12 months, but no later than 15 months.

Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned. Since 20 March 2006, the deadline for conclusion of newcomer reviews is nine months.

During these reviews, the main procedural rules outlined in chapter 2.1.2 are also applicable.

2.1.4. Judicial reviews

The procedural rights of the parties, including hearings and access to non-confidential files, are respected in the course of the proceeding, and a system of judicial review is in place to ensure their correct implementation. The competence to review anti-dumping and anti-subsidy cases lies with the Court of First Instance and the Court of Justice in Luxembourg. Furthermore, WTO members may recourse to the WTO dispute settlement mechanism.

2.2. Safeguards

2.2.1. What are safeguard measures?

Safeguard measures allow temporary protection against the adverse effects of import surges. Under the EU legislation[10] implementing the WTO Safeguards Agreement, they can be applied under the following conditions: safeguard measures may be imposed if, as a result of unforeseen developments, a product is being imported into the EU in such increased quantities and/or on such terms and conditions as to cause, or threaten to cause, serious injury to EU producers of like or directly competitive products. Safeguard measures may only be imposed to the extent and for such time as may be necessary to prevent or remedy the injury.

2.2.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic safeguard Regulations. These rules guarantee a transparent, fair and objective proceeding. In addition, the results of safeguard investigations are published in the Official Journal, and the EU is obliged to justify its decisions in this publication.

Initiation

The Commission is informed by one or more Member States should trends in imports of a certain product appear to call for safeguard measures. This information must contain evidence available, of the following criteria: a) the volume of imports, b) the price of imports, c) trends in certain economic factors such as production, capacity utilisation, stocks, sales, market share, prices, profits, employment, etc.. Where there is a threat of serious injury, the Commission must also examine whether it is clearly foreseeable that a particular situation is likely to develop into actual injury.

This information is immediately passed on by the Commission to all other Member States, at which stage consultations are held within the Advisory Safeguard Committee. If there is sufficient evidence to justify an investigation, the Commission publishes a notice of initiation in the Official Journal within one month of receipt of the information and commences the investigation, acting in co-operation with the Member States.

Provisional measures

Provisional measures may be imposed at any stage of the investigation. They shall be applied in critical circumstances where delay would cause damage which would be difficult to repair, making immediate action necessary, and where a preliminary determination provides clear evidence that increased imports have caused, or are threatening to cause, serious injury.

The duration of the provisional measures can, however, not exceed 200 days (i.e. six months).

Definitive measures

If, at the end of the investigation, the Commission considers that definitive safeguard measures are necessary, it will take the necessary decisions no later than nine months from the initiation of the investigation, at which stage the results of the investigation are being published in the Official Journal. In exceptional circumstances, this time limit may be extended by a further maximum period of two months, provided a notice is published in the Official Journal specifying the duration of the extension and a summary of its reasons.

Safeguard measures shall be applied only to the extent to prevent or remedy serious injury, thereby maintaining as far as possible traditional trade flows. As to the form of the measures, the EU will choose the measures most suitable in order to achieve these objectives. These measures could consist of quantitative quotas, tariff quotas, duties, etc.

Duration and review of the measures

The duration of safeguard measures must be limited to the period of time necessary to prevent or remedy serious injury and to facilitate adjustments on the part of the EU producers, but should not exceed four years, including the duration of the provisional measures, if any. Under certain circumstances, extensions may be necessary but the total period of application of safeguard measures should not exceed eight years.

If the duration of the measures exceeds one year, the measures must be progressively liberalised at regular intervals during the period of application. If the duration exceeds three years, the Commission should seek consultations with the Advisory Safeguard Committee in order to examine the effects of the measures, to determine the appropriateness of further liberalisation and to ascertain that the application of the measures is still necessary. Depending on the consultations, the measures may be revoked or amended.

3. TDI Review

The Trade Commissioner's portfolio includes e.g. the question of updating and modernising our current trade defence instruments. At the European Parliament hearing in 2009 the Trade Commissioner signalled openness to this debate but highlighted the need to obtain consensus among stakeholders.

In the meantime the Commission implemented in 2010 measures (such as revamp of TDI website; specific assistance for SMEs; improved disclosure etc) that would improve transparency in trade defence investigations.

Apart from any comprehensive reform, the internal policies of the European Commission require the Commission services to evaluate all their activities in a planned, systematic and regular manner. Since trade defence activities were last evaluated in 2005, a new evaluation arose within the normal cycle of DG Trade's evaluation planning. Such evaluation would help the Commission to design or improve its policy interventions, and to monitor their effectiveness. It would also help citizens to exercise their right to scrutinize, criticise and influence the policies and activities conducted by the Commission on their behalf.

Accordingly, the Commission published at the end of September 2010 an invitation to tender for an evaluation of the European Union's trade defence instruments (limited to anti-dumping and anti-subsidy). The objectives of the evaluation are:

- To provide a concise description of the European Union's trade defence instruments (TDI) and of the current practice in this area;

- To provide a balanced economic analysis of the fundamental arguments in favour of and against the use of trade defence instruments and their application in the context of the current international legal framework (e.g., in view of the absence of international competition laws) and economic realities;

- To provide an evaluation of the performance, methods, utilisation and effectiveness of the present TDI scheme in achieving its trade policy objectives;

- To provide an evaluation of the effectiveness of the existing and potential policy decisions of the European Union (e.g., the Union interest test, the lesser duty rule, the duty collection system) in comparison with the policy decisions made by the following EU trading partners: Australia, Canada, China, India, New Zealand, United States;

- To provide an examination of the basic anti-dumping and anti-subsidy Regulations in light of the administrative practice of the EU institutions, the judgments of the Court of Justice of the European Union and the recommendations of the WTO Dispute Settlement Body.

Following the evaluation of the offers submitted, the Commission awarded a contract to BKP Development Research & Consulting GmbH, which was signed in December 2010. The work was ongoing in 2011 with results expected early 2012.

4. Country-wide market economy status (MES)

A normal anti-dumping investigation can only be conducted if costs and prices are reliable and the result of market forces. There are five criteria to determine whether a country can be considered a full market economy for the purpose of anti-dumping investigations (according to Article 2 (7) of the basis antidumping Regulation). These criteria are:

i. a low degree of government influence over the allocation of resources and decisions of enterprises, whether directly or indirectly (e.g. public bodies), for example through the use of state-fixed prices, or discrimination in the tax, trade or currency regimes;

ii. an absence of state-induced distortions in the operation of enterprises linked to privatisation and the use of non-market trading or compensation system;

iii. the existence and implementation of a transparent and non-discriminatory company law which ensures adequate corporate governance (application of international accounting standards, protection of shareholders, public availability of accurate company information);

iv. the existence and implementation of a coherent, effective and transparent set of laws which ensure the respect of property rights and the operation of a functioning bankruptcy regime;

v. the existence of a genuine financial sector which operates independently from the state and which in law and practice is subject to sufficient guarantee provisions and adequate supervision.

To obtain Market Economy Status for trade defence investigations all five criteria must be met.

2010 saw the continued evaluation of five of the six requests for country-wide MES from China, Vietnam, Armenia, Kazakhstan, Mongolia and Belarus. All countries, except Belarus, continued to provide additional information in support of their claims throughout the year and their requests are at various stages of progress. The Consultations with the authorities of the Republic of Belarus were put on hold due to the political situation in the country. These five applicant countries are at different stages of progress in terms of meeting the five criteria for MES.

Companies from these applicant countries have the possibility to request market economy treatment on an individual basis in the context of anti-dumping investigations.

4.1 China

China is undoubtedly the most important MES applicant country and the first of the six countries to have requested the status.

The first preliminary assessment was prepared in 2004 which concluded at that time that China fulfilled only one of the five MES criteria i.e. the second criteria outlined above.

In September 2010 the 10th thematic MES Working Group China met in Beijing in a good and constructive atmosphere. The meeting’s focus was on criterion 4. The Chinese authorities provided information on new developments in the area of bankruptcy practices; in particular on the development of a set of laws regulating bankruptcy and on how these laws were implemented on the ground. Furthermore Chinese experts explained how and to what extend Chinese property laws allow private property.

At the working group meeting both parties also discussed the ongoing joint study on the accounting practices in the People’s Republic of China, especially the issue of access by the consultants to the Chinese companies.

The Commission will continue their evaluation in close cooperation with relevant Chinese's authorities and a further report is expected towards the end of 2011.

4.2 Vietnam

Vietnam's second preliminary assessment report was completed in February 2010. The report concluded that Vietnam fulfils one of the five criteria (criterion 1) which relates to the degree of government interference in the economy. The report concluded that the Vietnamese government does not exercise an undue influence over the allocation of economic resources in the economy or decisions of companies. In September 2010 the 3rd thematic working group meeting took place in Hanoi during which the Vietnamese provided the Commission with further information on their efforts to meet the remaining 4 criteria. A third assessment report is expected in 2011.

4.3 Armenia

The first assessment report on Armenia's MES request was transmitted to the Armenian authorities early in 2010. The report, completed late in 2009, had concluded that Armenia had made good progress in certain areas fulfilling two of the five criteria for MES, nos. i and v above. The Commission services followed this with a series of questions to the Armenian authorities in June 2010 in order to have information on further developments in their progress towards becoming a fully fledged market economy. By the end of 2010 no new information had been sent to the Commission from Armenia.

4.4 Kazakhstan

At the end of 2010, DG Trade's services assessed Kazakhstan's progress towards fulfilling the market economy status criteria. DG Trade's services concluded that although there have been positive developments and Kazakhstan has been following a route to create a functioning market economy, their progress has been hampered by their response to the impact of the global financial crisis on their economy.

It is hoped that the cooperation between the Commission services and the Kazakhstani authorities will continue and that a road map will be jointly developed setting out the next steps to be taken in order to achieve progress on this matter.

4.5 Mongolia

After the decision of the Mongolian Government to postpone the on spot verification mission scheduled for autumn 2008 the Commission repeated its readiness for a further mission but could not take place in 2010. The Commission provided information on progress of the MES assessment at the Joint EU-Mongolia Trade Committee in October 2010 and in December 2010, the Commission gave a list of questions to the authorities of Mongolia, in order to make further progress on the MES assessment report. Based on the replies to these questions, an on spot verification mission will be organised.

4.6. Belarus

In May 2009 the Minister of Foreign Affairs of the Republic of Belarus addressed an official request to the EU for market economy status. The official MES assessment process was launched formally in July 2010 during a visit to the authorities of Belarus. The Commission has continued analysing the submitted application documents from Belarus, as well as information from third sources concerning the concrete market situation and the existence and application of laws which are relevant to the context of the MES assessment.

5. Trade Defence Instruments – Raw Material Strategy

The first case where MET was refused on the grounds that the costs of a major input did not substantially reflect market values happened in 2009 and was reported in last year's Annual Report. During 2010 the Commission services continued to examine the costs of major inputs in cases where MET is being claimed to ensure that they reflect true market values. The existence of such distortions is also taken into account when assessing requests for global Market Economy Status (MES) by non-market economies. In this context the role of the country concerned is examined vis-à-vis their interference in the market and any policies which result in distorted prices of raw materials.

6. Information and Communication activities / Bilateral contacts

6.1. Small and medium sized enterprises (SMEs)

At the end of 2009 the Commission, in recognising the important role that SMEs have in the EU's economy and the difficulties they face in participating in trade defence investigations, launched a study to identify the needs of SMEs in the EU when participating in trade defence investigations. At the end of 2010, the Commission received from a contractor the results of the study identifying the needs of SMEs in the 27 EU Member States when submitting a complaint or participating in trade defence investigations as an importer or as a user or as exporters in investigations initiated by third countries. The outcome of the study also laid down specific proposals on how the Commission and the Member States could better assist SMEs in all areas of such investigations.

The Review identifies a set of concrete measures to support SMEs growth and competitiveness and proposes in particular, actions to increase information and assistance to SMEs with regard to the use of the EU Trade Defence Instruments. Such actions were discussed with National authorities involved in Trade Defence and DG TRADE, Trade Defence services with the intention of adopting in 2011 a declaration outlining a number of concrete actions to address the difficulties encountered by SMEs involved in Trade Defence Instruments.

The Trade Defence Helpdesk for SMEs was set up in December 2004 in view of the complexity of TDI proceedings, especially for SME's, because of their small size and their fragmentation. Its role is to address specific SME questions and problems regarding TDIs, both of a general nature or case-specific. A part of the TDI website is dedicated to SMEs, and refers to the Trade Defence Helpdesk contact points. This TDI website was further updated, making it more accessible and user-friendly, especially for SMEs.

In 2010 these contact points received many requests for information, which were all immediately addressed. These requests concerned both the procedures and content of TDI proceedings.

6.2. Bilateral contacts/information activities – industry and third countries

Explaining the legislation and practice of the EU's trade defence activity is an important part of the work of the TDI services.

A seminar on trade defence for officials from third countries took place in 2010. In addition, there were a number of bilateral contacts dedicated to discussing various trade defence related topics with a number of third countries including China, Korea, Vietnam, India, Belarus and Australia held in 2010.

There were also several meetings with key stakeholder associations and companies in 2010, including a number of events with Business Europe (namely a seminar with all the most relevant members of the association and several bilateral meetings with Business Europe's Committee on Trade Policy), as well as a seminar and regular meetings with the most relevant associations of importers and distributors, such as Eurocommerce and FTA.

7. The Hearing Officer

2010 was the third year of activity for the Hearing Officer for DG Trade, who became operational in April 2007. The Hearing Officer acts independently. He is attached for administrative purposes to the Director General of DG Trade to whom he reports.

The Hearing Officer's principal role is to safeguard the effective exercise of the procedural rights of interested parties and to ensure that the trade proceedings before the European Commission are handled impartially, fairly and within a reasonable time. The Hearing Officer also advises the Director General of DG Trade on issues related to due process and on any issue arising out of a trade proceeding, where appropriate.

An update of the Guidelines on cooperation between the Hearing Officer and the Commission trade investigation services was adopted. They set out a number of operating principles and introduce time windows for the organisation of hearings. There are rules on interventions with regard to confidentiality issues and access to files and a number of mechanisms for communication and follow-up on the interventions of the hearing officer. The updated guidelines were used as a basis for a draft Terms of Reference of the Hearing Officer. In the course of 2010 this decision was subject of internal consultations and its adoption is foreseen in 2011.

In 2010 the Hearing Officer had 55 interventions in 29 trade defence cases and held 24 hearings which represent a significant increase in comparison with 2009. The Hearing Officer was contacted by interested parties, Commission investigation services, and stakeholders. He intervened on issues covering all stages of the investigation.

A number of good practices have been adopted at the recommendation of the hearing officer and after the conclusions of the working groups created by the Commission services. For example, the services have started including in the file for consultation by interested parties notes to the file on pre-decisions such as sampling. The timing of sending disclosure documents to interested parties seems to have improved as well. The hearing officer has not received many complaints with the exception of the Market Economy Treatment (MET) disclosure documents. In a case, the services contracted an expert who helped to analyse possible circumvention. The hearing officer expects that more experts will be used in future cases.

The main issues that the hearing officer faced in 2010 could be grouped in six categories: (i) MET determinations; (ii) non-confidential files and confidentiality; (iii) content and timing of disclosures; (iv) definition of a Union producer, an importer, or a user; (v) criteria for the selection of an analogue country; and (vi) use of experts.

MET determinations

A number of exporters who were refused MET asked for the intervention of the Hearing Officer. Their main concern was that before they receive an MET disclosure there was no indication from the Commission services that there were problems with their MET claim. At the time of an MET disclosure it is usually difficult to provide the necessary evidence and to have it verified. The Hearing Officer made a number of suggestions to the Commission services which aim at increasing transparency in those cases.

Non-confidential files and confidentiality

Many of the interventions of the Hearing Officer related to access to the file, quality of non-confidential summaries of confidential information and confidentiality issues. The Hearing Officer observed improvements of the overall quality of the files after his interventions. A recurring issue is the requests by complainants to the Commission to keep their identity confidential. In most of the cases there was evidence which justified such requests. However, such requests decrease transparency. In particular, they prevent the other interested parties from submitting arguments in their defence, which they would have otherwise submitted. In view of this the Hearing Officer would encourage complainants not to request such confidentiality unless there would be no other solution.

Content and timing of disclosures

The Hearing Officer continued insisting on more detailed disclosure documents sent to the parties as early as possible in order to enable the latter to exercise effectively their rights of defence. The cases in which the Hearing Officer intervened were complex in view of the difficult balance that had to be drawn between the obligation of the Commission not to divulge business secrets and the right to information of interested parties. The Hearing Officer believes that in those cases the Commission services should provide as detailed as possible description of the methodology that the Commission services followed to arrive at their findings. The power of the Hearing Officer to check the confidential file on behalf of a party that has no access to this file can also contribute to ensuring that the rights of the parties in trade proceedings are respected fully.

Definition of a Union producer, an importer, or a user

The European producers, importers and users spread their business activities internationally. This is a global trend which concerns companies in countries outside the EU as well. The modems case, in particular, has demonstrated that this fact has to be carefully considered in trade defence cases. The Hearing Officer would encourage more detailed explanations of the reasons to determine that a company is a producer, importer or user in any future case.

Criteria for the selection of an analogue country

It is very rare that producers in two or more "analogue" or "reference" countries agree to cooperate for the establishment of a normal value. The normal value and thus the dumping margin could be different depending on the choice of an analogue country. However, there is little case-law on the basis of what criteria to select the more appropriate country. The Hearing Officer, therefore, considers that the reasons to choose a country should be explained in detail in the regulation imposing measures. This would enable the parties to exercise effectively their rights of defence and will help further developing the criteria.

Use of experts

There appears to be an increasing need for the use of experts in trade defence investigations. Detailed discussions on the product scope of the investigations, in particular, have become a usual practice and in certain more complicated cases the Commission services do not have the necessary expertise. Their analysis would therefore be strengthened, if they would be able to rely on an independent opinion. This was already done in a case and proved to be useful.

Taking into account the increased number of interventions and the variety of issues dealt with, it could be claimed that the function of the Hearing Officer is now well established.

8. General overview of anti-dumping and anti-subsidy investigations and measures

The number of new investigations initiated in 2010 decreased in comparison to the previous year, 18 compared to 21. The number of definitive measures imposed dropped slightly while the number of provisional measures imposed in 2010 increased by almost a third compared to 2009. Below are details on new investigations and review investigations.

8.1. New investigations

At the end of 2010, the EU had 124 anti-dumping measures and 11 countervailing measures in force[11]. The anti-dumping measures covered 68 products and 27 countries (see Annex O); the countervailing measures covered 6 products and 7 countries (see Annex P). Of the measures, the large majority was in the form of duties; however, in a number of cases, undertakings were accepted.

Of the 124 anti-dumping measures in force at the end of 2010 the main countries affected were China 56, India, Russia and Thailand 7 each, Ukraine 6, Korea and Taiwan 5 each, Indonesia 4 and Belarus, Malaysia and USA 3 each. Of the 11 anti-subsidy measures in place the majority concern imports from India – 5 in total, with 1 each for Brazil, Israel, Iran, Pakistan, United Arab Emirates and USA.

Regarding the of anti-dumping measures one has to look at the trade volume of the products concerned, which varies considerably depending on the sector concerned. The largest trade volumes are often generated by high technology, such as electronics, which are high-value products. It should be noted that in 2010, only 0.43%[12] of total imports into the EU was affected by anti-dumping or anti-subsidy measures.

Table 1 below provides statistical information on the new investigations for the years 2006 – 2010.

TABLE 1

Anti-dumping and anti-subsidy new investigations

during the period 1 January 2005 - 31 December 2009[13]

|| 2006 || 2007 || 2008 || 2009 || 2010

Investigations in progress at the beginning of the period || 28 || 33 || 20 || 26 || 25

Investigations initiated during the period || 36 || 9 || 20 || 21 || 18

Investigations in progress during the period || 64 || 42 || 42 || 47 || 43

Investigations concluded : - imposition of definitive duty or acceptance of undertakings - terminations[14] || 13 18 || 12 10 || 16 3 || 11 11 || 9 10

Total investigations concluded during the period || 31 || 22 || 16 || 22 || 24

Investigations in progress at the end of period || 33 || 20 || 26 || 25 || 19

Provisional measures imposed during the period || 13 || 12 || 5 || 10 || 13

Details on the conclusions can be found under heading 9.1.

8.2. Review investigations

Anti-dumping measures, including price undertakings, may be subject, under the basic Regulation, to five different types of reviews: expiry reviews (Article 11(2)), interim reviews (Article 11(3)), newcomer investigations (Article 11(4)), absorption investigations (Article 12) and circumvention investigations (Article 13).

Also anti-subsidy measures may be subject, under the basic Regulation, to five different types of reviews: expiry reviews (Article 18), interim reviews (Article 19), absorption investigations (Article 19(3)), accelerated reviews (Article 20) and circumvention investigations (Article 23).

These reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 2006 to 2010, a total of 164 review investigations were initiated. These review investigations represented 61% of all investigations initiated in that period.

In 2010, 31 reviews were initiated. Of these, 14 were expiry reviews, 12 interim reviews, 3 newcomer review, and 2 circumvention investigation.

An overview of the review investigations in 2010 can be found in Annexes F to K. Table 2 provides statistical information for the years 2006 – 2010.

TABLE 2

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 2006 - 31 December 2010[15]

|| 2006 || 2007 || 2008 || 2009 || 2010

Reviews in progress at the beginning of the period || 63 || 52 || 46 || 32 || 33

Reviews initiated during the period || 35 || 41 || 23 || 34 || 31

Reviews in progress during the period || 98 || 93 || 69 || 66 || 64

Total reviews concluded during the period[16] || 46 || 47 || 37 || 30 || 30

Reviews in progress at the end of the period || 52 || 46 || 32 || 33 || 34

Details on the conclusions can be found under heading 9.2.

9. Overview of activities in 2010

9.1. New investigations

9.1.1. Initiations

In 2010, 15 new anti-dumping investigations and 3 new anti-subsidy investigations and 1 safeguard were initiated in the period. The anti-dumping investigations involved 13 different products from 8 different countries. The anti-subsidy investigations involve 3 products from 2 different countries. Details of these investigations are given in Annex A. The country most affected by the anti-dumping investigations is China with 8 investigations, India 2 investigations and 1 investigation each opened concerning Bosnia & Herzegovina; Thailand, Indonesia, Malaysia and USA. The main sector concerned by these new cases is chemicals.

In the five-year period from 2006 to 2010, 104 investigations were initiated on imports from 24 countries. The main sectors concerned by the investigations were chemical and allied - 33 investigations, iron and steel – 24 investigations, other metals - 13 investigations and electronics - 8 investigations. A breakdown of the product sectors is given in Annex B(A).

The main countries concerned during the period from 2006 to 2010 include the People's Republic of China with 41 investigations, India and USA with 7 each, Thailand with 6, Taiwan and Malaysia with 5 each, Korea, Russia and Turkey with 3 each, Pakistan and Turkey with 3 each. A table showing all the investigations initiated over the last five years broken down by country of export is at Annex B(B).

The list of cases initiated in 2010 can be found below, together with the name of the complainant. More information can be obtained from the Official Journal to which reference is given in Annex A.

Product || Country of origin || Complainant

Zeolite A powder || Bosnia & Herzegovina || Industrias Quimicas del Ebro, SA; MAL Magyar Aluminium; PQ Silicas B.V.; Silkem d.o.o. and zeolite Mira Srl Unipersonale

Melamine || P.R. China || Borealis Agrolinz Melamine GmbH, DSM Melamine B.V. and Zaklady Azotowe Pulawy

Coated fine paper || P.R. China || CEPIFINE

Stainless steel bars || India || EUROFER

Open mesh fabrics of glass fibres || P.R. China || Saint-Gobain Vertex s.r.o., Tolnatext Fonalfeldolgozo, Valmieras ‘Stikla Skiedra’ AS and Vitrulan Technical Textiles GmbH

Ring binder mechanisms || Thailand || Ring Alliance Ringbuchtechnik GmbH

Ceramic tiles || P.R. China || European Ceramic Tile Manufacturers’ Federation (CET)

Wireless wide area networking modems || P.R. China || Option NV

Tris (2-chloro-1-methylethyl) phosphate || P.R. China || European Chemical Industry Council (CEFIC)

Fatty alcohols and their blends || India Indonesia Malaysia || Cognis GmbH and Sasol Olefins & Surfactants GmbH

Seamless pipes and tubes of stainless steel || P.R. China || Defence Committee of the seamless stainless steel tubes industry of the European Union

Vinyl acetate || U.S.A. || Ineos Oxide Ltd

Graphite electrode systems || P.R. China || European Carbon and Graphite Association

Stainless steel bars (AS) || India || EUROFER

Coated fine paper (AS) || P.R. China || CEPIFINE

Wireless wide area networking modems (AS) || P.R. China || Option NV

Wireless wide area networking modems (Safeguard) || P.R. China || Belgian Government

Initiation of safeguard case concerning imports of Wireless wide area networking modems.

In June 2010 the Commission initiated a safeguard investigation under Article 6 Regulation (EC) No 260/2009 and Article 5 of Regulation (EC) on imports of Wireless wide area networking modems. This followed a request from the Belgian Government with evidence showing that imports into the Union of the product concerned were increasing rapidly both in absolute terms, and relative to Union production and consumption, and that imports had increased by more than 4 100 percentage points from 2006 to 2009. The request stated that there is one single Union producer of the like or directly competitive product which is located in Belgium with some production in other Union Member States

The request also alleged that the volumes and conditions of the imports concerned had a negative impact on the prices of like products in the Union, and on the market share held, the quantities sold and the level of prices charged by the Union producers. As a result there was serious injury to the Union producers.

The safeguard investigation was still ongoing at the end of 2010.

9.1.2. Provisional measures

In 2010, provisional duties were imposed in 9 anti-dumping proceedings and 4 anti-subsidy proceeding. The AD measures involved imports from 8 products and covering 4 countries while for anti-subsidy they concern of 2 products covering 4 countries. As shown in Table 1 (see point 8.1), this figure compares to 10 in 2009 and 5 in 2008.

The list of cases where provisional measures were imposed during 2010 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex C.

Product || Originating from || Type[17] and level of measure

Sodium gluconate || P.R. China || AD Duty ranging :5.6% - 27.3% Others rate: 53.4%

Aluminium wheels || P.R. China || AD Duty 20.6%

Polyethylene terephthalate (PET) || Iran UAE || AD Duty ranging 0 Eur/tonne – 54.80 Eur/tonne

High tenacity yarn of polyesters || P.R. China || AD Duty ranging: 0% - 8.9% Others rate: 9.3%

Continuous filament glass fibre products || P.R. China || AD duty 8,5% Others rate: 43.6%

Melamine || P.R. China || AD Duty ranging: 44.9% - 49% Others rate: 65.2%

Zeolite A powder || Bosnia & Herzegovina || AD Duty: 28.1%

Coated fine paper || P.R. China || AD Duty: 19.7% Others rate: 39.1%

Polyethylene terephthalate (PET) (AS) || Iran Pakistan UAE || AS Duty 142.97 Eur/ tonne AS Duty 83.64 Eur/tonne AS Duty 42.34 Eur/tonne

Stainless steel bars (AS) || India || AS Duty Ranging 3.3% - 4.3% Others rate 4.3%

9.1.3. Definitive measures

During 2010, definitive duties were imposed in 6 anti-dumping cases and 1 anti-subsidy case. They involved imports from 4 different countries and covered 7 products. The People’s Republic of China featured with 6 anti-dumping measures, with Ian, Pakistan and UAE with 1 measure each.

The list of cases where definitive measures were imposed during 2010 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex D.

Product || Originating from || Type[18] and level of measure

Cargo scanning systems || P.R. China || AD Duty: 34%

Molybdenum wires || P.R. China || AD Duty: 64.3%

Aluminium road wheels || P.R. China || AD Duty: 22.3%

Sodium gluconate || P.R. China || AD Duty ranging: 5.6% - 27.1% Others rate: 53.2%

High tenacity yarn of polyesters || P.R. China || AD Duty ranging 0% - 9.8% Others rate: 9.8%

Ironing board (Since Hardware) || P.R. China || AD Duty 35.8%

Polyethylene terephthalate (PET) (AS) || Iran Pakistan UAE || AS Duty 139.70 Eur/tonne AS Duty 44.02 Eur/tonne AS Duty 42.34 Eur/tonne

9.1.4 Details on individual cases

Cargo scanning systems originating in the People's Republic of China

An anti-dumping investigation was initiated in February 2009 following a complaint lodged by Smiths Detection Group Limited on behalf of EU producers. The investigation period (IP) was from 1 July 2007 to 31 December 2008 with trends relevant for the assessment of injury being examined over a period covering 1 January 2004 to the end of the IP. An 18-month period was selected due to the specific particularities of the product concerned/like product market, i.e. public procurement/ tendering processes with long lead time periods for transactions and the existence of relatively few transactions. Provisional measures were imposed in December 2009. The product concerned is systems for scanning of cargo, currently falling within CN codes ex 9022 19 00, ex 9022 29 00, ex 9027 80 17 and ex 9030 10 00 and motor vehicles equipped with such systems currently falling within CN code ex 8705 90 90 originating in the People’s Republic of China.

Dumping

Only one Chinese producer co-operated with the proceeding and did not claim market economy treatment but did claim individual treatment. However, the investigation revealed that there was significant state interference in the activities of the company. This coupled with the fact that there was difficulties in obtaining specific import/export data. In line with the Basic Regulation regarding imports from non-market economy countries, normal value was based on information from an analogue country, in this case, the USA. The US producer only manufactured one type of the product concerned and therefore normal value for that product was based on the that producers' prices for domestic sales in the US. For other types of the product it was decided to use verified information on costs of the Union industry to construct normal value.

The sole cooperating exporting producer in the PRC made export sales to the Community only to public authorities following the award of public tenders. However the investigation revealed that the accounting of the company was deficient so that the exact details of export sales and prices could not be established with certainty for a number of transactions. As a result export prices of the product concerned were established pursuant to Article 18(1) of the basic Regulation on the basis of the prices paid for the product concerned. The comparison between normal value and export price was made on an ex-factory basis. Allowances in the form of adjustments were made for differences affecting prices and price comparability in accordance with the basic Regulation including for transport and insurance costs, packing costs, credit costs, warranty and guarantee costs, commissions, civil works and on-spot installation, and service costs have been made where applicable and justified. This resulted in a dumping margin of 38.8%.

Injury

The analysis of the economic indicators of the Community industry showed that there was injury to the EU industry. The most important injury indicators were profitability, market share and undercutting as they reflect directly the situation of the Union industry as regards its activity on the EU market. Certain other indicators were not considered as important as they relate to the production of cargo scanning equipment sold on the export market e.g. labour cost and productivity per worker. As regards profitability, the Union industry became loss making over the period considered with the sales volume of the Union producers falling by 24 % and market share by 20 percentage points. Furthermore, the Chinese producer undercut the complainant by a range of 15 to 20 %.

Financial indicators also confirmed that the future of the Community industry was at risk and that the presence of dumped imports from China prevented it from increasing sales volumes or prices to levels that could restore its financial situation.

Causation

It was concluded from the investigation that the material injury to the Union industry, which was evident by a decrease in EU sales and market share in the EU market as well as negative financial results, was caused by the dumped imports concerned. Imports from other countries were considered, however, these were found to be sporadic and not of sufficient volume to cause injury to the EU producers. The Chinese argued that the fact that EU producers did not participate in all tenders caused injury. However the investigation confirmed that neither the EU industry nor the sole cooperating Chinese exporting producer presented a bid in each and every tendering process. The EU industry presented bids only when it could submit a reasonable commercial offer. No compelling factor was found to suggest that the injury suffered resulted from the Community industry not participating in bids that were not deemed reasonable business options. Furthermore it was found that the export performance of the Community industry, the competition between Community producers and the above-mentioned bid-related issues did not have a significant effect on the Community industry’s negative developments.

EU Interest

The investigation found that imposing measures would clearly be in the interest of the EU industry. Without the imposition of measures the already bad financial position of the EU industry would deteriorate further and ultimately lead to the Community industry closing down. The imposition of measures would restore the import price to non-injurious levels, allowing the EU industry to compete under fair trade circumstances. Given the nature of the product concerned the EU interest analysis was limited to the effect of measures on users, in this case customs authorities. In any event, in the context of the investigation, no upstream suppliers made themselves known, there were no representations received from consumers’ organisations and no unrelated importers/ distributors of the product concerned were known to exist in the EU. Some users were concerned about the negative impact that measures could have both on competition and on stimulating innovative solutions but no concrete evidence was provided that could substantiate this claim. The main general concern of users was that measures might have a negative impact on their budgets and increase the cost of investment by Customs administrations. However, it was considered that as the product concerned is considered as a fixed asset any anti-dumping duties paid could be spread over the useful life of the cargo scanner. As regards procurement procedures it was noted that such procedures are not designed to counteract dumping practices. The EU industry would clearly be in a position to benefit from any measures by increased economies of scale because of an increase in production and sales by the EU producers.

Definitive anti-dumping measures of 34% were imposed in June 2010 based on the injury margin.

Aluminium road wheels originating in the People's Republic of China.

An anti-dumping investigation on imports of aluminium road wheels originating in the People's Republic of China was initiated in May 2010 on the basis of a complaint lodged by the Association of European Wheel Manufacturers (EUWA). Provisional anti-dumping measures were imposed in the case in December 2010.

The investigation period (IP) for dumping and injury covered 1 July 2008 to 30 June 2009 while the examination of trends relevant for the assessment of injury covered the period from 1 January 2006 to the end of the IP. The product concerned by the investigation was ‘aluminium road wheels of the motor vehicles of CN headings 8701 to 8705, whether or not with accessories and whether or not fitted with tyres, falling within CN codes ex 8708 70 10 and ex 8708 70 50 (TARIC codes 8708 70 10 10 and 8708 70 50 10)’. In view of the large number of exporting producers in the PRC, importers and Union producers, sampling was used in the investigation in line with Article 17 of the basic Regulation.

Dumping

Four Chinese groups of companies were included in the sample (representing 43% of total exports from the PRC to the EU) and all requested market economy treatment However, none of the PRC companies that had requested MET could show that they fulfilled the criteria set out in the basic Regulation. All the companies which claimed MET also claimed individual treatment (IT). IT was granted to three of the four groups of companies who claimed IT. As regards the fourth company CITIC Dicastal, a State-owned company directly controlled by the State (the majority of its shares belong to the State)it was considered that the State interference was such that it would permit circumvention of measures if it obtained a different rate of duty. In other words, production of other State-controlled companies could be re-directed through CITIC Dicastal. In line with the basic Regulation and the rules concerning the establishment of normal value in cases concerning non-market economies, Turkey was selected as an analogue country.

Normal value was calculated on the basis of actual domestic profitable prices in Turkey for certain types of the product concerned while for another type where no profitable sales were made, normal value was based on the manufacturing costs of the product type sold in the domestic market, plus selling, general and administrative costs and a reasonable value for profit where for a limited number of product types, normal value was calculated on the basis of normal value for comparable types of products making adjustments for physical differences.

The export prices were based on export prices actually paid or payable in the EU. Where sales were made via a related importer or trader, the export prices were constructed in accordance with Article 2(9) of the basic Regulation on the basis of the resale prices of that related importer/importer to first independent customers in the Union, with appropriate adjustments for all costs incurred between importation and resale.

The normal value and export prices were compared on an ex-works basis. For the companies granted IT, dumping margins were established by comparing the weighted average normal value established for the Turkish producers with each company's weighted average export price to the Union For the purpose of ensuring a fair comparison between the normal value and the export price, due allowance in the form of adjustments was made for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. The price comparison between the wheels exported from the PRC and those sold on the Turkish market by the Turkish cooperating producers was made by distinguishing sales to OEMs and sales in the After-market. The dumping margins calculated from 23,81% to 67,66%.

Injury

The product concerned is sold in the Union via two distribution channels: to the Original Equipment Manufacturer (OEM) segment and to the so-called aftermarket (AM) segment. Although the ‘OEM and AM’ aluminium road wheels were found to have different channels of distribution it was considered that they share the same physical and technical characteristics and interchangeable. In addition, ARWs are sold and imported from China in significant quantities via both sales channels. In analysing the situation of the EU market while the two segments were considered together some indicators were analysed separately. This analysis confirmed that the trends found for the product segment as a whole in general corresponded to those for the OEM and AM segments which were considered separately. The investigation concluded that Union industry suffered material injury. This conclusion was reinforced by the number of companies or production sites that would have closed (5 in the OEM segment) or that would have gone under insolvency procedures (21 in the AM and 4 in the OEM segment) over the period considered. The market share of EU producers dropped from 84,5% to 82,3% in OEM and for 57,4% to 48,5% for AM while the market share for the Chinese imports doubled. Price undercutting by imports from the PRC was found in the range of 20% to 38%. Overall profitability for the EU industry dropped from 3,2% on 2006 to -5,4% during the IP. Return on investments collapsed during the period considered, reaching -40% in the IP.

Causation

The investigation found there was a significant decrease of production and sales, loss of market share, as well as price depression leading to losses of the Union industry while imports from the PRC, which undercut substantially the Union industry prices, as well as their market share increased during the same period of time.

All other factors that might have contributed to the material injury suffered by the Union industry were also analysed. In this respect, it was found that the economic crisis, the imports from Turkey and the competition between Union producers leading to a concentration process may have had some impact on the injury situation. However, it was concluded that their impact was not such as to break the causal link between the dumped imports and the injury found. It was concluded that there was a causal link between the dumped imports from the PRC and the material injury suffered by the Union industry.

Union interest

This case found a high level of cooperation and support from the Union production (more than 70 %) suggesting that the imposition of measures was clearly in the interest of the EU producers. If measures were not imposed, it was considered that the increase of low-priced, dumped ARWs, in particular on the AM segment, would continue, if not increase. The low level of co-operation of unrelated importers suggested that the imposition of measures would not have any significant impact on their activity. As regards users i.e. car manufacturers the investigation found that they appear to rely on Chinese supplies only to a limited extent. Some were found not to import from China at all, others import less than 5 %, but some import up to 30 % of their needs. However, this argument was not decisive because of the existence of significant imports from other third countries. As regards the cost of measures t was found that ARWs represent about 1 % of the cost of a car so therefore a measure of 20 % on ARWs would lead to a cost increase of only 0,2 %. No argument has been raised as regards the impact of measures on final consumers. As regards the impact on suppliers to the EU industry it was found that for some their sales to the Union industry range between 30 % and 50 % of their total turnover. Given that these companies are SMEs, the viability of the Union industry is essential to their operations. Some parties claimed that the imposition of duties on ARWs originating in the PRC would give an advantage to South Korean car manufacturers, in addition to the 0 % duty on cars under the Free Trade Agreement (FTA). In this respect it was found that the market share of cars originating in South Korea amounted at that time to only 3 % of the EU car market. While it was difficult to foresee the import evolution for Korean cars, but having regard to the very limited direct cost impact of measures on the EU car makers, it could not be concluded that the imposition of an anti-dumping on ARWs from China would play any meaningful role in that respect. It was therefore considered to be in the interest of the EU to impose anti-dumping measures on imports of ARW originating in China.

For the purpose of determining the level of duties to be imposed account was taken of the dumping margins found and the amount of duty necessary to eliminate the injury sustained by the Union industry. The ARW market is characterised by the existence of two relatively distinct market segments with sales by the Union producers concentrated in the OEM segment, counting for 85 % of all Union industry sales. For that reason it was therefore found appropriate to assess an injury margin that takes into account this specific market situation.

In the OEM segment, ARW purchasers (which are carmakers) typically place their orders pursuant to tender proceedings. It was therefore found appropriate to calculate the underselling margin on the basis of the prices identified from the data submitted by EU producers and Chinese exporters when they compete for such tenders.

When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Union industry to cover its costs of production and achieve a reasonable profit. Further, it was considered that a reasonable profit before tax that could be reasonably achieved by an industry of this type under normal conditions of competition, i.e. in the absence of dumped imports, on sales of the like product in the Union should be assessed by reference to the profitability achieved in 2006 which amounted to + 3,2 %, a year where the volume of imports from China was still relatively low. On this basis, a non- injurious price was calculated for the Union industry for the like product. This resulted in an injury margin of 22,3%.

Definitive anti-dumping measures were imposed in October 2010 at a rate of 22,3%.

Ironing Boards (Since Hardware) originating in the People's Republic of China

Following an anti-dumping investigation concerning imports of ironing boards originating in the People’s Republic of China (‘PRC’) and Ukraine (‘the first investigation’), anti-dumping measures were imposed in April 2007. At that time the rate of the definitive anti-dumping duty imposed on ironing boards produced by the Chinese exporting producer Since Hardware (Guangzhou) Co., Ltd. (‘Since Hardware’) was 0 % while it ranged between 18,1 % and 38,1 % for other Chinese exporting producers. Following a subsequent interim review these duty rates were increased to up to 42,3 % in March 2010 amending the original definitive regulation.

In October 2009, the Commission initiated an anti-dumping investigation pursuant to Article 5 of the basic Regulation concerning imports into the Union of ironing boards originating in the PRC, limited to Since Hardware. The anti-dumping investigation was initiated following a complaint lodged on 20 August 2009 by three Union producers, representing a major proportion of the total Union production of ironing boards.

The new anti-dumping investigation based on Article 5 of the basic Regulation was initiated against Since Hardware rather than an interim review pursuant to Article 11(3) of the basic Regulation, in the light of the WTO Appellate Body report entitled ‘Mexico — Definitive Anti-dumping Measures on Beef and Rice’ (AB-2005-6) . That report stipulated that an exporting producer not found to be dumping in an original investigation has to be excluded from the scope of the definitive measure imposed as a result of such investigation and cannot be made subject to administrative and changed circumstances reviews.

Since Hardware argued that the Commission could not initiate a new anti-dumping investigation based on Article 5 of the basic Regulation against one company as it thereby violated the general principle enshrined in GATT Article VI and the WTO Anti-dumping Agreement (WTO ADA) as well as that in the basic Regulation that anti-dumping proceedings are directed against imports of countries and not of individual companies.

However it was considered that none of the provisions of the basic Regulation excluded the opening of a new anti-dumping investigation based on Article 5 of the basic Regulation against one company. It was also considered that EU must, so far as possible, be interpreted in a manner that is consistent with international law, in particular where the provisions concerned are intended to give effect to an international agreement concluded by the Union. Since the WTO ADA on the one hand allows WTO members to impose duties to counteract harmful dumping, but on the other hand was interpreted by the Appellate Body in the WTO Appellate Body report as not allowing reviews of companies found not to be dumping during an original investigation, the basic Regulation must therefore be interpreted to allow the Union to open an investigation based on Article 5 of the basic Regulation against an individual company in circumstances such as the ironing boards case presented.

The investigation of dumping and price undercutting covered the period from 1 July 2008 to 30 June 2009 (the ‘investigation period’ or ‘IP’). The examination of import volumes of Since Hardware products relevant for the assessment of injury covered the period from 1 January 2006 to the end of the IP. However, given that another original investigation concerning the same product and country took place only some years beforehand, and because the duties resulting from that investigation were still in place, in the injury analysis reference to the investigation period of that earlier investigation was also made.

There were no provisional measures imposed in this case.

Dumping

Since Hardware requested market economy treatment (‘MET’) or individual treatment (‘IT’) in case MET was not granted. The company did not fulfil all the criteria for MET but did qualify for IT. In cases concerning non-market economies normal value is normally based on data from an analogue country. However, given the lack of co-operation from any producers in third countries it was decided to use data from co-operating Union producers to establish normal value. The export price was based on prices paid for exports of the product by Since Hardware. The normal value and export price were compared on an ex-works basis with allowances made for differences in factors which were claimed and demonstrated to affect prices and price comparability including transport costs, insurance, handling charges, credit costs and indirect taxes. This revealed dumping of 51,7%.

Injury

A full analysis of injury in respect of all imports of ironing boards originating, inter alia, in the PRC was already carried out in the framework of the first investigation. Indeed, in that investigation the Commission established that dumped imports of ironing boards originating, inter alia, in the PRC had caused material injury to the Union industry. These findings were based on an assessment of the effects of all imports originating in the PRC and Ukraine, with the sole exclusion of imports of ironing boards produced by Since Hardware which had been found to be sold at non-dumped prices.

As a result, during the IP in the second case, anti-dumping duties were applicable to all imports from those countries (only Since Hardware was subject to a zero duty). As the Union industry was already protected against the harmful effects of these imports during the IP, it was impossible to perform a normal full injury analysis. Therefore, a specific approach was developed with focus on particular injury indicators. In particular the analysis focussed on whether Since Hardware had undercut the EU prices and what was the profitability of those prices.

The average undercutting margin found for Since Hardware, expressed as a percentage of the Union industry’s price, is 16,1 %. Over the period considered, Since Hardware’s exports to the Union increased strongly, by 64 %. On the other hand, the imports of other Chinese and Ukrainian producers have constantly decreased following the imposition of provisional duties in 2006.

Causation

It was concluded that imports of ironing boards from Since Hardware caused injury to the Union producers given it offered its products, during the IP, at heavily dumped prices which strongly undercut the Union industry’s prices. As a result, it succeeded to sell quantities during the IP which were much higher than, for instance, in 2005 or 2006. It was concluded that no factor existed that could break the causal link between the dumped imports from Since Hardware and their contribution to injury which was found.

Anti-Dumping duty

When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Union industry to cover its costs and obtain a profit before tax that could be reasonably achieved in the absence of dumped imports. The pre-tax profit margin used for this calculation was 7 % of turnover as it was demonstrated in the course of the first investigation that this was the profit level that could reasonably be expected in the absence of injurious dumping. This resulted in an injury elimination level of 35,8%. Definitive anti-dumping measures at that level were imposed on ironing boards from Since Hardware in December 2010 to be effective until April 2012 which is the normal expiry date of the anti-dumping measures on the same product originating in China.

Polyethylene terephthalate (PET) originating in Iran, Pakistan and UAE – Anti-subsidy measures

An anti-subsidy complaint was lodged by the Polyethylene Terephthalate Committee of Plastics Europe in July 2009 regarding imports of certain polyethylene terephthalate originating in Iran, Pakistan and United Arab Emirates (UAE). Prior to the initiation of an investigation the respective Governments were invited for consultations with the aim of clarifying the situation as regards the contents of the complaint and arriving at a mutually agreed solution. All the Governments accepted the offer of consultations and consultations were subsequently held. However during the consultations, no mutually agreed solution was foundt. An investigation was subsequently initiated in September 2009. A parallel anti-dumping investigation on the same product originating in the same countries was also initiated on the same date. Provisional anti-subsidy and anti-dumping measures were imposed simultaneously in June 2010 on imports of the product concerned from the three countries subject to the proceedings.

The investigation of subsidisation covered the period from 1 July 2008 to 30 June 2009 (IP). The examination of trends relevant for the assessment of injury covered the period from 1 January 2006 to the end of the IP. The product concerned was polyethylene terephthalate which for the purposes of the investigation was subdivided into different product types according to different viscosity numbers given the viscosity number was essential to determine the different possible applications of the PET type produced.

Subsidisation

Iran

There were two schemes investigated which allegedly involved the granting of subsidies by the Iranian Government i.e. Measures connected to Special Economic Zones (‘SEZs’) – Petrochemical SEZ and Financing from National Petrochemical Company to the PET exporting producer. Both schemes were deemed to be specific and countervailable under Article 4(4)(a) of the basic Regulation with the amount of countervailable subsidies being calculated at 51,88% for the one co-operating exporter.

Pakistan

There were seven schemes investigation concerning Pakistan which allegedly involved the granting of subsidies, these were: Manufacturing Bond Scheme; Imports of plant, machinery and equipment in Manufacturing Bond; Tariff protection on purchases of PTA in the domestic market; Final Tax Regime (FTR); Export Long-Term Fixed Rate Financing Scheme (LTF-EOP); Export Finance Scheme from the State Bank of Pakistan (EFS);(VII) Finance under F.E. Circular No 25 of the State Bank of Pakistan. All seven schemes were deemed to be specific and countervailable under Article 4(4)(a) of the basic Regulation with the amount of countervailable subsidies being calculated at 5.15% for the one co-operating exporter.

UAE

There were two schemes investigated which allegedly involved the granting of subsidies by the UAE Government. These were: Federal Law No 1 of 1979 and Free Trade Zone (FTZ). Both schemes were deemed to be specific and countervailable under Article 4(4)(a) of the basic Regulation with the amount of countervailable subsidies being calculated at 5.13% for the one co-operating exporter.

Injury

12 Union producers cooperated with the investigation representing more than 80 % of the total Union production of PET. Given the large number of companies sampling was used and six companies selected for the sample. For the purposes of the injury assessment, the imports from the three countries were cumulated in accordance with the basic Regulation. The volume of these subsidised imports of the product concerned into the EU rose by more than 5 times between 2006 and the IP reaching 304 202 tonnes in the IP. The market share held by the subsidised imports from the countries concerned stood at 2,1 % during 2006 and increased to 10,2 % in the IP. At the same time the average import prices decreased by 14 % in the period considered with the sharpest decline between 2008 and the IP. These low prices undercut the EU's prices by 3,2 % overall and on an individual basis as follows; UAE - 3,9 %, Iran - 3,2 % and Pakistan - 1,4 %.

As regards injury, macroeconomic data showed that the Union producers decreased their production and sales during the period considered. Union production decreased by 4 % between 2006 and the IP. While the decrease was not dramatic as such, it was examined in the context of the increase in demand. During the period considered, the Union producers lost 10 percentage points of market share, which decreased from 85 % in 2006 to 75 % in the IP. This loss of market share reflects the fact that, despite an increase in consumption, the Union industry’s sales dropped by 3 % in the period considered. At the same time the relevant microeconomic indicators showed a clear deterioration of the economic situation of the sampled Union producers. The profitability and return on investment remained negative and overall declined further between 2006 and the IP. The cash flow, despite an overall positive development, also remained negative in the IP. The employment level of the Union producers also showed a decrease of 15 % between 2006 and the IP. It was therefore concluded that the Union industry suffered material injury within the meaning of Article 8(4) of the basic Regulation

Causation

The increased imports from the countries concerned at subsidised prices were found to have exerted a downward pressure on prices, preventing the Union industry from keeping its sales prices to a level that would have been necessary to cover its costs and to realise a profit. As a result it was considered that a causal link existed between those imports and the injury suffered by the EU. Other factors were also analysed but were found not to break the causal link between the effects of the subsidised imports and the injury suffered by the Union industry. These factors included imports from other sources (found to be decreasing in volume and increasing in price), the export performance of the Union industry, competition from the other Union producers, the economic downturn, the geographical location and lack of vertical integration, none of which were found to contributed to the injury of the Union industry to an extent that would break the causal link. It was however acknowledged that mports from the Republic of Korea may have contributed to the injury suffered by the Union industry, but the small price difference between these imports and the Union market prices was not considered to break the causal link established with the subsidised imports from the countries concerned.

Union interest

It was considered that that the imposition of measures on imports from the countries concerned would provide an opportunity for the Union industry, as well as the other Union producers, to improve their situation through increased sales volumes, sales prices and market share. While it was acknowledged that some negative effects could occur in the form of cost increases for users (mainly converters), it was considered that they would be likely to be outweighed by the expected benefits for the producers and their suppliers. It was also concluded that restoring fair competition and maintaining a reasonable price level in the EU would encourage PET recycling, thus, assisting in the protection of the environment. As a result it was found that no compelling reasons existed for not imposing measures on imports of PET from the countries concerned.

Measures

Given the lesser duty rule i.e. that measures be imposed only at a level sufficient to eliminate the injury caused to the Union industry by the subsidised imports, without exceeding the subsidy margin found, an injury elimination level was calculated. This was done on the basis that any measures should allow the Union industry to cover its costs of production and obtain overall a profit before tax that could be reasonably achieved under normal conditions of competition, i.e. in the absence of subsidised imports. 5 % was considered as the most appropriate target profit. On this basis the injury elimination level was calculated as Iran - 17,0 %; Pakistan - 15,2 % and UAE - 18,5 % .

9.1.5. Investigations terminated without measures

In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting there from, measures not in the interest of the EU).

In 2010, 10 new proceedings (8 anti-dumping and 2 anti-subsidy) were terminated without measures, compared to 11 in 2009 and 3 in 2008.

The alphabetical list of cases which were terminated without the imposition of measures during 2010 can be found below. More information can be obtained from the Official Journal to which reference is given in Annex E.

Product (type of investigation[19]) || Originating from || Main reason for termination

Ring binder mechanisms || Thailand || Complaint withdrawn

Stainless steel fasteners || India Malaysia || Complaint withdrawn

Polyethylene terephthalate (PET) || Iran Pakistan United Arab Emirates || No injury No dumping No dumping

High tenacity yarn of polyesters || Korea (Rep. of) Taiwan || No dumping No dumping

Stainless steel fasteners (AS) || India Malaysia || Complaint withdrawn

9.1.6. Details on some individual cases

Anti-dumping proceeding concerning Polyethylene terephthalate originating in Iran, Pakistan, UAE

In September 2009, the Commission initiated an anti-dumping proceeding on imports of certain polyethylene terephthalate (PET) originating in Iran, Pakistan and the United Arab Emirates. The proceeding was initiated following a complaint lodged in July 2009 by the Polyethylene Terephthalate Committee of Plastics Europe. The investigation period was from 1 July 2008 to 30 June with the assessment of injury covering the period from 1 January 2006 to the end of the IP. In June 2010, the Commission imposed a provisional anti-dumping duty on imports of the product originating in Iran and the United Arab Emirates. The dumping levels found at that stage for Pakistan were de minimus for the sole exporting producer in the country and therefore no provisional measures were imposed.

In June 2010 in a parallel anti-subsidy proceeding concerning the same product from the same countries, the Commission imposed a provisional countervailing duty on imports of the product originating in Iran and the United Arab Emirates.

Dumping

Except for Iran, quarterly data was used in establishing the normal value and export price in this case. This was due to the considerable fluctuations in raw material costs and PET market prices observed during the IP . For each of the three countries concerned, normal value was based on the actual domestic prices, calculated as a weighted average of profitable sales. Regarding export prices concerning Iran these were based on prices from of a related importer to independent customers in the Union. Exports from Pakistan and the UAE were made directly to independent customers in the Union and therefore the export prices were established on the basis of the prices actually paid or payable by these independent customers for the product concerned.

The normal values and the export prices of the countries concerned were compared on an ex-works basis. Where necessary, in order to ensure a fair comparison, allowance in the form of adjustments were made for differences affecting price comparability in accordance with Article 2(10) of the basic Regulation. These adjustments included differences in import charges, discounts, rebates, transport, insurance, handling, loading and ancillary costs, packing costs, credit costs, after-sales costs (technical assistance and services), commissions, and other factors (bank charges. The Iranian exporting producer submitted a claim regarding the alleged impact of the international sanctions against Iran. However, the Iranian exporting producer was unable to quantify the alleged impact of the sanctions in a way that could be supported by any evidence. As a result it was concluded that there were no grounds to make an allowance in the form of an adjustment for the impact of sanctions on Iran.

The dumping margins calculated expressed as a percentage of the CIF Union frontier price, duty unpaid, were 26.8% for Iran and 0.6% for both Pakistan and UAE, the latter two being below de minimis according to the basic Regulation.

Injury

Given that the dumping found for both Pakistan and UAE was de minimis there was no cumulation of imports for the purposes of injury. As regards the dumped imports from Iran these more than doubled between 2006 and 2007 and between 2006 and the IP by over 350%. The market share of the imports from Iran increased from 0.4% in 2006 to 1.9% in the IP. This increase in imports was accompanied by a decrease in prices which undercut the Union producers by 3.2%. The analysis of the macroeconomic data show that the Union producers decreased their production and sales during the period considered. Although it was found to be not dramatic as such, when seen in the context of increased demand between 2006 and the IP, it resulted in the Union producers’ market share dropping by 10 percentage points to 75 %.

The relevant microeconomic indicators showed a clear deterioration of the economic situation of the sampled Union producers in