PROPOSAL FOR A COUNCIL REGULATION ( EEC ) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF POTASSIUM PERMANGANATE ORIGINATING IN CZECHOSLOVAKIA AND DEFINITIVELY COLLECTING THE PROVISIONAL ANTI-DUMPING DUTY IMPOSED ON THOSE IMPORTS
Date: 1990-02-01
Institutions: European Commission
Subjects: Czechoslovakia, EU production, anti-dumping legislation, chemical product, export price, trading margin

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0MC90) 38 final 

Brussels, 1 February  1990 

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

imposing  a definitive anti-dumping  duty on  imports of 
potassium  permanganate originating  in Czechoslovakia 
and definitively  collecting  the provisional 
anti-dumping  duty  imposed  on those  imports 

(presented  by the  Commission) 

C^x  Sfc J 9* 

EXPLANATORY  MEMORANDUM 

1)  Following 

the  violation  of  an  undertaking 

by  a 
Czechoslovak I an 
the 
the 
antidumping  proceeding,  and  by  Regulation  (EEC)  No  2535/89^2^ 
withdrew  Its  acceptance  of  the  undertaking  and  imposed  a 
provisional  antidumping  duty  on  Imports  of  potassium  permanganate 
originating  In Czechoslovakia. 

given 
reopened^1) 

Commission 

exporter, 

2)  By  Council  Regulation  (EEC)  No 

3844/89(3>,  the  period  of 
validity of  the provisional  duty was extended  for  a  further  period 
not  exceeding  two months. This  provisional  duty  will  expire  on  23 
February  1990. 

3)  After  the  imposition of  the provisional  duties, the Commission  gave 
the  parties  directly  concerned  the  opportunity  to  answer  to  the 
questionnaires  addressed  to  them,  to  make  known  their  views  in 
writing  and  to  request  a  hearing.  However,  replies  sent  by  the 
exporter  and  Importers, which made  themselves known, covered only a 
part  of  the  imports  registered  in  the  official  Community 
statistics.  Therefore,  dumping  and  the  resulting  injury  had  to  be 
determined on  the basis of  facts available, and official  statistics 
were  used  to  fill  the  gap  shown,  in  that  respect,  by  Imports 
reported  in the replies obtained  from  the exporter  and  Importers. 

4)  Upon  request,  the  Community  producer  and  the  Czechoslovak I an 
exporter  were  informed of  the essential  facts and considerations on 
the basis of which  it was  intended  to recommend  the  imposition of a 
definitive  duty,  and  the  definitive  collection  of  the  amounts 
secured  by  way  of  a  provisional  duty.  Comments  made  by  all  the 
parties  involved were considered  prior  to the Commission  finalising 
its conclusions. 

5)  The  Commission  found  that  potassium  permanganate  produced  in  the 
Community  and  that  exported  from  Czechoslovakia  are  like  products 
in  ail  essential  physical  and  technical  characteristics.  It  also 
verified  that  there  are  no  such  differences  between  the  product 
manufactured  in  Czechoslovakia  and  that  produced  In  the  United 
States which were chosen as reference country  (see point  6 below). 

6)  In establishing  normal  value, the-Commission  had  to take account of 
the  fact  that  Czechoslovakia  Is not  a market  economy  country.  For 
this purpose  the United  States were chosen  as reference country and 
normal  value was established on  the basis of  the  comparable  prices 
actually  paid or  payable  for  the  like product  on  the United  States 
market. 

7)  Export  prices  were  determined,  In  general,  on  the  basis  of  the 
prices actually paid or  payable  for  the product  sold  for  export  to 
the Community.  However, for 24 % of  the exports  taken  Into account, 
export  prices were  based,  for  the  reasons  given  in point  3 above, 
on official  Community  statistics. 

(1) 0J  No  C 216, 22-8-1989, p. 7 
(2) 0J  NO  L 245, 22-8-1989, p. 5 
(3ï 0J  NO  L 374, 22-12-1989, p. 1 

- 

tL 

-

8)  The  comparison  of  normal  value  to  export  prices,  after  taking 
price 

account 
comparability,  showed  Czechoslovak I an exports  were  being  dumped  In 
the Community  with a weighted  average dumping  margin of  19.6 X. 

where  appropriate  of  differences 

affecting 

9)  a)  As  regards  the  injury,  Imports  Into  the Community  of  potassium 
permanganate  originating  in  Czechoslovakia, in spite  of  the 
existing undertaking,  rose from  131  tons  In 1987 to 384 tons in 
1988,  and  amount  to  166  tons  on  an  extrapolated  annual  basis 
for  1989.  The  development  of  these  imports  led  to  a  market 
share which also  Increased  from 3.3 %  In 1987 to 11.4 %  In 1988 
and  reached  6.6  % during  the  first  semester  of  1989.  The  low 
level  of  prices  for  the  Imports  concerned  forced  the  Community 
producer  to sell  the product  in the Community  market  at  prices 
which  either  did not  cover  the Community  production cost  or d!d 
not  allow  to make  a  reasonable  profit.  Import  prices  not  only 
prevented  the  Community  producer  of  price  Increases  which 
normally  would  have  occurred,  but  obliged  the  Community 
producer  to decrease  Its prices  In an attempt  to hold  Its sales 
and market  share. 

b)  As  to  the  Impact  of  the  Imports  on  the  situation  of  the 
Community  producer,  it was  found  that  its capacity  utilization 
remained,  on  average, during  the  last  three years, at  the very 
low  level  of  33  %.  In addition,  stocks  cumulated  and  reached 
1200 tons  in June  1989, equivalent  to one year  sales. Sales by 
Community  producer  in the Community  decreased  from  1209 tons In 
1987 to 402 tons on an extrapolated  annual  basis for  1989. This 
development  of  sales,  compared  with  that  of  Community 
consumption,  shows  a  Community  producer's  market  share  which 
decreased  from  25.9  %  In  1987  to  16  % during  the  first  six 
months  of  1989.  The  combined  effects  on  suppression  and 
depression  of  Community  prices by  Import  prices  have  Increased 
losses  Incurred by the Community  producer  which continues  to be 
placed  In  a  precarious  financial  situation.  The  continuous 
production  shutdowns  suffered  by  the Community  producer  on  its 
potassium  permanganate  division  put  at  risk  the  continuity  of 
the employment  concerned. 

c)  In  the  light  of  the  trends  of  the  relevant  economic  factors 
referred  to  above,  It  appears  that  the  situation  of  the 
Community  producer  has  been  adversely  affected.  This  is 
especially  witnessed  by  a  loss  of  profitability,  sales  and 
market  share.  In  these  circumstances  it  Is concluded  that  the 
Community  Industry  is sufferIng material  Injury.  -

10) There  Is a clear  parallei ism and  simultaneity  between  the  increase 
in  volume  of  the  dumped  Imports  originating  In Czechoslovakia  and 
the  loss  of  market  share  and  profitability  of  the  Community 
producer.  The  price  decrease  of  Imports  from  Czechoslovakia 
resulting  from  the  violation  of  the  undertaking  had  an  Immediate 
effect  on  the  Community  producer  as  Indicated  In point  9.3 above. 
The  Increase  of  the  Community  market  share  held  by  the 
Czechoslovakian  Imports  also  corresponds,  to  a  certain  degree,  to 
the decrease  In the market  presence of  the Community  producer. 

-  3 -

11) The  Commission  has  considered  whether  Injury  has  been  caused  by 
other  factors  such  as  changes  In demand,  a  fall  In exports  by  the 
Community  producer  to third  countries  or  an  Increase  In  Imports  not 
subject  to  ant I-dumping  measures.  In  this  respect,  although  Injury 
may  also  have  been  caused  by  Imports  originating  in  countries  not 
concerned  by  the  proceeding,  these  imports  would  only  have 
contributed  In  part  to  the  material  Injury  found  and  would  not 
affect  the  Injurious  Impact  of  dumped  Imports  originating  in 
Czechoslovakia. 

In these  circumstances,  It can  be concluded  that  the dumped  Imports 
originating  In Czechoslovakia  In violation  of  the undertaking,  have 
had  a  discernible  and  material  Injurious  Impact  on  the  Community 
Industry. 

12) Failure  to  adopt  measures  to  eliminate  the  injury  caused  by  the 
dumped  Imports,  would  put  at  risk  the  Community  Industry  survival. 
The  multiple,  and  sometimes  strategic,  uses  of 
potassium 
permanganate  makes  necessary  for  the  Community  to  keep  the  sole 
remaining  Community  producer.  The  measures  envisaged  would  have 
negligible  effect  on  prices  for  users  in  the  Community  In  respect 
of  final  products  In which  potassium  permanganate  Is  Incorporated. 
On  this basis,  it  Is concluded  that  It  is  In the Community  interest 
that  action  should  be  taken  to eliminate  the  injury  caused  and  this 
action  should  take  the  form of  a definitive  antidumping  duty. 

13) The  Commission  determined  the  amount  of  the  duty  necessary  to 
eliminate  the  Injury,  to be  25.4 %. However,  the  elimination  of  the 
Injury  at  that  level  would  Imply  to  exceed  the  margin  of  dumping 
found  during  the  Investigation period.  Consequently,  the  Injury  can 
only  be  removed  at  a  level  not  exceeding  such  dumping  margin  of 
19.6  %. Moreover,  since  the  previous  undertaking  was  breached,  and 
in  order  to  prevent  increased  dumping  as  well  as  Injury,  through 
further  decreases  in  export  prices,  it  Is  considered  that  the 
appropriate  form  of  the  duty  to  be  Imposed  would  be  that  of  a 
variable  duty.  Therefore,  It  Is concluded  that  the  injury  should  be 
removed  at  the  level  of  the  dumping  margin  found,  and  that  the 
amount  of  the  definitive  duty  should  be  the  amount  by  which  the 
price,  per  kilogram  net,  free-at-Communlty-front1er,  not  cleared 
through  customs,  is  less than  2.20  ECU. 

14)  In view of  the  findings  on  dumping  and  Injury  resulting  therefrom, 
It  Is  also  considered  that  the  amounts  secured  by  way  of 
provisional  antidumping  duty  under  Regulation  (EEC)  No  2535/89, 
should  be definitively  collected  to the extent  of  the -amount of  the 
duty  definitively  Imposed.  Therefore,  provisional  antidumping 
duties  collected  or  securities  received  for  potassium  permanganate 
which  are not  covered  by  the definitive antidumping  duty,  should  be 
released. 

Proposal  for a 

COUNCIL REGULATION  (EEC) 

Imposing a definitive anti-dumping duty on  Imports of 

potassium permanganate originating  In Czechoslovakia 

and definitively  collecting  the provisional 

anti-dumping duty  imposed on those  Imports 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty establishing the European Economic Community, 

Having  regard  to Council  Regulation  (EEC) No  2423/88 of  11  July  1988 on 

protection  against  dumped  or  subsidised  Imports  from  countries  not 

members  of  the  European  Commun!tyC),  and  In  particular  Article  12 

thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after 

consultation  within  the  Advisory  Committee  as  provided  for  under  the 

above Régulât Ion, 

Whereas: 

A. PREVIOUS PROCEDURE 

(1)  Following  a  complaint  lodged  by  the  European  Council  of  Chemical 

Manufacturers' Federations (ECCMF) on behalf of a Community  producer 

whose output  represents the entire Community production of potassium 

permanganate,  the  Commission  published  a  notice  In  the  Official 

Journal  of  the European Communities^2) announcing  the  initiation of 

an ant I-dumping proceeding  concerning  imports  Into the Community  of 

potassium  permanganate  corresponding  from  1 January  T988 to CN  code 

ex  2841  60  00  (TARIC  code:  2841  60  00  *10)  and  originating  In 

Czechoslovakia,  the  German  Democratic  Republic  and  the  People's 

Republic of China and commenced an  investigation. 

(1)  0J No L 209, 2.8.1988, p.1. 

(2)  0J No C 63, 18.3.1986, p.5. 

- 2 -

(2)  Following  the  Investigation  which  established  the  existence  of 
dumping  and  Injury^3*,  the  Czechoslovak I an  exporter,  Chemapol 
Foreign  Trade  Co. Ltd, one  exporter  from  the  People's  Republic  of 
China  and  the exporter  from  the German  Democratic  Republic  offered 
price undertakings. 

(3)  Under  the  terms  of  the  undertaking  given  by  the  Czechoslovak!an 
exporter,  the  abovementloned  firm  undertook  to  Increase  Its export 
price  by  an  amount  considered  sufficient  to  eliminate  the  Injury 
caused  by  dumping.  This  undertaking  was  accepted  by  the 
Commission^4). 

B. BREACH OF THE UNDERTAKING AND REOPENING 
OF THE PROCEEDING 

(4)  The  Commission,  having  received  a  request  from  the  complainant  to 
the  price  undertaking,  obtained 
Investigate  non-compliance  with 
evidence  showing  that  potassium  permanganate  exported  by  Chemapol 
was  again  being  imported  Into  the  Community  market  at  a  very  low 
price,  which  indicated  that  the  price  undertaking  was  being 
breached  and  resulted  In material  Injury  to the Community  producer, 
and  decided^5),  having  heard  the  Czechoslovak I an  exporter,  to 

reopen  the  ant I-dumping  proceeding  concerning  Imports of  potassium 
permanganate originating  In Czechoslovakia. 

C. PROVISIONAL ACTION 

(5)  The Commission, on  the basis of  the price  violation  and  the  Injury 
resulting  therefrom,  withdrew  Its  acceptance  of  the  undertaking 
given  by  the  Czechoslovak I an  exporter  and  imposed  a  provisional 
anti-dumping  d u t yW 
Imports  of  the  product  concerned 
originating  In  Czechoslovakia.  That  duty  was  extended  for  a 
maximum period of  two months by Counci I Regulation (EEC) No 384A/89'  . 

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(3)  Commission  Regulation  (EEC)  No  2495/86,  (OJ  No  L  127,  5.8.1986, 

p.12.). 

(4)  Decision 86/589/EEC, (OJ No L 339, 2.12.1986, p. 32). 
(5)  OJ No C 216, 22.8.1989, p.7. 
(6)  OJ No L 245, 22.8.1989, p.5. 
(7)  OJ No L 374, 22.12.1989, p.1. 

y-

D. SUBSEQUENT PROCEDURE 

(6)  The Commission  officially  Informed  the exporter  and  Importers  known 

to  be  concerned,  the  representatives  of  the  exporting  country  and 

the Community  producer  of  the reopening  of  the proceeding,  and  gave 

the  parties  concerned  the  opportunity  to  answer  the  questionnaires 

addressed  to  them,  to  make  known  their  views  In  writing  and  to 

request  a hearing. 

(7)  The Community  producer  and  the Czechoslovak I an exporter  returned  the 

duly  completed  questionnaire  to the Commission  and made  known  their 

views  in  writing.  Only  four  importers  sent  replies  to  the 

Commission's  questionnaire, while the rest  either  answered  that  they 

were  not  concerned  by  the  proceeding  or,  In  most  cases,  did  not 

reply at  all. 

However,  replies  sent  by  the  exporter  and  importers,  which  made 

themselves  known,  covered  only  a  part  of  the  imports  Into  the 

Community  of  potassium  permanganate  originating  in  Czechoslovakia 

registered  In the official  Community  statistics.  Therefore, dumping 

and  the resulting  Injury had  to be determined  on  the basis of  facts 

available,  In accordance with Article  7 (7) (b) of  Regulation 

(EEC)  N°  2423/88. Thus,  official  statistics  were  used  to  fill  the 

gap  shown,  in  that  respect,  by  imports  reported  In  the  replies 

obtained  from the exporter  and  Importers. 

(8)  Upon  request,  the  Community  producer  and  the  Czechoslovak I an 

exporter  were  informed  of  the essential  facts and  considerations on 

the basis of which  it was  intended  to recommend  the  imposition of a 

definitive duty and  the definitive collection of  the amounts secured 

by way of  a provisional  duty. The Czechoslovak I an exporter  was also 

granted  a  period  within  which  representations  could  be  made. 

Comments  made  by  the  Community  producer  and  the  Czechoslovak I an 

exporter  were  considered  prior  to  the  Commission  finalising  Its 

conclusions. 

-  4 -

(9) The  Commission  sought  and  verified  all  information  It deemed  to be 

necessary  for  the  purposes  of  a  determination  and  carried  out 

Investigations on the premises of  the following companies : 

(a) Community producer: 

Industrial  Qulmlca del  Nalôn S.A., Ovledo, Spain 

(b) Producer  In the country of reference: 

Carus Chemical  Company, Ottawa,  Illinois, USA 

(c) Importers  In the Community: 

Hachemie  -  Hamburger  Chemlsche  GmbH,  Hamburg,  Federal 

Republic of Germany 

Grlllo Chemlkallën  GmbH, Dulsburg-Hamborn,  Federal  Republic 

of Germany 

(10) The Commission's  Investigation of  dumping covered  the period  from 1 

July  1988 to 30 June 1989. 

E. PRODUCT UNDER CONSIDERATION 

(I) 

DESCRIPTION OF THE PRODUCT 

(11) The  product  which  Is  subject  of  the  investigation  Is  potassium 

permanganate and, at room  temperature, appears as a crystal I ne solid 

of  rombic shape with a dark purple metha I lie sheen.  It  Is a compound 

of  manganese,  potassium  and  oxygen  whose  manufacture  requires  two 

basic  raw  materials  : pirolusite  ore  and  caustic  potash.  By  a  two 

step  manufacturing  procedure  the  raw  materials  are  converted  by 

oxidation,  first  to  potassium  manganate  and  then  to  potassium 

permanganate. 

(12) The  product  is mainly  available  In three  grades  : Technical, Free-

Flowing  and  Pharmaceutical.  Technical  and  Free-Flowing  grades  are 

interchangeable  In all  uses. 

- o -

3 

(I I) 

LIKE PRODUCT 

(13) The  Commission  found  that  potassium  permanganate  produced  In  the 

Community  and  that exported  from Czechoslovakia are  like products In 

all  essential  physical  and  technical  characteristics.  It  also 

verified  that  there  are  no  such  differences  between  the  product 

manufactured  in  Czechoslovakia  and  that  produced  in  the  United 

States  which  were  chosen  as  reference  country  (see  recitals  15 

and 16). 

(14) The Council  concludes that Czechoslovak!an  Imports are  like products 

to  potassium  permanganate  produced  In the Community  and  the  United 

States. 

F. DUMPING 

(15) In establishing the existence of dumped  Imports from Czechoslovakia, 

the Commission  had  to  take  account  of  the  fact  that  Czechoslovakia 

Is  not  a  market  economy  country  and  therefore  had  to  base  Its 

calculations on  the normal  value of  the product  in a market  economy 

country.  For  this purpose  the complainant  had  suggested  the  choice 

of  the  United  States  as  reference  country.  Since  for  the  previous 

proceeding  the  United  States  had  also  been  chosen  as  reference 

country,  the  Commission  retained  the  : mplalnant's  suggestion  and 

considered  that  the  basis  for  comparison  should  once  again  be  the 

selling  price  of  the  product  on  the  United  States  market.  The 

Czechoslovak I an exporter  did not oppose this choice. 

(16) The Commission verified  that  in the United States there are no price 

controls  and  there  Is  sufficient  competition  as  a'result  of  the 

presence  of  substantial  imports  from  third  countries;  In addition, 

it was  verified  that  prices  charged  by  the  US  manufacturer  on  its 

domestic  market  are  In a  reasonable  proportion  to production  costs 

and  allow  a  profit  margin.  Therefore»  the  Council  confirms  the 

Commission's  choice  concerning  the basis  for  determining  the normal 

value. 

- 6 -

(17) Normal  value  was  established  on  the  basis  of  the  comparable  prices 

actually  paid  of  payable  In  the  ordinary  course  of  trade  for  the 

like product  on the United  States market. 

(18) Sales  in  the  American  market  considered  for  calculation  of  normal 

value  were  made  to  independent  customers,  at  a  comparable  level  of 

trade  to  export  sales,  at  a  profit  and  in  substantial  quantities. 

The  weighted  average  of  the  prices  of  these  sales  were  therefore 

considered  to  be  representative  of  those  on  the  American  domestic 

market. 

(19) Export  prices  were  determined,  In  general,  on  the  basis  of  the 

prices  actually  paid  or  payable  for  the product  sold  for  export  to 

the Community.  However,  for  24% of  the exports  taken  into account, 

export  prices  were  based,  for  the  reasons  given  In  recital  (7) 

above, on official  Community  statistics duly  adjusted. 

(20)  In  comparing  normal  value  with  export  prices  the  Commission  took 

account,  where  circumstances  permitted  and  where  there  was 

sufficient  evidence,  of  differences  affecting  price  comparability, 

in particular  differences  In quantities, delivery, payment  terms and 

other  selling  expenses.  All  comparisons  were  effectively  made  at 

ex-works  level. 

(21) These  comparisons  show  the  existence  of  dumped  exports  to  the 

Community  during  the  Investigation period.  The margins of  dumping, 

calculated  C.I.F. at Community  frontier, before  customs duty,  based 

on  cash  payment  terms, vary  according  to the export  transaction  and 

the  importing  Member  State, and  have  a weighted  average  of  19.6  %. 

The Council  confirms this definitive dumping margin. 

G.  INJURY 

(22) The evidence available  to the Commission  shows that  imports  Into the 

Community  of  potassium  permanganate  originating  in  Czechoslovakia, 

In spite of  the existing  undertaking,  rose  from  131  tons  In 1987 to 

384  tons  In  1988, and  amount  to  166  tons on  an  extrapolated  annual 

basis  for  1989.  Consequently,  the exporting  country's  share of  the 

Community  market  Increased  from  3.3%  In  1987  to  11.4%  in  1988  and 

reached  6.6%  during  the  first  semester  of  1989.  These  Imports were 

concentrated  on  the markets  of  the  Federal  Republic  of  Germany  and 

France,  which  alone  account  for  94% of  the  volume  of  Imports  from 

Czechoslovakia  into the Community  since 1987. 

(23) Regarding  prices  of  the  Imports  concerned,  their  low  level  forced 

the  Community  producer  to  sell  the  product  In  the  Community  market 

at  prices  which  either  did  not  cover  on  average  the  Community 

producer  cost  of  production,  In  Community  countries  on  which  the 

imports  concerned  were present, or  did  not  allow  In other  Community 

countries  to  make  a  reasonable  profit.  Import  prices  not  only 

prevented  the  Community  producer  of  price  Increases  which  normally 

would  have  ocurred,  but  obliged  the Community  producer  to  decrease 

its prices  In an attempt  to hold  Its sales and market  share. 

(24) As  far  as  the  impact  of  the  Imports  on  the  situation  of  the 

Community  producer  Is  concerned,  account  had  to  be  taken  of  the 

fol lowing factors: 

(a) The  material  Injury  suffered  by  the  Community  producer  as  a 

result of  Imports originating  In Czechoslovakia up  to the end of 

1986, was  initially alleviated by  the price undertaking given by 

the Czechoslovak I an exporter  at  that  time. 

- 8 -

However,  afterwards, potassium  permanganate  originating  in that 

country  was  released  for  free  circulation  In  the  Community  at 

prices  clearly  breaching  the  price  agreed.  Therefore,  the 

relief  of  the  Community  Industry  did  not  last.  Capacity 

utilization of  the Community  producer  has  remained, on  average, 

during  the  last  three  years  at  the  very  low  level  of  33%.  In 

addition,  stocks  cumulated  and  reached  1.200  tons  in  June  1989 

equivalent  to one year sales. 

(b) Sales by the Community producer  of  potassium  permanganate  In  the 

Community  decreased  from  1209  tons  In 1987  to 713  tons  In  1988 

and  to 402  tons on  an extrapolated  annual  basis  for  1989.  This 

pattern  of 

sales,  compared  with  that  of  Community 

consumption, shows a market  share held by  the Community  producer 

which decreased  from 25.9 %  In 1987 to 21.2 %  in 1988 and to 16% 

during  the first six months of 1989. 

(c) The  combined  effects of  suppression  and  depression  of  Community 

prices  by  Import  prices  have  Increased  losses  Incurred  by 

Community  producer  which  continues to be placed  In a precarious 

financial  situation. 

(d) Despite  the  continuous  production  shutdowns  suffered  by  the 

potassium  permanganate  division  of  the  Community  producer, 

employment  for  the 33 people working  in that  division has, until 

now, been maintained  through  transferring  these employees  to other 

divisions  of  the  company  during  the  production  shutdowns. 

However,  should  the  degenerating  financial  situation  of  the 

potassium  permanganate  operation  continue  and  not  be  rapidly 

Improved,  It would  put  at  risk  the continuity  of  employment 

for t hose peop I e. 

(25)  In the  light of  the trends of  the relevant  economic  factors referred 

to  above,  It  appears  that  the  situation  of  the  Community  producer 

has been  adversely  affected. This  Is especially  witnessed  by  a  loss 

of profitability, sales and market  share.  In these circumstances, It 

is  concluded  that  the  Community  Industry  is  suffering  material 

injury. The Council  confirms  this conclusion. 

(26) As  far  as  the  dumped  Imports  originating  in  Czechoslovakia  are 

concerned, there  Is a clear parallelism  and simultaneity  between  the 

increase  in  their  volume  and  the  loss  of  market  share  and 

profitability  of 

the 

Community 

producer. 

Since 

potassium 

permanganate  is a price-sensitive product, the price decrease of  the 

Czechoslovak I an  Imports  resulting  from  the  violation  of  the 

undertaking  had  an  Immediate  effect  on  the  Community  producer  as 

shown  In  recital  23  above.  The  Increase  of  the  Community  market 

share  held  by 

Imports  originating 

In  Czechoslovakia  also 

corresponds,  to  a  certain  degree,  to  the  decrease  in  the  market 

presence of  the  Community producer. 

(27) The  Commission  has  considered  whether  injury  has  been  caused  by 

other  factors  such  as  changes  In demand,  a  fall  in exports  by  the 

Community  producer  to third  countries or  an  increase  In  imports not 

subject  to anti-dumping measures. 

Consumption  of  potassium  pemanganate  In the Community, decreased  by 

nearly  40% when  comparing  consumption  during  the  first  semester  of 

1989,  extrapolated  at  an  annual  basis,  to  that  in  1987.  However, 

this development  In consumption could explain  the decrease  In sales 

of  the Community producer  but not  the reduction of  Its market share. 

Thus,  In that period, while  Imports from Czechoslovakia  Increased by 

almost  27%, sales of  the Community  producer  In the Community  market 

decreased  distinctly  faster  than  Community  consumption,  and 

consequently  its  market  share  and  profitability  In  the  Community 

respectively decreased by 38% and 50%. 

Exports  by  the  Community  producer  to  third  country  markets,  in 

particular  to the United  States, has remained  stable,  In volume  and 

value,  since  1987, and,  therefore, could  not  explain  the  Community 

producer's  loss of profitability. 

-  10 -

Regarding  imports  not  subject  to  either  ant I-dumping  measures  o 

investigations,  since  1987,  they  have  Increased  faster  than  the 

Community  consumption  and  reached  a  market  share  of  54%  on  the 

Community  market  during  the first  semester  of  1989. More  than 90% of 

this market  share  Is held  by  Imports  from  the United  States, Taiwan 

and  Hong-Kong.  As  regards  Imports  from  the  United  States  they  have 

been  made  at  prices  far  higher  than  those  for  the  Czechoslovak I an 

product  and  there  is no evidence of  dumping. 

Concerning  Imports  from  Taiwan  and  Hong-Kong,  they  have  been 

excluded  from  the  present  proceeding  pending  the  outcome  of  the 

Commission  investigation, already  In progress, concerning  the origin 

of  these  Imports.  There  are  Indications,  as  potassium  permanganate 

Is not  likely  to be produced  In these countries,  that  these  Imports 

may  originate  In  countries  for  which  ant I-dumping  measures  are  In 

force. 

Given  the  above,  Injury  may  also  have  been  caused  by  Imports 

originating  In countries  not  concerned  by  the  proceeding.  However, 

these  Imports  would  only  have  contributed  In  part  to  the  material 

Injury  found  and  would  not  affect  the  injurious  Impact  of  dumped 

imports originating  In Czechoslovakia  (see recital 26). 

In these  circumstances,  It can be concluded  that  the dumped  imports 

originating  in Czechoslovakia  in violation  of  the undertaking,  have 

had  a  discernible  and  material  Injurious  impact  on  the  Community 

Industry. The Council  confirms this conclusion. 

-  11 -

A 

H. COMMUNITY  INTEREST 

(28) On  the  basis  of  the  serious  difficulties  facing  the  Community 

producer  concerned,  failure  to  adopt  measures  to  eliminate  the 

Injurious 

effects 

of 

the  dumped 

Imports 

originating 

In 

Czechoslovakia, would  put  at  risk  the  Industry's  survival, with  the 

resulting  adverse  consequences  on  employment.  In  addition,  the 

multiple  uses  of  potassium 

permanganate 

In  environmental, 

agricultural  and  other, sometimes  strategic  fields, makes  necessary 

for  the  Community  to  keep  the  sole  remaining  Community  producer. 

Moreover,  the  measures  envisaged  would  have  a  negligible  effect  on 

prices  for  users  in  the  Community  in  respect  of  final  products  In 

which  potassium  permanganate  Is  incorporated. 

(29) The Czechoslovak!an  exporter,  having  been  informed  of  the  essential 

facts  and  considerations  on  the  basis  of  which  It  was  Intended  to 

recommend  the  imposition  of  a  definitive  duty,  offered  to  keep  in 

force  the  previous  undertaking.  However,  given  the  breach  of  the 

undertaking,  its  renewal  would  not  afford  the  Community  producer 

sufficient  and  reliable  protection  and  would  discriminate  against 

exporters of  the product  concerned  In other  third countries honoring 

the undertakings given  to the Commission. 

Therefore,  the Council  has come  to the conclusion  that  It  Is  in the 

Community's  interest  that  action  should  be  taken  to  eliminate  the 

injury caused  to the Community  Industry directly  concerned, and this 

action should  take the form of a definitive ant I-dumping duty. 

-  \z  -

I. RATE OF THE DUTY 

(30) Having  taken  Into  account,  on  the  one  hand, the ex-factory  selling 

price  necessary  to  provide  an  adequate  profit  to  the  Community 

producer  and,  on  the  other  hand,  the  CIF  at-Community-frontier 

price,  before  customs  duty,  for  the  Imports  concerned,  the 

Commission  determined  the amount  of  the duty  necessary  to eliminate 

the  Injury  to  be  25.4%.  However,  the  elimination  of  the  Injury 

through  an  increase of  Import  prices up  to the  level  of  such  Injury 

threshold  would  Imply  exceeding the margin  of  dumping  found  during 

the  Investigation  period.  Consequently,  the  Injury  can  only  be 

removed  at  a  level  not  exceeding  the  dumping  margin  of  19.6%  (see 

recital  21). Moreover,  since  the  previous  undertaking  was  breached 

and  In order  to prevent  Increased dumping  as well  as  injury, through 

further  decreases  In  export  prices  It  is  considered  that  the 

appropriate  form  of  the  duty  to  be  imposed  would  be  that  of  a 

variable  duty.  Therefore,  the  Council  concludes  that  the  Injury 

shall  be  removed  at  the  level  of  the  dumping  margin  found  and  that 

the  amount  of  the  definitive  duty  shall  be  the  amount  by which  the 

price  , per  kilogram  net,  free-at-Communlty-front1er,  not  cleared 

through customs,  Is  less than 2.20 ecus. 

J. COLLECTION OF THE PROVISIONAL DUTY 

(31) For  the reasons set  out  in recitals  (15) to  (27) above, the Council 

also  considers  that  the amounts  secured  by way of  provisional  anti 

dumping  duty under  Regulation  (EEC) No 2535/89should be definitively 

collected  to  the  extent  of  the  amount  of  the  duty  definitively 

Imposed.  Therefore,  provisional  ant I-dumping  duties  collected  or 

securities received  for potassium  permanganate which are not  covered 

by the definitive anti-dumping duty should be released. 

i-'AS ADOPTED  THIS REGULATION : 

-  ij  -

ARTICLE 1 

M 

1.  A  definitive  anti-dumping  duty  is  hereby  Imposed  on  Imports  of 

potassium  permanganate  falling  within  CN  Code  ex  2841  60  00, 

originating  In Czechoslovakia. 

2. 

The  amount  of  the  duty  shall  be  equal  to  the  amount  by  which  the 

price,  per  kilogram  net,  free-at-Community-front1er,  not  cleared 

through  customs,  is less than 2.20 ecus. 

The  said  free-at-Community-front 1er  price,  not  cleared  through 

customs,  shall  be  net  if  the  actual  terms  and  conditions  of  sales 

provide  that  payment  shall  be  made  within  30  days  of  the  date  of 

dispatch;  it shall  be  lowered  by  1% for each month  by which  payment 

is actually  deferred. 

3.  The provisions  In force concerning  customs duties shall  apply. 

ARTICLE  2 

The  amounts  secured  by  way  of  provisional  anti-dumping  duty  under 

Regulation  (EEC)  No  2535/89  shall  be  collected  to  the  extent  of  the 

amount of  the duty definitively  Imposed. 

The  amounts collected or  secured which  are not  covered  by  the definitive 

duty shall  be  released. 

-  14 -

ARTICLE 3 

This  Regulation  shall  enter  Into  force on  the day  following  that  of  Its 

publication  In the Official  Journal  of the European Communities. 

This  Regulation  shall  be binding  in  its entirety  and  directly  applicable 

in all Member States. 

Done at Brussels 

For  the Council 

ISSN 0254-1475 

COM(90) 38 final 

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