PROPOSAL FOR A COUNCIL REGULATION ( EEC ) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF AUDIO TAPES IN CASSETTES ORIGINATING IN JAPAN AND THE REPUBLIC OF KOREA, COLLECTING DEFINITIVELY THE PROVISIONAL DUTY AND TERMINATING THE PROCEEDING CONCERNING HONG KONG
Date: 1991-04-12
Institutions: European Commission
Subjects: Hong Kong, Japan, South Korea, anti-dumping duty, import, magnetic medium

COMMISSION OF THE EUROPEAN  COMMUNITIES 

C0M(91) 118 final 

Brussels, 12 April 1991 

Proposal  for a 

COUNCIL  REGULATION (EEC) 

imposing a definitive  anti-dumping  duty on  imports 

of  audio  tapes  in cassettes originating  in Japan 

and the Republic of Korea, collecting  definitively 

the provisional  duty and terminating the 

proceeding  concerning  Hong  Kong 

(presented by the Commission) 

v, i" 

-  2 -

EXPLANATORY  MEMORANDUM 

The  Commission,  by  Regulation  (EEC)  No  3262/90^1),  imposed  a 

provisional  anti-dumping  duty on  imports  into the Community  of  audio 

tapes  in  cassettes  (hereafter  referred  to  as  audio  cassettes) 

originating  in Japan, the Republic of Korea  and Hong Kong.  The duty 

was  extended  for  a  maximum  period  of  two  months  by  Council 

Regulation  (EEC) No 578/91<2> 

In  its  provisional  findings,  the  Commission  found  that  although 

there  are various models of  audio cassettes  differing  in  length  and 

coating  of  tape  and  design  of  the  cartridge,  these  models  have  the 

same  basic  physical  characteristics,  application,  use  and  channels 

of  distribution.  It  is  proposed  that  this  provisional  finding  be 

confirmed. 

For  the  purpose  of  definitive  findings,  normal  value  was,  in 

general, established  on  the basis of  the  same methods  as  those  used 

in  the  provisional  determination  of  dumping,  after  talcing  into 

consideration new  facts and arguments presented  by  the parties. 

-  As  previously  stated  in  its provisional  findings,  the  Commission 

considered  that  giveaway  goods,  which,  by  their  nature  were 

unconnected  with  the  product  under  consideration,  did  not  have 

the  effect  of  reducing  the  price  of  audio  cassettes  sold  on  the 

domestic  market  but  were  promotional  expenses  for  which  no 

deduction can be made. 

(1) OJ No L 313, 13.11.1990, p. 5. 
(2) OJ No L 65, 12.3.1991, p. 20. 

-  3 -

-  Since  it was established  that  for one exporter  there were  neither 

sufficient  sales on  the  domestic  market  of  audio  cassette  models 

suitable  for  direct  comparison  to  those  sold  for  export  to  the 

Community  nor  sales  at  prices  which  permitted  recovery  of  all 

costs  reasonably  allocated,  normal  value  was  determined  on  the 

basis of  a constructed  value of each model  concerned. 

-  One  exporter  maintained  its  claim  that  there  were  no  comparable 

prices,  since  it made  no  sales  to OEM  customers  on  the  domestic 

market, whereas  its export  sales  to the Community  were made on an 

OEM  basis 

For  the  purpose  of  definitive  determination,  the  Commission 

considered  that, given  the  limited nature of  the costs assumed  by 

the  importer  (for  instance  absence  of  after  sales  service),  the 

profit  rate  of  the  manufacturer's  own  brand  sales  used  for 

constructing normal  value should  be reduced  by 50%. 

It  is proposed  to confirm  the above  findings. 

4.  The  final  examination  of  the  facts  showed  the  existence  of  dumping 

in  respect  of  audio-cassettes  in  Japan,  the  Republic  of  Korea  and 

Hong Kong on  the part  of eight  exporters  concerned. 

The  weighted  average  margins  varied  according  the  exporters  as 

fol lows : 

Japanese exporters : 

Fuji 

TDK 

Maxell 

Denon Columbia 

64.2% 

48.2% 

47  % 

44.5% 

-Korean  exporters 

- Goldstar 

9.2% 

-  Sunkyong Magnetics  :  2.6% 

-Hong Kong  exporters 

-Yee Keung 

2.4% 

-  4 -

As  far  as  Saehan  Media,  Sungnam,  Keum  Sahn  Electronics  (Korea), 

Tomei  Magnetics,  Swire, Magnetic  Enterprise  and  Forward  Electronics 

(Hong Kong) are concerned, no dumping  was  found. 

5.  As  far  as  injury  is  concerned,  the  Commission  considered,  in  its 

provisional  findings,  that  the effects  of  Japanese,  Korean  and  Hong 

Kong  imports  had  to  be  analysed  cumulatively.  It  is  proposed  to 

confirm  this  finding  except  for  audio  cassettes  imported  from  Hong 

Kong  since  they  had no discernible  impact  on  the Community  industry. 

6. 

In  addition,  it  is  considered  that  the  Community  industry  had 

suffered  material  injury  which  manifested  itself,  in particular,  by 

a  loss  of  market  share,  price  erosion,  insufficient  profitability 

and  employment  losses.  This  finding  is  based  on  the  following 

facts : 

imports of  audio cassettes  from  Japan  and Korea  have  increased at 

a more  rapid  rate  than  the rate of Community  consumption. 

-  the market  share of  the total  dumped  imports  from Korea  and  Japan 

increased  by  3%,  namely  from  43.5%  to  46.4%  from  1985  to  1988. 

As  far  as  Hong  Kong  is  concerned,  its  market  share  remained 

stable  (1.5%  in 1985; 1.6%  in  1988); 

-  the  complainant  producers'  selling  prices  in  the  Community 

suffered  a significant  erosion  between  1985 and  1988; 

-  Community  producers were unable  to  increase, significantly,  their 

production  between  1985  and  1988  and  their  sales  fell  by  8.5% 

over  this  period,  despite  an  increase  in  total  consumption  of 

30%; 

-  between  1985  and  1988  return  on  sales  of  the  Community  industry 

showed  a constant  negative  trend. 

-  5 -

-  large  price  undercutting  was  found  on  the  part  of  Korean 

exporters  and  significant  price  undercutting  on  the  part  of 

Japanese  exporters  on  the  German  market  where  the  Community 

industry  still  retained  a  large market  share. 

As  far  as  Hong  Kong  imports  are  concerned,  the  Council  considers 

that  in  view  of  the  small  amount  of  dumped  imports  from  Hong  Kong 

and  of  the  absence  of  their  brand  recognition  on  the  Community 

market,  these could  not  have caused material  injury  to the  Community 

industry. 

7. 

Finally,  it  is proposed  to  confirm  that  the  Community  industry  was 

unable  to defend  its price, brand  image  and  volume  of  sales  against 

the  Japanese  exporters  : these  were  able  to  finance  large  selling 

expenditure  thanks  to  their  high  domestic  profits.  It  is  also 

considered  that  the  Community  industry  had  to  face  the  effect  of 

dumped  imports  from  Korea,  and  was  not  able  to meet  the  low  prices 

of  these  imports. 

In conclusion, Korean  and  Japanese  imports, taken  in  isolation,  have 

caused material  injury. 

8. 

In  its provisional  findings,  the Commission  considered  and  balanced 

the  interests  of  the  Community  industry,  of  the  consumers  and  of 

other  industries  and  activities concerned,  and  it concluded  that  the 

Community  interests  called,  on  balance,  for  granting  protection  to 

the  Community  industry  against  unfair  competition  due  to  dumped 

imports.  It  is proposed  to confirm  this  finding. 

9. 

The  provisional  findings  of  the  Commission  with  regard  to  duty 

calculation were also  confirmed. 

In addition,  it  is considered  that,  in order  to  establish  the  rate 

of  the  definitive  duties  to  be  imposed,  the  individual  injury 

margins  determined  provisionally  have  to  be  expressed  as  a 

percentage of  the CIF  value of  the  imports. 

- 6 -

The  result  of  this  calculation  is  the  price  increase  at  the 

Community  frontier  necessary  to  remove  the  injury  caused  by  each 

exporter. 

The duties to be  imposed should thus be at the  level of the dumping 

margin  for  all  exporters  except  for  the  exporters  whose  dumping 

margins exceed the injury  level and are as follows : 

(a) 

27.4% for  audio  cassettes originating  in Japan  , with  the 

exception : 

Sony 

23.4% 

MaxelI 

21.8% 

Denon 

18.7% 

Fuji 

15.2% 

(b) 

9.2%  for  audio  cassettes  originating  in  the  Republic  of 

Korea  , with the exception of : 

Sunkyong Magnetics Ltd (SKM) : 2.6% (Taric additional code : 

8489) 

- 7 -

Proposal  for a 

COUNCIL REGULATION (EEC) 

imposing a definitive anti-dumping duty on imports 

of audio tapes in cassettes originating  in Japan 

and the Republic of Korea, collecting definitively 

the provisional duty and terminating the 

proceeding concerning Hong Kong 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having regard to the Treaty establishing the European Economic Community, 

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

protection  against  dumped  or  subsidized  imports  from  countries  not 
members  of  the  European  Economic  Community<1),  and  in  particular 

Articles 9 and  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.  PROVISIONAL MEASURES 

The  Commission,  by  Regulation  (EEC)  No  3262/90(2),  imposed  a 

provisional anti-dumping duty on  imports into the Community of audio 

tapes  in  cassettes  (hereinafter  referred  to  as  audio  cassettes) 

originating  in  Japan,  the  Republic  of  Korea  and  Hong  Kong  and 

falling  within  CN  code  8523  11  00.  The  duty  was  extended  for  a 

maximum  period  of  two  months  by  Council  Regulation  (EEC) 
No 578/91(3>. 

(1) OJ No L 209, 2.8.1988, p. 1. 
(2) OJ No L 313, 13.11.1990, p. 5. 
(3) OJ No L 65, 12.3.1991, p. 20. 

-  8 -

B.  SUBSEQUENT  PROCEDURE 

2. 

Following  the  imposition  of  the  provisional  anti-dumping  duty,  all 

the exporters mentioned  by  name  in Regulation  (EEC) No  3262/90, as 

well  as  the  representatives of  the complainants, requested  and  were 

granted  an opportunity  to be heard by  the Commission.  They, as well 

as one  importer,  also  made  written  submissions  making  their  views 

known on the findings. 

3.  The  Commission  continued  to  seek  and  verify  all  information  it 

deemed  to be necessary  for  its determinations.  For  this purpose, an 

investigation  was  carried  out  at  the  premises  of  the  following 

exporter  : 

- Hitachi  Maxell, Tokyo, Japan 

4.  Upon  request,  the  parties  were  informed  of  the  essential  facts  and 

considerations  on  the  basis  of  which  it  was  intended  to  recommend 

the  imposition of definitive duties and  the definitive collection of 

amounts  secured  by  way  of  a  provisional  duty.  They  were  also 

granted  a period  within which  to make  representations  subsequent  to 

these  disclosures.  Their  oral  and  written  comments  were  considered 

and, where  appropriate,  the  Commission's  findings  were  modified  to 

take account of  them. 

5.  Owing  to  the  complexity  of  the  proceeding,  in  particular  to  the 

detailed  verification  of  the  voluminous  data  involved  and  the 

numerous  arguments  put  forward,  the  investigation  could  not  be 

concluded  within  the  time  limit  provided  for  in Article  7(9)  (a) of 

Regulation  (EEC) No 2423/88. 

- 9 -

C. PRODUCT UNDER  CONSIDERATION, LIKE PRODUCT, 

COMMUNITY  INDUSTRY 

6. 

In  its provisional  findings,  (recitals  9  to  12 of  Regulation  (EEC) 

No  3262/90)  the  Commission  found  that  although  there  are  various 

models  of  audio  cassettes  differing  in  length  and  coating  of  tape 

and  design  of  the  cartridge,  these  models  have  the  same  basic 

physical 

characteristics,  application,  use  and  channels  of 

distr ibut ion. 

7.  This finding was questioned by one exporter  who requested  that  audio 

cassettes  whose  tapes were  coated  with  a metal  pigment  (hereinafter 

referred  to  as  metal  audio  cassettes)  should  be  excluded  from  the 

scope  of  the  proceeding.  This  exporter  submitted  that  metal  audio 

cassettes  are  extremely  high  quality  cassettes  bought  by  specialist 

consumers  and  require  a  cassette  recorder  with  a  specific  key-

function  to  appreciate  their  true  quality.  A  similar  claim  was 

submitted  by  an  importer  requesting  the  exclusion  of  audio 

cassettes  for answering machines  from  the scope of  the proceeding. 

8. 

However,  while  the  Commission  accepts  that  there  are  minor 

differences  in quality  or  use of  audio  cassettes,  it considers  that 

these  are  actually  outweighed  by  the  similarity  of  characteristics 

and  functions  which  give  them  a  high  degree  of  interchangeabiIity. 

The Commission  notes  in this  respect  that  metal  audio  cassettes  can 

be  used  on  a  cassette  recorder  without  a  specific  key-function 

(giving  thus  a  sound  of  a  lower  quality)  and  that  cassettes  for 

answering  machines  can  be  used  on  any  other  cassette  recorder  or 

player  to  record  or  play  any  sound.  In  these  circumstances,  the 

Commission  concludes  that  metal  audio  cassettes  and  standard 

cassettes  for  answering  machines  should  not  be  excluded  from  the 

scope of  the proceeding. 

- 10 -

9.  The  Council  confirms  the  above  conclusions  and  confirms  that,  in 

contrast, audio cassettes which have  important physical  differences 

in size, components and use such as micro cassettes, small  endless 

cassettes  for  answering  machines,  computer  cassettes  or  digital 

audio  tapes  (DAT) cassettes  are  not  covered  by  the  scope  of  the 

present proceeding.  In addition, the Council  confirms the findings 

of the Commission with regard to the  like product and the Community 

Industry  set  out  in  recitals  15  and  16  (on  the  content  of  which 

there was no comment by the  interested parties) of Regulation (EEC) 

No 3262/90. 

D.  NORMAL VALUE 

10.  For  the  purpose  of  definitive  findings,  normal  value  was,  in 

general, established on the basis of the same methods as those used 

in  the  provisional  determination  of  dumping,  after  taking  into 

consideration new facts and arguments presented by the parties. 

1) Normal value based on prices in the exporting country 

11.  In recital  20 of Regulation (EEC) No 3262/90, the value of giveaway 

goods (e.g.  index cards, photographs, ...) granted by  two exporters 

was* disallowed  for  the  purpose  of  provisional  findings  as  a 

deduction from domestic sales prices in establishing normal value. 

The exporters concerned have reacted to the Commission's provisional 

findings  and  have  argued  that  the  value  of  these  giveaway  goods 

should be  treated  as a discount  and as such, be deducted  from  the 

domestic selling price. 

-  11 -

As  previously  stated  in  its  provisional  findings,  the  Commission 

considers  that  these  giveaway  goods,  which,  by  their  nature  are 

unconnected  with  the  product  under  consideration,  do  not  have  the 

effect  of  reducing  the price of  audio cassettes sold on  the domestic 

market  but  are  promotional  expenses  for  which  no  deduction  can  be 

made  in  conformity  with  the  provision  of  Article  2(3)  (a)  of 

Regulation  (EEC) No 2423/88.  This view  is confirmed  by  the Council. 

2) Normal  value based on constructed  value 

a)  models grouped  together  in series 

12.  As  explained  in  recital  22  of  Regulation  (EEC)  No  3262/90,  the 

Commission  provisionally  established  normal  value  for  one  exporter 

on  the  basis  of  the  weighted  average  price  of  series  of  models  of 

audio  cassettes.  Subsequent  investigation  led  the  Commission  to 

believe  that  this  average  price  could  not  be  relied  upon  to  form 

accurate  data  for  the establishment of  normal  value. 

13.  Since  this  subsequent  investigation  established  that  there  were 

neither  sufficient  sales  on  the  domestic  market  of  audio  cassette 

models  suitable  for  direct  comparison  to  those  sold  for  export  to 

the  Community  nor  sales  at  prices  which  permitted  recovery  of  all 

costs  reasonably  allocated,  normal  value was determined  on  the basis 

of  a  constructed  value  of  each  model  concerned. 

This  constructed 

value  was  established  on  the  same  basis  as  described  in  recital  23 

of Regulation  (EEC) No 3262/90. 

b)  OEM  sales 

14.  One  exporter  maintained  its  claim  that  there  were  no  comparable 

prices,  since  it  made  no  sales  to  OEM  customers  on  the  domestic 

market,  whereas  its  export  sales  to  the  Community  were  made  on  an 

OEM basis; this exporter  thus required  that  the Commission  establish 

-  12 -

a  constructed  value  including  a  reduced  profit  margin  for  the 

purpose of comparison with  its export  sales made on an OEM  basis and 

submitted  new facts to substantiate  its request. 

In  view  of  this  evidence,  the  Commission  considers  that  the 

Community  customers  of  this  Korean  exporter  are  buying  on  an  OEM 

basis  :  indeed,  they  are  purchasing  audio  cassettes  made  to  their 

own  specifications  (which  differ  in  some  aspects  from  the  Korean 

producer's  own  specifications)  in  order  to  supplement  their  own 

production and resell  them while assuming  the full  responsibility of 

a  manufacturer  with  regard  to  the  product.  In  addition,  the 

difference  claimed  was  clearly  reflected  in the  quantities  sold  and 

the pattern of  price charged. 

For  the  purpose  of  definitive  determination,  the  Commission 

considers  that, given  the  limited nature of  the costs assumed  by  the 

importer  (for  instance  absence  of  after  sales  service),  the  profit 

rate  of  the  manufacturer's  own  brand  sales  used  for  constructing 

normal  value  shall  be  reduced  by  50%  :  indeed  this  constitutes  the 

difference  which  exists  between  own-brand  and  OEM  profits  if  sales 

of  the  latter  had  taken place on  the Korean market. 

In the  light  of  the  Commission's  considerations  set  out  above,  the 

Council  confirms the Commission's  findings and conclusions. 

c) Profit 

15.  As  explained  in  recital  30  of  Regulation  (EEC)  No  3262/90,  where 

insufficient  profitable  sales  took place on  the domestic market, the 

addition of profit  to be  included  in the constructed  value was based 

on  the  weighted  average  profits  realized  by  other  exporters  on 

profitable sales on  the domestic market. 

16.  Two  Hong  Kong  exporters  contested  the  profit  figure  used  by  the 

Commission  since,  according  to  them,  this  figure  was  based  on  the 

-  13 -

profits achieved  by a fully-integrated producer  in Hong Kong  whereas 

they  were  not  integrated  and  actually  mainly  involved  in  the 

assembling  of  audio  cassettes.  They  alleged  that  a  lower  profit 

margin should  thus be applied  to reflect  this difference. 

In these circumstances, the Council  considers  reasonable  to base  the 

profit  figure  for  these  Hong  Kong  exporters  on  the  rate  of  profit 

determined  for  the manufacturing  of  a  product  in  the  same  business 

sector,  namely  video  cassettes,  where  these  exporters  performed 

similar  activities  (see Council  Regulation  (EEC) No  l768/89)( 4 ). 

E.  EXPORT PRICE 

17.  The Council  confirms  the  findings and conclusions of  the Commission, 

as well  as  those  set  out  in recitals  31  to  39  of  Regulation  (EEC) f 

No 3262/90 on  the content of which  recitals  there was no substantial 

comment  by  the  interested parties. 

F.  COMPARISON 

18.  One exporter  contested  the amount  of  credit  costs  deducted  from  the 

domestic  selling  price  for  the  establishment  of  normal  value  and 

claimed  that  it was  lower  than  its actual  expenses. 

The Commission  considers  that  the credit  expenses claimed  are partly 

related  to  sales  of  products  other  than  audio  cassettes  and  should 

thus be  reduced  to  the proportion  of  sales of  audio  cassettes only, 

in  conformity  with  the  provisions  of  Article  2(11)  of  Regulation 

(EEC) No 2423/88. 

(4) OJ  No L 174, 22.6.1989, p. 1 

- 14 -

G.  DUMPING MARGIN 

19.  On  comparing  normal  values  for  domestically  sold  models  of  the 

producers/exporters  which were  investigated  with  the export  prices 

of  comparable  models  on  a  transaction-by-transaction  basis,  the 

final  examination of  the  facts  shows  the  existence  of  dumping  in 

respect of audio-cassettes  in Japan, the Republic of Korea and Hong 

Kong on the part of eight exporters concerned, the margin of dumping 

being equal  to the amount  by which  the normal  value as established 

exceeds the price for export to the Community. 

20.  The  weighted  average  margins,  expressed  as  a  percentage  of  CIF 

frontier prices, varied according the exporters as follows : 

Japanese exporters : 

Fuji 

TDK 

Maxell 

Denon Columbia 

64.2% 

48.2% 

47  % 

44.5% 

-Korean exporters 

- Goldstar 

9.2% 

- Sunkyong Magnetics :  2.6% 

-Hong Kong exporters 

-Yee Keung 

2.4% 

21.  As  far  as  Saehan  Media,  Sungnam,  Keum  Sahn  Electronics  (Korea), 

Tomei Magnetics, Swire, Magnetic Enterprise and Forward  Electronics 

(Hong Kong) are concerned, no dumping was found. 

22.  For those exporters who did not make themselves known  in the course 

of  investigation, or cooperated only  partly with  the Commission, a 

dumping margin was determined on the basis of the facts available as 

explained  in recitals 50 and  51 of Regulation  (EEC) No 3262/90 and 

it  is considered  appropriate  to use  the  highest  dumping  margin of 

-  15 -

64.2%  for  Japan  and  9.2%  for  Korea  and  2.4% for  Hong  Kong  for  these 

groups of exporters. 

The Council  confirms the above  findings and  conclusions. 

H.  INJURY 

1. Cumulât ion 

23.  In  its  provisional  findings,  the  Commission  considered  that  the 

effects of  Japanese, Korean  and Hong Kong  imports  had  to be  analysed 

cumulatively.  The exporters  reacted  extensively  to the  Commission's 

provisional  findings.  They  argued  that  the  difference  in  consumer 

recognition, market  segment  and  pricing  pattern  acknowledged  in the 

provisional  findings between  Japanese  and Korean  exports  should  have 

led the Commission  to rule out  the cumulation  of  imports  from  Japan, 

Korea  and Hong Kong  for  the purpose of  assessing  injury. 

24.  The  Commission  confirms  its  finding  set  out  in  recital  78  of 

Regulation  (EEC) No  3262/90  that, on one  hand,  the  Korean  exporters 

compete  to  a  very  large  extent  on  price  alone,  with  products  of 

comparatively  standard  technology  and  no  significant  difference  in 

features  and  quality,  while  on  the  other  hand,  the  Japanese 

exporters  now  tend  also  to  concentrate  on  non-price  elements,  such 

as  brand  name,  marketing  features  and  styling  as  their  main 

market ing strategy. 

However,  it  is standard  practice  for  the  Community  institutions  to 

cumulate  imports  from several  countries when  these  imported  products 

and  the  like  product  of  the  Community  industry  meet  the  following 

criteria  : 

-  they  are  interchangeable, 

-  they  are  sold  or  offered  for  sale  in  the  same  geographical 

markets, 

-  they  have common  or  similar  channels of  distribution, 

-  they  are simultaneously  present  in the market, 

-  they  are not  negligible  as such. 

- 16 -

25.  The  application of  these  criteria  does not  permit  the  establishment 

of  a  clear  dividing  line,  separating  audio  cassettes  either  from 

Japan  or  from  Korea.  Indeed,  besides  the  identity  of  the  basic 

physical  characteristics,  application  and  use  of  audio  cassettes 

whatever  their  source,  there  is  to  a  very  large  extent,  commercial 

interchangeabiIity  and  competition  between  the  various  models  of 

audio  cassettes;  this  is shown  by  the  fact  that  Japanese  exporters 

are  selling  in  the  Community  audio  cassettes  manufactured  both  in 

Japan  and  Korea, with  no  difference  in  the consumer's  perception of 

these products by reason of  their  different  sources. 

In contrast, given  the small  amount  of  audio cassettes  imported  from 

Hong  Kong  which  were  found  to  be  dumped,  they  had  no  discernible 

impact  on  the Community  industry.  Indeed,  dumped  imports  from  Hong 

Kong  represented  in 1988 a very  small  share  of  the Community  market 

and  their  brand  recognition  was  almost  inexistant.  Accordingly, 

since  they  did not  bear  any  contribution  to material  injury,  imports 

from Hong Kong  should  not  be  cumulated. 

The Council  confirms  the above  findings and  concludes  therefore  that 

the  effects  of  Japanese  and  Korean  imports  have  to  be  analysed 

accumulatively. 

2) Effect  on  the dumped  imports 

26.  The  Commission  concluded  in  its  provisional  findings  that  the 

Community  industry  had  suffered  material  injury  which  manifested 

itself,  in  particular,  by  a  loss  of  market  share,  price  erosion, 

insufficient  profitability  and  employment  losses.  It  based  this 

finding on  the  following  facts : 

imports of  audio cassettes  from  Japan  and Korea  have  increased  at 

a  more  rapid  rate  than  the  rate  of  Community  consumption,  from 

149 million  units  in  1985  to  205 million  units  in  1988,  i.e.  by 

38%.  Imports  from  Japan  increased  from  142  million  units  to 

154 million  units  over  this  period,  while  imports  from  Korea 

increased  from 7 million units  to 51 million units; 

- 17 -

-  imports  of  audio  cassettes  from  Hong  Kong  have  increased  from 

4.9 million units  in 1985  to 7 million units  in 1988; 

-  the market  share of  the total  dumped  imports  from Korea  and  Japan 

increased  by  3%,  namely  from  43.5%  to  46.4%  from  1985  to  1988. 

As  far  as  Hong  Kong  is  concerned,  its  market  share  remained 

stable  (1.5%  in 1985; 1.6%  in  1988); 

-  the  complainant  producers'  selling  prices  in  the  Community 

suffered  a significant  erosion  between  1985 and  1988; 

-  Community  producers were unable  to  increase, significantly,  their 

production  between  1985  and  1988  and  their  sales  fell  by  8.5% 

over  this  period,  despite  an  increase  in  total  consumption  of 

30%; 

-  between  1985  and  1988  return  on  sales  of  the  Community  industry 

showed  a  constant  negative  trend.  The  slight  improvement  of  its 

profit  in  1988  appears  to  be  the  result  of  the  withdrawal  of 

loss-making  models,  which  involves  a  further  shrinking  of  its 

sales and presence on  the market; 

-  cost-saving  measures  involved  a  decline  of  employment  in  the 

Community  of  some  23% of  the  audio  cassettes  workforce  between 

1985 and  1988; 

-  for  a  large  number  of  transactions,  large  price  undercutting  was 

found  on  the  part  of  Korean  exporters  and  significant  price 

undercutting  on  the  part  of  Japanese  exporters  on  the  German 

market  where  the Community  industry  still  retained  a  large market 

share. 

27.  No  new  facts  concerning  these  findings  were  submitted  to  the 

Commission  but  the exporters concerned  challenged  injury  findings on 

a number  of points. 

- 18 

28.  One exporter  argued  that  the use of  average  figures  for  the whole of 

Community  industry  was  misleading  since  they  mask  conflicting 

underlying  trends by  the  two major  Community  producers which  should 

have  led  to  a  separate  determination  of  injury  for  each  of  them. 

The  Council  cannot  accept  this  argument  since  when  determining 

whether  material  injury  has  been  caused  to  the  Community  industry, 

this  term  shall  be  interpreted  in  conformity  with  Article  4(5)  of 

Regulation  (EEC)  No  2423/88  as  referring  to  the  production  of  the 

Community  producers as a whole. 

29.  One exporter  also argued  that one of  the Community  producers was not 

experiencing  material  injury  and  should  have been  excluded  from  the 

injury assessment  owing  to an alleged  healthy  profit  situation.  The 

Council  cannot  accept  this view and  recalls, as noted  in recital  26, 

that  the  injury  suffered  by  the  Community  industry  is  determined 

globally, on  the basis of economic  factors relating  to  its situation 

as a whole. 

In addition  it notes  that  several  factors  concerning  this  Community 

producer  were  a  clear  indication  of  the  existence  of  material 

injury, such  as a profit  rate which  was  in fact  below  the  average, 

and  a  low  global  profitability  achieved  at  the  expense  of 

withdrawing  loss-making models  from  the market. 

30.  It  was  also  argued  that  the  Commission's  findings  with  regard  to 

production,  capacity,  utilization  of  capacity,  and  sales  not  only 

referred  to  production  in  the  Community  but  also  included  audio 

cassettes  manufactured  by  the  Community  industry  in  its  overseas 

facilities, and sold  in the Community. 

As  noted  in  the  provisional  findings  of  the  Commission,  this 

activity  has  completely  ceased  in  1988,  which  is  a  further 

indication  of  the  existence  of  material  injury.  Indeed,  while  in 

1985  the Community  industry  was operating  at  full  capacity  and  thus 

decided,  in order  to  meet  the  demand,  to  increase  its  capacity  of 

production  in  the  Community  and  simultaneously  to  supply  the 

-  19 -

Community  market  with  products  manufactured  in overseas  facilities, 

the  subsequent  decrease  of  its  sales  in  clear  contrast  with  the 

buoyancy  of  the market  led  it to close  these overseas  facilities and 

to bear  the costs of  increasingly  idle production  facilities. 

31.  Several  exporters  contested  the  Commission's  analysis  of  price 

undercutting. 

One  exporter  argued  that  the  price  undercutting  analysis  for  the 

German  market  was  based  on  data  involving  the  resale  by  its 

subsidiary  of  audio  cassettes  to  other  Community  markets  and 

submitted  new data  at  the end of  the  investigation. 

However,  the  Commission  considers  that  these  new  data  should  be 

disregarded  :  indeed,  they  show  discrepancies  when  the  Commission 

cross-checked  these  with  other  data  supplied  by  this  exporter, 

whilst  the data used  for  the undercutting  analysis were  submitted  by 

the  exporter  itself  as  referring  unequivocally  and  exclusively  to 

the  German  market  and  were  verified  as  correct  at  the  premises  of 

this company. 

In addition,  these  new  data  appear  to  show  that  price  undercutting 

has  been  merely  shifted  to  other  geographical  markets  in  the 

Community.  Finally,  the  necessary  verification  of  these  new  data 

would  have  inadmissably  delayed  the course of  the  proceeding. 

The Council  confirms the above  finding of  the Commission. 

32.  Another  exporter  argued  that  the  Italian  market  should  have  been 

taken  into  account  in  the  price  undercutting  analysis  since  it  was 

in  Italy  that  it sold  its most  important  volume  of  audio  cassettes. 

However,  it  has  to  be  noted  that,  as  explained  in  recital  66  of 

Regulation  (EEC)  No  3262/90,  the  Commission  selected  three  major 

Community  markets  covering  more  than  70%  of  the  Community  sales 

which  are  the most  representative of  all  sales of  audio cassettes  in 

the Community.  The  Commission  found  in contrast  that  the  volume  of 

-  20 -

sales and price patterns of  the exporters  and Community  producers on 

other  markets  were  not  representative  of  the  Community  market  as a 

who Ie. 

33.  The  above  conclusion,  in addition  to  the  findings of  the  Commission 

set out  in recitals 55 to 77 of  Regulation  (EEC) No 3262/90  lead  the 

Council  to  consider  that  the  Community  industry  is  suffering 

material  injury  within  the  meaning  of  Article  4(1)  of  Regulation 

(EEC) No 2423/88. 

3. Causât ion of  injury 

a) Effect  of dumped  imports 

34.  In  its provisional  findings, the Commission  found  that  the  increased 

influx of  dumped  imports coincided  with  a significant  loss of  market 

share  and  reduced  profitability  on  the  part  of  the  Community 

industry,  together  with  price erosion, and price undercutting  of  the 

audio  cassettes  produced  by  the  Community  industry.  In particular, 

it was  noted  that  the  Community  industry  was  in  a  dilemma  since  it 

had  simultaneously  to  resist  the  dumped  imports  from  Japan  in  the 

high segment  of  the market, and  the dumped  imports  from Korea  in the 

lower  segment  of  the  market  where  competition  is  led  mainly  by 

price.  As  a  result,  the  Commission  concluded  that  dumped  imports 

had,  taken  in  isolation,  caused  material  injury  to  the  Community 

industry. 

35.  As  far  as  Hong  Kong  imports  are  concerned,  the  Council  considers 

that  in  view  of  the  small  amount  of  dumped  imports  from  Hong  Kong 

and  of  the  absence  of  their  brand  recognition  on  the  Community 

market,  these could  not  have caused material  injury  to  the Community 

industry. 

36.  As  far  as  Japanese  and  Korean  imports  were  concerned,  several 

arguments  were  raised,  mostly  by  Japanese  exporters.  These 

contested  the  provisional  finding  of  the Commission  and  argued  that 

their  exports could  not  be held  responsible  for  causing  injury  since 

-  21 -

, .!=;•. »!,•. : ^ A « l . . i l 4 t . .^  -V. . • ^.  ^ft/,.'^ 

the market  share of  their  exports  decreased  from  42% to  35% between 

1985 and  1988 and  have been mainly  replaced  by products  manufactured 

by  their  subsidiaries  in  the  Community.  According  to  these 

exporters,  material  injury  could  only  be  attributed  to  dumped 

imports  from  Korea,  or  to  the  effect  of  non-dumped  sales  in  the 

Community  which  had  been  overlooked  by  the  Commission,  such  as  the 

sales  of  the  audio  cassettes  manufactured  by  their  production 

subsidiaries  in the  Community. 

37.  The  Council  cannot  accept  these  arguments.  If  Japanese  dumped 

exports  were  isolated  from  the  other  dumped  exports,  the  arguments 

raised  are  not  corroborated  by  the  facts.  Indeed,  while  there  is a 

certain  decrease  of  the  market  share  of  dumped  exports  from  Japan 

the  Japanese  exporters  in  1988  retained  a  very  large  share  of  the 

Community  market  (35%,  which  is  almost  double  the  Community 

industry's  market  share) and  have  increased  in absolute  terms  their 

volume of dumped  imports by 8%. 

In addition,  as explained  in recital  27,  the Council  considers  that 

the effect  of  dumped  imports  from  Japan  and Korea  should  be  analysed 

cumulatively.  This  analysis  shows  an  increase  in  volume  of  the 

dumped  imports by  38% and  in market  share by  3%. 

38.  Finally,  the  effect  of  the  dumped  exports  from  Japan  could  not  be 

analysed  without  reference  to the real  weight  that  they  have on  this 

market.  It  should  be  pointed  out  that,  as  described  in  recital  81 

of  Regulation  (EEC) No  3262/90,  the  Japanese  exporters  have  between 

1985  and  1988  retained  their  market  presence  at  about  70%  of  the 

Community  market  including  audio cassettes  produced  in the  Community 

and  in  Korea  by  related  companies.  They  diversified  their  supply 

channels  in particular  by  increasing  the output  of  their  production 

subsidiaries  in the Community,  but  dumped  imports  from  Japan  remain 

their  main  source  of  supply.  In  this  respect,  the  Council  notes 

that  dumped  imports  of  audio  cassettes  and  sales of  audio  cassettes 

from other  sources are part  of  the same commercial  strategy  In which 

dumping  is the driving element. 

22 -

°) Effects of other  factors 

39.  One  exporter  argued  that  the  Commission  did  not  consider  in  its 

provisional  findings, the effect  of  the  audio  cassettes  manufactured 

by  the  Community  industry  and  sold  for  export  to  third  countries. 

The  Commission  notes  that  between  1985  and  1988,  while  Community 

sales  decreased  from  94  million  units  to  86  million  units,  export 

sales  of  audio  cassettes  increased  from  11  million  units  to 

21 million  units 

however,  this  only  shows  that  the  Community 

industry  has reacted  in an efficient  manner  to the effect  of  dumping 

by  developing  new  markets  which  were  not  affected  by  unfair 

competition.  A  further  indication  of  injury  is  shown  by  the  fact 

that  the  production  of  the  Community  industry,  after  deduction  of 

the  production  destined  for  export,  was  actually  declining  over  the 

per iod considered, 

40.  It  was  also  argued  that  the  injury  suffered  by  one  of  the 

complainants  was  the  result  of  a  wrong  commercial  decision  when  it 

cut  its prices  in an attempt  to sell on  the  low end of  the market. 

The  Council  cannot  accept  this  argument 

the  good  performances 

achieved  by  this Community  producer  in other  sectors  show  that,  for 

lack of contrary  proof,  its commercial  policy was adequate  in so far 

as  it  decided  to  decrease  its  prices  in  an  attempt  to  retain  its 

market  share against  the pressure of  the dumped  imports. 

41.  In conclusion,  the  Council  recognizes  that  oth^r  factors,  including 

the  sales of  the production  subsidiaries  of  the  Japanese  exporters, 

may  have  had  a  negative  effect  on  the  situation  of  the  Community 

industry.  However,  this  does  not  detract  from  the  fact  that  the 

dumped  imports  had  a  clear  detrimental  impact  on  the  situation  of 

the Community  industry  and  that  this  impact,  taken  in  isolation,  has 

to be considered  as material. 

Indeed,  given  the  facts  described  in recitals  30  to  32,  the Council 

confirms  the  Commission's  findings  that  the  Community  industry  was 

-  23 -

unable  to defend  its price,  brand  image  and  volume  of  sales  against 

the  Japanese  exporters  : these  were  able  to  finance  large  selling 

expenditure  thanks  to  high  profits  on  a  domestic  market  without 

foreign competition  and  large volume of  sales resulting  from  dumping 

and  were  in  a  position  to  force  down  the  prices  of  the  Community 

industry  in particular  in  its most  important  national  market  where a 

significant  price undercutting was  found. 

The  council  also  considers  that  the  Community  industry  had  to  face 

the  effect  of  dumped  imports  from  Korea,  and  was  not  able  to  meet 

the  low prices of  these  imports without  definitively  undermining  its 

profit  situation  and  jeopardizing  any  possibility  of  competition 

with  the Japanese  products  in the high  segment  of  the market. 

Therefore, the Council  adopts  the  findings of  the Commission  set out 

in  recitals  78  to  94  of  Regulation  (EEC) No  3262/90  pertaining  to 

Korean  and  Japanese  imports  and  concludes  that  these,  taken  in 

isolation, have caused material  injury. 

I.  COMMUNITY  INTEREST 

42.  In  its provisional  findings,  the  Commission  considered  and  balanced 

the  interests  of  the  Community  industry,  of  the  consumers  and  of 

other  industries and activities concerned.  For  the  reasons given  in 

recitals 95 to 104 of Regulation  (EEC) No 3262/90,  it concluded  that 

the  interests  of  the  Community  call,  on  balance,  for  granting 

protection  to  the Community  industry  against  unfair  competition  due 

to dumped  imports. 

43.  One  exporter  submitted  that  the  withdrawal  of  one  of  the 

complainants,  AGFA,  from  this  sector  in  1990,  and  the  takeover  of 

its  activities  by  another  complainant,  BASF,  will  lead  to  cost-

savings  and  rationalization  which  could  not  fail  to  improve  the 

profit  situation  of  the  Community  industry,  and  thus  render 

protective measures unnecessary  and  contrary  to Community  interest. 

-  24  -

The  samo  exporter  also  argued  that  the  creation  of  manufacturing 

subsidiaries  in  the  Community  by  some  Japanese  exporters  has 

actually  offset  the  loss  of  Jobs  incurred  in  the  Community 

industry's plants. 

44.  The  Council  considers  on  the  contrary  that  these  facts  strengthen 

the  case  for  the adoption  of  protective  measures  in order  to  prevent 

other  Community  producers  from  disappearing,  and  considers  that  the 

creation  of  jobs  by  non-integrated  subsidiaries  of  the  Japanese 

exporters  could  not  be  considered  as  a  fair  substitute  for  a  global 

loss of  employment  in fully  integrated  producers. 

Therefore  the  Council  confirms  the  Commission's  findings  that  it  is 

in  the  Community  interest  to  impose  ant I-dumping  measures  to 

eliminate  the  injurious  effects  of  imports  originating  in  Japan  and 

In Korea. 

J.  DUTY 

Sovera!  exporters  contested  the  methodoiogy  applied  by  the 

Commission  to  determine  the  individual  injury  margin  of  each 

exporter.  They  argued  that  the  effect  of  the  determination  of  the 

price  increase  of  the  Community  industry  was  to  compensate  for  past 

lose of market  share  and  not  to eliminate  present  injury. 

In addition,  they  alleged  that  this determination  took  no  account  of 

the  other  factors  which  may  have  contributed  to  ths  current 

unsatisfactory  state  of  the Community  industry. 

The Commission  cannot  accept  these  arguments. 

Firstly,  the  Commission  recalls  that  the  very  purpose  of  the 

Commun i ty's  ant i-dump i no  ! eg i G 1 at i on  is  to  counter act  dump i ng  and 

material 

injury  caused 

thereby.  Consequently, 

the 

Community 

institutions  are  empowered  to  impose  anti-dumping  duties  to  the 

extent  of  the  dumping  found.  There  is,  however,  an  additional 

-  25 -

responsibility  on  the  institutions  to avoid  measures  which  can  have 

excessive  consequences.  Indeed,  Article  13(3)  of  Regulation  (EEC) 

No  2423/88  states  that  the  measures  "should  be  less"  than  the 

dumping  margin  "if  such  lesser  duties  would  be  adequate  to  remove 

the  injury".  This  entails  an  assessment  and  a  forecast  of  the 

future  effects  on  the Community  market  of  any  anti-dumping  measures 

which  by  its very  nature  is Judgemental.  This assessment,  for  which 

the  legislation  gives  no  guidance,  has  to  be  reasonable  and  take 

account  of  the particularities of each  case. 

In fulfilling  this  responsibility  the Commission  considered  that  it 

is  reasonable  to  assess,  in  this  case,  that  the  elimination  of  the 

full  dumping  margin  for  some  exporters  would  probably  be  excessive 

since  the consequent  price  increase would  place  them  at  too much  of 

a disadvantage  and possibly  eliminate  them  from  the market. 

The  Commission  therefore  concluded,  given  the  serious  injury 

inflicted  on  the  Community  industry  over  the  years  and  its  present 

weakened  situation,  that  the minimum  necessary  for  its recovery  from 

the  injurious effects of  dumping  would  be  to ensure  that  it  is able 

to  achieve  a  reasonable  rate  of  profit  in  combination  with  a 

reasonable  quantity of sales. 

46.  As  far  as  this  rate of  profit  is concerned,  the Commissioan,  in  its 

preliminary  findings, has established  12% as  reasonable. 

One  exporter  contested  the  rate  of  the  target  profit  of  12% 

determined  by  the  Commission,  arguing  that  an  audio  cassette  is a 

mature  product  which  does  not  necessitate  large  research  and 

development  expenditures  which  have  to be  financed  by  profits.  The 

Commission  considers  that,  on  the  contrary,  in  view  of  the 

importance  of  the  marketing  and  promotion  expenditures  on  this 

Community  market,  and  of  the  need  for  constantly  upgrading  the 

features and  styling of  audio cassettes  to attract  consumers, a rate 

of  profit  of  12%  is reasonable.  This  is supported  by  the  fact  that 

profits  achieved  by  several  of  the  exporters  concerned  on  their 

domestic  markets  are  far  higher  than  this  rate.  This  view  is 

confirmed  by  the Council. 

26  -

As  far  as  a  reasonable  turnover  is  concerned  the  Commission 

considers  it  inappropriate,  as  explained 

in  its  preliminary 

findings,  to  take  the  turnover  of  the  Community  industry  in  the 

reference  psriod  (i.e.  tho  year  1988)  since  this  turnover  was 

particularly  heavily  affected  by  the  dumping  practices  found. 

Therefore,  calculations  of  the  necessary  amounts of  duty  were  based 

on  tho quantity  of  sales  achieved  by  tho Community  industry  in 1985, 

a  year  which  i«j  considered  closer  to  a  normal  situation, 

notwithstanding  tho  fact  that  the  sales  volume  In  that  period  may 

also have been adversely  affected  by  dumped  imports or  other  factors 

and  that  the  trarket  has  evolved  with  the  appearance  of  new 

suppiiers. 

47.  Several  exporters,  atso  contested  tho  use  of  an  adjustment  of  the 

injury  margin  of  each  exporter  according  to  the  relative  volume  of 

dumped  imports  of  each  exporter  in  relation  to  the  others.  It  was 

ajrgue/d;  that,  the  comparât i ve  volume  of  dumped  Imports  bears  no 

relationship  to  the  injury  suffered  by  the  Community  industry,  and 

that  the  adjustment  was  based  on  an  arbitrary  factor  which  does  not 

reflect  the  real  position of  each  exporter. 

48.  The  Gouncii 

cannot  accept  this  view.  Indeed,  as  shown  in 

recitals 55  to  61  and  80  to  87  of  Regulation  (EEC)  No  3262/90  tho 

volume  of  dumped  import;? has  been  identified  as  one  of  the  critical 

factors  of  injury  and  it  had  thus  to  be  taken  into  account  when 

detera&taP/ig  which  duty,  iower  than  the  dumping  margin,  would  be 

acteQUattt  to  remove  the  injury  in  conformity  with  Article  13(3)  of 

Rsgula'tion  (EEC) No  242 3/88.  In addition,  tho  factor  used  for  this 

adjustment, namely  a variation of  20% of  tho  injury margin  above  and 

below  the  average  according  to  the  volume  of  exports  of  each 

exporter,  far  from  being  unreasonab!e  has  been  determined  by  the 

Commission  according  to  its  injury  findings  (such  as  evolution  of 

volume  and  market  share  of  dumped  imports  and  of  tho  Community 

industry)  as  a  reasonable  estimate  of  the  effect  of  tho  volume  of 

CiUmped  imports on  tho  injury  suffered. 

-  27 -

49.  It  was  also  submitted  that  this  adjustment  should  be  based  on  the 

volume  of  sales  of  dumped  audio  cassettes  in  the  Community  rather 

than  the  volume  of  dumped  imports.  The  Council  considers  however 

that  this  adjustment  can  be  based  only  on  the  volume  of  imports, 

since  the volume of  sales of  these  imports  in the Community  may  vary 

during  a  period  for  inventory  reasons,  or  because  of  transfers 

between  subsidiaries,  and  thus  not  be  representative  of  the 

injurious effect  of  the volume of  dumped  imports. 

50.  Finally,  the  Commission  considers  that,  in  order  to  establish  the 

rate  of  the  definitive  duties  to  be  imposed,  the  Individual  injury 

margins  determined  provisionally  have  to  bo  expressed  as  a 

percentage of  the CIF value of  the  imports. 

To  do  this,  for  each  exporter  the weighted  average  selling  price of 

its  sales  to  the  first  unrelated  buyer  has  been  converted  to  the 

average  CIF  value  of  these  sales.  The  individual  injury  threshold 

was  then  expressed  as  a  percentage  of  the  weighted  average  resale 

price of each  exporter  at CIF  level.  The  result  of  this  calculation 

is the price  increase  at  the Community  frontier  necessary  to  remove 

the  injury  caused  by each  exporter. 

51.  The  Council  confirms  the  above  findings  of  the  Commission,  and 

concludes  that  on  the  basis  of  the  injury  calculation  method 

described  in recitals  105  to  109 of  Regulation  (EEC)  No  3262/90  and 

for  the abovement ioned  reasons,  the  duty  to be  imposed  should  be at 

the  level  of  the  dumping  margin  for  all  exporters  mentioned  in 

recital  21,  except  for  the  exporters  whose  dumping  margins  exceed 

the  injury  level  and  for which  the  following  anti-dumping  duties are 

required  to eliminate  the  injury  suffered  : 

•  .  •1<C-L.  ,  * . - - '.  . 

-  28  -

Fuji 

Denon  Columbia 

Maxel 2 

Sony 

TDK 

15.2% 

18.7% 

21.8% 

23.4% 

27.4% 

52.  For  other  companies  which  neither  replied  to  the  Commission's 

questionnaire  nor  otherwise  made  themselves  known  or  refused  full 

access  to  information  deemed  to  be  necessary  by  the  Commission  for 

its  verification  of  the  company's  records,  the  Council  considers  it 

appropriate  to  impose  the  highest  duty  calculated,  i.o.  27.4%  for 

products  originating  in  Japan  and  9.2%  for  products  originating  in 

Korea.  Indeed,  it  would  constitute  a  bonus  for  non-cooperation  to 

hold  that  tho  duties  for  these  producers/exporters  woro  any  lower 

than  the  highest  anti-dumping  duty  determined. 

Tho  duty  to  be  imposed  should  apply  to  all  audio  cassettes  from 

Japan  and  Korea. 

K.  COLLECTION OF  PROVISIONAL  DUTIES 

53.  in  view  of  the  dumping  margins  established,  and  the  seriousness  of 

the  injury  caused  to  the  Community  industry,  tho  Council  considers 

it  necessary  that  amounts  collected  by  way  of  provisional  anti 

dumping  duties  should  be  definitively  collected  to  the  extent  of  the 

amount  of  the  duty  definitively  imposed. 

54.  !n  respect  of  tho  exporters  whose  dumping  did  not  cause  material 

injury,  the  provisional  duty  coilected  has  to  be  released  entirely. 

Provisional  anti-dumping  duties  collected  or  securities  received  for 

audio  cassettes  not  covered  by  the  definition  anti-dumping  duties 

should  also  be  released. 

HAS ADOPTED THIS REGULATION 

- 29 -

Article 1 

(1)  A definitive anti-dumping duty  is hereby  imposed on  imports of audio 

tapes  in  cassettes  falling  within  CN  code  ex  8523  11  00  (Taric 

code 8523  11 00 *10) and originating  in Japan and  the Republic of 

Korea. 

(2)  The  rate  of  the  duty  applicable  to  the  net-free-at-Community-

frontier price before duty, is set as follows : 

(a) 

27.4%  for  audio  tapes  in  cassettes  originating  in  Japan 

(Taric  additional  code 

8487),  with  the  exception  of 

imports which  are manufactured  and  sold  for  export  to the 

Community by the following companies.  These companies shall 

be subject to the rate of duty mentioned hereunder : 

Sony 

23.4% (Taric additional code  : 8483) 

MaxelI 

21.8% (Taric additional code : 8484) 

Denon 

18.7% (Taric additional code  : 8486) 

Fuji 

15.2% (Taric additional code : 8485) 

(b) 

9.2%  for  audio  tapes  in  cassettes  originating  in  the 

Republic of Korea  (Taric additional  code  : 8488), with  the 

exception  of  imports  which  are  manufactured  and  sold  for 

export  to  the  Community  by  the  following  company.  This 

company  shall  be  subject  to  the  rate  of  duty  mentioned 

hereunder : 

Sunkyong Magnetics Ltd (SKM) : 2.6% (Taric additional code : 

8489) 

- 30 -

(3)  None of tho  duties shall apply to Imports of tho products specified 

in paragraph  1 manufactured  and  sold  for  export  by  the  following 

Korean companies : 

- Saehan Media Co. Seoul  (Taric additional code  : 8490) 

- Sungnam Ltd. Seoul  (Taric additional code  : 8490) 

- Keum Sahn Electronics Co. Ltd, Kyung Do (Taric additional 

code  : 8490) 

(4)  For  the purpose  of  this  Regulation, audio  tapes  in cassettes  mean 

audio  cassettes  of  a  length  of  100  millimetres,  a  height  of 

64 millimetres and a depth of 12 millimetres and with a tolerance of 

approximately +/- 2 millimetres. 

(5)  In  cases  where  the  exporting  company  is  not  the  same  as  the 

producing company the rate applicable to the producing company shall 

apply. 

(6)  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 3262/90 shall  be definitively  collected  at  the duty 

rate definitively  imposed.  Amounts  secured  in excess  of  the definitive 

rate of duty shall be released. 

Article 3 

The  anti-dumping  proceeding  concerning  imports  of  audio  tapes  in 

cassettes originating  In Hong Kong  is terminated.  The amounts secured by 

way  of  provisional  anti-dumping  duty  under  Regulation  (EEC) No 3262/90 

shalI be released. 

-  31  -

Article  4 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its 

publication  in the Official  Journal  of  the European Communities. 

This Regulation  shall  be binding  in  its entirety  and  directly  applicable 

in all Member States. 

Done at Brussels, 

For  the Council 

The President 

-  32  -

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COM(91) 118 final 

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