Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 1768/89 in respect of the definitive anti-dumping duty on certain imports of video cassettes originating in Hong Kong
Date: 1992-05-26
Institutions: European Commission
Subjects: Hong Kong, anti-dumping duty, export price, free-at-frontier price, trading margin, video cassette

iCGMt/IISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM(92) 208 final 

Brussels, 26  May 1992 

Proposal  for a 

COUNCIL PF^ULATION  (EEC) 

amending Regulation  (EEC) No 1768/89  in respect of the definitive 

anti-dumping duty on certain  Imports of video cassettes 

originating  in Hong Kong 

(presented by the Commission) 

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EXPLANATORY  MEMORANDUM 

1.  By  Regulation  (EEC)  No  1768/89,  the  Council  imposed  a  definitive 

anti-dumping duty of 21.9% on  imports of VHS video tape  in cassettes 

originating  in Hong Kong. 

2.  By a notice published on 12 October  1991  the Commission  initiated a 

review  of  the  anti-dumping  duty  concerned  as  regards  a  Hong  Kong 

company, Bico Magnetics Ltd. 

3.  The  investigation showed  that Bico Magnetics Ltd  had never  exported 

own-produced  video cassettes to the European Community and was about 

to begin such exports. 

4.  Normal  value was determined on the basis of constructed value of the 

models concerned. 

Since  Bico  Magnetics  Ltd  had  not  exported  video  cassettes  to  the 

Community, no export price could be established. 

5. 

In these  circumstances, the anti-dumping duty  to be  imposed should 

be a variable duty equal  to the difference between  the normal  value 

and the net price free-at-Community-frontier. 

6. 

In conclusion,  it  is proposed  that  the Council  amend  its Regulation 

(EEC)  No  1768/89,  exempt  Bico  Magnetics  Ltd  from  the  definitive 

anti-dumping  duty  imposed  on  VHS  video  tapes  in  cassettes 

originating  in Hong Kong and  impose  instead  the above variable duty 

for the models meant to be exported to the Community. 

-  3 -

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

amending Regulation  (EEC) No 1768/89  in respect of  the definitive 

anti-dumping duty on certain  imports of video  cassettes 

originating  in Hong Kong 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Having  regard  to the Treaty establishing  the European  Economic  Community, 

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

protection  against  dumped  or  subsidized  imports  from  countries  not 
members  of  the  European  Economic  Community1,  and  in  particular  Article 
14 thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after 

consultation  within  the  Advisory  Committee  as  provided  for  under  the 

above Regulat ion, 

Whereas: 

I - PREVIOUS  PROCEDURE 

1. 

By  Regulation  (EEC)  No  1768/892,  as  amended  by  Regulation  (EEC) 
No 3522/903,  the  Council  imposed  a  definitive  anti-dumping  duty  of 
21.9%  on  imports  of  VHS  video  tape  in  cassettes  (hereafter  "video 

cassettes")  falling  within  code  ex  8523 13 00  and  originating  in 
Hong  Kong,  with  the  exception  of  imports  from  several  exporters 

especially  mentioned which  were  subject  to a  lesser  rate of  duty or 

exempt  from duty. 

1 
2 
3 

OJ  No L 209, 2.8.1988, p. 1. 
0J No L 174, 22.6.1989, p. 1 
OJ  No L 343, 7.12.1990, p. 1 

- 4 -

2. 

In  recital  43  of  Regulation  (EEC)  No  1768/89,  concerning  companies 

which  started  or  will  start  exporting  own-produced  video  cassettes 

to  the  Community  after  the  investigation  period  (newcomers),  the 

Council  noted  that  the  Commission  is ready  to  initiate without  delay 

a  review  proceeding 

if  the  exporting  company  can  show  the 

Commission,  and  supply  sufficient  evidence,  that  it  did  not  export 

the  products  concerned  to  the  Community  during  the  period  of 

investigation.  The  company  also  has  to  demonstrate  that  it  started 

or  will  start  those  exports  after  the  said  period  and  that  it  is not 

related  to  or  associated  with  any  of  the  companies  subject  to  the 

invest igat ion. 

II -  REVIEW 

3. 

By  a  notice  published  on  12  October  19914,  the  Commission,  after 

consultation  within  the  Advisory  Committee  and  in  accordance  with 

Article  14  of  Regulation  (EEC)  No  2423/88  initiated  a  review  of 

Regulation  (EEC)  No  1768/89  as  it  concerned  a  Hong  Kong  company, 

Bico  Magnetics  Ltd.  This  company  had  submitted  that  it  did  not 

export  the  products  subject  to  the  anti-dumping  duty  during  the 

previous  period  of  investigation  (1  January  -  30  November  1987). 

In  addition,  it  submitted  that  it  was  not  related  with  any  of  the 

companies  subject  to  the  previous  investigation  for  which  dumping 

was  found.  In  addition,  no  evidence  was  found  that  it  had  ever 

exported  video  cassettes  to  the  Community.  Accordingly,  the 

Commission  commenced  an  investigation  in  order  to  verify  that  Bico 

Magnetics  Ltd  could  be  considered  as  a  newcomer  and  to  establish  a 

dumping  margin,  if any,  for  this  company. 

OJ  No C  266,  12.10.1991,  p.  7 

- 5 -

Newcomer 

4.  The  investigation showed  that Bico Magnetics Ltd  had not previously 

exported  or  produced  video  cassettes  which  were  exported  to  the 

Community and was now about  to begin such exports.  In addition, it 

was  found  that  this  company  had  no  link  of  any  sort  with  the 

exporters  involved  in the previous procedure and  for  which dumping 

was  found.  The  Council  confirms  that  it  should  accordingly  be 

considered  as  a  newcomer  and  that  a  partial  review  of  Regulation 

(EEC) No  1768/89,  inasmuch  as  it concerned  Bico Magnetics Ltd, was 

warranted. 

Ill -  RESULTS OF THE  INVESTIGATION 

1. Normal value 

5.  Since  Bico  Magnetics  Ltd  did  not  sell  any  video  cassettes  on  the 

domestic  market  during  the  investigation  period  for  this  review 

(from 1 January to 30 June 1991), normal value was determined on the 

basis  of  the  constructed  value  of  the  product  concerned  in 

accordance  with  Article  2(3)(b)  of  Regulation  (EEC)  No  2423/88. 

This constructed  value was computed on the basis of all  costs, both 

fixed  and  variable,  in  the  country  of  origin  of  materials  and 

manufacture for the models destined for export to the Community plus 

a  reasonable  amount  for  selling,  administrative,  other  general 

expenses and profit. 

6.  As  far  as  selling,  administrative  and  general  expenses  were 

concerned,  they  were  calculated  by  reference  to  such  expenses  as 

they  were  stated  in  the  audited  accounts  of  Bico.  These  costs 

corresponded  to such costs  incurred by other Hong Kong manufacturers 

for  their  sales  of  video  cassettes  on  the  domestic  market,  as 

established  during  previous  investigations  concerning  video 

cassettes from Hong Kong. 

- 6 -

As far  as profit was concerned,  it was found  appropriate to apply a 

profit  rate  of  8%  on  turnover;  this  rate  was  used  in  Regulation 

(EEC) No 1768/89 for the Hong Kong video cassette manufacturers and, 

according  to the  information  available to the Commission,  can still 

be  regarded  as  the  profit  which  Hong  Kong  companies  can  normally 

achieve  on  their  domestic  market.  The  Council  confirms  these 

f indings. 

7.  On  this basis, normal  value was established  for  the models produced 

and  destined  for  export  to  the  Community  by  Bico  Magnetics  Ltd, 

namely normal grade. 

2. Measures 

8.  Since  it was  found  that  Bico  Magnetics  Ltd  had  not  exported  video 

cassettes to the Community, no export  price could be established  for 

the  product  under  consideration,  and  no  dumping  margin  could  be 

calculated. 

9.  However,  it  is clear  that  if the export  prices of the various models 

of  video  cassettes  sold  for  export  to  the  Community  by  Bico 

Magnetics Ltd at  least equal  the normal  value  for  the corresponding 

models, these products would not be dumped. 

10.  In  addition,  this  normal  value  is  less  than  the  target  price 

determined  for  the  Community  industry  in  Regulation  (EEC)  No 

1768/89. 

- 7 -

11.  In  these  circumstances,  it  is considered  that  the  measures  to  be 

imposed  in  respect  of  the  imports  to  the  Community  of  video 

cassettes produced  by Bico Magnetics Ltd, should  guarantee  that the 

products  are  not  sold  to  the  Community  at  less  than  their  normal 

value. 

IV - AMENDMENT OF THE REVIEWED MEASURES 

12.  Accordingly,  it  is considered  appropriate  that  Regulation  (EEC) No 

1768/89  should  be  amended  and  that  Bico Magnetics  Ltd  be  exempted 

from the definitive anti-dumping duty  imposed on VHS video tapes in 

cassettes  originating  in  Hong  Kong  in  respect  of  the  models  E60, 

E90,  E120, E180, E195 and  E240,  in so  far  as  these models will  be 

subject  to a duty equal  to the difference between minimun price set 

out  for each of  these models and  their net price free-at-Community-

frontier before customs clearance.  The minimum price corresponds to 

the normal  value duly adjusted  to bring  it to CIF level. 

13.  Bico  Magnetics  Ltd  was  informed  of  the  essential  facts  and 

considerations  on  the  basis  of  which  the  imposition  of  the  anti 

dumping  duties  were  proposed,  and  was  given  an  opportunity  to 

comment  on  such  proposal.  No  comments  were  made  by  the  exporting 

producer concerned. 

14.  The complainants were  informed of  the considerations and main  facts 

on the basis of which the Council  intented to amend Regulation (EEC) 

No 1768/89 and had no comment to make. 

15.  Since this review  is only  limited to one Hong Kong producer,  it does 

not prolong the validity of Regulation  (EEC) No 1768/89  in regard to 

Article 15(1) of Regulation  (EEC) No 2423/88, 

HAS ADOPTED THIS REGULATION: 

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Article 1 

The  following subparagraph  is hereby  added  to Article  1(3) of Regulation 

(EEC) No 1768/89: 

"The duty  specified  in paragraph  2(b) shall  not apply  to models of video 

tapes  in cassettes E60-E90-E120, E180-E195-E240  in normal  grade produced 

and  sold  for  export  to  the  Community  by  Bico Magnetics  Ltd,  Hong  Kong 

(Taric additional  Code 8292);  these models shall  be subject  to an anti 

dumping  duty  equal  to  the  difference  between  the  price  mentioned 

hereunder  for each of  the models concerned  and  their  net  price, free-at-

Community-frontier, not cleared through customs: 

E60 

E90 

E120 

E180 

E195 

E240 

ECU 0.70 

ECU 0.83 

ECU 0.96 

ECU  1.22 

ECU  1.29 

ECU  1.48 

-  9  -

Article  2 

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

publication  in the Official  Journal  of  the  European  Communities. 

This  Regulation  shall  be  binding  in  its entirety  and  directly  applicable 

in all  Member  States. 

Done  at  Brussels, 

For  the  Council 

The  President 

ISSN 0254-1475 

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