Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty concerning the importation of certain electronic weighing scales originating in Japan
Date: 1993-03-25
Institutions: European Commission
Subjects: Japan, anti-dumping duty, electronic device, import, measuring equipment

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0MC93) 87  final 

Brussels, 25 March  1993 

Proposal  for a 

COUNCIL REGULATION  (EEC) 

imposing a definitive anti-dumping duty concerning the  importation 

of certain electronic weighing  scales originating  in Japan 

(presented by the Commission) 

- 2 -

EXPLANATORY  MEMORANDUM 

1. 

In  a  notice  published  in  Official  Journal  No  C  50  of  26  February 

1991, the Commission  announced  a review,  in accordance  with  Articles 

14 and  15 of Council Regulation  (EEC) No 2423/88, of the  anti-dumping 

measures  imposed on  imports  into the Community  of certain  electronic 

weighing  scales originating  in Japan. 

2. 

The  Commission  carried  out  its  investigation  in  the  period  between 

1 January and 31 December 1990. 

3. 

Normal  value  for  all Japanese  producers was  based  on  domestic  sales, 

if  those  sales  were  comparable  in  product  type,  price  structure, 

quantity  and  category  of  customer  with  sales  made  during  the 

investigation  period  to  the  Community  market.  In  a  few  exceptional 

cases, where none of these comparable  sales were made on the domestic 

market,  normal  value was constructed  on the basis  of  the  actual  cost 

of production plus a reasonable profit margin. The comparison between 

the  normal  value  and  export  price  to  the  Community  showed  dumping 

margins  for all Japanese producers, ranging from  15.3% to  80.7%. 

4. 

As  far  as  injury  is  concerned,  investigations  sought  to  determine 

whether  there  had been  any  changes  in the  situation  of  the  Community 

industry  as  a  result  of  the  behaviour  of  the  exporters  on  the 

Community  market  since  the  imposition  of  the  anti-dumping  measures 

under  review.  Furthermore,  the  Commission  also  examined  whether  the 

expiry  of  existing  anti-dumping  measures  would  be  likely  to  lead  to 

recurrence of  injury. 

It emerged  from  the  investigation  that  the  present  situation  of  the 

Community  industry  -  falling  sales  and  financial  losses  - meant  that 

protection  was  still  required  against  dumped  imports  originating  in 

Japan.  It was  found that the measures under review had  not prevented 

the  undercutting  of  Community  producers'  prices  by  the  Japanese 

imports,  which  remained  at  an  appreciable  level.  In  these 

circumstances,  the  lifting  of  the  anti-dumping  measures  in  force 

could  not  be  justified.  However,  the  measures  required  amendment  in 

the  light  of the  information  on dumping  and  injury which  had  emerged 

from the  investigation. 

-  3 -

5. 

With  respect  to Community  interests, the  industry  concerned  not  only 

requires  a  significant  number  of  qualified  staff,  but  also  involves 

technologies,  the  loss  of  which  would  mean  a  general  loss  of 

competitive edge in the electronic  sector. 

In  addition,  the  removal  of  the  unfair  advantages  gained  by  the 

dumping  practices  is  designed  to  prevent  the  further  decline  of  the 

Community  industry  and  thus help to maintain  the  availability  to the 

consumer of the widest possible choice of product. 

Furthermore,  the  Commission  has  also  carefully  considered  the 

implications  of  anti-dumping  measures  for  consumer  prices  and  there 

is  no  evidence  that  they  would  be  significantly  affected  by  a 

continuation of such measures. 

6. 

That  being  the  case, the  anti-dumping  measures  should  be  maintained 

and adjusted  in the  light of the results of the review. 

7. 

In accordance  with Article  13 of Council  Regulation  (EEC) No  2423/88 

the  duty  to  be  established  for  the  individual  Japanese  exporters 

should  be  less  than  the  dumping  margin  found,  if  such  lesser  duty 

would  be  adequate  to  remove  the  injury.  This  is  the  case  for  the 

following three Japanese exporters: 

- 

Tokyo Electric Co Ltd - 22.5%; 

Ishida Scales Mfg Ltd  - 31.6%; 

Teraoka Seiko Co Ltd  - 22.6%. 

For  Yamato  Scales  Co  Ltd,  for  which  the  injury  margin  established 

exceeds  the  dumping  margin  found,  the  duty  would  be  15.3%.  In  the 

case  of  companies  that  failed  to  cooperate,  the  Commission 

established  that  there  was  no  reason  to  believe  that,  for  such 

producers,  the duty  should  be  lower than  the highest  rate  considered 

necessary  to remove the  injury, namely  31.6%. 

- 4 -

Proposal for a 

COUNCIL REGULATION  (EEC) 

imposing a definitive anti-dumping duty concerning the importât] 

of certain electronic weighing  scales originating  in Japan 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having regard to the Treaty establishing  the European Economic  Community, 

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

protection  against  dumped  or  subsidized  imports  from  countries  not  members 

of  the  European  Community (!),  and  in  particular  Articles  14  and  15 

thereof, 

Having  regard to the proposal  from the Commission, 

After  consultations  within  the  Advisory  Committee  as  provided  for  by  the 

Regulation, 

Whereas: 

A. 

Procedure 

(1)  By  Regulation  (EEC)  No  2865/85(2),  the  Commission  imposed  a 

provisional  anti-dumping  duty  on  imports  of  certain  electronic 

weighing  scales  originating  in  Japan  and  accepted  undertakings  in 

respect of certain  imports of such products originating  in Japan. 

(2)  By  Regulation  (EEC) No  1058/86(3),  the  Council  imposed  a  definitive 

anti-dumping  duty  on  imports  of  certain  electronic  weighing  scales 

originating  in Japan. 

(1)  OJ No L 209, 2.8.1988, p. 1. 
(2)  OJ No L 275, 16.10.1985, p. 5. 
(3)  OJ No L 97, 12.4.1986, p. 1. 

-  5 -

(3)  Following  a  subsequent  investigation  covering  the  circumvention  of 

this  duty,  the  Commission,  by  Decision  88/398/EEC<4),  accepted  an 

undertaking  concerning  electronic  weighing  scales  assembled  in  the 

Community. 

(4) 

In April  1990,  the Commission  published  a noticed) of  the  impending 

expiry  of  the  undertakings  mentioned  in  recital  (1)  above,  in 

accordance with Article  15(2) of Regulation  (EEC) No 2423/88. 

(5)  In June 1990, producers, representing  a major proportion of the total 

Community  production  of  retail  electronic  weighing  scales,  submitted 

to  the  Commission  a  request  for  review  of  Regulation  (EEC)  No 

2865/85. 

(6)  In August  1990, a  request  for  review  of  the  definitive  anti-dumping 

duty  imposed  by  Regulation  (EEC)  No 1058/86  was  lodged  by  the  same 

producers  in  accordance  with  Article  14(1)  of  Regulation  (EEC) 

No 2423/88. 

(7)  Consequently,  in  February  1991, the  Commission,  after  consultation, 

announced,  by  a  notice  published  in  the  Official  Journal  of  the 

European  Communities, the  initiation  of  a  review  of  both  Regulation 

(EEC)  No  2865/85  and  Regulation  (EEC)  No  1058/86  pursuant  to 

Articles  14  and  15  of  Regulation  (EEC)  No 2423/88,  and  opened  an 

investigation(6). 

(8)  In  March  1991,  in  accordance  to  Article  15(4)  of  Regulation  (EEC) 

No 2423/88, the  Commission  published  a noticed) on  the  continuation 

in force of the anti-dumping measures during the review proceeding. 

(9)  The  Commission  officially  notified  the  exporters  and  the  Community 

importers  and  producers  known  to  be  concerned  and  gave  them  the 

opportunity  to  make  known  their  views  in  writing  and  to  request  a 

hearing. 

(4)  OJ No L 189, 20.7.1988, p. 27 
(5)  OJ No C 106, 28.4.1990, p. 5. 
(6)  OJ No C 50, 26.2.1991, p. 3. 
(7)  OJ No C 81, 26.3.1990, p. 5. 

-  6 -

(10)  Most  of the Japanese exporters  and most  of the  complainant  Community 

producers  made  their  views  known  in  writing.  Submissions  were  also 

made by a number of  importers. Some of the parties directly  concerned 

requested  and were granted hearings. 

(11)  The Commission  sought  and  verified  all the  information  it  considered 

necessary  for  a preliminary  determination  of dumping  and  injury,  and 

carried out  investigations at the premises of the  following: 

(a)  Community  producers 

Bizerba Werke GmbH, Balingen, Germany 

GEC Avery, Smethwick, United  Kingdom 

Maatschappij van Berkels Patent N.V., Rijswijk, Netherlands 

Testut, Béthune, France 

Lutrana, Viry-Châtillon, France 

Esselte Meto E.S.T., Saint Maur, France 

Brevetti van Berkel S.p.a., Milano, Italy 

Santo Stefano S.p.a., Cassano Magnago, Italy 

Vandoni S.p.a., San Donato Milanese, Italy 

Grupo Campesa, Barcelona, Spain 

(b)  Japanese exporting  producers 

Ishida Scales Mfg Co Ltd, Kyoto 

Teraoka Seiko Co Ltd, Tokyo 

Tokyo Electric Co Ltd, Tokyo 

Yamato Scales Co Ltd, Akashi 

(c)  Related  importers 

TEC Elektronik GmbH, Ratingen, Germany 

TEC UK Ltd, Watford, United  Kingdom 

(d)  Unrelated  importers 

Biesta BV, Leusden, Netherlands 

Carrin & Co N.V., Antwerp, Belgium 

Digi System N.V., Antwerp, Belgium 

Herbert  & Sons, Suffolk, United  Kingdom 

-  7 -

(12)  The  Commission  requested  and  received  written  and  oral  submissions 

from  the complainants,  from the exporters named  and  from a number of 

related  and unrelated  importers and verified the information  provided 

to the extent considered  necessary. 

(13)  The  exporters,  related  importers  and  complaining  industry  were 

informed  of  the  essential  facts  and  considerations  on  the  basis  of 

which  it was  envisaged  to  recommend  the  imposition  of modified  anti 

dumping duties. Due account was taken of the parties'  representations 

in the findings of the Commission. 

(14)  The  investigation  into  dumping  practices  covered  the  period  from 

1 January  1990 to 31 December  1990  ("the  investigation  period"). 

(15)  The  investigation  exceeded  the  normal  period  because  of  the  volume 

and complexity  of the data which had to be gathered  and examined, and 

because  the  completion  of  the  investigation  required  the  examination 

of  new  issues which  had  arisen during  the proceeding  and  which  could 

not have been  foreseen at its outset. 

B. 

Product 

Product description 

(16)  The  products  under  investigation  are  electonic  weighing  scales  for 

use  in  the  retail  trade  which  incorporate  a  digital  display  of  the 

weight,  unit  price  and  price  to  be  paid  (whether  or  not  including  a 

means  of  printing  this  data)  covered  by  CN  Code  8423 81 50  and 

hereinafter  referred  to  as  "R.E.W.S."  (retail, electronic  weighing 

scales). 

R.E.W.S.  are  produced  with  different  types  or  levels  of  performance 

and  technology.  In this respect, the  industry  defines  three  segments 

of R.E.W.S., namely: 

- 

a low-range  segment which comprises  stand-alone  R.E.W.S. without 

built-in printer  and preset key system; 

- 8 -

a  mid-range  segment  with  built-in  printer  and  an  additional 

preset key  system; 

a  top-range  segment  having  the  additional  option  of  being 

connected  to a computer  system and of being  computer-related. 

(17)  Although the potential use and quality of R.E.W.S. can vary, there is 

no  significant  difference  in  the  basic  physical  characteristics  or 

marketing  methods  within  the  various  types  of  R.E.W.S.  In  addition, 

between  these  three  segments  there  are  no  clear  dividing  lines, 

models  in  neighbouring  segments  being  often  interchangeable.  They 

have,  therefore,  to  be  considered  as one  product  for  the  purpose  of 

this proceeding. 

(18)  The Council  confirms the above findings. 

Like product 

(19)  The  investigation  has  shown  that  the  various  R.E.W.S.  sold  on  the 

Japanese  market,  despite  differences  in  size,  life-span,  voltage  or 

design,  are  identical  to  the  R.E.W.S.  exported  from  Japan  to  the 

Community,  or  closely  resemble  them,  and  accordingly  have  to  be 

regarded  as like products. 

Likewise,  apart  from  minor  technical  differences,  the  Community-

produced  R.E.W.S.  in all three  segments  are alike  in all  respects  to 

the R.E.W.S. exported  from Japan to the Community. 

(20)  The Council  confirms those findings. 

c- 

Export prices 

Sales to  independent  importers 

(21)  Where  sales  were  made  direct  to  independent  importers  in  the 

Community,  export  prices  were  determined  on  the  basis  of  the  prices 

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

Community.  The  Japanese  producers  identified  these  sales  as  being 

- 9 -

made  at  the  level  of  importer/distributor  or  dealer,  and  the 

Commission  is satisfied, on the evidence presented, that  such was the 

case.  In  accepting  this  claim,  the  Commission  took  account  of  the 

functions  of  both  seller  and  buyer  based  on  the  costs  incurred  and 

the  quantities  sold,  on  a  consistency  in  the  prices  charged  at  this 

particular  level  and,  finally,  on  the  evidence  available  on  the 

distribution chain. 

(22)  The Council  confirms that conclusion. 

Sales to related  importers 

(23)  Where exports were made to related  importers  in the Community,  export 

prices  were  constructed  in  accordance  with  Article  2(8)(b)  of 

Regulation  (EEC)  No  2423/88,  on  the  basis  of  resale  prices  to  the 

first  independent  purchaser,  adjusted  to  take  account  of  all  costs 

incurred  between  importation  and  resale  together  with  a  5%  profit 

margin  which  was  considered  reasonable  in  the  light  of  the 

information  available  to  the  Commission  from  the  unrelated  importer 

which  cooperated. 

The Commission, on the same grounds as those outlined  above  for sales 

to  independent  importers,  accepted  the  Japanese  producers*  claims 

that  the  export  prices,  reconstructed  to  a  CIF  Community-frontier 

basis, were made at the  level of  importer/distributor. 

(24)  The Council  confirms that conclusion. 

D. 

Normal value 

1. 

Inadequate reply to the  questionnaire 

(25)  In  the  case  of  one  of  the  Japanese  producers  concerned,  the 

Commission  was  unable  to  use  its  reply  to  the  questionnaire  as  the 

basis  for  establishing  the  normal  value.  The  reply  was  deemed 

unreliable  because  the evidence  supplied  on  costs was  incorrect  to a 

substantial  degree. The  true  extent  of  the  falsity  or  unreliability 

-  10 -

of  the  information  presented  by  the  company  can  be  gauged  from  the 

fact  that  its  claims  for  deductions  from  selling,  general  and 

administrative  costs  exceeded  the  total  amount  of  those  costs  which 

the  firm  claimed  were  incurred  for  the  product  concerned. 

Consequently,  the  fact  that  the  cost  data  could  not  be  used  meant 

that prices  also  had  to be deemed  unreliable  because  it could  not be 

established  whether  they  covered  costs  and  were  thus  made  in  the 

ordinary course of trade. 

(26)  In  fact,  new  cost  figures  were  presented  during  verification  at  its 

premises, but they diverged  in important  respects  from those given in 

the original  reply. 

(27)  In  that  respect  the  Commission  recalls  that  it  is  essential  for 

replies to questionnaires, and  significant  corrections to them, to be 

submitted  within  the  reasonable period  provided  for this purpose, as 

a  considerable  amount  of  preparatory  work  and  analysis  of  replies 

must  be  carried  out  by  the  investigating  authorities  prior  to  the 

verification  visit.  In  the  present  case,  however,  the  Commission 

attempted  to  verify  the  company's  revised  information,  presented 

during  the  verification  visit,  but  the  fact  that  it  was  received 

during  the  visit  and  the  confusing  nature  of  the  conflicting 

information  precluded  an  adequately  accurate  identification  and 

verification  of  actual  costs.  Thus,  the  Commission  considered  that 

the  company's  reply  was  substantially  false  or  misleading  and 

significantly  impeded  the  investigation  process.  The  Commission  was 

accordingly  unable  to  establish  normal  value  for  this  company  on  the 

basis of the information  supplied  and established  its findings on the 

basis  of  the  facts  available  in  accordance  to  Article  7(7)(b)  of 

Regulation  (EEC) No 2423/88  (see recital  (63)). 

(28)  The Council  confirms that  conclusion. 

2. 

Normal value based  on prices  in the exporting  country 

(29)  For  the  remaining  Japanese  producers, domestic  sales  were  considered 

sufficiently  representative  as  a  basis  for  normal  value  since  the 

Commission  established  that  domestic  sales  volume exceeded  5% of  the 

export  sales to the Community. 

- 11 

Most  models  were  sold  domestically  in  sufficient  quantities  and  at 

prices which permitted  the recovery of all costs reasonably  allocated 

in  the  ordinary  course  of  trade  on  the  domestic  market  in  Japan. 

Normal  value was therefore  for these models  established  on  the basis 

of  their  weighted  average  domestic  prices,  net  of  all  discounts  and 

rebates directly  related  to the sales of R.E.W.S. 

Selective normal  value 

(30)  Three  Japanese  producers  claimed  that  a  distinction  should  be  drawn 

between  the  several  categories  of  their  independent  buyers  on  the 

domestic  market,  and  that  the  normal  value  should  be  established 

selectively  on  the  basis  of  the  weighted  average  prices  of  their 

sales  to  one  of  those  categories,  i.e.  alleged  distributors  or 

dealers  which  they  claimed  to  be  at  the  most  appropriate  level  of 

trade  for  comparison  with  their  export  sales.  They  contended  in 

particular  that  this  special  category  of  customer  had  different 

functions  from  the other  unrelated  customers, reflected  in the  scale 

and  type  of  costs  incurred,  the  quantities  sold  and  the  pattern  of 

prices  charged. 

(31)  It is the Community  institutions' consistent  position that a specific 

level  of  trade  can  only  be  adequately  identified  if  a  demonstration 

is  made  of  all  relevant  factors,  including  the  functions  of  both 

seller  and  buyer  and  the  consistency  of  quantities, costs  and  prices 

at the distribution  level  in question as compared with other levels. 

Another  important  question  in  identifying  a  specific  category  of 

customer  is how  that  category  stands  in relation  to  the  distribution 

system  of  the  market  concerned  and  whether  this  comparison  can 

indicate  that  only  this  category  should  be  compared  to  export 

customers  holding  a  similar  position  in  the  distribution  system  of 

the export market. 

(32)  One  Japanese  producer  alleged  that  its sales were made  through  three 

distribution  channels  and  that  its  normal  value  should  be  based  on 

sales to customers alleged  to have distribution  functions which, this 

producer  claimed, were made only through one channel. 

-  12 -

For  one  of  the  three  distribution  channels,  a  distinction  in 

quantities  sold,  a  clear  difference  in  costs,  and  prices  which 

reflect  different  functions  of  the  category  of  customer  within  that 

channel  compared  with  other  independent  customers,  confirmed  that 

sales  in  the  channel  in  question  were  made  at  a  level  of  trade 

different  from the  sales to other  categories  of  client  and  different 

from  the  categories  of  customer  to which  export  sales  were  made.  In 

addition,  the  evidence  available  on  the  distribution  chain  for  the 

market  concerned  supported  this  producer's  claims  on  customers' 

functions. 

(33)  Regarding  the  other  two  distribution  channels  operated  by  that 

exporter, the Commission  found that there was no clear distinction  in 

quantities,  in  product  sales  costs,  or  in  prices  charged  in  one 

distribution  channel  in relation to the other. 

The  Commission  therefore  concluded  that, with  respect  to  sales  made 

within  those  two  channels,  no  specific  and  clearly  distinguishable 

category  of  customers  could  be  identified.  Accordingly,  the  normal 

value  for  this  producer  was  established  selectively  on  the  basis  of 

the weighted  average  domestic  prices  of  its  sales  in  those  channels 

which  were  considered  most  appropriate  for  comparison  with  export 

sales. 

(34)  The Council  confirms that conclusion. 

(35)  With  regard  to the claim  of  one of the other  Japanese producers, the 

Commission  found  that  the  information  given  in  the  reply  to  the 

questionnaire  was misleading.  In  its reply the  company  had  indicated 

that 

only 

the 

sales  through 

one  channel  were  made 

to 

distributors/dealers,  and  claimed  that  normal  value  should  be  based 

selectively  on  those  sales.  However,  on  verification  it  was  found 

that  sales  through  a  second  channel  were  also  being  made  to  similar 

customers. 

Therefore  the claim was  rejected,  since normal  value  had  to  be based 

on sales made to the same category  of  independent customers. 

-  13 -

(36)  Regarding  this  other  channel, the  company  also  claimed  that  a  small 

portion  of  the  sales were  made  to  end-users  and  should  be  excluded, 

as  they  were  at  a  different  level  of  trade  from  export  sales. 

However, the producer  failed to establish adequately  a consistency of 

quantities, costs and prices at one distribution  level  in relation to 

other levels. 

In  fact,  the  evidence  provided  on  some  of  these  factors  for  the 

specific  category  of  customer  in  question,  showed  that  they  were 

largely  similar to other categories alleged  to be different. 

(37)  In  those  circumstances,  the  Commission  concluded  in  respect  of  the 

producer  in  question  that  the  evidence  presented,  which  was  often 

conflicting,  was  insufficient  to demonstrate  that  sales were made  to 

specific  and  clearly  distinguishable  categories  of  customer  or  that 

only one of those allegedly  different  categories was more  appropriate 

than  all domestic  sales  for  comparison with  the export  prices. Thus, 

normal  value  for  this  producer  was  determined  on  the  basis  of  all 

sales to independent customers. 

(38)  The Council  confirms that conclusion. 

(39)  The  third  Japanese  producer  requested  during  the  verification  that 

normal value should be restricted  to sales to distributors/dealers  on 

the  domestic  market.  This  claim  was  not  supported  by  any  evidence 

concerning  differences  in  costs  and  prices  for  such  sales  and  is 

therefore  rejected. 

(40)  Normal  value  for  this  producer  was  therefore  based  on  a  weighted 

average of all  sales made to independent  customers  in Japan. 

(41)  The Council  confirms that conclusion. 

Sales to related  companies 

(42)  One  of  the  Japanese  producers  also  claimed  that  normal  value  should 

be established  on the basis of  its sales to related  sales companies -

that  is,  on  the  basis  of  transfer  prices  within  the  meaning  of 

Article  2(7)  of  Regulation  (EEC)  No 2423/88  -  and  not  based  upon 

prices charged by those related  companies to independent customers. 

14 -

(43)  The  Commission  found  that  the  producer  in  question  had  divided  the 

tasks  of marketing  its production  in Japan  between the manufacturing 

company,  selling  direct  to  distributors  or  dealers,  the  sales 

department  of  the  manufacturing  company  and  two  related  sales 

companies  which  sold  to  end-users  and  over  which  the  producer  had 

financial  control.  The  sales  functions  of  those  different  parts  of 

the  group  were  not  essentially  different  from  each  other.  The 

division  of  production  and  sales  activities  as  arranged  within  the 

group  can  in  no  way  alter  the  fact  that  the  group  is  a  single 

economic  entity  which  has  thus  organized  activities  which,  in  other 

cases, will be carried  out by a single legal entity. 

(44)  Another  producer  which  made  all  domestic  sales  through  a  related 

sales  company  claimed  that  its  normal  value  should  not  be  based  on 

prices  charged  by  its  sales  company  to  independent  customers  but 

should  be  constructed  on  the  basis  of  cost  of  production,  excluding 

selling,  general  and  administrative  costs,  incurred  by  the  sales 

company.  However,  the  Commission  found  that  the  latter  performed 

functions  falling  into the  category  of  those  described  in recital  43 

and  therefore  also  formed  an  economic  entity  with  the  manufacturing 

company. 

(45)  Consequently,  in both  cases, and  in accordance with  the  Commission's 

consistent  practice  upheld  by  the  Court  of  Justice,  the  activities 

and  functions  of  the  various  parts  of  the  entity  were  treated  as  a 

whole.  Thus,  normal  value  was  not  established  on  the  basis  of 

transfer  prices  or  of  the  cost  of  production  of  the  manufacturing 

company  alone,  but  on  the  basis  of  the  prices  charged  on  sales  to 

independent customers. 

(46)  The Council  confirms those conclusions. 

3. 

Normal value based on constructed  value 

(47)  Certain  models  sold  domestically  were  similar  but  could  not  be 

directly  compared  to  models  sold  for  export  to  the  Community,  as  a 

result  of  differences  in  technical  specifications  and  physical 

characteristics.  Those  differences  could  not  be  evaluated  with  any 

-  15 -

precision  given  the  different  nature  of  the  technology  used  and  the 

variety  of  combinations  of  features  and  accessories  which  form  part 

of the product. 

(48)  The Commission, accordingly, refrained  from establishing  normal value 

for those models on the basis of domestic  prices, since, in order to 

make domestic and import prices comparable to each other, this method 

would  have required  a great many  adjustments which would  have had  to 

be  based  on  estimations.  Consequently,  normal  value  was  in  these 

cases determined on the basis of constructed value, 

(49)  The  constructed  values  were  established,  in  accordance  with 

Article 2(3)(b)(ii)  of  Regulation  (EEC) No  2423/88, on  the  basis  of 

the  costs  in  Japan,  both  fixed  and  variable,  of  materials  and 

manufacture  for  the models  sold  for  export  plus  a  reasonable  amount 

for selling, general and administrative expenses and profit. 

As  regards  the  selling,  general  and  administrative  expenses,  the 

amounts were calculated  by reference to the average expenses actually 

incurred  by  each  producer  concerned  on  its  sales  of  R.E.W.S  on  the 

domestic market. The profit  rate of each producer was calculated  on a 

weighted-average  basis  for  all  domestic  sales  of  the  product 

concerned. 

(50)  The Council confirms that finding. 

4. 

Comparison 

General 

•(51)  Japanese  exports  were  made  to  different  Community  customers  at 

different  prices  and  in  different  regions  of  the  Community. 

Therefore,  export  prices  were  compared  with  normal  value  on  a 

transaction-by-transaction basis. 

- 16 -

(52)  Furthermore,  for  the  purpose  of  a  fair  comparison  between  normal 

value  and  export  prices, the  Commission,  in  accordance  with  Article 

2(9)  and  (10)  of  Regulation  (EEC)  No  2423/88,  took  account,  where 

warranted,  of  differences  affecting  price  comparability  wherever  a 

direct  relationship  of  those  differences  to  the  sales  under 

consideration  could  be  satisfactorily  substantiated.  All  comparisons 

were made at the ex-works stage and at the same level of trade. 

Differences  in physical  characteristics 

(53)  As  far  as  differences  in  physical  characteristics  were  concerned, 

normal  value was  adjusted  by  an amount  corresponding  to  a  reasonable 

estimate of the value of the differences. 

(54)  The Council confirms that  finding. 

Differences  in selling  expenses 

(55)  As  far  as  differences  in  selling  expenses  were  concerned,  normal 

value  and  export  prices  were  adjusted  in  order  to  take  account  of 

differences  in  credit  terms, warranties,  commissions,  salaries  paid 

to  sales  personnel,  packing,  transport,  insurance,  handling  and 

ancillary  costs, wherever evidence was given that these expenses were 

directly  related to the sales under  consideration. 

(a)  Sales staff  salaries 

(56)  As regards salaries  for personnel  involved  in domestic  sales, several 

Japanese  producers  had  requested  an  allowance  for  salarial  costs  for 

personnel  partly  engaged  selling  R.E.W.S.  and  partly  involved  in 

activities  concerning  other  products.  An  allowance  was  granted  for 

the portion of costs  incurred  in selling the product  concerned. 

-  17 -

Some of the salarial costs  for which allowances were claimed  related 

to  administrative  and  promotional  activities.  The  companies  were, 

however,  unable  to  relate  those  costs  to  the  product  concerned  and 

they were therefore considered  to be  general overheads which did not 

affect  price  comparability.  The  Commission,  consequently,  rejected 

the claim  for deduction of such costs. 

(57)  The Council confirms that conclusion. 

(b)  After-sales  servicing 

(58)  Some  companies  claimed  an  adjustment  for  after-sales  servicing  but 

were  not  in  a position  to  link  the  costs  directly  to  the  particular 

sales transactions regarding the product under  consideration. 

The  Commission  therefore  concluded  that  the costs  in question  had  to 

be considered  general overheads  for which no adjustment  could be made 

under  Article  2(10)  of  Regulation  (EEC)  No  2423/88.  The  claim  was 

consequently  rejected  by the Commission. 

(59)  The Council confirms that conclusion. 

(c)  Credit  terms 

(60)  The  Commission  made  adjustments  for  credit  granted  to  customers, 

where  it  received  evidence  of  a  fixed  credit  period  agreed  with  the 

buyer  at  the  date  of  sale.  Several  exporters  claimed  that  such 

adjustment  for  credit  terms  should  also  be  granted  where  no  fixed 

credit  period  had  been  agreed  or  where  an  agreed  period  had  been 

exceeded  and  that  the  cost  of  credit  in  such  cases  should  be 

calculated  on  the  basis  of  the  normal  interest  in  Japan  for  short-

term borrowing. 

Those claims were examined  in order to establish whether, as required 

by  Article  2(9)(a)  of  Regulation  (EEC) No 2423/88, the  credit  costs 

in question  could  be considered  to have affected  price  comparability. 

In  principle,  price  comparability  can  only  be  affected  by  factors 

known  to  the  buyer  when  he  decides  on  the  purchase.  Credit  periods 

-  18 -

which, contrary  to the usual practice  in Japan, are not agreed  at the 

date  of  sale  do  not  fall  into  this  category.  In  addition,  the 

Commission  found  that  such  credit  periods  varied  considerably  from 

one  customer  to  another.  In  such  circumstances  the  Community 

institutions would  normally  have  rejected  the claims. In this case, 

however,  and  in  conformity  with  the  line  taken  in  previous 

proceedings,  the  Commission  estimated  the adjustment  for  these  sales 

on  the  basis  of  30 days  of  credit. This  was  considered  to  represent 

the  usual  average  period  of  credit  granted  to buyers  of  products  in 

the same business sector on the Japanese market. 

(61)  The Council  confirms those conclusions, 

(d) 

"Trade-in allowance" 

(62)  A  Japanese  producer  claimed  an  allowance  for  trade-in  payments  made 

where  a  purchaser  (in  general,  distributors  or  dealers)  of  new 

machines  "traded  in"  old  and/or  used  machines.  It  was  established 

that  the  value  of  the  product  traded  in  did  not  appear  on  the 

invoiced  amount.  The  producer,  however,  argued  that  this  should  not 

be  considered  to be relevant  since trade-in  operations  were  directly 

related  to  the  sales  under  consideration  and  sellers  were  allowed 

directly  to  offset  the  value  of  the  trade-in  against  the  invoiced 

sales  price.  This  producer  therefore  argued  that  its  financial 

contribution  to  the  activities  of  their  customers  should  be  treated 

as a rebate and should therefore be deducted  from normal value. 

(63)  The  Commission,  however,  in  conformity  with  its  consistent  practice 

upheld  by  the  Court  of  Justice,  considered  that  the  contribution  in 

question  was  not  a rebate but  in  fact  a payment  for which  a  certain 

value was obtained. 

Indeed,  with  the  removal  of  traded-in  machines  from  the  market,  the 

demand  for  new machines  is maintained  at the highest  possible  level. 

This  higher  demand  stimulates  not  only  prices  but  also  higher  sales 

volumes  and  production  levels  which  should  normally  result  in 

increased economies of scale and commensurately higher profit levels. 

19 -

In these circumstances, the  "rebates" in question, were considered  to 

be the equivalent  to the value which the manufacturer  attaches to the 

withdrawal of the old and/or used R.E.W.S. from the market. 

The payments were therefore  not deducted  from the price actually paid 

or payable by the buyer, and the full domestic price was retained  for 

the purpose of  comparison. 

(64)  The Council confirms that  finding. 

5. 

Dumping  margins 

(65)  The  weighted-average  dumping  margins  for  each  Japanese  producer 

concerned,  as  a  percentage  of  free-at-Community-frontier  values, 

exceeded  60% in all cases, except  for Yamato Scales Co,  for which the 

margin was  15.3%. 

(66)  In  the  case  of  firms  which  failed  to  cooperate  or  where  the 

Commission  was  unable  to  use  the  producer's  submission  (see  recital 

(27)) above, the dumping  margin  should be established  on the basis of 

the  facts  available,  pursuant  to Article  7(7)(b) of  Regulation  (EEC) 

No 2423/88. 

The  Commission  considered  that  the  most  reasonable  elements  were 

those  established  during  the  investigation  and  that  to  attribute  to 

such  firms  a  dumping  margin  lower  than  the  highest  established  for 

the  cooperating  companies  would  act  as  a  bonus  for  non-cooperation 

and could  lead to circumvention of the anti-dumping  measures. 

(67)  The Council  confirms that  finding. 

E. 

Recurrence of  injury 

(68)  In the case  under  consideration,  the Commission  had  to determine,  in 

accordance with Article  15(3) of Regulation  (EEC) No 2423/88, whether 

the  expiry  of  the  measures  in  force  would  lead  again  to  injury  or 

threat of  injury. 

-  20 -

Therefore  it was  necessary  to examine  the present  economic  situation 

of the Community  industry  and the behaviour of the Japanese  exporters 

on the Community market. 

1. 

Situation of the Community  industry 

Community market 

(69)  The  Community  market  for  R.E.W.S.  remained  stable  in  size,  rising 

from  some  135 000 units  in  1988 to  140 000 units  in  1989 and  falling 

to  135 000 units  in 1990. 

Production capacity, utilization rate, stocks 

(70)  Community  production  of  R.E.W.S.  fell  from  140 000  units  in  1988  to 

122 000  units  in  1989  and  114 000  units  in  1990.  Though  production 

capacity  also  fell  from  181 000  units  in  1988  to  166 000  units  in 

1989  and  155 000  units  in  1990, the  utilization  rate  decreased  from 

77% to 73%. 

(71)  Stocks  remained  at  a  continuously  high  level  (more  than  10% of  the 

total Community  production) between  1988 and 1990. 

Sales volume and market  share 

(72)  The  quantity  of  R.E.W.S.  sold  in  the  Community  by  the  Community 

industry  fell  from 113 000 units in 1988 to 105 000 units  in 1989 and 

to  97 000  units  in  1990.  The  Community  industry's  market  share 

changed  as follows: 84% in 1988, 75% in 1989 and  72% in 1990. 

Price trends 

(73)  Prices  of  the Community  industry  decreased  between  1988  and  1990 by 

nearly  6%  on  a weighted-average  basis. This downward  trend  coincided 

with  an overall  price decrease  on  imported  R.E.W.S. and  considerable 

price undercutting  by Japanese  imports  (see recitals  (78) to  (81)). 

- 21 -

Profits 

(74)  The Commission  found that, overall, the Community  industry has showed 

poor  financial  results  since  1988.  In  1990,  a  negative  return  on 

sales  of  5.5%  on  a  weighted-average  basis  was  recorded.  One  EC 

producer,  who  suffered  considerable  losses  throughout  the  cited 

period, discontinued  production at the end of 1990. 

Employment  and  investment 

(75)  Between  1988  and  1990  the  Community  industry  shed  245  jobs, 

representing  16% of  its  labour  force;  investments  were  cut  back  and 

two factories  closed. 

(76)  The Council  confirms those findings. 

2. 

Exporters' behaviour on the Community market 

Volume and market  shares of the dumped  imports 

(77)  Despite the measures  in force, the volume of dumped R.E.W.S.  imported 

from Japan rose  from 13 000 units in 1988 to 17 000 units in 1989 and 

to  approximately  19 000 units  in  1990. The market  share  of  Community 

consumption  held  by Japanese  imports  rose  from  9.8%  in  1988 to 12.1% 

in 1989 and to  14.6% in 1990. 

Price of dumped  imports 

(78)  The  Commission  investigated  whether  there  was  price  undercutting 

practised  by  the  Japanese  exporters  during  the  investigation  period. 

To  this  end,  the  exporters'  sales  in  six  Community  markets  (United 

Kingdom,  Germany,  Netherlands,  Belgium,  France  and  Greece)  were 

examined, where nearly  all Japanese  imports were sold. 

(79)  The  Commission  first  selected  representative  R.E.W.S. of  the  various 

segments  (low-range,  mid-range,  high-range  models)  marketed  by  the 

Community  producers.  The  Commission  then  considered  the  Japanese 

export  models  in  the  same  segments  which  were  directly  comparable 

with  the  Community  producers'  models,  so  that  no  adjustments  for 

technical differences  had to be made. 

-  22 -

Prices  for  the models  concerned  were  compared  on  the  basis  of  sales 

made at the same level of trade  (distributor/dealer  level). 

(80)  The  comparison  outlined  above  showed widespread  and  consistent  price 

undercutting  on the part of all exporters, ranging  from 20 to 70%. 

(81)  The Council confirms those findings. 

3. 

Conclusions 

(82)  On  the  basis  of  the  above,  the  Commission  concluded  that  the 

Community  industry  is  in a precarious  situation.  Indeed,  it  suffered 

substantial price erosion which provoked  further  financial  losses and 

a reduction  in sales volume and market share. 

This  situation  was  highly  influenced  by  the  fact  that  the  dumped 

imports were made  in an open  and transparent  market  where  prices  are 

very  well  known.  Price  elasticity  and  huge  price  undercutting 

therefore  had  a  clear  effect  on  the  sales  volumes  and  the  financial 

results of the Community  industry. 

For  those reasons  the Community  industry  could  not take  advantage of 

the anti-dumping measures  in force. 

(83)  The Council confirms that conclusion. 

(84)  The  Commission  has  also  considered  whether  other  factors  than  the 

dumped  imports  could  have  prevented  the  Community  industry  from 

regaining economic health. 

(85)  In  that  ronpoct,  one  exporter  alleged  that  the  effects  of  the 

increase  in  volume  and  the  low  price  of  R.E.W.S.  imports  from  other 

countries,  principally  Singapore,  the  Republic  of  Korea,  Taiwan  and 

Turkey,  have  been  at  least  partly  responsible  for  the  precarious 

situation of the Community  industry. 

-  23 -

(86)  The  Commission  is presently  examining  the  effects  of  the  imports  of 

R.E.W.S. from Singapore and Korea. However, even if these imports are 

found  to  have  injured  the  Community  industry,  this  cannot  eliminate 

the  fact  that  the  dumped  exports  from  Japan,  because  of  their  high 

volume  and  particularly  low  prices,  remained  an  important  factor 

which  prevented  the  Community  industry  from  improving  its  economic 

situation. 

As  far  as  imports  from  Taiwan  are  concerned,  the  Commission  found 

that  such  imported  scales  from  Taiwan  were  mostly  counting  scales 

which are not comparable to the product under  consideration. 

Finally,  no  imports  from  Turkey  took  place  during  the  investigation 

period. 

(87)  Apart  from  the  above, the  Commission  did  not  find  any  other  factors 

which could  explain the difficult economic  situation of the Community 

industry.  Indeed,  there were  no  substantial  imports  other  than  those 

mentioned  above, nor was there any contraction  in demand. 

(88)  On the basis of  the above, the Commission  concludes that, while other 

imports may  also  have contributed  to the  injury, the  dumped  Japanese 

imports, taken  in isolation, have to be considered  an  important  cause 

of the unsatisfactory situation of the Community  industry. 

4. 

Possible effects of expiry of the measures 

(89)  In  those  circumstances,  the  Commission  is  of  the  opinion  that  the 

expiry  of  the  measures  would  worsen  the  situation  of  the  EC 

producers. 

(90)  Indeed,  if there are no measures, an  increase  in the  undercutting  by 

Japanese  imports  has  to  be  expected.  This  would  lead  to  further 

losses  in  market  share  for  the  Community  industry  and  would 

negatively  affect  its sales and market share. 

-  24 -

(91)  In that  connection,  two  factors  deserve particular  attention. On  the 

one  hand,  the  Japanese  producers  have  recently  expanded  their 

production  capacity.  On  the  other  hand,  the  Community  market  is  at 

present  in  a  recession.  This  points  to  the  conlusion  that  pressure 

from  Japanese  dumped  imports  is  likely  to  increase  and  that  the  EC 

industry  is  now  even  more  vulnerable  to  such  practices  than  in 

previous years. 

(92)  That being  so, it can be clearly  foreseen that the Community  industry 

will  suffer  material  injury  from  the  dumped  imports  in the  event  of 

the  expiry  of  the  anti-dumping  measures.  The  Commission  therefore 

concludes  that  these  measures  should  not  be  allowed  to  lapse  but 

should be adjusted  in the light of the evidence of dumping  and of the 

economic  situation of the Community  industry. 

(93)  The Council confirms those conclusions. 

F. 

Community  interests 

(94)  With  respect  to Community  interests, the Council  recalls that  it had 

already  concluded,  in  its  original  proceeding,  that  Community 

interests  called  for  intervention  in  order  to  prevent  injurious 

dumping.  The  Commission  considers that  no substantial  change  in this 

situation  has  occurred  since  then.  This  applies  specifically  to  the 

negative  influence  which  the  disappearance  of  the  Community  industry 

would  have  on  the  supply  industry.  Indeed,  R.E.W.S.  involve 

increasingly  high-level  technology  and  any  loss  of  technological 

know-how  in the R.E.W.S. sector would mean a loss of competitive edge 

in the electronic  sector as a whole. 

(95)  While  the  Commission  recognizes  that  maintaining  anti-dumping 

measures  in  force  will  continue  to  affect  price  levels  of  the 

exporters  concerned  in  the  Community  and  may  subsequently  have  some 

influence  on  the  relative  competitiveness  of  their  products,  those 

measures  are  intended  to  restore  normal  and  fair  market  conditions. 

In  addition,  the  removal  of  the  unfair  advantages  gained  by  the 

dumping  practices  is designed  to  prevent  the  further  decline  of  the 

Community  industry  and  thus help  to maintain  the availability  to the 

consumer of the widest possible choice of product. 

-  25 -

(96)  Though  end-users, which  are  all  professionnals,  may  have  to  bear  an 

increase  in prices, the present  low prices were  the result  of  unfair 

competitive  behaviour.  They  cannot  therefore  expect  to  continue  to 

take advantage of the effect of such practices. 

(97)  For  these  reasons,  the  Commission  considers  that  the  Community 

interests  call  for  intervention  in order to prevent  the  continuation 

of  injury  and  a  further  deterioration  in  the  economic  situation  of 

the Community  industry. 

(98)  The Council  confirms that conclusion. 

G. 

Level of the duty 

(99)  When calculating  the amount of duty  necessary  to enable the Community 

industry  to  regain  a  healthy  and  non-injurious  situation,  the 

Commission  had to bear  in mind  that the Community  industry  as a whole 

was  not  profitable.  Accordingly,  it  is  considered  necessary  for  the 

measures taken to allow the Community  industry to increase  its prices 

so  as  to  cover  its  costs  of  production  and  to  obtain  a  reasonable 

return on sales. 

In  the  circumstances  of  the  industry  concerned,  it  was  found  that, 

based  on  normal  market  conditions  and  the  industry's  ongoing  long-

term  investment  requirements, an annual  return on sales of  10% before 

tax could be regarded  as an appropriate minimum. 

(100) In  order  to  establish  the  margin  by  which  the  prices  of  Japanese 

producers  should  be  increased  to  allow  the  Community  industry  to 

achieve the abovementioned  return on sales, the Commission  classified 

the  most  representative  R.E.W.S.  produced  and  marketed  by  the 

Community  producers  into  three  segments  (see  recital 

(16)), 

calculated  for  each  segment  a  weighted-average  price  on  an  ex-works 

basis  (see  recital  (49)) and  compared  these  prices  to  the  prices  at 

Community  frontier  of  the  similar  Japanese  export  models,  duly 

adjusted.  The  difference  between  these  prices  reflects  the  price 

increase at the Community  frontier considered  necessary  to defeat  the 

injurious effects of the dumped  imports. 

-  26 

(101) Except  for one company, these price  increases were considerably  lower 

than  the  dumping  margins  found  and  therefore  determine  the  level  of 

anti-dumping  duties,  in  accordance  with  Article  13(3)  of  Regulation 

(EEC)  No 2423/88.  For  the  latter  company,  it  is  the  dumping  margin 

which should be  imposed  as a duty. 

(102) Accordingly, the  following duties should be  imposed: 

Tokyo Electric Co Ltd 

Ishida Scales Mfg Ltd 

Teraoka Seiko Co Ltd 

Yamato Scales Co Ltd 

22.5%; 

31.6%; 

22.6%; 

15.3%. 

(103) In  the  case  of  companies  which  failed  to  cooperate  in  the 

investigation,  the  Commission  considered  that  the  duties  should  be 

established  on  the  basis  of  the  facts  available  in  accordance  with 

Article  7(7)(b)  of  Regulation  (EEC)  No 2423/88.  It  was  considered 

that  the most  reasonable  elements  were  those  established  during  the 

investigation  and  that  to attribute  to  such  firms  a duty  lower  than 

the  highest  established  for  the cooperating  companies,  namely  31.6%, 

would  act  as  a  bonus  for  non-cooperation  and  could  lead  to 

circumvention  of the anti-dumping measures. 

(104) The Council confirms those findings. 

H. 

Prev iou s Regu1at ions 

(105) Regulation  (EEC)  No 2865/85  and  Regulation  (EEC)  No  1058/86  should 

accordingly  be repealed. 

I. 

Anti-circumvention  measure 

(106) By  Decision  88/398/EEC,  the  Commission  accepted  an  undertaking  from 

TEC  (UK) Ltd  concerning  certain  electronic  weighing  scales  assembled 

in the Community. 

-  27 -

(107) The  Commission  considers  that,  on  the  basis  of  the  regular  and 

detailed  information  submitted  by  the  company  concerned,  no 

circumvention  has  taken  place  since  the  acceptance  of  that 

undertaking.  In  these  circumstances,  the  Commission  considers  that 

Decision 88/398/EEC  should be repealed, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of 

electronic  weighing  retail  trade  scales  falling  within  CN  code 

8423 81 50  (Taric code 84238150*10) and originating  in Japan. 

2. 

The  rate of  the  duty  shall  be  31.6%  (Taric  additional  code  8697) of 

the  net  free-at-Community-frontier  price  before  duty,  with  the 

exception  of  retail  electronic  weighing  scales  produced  by  the 

companies below, to which the following  rates shall apply: 

Tokyo Electric Co Ltd, Tokyo 

22.5% 

(Additional Taric code  8694); 

Teraoka Seiko Co Ltd, Tokyo 

22.6% 

(Additional Taric code  8695); 

Yamato Scales Co Ltd, Akashi 

15.3% 

(Additional Taric code  8696). 

3. 

Regulation  (EEC) No 2865/85, Regulation  (EEC) No 1058/86 and  Decision 

88/398/EEC are hereby  repealed. 

4. 

The provisions  in force concerning  customs duties shall apply. 

-  28 -

Article 2 

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

publication  in the Official Journal of the European Communities. 

This Regulation  shall be binding  in its entirety  and directly  applicable in 

all Member States. 

Done at Brussels, 

For the Council 

The President 

29  -

ISSN 0254-1475 

COM(93) 87 final 

DOCUMENTS 

EN 

02  il 

Catalogue number : CB-CO-93-108-EN-C 

ISBN 92-77-53521-0 

Office for Official  Publications of the European Communities 
L-2985 Luxembourg