Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 3308/90 by imposing an additional anti-dumping duty on imports of woven polyolefin sacks originating in the People' s Republic of China
Date: 1993-07-20
Institutions: European Commission
Subjects: China, anti-dumping duty, dumping, import, packaging product, plastics

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

COM(93)  166 final 
Brussels,  20  July  1993 

Proposal  for a 
mijNriL^_G^AT!ON  (EEC) 

amending Regulation  (EEC) No 3308/90  by imposing  an additional 
anti-dumping  duty on  imports of  woven  polyolefin  sacks 
originating  in the People's Republic of China 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. 

2. 

3. 

4. 

5. 

6. 

By  Council  Regulation  (EEC)  No  3308/90,  an  anti-dumping  duty  of  43.4%  was 
imposed  on  imports  of  woven  polyolefin  sacks  originating  in  the  People's  Republic 
of  China. 

Subsequently,  the  Commission  received  a  complaint  lodged  by  the  European 
Association  for  Textiles  Polyolefin  alleging  that  the  anti-dumping  duty  imposed  by 
Regulation  3308/90 had been borne by the exporters concerned.  Since this complaint 
contained  sufficient  evidence  that  the  duty  had  been  borne  by  the  exporters,  the 
Commission  announced  the  initiation  of  an  investigation,  provided  for  in  Article 
13(11) of Regulation (EEC) No 2423/88, in a notice published  in the Official  Journal 
of  the European  Communities  on  15 June  1991. 

The  Commission  based  its  findings  on  the  information  supplied  by  the  Chinese 
exporters. 

It  was  found  that,  by  reducing  their  prices  for  export  to  the  Community  after 
imposition  of  an  anti-dumping  duty,  exporters  of  these  sacks  originating  in  the 
People's  Republic  of  China  have borne the  anti-dumping  duty. 

The  absorption  of  duty  was  calculated  on  the  basis  of  the  difference  between  the 
import price of woven polyolefin  sacks originating in the  People's Republic of China 
during the period of the original  investigation  and the import  price during the period 
following  imposition  of  the anti-dumping  duty.  On the basis of  this comparison  and 
taking into account  the reduction  in the export price, the level of absorption  is 97.6% 
when  expressed  as  a  percentage  of  the  amount  of  duty  paid  on  the  reduced  export 
price. 

Given  that the imposition  of the original  duty  of 43.4% had  been  considered  to be in 
the Community's interest, it follows that a measure aimed at restoring the effect  of the 
duty  concerned  is in  the  Community's  interest. 

Since  the  exporters  have  borne  97.6% of  the  exisitng  43.4%  anti-dumping  duty, an 
additional  anti-dumping  duty equivalent to the level  of this absorption  must  therefore 
be imposed  (97.6% of 43.4% = 42.3%). 

It  is  therefore  proposed  that  the  Council  amend  Regulation  (EEC)  No  3308/90  and 
impose a total  duty of  85.7% on the net, free-at-Community  frontier  price of  imports 
of  woven  polyolefin  sacks originating  in  the  People's  Republic  of  China. 

Proposal  lor a 
COUNCIL REGULATION (EEC) 

amending  Regulation  (EEC) No 3308/90  by  imposing  an additional 
anti- dumping  duty on imports of  woven  polyolefin  sacks 
originating  in the People's  Republic of China 

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  , and in particular  Articles  12 and  13(11) and  14 thereof, 

Having  regard to  the  proposal  submitted  by  the  Commission  after  consultation  within  the 
Advisory  Committee  as provided  for  under the abovementioned  Regulation, 

Whereas: 

A. 

1. 

2. 

3. 

4. 

5. 

PROCEDURE 

By Commission  Regulation (EEC) No 2051/90(2), a provisional  anti-dumping  duty of 
43.4% was imposed on imports of woven polyolefin  sacks originating in the People's 
Republic  of  China.  This  duty  was  confirmed  by  Council  Regulation  (EEC)  No 
3308/90(3). 

The  Commission  received  a  complaint  lodged  by  the  European  Association  for 
Textiles Polyolefin (EATP) on behalf of producers representing a major proportion of 
Community production of woven polyolefin  sacks, alleging that all or part of the anti 
dumping duty had been  borne by the exporters concerned 

Since the complaint contained sufficient  evidence of absorption of anti-dumping duty 
by  the  exporters,  the  Commission  announced  the  initiation  of  an  investigation  as 
provided for in Article  13(11) of Regulation (EEC) No 2423/88, in a notice published 
in the Official  Journal  of  the European Communities(4). 

The Commission officially  advised the exporters and importers known to be concerned 
and gave  interested parties the opportunity  to make their views  known  in writing. 

Replies to the  Commission's  questionnaire  were  received  on  behalf  of  nine  Chinese 
exporters.  Only two of the replies of the importers to whom questionnaires were sent 
contained substantive  information.  These two importers accounted  for approximately 
36% of total imports into the Community of woven polyolefin  sacks originating in the 
People's Republic of China. 

( i) 

(2) 

t») 

(4) 

OJ No L 209, 2.8.1988,  p. 1. 
OJ NoL  187,  19.7.1990, p. 36. 
OJ No L 318,  17.11.1990,  p. 2. 
OJ No  C  157,  15.6.1991, p.  5 . 

6. 

7. 

B 

8. 

C. 

(I) 

9. 

10. 

11. 

None of  the  interested parties requested the  Commission  to  undertake  a full  review 
Regulation  (EEC)  No  3308/90  pursuant  to  Article  14  of  Regulation  (EEC)  No 
2423/88. Moreover, on the basis of the information  available, the Commission did not 
consider  that  circumstances  had changed  sufficiently  to justify  the need  for  such a 
review on the Commission's initiative. 

The investigation  into absorption of the anti-dumping  duty by the exporters covered 
the  original  investigation  period,  I  January  1988  to  31  December  1988,  which had 
been taken into account for calculation of the anti-dumping duty, and the nine-month 
period following the  imposition of the provisional anti-dumping duty and prior to the 
initiation of the present investigation  i.e.  from  1 August  1990 to 30 April  1991. 

PRODUCT 

The product  under consideration  is identical  to the  product  subject  to the  definitive 
anti-dumping  duty referred to  in recital  1, i.e.  woven polyolefin  sacks (polyethylene 
or polypropylene)  falling  within CN code 6305  31 91. 

ABSORPTION  OF THE ANTI-DUMPING  DUTY BY  THE EXPORTER 

Existence of  absorption  of duty 

The  Commission  based  its findings on  the  export  prices  provided  by  the  Chinese 
exporters who  replied  to the Commission's  questionnaire,  and used official  customs 
statistics  and  information  verified  at  the  premises  of  the  co-operating  importers  to 
corroborate the information  obtained from the Chinese exporters. 

The  information  on  prices  provided  by  the  Chinese  exporters  clearly  shows  that, 
following the imposition  of provisional  anti-dumping duties by Regulation (EEC) No 
2051/90 on woven polyolefin  sacks, the import price at Community  frontier (i.e. the 
CIF price before  payment of  customs and anti-dumping  duties) fell  considerably. 

As  a  consequence,  by  reducing  their  prices  for  export  to  the  Community  after 
imposition  of  the  anti-dumping  duty,  the  exporters  of  woven  polyolefin  sacks 
originating  in the People's  Republic  of  China have  absorbed  completely  or partially 
the effect  of the anti-dumping duty. 

(II) 

Extent of  absorption  of the duty 

12. 

Since  the  absorption  took  the  form  of  a  lowering  of  export  prices,  the  extent  of 
absorption of the anti-dumping duty has been calculated on the basis of a comparison 
of  prices of  woven  polyolefin  sacks  originating  in the  People's  Republic of China 
during the period  1 January  1988 to 31  December  1988, and prices during the period 
following 
imposition  of  an  anti-dumping  duty  i.e.,  from  1 August  1990  to 
30 April  1991. 

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with  :ji  upTio!*ri  "or :i: 
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This price  was then  compared  to the  OF  price,  anti-dumping  duty  paid,  for  the nine 
month  period  following  the  imposition  of  the  provisional  duty.  In  establishing  these 
prices,  the  Commission  followed  the  same  methodology  and used  the  same  exchange 
rates  as  for  the  calculation  of  the  prices  in  the  original  investigation  period.  On  the 
basis  of  this  comparison,  taking  into  account  the  reduction  in  the  export  price,  the 
level  of  absorption  is  97.6%  when  expressed  as  a  percentage  of  the  amount  of  duty 
paid  on  the  reduced  export  price. 

D 

OTHERS  FACTORS 

14. 

The  Chinese  exporters  claimed  that  in  investigating  the  allegation  of  absorption  the 
Commission  should take into account the impact of currency  fluctuations  and changes 
in raw material  prices in China on their export prices to the Community.  They  argued 
that any  decrease  in their export price  after  the imposition  of  duty  was attributable  to 
those  factors. 

In addressing  this argument, it is recalled that as the People's Republic of China is not 
a  market  economy  country,  normal  value  had to  be based on  the  normal  value  of  the 
like  product  in  India.  Since  the  Commission  has  no  convincing  evidence  at  its 
disposal,  nor  was  any  submitted  that  the  normal  value  established  for  the  Indian 
producers  has  altered  and  in  any  event  not  to  an  extent  to  influence  the  conclusions 
of  this  investigation,  a general  review  is  not  warranted  nor  has  any  request  for  such 
a  review  been  received. 

E 

CONCLUSION 

15. 

On  the  basis  of  the  above  findings,  the  Council  concludes  that  the  exporter  has 
effectively  borne  a  large  part  of  the  anti-dumping  duty  through  a  corresponding 
reduction  in  its  export  price  and  that  its  dumping  margin  is  not  lower  than  the  sum 
of  the  original  duty  and  the  amount  borne. 

F. 

COMMUNITY  INTEREST 

16. 

17. 

The  purpose  of  the  additional  anti-dumping  duty  provided  for  in  Article  13(11)  of 
Regulation  (EEC)  No  2423/88  is  to  compensate  for  the  amount  of  the  anti-dumping 
duty  borne  by  the  exporter,  which  effectively  increases  his  dumping  margin  and 
nullifies  the  effect  of  the  original  duty. 

The  Commission  has  no  reason  to  believe  that  the  findings  concerning  Community 
interest  expressed  in  recitals  7  and  8  of  Regulation  (EEC)  No  3308/90  warrant 
amendment. 

18.  Moreover, given that the absorption of an anti-dumping duty by the exporters cancels 
the effect  of the anti-dumping  duty  and therefore  prevents the removal  of the injury 
suffered  by  the  Community  industry,  and that the  imposition  of  this  duty  had been 
considered to be in the Community's interest, a measure aimed at restoring the effect 
of the said duty  is therefore  in the Community's interest. 

19. 

No other arguments showing that additional  measures would not be in the Community 
interest have been put forward. 

G. 

20. 

21. 

ADDITIONAL  ANTI-DUMPING  DUTY 

In order to  compensate  for  the  level  of  absorption  and  to  restore  the  effect  of  the 
original  duty, an additional  duty, equivalent to 97.6% of the existing duty, i.e. 42.3% 
is  required  to  bring  the  current  Chinese  export  price  up to  the  level  envisaged  by 
Regulation  (EEC) No 3308/90. 

Since the anti-dumping duty currently in force is 43,4% of the net, free-at-Community 
frontier price, an additional  duty of 42.3% must be imposed. The total  anti-dumping 
duty  imposed  on  imports  of  woven  polyolefin  sacks  originating  in  the  People's 
Republic of  China should, therefore,  be 85.7% 

For  practical  reasons,  the  imposition  of  this  additional  duty  takes  the  form  of  an 
amendment to Regulation (EEC) No 3308/90. This does not constitute a modification 
of  the  anti-duhiping  duty  within  the  meaning  of  Article  15(1) of  Regulation  (EEC) 
No 2423/88  and, therefore,  the expiry  date of the anti-dumping  duty,  including the 
additional  duty, remains unchanged, 

HAS ADOPTED THIS REGULATION 

Article I 

Article  1(2) of  Regulation  (EEC)  No  3308/90  is  replaced by the following. 

"2. 

The rate of duty, applicable to the net, free-at-Community  frontier price, before duty 
shall  be 85.7%". 

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 

COM (93) 166 final 

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