Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on imports of certain magnetic disks (3.5" microdisks) originating in Japan, Taiwan and the People' s Republic of China, and collecting definitively the provisional duty imposed
Date: 1993-10-07
Institutions: European Commission
Subjects: China, Japan, Taiwan, anti-dumping duty, import, magnetic medium

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

COM(93)  448  final 

Brussels,  7  October  1993 

Proposal  for a 

COUNCIL REGULATION  (EEC) 

imposing  a definitive  anti-dumping duty 

on imports of  certain  magnetic  disks (3.5" microdisks) 

originating  in Japan, Taiwan  and the People's Republic of China, 

and collecting  definitively  the provisional  duty  imposed 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. 

The  Commission,  by  Regulation  (EEC)  No  920/93(1)  of  15  April  1993  imposed  a 

provisional  duty on imports of certain  magnetic disks (3.5" microdisks) originating in 

Japan, Taiwan and the People's Republic of China.  The Council, by Regulation (EEC) 
No  2206/93(2)  of  5  August  1993  extended  this  duty  for  a period  not  exceeding  two 

months. 

2. 

Following  the  adoption  of  the  provisional  measures,  the  interested  parties,  who  so 

requested,  were  heard  by  the  Commission  and  made  written  submissions.  Upon 

request, 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 the disclosure. 

3. 

The oral  and written comments submitted  by  the parties  were considered  and, where 

appropriate, the Commission's findings  were modified  to take account of them. 

4. 

The facts, as finally  established, show dumping for almost all the exporters concerned 

as well  as injury  to the  Community  industry  caused  thereby,  especially  demonstrated 

by sales suppression, price depression  and a resulting lack  of  profitability. 

5. 

In these circumstances, the Commission  considers that it is in the Community  interest 

to  adopt definitive  measures intended to eliminate the  injurious  effect  of the dumped 

imports concerned.  Consequently, in accordance with Article  12 of Council Regulation 
(EEC)  No  2423/88(3),  the  Commission,  after  consultation  within  the  Advisory 

Committee,  proposes  the  imposition  of  definitive  anti-dumping  duties  on  imports  of 

certain  magnetic  disks  (3.5"  microdisks)  originating  in  Japan,  Taiwan  and  the 

People's Republic of China. 

0) 

(2) 

(3) 

OJ No  L 95, 21.4.1993, p. 5. 
OJNoL  196,  5.8.1993, p. 47. 
OJNo  L209,  2 8.1988,  p. 1. 

6. 

In view  of the dumping  margins established,  and the seriousness of  the injury  caused 

to  the  Community  industry,  it  is  also  proposed  that the  amounts  secured  by  way  of 

provisional  anti-dumping  duty be definitively  collected to the extent of the amount of 

the duty definitively  imposed. 

Proposal  for  a 

COUNCIL  REGULATION  (EEC) 

imposing  a definitive  anti-dumping  duty 
on  imports of  certain  magnetic  disks (3.5M  microdisks) 

originating  in Japan, Taiwan  and  the People's Republic of  China, 

and collecting  definitively  the provisional  duty  imposed 

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  Article  12 thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consultation  within  the 

Advisory  Committee  as provided  for  under  the above  Regulation, 

Whereas: 

A. 

PROVISIONAL MEASURES 

(1)  The  Commission,  by  Regulation  (EEC)  No  920/93(2)  (hereinafter  "the  provisional 

Regulation"), imposed a provisional  anti-dumping duty on imports into the Community 

of  certain  magnetic  disks  (hereinafter  referred  to  as  3.5"  microdisks)  originating  in 

Japan,  Taiwan  and  the  People's  Republic  of  China  (hereinafter  "China"),  and  falling 

within CN Code ex 85 23 20 90.  The duty was extended for a maximum period of two 
months by  Council  Regulation  (EEC)  No  2206/93(3). 

(1) 
(2) 
(3) 

OJNoL209,  2.8.1988, p. 1. 
OJ  NoL95,  21.4.1993, p. 5. 
O J N oL  196, 5.8.1993, p. 47. 

B. 

SUBSEQUENT PROCEDURE 

(2)  Subsequent to the imposition of the provisional anti-dumping duty, the interested parties 

who so requested were granted an opportunity to be heard by the Commission.  Certain 

of  those parties  also  presented  written  submissions  making  known  their  views on  the 

findings. 

(3)  Two  importers  which  had  not  cooperated 

in  the  investigation  made  written 

representations  to the  Commission  following  the  introduction  of  the provisional  anti 

dumping duty.  One of  them  requested  and was granted  a hearing. 

(4)  Upon request, parties were informed  in writing 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 provisional duty.  They were 

also granted  a reasonable  period  within  which  to  make  representations  subsequent  to 

the  disclosure. 

(5)  The  oral  and  written  comments  presented  by  the  parties  were  considered,  and,  where 

appropriate, the Commission's findings  were modified  to take  account  of them. 

(6)  Because  of  the volume  and  complexity  of  the  data  examined,  the  investigation  could 

not  be  concluded  within  the  time  limit  provided  for  in  Article  7(9)(a)  of  Regulation 

(EEC) No 2423/88  (hereinafter  referred  to as  "the Basic Regulation"). 

C. 

PRODUCT UNDER CONSIDERATION/LIKE PRODUCT 

(7)  As no new  arguments have been presented  regarding  the product  under  consideration 

and the like product, the Council  adopts the findings  of the Commission  as set out in 

recitals (7) to  (12) of  the provisional  Regulation. 

D. 

INDIVIDUAL TREATMENT OF CHINESE EXPORTERS 

(8)  Several producers in China reiterated their request that the Commission make individual 

company  findings  for  each  of  them,  without,  however,  presenting  any  evidence 

additional  to  that  submitted  prior  to  the  provisional  findings  and  referred  to  at 

recital  (13) of the provisional  Regulation. 

The Commission  recalls, in this respect, that  individual  treatment  is not a  requirement 

of  the  Basic  Regulation.  Indeed,  the  grant  of  individual  treatment  to  some  of  those 

producers may affect  or even distort the outcome of the calculation of the country-wide 

anti-dumping  duty 

In  addition, it is in  practice extremely  difficult  to establish  in  the 

case of a country  such as China whether  a company  really  enjoys, both in point of law 

and  in  fact,  independence  from  the  State  and  in  particular  whether  a  company  has 

permanent  independence  where  it  appears  to  enjoy  independence  at  a  given  point 

in time. 

Finally, since the grant of  individual  treatment  may  cause  inappropriate  levels of  duty 

to be imposed and gives rise to an opportunity  for the State to circumvent  anti-dumping 

measures by channelling through the exporter with the lowest duty, the Commission has 

come  to  the  conclusion  that  departures  from  the  general  rule,  whereby  a  single  anti 

dumping duty is established for State-trading  countries, should only be made where the 

Commission  is  completely  satisfied 

that  the  effectiveness  of  the  measures  is 

not  undermined. 

In  the provisional  Regulation,  the  facts  established  for  Hanny  Magnetics  (Zuhai)  Ltd. 

during  the  Commission's  investigation  demonstrated  that  this  company  is  free  of 

government  intrusion  in  the  conduct  of  its  business,  and  individual  treatment  was 

granted.  In the light of the principles of  legitimate expectations  and legal  certainty the 

Commission  considers that the individual  treatment granted to this company  should be 

maintained.  Furthermore, given the small  difference  found  in the dumping margin  for 

this  producer  and  that  applicable  to  the  other  producers,  the  risk  of  circumvention 

is minimal. 

The findings  at the said recital  (13) are thus maintained. 

(9)  The Council  confirms the Commission's  findings. 

E.  DUMPING 

1.  Normal yajug 

(10)  For the purpose of the 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. 

(11)  Following publication of the provisional  Regulation, one Taiwanese producer claimed 

that the normal value established should have been based on the prices of all sales of 

the like product on the domestic market, including sales made at a loss. 

As stated in recital (18) of the provisional  Regulation, normal value in Taiwan for this 

producer  was  established  in  accordance  with  Article  2(3 )(a)  and  (4)  of  the 

Basic Regulation, on the basis of the price actually paid in the ordinary course of trade 

for domestic sales of the like product which were made in sufficient quantities to permit 

a proper comparison. 

However, it was found that the majority of its domestic sales of one product type were 

made  at  a  substantial  loss.  The  Commission  had,  therefore,  to  exclude  from  the 

determination of normal value the sales of this product type, the prices of which did not 

permit recovery,  in the normal  course of trade in the investigation  period, of  all costs 

reasonably  allocated. 

As regards the other product type, the producer in question  was able to show that its 

prices  for  sales  of  this product  were  sufficiently  profitable  to  be  considered  to have 

been made in the ordinary course of trade over the investigation period.  Accordingly, 

normal value for this type  was established by  reference  to those prices. 

(12)  The producer  in  China referred  to in  recital  (21) of the provisional  Regulation  argued 

that  the  normal  value  established  on  the  basis  of  an  analogue  third  market  economy, 

namely Taiwan, should be adjusted  to reflect  the lower manufacturing  cost structure in 

China. 

The  Commission  cannot  accept  this  argument.  To  make  allowances  for  alleged 

differences  in  cost  structures  in  a State-trading  country  would  involve  relying  on  that 

country's costs of production, in particular its labour, utility and transport costs, property 

charges,  and  other  inputs,  which  are  not  determined  by  market  forces  and  would, 

therefore,  not  permit  a proper  comparison. 

(13)  The  Council  confirms  these  findings  and  those  set  out  at  recitals  (15)  to  (23)  of  the 

provisional  Regulation  concerning  normal  value. 

2. 

Export  price 

(14)  One  Taiwanese  producer  claimed  that,  in  its  calculation  of  export  prices,  the 

Commission,  for  reasons  of  equity, 

should  have  excluded  export  sales  made  to 

complainant  Community  producers. 

The  Commission  could  not,  however,  accept  any  such  exclusion,  as  the  sales  in 

question satisfied the provisions of Article 2(8)(a) of the Basic Regulation regarding the 

determination  of export prices.  Indeed, not only  is such  an exclusion  not provided  for 

by the Basic Regulation, but the reliability  of  these prices is unaffected,  in the present 

case, by  the status of the customer  involved. 

The related problem  of  self-inflicted  injury  is addressed in  recital  (28) below. 

(15)  The  Council  confirms  this  view  and  the  findings  on  the  export  price  set  out  in 

recitals (24) to (28) of the provisional  Regulation. 

3. 

Comparison 

(16)  The Chinese producer referred to in recital  (31) of the provisional  Regulation  claimed 

that the  adjustment  made to  normal  value  to  take  account  of  differences  in physical 

characteristics of the uncertified  diskettes sold for export did not reflect  the full  value 

of these  differences. 

The  Commission  has examined  this  question.  It has noted  that the  purchaser  runs a 

certain risk in purchasing uncertified diskettes, and consequently, an adjustment should 

be made to reflect  the differences  in physical  characteristics.  However, this producer 

was  unable  to  provide  new  evidence  substantiating  the  additional  claim.  In  those 

circumstances,  the  Commission  considers  that  the  adjustment  provisionally  made 

reflected fully the differences  established in physical characteristics.  Consequently, the 

claim for an additional  adjustment  was rejected. 

(17)  Several  other  Chinese  producers  and  one  Taiwanese  producer  claimed  that,  in  the 

comparison of normal value on the Taiwanese market with export price, no adjustment 

had been made to  reflect  the differences  in  direct  selling  expenses  for  sales  to OEM 

customers on the export market and for sales to non-OEM  customers on the domestic 

market.  In  its  examination  of  the  situation  of  the  Taiwanese  producer  which  made 

domestic sales in sufficient  quantities to permit a proper comparison, the Commission 

found no indication that there was any difference  in selling expenses incurred and profit 

realized in different  channels of  sale.  No  adjustment in this respect, therefore,  could 

be made. 

4. 

Dumping  margins 

(18)  On the basis of the modifications  made to the calculations of normal  value  and  export 

price,  the  definitive  dumping  margins  calculated  by  the  Commission,  expressed  as  a 

percentage  of  the CIF value, established  in  accordance  with  the provisions  of  Council 

Regulation  (EEC)  No  1224/80 of  28  May  1980 on the valuation  of goods for  customs 
purposes(4),  as  last  amended  by  Regulation  (EEC)  No  4046/89(5),  for  each  of  the 

companies  concerned,  are  as  follows: 

Japan  Memorex  Telex  Japan  Ltd. 

49% 

China 

Hanny  Magnetics 

Hitachi-Maxell  Ltd. 

TDK  Ltd. 

Sony  Ltd. 

Taiwan  CIS Technology  Ltd. 

Megamedia Ltd. 

32.8% 

44.8% 

60.1% 

19.8% 

32.7% 

(Zuhai)Ltd. 

35.6% 

Other companies  39.4% 

(19)  As far  as non-cooperating  producers  are  concerned,  no  comments  on  the  conclusions 

reached by the Commission  in recital  (37) of the provisional  Regulation  were received. 

In  those  circumstances,  the  Council  confirms  these  findings  and  the  dumping  margin 

for  non-cooperating  producers  is  set  at  the  level  of  the  highest  dumping  margins  for 

each  country. 

F 

COMMUNITY  INDUSTRY 

(20)  Producers  in  Japan  and  China  challenged  the  Commission's  finding  in  recitals  (39)  to 

(47)  of  the  provisional  Regulation  that  the  five  complainant  producers  represented  a 

major  proportion  of Community  production  of  3.5" microdisks, and could therefore  be 

considered  to be the  Community  industry  under  Article  4(5)  of  the  Basic  Regulation. 

They argued, in particular, that the output of the producers in the Community  found  to 

be related to the producers in the countries subject  to the proceeding  should have been 

(4) 
(5) 

OJ  No  L  134, 31.5.1980, p.  1. 
OJ No  L 388, 30.12.1989, p. 24. 

10 

included in total Community production when calculating whether the output of the five 

complainant producers constituted a major proportion of  total  Community  production 

of the product in question. 

In  this  context,  the  Commission  recalls  that  it  is  the  consistent  practice  of  the 

Community  institutions  to  accept  that  total  Community  production  can  only  be 

considered to mean the output of those Community  producers which are not excluded 

for the reasons given  in first  indent of  the said  Article 4(5).  The output of producers 

which  are  excluded  from  the  definition  of  "Community  industry"  because  of  their 

relationship to exporters should, therefore, be excluded a fortiori from total Community 

production,  when  determining  whether  the  Community  industry  represents  a major 

proportion of  such production. 

The  rationale  of  Article  4(5)  of  the  Basic  Regulation  is  indeed  that,  for  the 

determination  of  injury,  it  should  not  be  open  to  producers  found  to  be  related  to 

exporters  to  seek  relief  from  unfair  trading  practices,  since  they  may,  through  this 

relationship,  have participated  in or benefited  from  injurious  dumping.  It is  only by 

excluding such producers, where appropriate, that the Community institutions can obtain 

an undistorted and objective view of the effects of the dumped imports.  If this was not 

the case, then, in addition to  contributing to the injury, producers  related to exporters 

or  otherwise  benefiting  from  dumping  would  be  in  a  position  to  hinder - or  even 

block  - the  attempts  of  complainant  Community  producers  to  seek  legitimate  relief 

against the injury  caused by dumped imports. 

The  Commission,  therefore,  maintains  its  findings  at  recitals  (39)  to  (47)  of  the 

\ 

provisional  Regulation, that producers in the Community  related to producers in Japan 

should be excluded from  "the Community industry" and that, on this basis, production 

of  3.5"  microdisks  by  the  complainant  producers  represented  around  77% of  total 

Community  production  during the investigation  period. 

11 

(21)  The Council  confirms  these findings. 

G. 

INJURY 

1 •  Cumulation of the effects  of  the dumped imports 

(22)  Some Japanese producers contested the Commission's findings on cumulation at recitals 

(50) to (52) of the provisional  Regulation.  However, no new arguments or facts were 

presented.  The Council  confirms  the aforementioned  Commission  findings. 

2. 

Prices of  dumped imports 

(23)  One Japanese producer and producers in China queried the basis for the Commission's 

statement at recital  (55) of the provisional  Regulation that the prices of imported 3.5" 

microdisks had undergone, in many cases, a decrease of more than 75% between  1988 

and the investigation period. 

The Commission has reviewed the information  available to it in respect of export price 

trends since  1988.  Prices declined substantially,  varying  by company  and by product 

type, by between  23% and 79%. 

Furthermore,  by comparing  the prices  realized  at the beginning  and at the end of the 

investigation  period, price declines of  13% on average for  un branded 3.5" microdisks 

and 31%  for branded 3.5" microdisks were found  over this period. 

(24)  One Japanese producer claimed that in establishing price undercutting, the Commission 

should have taken  account of  the fact  that  its sales  to  an exclusive  distributor  on the 

French market by its German subsidiary  were made at a different  level of trade to that 

of  the relevant Community  industry sales. 

Following the claim from the Japanese producer concerned, the Commission  reviewed 

the undercutting calculations for this producer. 

12 

The producer provided no evidence, however, to show that the tasks or activities of the 

distributor  in  France  were  any  different  from  those  of  other  distributors  in  the 

Community.  In those circumstances, the Commission has, for this producer, established 

prices  to  distributors  and  compared  them  with  prices  for  sales  to  distributors  by  the 

Community industry.  In addition, prices to other categories of customer were compared 

at the same level. 

The  result  of  the  revised  comparison  of  prices  reveals  an  undercutting  margin  still 

within the range mentioned in recital  (55) of  the provisional  Regulation. 

(25)  The  Council  confirms  these  findings,  and  those  in  recital  (55)  of  the  provisional 

Regulation. 

3. 

Situation of the Community  industry 

(26)  As  no  new  arguments  or  information  were  put  forward,  the  Council  confirms  the 

Commission's findings  as set out in recitals (56) to (61) of the provisional  Regulation 

on the situation of the Community industry, and those relating to injury at recital (62). 

H.  CAUSATION 

(27)  Two  Japanese producers,  on  the  grounds that the market  share held  by  imports from 

Japan had fallen  considerably  over  the  period  concerned,  disputed  the  Commission's 

conclusion  contained  in  recital  (66)  of  the  provisional  Regulation,  that the  effects  of 

imports from third countries not  covered  by the proceeding  did not alter the fact that 

the dumped imports from Japan, Taiwan and China, taken in isolation, caused material 

injury to the Community industry.  Those producers therefore  requested that the effect 

of imports from Japan should not be examined cumulatively  with those from the other 

countries concerned. 

13 

The  Commission  recalls  that  it  has  been  the  consistent  practice  of  the  Community 

institutions, upheld by the Court of  Justice of  the European  Communities, to examine 

the effect of the dumped imports as a whole, except where the level of dumped imports 

from a given  country  is negligible  or otherwise  does not contribute to injury. 

The  Commission,  in  recital  (54)  of  the  provisional  Regulation,  acknowledged  that 

imports into the Community  of  3.5" microdisks  from  Japan had fallen  between  1988 

and the investigation period. 

However, at 22%, their market share remained substantial, and was almost double that 

of the Community  industry. 

Furthermore,  the  dumped  imports  from  the  three  countries  concerned,  viewed 

cumulatively,  attained  a  market  share  of  33.8%  in  the  investigation  period.  That, 

together  with  the  substantial  price  depression  arising  from  the  price  undercutting by 

those dumped  imports, could not have  failed  to have a marked negative  effect  on the 

situation of the Community  industry,  which had only  recently  been established. 

The Commission, therefore,  maintains the findings  at the said recital (66). 

(28)  Two Japanese producers questioned the Commission's  recognition of  under-utilization 

of  capacity  as  an  indicator  of  material  injury  at  recital  (57)  of  the  provisional 

Regulation, when complainant Community producers were, at the same time, importing 

sometimes  substantial  quantities  of the product concerned  from  the countries covered 

by the proceeding.  Hence the Community  industry  was inflicting  injury  upon itself. 

As pointed out in recital (43) of the provisional Regulation, imports of 3.5" microdisks 

by all but one of the Community producers  represented only a small proportion of their 

sales in the investigation period.  Therefore, the arguments presented by the Japanese 

are not supported by the facts. 

14 

It  should  be  noted  that  the  complainant  producer  which  had  a  substantial  level  of 

imports also had a high  capacity-utilization  rate.  No contradiction  thus exists between 

the Commission's  recognition of general  capacity  under-utilization  and imports of 3.5" 

microdisks.  The  imports  were  a  consequence  of  the  fact  that,  due  to  the  effects  of 

low-priced  imports  from  the  countries  concerned,  the  producer  in  question  had  been 

unable  to  generate  the  investment  funds  needed  to  develop  a  production  capacity 

sufficient  to meet demand  in  the Community.  At the time, that producer  had no other 

reasonable choice but to act in self-defense,  and did not therefore  inflict injury  on itself. 

(29)  The  Council  confirms  the  Commission's  findings  regarding  causality  and  the  injury 

attributable  to  other  factors,  and  those  contained  in  recitals  (64)  to  (74)  of  the 

provisional  Regulation. 

L 

COMMUNITY  INTEREST 

(30)  Two  Japanese  producers  argued  that  the  imposition  of  duties  at  a time  of  shortage  of 

supply  on  the  Community  market,  with  the  Community  industry  unable  to  meet 

demand, would  only  serve to raise costs and prices, to the detriment  of  software  firms 

and  consumers. 

In recital (78) of the provisional Regulation, the Commission recognized that production 

by  the  Community  industry  is currently  insufficient  to  meet  the  surge  in  demand  that 

has  recently  occurred  in  the  Community  market.  Nevertheless,  the  Community 

industry,  in  an  appropriate  response  to  this  development,  has  since  the  end  of  the 

investigation period acted to increase production capacity and, given the respite  afforded 

by  anti-dumping  duties  from  the  pricing  pressures  caused  by  unfairly  traded  imports, 

can  be  expected  to  continue  to  invest  in  this  sector.  Moreover,  new  Community 

producers,  in à further  response  to  the  market,  have  set  up production  facilities  in  the 

Community.  The Commission  considers  it essential  that the complainant  Community 

industry  and  these  new  independent  Community  producers  be  given  the  opportunity 

to attain, in  conditions of  fair  trade  undistorted  by  dumping, the levels of  profitability 

needed  for  economic  viability.  The  Commission  therefore  maintains  its  findings  on 

Community  interest  as set  out  in  recitals  (75)  to  (80)  of  the  provisional  Regulation. 

15 

(31)  One importer argued that the imposition of  a definitive  anti-dumping  duty would only 

increase  costs  to  users,  without  in  any  way  helping  the  Community  industry,  as 

producers  and exporters  in  countries  not subject to the duty  would take advantage  of 

the higher prices engendered to increase market shares at prices below those needed by 

the Community  industry. 

The  Commission  notes,  however,  that  the  purpose  of  the  present  proceeding  is  to 

address problems arising from the dumped imports from the countries concerned.  It is 

not the purpose of anti-dumping measures to protect the Community industry from the 

normal  operation  of  fair  competition  in  circumstances  in  which  there  should  be 

unhindered market access. 

(32)  As  no  other  arguments  were  presented,  the  Council  confirms  these  conclusions  and 

those set out in recitals (75) to (85) of the provisional  Regulation. 

DUTY 

(33)  In  the  provisional  determination,  the  Commission  established  the  amount  of  duty 

necessary  to  remove  the  injury  on  the  basis  of  full  costs  of  production  plus  a 10% 

return  on  sales.  The  complainant  argued  that  the  use  of  a profit  margin  of  10% is 

insufficient  to  meet the needs  of  the  Community  industry  for  investment  to  increase 

production  capacity,  marketing  expenditure,  and  research  and  development  of  new 

products, and that the Commission should use a profit margin of between  12% and 16% 

of turnover to calculate the increase in prices necessary  to remove the injury. 

(34)  The  Commission  maintains  its  argument  that,  in  respect  of  the  relevant  costs  in the 

period  covered  by  the  investigation,  it  would  have  been  unrealistic  to  expect  profit 

margins  for  the  Community  industry  above  the  10% considered  to be  the minimum 

required to ensure the viability  of that industry. 

16 

(35)  One Japanese producer  argued  that,  because  of  its  calculation  of  the  duty  required  to 

remove  injury,  the  Commission  had  attributed  to  the  producers  in  the  countries 

concerned not only that part of  any injury  suffered  by the Community  industry  caused 

by imports from  those countries but also the injury  caused by other factors, notably by 

imports from  countries  not  subject  to the proceeding. 

The  Commission  rejects  the  contention. 

In its overall assessment of the situation, the Commission  examined all potential causes 

of injury,  to ensure that factors other than  imports from  Japan, Taiwan  and China were 

not  in  fact  responsible  for  the  injury  suffered  by  the  Community  industry.  This 

examination  covered,  as  is  pointed  out  in  recital  (66)  of  the  provisional  Regulation, 

imports from  third countries not included in the proceeding, and it was found  that, even 

if some of the injury  could have been  attributed to those imports, this did not alter  the 

fact  that  the  injury  caused  by  the  dumped  imports  from  the  countries  subject  to  the 

proceeding  was, taken  in  isolation,  material. 

Furthermore, in line with consistent Community  practice, the Commission  has acted to 

remove the  injury  established  by  imposing  duties only  up to the  limit  of  the  dumping 

margins or the  margins of underselling  individually  determined  for  producers found  to 

be dumping.  It is clear, therefore, that by adopting this approach, the Commission  does 

not remove  more injury  than that  caused  by  each exporter  by  its dumped  imports, and 

does not. therefore, attribute to the dumped imports any element of injury  that may have 

been  caused  by  other  factors. 

(36)  The  difference  between  the  prices  for  the  Community 

industry,  established  in 

accordance  with  the  method outlined  in  recital  (81) of the provisional  Regulation,  and 

the  prices  of  the  dumped  imports  used  to  establish  undercutting,  as  outlined  in 

recital  (55) of the provisional  Regulation, as adjusted  by recital (27) of this Regulation, 

expressed on a weighted  average  basis  and  as a percentage  of the  free-at-Community-

frontier  price,  established  in  accordance  with  the  provisions  of  Regulation  (EEC) 

No  1224/80,  weie  above the  dumping  margins  found  for  all  the  producers  in  Taiwan 

and  China,  Mid ranged  from  6.1% to  40.9% for producers in  Japan. 

17 

As far  as non-cooperating producers are concerned, the Commission  considers that the 

result of its investigation  forms  the most appropriate basis for  the establishment of  the 

level  of  duty,  and  thus  concludes  that  the  highest  level  of  duty  determined  for  a 

producer  in the  same  country  should  be applied  to  the non-cooperating  producers. 

(37)  The Council  confirms  the above findings  of the Commission  and the determination  of 

the  duty  to  be  applied,  as  described  in  recitals  (81)  to  (85)  of  the  provisional 

Regulation. 

K.  UNDERTAKINGS 

(38)  Several  producers have suggested  offering  undertakings,  and  have  been  informed  that 

the  Commission  is  unable  to  accept  undertakings  in  this  case.  The  Commission 

considers  that  the  degree  of  non-cooperation  in  the  proceeding,  the  rapidity  of 

technological  change  in  the  product,  and  the  volatility  of  prices,  would  render  the 

observance of undertakings exceedingly  difficult  to monitor.  In addition, the high level 

of mobility of the production  facilities  in the industry  would be unlikely  to  contribute 

to  the  restoration  of  fair  competitive  conditions  in  the  market. 

(39)  Given the above, the Council  concludes that  measures should  be imposed  in the  form 

of  definitive  anti-dumping  duties. 

L.  COLLECTION  OF THE PROVISIONAL DUTIES 

(40)  In  view  of  the  dumping  margins  established,  the  injury  caused  to  the  Community 

industry,  and  the  latter's  precarious  financial  situation,  the  Council  considers  it 

necessary  that  the  amounts  secured  by  way  of  provisional  anti-dumping  duty  for  all 

companies  should  be  collected  definitively.  Where  the  provisional  duty  exceeds  the 

duty  rate  definitively  imposed,  the  amount  collected  should  not  exceed  that  of  the 

definitive  anti-dumping  duty, 

18 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A definitive  anti-dumping  duty is hereby imposed on imports of  3.5" microdisks used 

to  record  and  store  encoded  digital  computer  information  falling  within  CN  Code 

ex  8523  20 90 (Taric Code 8523  20 90*10), and originating in Japan, Taiwan and the 

People's Republic of China. 

2. 

The  rate  of  duty  applicable  to  the  net  free-at-Community-frontier  price,  not  cleared 

through customs, shall  be as follows. 

(a)  40.9% in  respect  of  the  products  specified  in  paragraph  1  originating  in  Japan 

(Taric additional code: 8708), with the exception of imports which are manufactured 

and sold for export to the Community  by the following  companies, which shall be 

subject to the rates of duty mentioned hereunder: 

Memorex Telex  Japan Ltd.: 

6.1% (Taric additional  code  :  8705) 

Hitachi-Maxell  : 

20.6% (Taric  additional  code  :  8706) 

- 

TDK: 

26.7% (Taric additional  code  :  8707) 

(b) 32.7%  in  respect  of  the  products  specified  in  paragraph  1 originating  in  Taiwan 

(Taric additional code: 8710), with the exception of imports which are manufactured 

and sold for  export to the Community  by  the following  company,  which  shall  be 

subject to the rate of duty  mentioned hereunder: 

CIS Technology: 

19.8% (Taric additional  code:  8709) 

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(c)  39.4%  in  respect  of  the  products  specified  at  paragraph  1 originating  in  China 

(Taric additional code: 8712), with the exception of imports which are manufactured 

and sold for export by the following  company, which shall be subject to the rate of 

duty mentioned hereunder: 

Hanny Magnetics: 

35.6% (Taric additional  code:  8711) 

3. 

The provisions in force  concerning  customs duties shall  apply  to the said duty. 

Article 2 

1. 

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

Regulation  (EEC)  No  920/93  in  respect  of  3.5"  microdisks  shall  be  definitively 

collected.  Where the provisional  duty  exceeds the duty  rate definitively  imposed, the 

amount collected  should not exceed that of  the definitive  duty. 

2. 

Amounts secured in excess of the definitive  rate of  duty  shall  be released. 

Article 3 

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

Official  Journal of the European Communities. 

This Regulation shall be binding in its entirety and directly  applicable in all Member States. 

Done  at Brussels, 

For the  Council 

The President 

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ISSN 0254-1475 

COM(93) 448 final 

DOCUMENTS 

EN 

08 

Catalogue numtjer : CB-CO-93-491-EN-C 

ISBN 92-77-59463-2 

Office for Official Publications of the European Communities 
1^2985 Luxembourg 

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