Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports into the Community of bookbound photo albums originating in the People' s Republic of China and collecting definitively the provisional anti-dumping duty
Date: 1993-12-10
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, pulp and paper industry, visual arts

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0MC93) 641  final 

Brussels,  10 December  1993 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

imposing a definitive anti dumping duty on  imports 

into the Community ol  bookbound  photo albumu originating 

in the People's Republic ot China and collecting 

definitively the provisional  anti-dumping duty. 

(presented  by  the Commission) 

A 

COUNCIL REGULATION  (EC) No. 

/93 

Of 

imposing a definitive anti-dumping  duty on  imports 

into the Community of bookbound  photo albums  originating 

in the People's Republic of China and  collecting 

definitively  the provisional  anti-dumping  duty. 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  *"*  . 

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 

Article  12 thereof, 

Having  regard  to  the  proposal  presented  by  the  Commission  after-

consultation  within  the Advisory  Committee  as provided  for by  the  above 

Regulation, 

(I) OJ No L 209,  ?..  8.  19HH, p.l 

/y 

Whereas : 

A-  PROVISIONAL  MEASURES 

(1)  By  Regulation  (EEC)  No.2477/93  (  ,  the  Commission  imposed  a 

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

bound  photo  albums  originating  in  the  People's  Republic  of  China 

and  falling within  CN code 48205000. 

B.  SUBSEQUENT  PROCEDURE 

(2)  Following  the  imposition  of  the  provisional  anti-dumping  duty  the 

following parties submitted comments  in writing: 

Exporter  of  book  bound  photo  albums  originating  in  the  People's 

Republic of China. 

Climax  Paper Converters  Ltd., Hong Kong. 

Community producers: 

Germany : 

- Walter Aulfes, Mûnchen. 

- Ludwig  Fleischmann GmbH & Co. KG, Fulda. 

- Karl Walter GmbH & Co. KG, Nettetal. 

Holson GmbH, Alsdorf. 

Netherlands : 

- Honzo B.V.,  Roermond. 

(2) OJ No L 228  9. 9. 1993, p.16 

3 

Independent  importer: 

WAHA,  Gebrauchsgûter  import  Handelsgesellschaft  mbH,  Germany 

(3)  Parties  who  so  requested  were  granted  an  opportunity  to  be  heard  by 

the  Commission.  The  parties  were  informed  ol  the  essential  facts 

and  considerations  on  the  basis  ot  which  it  wus  intended  to 

recommend  ttie  imposition  of  definitive  anti-dumping  measures  and 

the  definitive  collection  of  amounts  secured  by  way  of  provisional 

duty.  They  were  also  granted  a  period  within  which  to  make 

representations  subsequent  to  the  disclosure. 

(4)  The  parties'  comments  were  considered,  and,  where  appropriate,  the 

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

(M  The  invest igat;ion  overran  the  normal  duration  of  one  year  provided 

for  in  Article  7  (9)  (a)  of  Regulation  (EEC)  No.  2423/88  due  to 

the  time  expended  in  finding  an  appropriate  reference  country  for 

establishment  of  normal  value. 

C.  PRODUCT  UNDER  INVESTIGATION  AND  LIKE  PRODUCT 

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

consideration  and  the  like  product,  the  Council  confirms  the 

findings  of  the  Commission  as  set  out  in  recitals  7  to  10  of  the 

provisional  Regulation. 

D.  COMMUNITY  INDUSTRY 

(7)  No  arguments  have been presented  regarding  the  Community  industry. 

The  Council  therefore,  confirms  the  findings  of  the  Commission  as 

set out  in recital 26 of the provisional  Regulation. 

INDIVIDUAL TREATMENT 

(8)  in  Recitals  13  to  18  of  Regulation  (EEC)  No.  2477/93,  the 

Commission outlined the general and specific reasons why  it was not 

appropriate  to grant  individual  treatment  in this case. 

Climax  Paper  Converters  Ltd.,  (hereinafter  Climax),  the  Hong  Kong 

based  exporter  of  Chinese  bookbound  photo  albums,  contested  the 

Commission's  decision  not  to  grant  individual  treatment  to  its 

exports  on  the basis of  its dumping  margin.  The  exporter  stressed 

that  it  is  a  profit  oriented  company,  based  in  Hong  Kong  and 

operating  under  open  market  principles.  The 

manufacturing 

operation  in  the  People's  Republic  of  China,  it  alleged,  is 

governed  by  these  same  market  principles.  The  exporter  further 

alleged  that  as  it was  the  sole  cooperating  exporter  it  is  doubly 

penalised  since  it  suffers  the  impact  of  the  dumping" margin 

calculated  for non-cooperating exporters. 

(9)  In it's preliminary determination the Commission outlined  in detail 

at  recital  18  the  specific  reasons  why  Climax  was  not  entitled  to 

individual  treatment.  Since  then  no  new  arguments  have  been  put 

forward  establishing  that  Climax  is  free  to  act  autononmcusly  in 

its  business  decisions  in  the  People's  Republic  of  China.  The 

exclusion 

of 

individual 

treatment 

and 

consequently 

the 

establishment  of  a  single  dumping  margin  has  an  impact  on  the 

cooperating  exporter.  However  no  other  solution  is  practicable 

since  the  overriding  consideration  must  remain  that  all  exports 

from  countries  referred  to  in  Article  2  (5)  of  the  Basic-

Regulation  must  be  subject  to  a  single  country-wide  duty  for  the 

reasons  set out  in recitals  13 to  17 of  the provisional  Regulation 

and,  in  particular,  if  it  is  not  established  that  individual 

exporters  are  free  to  act  independently  from  the  State  in  the 

conduct of their business affairs. 

The  Commission  has,  therefore,  come  to  the  conclusion  that  it  is 

appropriate  in  this  case  to  establish  a  single  anti-dumping  duty 

for all exports  from the People's Republic of China. 

The Council confirms this conclusion. 

é 

F.  DUMPING 

1.  Normal Value 

(10) In the provisional duty determination  the Commission concluded  that 

South  Korea  was  an  appropriate  analogue  country  for  the 

establishment  of  the  normal  value  of  Chinese  exports  to  the 

Community  and  normal  value  was  consequently  established  on  the 

basis  of  Article  2 

(b)  (b)  of  the  Basic  Regulation,  i.e.  the 

constructed  va Lue of  the  like product  in a market  economy  country, 

South  Korea. 

(11) The complainant  Community producers argued  that South Korea was not 

an  appropriate  and  reasonable  reference  country  for  the 

determination  of  the  normal  value  and  reiterated  that  the  normal 

value  should  have  been  established  under  Article  2  (5)  (c) of  the 

Basic  Regulation  on  the  basis  of  prices  payable  in  the  Community 

for the like product.  It was contended  that, although a comparable 

product  is  manufactured  in  South  Korea,  the  existence  of  anti 

dumping  measures  against  South  Korean  producers  established  by 

Commission  Decision  No.  90/241/EEC^ 

may  have  influenced  the 

competitive  situation  of  South  Korean  exporters  and  affected  the 

level  of  selling,  general  and  administrative  expenses  and  profit 

margin obtaining  in the South Korean market. 

(12) The Commission rejected this argument  since all of the elements on 

which  the  normal  value  was based  as  set out  in  recitals  21  and  22 

of  the provisional  Regulation were  subject  to normal  market  forces 

and there  is no reason to consider that  they were affected by 

(3)  OJ No. L 138, 31.5.1990, P.48 

î 

existing  anti-dumping  measures  i.e.  price  undertakings.  Moreover 

reference  to  Article  2  (5)  (c)  is  only  appropriate  if  either 

domestic  prices  or  constructed  value  does -not provide  an  adequate 

basis.  Since  such a basis was  found  this  excludes  the  application 

of Article 2  (5)  (c) . 

The Council confirms  this approach. 

2. 

Export  Price 

(13) Climax contested the methodology used to establish  the export  price 

of  bookbound  photo  albums  from  the  People's  Republic  of  China.  It 

argued  that  t he  5%  profit  margin  deducted  from  the  Hong  Kong 

export  price,  estimated  by  the  Commission  to  be  a  normal  profit 

realised  on  sales  of  photo  albums  of  Chinese  origin  occurring  via 

in  Hong  Kong,  was  excessive.  It  alleged  that  a  1%  or  2%  profit 

margin  was more  appropriate  for  the transhipment  of goods  from  the 

People's Republic of China to Hong Kong Harbour. 

(14) The Commission rejected the exporter's argument  since the resale of 

book bound albums  in Hong Kong  is an extensive  commercial  operation 

requiring  an appropriate  infrastructure.  Therefore  a profit  margin 

of  5%  is  considered  reasonable  to  remunerate  the  effort  involved 

and  therefore  an  appropriate  deduction  in  order  to  determine  the 

export price ex-China. 

(15) The  Commission  set  out,  in  recital  23  of  the  provisional 

Regulation,  the methodology  used  to determine  the  export  prices  of 

the  remaining  exports  where  no  information  was  available.  These 

export prices were determined  on the basis of  the  facts available, 

in accordance with Article 7  (7)  (b) of the Basic Regulation. 

s 

(16) Climax contested the methodology used  to determine  these prices and 

argued  that, since  the Eurostatistics  for  CN  Code  48205000  embrace 

other  types  of  albums,  the  Commission's  estimate  of  the.volume  of 

bookbound  albums  imported under this CN code was arbitrary. 

(17) In  estimating  the  volume  of  bookbound  albums  imported  under  CN 

Code  48205000  the  Commission  knew  the  precise  volume  of  bookbound 

albums exported by Climax and thus ascertained  the volume of albums 

of  whatever  type, which  made  up  the  balance  imported  under  the  CN 

Code.  It  was  conservatively  estimated  that  50%  of  the  remaining 

balance  under  the CN Code were bookbound  photo  albums  since  it was 

alleged  that  several manufacturers of bookbound  albums  in Hong  Kong 

relocated  their production to the People's Republic  of  China during 

1989 or  1990.  Since publication of the provisional  findings  it has 

been  confirmed  by  an  importer  that,  indeed,  three  manufactueres 

relocated  and  commenced  production  in  the  People's  Republic  of 

China  which  confirms  that  the attribution  of  50% of  the balance  to 

bookbound  photo  albums  was  a  conservative  estimate.  Furthermore, 

as  Climax  is  apparently  the  main  exporter  of  this  product  to  the 

Community,  the attribution of 50% of the balance under  the CN Code 

to other  bookbound  album  exporters  remains  the  most  reasonable  and 

accurate approach. 

(18) Climax  also  argued  that  the  export  prices  of  the  non-cooperating 

producers  should have been established on a model by model basis. 

.3 

(19) In establishing  the export prices of the non-cooperating producers, 

the  Commission  took  account  of  the  sub-categories  of  bookbound 

photo  albums  sold  by  Climax.  The  two  elements  which  delineate  a 

sub-category  are  the  size  of  the  inner  sheet  and  outer  cover  and 

the  number  of  sheets  contained  in  the  albums.  Indeed,  these 

criteria  are  used  by  Climax  to  identity  their  albums  and  are  the 

key  factors used to compare albums of different  producers. 

(20) Models  within  a  sub-category  are  merely  variations  arising  due  to 

the colour of the outside cover, the design of  the outside  cover or 

other  incidental  features peculiar to an  individual  producer. 

(21) In determining  export  prices  for the non-cooperating  producers  the 

objective  was  to base  these  prices  on  the  lowest  prices  at  which 

Climax  sold  bookbound  albums within a sub-category  always  ensuring 

that  sales  within  the  sub-category  concerned  could  be  considered 

representative.  While  the  Commission  rejected  the  argument  that 

prices  should  have  been  established  on  a  model  by  model  basis,  it 

re-considered  the representativeness of the sub-categories  included 

in the exercise.  In order to ensure that models  were  included  from 

as  many  sub-categories  as  possible,  further  export  transactions 

have  been  included  thus  ensuring  that  all  sub-categories  where 

sales  exceeded  5%  of  total  sales  and  which  were,  therefore, 

sufficiently  representative, were included  in the sample. 

The Council confirms this approach. 

^ 

3. 

Comparison 

(22) As  far  as recital  24 of Regulation  (EEC) No. 2477/93  is concerned, 

no  evidence  was  received  to  alter  the  Commission's  provisional 

conclusion. 

The Council  therefore confirms this conclusion. 

4. 

Dumping  Margin 

(23) No  further  arguments  were  adduced  on  the  methodology  used  by  the 

Commission  in  its  preliminary  determination  of  a  single  dumping 

margin  for  all  Chinese  exports.  Therefore  one  dumping  margin  has 

been established  for the People's Republic of China on the basis of 

a  weighted  average  of the dumping margin  for which  information  was 

available  and  the  dumping  margin  determined  on  the  basis  of  the 

facts  available  in accordance  with  Article  7  (7)  (b)  (see  recital 

15) of  the Basic Regulation  for the remaining  exports  for  which  no 

information was received. 

On  the  basis  of  the  modification  made  to  the  determination  of 

export prices  for the non-cooperating producers, the dumping  margin 

for  exports  from  the  People's  Republic  of  China  has  been 

established on a weighted  average basis at  18.6%. 

•  '' • 

The Council confirms this conclusion. 

^ 

G.  INJURY 

1. 

Total consumption, volume and market shares of dumped  imports. 

(24) All  figures  are  confirmed  except  the  data  relating  to  Community 

consumption.  During  the  preliminary 

investigation, 

it  was 

estimated  that  thirty per cent of  the volume  of  albums  exported  by 

Indonesian  producers  were  of  the  bookbound  category.  However  it 

was  subsequently  established  that  Indonesian  exports  of  albums  are 

mainly  of  the  spiral  and  pocket  type  category  and  that  bookbound 

exports are negligible.  Therefore the data on  Indonesian  bookbound 

albums  was  overestimated  and  consequently  Community  consumption 

considered  to  be  in  the  order  of  15,500  tonnes  during  the 

investigation period. 

2. 

Prices of dumped imports. 

(25) In  recital  10 of  Regulation  (EEC) No. 2477/93  it  was  acknowledged 

that  there  were  some  physical  differences  between  the  imported 

product  and  Community  production.  A  10% adjustment  was  estimated 

to  be  appropriate  to  account  for  such  differences  and  was  taken 

into  account  in  establishing  the  price  undercutting  margin 

referred  to in recital  29 of the provisional  Regulation. 

(26) The  Community  industry  challenged  the  10%  adjustment  granted  for 

apparent  differences  of  the  imported  product  vis-a-vis  Community 

production  in  the  determination  of  the  undercutting  margin.  It 

argued  that  a 5% reduction  in price was  more  reasonable  to  account 

for material differences. 

IL 

(27) The  Commission  has  considered  this argument  but  finds  no  reason  to 

deviate  from  the  original  figure  based  on  a  visual  comparison  of 

export models and Community production. 

3 . •••  State of the Community  Industry 

(28) No  new  arguments  were  put  forward  on  the  state  of  the  Community 

industry.  The  Council  therefore  confirms  the  findings  of  the 

Commission  as  set  out  in  recitals  30  to  35  of  the  provisional 

Regulation. 

4. 

Conclusion as to injury 

(29) Climax  requested  that  its original  submission on  injury  made  prior 

to  the  adoption  of provisional  measures  be  again  considered  before 

a definitive determination  is made. 

The Commission  re-examined  the exporter's  submission but  found  that 

it had already replied  in full to the arguments put  forward  therein 

and  since  there  were  no  fresh  grounds  to  modify  the  provisional 

determination  confirms  that  the  Community  industry  suffered 

material  injury. 

The Council  confirms this conclusion. 

M 

H.  CAUSE OF INJURY 

(a)  Effect of dumped  imports 

(30) The  Commission  has,  in  its  preliminary  conclusions,  set  out  in 

detail  the  effect  of  the  dumped  imports  on  the  Community  industry 

(recitals  37  and  38  of  Regulation  (EEC)  No.  2477/93) .  No  new 

arguments  were put  forward  in this connection  and,  accordingly  the 

Council  confirms  these conclusions. 

(b)  Other  factors. 

(31) As  far  as  recitals  39  to  40  of  Regulation  (EEC)  No.  2477/93  are 

concerned  no  new  evidence  was  received  to  change  the  Commission's 

provisional  findings.  The  Council  consequently  confirms  these 

findings. 

COMMUNITY  INTEREST 

(32) As  stated  in  recital  48  of  Regulation  (EEC)  No.  2477/93,  the 

Commission  concluded  that  it was  in the  interests  of  the  Community 

that  measures  be  taken.  Climax  requested  that  its  original 

submission  on  Community  interest  be  again  considered  before  a 

definitive determination  is made. 

11 

(33) The  Commission  must  point  out  that  the  argument  put  forward  by 

Climax  at  the provisional  stage,  i.e.  that  the  only  result; of  the 

imposit ton  <>l  measures  on  Chinese  cxpuii :; would  be  to  giant,  an 

advantage  it  its  competitors  particularly  Indonesian  producers, 

has been addressed  in recital 46 of the provisional Regulation.  No 

new  arguments  have been presented  which would  cause  the  Commission 

to alter the conclusions  set out  in that recital. 

The Council confirms this conclusion. 

J.  DEFINITIVE  DUTY 

(34) Given  that  the  injury  level  exceeded  the  dumping  margin,  the  duty 

should  be based  on  the  latter  in accordance  with Article  13  (3) of 

the Basic Regulation. 

K.  COLLECTION  OF  DEFINITIVE  DUTIES 

(35) In view  of  the  dumping  margin  established,  and  the  seriousness  of 

the injury caused to the Community  industry, the Council  considered 

it  necessary., that  amounts  secured  by  way  of  provisional  anti 

dumping  duty  should  be  definitively  collected  at  the  rate 

corresponding  to the definitive rate of duty. 

HAS ADOPTED THIS REGULATION: 

\r 

Article 

1 

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

bookbound photo albums falling within CN code 48205000, (Taric Code 

4820500 10) originating in the People's Republic of China. 

2.  The  rate  of  the  duty,  applicable  to  the  net,  f ree-at-Community-

frontier price, before duty, shall be 18.6%. 

3.  The provisions in force concerning customs duties shall apply. 

At  Licit: 

2 

The amounts secured by way of provisional anti-dumping duty  imposed by 

Regulation  (EEC)  No.  2477/93  shall  be  definitively  collected  at  the 

rate corresponding to the definitive duty. 

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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