Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of furazolidone originating in the People' s Republic of China and collecting definitively the provisional duty imposed
Date: 1994-10-17
Institutions: European Commission
Subjects: China, anti-dumping duty, antibiotic, dumping, import

fit, 

U  COMMISSION  OF  THE  EUROPEAN  COMVTUNITIES 

C0M(94) 425 final 
Brussels,  17.10.1994 

Proposal  for a 

COUNCIL REGULATION  (EC) 

imposing a definitive  anti-dumping duty 
on imports of furazolidone  originating 
in the People's  Republic of China and collecting  definitively 
the provisional  duty imposed 

(presented  by the Commission) 

EXPLANATORY MEMORANDUM 

1.  The Commission, by Regulation (EC) No  1648/94 of 6 July  19941 imposed a 

provisional anti-dumping duty on imports of furazolidone  originating in the People's 
Republic of China. 

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 ail 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 2423/8S2, the Commission, after consultation within the 
Advisory Committee, proposes the imposition of definitive anti-dumping duties on 
imports of furazolidone originating in the People's Republic of China. 

6.  In view of the dumping margin 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. 

1 
2 

OJ No L 174, 8.7.1994, p. 4. 
OJ No L 209,2.8.1988, p. I. 

COUNCIL REGULATION  (EC) No 

of 

1994 

imposing a definitive  anti-dumping duty 
on imports of furazolidone  originating 
in the People's Republic of China and collecting  definitively 
the provisional duty imposed 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having regard to the Treaty establishing the European  Community, 

. 

Having regard to Council  Regulation  (EEC) N° 2423/88 of  11 July  1988 on 
protection against dumped or subsidised imports from  countries not members of the 
European  Community1, as last amended by Regulation  (EC) N°  522/942, and in 
particular Article  12 thereof, 

Having regard to the proposal  submitted by the Commission after  consultation 
within the Advisory  Committee, 

Whereas : 

A.  PROVISIONAL MEASURES 

The Commission,  by Regulation  (EC) N°l648/943,  hereafter  referred  to as 
(1) 
the "provisional Regulation",  imposed a provisional anti-dumping duty on imports 
into the Community of furazolidone  originating  in the People's Republic of China 
and falling  within CN Code 2934 90 40. 

B.  SUBSEQUENT PROCEDURE 

Subsequent to the imposition  of the provisional anti-dumping duty,  the 

(2) 
interested parties who so requested  were granted an opportunity  to be heard by the 
Commission.  They also made written  submissions making known  their views on the 
findings. 

lOSNoL2Û9,  2.8.1988,  p. 1. 
2OJ No L66,  10.3.1994, p. 10. 
3OJNoL174,  8.7.94,  p.4. 

-tu^ 

Upon  request,  parties were  informed  of the essential  facts and considerations 

(3) 
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. 

The oral and written comments submitted by the parties were considered 

(4) 
and,  where appropriate,  the Commission's  findings  were modified  to take account 
of them. 

C.  PRODUCT UNDER CONSIDERATION,  LIKE PRODUCT AND 

COMMUNITY  INDUSTRY 

As no further arguments have been presented regarding the product under 

(5) 
consideration, the like product and the Community industry, the findings set out in 
recitals (7) to ( 10) of the provisional Regulation are confirmed. 

O. DUMPING 

I.  Analogue country 

(6) Following publication of the provisional Regulation, the Chinese exporters 
claimed that the selection of  India as an analogue country was inappropriate for the 
following reasons : 

- the high customs duty payable in India on imports of 
both the product concerned and on raw materials used in its manufacture, constitute 
an insurmountable barrier to the existence of normal competition in India for 
furazolidone. 

India as it was highly protected and monopolized by one Indian producer. 

- there was no reasonable competition on the market in 

- the sole producer in India on which the normal value 
was based was inefficient  and has,  since the investigation  period,  ceased production 
of the product concerned.  To furthermore  use a profit  of 9% in constructing  normal 
value for  such a company  was inappropriate. 

It was suggested that the most appropriate analogue market in this case, given that 
no other third country can be used,  would be the European  Community  market. 

(7)  Having examined these claims,  it was considered  that the existence of high 
customs duties on imports of the product concerned  and its raw  materials has not 
detracted  from  the competitive  nature of the market in India.  Indeed,  the Chinese 
exporters themselves were very  much present on the market and indications were  x 
that, despite the high customs duty,  they were able to actively compete on the 
Indian market.  Furthermore,  the Commission,  when constructing  normal value  for 
the product concerned,  made appropriate adjustments  for  the high level of customs 
duty paid on imported  raw materials in order not to artificially  inflate  the normal 
value. 

In addition,  while noting that the Indian producer,  on whose costs normal  value 
was based,  has since ceased production  of the product concerned,  it was considered 
that the volume of the product on which normal was based,  was, during the 
investigation  period,  sufficiently  representative  when compared  to the volume 
exported  to the Community  from  China. 

While no facts were provided  by the Chinese exporters in support of this claim,  it is 
considered  that,  in any event,  the alleged inefficiency  of the Indian producer 
concerned  is not a relevant factor  in establishing the normal value on the market.  In 
the absence of profitable  sales of the product concerned by this producer during the 
investigation period,  normal  value was constructed on the basis of the cost of 
manufacture  of the producer concerned plus an amount  for  selling, general and 
administrative expenses and a reasonable margin of profit.  The profit  margin used 
(9%) was, as stated in recital  (13) of the provisional  Regulation,  that regarded as 
reasonable by the producer concerned,  and furthermore,  is in the range of the  profit 
considered  reasonable  for  sales of the product concerned in the Community. 

In any event, to use the European Community as an alternative analogue market 
would have no impact on the measures to be imposed, since it would be equivalent 
to having the dumping margin based on the injury elimination margin which is the 
basis on which the provisional duty was actually imposed. 

(8) The claim that India was an inappropriate analogue country and that the 
European Community market should be used was, therefore, rejected. 

II.  Normal  value 

For the purpose of the  definitive findings, normal value was established on 

(9) 
the basis of the same methods as those used in the provisional determination of 
dumping. No objections with regard to these methods were raised by any interested 
party. The findings  set out in recital (13) of the  provisional Regulation are, 
therefore, confirmed. 

m.  Export price 

(10)  No new arguments were presented regarding the establishment of export 
prices. The findings set out in recital (14) of the  provisional Regulation are, 
therefore, confirmed. 

IV.  Comparison 

(11)  No new arguments were presented concerning the method followed by the 
Commission in the comparison between normal value and export price. The method 
set out in recital (15) of the  provisional Regulation is, therefore,  confirmed. 

V. Dumping margins 

(12)  No further arguments were submitted on the methodology used by the 
Commission in its preliminary determination. Therefore, the weighted average 
dumping margin definitively  established and expressed as a percentage of the  free-
at-Community-frontier price, is 93%. 

(13) In its provisional findings, the Commission  considered  that the request  from 
one Chinese exporter that an individual dumping  margin be established  was not 
justified  for  the reasons given  in recitals (17)  to (20) of the provisional  Regulation. 
Following  the publication of that Regulation,  the exporter concerned  repeated  the 
request for  the establishment  of an individual dumping  margin.  However,  as no new 
facts or arguments have been provided,  the findings  in recitals (17) to (20) of the 
provisional  Regulation are  confirmed. 

E.  INJURY 

I.  Community consumption,  volume and market share of the dumped 
imports 

(14) The Chinese exporters claimed that the injury  determination  in the provisional 
Regulation  was based on an incorrect assessment of the facts.  In particular,  they 
claimed  that the Commission  should have used Eurostat  statistics relating to imports 
of  the product concerned  during  the investigation  period,  rather than  the import 
volumes of  the product concerned  reported  in the questionnaire  responses by the 
Chinese exporters themselves.  It was argued that some transactions reported  by the 
Chinese exporters as being export  sales to the European  Community  were,  in  fact, 
not destined  for the Community  market but were transhipped outside the 
Community. 

This claim could not be accepted.  It was found  that,  while on the one hand,  no 
evidence was provided  in support of this claim,  the use in the injury  assessment of 
Eurostat  statistics for the investigation  period would still show a substantial increase 
in the imports concerned  since  1990,  together with a sizeable increase in market 
share held by these imports, and that the trend so established  would not differ  from 
that determined by the Commission  in its provisional findings. 

The claim  for the injury  assessment to be made on the basis of Eurostat statistics is, 
therefore,  rejected. 

II.  Prices of the dumped  imports 

(15)  In the absence of comment,  the findings  in recital (22) of the provisional 
Regulation are  confirmed. 

III.  Situation of the Community  industry 

(16) As the claim in recital (14) above has been rejected,  and as no other comments 
have been received on the situation of the Community industry,  the findings in 
recitals (23) to (28) of the provisional  Regulation are  confirmed. 

F. CAUSATION 

(17)  In its provisional  Regulation,  the Commission examined a claim by the Chinese 
exporters that the cause of price decreases of the product concerned on the 
Community market was the threatened prohibition of the product concerned  in the 
Community,  due to the uncertainty about its future  applications.  This claim was 
rejected  by the Commission  for  the reasons given in recitals (33) and (34) of the 
provisional  Regulation. 

Following  the publication  of the provisional  Regulation,  the Chinese exporters 
repeated this claim but,  since new arguments have not been submitted on this issue, 
the findings of the provisional  Regulation are  confirmed. 

G.  COMMUNITY  INTEREST 

(18) As no new arguments have been received in respect of the community  interest, 
the findings at recitals (36) to (39) of the provisional  Regulation are  confirmed. 

H.  DUTY 

(19)  No comments were received on the methodology  adopted by the 
Commission  for the establishment of the duty rates to be applied,  as set out in 
recitals (40)  to (43) of the provisional  Regulation. These are therefore  confirmed. 

Since the margin of dumping  found  was greater than the corresponding 
increase in export prices necessary  to remove the injury  suffered  by the Community 
industry,  the definitive  duty to be imposed should,  therefore,  correspond  to the 
injury  margin established  i.e.  70.6%. 

I. RETROACTIVE DUTIES 

(20)  The Community  producer requested the imposition of retroactive duties on 
the grounds that importers were aware that the exporters were practising dumping 
and that there would be material  injury  caused by sporadic dumping in the form of 
massive imports of furazolidone  in a relatively  short period prior to the  imposition 
of the provisional anti-dumping duty. 

(21)  The Commission examined  this claim,  but found  that it was not  substantiated 
by any evidence showing the awareness of dumping practices on the part of the 
importers or any indications of the existence of sporadic dumping.  In these 
circumstances,  there were no grounds to impose retroactive anti-dumping  duties in 
this case. The Council consequently  decided not to impose retroactive  anti-dumping 
duties on furazolidone  originating  in the People's Republic of China. 

J. COLLECTION OF THE PROVISIONAL DUTIES 

(22) 
In view of the dumping  margin established  and the injury  caused  to the 
Community  industry,  it is considered  necessary that amounts secured by way of 
provisional anti-dumping duty  for all companies should be collected  definitively. 

HAS ADOPTED THIS REGULATION 

Article  1 

1. 

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

furazolidone,  falling  within CN  code  2934  90 40 and originating  in the  People's 

Republic  of  China. 

2. 

The  rate of duty applicable  to the net free-at-Community-frontier  price 

before  duty  shall  be 70.6%. 

3. 

Unless otherwise  specified,  the provisions  in force  concerning  customs duty 

shall apply. 

Article  2 

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

Regulation  (EC)  No.  1648/94  concerning  the imports from  the  People's  Republic  of 

China shall  be collected  definitively. 

Article  3 

This  Regulation  shall  enter  into  force  on  the day  following  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 

1SSNQ254-1475 

COM(94) 425 final 

DOCUMENTS 

EN 

11 02 

Catalogue number : CB-CO-94-450-EN-C 

ISBN 92-77-80965-5 

Office for Official Publications of the European Ctoniinimities 

L-2985 Luxembourg