Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of potassium permanganate originating in the People' s Republic of China
Date: 1994-10-19
Institutions: European Commission
Subjects: China, anti-dumping duty, chemical product, dumping, import

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(94) 424 final 

B r u s s e l s,  19.10.1994 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 
imposing  a definitive  anti-dumping  duty  on  imports of potassium  permanganate  originating 
in the People's  Republic of China 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

1.  The Commission, by Decision 86/589/EEC of 26 November  1986, accepted inter alia an 
undertaking  concerning  imports  of  potassium  permanganate  originating 
in  the 
People's Republic  of  China,  offered  by  the  only  exporter  in  the  People's  Republic 
of China. 

2.  After  failure  of  the  exporter  in  the  People's  Republic  of  China  to  comply  with  the 
undertaking,  the  Commission,  by  Regulation  (EEC)  No  360/88  of  4  February  1988, 
withdrew its acceptance of the undertaking and imposed a provisional anti-dumping duty 
on  imports  of  potassium  permanganate  originating  in  the  People's Republic  of  China. 
The Council, by  Regulation  (EEC) No  1531/88 of 31 May  1988, imposed  a  definitive 
anti-dumping  duty  on  imports  of  potassium  permanganate  originating 
in  the 
People's Republic  of China. 

3.  Upon  request  for  a review  of this measure under  Article  15 of the basic Regulation(1), 
lodged by the European Chemical Industry Council (CEFIC), the Commission, by Notice 
of 11 September 1993, initiated an anti-dumping review concerning imports of potassium 
permanganate  originating  in the People's  Republic  of China. 

4.  The review  investigation  revealed  that,  notwithstanding  the measures in  force,  imports 
of potassium  permanganate originating in the People's Republic of China were dumped 
and  were continuing to cause injury  to the Community  industry. 

5. 

In  the  light  of  the  investigation  findings,  it  is  considered  in  the  interest  of  the 
Community  to take measures in the form  of an anti-dumping duty.  The amount of the 
duty  proposed  is ECU  1.26  per kilogram. 

6.  The Commission informed  interested parties of the essential facts and considerations on 
the  basis  of  which  it  is  intended  to  propose  the  imposition  of  a  definitive  anti 
dumping duty. 

7.  The Commission, in accordance with Articles  12,  14 and  15 of the basic Regulation and 
after  consultation  of the Advisory  Committee,  is now proposing to impose a  definitive 
anti-dumping  duty  on  imports  of  potassium  permanganate  originating 
in  the 
People's Republic of China. 

.1 

(i)  Regulation (EEC) No 2423/88  of  11 July  1988. 

2 

Proposal  for a 
COUNCIL REGULATION  (EC) 
imposing  a definitive  anti-dumping  duty  on imports of potassium  permanganate  originating 
in the People's Republic of China 

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(1), as last amended by Regulation (EC) No 522/94(2), and in particular Articles 12, 
14 and  15 thereof, 

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

Whereas: 

A.  PROCEDURE 

(1) 

(2) 

The proceeding was first  initiated by notice published  in the Official  Journal  of the 
by 
European  Communities^. 
Decision  86/589/EEC(4),  inter  alia  accepted  a  price  undertaking  offered  by  the 
exporter  in  the  People's  Republic  of  China  in  connection  with  the  anti-dumping 
proceeding  concerning  imports of potassium  permanganate. 

In  November  1986, 

the  Commission, 

After  failure  of the  exporter  in the  People's Republic  of China to  comply  with  the 
undertaking,  the  Commission  withdrew  its  acceptance  of  the  undertaking  and 
reimposed  a provisional  anti-dumping  duty  by  Regulation  (EEC) No  360/88(5) and 
decided(6) to reopen the anti-dumping investigation  concerning imports of potassium 
permanganate  originating  in  the  People's  Republic  of  China.  The  Council,  by 
Regulation (EEC) No  1531/88(7), imposed a definitive anti-dumping duty on imports 

(i) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

OJNoL209,  2.8.1988, p. 2. 
OJ N0L66,  10.3.1994, p. 10 
O J N o C 6 3,  18.3.1986, p. 5. 
OJ No L 339, 2.12.1986,  p. 32. 
OJNoL  35, 9.2.1988,  p. 13. 
OJNoC37,  9.2.1988,  p. 3. 
OJ NoL  138, 3.6.1988,  p.  1. 

of  potassium  permanganate  originating  in  the  People's  Republic  of  China.  The 
amount  of  the  duty  imposed  was  equal  to  either  the  amount  by  which  the  free-at-
Community-frontier-price  per  kilogram  net,  before  duty  is  less  than  ECU 2.25  or 
20%  of  that  price  per  kilogram  net,  free-at-Community  frontier,  before  duty, 
whichever  is the higher 

Following the publication  in  December  1992<8) of a notice of the impending expiry 
of the measures in force,  the Commission  received a request for a review lodged by 
the European  Chemical  Industry  Council  (CEFIC), on behalf of producers allegedly 
representing the totality  of the Community  production  of potassium  permanganate. 

Subsequently,  in  a  notice  published  in  the  Official  Journal  of  the  European 
Communities(9), the Commission  announced  a review of the anti-dumping  measures 
in  force. 

The  Commission  notified  the  exporter  and  importers  known  to  be  concerned,  the 
representatives of the exporting country  and the complainant Community producers, 
and gave the parties directly  concerned  the opportunity  to make their views known 
in  writing  and to request  a hearing. 

All  complainant  Community  producers  replied  to the  questionnaire  and  made their 
views known  in writing. 

Neither the Chinese government  nor the exporter  in the People's Republic of China 
nor  the  related  importers  known  to  exist  in  the  Community  nor  any  unrelated 
importers replied  to the questionnaire. 

The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
purpose  of  a  determination.  Normal  value  had  to  be  determined  on  the  basis  of 
domestic prises in an analogue country (see recital 29). Consequently, investigations 
have been  carried  out at the premises of the following  companies: 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

complainant  Community  producers: 

Chemie AG (Germany) 

Industrial  Quimica del  Nalôn (Spain); 

reference  country: 

Carus Chemical  Company,  Ottawa,  Illinois, USA. 

(9) 

The investigation  of dumping covered the period from  1 July  1992 to 30 June  1993 
(the investigation  period). 

(9) 

OJNoC319,  5.12.1992,  p. 4. 
OJNoC  248,  11.9.1993, p. 9. 

B.  PRODUCT  UNDER CONSIDERATION  AND  LIKE  PRODUCT 

(10) 

(11) 

The  product  covered  by  the complaint  and  for  which  the  review  investigation  was 
initiated is potassium  permanganate falling within CN code 2841 60 10 (before  1992 
the CN code was ex 2841  60 00). It is identical  to the product which was subject of 
the previous investigation  and  for  which the definitive  duty  was imposed. 

Potassium  permanganate  is a  strong  oxidizing  agent  and  is used  for  potable  water 
treatment, waste water treatment, ehemical manufacture and processing, aqua-culture, 
metal  refining  and  metal  surface  cleaning, disinfectant  in agriculture  and veterinary 
practices,  flue  gas  purification,  process  gas  deodorization,  bleaching  and  special 
treatment  in  textile  industry,  odour  abatement,  radioactive  decontamination,  gas 
turbine  engine  cleaning,  manufacture  of  printed  circuit  boards  and  submarine  air 
purification. 

The  product  can  be  manufactured  in  three  grades,  technical,  free  flowing  and 
pharmaceutical.  All grades are obtained from  the same production process, show the 
same chemical properties and are interchangeable in all uses. The material is assigned 
to the specific  grade according to  demand  and after  having performed  the  different 
analysis needed. 

(12) 

The  investigation  showed  that  the  product  produced  and  sold  by  the  Community 
producers on the Community market is identical in its chemical characteristics to the 
potassium permanganate imported from the People's Republic of China. It is therefore 
considered as being a like product within the meaning of Article 2(12) of Regulation 
(EEC)  No 2423/88 (hereinafter  referred  to as  "the basic Regulation"). 

C.  COMMUNITY  INDUSTRY 

(13) 

Until  1990,  there  was  only  one  Community  producer.  The  other  producer,  the 
producer  located  in  the  former  German  Democratic  Republic,  became  part  of  the 
Community  industry  in the course of the German  unification. 

For  the  German  producer,  unification  implied  fundamental  institutional  changes 
towards  a  market  economy.  From  the  beginning  of  the  economic,  monetary  and 
social union  on  1 July  1990, it had to adapt to market  conditions. It was part of the 
former  combine  "VEB  Chemiekombinat  Bitterfeld"  and  is  now  offered  for 
privatization  by the  "Treuhandanstalt",  the German  State holding company. 

On a Community level, during the period preceding formal  unification  (1 July  1990 
until  2  October  1990),  rules  governing  trade  with  the  former  German  Democratic 
Republic  were  geared  towards  free  access  of  Community  products  to  the  former 
German  Democratic  Republic  and  towards  equivalent  access  to  the  Community 
(EEC)  No  1794/900<)).  By 
for  products  of 
Commission  Regulation No 1795/90(11) the former German Democratic Republic was 

latter  (Council  Regulation 

the 

(10)  OJ  NoL  166, 29.6.1990,  p. 1. 
(11)  OJ No L  166, 29.6.1990, p. 3. 

regarded,  for  implementation  purposes,  as forming  a part  of the Community.  With 
formal  unification  on  3  October  1990,  the  former  German  Democratic  Republic 
became part of the Community. 

Consequently  since 1  July  1990, all German producers form a part of the Community 
industry.  The  complainant  producers  manufacture  the  total  Community  output  of 
potassium  permanganate.  Therefore,  they  comprise the Community  industry  within 
the meaning  of  Article 4(5) of the basic  Regulation. 

D.  PRESENT SITUATION  IN THE COMMUNITY  MARKET 

(14) 

In  order to  establish  whether the  expiry  of the  measures in force  would  lead  again 
to injury  or threat  of injury,  it was first  necessary  to examine the present  economic 
situation  of the Community  industry. 

Production 

(15) 

The total Community production of potassium permanganate decreased by 74 % from 
1989 to the investigation  period.  This figure  is influenced  by the  adjustment  of the 
German  producer to market  conditions, which  took  place to a large part in just one 
year  (1990  to  1991).  However,  comparing  1991  and  the  investigation  period, 
production  of the Community  industry  fell  by 52%. 

Production  capacity  and  utilization  rate 

(16) 

The capacity  remained  stable at 7 500 metric tonnes (MT) per year.  The utilization 
rate dropped  from  75.8% in  1989 to 33.9% in the investigation  period. 

Sales 

(17) 

Sales of the Community  industry  on the Community  market  declined  from  1989 to 
the  investigation  period  by  nearly  50%.  This  rate  is  higher  than  the  drop  in 
consumption  of 36% during this period. 

Stocks 

(18) 

Stocks decreased  from  1 132 MT (1989) to 785 MT (investigation  period), passing 
a peak in  1991 with  1 349 MT. This decrease was caused by sales made from  stocks, 
meanwhile the Community  industry  stopped  producing for  certain  periods, in  1992 
and  in the investigation  period. 

Employment 

( 19) 

Thus the reduction of the stocks was at the expense of employment, which decreased 
by  37.3% from  1989  to  the  investigation  period.  The  transitional  situation  in  the 
eastern part of Germany accounted for  70% of this decrease. However, these figures 
do  not  include  temporarily  lay-offs  and  short-time  working,  which  had  to  be 
introduced  to bridge  stand-still  periods in the factories. 

Community  consumption  and  market  share held  by the Community  industry 

(20) 

The  apparent  consumption  in  the  Community  market,  based  on  imports  and  sales 
volume of the Community industry decreased from  4 459 MT in  1989 to 2 641 MT 
in the investigation period, a drop of 41%.  However, the statistical data  1989 to 1991 
include  "other  Manganates",  which  account  for  14% of the  imports  recorded  under 
CN code ex 2841 60 00. These adjusted  import figures for the years  1989-1991 result 
in  an adjustment  to the drop in consumption  to 36%. 

The  reduction  in  sales of the Community  industry  (see  recital  17) was higher  than 
the  shrinking  of the  market  and  therefore  resulted  in  a loss  of its  market  share  of 
7.8 percentage points. 

(21) 

(22) 

(23) 

Price trends 

Net  sales  prices  showed  an  increase  on  average  by  6.8  %  from  1990  to  the 
investigation  period.  However,  this figure  is influenced  by the  special  and  singular 
developments in the course of the German unification  (see recital  13). Since then the 
German  producer has had to adjust  to market economy  conditions  and increased  its 
prices by  more than  12% from  a much  lower base than  on the Community  market 
until, in the investigation  period,  prices of the  Community  industry  worked  out on 
the same level. By contrast,  the other Community  producer, which was not  affected 
by  such  influences,  showed  a  steady  fall  in  prices  from  1990  to  the  investigation 
period of  13%. Therefore it can be concluded that, overall  in the Community, market 
prices have been  depressed. 

Profitability 

Due  to  the  special  situation  of  the  German  producer  (see  recital  13)  no  average 
profit/loss margin is available for  1989. The average loss margin for the Community 
producers  was  1.8%  in  1990. This loss margin  reached  15.1% in  the  investigation 
period.  The Community  producers were  not  able to  regain  profitability  since  sales 
were made at a loss from  1990 to the investigation  period. 

Investments 

For more than five years, only small amounts have been invested by the Community 
industry  in replacements and minor upgrades of single parts of the factories.  Due to 
the stand-still  periods (see recital  18), wear and tear of the production  facilities was 
less than under normal production  conditions. More significant  amounts invested by 
Chemie AG, the producer in the eastern part of Germany, in the investigation  period 
were  necessary  to  increase  productivity.  To  prepare  for  privatization,  the  former 
combine  was  split  up  and  restructured,  which  led  to  the  separation  of  formerly 
integrated  chemical  processes.  Investments  were  aimed  at  substituting  these  lost 
internal  links. However,  this brought  no gains in  productivity  or  efficiency. 

Conclusion 

(24) 

It was accordingly  concluded that, in spite of the measures in force, the Community 
industry  continued  to  show  clear  signs  of  economic  difficulties.  The  Community 
industry experienced a considerable drop of sales in terms of both volume and market 
share.  These  developments  combined  with  continued  sales  at  losses  and  price 
depression  heavily  affected  production  and  employment  figures. 

E.  THE BEHAVIOUR  OF THE EXPORTERS  CONCERNED 

(25) 

It was also necessary to examine the behaviour of the exporters concerned. However, 
the lack of cooperation  from  the Chinese government,  the Chinese exporter  and all 
known  importers (recital  7) made any accurate assessment  difficult. 

Volume and  market  share of  imports from  the People's  Republic  of China 

(26) 

Imports  from  the  People's  Republic  of  China  increased  from  433  MT  in  1989  to 
448 MT  in  the  investigation  period.  That  is  in  contrast  to  the  development  of 
consumption  (recital  20) which  decreased  significantly. 

In terms of  market  share Chinese imports  rose from  9.7%  in  1989 to  16.9% in the 
investigation  period. 

However, the real  market  share was almost  certainly  higher.  The statistics recorded 
imports from  non-member countries which have no or very  small production  of the 
like  product.  For  example,  imports  from  North  Korea  have  been  recorded,  while 
apparently  no  production  exists  in  that  country.  Similarly,  most  of  the  imports 
statistically registered to originate in India must have a different  origin since the three 
plants known  to  exist  in  India  have a very  small  capacity  of less than  40 tonnes a 
year each, which is just 26% of the Indian import volume according to Eurostat. In 
addition,  a customs investigation  in  1991  proved  that potassium  permanganate was 
fraudulently  declared  to  originate  in  Hong  Kong  or  Taiwan,  although  it  was 
established  that  no  production  existed  in  these  countries.  The  results  of  this 
investigation  are not reflected  in Eurostat  statistics. 

Consequently,  if  the  imports  from  India,  North  Korea  and  Taiwan  suspected  of 
having a different  origin were to be attributed to the People's Republic of China, its 
market  share in the Community  would  approach 40%. 

Sales prices 

(27) 

It was investigated whether the exporting producer was undercutting the prices of the 
Community  producers during the investigation  period.  Based on Eurostat  data, CIF 
prices for Chinese product were undercutting the prices of the Community producers 
during the investigation  period by  11.5%. 

The  findings  of  the  investigation  confirmed  that  Eurostat  prices  for  imports  of 
potassium  permanganate from  China into the Community  are not in line with actual 
prices quoted for Chinese material. Indeed the complainants submitted evidence that, 
during the investigation  period, real prices for the Chinese product were much lower 
than reported in Eurostat. In support of this, they attached to the complaint quotations 
for Chinese product at an average CIF price significantly  below the Eurostat figures. 
In addition, the attribution of imports of the like product of suspected Chinese origin 
actually  recorded  to  originate  from  other  non-member  countries  (see  recital  26) 
already  results in  a lower price level  for  Chinese product,  since average prices  for 
imports from  India (ECU  1.4  per kg), Thailand  (ECU  1.3  per kg)  and Hong Kong 
(ECU  1.1  per kg) are significantly  below the prices reported for imports from  China 
in Eurostat. 

Thus,  it  was  concluded  that  Eurostat  figures  were  not  an  appropriate  basis  for  a 
calculation of price undercutting in the present case and that actual undercutting must 
have been  higher than  appeared  from  the statistical figures. 

Conclusion 

(28) 

Chinese imports increased their market share and price undercutting continued despite 
the  anti-dumping  duty  in  force.  It  was therefore  considered  necessary  to  examine 
whether dumping was occurring which contributed to the deteriorated situation of the 
Community  industry  described  above  and  whether  the  expiry  of  the  anti-dumping 
duty  would  lead  again  to a recurrence  of dumping  and  injury. 

F.  RECURRENCE  OF DUMPING 

I. 

Reference  country 

(29) 

The People's Republic of China is a non-market economy country. Therefore normal 
value had to be based on data obtained in a market economy country, in accordance 
with Article 2(5) of the basic Regulation.  The complainants  suggested the USA for 
this purpose. 

The Commission considered  that the US product is alike in all respects to potassium 
permanganate  manufactured  in  China.  Furthermore, the USA is the biggest  market 
world-wide.  Since potassium  permanganate is a homogenous product, imports to the 
US,  which  accounted  for  about  25-30%  market  share  in  the  investigation  period, 
backed  by  substantial  capacities in the exporting countries ensured  that price levels 
were  in  reasonable  proportion  to  production  costs.  Furthermore,  potassium 
permanganate competes for  numerous applications with other oxidizing agents such 
as  ozone  and  pure  oxygen,  which  tends  to  have  a  reducing  effect  on  prices  of 
potassium  permanganate. 

In addition, the USA was already chosen as the analogue country in the initial case. 
Finally, production in other countries is not operational (Brazil) or has not yet started 
(Japan),  has  only  a  minor  size  (India),  is  near  to  closure  (Czechoslovakia)  or  is 
situated  in  non-market  economy  countries  (Russian  Federation  and  Ukraine). 
Consequently,  the USA remained the sole appropriate  and reasonable choice. 

II. 

Normal  value 

(30)  Normal  value was determined  on the basis of prices in the ordinary  course of trade 
at which the potassium  permanganate was actually  sold for  consumption  on the US 
market. 

No distinction  was made between  sales to distributors  and  sales to  end users  since 
in  terms  of  prices.  Therefore  normal  value  was 
there  was  no  differentiation 
determined  on the basis of the weighted-average  sales in  the investigation  period 

III. 

Export  price 

(31) 

In view of the non-cooperation  of the Chinese producer/exporter  and  of the related 
importers  known  to  exist  in the  Community,  the  facts  available  had  to be  used  in 
accordance with  Article  7(7)(b) of the basic  Regulation. 

(32) 

It  was  examined  whether  Eurostat  figures  could  be  considered  as  a  basis  for 
establishing  export price. 

For  the  forecast  needed  for  the  determination  of  recurrence  of  dumping,  Eurostat 
figures could not be taken into account. They were influenced  by the change of tariff 
headings and  the attribution  of imports to non-member  countries with  no or a very 
small  production  as  set  out  in  recital  27. Thus,  prices  which  would  be  applied  for 
Chinese exports to the Community  if the duty  were allowed  to expire could  not be 
deducted  from  this source. 

The  price  information  supplied  by  the  complainants  was  considered  for  the 
determination of the export price. The quotations were considered reliable. The same 
price level  appears to be applied for  Chinese exports to Morocco. Prices for  exports 
of  Chinese  product  to  the  United  States  are  higher  since  they  are  most  likely 
influenced  by  the  anti-dumping  duty  of  128,9  %  imposed  in  1991  on  imports  of 
Chinese product into the United  States. 

(33) 

The price information  is confirmed  by additional  quotations and information  on the 
price at which Chinese potassium  permanganate was actually  sold. This  information 
had  been  requested  and  received  from  the  complainants.  It  shows  that  the  quotes 
initially  supplied  were  not  exceptional  but  part  of  a consistent  pricing  policy.  The 
exporter/producer  in  China  was  aware  of  the  price  level  which  was  alleged  in  the 
complaint  and had the opportunity  to make comments on it. 

IV. 

Comparison 

(34) 

Normal  value  has  been  compared  to  the  export  prices  of  Chinese  potassium 
permanganate  at ex-works level. For the People's Republic  of China, ex-works was 
taken  as  ex-national  border  in  accordance  with  normal  practice  for  non-market 
economy countries. 

10 

For  the  purpose  of  ensuring  a fair  comparison,  normal  value  has been  adjusted  in 
accordance with  Article 2(9)(a) of the basic Regulation.  Deductions  were made for 
freight  costs,  packing  and  salesmen's  salaries.  Similarly,  the  export  price  has been 
adjusted  deducting  estimated  amounts for  ocean freight  and insurance. 

V. 

Dumping margin 

(35) 

The comparison  resulted  in a dumping margin  of ECU  1.26  per  kilogram. 

G.  RECURRENCE  OF INJURY 

(36) 

(37) 

In the light of the above and in order to assess the likely  effect  of the expiry  of the 
measures in force,  the following  was considered: 

Product from  the People's Republic of China was found  to be sold to the Community 
at  prices  which  significantly  undercut  those  of  the  Community  industry  thereby 
gaining an increased  market  share. 

I. 

Effect  of dumped  imports 

(38)  A  clear  correlation  was  found  between  the  evolution  of  the  Community  industry 
market share and the Chinese import market share according to statistical figures  In 
fact while the former lost 7.8 percentage points, the latter gained at least 7 percentage 
points  between  1989  and  the  investigation  period,  despite  the  existence  of  anti 
dumping  measures.  It is evident  that these imports which  were found  to have been 
dumped  have  continued  to  injure  the  Community  industry  and  it  can  therefore  be 
expected  that  the expiry  of measures will  only lead to  a further  deterioration  of an 
already  weakened  Community  industry. 

(39) 

In  addition,  market  access  in  the  US  is  now  more  difficult  for  the  Chinese 
exporter/producer  due  to  higher  anti-dumping  measures  taken  in  1991  by  the 
US authorities (from  39.0% to 128.9%). This will inevitably increase the pressure on 
the  Community  market  should  the measures  currently  in  force  expire  whereby  the 
Chinese exporter/producer  has the capacity  (approximately  5 000 - 6 000 MT/year) 
to meet the entire demand  in the Community. 

II. 

Effect  of other  factors 

(40)  Apparent  consumption  of potassium  permanganate  in the  Community  fell  by 36%. 
The  Community  industry  would  have  been  in  a  better  position  to  adapt  to  this 
decrease in demand if it had not continued to be affected  by unfair trading practices, 
which should have been the case since anti-dumping measures were in force. Instead, 
the  Community  industry  lost  market  share  since  imports  of  the  like  product 
originating  from  the  People's  Republic  of  China  at  low  prices  continued,  thus  not 
allowing the intended relief. 

II 

Imports from  non-member  countries other  than  the  People's Republic  of China  fell 
in terms of volume from  1 664 MT (1989) to  1 023 MT (investigation  period). The 
market  share  represented  by  these  imports  during  the  period  considered  remained 
relatively  stable,  increasing  only  slightly  to  38.7%. However,  the  import  volumes 
from  India, I long Kong and Taiwan accounting for more than 23% market share are 
to a large part most likely attributable to the People's Republic of China (recital 26). 
Imports from  the US represent  15% of the market, but at a price level  considerably 
above those of Asian imports. Therefore  imports, other than  Chinese, had, if any, a 
limited  influence  on  market  conditions  for  potassium  permanganate.  Under  these 
conditions,  it  was  considered  that  only  a  very  limited  part  of  imports  other  than 
Chinese  imports  could  have  contributed  to  the  difficult  state  of  the  Community 
industry  while the  Chinese  imports  taken  in  isolation  have  clearly  been  a cause of 
this difficult  state. 

*~  III. 

Conclusion 

(41) 

In the light of the new dumping and injury  findings,  it was concluded that the expiry 
of the measures currently in force would lead to recurrence and even aggravation  of 
injury  caused  by  dumping  and  that  the  nature  of  these  measures  has  to  be 
reconsidered  in order to take account  of the new dumping  and injury  findings. 

H.  COMMUNITY  INTEREST 

(42) 

(43) 

(44) 

The  purpose  of  anti-dumping  measures  is,  in  general,  to  eliminate  distortion  of 
competition arising from  dumping practices and thus  re-establish open and  effective 
competition  on  the  Community  market.  In  considering  the  Community  interest, 
account has been  taken  of the position  of the  Community  potassium  permanganate 
industry and of the users of potassium permanganate. In this respect it is also recalled 
that in the previous investigation,  the adoption  of measures was considered to be in 
the interest  of the Community. 

The Community  industry  will  have to cease production  of potassium  permanganate 
if  it cannot  quickly  regain  market  share and profitability.  This will  not be  possible 
under  the current  price pressure  and this will  be  increased  should the  measures be 
removed. 

The Community  industry  was prevented from  regaining profitability  during the past 
period  of anti-dumping measures because of ongoing dumping. In  1986 and  1987 a 
breach  of  the  undertaking 
led  to  the  imposition  of  the  definitive  duties 
(Regulation  (EEC) No  1531/88) and up to  1991, circumvention  of the anti-dumping 
measures eroded their intended  effect  and left  no breathing space to the Community 
producers which they required to develop new markets and to make the investment 
needed for necessary productivity gains. The Community industry would be deprived 
of  its  efforts  already  undertaken  to  develop  these  markets  and  would  not  be  in  a 
position to make the possible future productivity improvements involving  significant 
investment if the measures currently in force were to be removed and no action taken 
in  order  to  remove  the  further  injury  caused  by  dumping  established  during  the 
investigation. 

12 

(45) 

As far  as the users of potassium  permanganate are concerned,  an anti-dumping duty 
will  have  a  limited  effect,  since  the  addition  to  the  costs  of  products  for  which 
potassium  permanganate  is  used  will  be  very  small.  It  has  to  be  considered  that, 
without  measures, the Community  industry  would  disappear  while its  maintenance 
on the market will ensure competition between the Community producers and imports 
from  other non-member countries which will have a beneficial  effect  on price levels. 
In  addition,  since the  new  applications  for  the  product  include  drinking  water  and 
waste  water  purification,  and  the  customers  in  this  case  are  not  big  industries but 
municipalities,  stability  of  supply  is  an  important  objective.  Therefore  it  is  in  the 
interest  of the  users and,  more particularly,  the general  public that the  Community 
industry  remains  as  a  reliable  supplier  of  this  product  and  is  not  forced  out  of 
the market. 

(46) 

After  considering  the  various  interests  involved,  it  is  concluded  to  be  in  the 
Community  interest  to  maintain  definitive  anti-dumping  measures  in  force  which 
should however be adapted to eliminate the injurious effects  of increase in dumping. 
These measures should take the form  of anti-dumping duties. As already  in the past 
(see recital 26), appropriate steps should be taken in order to avoid duty evasion and 
in this context it was considered that a fixed amount in ECU per kilogram constitutes 
the most appropriate type of anti-dumping  duty. 

I.  DUTY 

(47)  When calculating the amount of duty necessary to provide adequate protection to the 
Community  industry  from  continued injurious  dumping, it was considered  that any 
measure should allow the Community  industry  to cover the costs of production  and 
to obtain  a reasonable  profit. 

(48) 

For  this  purpose,  a  minimum  price  level  was established  by  adding  to the  cost  of 
production  of  the  Community  industry  a  profit  margin  of  5%  of  the  cost  of 
production  which  is  considered  a  minimum  return  on  sales  under  current  market 
conditions for  the industry  sector in question. 

An  injury  margin  was  then  calculated  on  the  basis  of  a  comparison  between  this 
minimum  price  and  the  average  free-at-Community-frontier  value  of  the  Chinese 
imported  like product. 

(49)  As the injury  margin found  was higher than the dumping margin, the anti-dumping 
duty should be based  on the latter pursuant to Article  13(3) of the basic Regulation, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  potassium 
permanganate  falling  within  CN  code  2841  60  10  and  originating  in  the 
People's Republic of China. 

13 

2. 

3. 

The amount  of duty  is ECU  1.26  per kilogram. 

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties 
shall  apply. 

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 

14 

BSN 0254-1475 

COM(94) 424 final 

DOCUMENTS 

EN 

il  02 

Catalogue number : CB-CO-94-449-EN-C 

ISBN 92-77-80956-6 

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

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