Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 2887/93 by imposing an additional anti-dumping duty on imports of certain electronic weighing scales originating in Singapore
Date: 1995-11-10
Institutions: European Commission
Subjects: Singapore, anti-dumping duty, electronic device, export price, measuring equipment

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  10 II  1995 
COM(95)  548  final 

Proposal  for  a 

COU NCIL  RHGUL AllO N (nC ) 

amending Regulation (EEC) No 2887/93 by imposing 

an additional anti-dumping duty on imports of certain electronic weighing scab 

originating in Singapore 

(presented  by  the  Commission» 

EXPLANATORY  MEMORANDUM 

1. 

2. 

3. 

By Council Regulation  (EEC) No 2887/93, a definitive  anti-dumping duty of 10,8% 
was  imposed  on  imports  of  certain  electronic  weighing  scales  originating  in 
Singapore. 

By  Notice  of  11  May  1994,  the  Commission  announced  the  initiation  of  an 
investigation  pursuant  to  Article  13(11) of  Council  Regulation  (EEC)  No  2423/88 
into the  alleged  absorption  by the  sole known  exporter  Teraoka  Weigh  System  Pte 
Ltd. 

The investigation  into absorption  of the anti-dumping  duty by the exporter  covered 
the  original  investigation  period,  1 January  to  31 December  1991, which  had  been 
taken  into  account  for  calculation  of  the  anti-dumping  duty,  and  the  period 
following  the  imposition  of  the  definitive  anti-dumping  duty  and  prior  to  the 
initiation of the present investigation, i.e. from  23 October  1993 to 30 April  1994. 

4. 

In  order  to  establish  the  existence  of  absorption,  the  Commission  examined 
whether,  following  the  imposition  of  the  definitive  anti-dumping  duty,  the  import 
prices at the Community frontier  had  fallen. 

Import  prices  were  determined  on  the  basis  of  the  prices  actually  paid  or  payable 
for  the product  sold  for  export  to the Community,  since  all export  sales were  made 
directly to independent importers in the Community. 

5. 

The  information  on  export  prices  provided  by  the  exporter  revealed  that  the 
exporter has absorbed partially the effect  of the anti-dumping duty. 

The calculation  established  an absorption  of 4.6%. This is, therefore,  the amount of 
additional anti-dumping duty  required. 

Since  the  imposition  of  the  anti-dumping  duty  was  considered  in  the  Community's 
interest, any measure which compensates for the amount of absorption  must  also be 
in the interest of the Community. 

Accordingly,  an  additional  anti-dumping  duty  should  be  imposed,  which  will 
increase  the  anti-dumping  duty  of  10,8% currently  payable  to  15,4% (i.e.  10,8% + 
4,6%). 

6. 

7. 

COUNCIL REGULATION (EC) No 

amending Regulation (EEC) No 2887/93 by imposing 

an additional anti-dumping duty on imports of certain electronic weighing  scales 

originating in Singapore 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having regard to the Treaty establishing the European  Community, 

Having  regard  to  Council  Regulation  (EC)  No  3283/94  of  22  December  1994  on 
protection  against  dumped  imports  from  countries  not  members  of  the  European 
Community1, as last  amended  by Regulation  (EC) No  1251/952, and  in particular  Article 
23 thereof, 

Having  regard  to  Council  Regulation  (EEC)  No  2423/88  of  11 July  1988  on  protection 
against  dumped  or  subsidised  imports  from  countries  not  members  of  the  European 
Economic  Community3,  as  last  amended  by  Regulation  (EC)  No  522/944,  and  in 
particular Articles  12, 13(11) and  14 thereof, 

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

Whereas: 

1  OJNoL349,  31.12.1994, p. 1. 

2  OJ No L  122, 2.6.1995, p. 1. 

3  OJ No L 209, 2.8.1988, p. 1. 

4  OJ No L 66,  10.3.1994, p. 10. 

A.  PROCEDURE 

(1)  By  Council  Regulation  (EEC)  No  2887/935,  a  definitive  anti-dumping  duty  of 
10,8% was imposed  on imports  of certain electronic  weighing  scales originating  in 

Singapore. 

(2)  The Commission  subsequently received a complaint alleging that the anti-dumping 
duty had been borne, wholly or partly, by the sole known exporter, Teraoka Weigh 
System Pte Ltd. The evidence for this allegation consisted of price lists of importers 
selling the product in question which, according to the complainant,  demonstrated 
that, since the imposition of the anti-dumping duty, the resale prices of most 
models have remained unchanged or have actually declined and that therefore  the 
anti-dumping duty has been borne by the exporter concerned. 

(3)  The complaint  was lodged by the Community  producers  which had  also  lodged  the 

initial anti-dumping  complaint. 

(4)  Since  the complaint  contained  evidence  of  absorption  of  anti-dumping  duty  by  the 

exporter,  the  Commission  announced  the  initiation  of  an investigation  as  provided 

for  in  Article  13  (11)  of  Regulation  (EEC)  No  2423/88  (hereafter  "the  basic 

Regulation"),  by  a  notice  published  in  the  Official  Journal  of  the  European 
Communities6. 

(5)  The  Commission  officially  advised  the  exporter  and  importers  known  to  be 

concerned and gave interested parties the opportunity  to make their views known in 

writing. 

(6)  Replies  to the Commission's  questionnaire  were received  from  the exporter  subject 

to the investigation  and from  six unrelated importers. 

(7)  The investigation  into the alleged absorption of the anti-dumping duty by the 

exporter covered the original investigation period,  1  January to 31 December  1991 
(hereinafter  referred  to as the "reference period"), which had been taken into 
account for calculation of the anti-dumping duty, and the period following  the 
imposition  of the definitive  anti-dumping duty and prior to the initiation of the 
present investigation, i.e. from  23 October  1993 to 30 April  1994  (hereinafter 
referred  to as the  "investigation period"). 

5  OJ No L 263, 22.10.1993, p. 1 

6  O J N oC  129,  11.5.1994, p. 6. 

B.  PRODUCT 

(8)  The product under consideration is electronic weighing scales for use in the retail 
trade which incorporate a digital display of the weight, unit price and price to be 
paid (whether or not including a means of printing this data) falling  within CN 
Code 8423 81 50 (Taric Code 842381 50 10). 

C. ABSORPTION OF THE ANTI-DUMPING DUTY 
BY THE EXPORTER 

I. 

Existence of absorption of duty 

(9) 

In  order  to  establish  the  existence  of  absorption,  the  Commission  examined 
whether,  following  the  imposition  of  the  definitive  anti-dumping  duty,  the  import 
prices  free-at-Community  frontier  (before  payment  of  customs  and  anti-dumping 
duty)  had  fallen.  Import  prices  were determined  on the basis  of  the prices  actually 
paid  or payable  for  the product  sold  for  export  to the  Community,  since  all  export 
sales  were  made  directly  to  independent  importers  in  the  Community.  The 
Commission  based  its findings  on the export prices provided  by the exporter  which 
replied to the Commission's  questionnaire. 

(10)  One model was, as far as production  in Singapore is concerned, a completely  new 
model which was not exported to the Community  during the reference  period. This 
model has therefore  been excluded  from  the calculations. 

(11)  In the reference  period imports were mainly invoiced in Yen, whereas the imports 

in the investigation  period were made in US$. The exporter started to invoice in 
US$ around the time of imposition of the definitive  duty. For the price comparison, 
import prices have been converted into Singapore $ (which was the currency  used 
for calculating the dumping margin), on the basis of the exchange rates prevailing 
during the respective periods. 

(12)  The information  on export prices provided by the exporter clearly  shows that, 

following  the imposition  of the definitive  duty, export prices fell  considerably  for 

most models. 

(13)  Therefore, by reducing its prices for export to the Community  after  imposition of 
the definitive  anti-dumping duty, the exporter of electronic weighing scales 
originating in Singapore has absorbed completely or partially the effect  of the anti 
dumping duty. 

4 

II.  Level of absorption of the duty 

(14)  The level of absorption of the anti-dumping duty has been calculated by comparing 

the difference  between the weighted average free-at-Community-frontier  price per 
model in the reference period and the weighted average  free-at-Community-frontier 
price per model in the investigation  period. 

(15)  In  order  to  arrive  at  the  level  of  this  absorption,  the  Commission  calculated  the 
amount of absorption per model which equals the amount of reduction in the export 
price, plus  the  duty  amount  initially  intended  for  collection  (equal  to  the  dumping 
margin)  during  the  reference  period,  minus  the  amount  of  anti-dumping  duty 
actually paid on the reduced export price during the investigation  period. 

(16)  In  those  instances  where  the  reduction  in  the  export  price  was  greater  than  the 

amount  of  duty  initially  intended  (dumping  margin),  the  amount  borne  by  the 

exporter has been capped so as not to exceed that amount. 

(17)  The total  amount of absorption  is 4,6% when expressed  as a percentage of the total 

free-at-Community-frontier  price  for  all  models  exported,  which  represents  the 

amount of the additional  anti-dumping duty required. 

D. OTHER  CONSIDERATIONS 

(18)  The  Commission  has  no  information 

to  suggest  that  the  normal  value,  as 

established  for  the  reference  period,  has  altered.  It can  therefore  be  concluded  that 

the  dumping  margin  has  increased  commensurate  with  the  reduction  in  export 

prices  and corresponds  consequently  at least  to the  sum  of  the  original  duty  and of 

the amount borne. 

E. COMMENTS  RECEIVED 

(19)  The  Singapore  exporter  claimed  that,  in  investigating  the  allegation  of  absorption, 
the Commission  should  make a comparison  of prices  in a Community  currency  and 
not  in  a  third  country  currency,  because  a  decrease  in  prices  expressed  in  a  third 
country  currency  would  not  necessarily  mean  that  a  corresponding  decrease  in 
prices takes place on the Community  market. 

5 
In  assessing  the  allegation  of  absorption,  the  Commission  had  to  compare  the 
Singapore  exporter's  prices  to  the  first  independent  customer  during  the  reference 
period  with  those  of  the  investigation  period  in  order  to  establish  whether  the 
exporter  had  borne  the  duty.  It  should  be  recalled  that  the  exporter's  prices  were 
expressed  in Yen in the reference  period and in US $ in the investigation  period. In 
order  to  solve  the  problem  of  comparing  export  prices  in  different  currencies,  the 
Commission  converted  them into the currency  of the  exporter,  Singapore  $,  which 
was  also, as stated  above, the currency  originally  used  for  calculating  the  dumping 
margin. There is no reason which would  make the comparison  more  appropriate  in 
another currency than in Singapore $. 

As  to  the  argument  that  a  decrease  in  prices  in  a  foreign  currency  would  not 
necessarily  mean  a decrease of prices on the EC market  involving  an absorption  of 
the  duty,  the  Commission  considers  this  argument  to  have  no  foundation.  Article 
13(1 l)(a)  of  the basic  Regulation  makes clear that, in  establishing  the existence  of 
absorption  of  an anti-dumping  duty, it is the behaviour  of  the exporter  which  must 
be  examined  and  that  if,  as  in  this  case,  the  exporter's  price  has  fallen,  there  is 
evidence (rebuttable) that the exporter has borne the duty. 

(20)  The  Singapore  exporter  further  alleged  that,  as the  Commission  took  into  account 

different  physical  characteristics  for  the  various  versions  of  one  model  during  the 

reference  period,  and  as  separate  dumping  margins  were  thus  established  for  these 

different  versions,  the  same  approach  should  be  taken  during  this  investigation. 

Additionally,  it  was  argued  that  the  importers  tended  to  procure  the  simplest 

versions after  the imposition  of duties and that this was the reason for the decline in 

the exporter's prices. 

On  the  issue  of  physical  characteristics,  it  was  not  always  possible  to  compare 
exactly  each  version  of  the  same  model  between  the  reference  period  and  the 
investigation  period  as  these  versions  and  their  marketing  patterns  have  changed 
over  time.  As  regards  the  allegation  that  the  importers  tended  to  procure  the 
simplest  versions  since  the  imposition  of  the  anti-dumping  duty,  it  should  be 
pointed out that 30% of the sales (65% in terms of value of total exports) during the 
investigation  period  were  accounted  for  by  the  most  sophisticated  and  expensive 
model,  which  had  not been  exported  during  the  reference  period.  Furthermore,  for 
one model, the exporter ceased to export one version which was less expensive than 
the  versions  of  the  model  imported  during  the  investigation  period.  In  any  event, 
the claim that  importers  had  shifted  towards  cheaper  versions  could  not  reliably  be 
confirmed  in  view  of  the  surge  of  imports  immediately  prior  to  the  imposition  of 
provisional duties, as explained in recital 27. 

6 
Thus, the investigation  showed that the situation was more complex than alleged by 
the  exporter  and  that,  while  there  existed  some  factors  which  might  explain  a 
downward  movement  in  prices,  other  factors  which  were  also  present  clearly 
exerted an upward pressure on prices. In these circumstances, it appeared fairer  and 
more  appropriate  to  make  a  comparison  on  a  model-by-model  basis.  The 
Commission  calculated  the  weighted  average  prices  for  each  model,  rather  than 
individual  versions, during  the  two  above-mentioned  periods,  which  is  considered 
to be  a reasonable  approach  in  the  context  of  an  Article  13 (11)  investigation,  the 
purpose of which is not to establish a dumping margin, but to determine any change 
in the exporter's prices. 

Moreover,  it  should  be  recalled  that  a  single  anti-dumping  duty  was  then 
established  and  imposed  on  all  models  and  versions  of  the  like  product.  As  this 
investigation  is  concerned  with  whether  or  not  that  duty  has  been  borne  by  the 
exporter,  there  is  no  compelling  reason  for  a  breakdown  of  price  comparisons 
identical  to  the  breakdown  of  normal  values  established  during  the  reference 
period. 

(21)  It  was  further  claimed  that  the  allowances  made  for  physical  differences  in 

establishing  the  export  price  in  the  reference  period  should  be  adjusted  for  the 

further  reason  that  the  cost  of  the  same  model  could  vary  according  to  its 

destination  because  of  different  options  requested  by  customers  in  different 

segments of the Community  market. It was then  argued  again  that  importers  tended 

to  procure  the  simplest,  and  therefore  less  expensive  versions  after  the  imposition 

of duties. 

Apart  from  the  difficulty  to  distinguish  this  argument  from  the  one  dealt  with  and 
rejected  in recital 20, the relevance of considering  different  market  segments  within 
the  Community  and  allegedly  different  cost  structures  of  the various  models  of  the 
like product  exported  there in the context  of  an investigation  under  Article  13 (11) 
is unclear.  Indeed, the aim of such an investigation  is not to  verify  and compare  the 
cost  structure  of  the  models  under  consideration  at  different  points  in  time,  but  to 
establish  whether  or  not  the  Singapore  exporter  has  decreased  its  export  prices 
between the two periods in question. 

(22)  The  Singapore  exporter  found  it unjustified  that the  Commission  in  its  comparison 
included  a  model  not  exported  during  the  reference  period,  even  though  it  was 
admitted  that  the  model  belonged  to  the  same  range  as  the  model  used  in  the 
comparison.  It was  also argued  that  there was a major  price difference  between  the 
two models. 

7 
The  Commission  considered  that,  given  its  characteristics,  this  model  was  a 
replacement  of  a pre-existing  model  in the  same range  (even  if  it bears  a  different 
serial number). This was confirmed  during verification  visits at the premises of the 
importers.  It  was  therefore  considered  appropriate  to  include  this  model  in  the 
comparison. 

F.  CONCLUSION 

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

G.  COMMUNITY  INTEREST 

(24)  The aim of an additional anti-dumping duty as provided for by Article  13(11) of the 
basic Regulation  is to compensate for the amount of anti-dumping  duty borne by 

the exporter. 

(25)  The Commission has no reason to believe that its findings  on Community  interest, 
as set out in recitals 53 to 54 of Regulation (EEC) No  1103/937 imposing a 
provisional anti-dumping duty, confirmed by recitals  18 to  19 of Regulation  (EEC) 
No 2887/93 imposing a definitive  anti-dumping duty, on imports of the product in 
question, warrant  modification. 

(26)  Moreover, given that the absorption  of anti-dumping duty by the exporter cancels 

the effect  of the anti-dumping  duty and therefore  prevents the removal of the  injury 
caused by dumping and that the imposition of the anti-dumping duty was 
considered in the Community's interest, a measure aimed at restoring the effect  of 
the said duty is therefore  in the interest of the Community. 

(27)  The Singapore exporter pointed  out that  there has been  a substantial  decrease of  its 

exports  to the  Community  from  4 543 units  in  the calendar  year  1991 to 963  units 

during the seven month investigation  period, and has questioned  whether it is in the 

Community  interest  to impose  an additional  duty  given  the decrease  of  its  share of 

the EC market. 

7  OJ No L  112, 6.5.1993, p.20. 

8 
However,  as  an  anti-dumping  duty  was  imposed  on  the  strength  of  a  finding  of 
injurious  dumping,  it  is  obvious  that  the  volume  of  exports  in  1991  had  been 
achieved through dumping. Consequently, it was to be expected  that such a volume 
would decrease  following  the imposition  of the anti-dumping  duty even though  the 
duty was partially absorbed by the exporter. This fact  alone, therefore,  is not a valid 
reason  for  considering  an  additional  duty  to  be  inappropriate  in  circumstances 
where the original duty has been found  to have been totally or partially borne by the 
exporter. Indeed, the fact that the anti-dumping duty may have had some effect  does 
not  exclude  ipso  facto  that  absorption  has  taken  place  and  reduced,  if  not  entirely 
annulled, the impact of that duty. 

Moreover,  in  addressing  this  argument,  it  should  be  pointed  out  that  huge  imports 
of  the  exporters  products  took  place  before  the  imposition  of  the  provisional  anti 
dumping  duty.  As  a  consequence,  the  importers  had  enough  stock  to  cover  their 
sales  during  the  investigation  period  without  having  to  import  a number  remotely 
equivalent  to the  actual  sales.  Indeed,  at the  end  of  the  reference  period  there  was 
still  a  considerable  number  of  scales  in  stock.  It  is  therefore  considered,  for  the 
above reasons, that it is appropriate to impose an additional anti-dumping  duty. 

H.  ADDITIONAL ANTI-DUMPING DUTY 

(28)  In  order  to  compensate  for  the  level  of  absorption  and  to  restore  the  effect  of  the 
original  duty,  an  additional  duty  of  4,6%  is  required  to  bring  the  current  export 
price up to the level envisaged by Regulation  (EEC) No 2887/93. 

(29)  The  rate  of  the  anti-dumping  duty  currently  in  force  is  10,8%  of  the  net,  free-at-

Community-frontier  price.  An  additional  duty  of  4,6%  should  be  imposed  to 

compensate  for the level of absorption bringing the total anti-dumping duty to a rate 

of  15,4%. 

(30)  For  practical  reasons,  the  imposition  of  this  additional  duty  takes  the  form  of  an 
amendment 
to  Regulation  (EEC)  No  2887/93.  This  does  not  constitute  a 
modification  of  the  anti-dumping  duty  within  the  meaning  of  Article  15(1)  of  the 
basic Regulation  and, therefore,  the expiry date of the anti-dumping  duty,  including 
the  additional  duty,  remains  unchanged,  subject  to  the  relevant  provision  of 
Regulation  (EC) No 3283/94. 

HAS ADOPTED THIS REGULATION : 

Article 1 

Article  1  (2)(b) of Regulation  (EEC) No 2887/93 is replaced by the following  : 

"(b)  Singapore 

Products manufactured  by : 

Teraoka Weigh-System Pte Ltd, Singapore 
(Taric additional code 8703) 

All others 
(Taric additional code 8704)" 

Article 2 

15,4% 

31,0% 

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 

ISSN 0254-1475 

COM(95) 548 final 

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