Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of microwave ovens originating in the People' s Republic of China, the Republic of Korea, Malaysia and Thailand and collecting definitively the provisional duty imposed
Date: 1995-12-08
Institutions: European Commission
Subjects: Asia, anti-dumping duty, customs duties, furnace, import, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  08.12.1995 
COM(95)695  final 

Proposal  for a 

COUNCIL REGULATION  (EC) 

imposing definitive anti-dumping duties on 

imports of microwave ovens originating in 
the People's Republic of China, the Republic of Korea, Malaysia and Thailand 
and collecting definitively the provisional duty imposed 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

1. By Regulation (EC) No 1645/95 of 5 July  19951, the Commission  imposed 
provisional anti-dumping duties on imports into the Community of microwave ovens 
originating in the People's Republic of China, the Republic of Korea, Thailand and 
Malaysia, falling within CN code 8516 50 00. 

2. By Council Regulation (EC) No 2580/95 of 30 October  19952, the Council extended 
the validity of these duties for a period of two months. 

3. Certain parties requested and were granted hearings and presented written 

comments which were taken into account where appropriate. The Commission 

continued to seek and verify all information it deemed necessary for its definitive 

findings. 

4. The definitive determination confirmed the existence of dumping. Changes in the 
individual margins compared to the provisional findings are due to reassessments of 
the cost of production and allowances determined with respect to individual 
producers. 

Both Chinese producers requested individual treatment. As not all the conditions the 
Community Institutions have applied to grant such a treatment in the past were met, it 
is considered that neither of the two Chinese companies should be given individual 
treatment. 

1 OJ. No L 156,7.7.1995, p. 5 
2 OJ. No L 263,4.11.1995, p. 1 

5. The conclusion that the complaining industry suffered material injury is also 
confirmed. For the purpose of the determination of material injury, the imports from 
these countries were analysed cumulatively because it was found that the imports 
from each of these countries competed with each other and with the like product of 
the Community industry, that import volumes from each of the countries concerned 
were significant in the investigation period and that price trends were similar. 

6. The Commission established the causal link between the dumped imports and the 
injury suffered by the Community industry. It is the size of the dumped imports, their 
low prices and the fact that such imports went to the same channels as sales of the 
Community industry that led to this conclusion. 

7. In light of the investigation findings, it is considered in the Community interest that 
definitive duties should be imposed. The level at which the definitive duties should be 
set was determined by the dumping margins found which were lower than the injury 
level. These dumping margins ranged from 3.3% to 24.4% for the Republic of Korea, 
from 14.3% to 27.3% for Thailand, was 29.0% for Malaysia and 12.1% for the 
People's Republic of China. 

8. One Chinese producer offered an undertaking. The Commission considered the 
offer as not acceptable because it was considered not to remove injurious dumping. 

9. It is therefore proposed that the Council adopts the draft Régulation annexed  ;. 
imposing a definitive anti-dumping duty on imports of microwave ovens originating in 
the People's Republic of China, the Republic of Korea, Thailand and Malaysia. 

Council Regulation (EC) No ...795 imposing definitive anti-dumping duties on 
imports of microwave ovens originating in 

the People's Republic of China, the Republic of  Korea, Malaysia and Thailand 
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 (EC) No 3283/94 of 22 December  1994 on 

protection against dumped imports from countries not members of the European 
Community3, as last amended by Regulation (EC) No 1251/954, and in particular 
Article 23 thereof, 

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 Community5, as last amended by Regulation (EC) No 522/946 and in 
particular Article  12 thereof, 

Having regard to the proposal submitted by the Commission after consulting the 

Advisory Committee, 

WHEREAS: 

3 
4 
5 
6 

OJ No L 349, 31.12.1994, p.1. 
OJ No L 122, 2.6.1995,  p.1. 
OJ No L 209, 2.8:1988, p.  1. 
OJ No L 66,10.3.1994, p. 10. 

I. 

Provisional Measures: 

(1.) 

The Commission, by Regulation (EC) No 1645/957, hereinafter referred to as 
"the provisional duty Regulation", imposed a provisional anti-dumping duty on 
imports into the Community of microwave ovens (hereinafter referred to as 
"MWOs") originating in the People's Republic of China, the Republic of Korea, 
Malaysia and Thailand. 

By Regulation (EC) No 2580/958 the Council extended the validity of this duty 
for a period of two months expiring not later than 7 January 1996. 

II.  Subsequent  Procedure: 

(2.) 

Following the imposition of the provisional anti-dumping measures the following 
interested parties submitted comments in writing: 
1. Community industry: 

- GIFAM, the complainant and the following individual complaining Community 
producers: 
- AEG - Germany, 
- Groupe Moulinex S.A. - France, 
- Thomson Electroménager - France. 

2. A company with an MWO production located in a Member State newly part 
of the Community: 
- Whirlpool Europe B.V. - Sweden ("Whirlpool"). 

. 

' 

7 
8 

OJ No L 156 of 7.7.95, p. 5 
OJ No L 263 of 4.11.95,  p.1 

3. The following producers/exporters: 
- Beijing Sampo Electric Co. Ltd - China together with Vegary Ltd - Hong Kong, 
- Whirlpool SMC Microwave Products (China) Co. Ltd9, 
- Daewoo Electronics Co. Ltd. - Korea ("Deawoo") and its related importers in 
the Community, 

- LG Electronics Co. Ltd. - Korea ("LG Electronics") and its related importers in 
the Community, 

- Korea Nisshin Co. Ltd - Korea ("Korea Nisshin"), 

- Samsung Electronics Co. Ltd - Korea ("Samsung Korea"), and its related 
importers in the Community, 

- Samsung Electronics (M) SDN.BHD - Malaysia ("Samsung Malaysia")and its 
related importers in the Community, 

- Acme industry Co. Ltd - Thailand ("Acme"). 

4. An organisation representing importers into the Community, the Foreign 
Trade Association (" FTA"), Kôln. 

(3.) 

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

(4.) 

The Commission continued to seek and verify all information it deemed 
necessary for its definitive findings. 

The ownership of one producer located in China, i.e. SMC Microwave Products (China) Co. Ltd, 
changed after the investigation period. As a consequence the name of the Chinese producer 
changed. 

(5.)  Parties were informed of the essential facts and considerations on the basis of 

which it was intended to recommend the imposition of definitive anti-dumping 
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. 

(6.) 

The parties' oral and written comments were considered, and the conclusions 
altered where deemed appropriate. 

(7.)  Owing to the complexity of the case, in particular due to the number of 

exporting countries and parties involved, the investigation overran the normal 
duration of one year provided for in Article 7 (9) (a) of Regulation (EEC) No. 
2423/88 (hereafter referred to as the 'basic anti-dumping Regulation'). 

Hi.  Product under consideration and like product: 

(8.)  As no new evidence and comments have been presented regarding the 

product under consideration and the like product, the findings set out in recitals 

(7) to (10) of the provisional duty Regulation are confirmed. 

iV.  Dumping: 

•  < 

•

•

'

.

-

"

.

.• 

A. China: 
1. volume of Chinese exports to ttte Community; 
(9.) 

The investigation carried out with respect to MWOs originating in China had 

revealed at the provisional stage that the export volume to customers located in 
the Community reported by the two cooperating producers located in China 
was higher than the import volume from China reported in the Community 
import statistics for the investigation period. 

One Chinese producer claimed that import statistics should be used instead of 
the information provided by the cooperating Chinese producers. Although it 
was not possible to assess decisively the reason for the discrepancy, it was 
concluded that the determination of export/import volumes as well as 
export/import prices should be based on the specific information submitted by 
the Chinese producers which was verified at the premises of these producers' 
related exporters in Hong Kong and which covered these producers' exports of 
MWOs with the Community as final destination. 
It was considered that only in the absence of such information should generally 
available statistical information be used. 

2. Normal vaiue: 
(10.)  One Chinese producer argued that the normal value established based on 

Korean prices appeared inappropriate given the higher degree of sophistication 
of MWOs sold on the analogue country market. 
In respect of the above submission, it  should be noted that the normal values 
for by far the great majority of MWOs exported from China were constructed 
on the basis of the cost of manufacturing models exported by the Korean 
companies concerned to the Community, plus  an amount for selling, general 
and administrative costs ("SG&A") and profit realised for the like product on the 
domestic market. The constructed normal values established were therefore 
fully comparable to those of the Chinese producers. 
The same Chinese producer also claimed that the SG&A costs incurred for 
sales of the like product on the domestic market in Korea were inflated, given 
this market's inefficient distribution system. 

In fact, the amount of SG&A costs attributed was far below that which the 
Chinese producer concerned alleged had been used in constructing normal 
value.. The amount of SG&A costs used is in line with the Chinese producer's 
estimate. 

(11.) 

In these circumstances, it is considered that none of the comments  received 
after the imposition of provisional measures require the choice of an analogue 
country other than Korea, or a change in the methodology used for determining 
the normal values for the Chinese producers. Consequently, the approach 
followed at the provisional stage with regard to the determination of normal 
values concerning China is maintained. 

3. Export price: 
(12.) 

In establishing the export price all export transactions during the investigation 
period reported by Chinese producers were used. 

Account was taken of the fact that no price for the Chinese MWOs sold directly 
for export to the Community from the country of origin was found to exist as all 
export sales were made through related selling organisations located in 
Hong Kong. Therefore the export price had to be adjusted on the basis of the 
price at which the product concerned was resold by the Hong Kong based 
selling companies to independent customers located in the Community. 
Contrary to the approach taken at the provisional stage, at which a flat rate of 
5% was applied to reflect the costs incurred and profit realised by the exporters 
concerned for their export activity, at the definitive stage due allowance Was 
only made for the direct costs actually incurred by the Hong Kong sales ' 
companies. 

4. Comparison: 

(13.)  As at the provisional stage, all adjustments relating to differences in normal 
value affecting price comparability claimed by the Korean producers 
concerned, which proved to be justified and significant in accordance with 
Article 2 (10) (c) of the basic anti-dumping Regulation, were also applied in 
comparing normal value and export price for Chinese producers. Such 
adjustments were made in particular in respect of physical differences, 
differences relating to import charges and indirect taxes, differences in the level 
of trade and to differences in direct selling expenses as discussed in recital 
(20) below. 

Normal value established in the analogue country on an ex-frontier level was 
compared with the export price at the Chinese ex-frontier level on a 
transaction-by-transaction basis. 

5. Pumping margin: 

(14.)  The assessment of the information received from the Chinese producers 

concerned with respect to export prices and taking into account the normal 
value as established above shows the existence of dumping in respect of 
imports of MWOs originating in China taken as a whole. 
Unlike at the provisional stage, the two Chinese producers claimed individual 
treatment at the definitive stage. 

However, one company did not submit any new arguments after the imposition 
of provisional measures relating to the direct and indirect, contractual and 
factual involvement of Chinese public authorities in the operation of the 
company. 

The other company newly submitted information related to its operation in 
China which also indicates that the company does not operate in a way that 
would justify the granting of individual treatment. 

Indeed, both producers in China are joint-venture companies whose joint 
venture partners are non-Chinese as well as Chinese companies. From the 
joint-venture contracts, it appears that the producing companies are still partly 
controlled in their operations by the Chinese partners and are not entirely free 
to determine the destination of their sales. 
These case specific grounds are in themselves sufficient to reject the claims for 
individual treatment without having to examine further whether there has been 
a change in the involvement of the State in, or the influence of the State on, 
economic activity in China as described, in particular,  in recital (19) of Council 
Regulation (EEC) No 2474/9310 on the basis of which individual treatment could 
not, at that time, be granted. 

(15.) 

In conclusion concerning Chinese imports, the weighted average dumping 
margin found, expressed as a percentage of the net  free-at-Community-frontier 
price was determined at the definitive stage to be 12.1 %. 

B. Korea: 
1.  Normal value: 

a) Ordinary course of trade of domestic sales: 

(1) Total sales: 

(16.)  Two companies requested that normal value be established on the basis of all 
their sales on the domestic market. These companies considered this 

approach to yield a more representative result as compared to the one taken at 

the provisional stage in which the analysis was limited to approximately 85% of 
domestic salés. 

10 

OJ L 228/1, 9.9.93 

10 

On the basis of the above request, at the definitive stage the assessment of 
whether domestic sales were made in the ordinary course of trade took into 
account all sales of these companies. 

(2) Profitable sales: 

(17.)  Based on the total domestic sales transactions as determined above, and 

using the costs of production data submitted by the three Korean producers 
which had made representative sales, the profitability of these transactions was 
analysed. 

Where the companies concerned had reported incomplete information with 
respect to costs of production, where they had used allocation methods 
yielding unrepresentative results or where the allocation methods used were 
not supported by the internal accounts of the companies concerned, the costs 
of production were adjusted accordingly. Such adjustments concerned in 
particular the financing costs of three companies and the SG&A costs incurred 
for domestic sales of three companies. 

In accordance with Article 2 (11) of the basic anti-dumping Regulation, 

allocations of indirect costs after the above mentioned adjustments were made 

on the basis of turnover. 

It was concluded at the definitive stage after taking into account the above 

mentioned adjustments that all three Korean producers concerned had made 

profitable sales on the domestic market, i.e. that these companies had made 

sales in the ordinary course of trade. 
The same methodology described in recital (21) of the provisional duty 
Regulation and used at the provisional stage to assess the profitability by 

'. 

MWO model was used at the definitive stage. 

H 

b) Model comparison and normal value determination: 

(18.)  As far as model comparisons are concerned, the provisional conclusions 

reached in recital (23) to (25) of the provisional duty Regulation that the great 
majority of domestically sold models are not comparable to those exported 
were maintained. Consequently, normal values had to be constructed for the 
great majority of exported models using the companies' specific cost of 
production information and profit rates as determined for their sales in the 
ordinary course of trade. 

In the few cases where domestically sold models were comparable with 
exported models, normal value was established on domestic sales prices. 
For the fourth producer located in Korea, which had not made any domestic 
sales, normal value was constructed using the methodology described in recital 
(19) of the provisional duty Regulation. 

2. Export price: 
(19.)  As for the domestic sales, also export sales prices were established on the 
total sales volume, where requested, at the definitive stage. Otherwise the 
same methodologies as the ones used at the provisional stage and described 
in recitals (26) to (29) of thé provisional duty Regulation were used at the 
definitive stage in order to establish export prices. 

3. Comparison: 

(20.)  At the definitive stage, normal value by model, as determined above, was 
compared at an ex-factory level with the ex-factory export price on a 
transaction-by-transaction  basis. 

12 

For the purpose of a fair comparison, due allowance in the form of adjustments 
was made for differences affecting price comparability. Those allowances 
which were claimed and which proved to be significant were granted where 
justified in accordance with Article 2 (9) and (10) of the basic anti-dumping 
Regulation. Based on the analysis conducted after the imposition of provisional 
measures, adjustments were made in respect of physical differences, 
differences relating to import charges and indirect taxes, selling expenses and, 
in addition, with respect to differences in the level of trade, in particular as 
regards sales to original equipment manufacturers ("OEM"). 
As far as differences in selling expenses in the form of credit costs for 
differences in payment terms are concerned, the general approach taken at the 
provisional stage is maintained. This approach allowed for the granting of an 
allowance for differences in payment terms if it was demonstrated by the 
parties concerned that these differences affect price comparability. In this 
context it was considered that payment terms can affect prices paid by a 
customer only where the payment terms are agreed at the date of sale, i.e. the 
date of the conclusion of the sales contract or the date of the invoice at the 
latest. It is only in such circumstances that the cost of credit associated with the 
payment terms can be considered to have influenced the buyer's decision. 
As far as export sales to OEM-customers are concerned, allowances were 
granted in cases in which these customers performed functions different from 
customers on the domestic market resulting in consistently different export 
price patterns for such customers. 

Furthermore, two Korean producers had submitted information on the 
organisation of their export sales that did not reflect the actual export 
organisation. These producers had incorrectly described the role of related 
companies in the Community involved in the export transactions and not 
submitted information on the related costs of these related companies 
reflecting their role. 

13 

In these circumstances the directly related costs involved had to be determined 
on the basis of Article 7 (7) (b) of the basic anti-dumping  Regulation. This 
determination was based on general experience related to costs incurred by 
economic operators assuming such functions. 

4. Dumping margin: 

(21.)  The assessment of the information received from the producers concerned at 

the definitive stage with respect to export prices and taking into account the 
normal value as established above shows the existence of dumping in respect 
of imports of the product concerned originating in Korea also at the definitive 
stage. 

The weighted average dumping margins definitively established for each 
producer and expressed as a percentage of the total CIF Community- frontier 
value of imports are as follows: 

-Daewoo 

- LG Electronics 

- Korea Nisshin 

- Samsung Korea 

9.4% 

18.8% 

24.4 % 

3.3% 

As at the provisional stage and for the reasons set out in recital (35) of the 
provisional duty Regulation the dumping margins of the cooperating company 
with the highest margin, i.e. 24.4 %, should apply to all non-cooperating 
producers. 

14 

C. Malaysia: 
1.  Normal value: 
(22.)  No changes with regard to the overall methodology  described in recitals (36) 
and (37) of the provisional, duty Regulation were deemed to be necessary at 
the definitive stage for the détermination of normal value in the light of the 
comments received. 
However, since certain changes were made with respect to the amounts of 
SG&A and profit realised by Korean producers and since these items were 
used in constructing normal value for the Malaysian producer, the constructed 
normal values applied to the Malaysian producer have also changed. 

2. Export price: 
(23.)  No new arguments were raised in respect to the determination of the export 

price. The approach followed at the provisional stage is therefore maintained at 
the definitive stage. 

3. Comparison: 
(24.)  As for the determination of the normal values mentioned above, changes were 
also made with respect to certain allowances granted following changes in the 
amounts of these allowances for the Korean producers. Consequently, the total 
allowances granted in order to reflect differences affecting price comparability 
relating to selling expenses were changed accordingly. 

4. Dumping margin: 
(25.)  Applying the same methodology as explained in the provisional duty 

Regulation, the weighted average dumping margin established at the definitive 
stage for the sole cooperating Malaysian producer and expressed as a 
percentage*of the total CIF Community- frontier value of imports is as follows: 

Samsung Malaysia 

29.0% 

15 

As this producer was the only one which cooperated in the present 
investigation and as it appears from Community  import statistics that no other 
producer made any MWO-exports during the investigation period, it is 
considered appropriate to apply the above dumping rate to all M WO imports 
originating in Malaysia. 

D.Thailand: 
1.  Normal value and export price: 
(26.)  The cooperating Thai producer requested that the normal value for Thailand be 

established on the basis of sales made by this producer's related company on 
the Japanese market. The Thai producer in particular claimed that this was in 
line with the provisions of Article 2 (6) of the basic anti-dumping Regulation, as 
exports to the Community of MWOs produced in Thailand were actually 
shipped from Japan. In investigating this request, it was established that the 
producer's related company in Japan merely issued the invoices for export 
sales while the MWOs concerned were produced in Thailand and physically 
shipped directly from Thailand to export markets. Moreover, the information 
submitted by the Thai producer on its sales activity on the Japanese market 
turned out to be unreliable. 
In these circumstances, it is considered reasonable to maintain, as in the case 
of Malaysia, the general methodology for determining normal value for Thailand 
as outlined in recitals (46) and (47) of the provisional duty Regulation. 

As for Malaysia, certain changes in the profitability and SG&A costs of the 
Korean companies having profitable sales on the Korean market, led to a 
change in the average SG&A rate and the average profit rate used for 
constructing the normal values for the Thai producer. 

16 

2. Comparison: 

(27.)  As in the case of Malaysia, the changes in the total allowances granted to the 

Korean producers concerned and deducted from normal value were also taken 
into account in comparing normal value and export prices for the Thai 
producer.  In particular, an allowance was also granted for sales made at a 
different level of trade. 

3. Dumping margin: 

(28.)  Applying the same methodology as explained in the provisional duty 

Regulation, the weighted average dumping margin established at the definitive 
stage for the co-operating Thai producer and expressed as a percentage of the 
total CIF Community- frontier value of imports is as follows: 

Acme 

14.1% 

For the reasons set out at the provisional stage which were not contested by 
any party, the dumping margin for the non-cooperating Thai 
producer(s)/exporter(s)  is based on the highest weighted average dumping 
margin determined with regard to an individual MWO-segment for which the co-
operating Thai producer made significant export sales to the Community. 

(29.)  On this basis, the clumping margin established for all other exporters from 

Thailand expressed as a percentage of the total CIF Community-frontier value 
of imports is 27.3%; 

17 

V. DEFINITION OF COMMUNITY  INDUSTRY: 

(30.) 

In its provisional determination, the Commission had established that a variety 
of producers operated on the Community  market. 

In accordance with the provisions of Article 4 (5) of the basic anti-dumping 
Regulation, it was concluded that certain producers related to the exporters 
should be excluded from the definition of the Community production. On this 
basis, it was further concluded that the complaining companies represented a 
major proportion of the remaining Community production. The resulting injury 
assessment was consequently limited to the situation of the complaining 
producers. 

(31.)  One MWO producer located in the Community after its enlargement at 1 

January  1995 ("the enlarged Community") claimed that, for the purpose of the 
injury analysis, the term Community industry should be interpreted as including 
not only the complaining companies but all Community producers. 
Moreover, the company argued that producers from the new Member States 
should also be included in the definition of the Community industry for the 
purpose of this proceeding. 

In this regard, the complainant has submitted that the inclusion of producers 
located in new Member States should not be considered, given that these 
Member States were not part of the Community during the investigation period. 
Furthermore, it was argued that the producer concerned was directly related to 
one of the exporters subject to the investigation. The complainant has 
concluded that this company was shielded from the injurious effects of 
dumping and should on this ground alone be excluded from the definition of the 
Community  industry. 

18 

(32.) 

in respect of the above mentioned arguments the following is noted: 

-- in accordance with Article 4(5) of the basic anti-dumping  Regulation 
the term "Community industry" is defined as including either the 
producers located in the Community as a whole or those producers 
whose collective output represents a major proportion of the total 
Community production, 

-- as outlined in recital (110) of the provisional duty  Regulation, the 
Commission took the view that, with or without considering companies 
located in new Member States as part of the overall Community  industry 
and taking into account a conservative approach as far as the status of 
the remaining non-cooperating producers are concerned, the 
complaining companies represent in either case a major proportion of 
the total Community production. 

In view of the above, the Council confirms that it is not necessary to address 
the question of whether or not producers located in new Member States should 
be included into the overall Community production as in the present 
investigation the complaining producers fulfil in any case the requirements of 
Article 4 (5) of the basic anti-dumping Regulation and form a major proportion 
of the total Community production. 

(33.)  This conclusion is reinforced by the fact that, after the end of the  investigation 
period, another producer located in the Community, which did not initially 
cooperate in the investigation and which was not considered as part of the 
complaining producers at the provisional stage, approached the Commission 
indicating its support for the complaint. 

(34.)  Consequently, for the remainder of this document, the term  "Community 

industry"  refers only to that part represented by the complaining companies. 

19 

VI.  INJURY: 

A. Cumulation of the imports originating in the countries concerned: 
(35.)  One Chinese producer argued that the imports from the exporting countries 

concerned by this anti-dumping proceeding should not be cumulated. This 
producer in particular stressed that imports originating in China were not of the 
same volume as those from Korea. 

As already determined at the provisional stage and as outlined in recitals (66) 
to (69) of the provisional duty Regulation, it is considered that all criteria on the 
basis of which the Community Institutions usually decide whether the imports 
from several exporting countries may be cumulated are met in the present 
proceeding  . it has been established that imports from China followed trends 
comparable to those of the other exporting countries in that; 

- they were made at significant levels during the investigation period, 
- they were sold at low prices and 
- they were in competition on the Community market with the other 
imports concerned. 

Therefore, the Council confirms that it is justified and necessary to cumulate 

the imports from the countries concerned for the injury determination. 

20 

B. Prices of the dumped imports: 
(36.)  The investigation conducted after the provisional determination has confirmed 
that prices of MWOs originating in the countries concerned were significantly 
below the prices charged by the Community industry during the investigation 
period. In order to establish the level at which prices of the exporters undercut 
those of the Community industry, the methodology used for the purposes of the 
preliminary determination has been adapted, in that it was considered 
reasonable to take into account the possibility of a difference of level of trade 
between some of the export sales made to independent customers and those 
made, on average, by the Community industry. 

The revised methodology consisted of comparing the sales prices of all sales 
of the Community industry to independent customers with sales prices of the 
producers/exporters concerned to independent customers in the Community; 
an additional amount representing 10% of the export prices being added to the 
latter prices, representing an estimate for distribution and marketing costs and 
for a profit for the independent distributors located in the Community. 

(37.)  The above approach is considered conservative, given that the adapted export 
prices have been compared to all sales transactions of the Community industry 
whereas some of these sales by Community industry were made at a level of 
trade comparable to that of the Community frontier stage. The results of this 
price comparison showed that for all producers located in the exporting 
countries concerned substantial price undercutting remained. The weighted 
average undercutting margin was about 20% for China, between around 12% 
to 30% for Korea depending on the producers and was around 33% for 
Malaysia and Thailand. 

21 

C. Arguments raised concerning the injurious situation of the  Community 
industry: 

(38.)  No new arguments were raised relating to the injurious situation of the 

Community  industry after the imposition of provisional measures. Therefore, 

on the basis of the conclusion reached at the provisional stage in recitals (75) 
to (84) of the provisional duty Regulation, it was definitively concluded that the 
Community industry has been suffering material injury within the meaning of 
Article 4 of the basic anti-dumping Regulation. 

VH. CAUSATION: 

A. Effect of the dumped imports: 

(39.)  One Chinese producer, one producer located in the enlarged Community and 
tin importers' association alleged that at the provisional stage the Commission 
did  not establish a causal link between dumped imports from the countries 
under investigation and the injury caused to the Community Industry. According 
to these parties, the Commission has merely relied on a coincidence  between 
the imports and the deterioration of the situation of the Community  industry. 

(40.)  The complainant has contested these claims and supported the provisional 

conclusions of the Commission set out in recitals (85) to (95) of the provisional 
duty Regulation and has contested the influence of any factor other than 
dumped imports on the injurious situation of the Community  industry. 

22 

(41.)  With regard to the question of the causal link between dumped imports and the 
injury suffered by the Community industry, the Council notes the following: 
in the analysis undertaken, the Community  Institutions have not merely  relied 
on a coincidence in time of increased low-priced imports and the deterioration 
of the situation of the Community industry. The impact of the increase in 
volume and market share of the dumped imports and the amount by which they 
undercut the prices of the Community industry, with a particular emphasis on 
the pricing behaviour of the exporters and its consequent effect on the 
Community market has been examined in concreto. 
In this analysis it was established that sales made during the investigation 
period by the exporters concerned and by the Community industry actually 
went to the same sales channels and even customers. In the light of this and 
bearing in mind that customer loyalty is generally not very strongly  developed 
for this type of product - this factor being reflected in a high price elasticity of 
demand  - it was considered that the above claims are unfounded and that it 
was established that dumped imports have contributed significantly to the injury 
suffered by the Community industry. 

B. 
1. 

Other factors: 
Imports from other countries: 

(42.)  One Chinese producer and a producer located in Sweden stated that the loss 

in market share of one producer of the Community industry in particular was 

not due to dumped imports but to increased imports from Sweden. 

23 

(43.)  The Commission had provisionally concluded, as stated in recitals (89) to (90) 
of the provisional duty Regulation, that an examination of the trend in imports 
from other countries (i.e. Japan, Sweden, United States and other third 
countries) showed, overall, a declining tendency. The prices of these imports 
were found to be substantially higher than those from the countries subject to 
investigation. 

With regard to the above allegation, as stated in the provisional duty 
Regulation in recital (89) imports from Sweden taken individually increased up 
to the investigation period to reach a market share of around 8%. However, it 
was found that the average import prices of these imports were substantially 
higher than those of the exporting countries concerned by this proceeding and 
even higher than the average prices of MWOs of the Community industry. 
f  Furthermore, the development of the  market shares in individual Member 
States by the Community producer and the, Swedish producer has been 
specifically analysed, based on the information provided by the Chinese 
producer and the Swedish producer. This analysis shows that there is no 
consistent correlation between increases in market share in individual Member 
States for MWOs originating in Sweden and losses in market share for MWOs 
made by the Community producer and vice versa. Indeed, the two companies 
concerned have strongholds in entirely different Member States. 
In conclusion, it was deemed highly unlikely that the imports from Sweden have 
had a significant impact on the overall situation of the Community industry 
except that, if any, resulting from normal competition.-

24 

Behaviour of the Community industry: 

2. 
(44.)  One Chinese producer, one producer located in the enlarged Community and 

an importers' association alleged that the difficulties suffered by the Community 
industry can be reduced to problems encountered by one of the complaining 
companies. In particular the Chinese producer and the producer located in the 
enlarged Community have stated that this company has made wrong 
management decisions in its acquisition of a company located in the 
Community and in not renewing its model range. 

(45.) 

In addressing the above allegations, which were not supported by any relevant 
evidence, it is considered of particular jrhportance to stress that the 
investigation carried out before and after the provisional determination has 
confirmed that indeed all four individual companies constituting the complaining 
industry have suffered material injury. The collected and verified information on 
the state of the Community industry does not contain any indication that the 
material injury suffered by this industry was due to particularly adverse results 
by one company only. 

(46.)  Furthermore, it is noted that the above parties have not submitted any 
information in support of their claims that would justify a change in the 
assessment outlined in recital (92) of the provisional duty Regulation, 
concerning the acquisition policy of one particular complaining producer. 

25 

(47.)  As far as the policy of model renewal of the complaining producer mentioned in 

the above claim is concerned, the investigation has shown that, in the three 
years between 1990 and 1992 leading to the investigation period, the 
Community producer in question launched new model ranges which during the 
investigation period were sold in substantial quantities. In any event, as has 
been stated in recital (82) of the provisional duty Regulation, the Community 
industry could not implement all its investment plans due to its deteriorating 
financial situation resulting from the depressed price situation. 

(48.)  One Chinese producer and one producer located in the enlarged Community 

also alleged that certain Community producers, by over-investment in an 
unrealistic level of capacity for MWO production, had suffered self-inflicted 
injury. 

(49.)  The evidence relating to the history of investment decisions submitted in the 
course of the present anti-dumping proceeding by the companies concerned 
was reviewed in detail. This revealed that the investment decisions concerned 
were based on independent and reliable forecasts of the size of the Community 
MWO market and on realistic targets as far as market shares in this market are 
concerned. 

(50.)  One Chinese producer, one producer located in the enlarged Community and 
an importers1 association submitted that during the period under consideration 
for assessing injury, other Community producers, which were not part of the 
complaining industry, had a positive performance. 

26 

(51.) 

In  response to this argument, it should be noted that, as explained in recitals 
(57) to (64) of the provisional duty Regulation, certain producers operating in 
the Community which were not excluded from the definition of Community 
production, and which did not support the complaint, were shielded from the 
injurious effect of dumped imports by having themselves imported dumped 
MWOs in substantial quantities. It is considered that any positive performance 
by such companies cannot constitute proof that dumped imports have not 
caused injury to the complaining companies. 

(52.)  For the reasons given in recital (32) above, it was not necessary to determine 

whether such producers' output constituted Community production for the 
purposes of determining Community industry, but it should be noted that these 
companies' positive performance tends to reinforce the conclusion that it is 
actually necessary to exclude them from the category of Community production 
for the purposes of an examination of injury. If their data were to be included in 
the evaluation of the state of the Community industry, this would distort the 
evaluation of the situation of those companies that did not benefit from 
dumping and have encountered economic difficulties. 

Development of the Community MWO market: 

3. 
(53.)  One Chinese producer and the producer located in the enlarged Community 

have further alleged that the price erosion noticed in the Community MWO 
market can be explained by factors relating to changes in the distribution of 
MWOs in general. 

27 

Although the above parties have not supported their claim with evidence, it is 
considered that changes in the distribution system of MWOs might be one 
reason for a reduction in MWO sales prices. However, it should be emphasised 
that such developments do not explain the substantial level of price 
undercutting found between the export prices concerned and prices of the 
Community industry. 

C. 

Conclusion: 

(54.)  Based on the above analysis and taking into account the analysis summarised 

in recitals (85) to (95) of the provisional duty Regulation, the conclusions of 
which remain unchanged, it is considered that, on balance, it must be 
concluded that dumped imports have caused material injury to the Community 
industry. 

This conclusion is supported in particular by the findings concerning imports of 
MWOs made in increasing volumes and at prices substantially undercutting 
those of the Community industry and the findings that, to a great extent, the 
sales of the MWOs by both the exporters and the complaining producers were 
made through the same sales channels and in some cases the same 
customers. 

(55.)  This conclusion was reached at the definitive stage even though it cannot be 

excluded that certain other factors have also contributed to the economic  •  • • 
difficulties of the Community industry. It rémains the case that the injury caused 
by the dumped imports, taken in isolation, was material. 

28 

V1H. COMMUNITY  INTEREST: 

(56.)  The determination as to whether the Community interest calls for intervention in 

the present investigation was based on an appreciation of all various interests 
taken as a whole, including the interest of the domestic industry and users and 
consumers. In such an examination, the need to eliminate the trade distorting 
effects of injurious dumping and to restore effective competition was given 
special consideration. 

(57.)  After the imposition of provisional measures, one Chinese producer and one 

producer located in the enlarged Community stated that the imposition of 
definitive anti-dumping measures in this case would not be in the Community 
interest as such rrieasures would result in an increase of sales prices to the 
end customers.  In response to this argument, it is considered that while it is 
the purpose of any anti-dumping measure that the prices for imports originating 
in the countries concerned are increased to a non-dumped or at least non-
injurious level, it is also considered that, given the number of suppliers 
operating in this market, and given the purchasing power of the distribution 
channels in the Community, the overall price increase in the market will be 
limited as the market will continue to operate in a competitive environment. 
This conclusion is reached taking into account that, by the imposition of 
definitive anti-dumping measures, the Community industry will be allowed to 
operate under effective conditions of competition, ensuring this industry's 
presence on the Community market in the future. 

. 

29 

(58.)  Furthermore, the producer located in the enlarged Community argued that the 

imposition of anti-dumping measures would deprive it of the opportunity to 
pursue a global production and marketing strategy as it would be forced to 
operate separately in each region of the world. This in turn would lead to 
inefficiencies and ultimately to a worsening of the situation of its Community 
based production. 

As far as the above argument is concerned, it should be pointed out that anti 
dumping measures, perse,  do not affect the globalisation strategies of 
companies, unless such strategies rely on sourcing products at dumped prices. 
In such cases, where dumping has caused injury to a Community industry, the 
companies in question would, to the detriment of other producing companies in 
the Community,  in the absence of corrective measures eliminating injurious 
dumping, benefit from an unfair competitive advantage beyond any normal and 
fair advantage that globalisation might bring. 

(59.) 

In conclusion, and taking into account the analysis outlined in recitals (96) to 
(102) of the provisional duty Regulation, it is considered that, on balance, it is in 
the general interest of the Community to impose anti-dumping measures 
concerning imports of MWOs originating in China, Korea, Thailand and 
Malaysia. Indeed, no compelling reason not to impose anti-dumping measures 
in this case has been identified. 

30 

IX. UNDERTAKING: 
(60.)  The Commission has received an offer of an undertaking from one Chinese 

producer pursuant to Article 10 (2) of the basic anti-dumping  Regulation. This 
offer has been examined carefully. In particular, attention- has been paid as to 
whether the minimum prices offered in the undertaking are such that the 
Commission can be satisfied that the injurious effect of the dumping 
determined would be eliminated, as specifically  required by Article  10 (2) (b) of 
the basic anti-dumping Regulation. 

Furthermore, the Commission has assessed whether it would be feasible to 

monitor the undertaking proposed. 

(61.)  As far as the level of the prices offered is concerned and on the basis of the 

investigation conducted, it has been determined that the price levels proposed 
would lead to a dumping margin even higher than the one determined for the 
investigation period.  In any event, it should be noted that the acceptance of 
undertakings for consumer products has historically been exceptional given, 
inter alia, the complexity of the models, the number of different types and the 
variety and the regularity with which they are upgraded or otherwise modified. 
All these considerations tend to lead to virtually insurmountable difficulties in 
monitoring. These general considerations also apply to the present case. 

(62.) 

It was therefore considered by the Commission, after consultation, that the 
acceptance of an undertaking was not appropriate in this particular proceeding 
and the offer concerned has accordingly been rejected. The Commission has 
informed the exporter concerned accordingly. 

31 

X. DUTY: 

(63.)  For the purpose of establishing the level of the definitive duty, the same 

methodology already applied at the provisional stage and outlined in recitals 
(103) to (108) was used taking account of the dumping margins definitively 
determined and of the amount of duty necessary to eliminate the injury 
sustained by the Community industry. 

Since it was confirmed at the definitive stage that the injury consists  principally 
of price undercutting, price depression and, as a consequence, slightly 
decreasing market shares and substantial financial losses, the removal of such 
injury requires that the industry should be put in a position where prices can be 
increased to profitable levels without a continued loss of market share. 

For calculating the necessary price incxease^it was considered that the actual 
prices of these imports adjusted using the same methodology as mentioned in 
recitals (35) and (36) had to be compared to selling prices that reflect the costs 
of production of the complaining producers plus a reasonable amount of profit. 

(64.)  To this end, the costs of manufacturing of the complaining producers were 

increased by the SG&A costs and an amount of profit, i.e. a margin of 5% on 
turnover, which was considered to provide the minimum required to ensure the 
viability of the Community industry. 

The actual weighted average selling prices charged during the investigation 
.  period by the Community industry were compared to the values constructed as 

explained above, and increased, if appropriate, in order to achieve the overall 
minimum amount of profit required. The resultant prices thus established were 
' compared with the average prices of the dumped imports used to establish 
price undercutting. 

32 

The differences between these two prices expressed on a weighted average 
basis and as a percentage of the free-at-Community-frontier  price ranged from 
around 50% for China for which a single margin was established, between 35% 
and 60% for Korea depending on the exporters concerned and around 80% for 
Malaysia and Thailand. 

(65.)  Based on the above, definitive anti-dumping duties, expressed as a percentage 
of the free-at-Community-frontier price before CCT duty, should, in accordance 
with Article 13 (3) of the basic anti-dumping Regulation be imposed at the level 
of the dumping margins found, the dumping margins all being lower than the 
above levels of injury. Definitive duties should therefore be as follows : 

33 

China 

- all imports 

12.1 % 

Korea 

Daewoo 
LG Electronics 
Korea Nisshin 
Samsung Korea 
any other imports 

9.4% 
18.8% 
24.4% 
3.3 % 
24.4 % 

Malaysia : 

- all imports 

29.0 % 

Thailand : 

- Acme 
- any other imports 

14.1 % 
27.3 % 

XL COLLECTION OF THE PROVISIONAL DUTIES: 

(66.) 

In view of the magnitude of the dumping margins found for the majority of 

exporting producers and in light of the seriousness of the injury, in particular in 
light of the level of price undercutting and price underselling, it is considered 
necessary that amounts secured by way of provisional anti-dumping duties 
should be definitively collected for all companies at the level of the definitive 
duties, 

• • • • • . '; 

HAS ADOPTED THIS REGULATION : 

34 

Article 1 

Definitive anti-dumping duties are hereby imposed on imports of  microwave 
ovens falling within CN code 85 16 50 00 and originating in the People's 
Republic of China, the Republic of Korea, Malaysia and Thailand. 

The rate of the anti-dumping duties applicable to the net, free-at-Community-

frontier price, before CCT-duty, shall be as follows : 

Country 

Products manufactured by 

People's Republic of China : 

Republic of Korea  : 

- Daewoo Electronics Co. Ltd. 

- LG Electronics Inc. 

- Korea Nisshin Co. Ltd 

- Samsung Electronics Co. Ltd 

- other companies 

Rate of 

duty % 

Taric 

additional 
code 

1 2 . 1% 

-

9.4 % 

18.8% 

24.4 % 

3.3 % 

24.4% 

8829 

8830 

8831 

8832 

8833 

29.0 % 

.  -

< 

• 

Malaysia : 

•. 

Thailand: 

- Acme Industry Co. Ltd 

- other companies 

•  14.1 % 

27.3% 

8836 

8837 

35 

3. 

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

Article 2 

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

No. 1645/95 shall be definitively collected at the duty rate definitively imposed. 

Amounts secured in excess of the definitive rate of anti-dumping duty shall be 

released. 

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, 

36 

ISSN 0254-1475 

COM(95) 695 final 

DOCUMENTS 

EN 

02 

ll 

Catalogue number  : CB-CO-95-728-EN-C 

ISBN 92-77-98081-8 

Office for Official Publications of the European Communities 

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