Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of bicycles originating in Indonesia, Malaysia and Thailand and collecting definitively the provisional duties imposed
Date: 1996-03-14
Institutions: European Commission
Subjects: Indonesia, Malaysia, Thailand, anti-dumping duty, two-wheeled vehicle

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,14.03.1996 
COM(%)  112  final 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

imposing definitive anti-dumping duties 

on imports of bicycles originating in Indonesia, Malaysia and Thailand and 
collecting definitively  the provisional duties imposed 

(presented  by the  Commission) 

EXPLANATORY MEMORANDUM 

1. 
By Regulation (EC) No 2414/95C), the Commission imposed provisional 
anti-dumping  duties  on  imports  into  the  Community  of  bicycles  originating  in 
Indonesia, Malaysia and Thailand, falling within CN code 8712 00. 

By Regulation  (EC) No 245/96Q, the Council  extended  the validity  of 

2. 
these duties for a period of two months until  14 April 1996. 

Subsequent to the imposition of provisional anti-dumping  duties, certain 
3. 
parties  requested  and  were  granted  hearings,  and  presented  written  comments 
which were taken into account where appropriate. 

4. 
The  definitive  determination  confirmed  the  existence  of  dumping. 
Changes  in  the  individual  dumping  margins  compared  to  the  provisional 
findings  are due to the reassessment of certain adjustments. 

5. 
The conclusion that the Community  industry  suffered  material  injury  is 
also  confirmed.  For  the  purpose  of  the  determination  of  material  injury,  the 
imports from the countries concerned were analyzed cumulatively because it was 
found  that  the  import  volumes  for  each  country  were  not  negligible  and  the 
imported  products  competed  with  each  other  and  with  the  like  Community 
products. 

From  1990 to  1993, total imports from Indonesia, Malaysia and Thailand 
6. 
increased  by  190.6%.  Market  share  held  by  these  countries  increased  by  4.4 
percentage points, reaching a market share of 6.8% in  1993. Imports from  these 
countries undercut prices of the Community industry by 18.2% to 41.4%.  While 
it  cannot  be  excluded  that  other  factors  may  have  contributed  to  the  difficult 
state  of  the  Community  industry,  the  considerable  increase  of  the  dumped 

(1)OJNoL248,  14.10.95, p.12 

(2)OJNoL32,  10.02.96, p;l 

Z 

imports and their significantly  low prices which led to the conclusion that these 
imports caused the material injury  suffered  by the Community industry. 

7. 
Given  the  need  to  eliminate  the  trade-distorting  effects  of  injurious 
dumping and to restore effective  competition, the fact that a continuation of low 
priced  imports  would  jeopardize  the  adjustment  efforts  of  the  Community 
industry,  and  would  have  a negative  effect  on the  level  of  employment  in  the 
Community industry, with additional repercussions in the European bicycle parts 
industry, and in view of the limited effect  for consumers, it is considered  in the 
Community interest that definitive duties should be imposed. 

8. 
In accordance with the 'lesser duty rule', the level at which the  definitive 
duties should be set was determined by the dumping margins found  which were 
lower than the  injury  elimination  margins. The dumping  margins  ranged from 
21.9%  to  28.4%  for  exports  from  Indonesia,  from  23.1% to  37.3% for  those 
from Malaysia, and from  13.0% to 38.9% for those from Thailand, which are the 
levels at which it is proposed to set the duty rates. 

9. 
Malaysian  companies  indicated  their  readiness  to  discuss  the  terms  of 
undertakings, but made a specific  offer  only for a quantitative undertaking. The 
Commission  considered  that  it  would  be  impractical  and  unrealistic  to  accept 
price  undertakings  in  the  present  case  because  of  the  enormous  number  of 
different  bicycle models and the frequent  changes of specifications  which would 
render  monitoring  such  undertaking  impossible.  With  regard  to  quantitative 
undertakings, irrespective of concerns which could arise as regards their  effects 
on competition  between exporting countries, the Commission  considers that, in 
the  present  case,  such  undertakings  would  be  difficult  to  monitor  because 
bicycles do not normally bear a mark of origin. 

10. 
It  is  therefore  proposed  that  the  Council  adopts  the  draft  Regulation 
annexed  imposing  definitive  anti-dumping  duties  on  imports  of  bicycles 
originating  in Indonesia,  Malaysia  and  Thailand  and  collecting  definitively  the 
amounts secured by way of the provisional duties. 

COUNCIL REGULATION (EC) No ..../96 imposing definitive anti-dumping duties 
on imports of bicycles originating in Indonesia, Malaysia and Thailand and 
collecting definitively the provisional duties 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 
Community (l%  as  last  amended  by  Regulation  (EC) No  1251/95  of  1995  (2), 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  Community  (3), as  last amended  by Regulation  (EC) No  522/94  (4), and  in 
particular Article  12 thereof, 

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

WHEREAS: 

('jOJ  No L 349, 31.12.94, p.l 

(2)OJNoL  122, 2.6.95, p. 1 

(3) OJ No L 209, 2.8.1988, p.2. 

(4)OJNoL66,  10.3.1994, p. 10 

4 

A.PROVISIONAL MEASURES 

(1) 

The Commission,  by Regulation  (EC) No 2414/95(5), hereinafter  referred  to as 
'the  provisional  duty  Regulation',  imposed  provisional  anti-dumping  duties  on 
imports into the Community  of bicycles originating in Indonesia,  Malaysia and 
Thailand. 

By  Council  Regulation  (EC)  No  245/96(6),  the  validity  of  these  duties  were 
extended by a period not exceeding two months expiring not later than  14 April 
1996. 

B. 

SUBSEQUENT PROCEDURE 

(2) 

Immediately  after  the imposition of provisional  measures, the interested  parties 
were  informed  of  the  essential  facts  and  considerations  on  the  basis  of  which 
provisional measures had been adopted. 

(3)  Most of the Malaysian and Thai exporters had requested that they be informed of 
the essential  facts and considerations resulting from the investigation before  the 
imposition  of provisional  measures. The Malaysian exporters claimed that such 
prior  disclosure  was  necessary  in  order  to  allow  them  to  exercise  their 
fundamental  right  to  be  heard.  However,  Regulation  (EEC)  No  2423/88,  the 
applicable  Regulation  in  this  proceeding,  (hereinafter  referred  to  as  'the  basic 
Regulation')  already  reflects  and  transposes  into  the  field  of  anti-dumping  the 
general  principle  of  law  of  a  right  to  a  fair  hearing  as  defined  by  th^ 
jurisprudence of the Court of Justice of the European Communities, and does not 
require that disclosure take place before  the imposition of provisional  measures 
but  before  definitive  measures.  Accordingly,  the  Commission  did  not  disclose 
the  essential  facts  and  considerations  before  the  imposition  of  provisional 
measures. 

(5)OJNoL248,  14.10.95, p. 12 

(6)OJNoL32,  10.02.96, p. 1 

(4) 

Comments in writing were received from the following  interested parties within 
the time limit set: 

1. 

Producers and producer's association in Indonesia 

PT Jawa Perdana Bicycle Industry 

PT Wijaya Indonesia Makmur Bicycle Industries 
The Association of Indonesian Bicycle Industry 

2. 

3. 

Producers in Malaysia 
Akoko Sdn. Bhd. 
Berjaya Cycles Sdn Bhd 
Greenworld Systems Sdn Bhd 
Lerun Group Industries Berhad 
Rolls Rally Sdn Bhd 

Producers in Thailand 
Bangkok Cycle Industrial Co. Ltd 
Siam Cycles MFG. Co. Ltd 
Thai Bicycle Industry Co. Ltd 
Victory Cycle Co. Ltd 

4. 

Importers 
Universal Cycles pic. 

(5) 

(6) 

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

Parties  were  informed  of the  essential  facts  and  considerations  on the  basis  of 
which it was intended to recommend the imposition of a definitive  anti-dumping 
duty  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. 

(7) 

The parties' oral and written comments were considered, and where appropriate 
the conclusions were modified to take account of them. 

(8) 

(9) 

Owing  to  the  complexity  of  the  case,  in  particular  the  number  of  exporting 
countries  and  parties  involved,  and  the  variety  of  technical  specifications,  the 
proceeding  overran  the  normal  duration  of  one year  as provided  for  in  Article 
7 (9) of the basic Regulation. 

After  imposition  of  provisional  duties,  the  Association  of  Indonesian  Bicycle 
Industry  (hereinafter  'the AIPI') claimed that the proceeding was  discriminatory 
insofar  as  other  exporting  countries,  such  as  India  and  Vietnam,  were  not 
included. 

At the time of initiation  of the current proceeding  in early  1994, there were no 
allegations or indications that imports from  India or Vietnam were also dumped. 
The proceeding was initiated  on the basis of a complaint concerning  imports of 
bicycles  originating  in  Indonesia,  Malaysia  and  Thailand,  which  contained 
sufficient  evidence  of  dumping  and  of  material  injury  resulting  therefrom 
(recitals  1  and  2  of  the  provisional  duty  Regulation).  At  later  stages  of  the 
investigation,  when  the  actual  development  of  imports  from  these  countries 
starting in  1993 became apparent, no additional complaint was received from the 
Community industry. In the absence of such a complaint and of any prima facie 
evidence  of  injurious  dumping  from  the  countries  concerned,  the  Commission 
had no reason to extend the proceeding to these other countries. 

C. 

LIKE PRODUCT 

(10) 

It was concluded  at the provisional  stage  (recitals  13 and  14 of the  provisional 
duty Regulation) that all types of bicycles originating in Indonesia, Malaysia and 
Thailand  and sold in the Community  form  one single product  and that bicycles 
produced  by  the  Community  industry  and  sold  on  the  Community  market,  as 
well as bicycles produced in Indonesia, Malaysia and Thailand and sold on those 
markets,  are  a  like  product  within  the  meaning  of  Article  2  (12)  of  the  basic 
Regulation. 

(11)  After  imposition  of the provisional  duty, two Malaysian  companies argued that 
bicycles  produced  and  sold  on  the  Malaysian  domestic  market  are  not  a  like 
product  to the  bicycles  produced  and  sold  for  export  to the  Community.  They 

did  not  substantiate,  however,  why  those  bicycles  would  not  be  alike  in  all 
respects to bicycles exported to the Community. 

(12)  The  investigation  has  established  that  bicycles  produced  and  sold  in  Malaysia 
cover a similar model range and their basic technical and physical characteristics 
are  identical  to  those  of  bicycles  exported  to  the  Community.  No  valid 
comments which would affect  these conclusions have been raised. The mere fact 
that the only co-operating  Malaysian  company  selling bicycles on the domestic 
market  manufactures  them  in  a  factory  which  is  separate  from  that  in  which 
export models are produced does not in itself support the claim that products are 
different  within the meaning of Article 2 (12) of the basic Regulation. Therefore, 
the  findings  and  conclusions  set  out  in  recital  14  of  the  provisional  duty 
Regulation are confirmed. 

D. 

DUMPING 

1. 

Normal Value 

a) 

Indonesia 

(13)  For two Indonesian companies the provisional  dumping findings  were based on 
the  facts  available  in  accordance  with  Article  7(7)(b)  of  the  basic  Regulation 
because  it  was  not  possible  to  obtain  or  verify  the  necessary  information 
requested  in  the  questionnaire  (recital  28  of  the  provisional  duty  Regulation). 
For the other three Indonesian companies, in those cases where normal value had 
to be constructed, it was determined by adding to the manufacturing  costs of the 
exported  models  reasonable  SG&A  and  profit  margins  which  were  based  on 
actual figures  for the companies concerned (recitals 25 and 27 of the provisional 
duty Regulation). 

(14)  One  Indonesian  company  purchased  some  bicycle  parts  for  its  production 
through  a  related  trading  company  which  charged  a  commission  on  such 
purchases. The company requested that such commission should not be included 
in  the  cost  of  manufacturing,  as  was  done  for  the  provisional  determinations. 
However,  it  appeared  that  the  commission  was  actually  incurred  by  the 

B 

Indonesian  company  for  the  purchase  of  parts  and  that  it  would  hear  similar 
costs if it directly purchased those parts from  unrelated suppliers. Therefore, the 
commission  charged  had to  be considered  as an integral  part  of the cost  of the 
materials in question. 

(15)  One  company  argued  that 

interest  expenses,  which  in  the  provisional 
determinations were included in the selling, general and administrative expenses 
(SG&A),  should  be  deducted  as  public  accounting  principles  in  Indonesia 
exclude  interests  from  operating  expenses  which  are not  directly  related  to the 
production and sales of the goods concerned. The investigation  showed that the 
only activity of the company concerned was production and sale of bicycles and 
bicycle  parts.  Therefore,  these  interest  expenses  have  to  be  included  in  the 
SG&A  because  they  were  incurred  by  this  company  as  a  result  of  the  actual 
finance  structure necessary for running its bicycle and bicycle parts operations. 

(16)  Two  Indonesian  exporters  and  the  AIPI  claimed  that  the  allocation  of  SG&A 
expenses should have been made on the basis of quantities sold. One Indonesian 
producer  raised  the  same  argument  with  regard  to  the  allocation  of  SG&A 
expenses between export and domestic sales, and, in particular, the allocation of 
financing  costs. However, neither of these companies normally allocated SG&A 
expenses to single bicycle models for their internal reporting purposes. It cannot 
be  claimed,  therefore,  that  an  allocation  key  based  on  quantities  sold,  as  was 
proposed by these companies, was historically utilized. Consequently, there is no 
reason to deviate from the principle in Article 2 (11) of the basic Regulation that 
the allocation of such costs is normally done in proportion to the turnover. 

(17)  The profit  ratio applied in constructing normal value was based on the domestic 
sales  of each  company  where  these  sales  were  made  in  the  ordinary  course  of 
trade (recital 26 of the provisional duty Regulation). Two companies argued that 
the resulting profit  margins were too high. However, since these companies did 
not  substantiate  their  claims,  the  methodology  which  was  applied  in  the 
provisional determinations for the purpose of calculating a reliable profit  margin 
in accordance with Article 2 (3) (b) (ii) of the basic Regulation is confirmed. 

(18)  The  Indonesian  exporters  made  additional  claims  (concerning  namely  the 
determination  of  the  domestic  sales  turnover,  the  allocation  of  manufacturing 
costs, details of individual  sales transactions, the application  of the SG&A ratio 
to the manufacturing  costs, and the exchange rates applied) which could not be 
taken  into  account,  because  they  could  not  be  verified  at  the  late  stage  of  the 
procedure when they were made, are not  supported  by direct  evidence  or,  after 
double checking, turned out to be factually  unfounded. 

(19)  Consequently, the determination of normal value for Indonesian producers as set 
out in recitals  15 to 27 of the provisional duty Regulation is confirmed. 

(20) 

In the case of one Indonesian company, the AIPI argued that this company faced 
more rigid deadlines for submitting the response to the questionnaire than those 
given to Community producers. 

In  fact,  the  same  deadline  of  37  days  was  set  for  all  interested  parties  for 
responding  to  the  questionnaires.  Extensions  to  this  deadline  were  granted  to 
Community  and  non-Community  companies  based  on  the  merits  of  each 
application.  No  extension  was  ever  requested  by  the  company  concerned.  The 
AIPI's  claim  that  Community  producers  received  a more  favourable  treatment 
appears  to  be  based  on  a misunderstanding.  The  questionnaires  to  Community 
producers could only be sent after the sample had been selected (recital 73 of the 
provisional duty Regulation and recital 56 of this Regulation). This explains why 
in spite of the fact that the deadlines were the same as for Indonesian producers, 
the responses of the Community industry arrived later. 

The findings  set out in recital 28 of the provisional duty Regulation are therefore 
confirmed. 

b)  Malaysia 

(21) 

In the provisional  duty  Regulation,  two Malaysian  companies  belonging  to the 
same group of companies were considered as one single company. One of them 
exported bicycles to the Community  during the investigation  period but did not 
sell  any  on  the  domestic  market.  The  other,  on  the  contrary  sold  substantial 
quantities  on  the  domestic  market  but  had  no  export  sales  to  the  Community. 

7o 

(22) 

These two companies requested not to be treated as a single producing  exporter 
and to be assigned individual dumping margins. 

However,  it  has  been  the  consistent  practice  of the  Community  Institutions  to 
establish  one  single  dumping  margin  for  related  companies.  The  different 
approach  followed  exceptionally  in the Photocopiers  case (Regulation  (EC) No 
2380/95(7))  which  was  invoked  by  the  Malaysian  companies  to  support  their 
request  was  due  to  the  very  specific  circumstances  found  in that  investigation 
which are not present in this case. 

Consequently,  the  approach  followed  in  recital  29  of  the  provisional  duty 
Regulation is confirmed. 

In  the  provisional  determinations,  it  was  found  that  only  one  co-operating 
Malaysian exporter had representative  domestic sales of the like product during 
the  investigation  period,  i.e. the domestic  sales  volume was higher  than  5% of 
total export  sales (recitals  19 and  30 of the provisional  duty Regulation).  Since 
bicycle  models  sold  by  this  company  domestically  did  not  permit  a  proper 
comparison  or  were  not  made  in  the  ordinary  course  of  trade  (they  were 
technically  too different,  not  sold  in  sufficient  quantities, or  sold at a loss), for 
models  sold  by  this  company  the  normal  value  had  to  be  calculated  in 
accordance  with  Article  2(3)(b)(ii)  of  the  basic  Regulation,  on  the  basis  of  a 
constructed  value  which  was established  by  adding to  the  manufacturing  costs 
the  company's  domestic  SG&A  and  profit  margins.  The  other  Malaysian 
exporters  had  no  domestic  sales  and  therefore  a constructed  normal  value  also 
had  to  be  established  in  accordance  with  Article  2(3)(b)(ii)  of  the  basic 
Regulation.  The  SG&A  incurred  and  profit  realised  by the  only  producer  with 
representative  domestic  sales  were the  only  data  available  in Malaysia  for  this 
purpose.  These figures were  considered  reliable,  and  therefore  the  constructed 
value of all models sold for  export to the Community  by Malaysian  companies 
was established by adding to the manufacturing  costs of the exported models the 

(7) OJ No L 244,  12.10.95, p. 1, recitals 53, 54 

11 

SG&A  and  profit  figures  of  the  only  producing  exporter  with  domestic  sales 
(recitals 30-35 of the provisional duty Regulation). 

(23)  At the provisional  stage, the Commission  found  that the primary  material  costs 
of  one  Malaysian  exporter  were  substantially  understated  and  accordingly 
adjusted  these  costs  upwards.  The  company  concerned  later  argued  that  the 
Commission's  findings  and  conclusions  were  based  on  inaccurate  assumptions 
and consequently objected to the  adjustment. 

It was found that while the cost to turnover ratios for all other cost items (such as 
direct  labour,  factory  overhead  and  SG&A)  were  stable,  the  ratio  for  primary 
material costs differed  significantly  in the investigation period (the calendar year 
1993) as compared to the financial  years  1993 and  1992. A similar disproportion 
was  found  in  the  profitability  for  the  investigation  period  as  compared  to  the 
financial  year  1993, even though the investigation  period and the financial year 
1993 overlapped by 8 month. 

The  determination  of  the  cost  of  manufacturing  for  this  company  is  therefore 
confirmed,  including the adjustment above. 

(24)  Some  Malaysian  companies  questioned  whether  packing  costs  (inclusive  of 
packaging labour expenses) have not been double counted by treating them as an 
element of cost of manufacturing  for each individual exporter while at the same 
time considering them as part of the SG&A costs of the domestic producer used 
for the construction of normal values. 

For all Malaysian producers, packing costs have been considered  solely  as part 
of the manufacturing  costs, and have not been  included  in the  SG&A expenses 
incurred  for  the  domestic  sales  made  by  the  domestic  producer.  Packing  costs 
were therefore not double counted. 

(25)  For  the  determination  of  the  SG&A  and  profit  ratio  for  the  only  co-operating 
producing exporter with representative domestic sales, the Commission excluded 
inter-company  sales. The  company  concerned  argued  that  such  an  approach  is 
inconsistent  with  the  fact  that  the  Commission  included  inter-company  costs 
such as financing costs. It argued, therefore, that inter-company sales should also 

i-c 

have  been  included  in  the  company's  domestic  sales  turnover  for  the 
determination  of  the  SG&A  and  profit  ratios.  In  addition,  it  alleged  that  the 
financing  costs concerned had no link with the production or sale of bicycles and 
therefore  should have been excluded from the SG&A. 

As  far  as  the  determination  of  the  SG&A  and  profit  margins  are  concerned  it 
should be noted that the company in question did not report that some sales were 
inter-company  sales, a fact which only came to light during the verification.  As 
the  prices  reported  are  transfer  prices,  these  sales  could  not  be  considered  as 
made in the ordinary  course of trade (Article 2 (7) of the basic Regulation) and 
the transactions  concerned  had to be disregarded  for  the purpose  of  calculating 
the domestic profit margin. 

Concerning  the  calculation  of  the  SG&A  ratio,  it  was  considered  in  the 
provisional  findings  that for  sales to related  companies, none or only  marginal 
SG&A  costs  are  incurred  and,  consequently,  SG&A  expenses  need  not  be 
allocated to turnover to related  companies. After  the provisional  determination, 
the  situation  was  re-examined  and  it  was  found  that  the  allocation  of  SG&A 
expenses to turnover to unrelated companies should be limited only in respect of 
selling costs which are not incurred  for  sales to related companies. By contrast, 
the ratios for  financing  and administration  costs which can also be incurred  for 
inter-company  sales  are  now  based  on  the  total  turnover  including  sales  to 
related parties. The calculations have been revised accordingly. 

As  regards  interest  paid  to  a  related  company,  excluding  these  costs  would 
ignore the fact that they were incurred by the company concerned  as a result of 
its  actual  finance  structure  required  for  running  its  operations.  It  is  irrelevant 
who actually  provides  the necessary  resources  as long  as the  terms  of the loan 
are in the ordinary course of trade (Article 2 (3) (b) (ii) of the basic Regulation). 
Claims  that  the  loan  was  intended  for  purposes  other  than  the  company's 
activities were not substantiated.  Therefore, in accordance with Article 2 (3) (b) 
(ii)  of the  basic  Regulation,  these  interest  expenses  have to  be  included  in the 
SG&A. 

H 

these  sales  were 

(26)  The  SG&A  margin  of the only  co-operating  producing  exporter  with  domestic 
sufficiently 
sales  was  considered 
reliable  because 
representative,  i.e. the domestic  sales volume represented  more than  5% of the 
export  sales  volume.  The  profit  margin  was  considered  reliable  because  this 
company had a sufficient  number of profitable  domestic  sales (recital  33, 34 of 
the  provisional  duty  Regulation).  The  Malaysian  exporters  argued  that  the 
SG&A  and  profit  margins  of  that  company  are  too  high  and  cannot  be 
considered  reliable because it had no export  sales and should  have been treated 
distinctly  from  its related  company  specializing  in export  and because  it had  a 
monopoly position on the domestic market which renders its data unreliable. 

It is the opinion of the Council, that there are no reasons for treating the only co 
operating  company  with  domestic  sales  separately  from  its  related  exporter 
(recital 21 of this Regulation). Even if such request  for  separate treatment were 
to  be  followed,  the  information  obtained  from  the  only  co-operating  company 
selling on the domestic market would still constitute the basis for the SG&A and 
profit margins to be applied for the other Malaysian exporters in accordance with 
Article  2  (3)  (b)  (ii)  of  the  basic  Regulation.  With  regard  to  the  alleged 
monopolistic  position  of the  only  co-operating  producer/exporter,  it  was  found 
that  there  was  at  least  one  more  Malaysian  company  which  had  substantial 
domestic  sales. No  evidence  was provided  showing  that  sales  in  Malaysia  did 
not  permit  a  proper  comparison.  Data  on  domestic  sales  in  Malaysia  were 
therefore  considered  to  be  reliable  and  the  selling  prices  and  cost  data  were 
based  on  the  actual  conditions  prevailing  on  the  market  of  the  country 
concerned,  i.e.  conditions  which  are  generally  available  to  all  actual  and 
potential customers or suppliers. 

Consequently the Council confirms the calculation of normal values as based on 
the SG&A and profit  ratios found  for the only Malaysian co-operating company 
with domestic sales. 

(27)  The  Malaysian  exporters  made  additional  claims  (concerning  namely  the 
calculation  of the cost  of manufacturing,  the classification  of  SG&A expenses, 
the treatment  of discounts, the comparability  of bicycle models, the  calculation 
of  manufacturing  overheads,)  which  could  not  be  taken  into  account,  because 

'W 

they  could  not  be  verified,  were  not  supported  by  direct  evidence,  were 
contradicted  by  the  companies  own  information,  or,  after  double  checking, 
turned out to be factually  unfounded. 

c) 

Thailand 

(28)  Four Thai companies co-operated  in the proceeding. For the majority  of bicycle 
models  exported  by  three  of  these  Thai  companies,  normal  value  was 
constructed  (recitals  36,  38,  39  of  the  provisional  duty  Regulation).  For  the 
fourth  company, normal value could be based on actual domestic prices (recital 
37 of the provisional duty Regulation). In those cases where normal value had to 
be  constructed,  it was  determined  by  adding to the manufacturing  costs  of the 
exported  models  reasonable  SG&A  and  profit  margins  (recitals  40  - 42  of the 
provisional duty Regulation). 

For the company which had no domestic sales, normal value was constructed by 
adding  to  the  cost  of  manufacture  the  weighted  average  SG&A  figure  of  the 
three  other  companies  and  the  weighted  average  profit  margin  of  the  two 
companies  with  reliable  profit  figures.  For  another  company,  its  own  SG&A 
margin  and  the  weighted  average  profit  margins  of  the  two  companies  with 
reliable  profit  margins  were  added  to  the  manufacturing  costs.  For  the  third 
company, its actual figures were used. 

(29)  For one Thai company, the verification  of the manufacturing  costs allocated  to 
similar bicycle models revealed  substantial  discrepancies  in the value of certain 
materials used  which the company  was unable to explain.  Since the  company's 
accounting  system  did  not  provide  a breakdown  of  material  costs  for  specific 
bicycle  models,  it  was  decided  at  the  stage  of  provisional  findings  to  allocate 
manufacturing  costs  in proportion  to the turnover  in accordance  with Article 2 
(11)  of  the  basic  Regulation.  The  company  claimed  that  applying  a  turnover 
allocation key is unfair because exports of comparable models to third countries 
were  made  at  half  of  the  average  unit  price  charged  for  exports  to  the 
Community. 

1f 

The accounting  system of the company concerned does not distinguish between 
manufacturing  costs  incurred  for  export  to  the  Community  and  for  export  to 
other  third  countries,  thus,  not  permitting  a  global  adjustment  for  the  alleged 
differences.  Thus the provisional findings and the use of the turnover as basis for 
the allocation of the manufacturing costs is confirmed. 

(30)  Another Thai company had fully  allocated a major  SG&A item to export sales. 
The  company  failed  satisfactorily  to  explain  the  nature  of  the  expenses  in 
question,  despite  the  fact  that  detailed  explanations  had  been  requested  both 
prior to and during the verification.  Consequently, for the purpose of provisional 
determinations, the expenses in question were allocated  to export  and  domestic 
sales  on  a  turnover  basis  in  accordance  with  Article  2  (11)  of  the  basic 
Regulation. The company claimed that explanations were provided  and that the 
appropriateness of the allocation could have been verified. 

In the view of the  Council, the company  did not provide  a proper  explanation. 
On  the  basis  of  available  verified  information,  it  is  impossible  to  clarify  the 
correctness or otherwise of the explanations given. Consequently, the allocation 
of the expenses in question  on the basis of the turnover to export and domestic 
sales is confirmed. 

(31)  For  the  provisional  determination,  domestic  profits  were  considered  reliable 
when  the  number  of  bicycles  sold  at  a  price  above  the  calculated  cost  of 
production  constituted more than  10% of total domestic sales. This was not the 
case for one of the Thai companies with representative domestic sales, i.e. with a 
domestic  sales  volume  which  was  higher  than  5%  of  total  export  sales. 
Whenever  normal  values had to be constructed  for  this company,  the  weighted 
average profit  margin of the two other Thai companies with domestic sales was 
consequently  applied. This company claimed that the methodology  applied here 
is not in line with the basic Regulation. 

Pursuant to Article 2 (3) (b) (ii) of the basic Regulation, the profit  margin used 
for  constructing  normal  value  should  be  based  on  the  profit  realized  on  the 
profitable  domestic  sales,  if  such  data  is  inter  alia  reliable.  After  having 
excluded  domestic  sales  which  did  not  permit  a  proper  comparison  or  which 

1£ 

were  not  made  in  the  ordinary  course  of  trade  (recitals  38  and  22  of  the 
provisional duty Regulation), the remaining profitable  sales might be so few that 
the  profits  realized  on  these  sales  might  not  constitute  a  reliable  basis  to 
calculate a profit margin for use in the constructed normal value. This is why the 
Commission  also verified  that the remaining profitable  sales were sufficient  to 
constitute a  reliable basis for the determination of the profit margin. 

This  was  considered  to  be the  case  if  the  remaining  profitable  domestic  sales 
represented  not  less  than  10 %  of  the  domestic  sales  volume  which  could  be 
used  as  a  basis  for  the  profitability  test,  whereby  the  proportion  of  profitable 
sales  was  determined  by  comparing  net  sales  prices  to  the  calculated  cost  of 
production (recitals 21, 22 and 31 of the provisional duty Regulation). The ratio 
is  the  same  as  was  applied  to  determine  whether  sales  of  particular  bicycle 
models were made in the ordinary  course of trade (recital  22 of the provisional 
duty  Regulation).  Since the profits  realized  on the  domestic  market  depend  on 
the prices charged for domestic sales, it is appropriate and consistent to apply the 
same threshold  used to determine whether  such prices constitute  an appropriate 
basis for  the normal value. A similar  approach was adopted by the Community 
institutions in earlier cases. 

Consequently,  the  Council  confirms  that  the  profit  margin  of  the  company 
concerned  was  not  reliable  and  that  constructed  normal  value  had  to  be 
calculated by applying the weighted average profit margin of the two other Thai 
producers  for  which  a reliable  profit  realized  on profitable  domestic  sales  was 
found. 

(32)  Finally,  one  Thai  exporter  made  an  additional  claim  (concerning  namely  the 
calculation of manufacturing  overheads) which could not be taken into account, 
because it could not be verified, and was not supported by direct evidence. 

"n 

2. 

Export price 

a) 

Indonesia 

(33)  One Indonesian  exporter made comments  concerning  adjustments  to the export 
price  which  cannot  be  taken  into  account,  because  they  are  not  supported  by 
direct evidence. 

The  determination  of  export  price  for  Indonesia  (recital  43  of  the  provisional 
duty Regulation) is therefore  confirmed. 

b)  Malaysia 

(34) 

It was found  during the verification  visit to one Malaysian company that part of 
the  export  sales  which  had  been  reported  by  this  company  as  direct  sales  to 
independent importers in the Community were in fact sales to a related company 
in Taiwan which  subsequently  re-sold  the products to the importers  concerned. 
Since, this  company  had  clearly  supplied  misleading  information  in respect  of 
these  transactions  -which,  in  addition,  happened  to  reflect  a  transfer  between 
related  companies-  the  prices  reported  for  such  transactions  were  disregarded 
and  the  highest  dumping  margin  found  for  a  model  sold  by  this  company  to 
unrelated  customers  was  attributed  to  those  sales  in  accordance  with  Article 
7(7)(b)  of  the  basic  Regulation  (recitals  46,  47  of  the  provisional  duty 
Regulation). 

This  company  argued  that  the actual  link  with the  Taiwanese  company  had  no 
impact on prices, and that it was treated in a discriminatory manner vis-à-vis the 
two Indonesian exporters to which Article 7 (7) (b) of the basic Regulation was 
also applied. In addition it claimed that the sales in question were made directly 
to  the  customers  in  the  Community  and  provided  copies  of  invoices  as  new 
evidence. 

It was only after publication of the provisional duty Regulation that the company 
concerned  claimed  that  the  sales  in  question  were  actually  made  directly  to 
customers  in  the  Community.  This  claim  contradicts  the  findings  of  the 
verification  which were not disputed by the company at the time. Any  differing 

n 

presentation  cannot  be  verified  at  this  stage  of  the  proceeding  and  therefore 
cannot be taken into account. 

The relationship with the Taiwanese company was first denied by the Malaysian 
company  and was only established  during the verification  on the basis of direct 
and  conclusive  evidence.  This  clearly  impeded  the  factual  investigation  by the 
Commission.  In  view  of  this  dissimulation  of  information  by  the  Malaysian 
company, it is unlikely that the relationship had no impact on prices; anyway, at 
this  stage  of the  procedure,  the  question  could  not  be  further  investigated  and 
applying article 7 (7) (b) in the above described manner is fully justified. 

As regards the comparison with the two Indonesian companies to which Article 
7  (7)  (b)  of  the  basic  Regulation  was  also  applied  (recitals  28,  68  of  the 
provisional  duty  Regulation),  there  is  no  serious  ground  to  complain  of 
discriminatory  treatment.  The  application  of  Article  7  (7)  (b)  of  the  basic 
Regulation was based on the merits of each case, thereby reflecting the degree of 
co-operation and the degree to which necessary information  was not provided or 
could  not  be  verified  or  the  extent  to  which  misleading  information  was 
submitted. 

(35)  One  Malaysian  company  argued  that  for  establishing  the  free-at-Community-
frontier  price  for  its  export  sales  to  the  Community,  the  Commission  should 
have  included  a  mark-up  added  by  its  sales  agent.  That  company  never 
substantiated  its claim. However, the agent  for  the company  concerned  already 
received  a commission  fee  which was taken into consideration  and  it remained 
unclear  which  transactions  were  made  via  the  agent,  since  sales  were  also 
directly  invoiced  to customers  in the  Community.  Therefore,  the calculation of 
the free-at-Community-frontier price for  the exports of the company  concerned 
is confirmed. 

(36)  The Malaysian exporters made additional  claims (concerning  namely the nature 
of certain deductions, the treatment of certain bank charges and letters of credit 
charges)  which  could  not  be  taken  into  account,  because  they  and  were  not 
supported by direct evidence. 

19 

c) 

Thailand 

(37) 

In its questionnaire response one Thai company  stated that it was not providing 
any  guarantee/warranty  to  its  customers  in  the  Community.  It  was  discovered 
during  the  verification  that  it agreed  with  one of  its customers that  spare  parts 
equivalent  to  1%  of  the  invoice  value  were  shipped  with  each  order  free  of 
charge.  It  was  also  found  that  a  significant  number  of  major  customers  also 
received  spare  parts  free  of  charge.  Such  discounts  were  given  in  lieu  of  a 
guarantee. 

Since  such  sales  conditions  are a determining  factor  for  the  export  prices,  [the 
actual value of the spare parts shipped is irrelevant. Having received misleading 
information,  the  Commission  had  to  determine  the  deduction  for  agreed 
discounts  on the basis of the facts  available. The most tangible  and  reasonable 
basis  being  the  agreed  terms  identified  above,  a  1%  adjustment  for  agreed 
discounts was deducted from the export price. 

The  company  argued  that  this  adjustment  was  made  without  any  apparent 
justification,  since  the  Commission  received  a  summary  listing  of  all  cases 
where spare parts were given free  of charge to customers in the Community, on 
the basis of which a negligible adjustment would have been required. 

Although  a  listing  of  customers  and  corresponding  'warranty'  amounts  was 
provided by the company, this was done only towards the end of the verification 
when  a  satisfactory  clarification  of  the  complete  situation  was  no  longer 
possible.  Since  no  other  direct  evidence  supports  the  company's  claim,  it  is 
confirmed  that,  having  received  misleading  information,  the  deduction  for 
agreed  discounts  was  correctly  determined  on  the  basis  of  the  facts  available 
(Article 7 (7) (b) of the basic Regulation). Any lower deduction would constitute 
a premium for non co-operation. 

The adjustment  made for agreed discounts is therefore  confirmed. 

(38)  Some  Thai  exporters  made  claims  (concerning  namely  the  allocation  of 
transportation costs, the calculation of packing costs, ) which either could not be 
taken into account, because they could not be verified  and were not supported by 

zo 

direct  evidence,  or  which  are  contradicted  by  direct  evidence  provided  by  the 
company concerned. 

3. 

Comparison 

a) 

Indonesia 

(39)  One Indonesian  company  sold bicycles  for  export to the Community  through a 
related  trading  company  located  in  Japan.  In  the  provisional  determinations, 
export  prices  for  that  exporter  were  established  by  reference  to  the  prices 
actually  paid  or  payable  to  the  related  trading  company  in  Japan,  while  the 
Community  investigating  authorities  indicated  their  intention  to  review  the 
appropriateness of that approach (recital 44 of the provisional duty Regulation). 

(40) 

It  has  been  determined  that  because  of  the  relationship  between  the  two 
companies, the prices charged by the producing company to the trading company 
are  not  reliable.  To  establish  a  reliable  export  price  to  the  Community  from 
Indonesia, the  price  charged  from  Japan  to the  Community  was adjusted  to  an 
ex-Indonesia level. As the related trader's functions  can be considered  similar to 
those  of a trader  acting  on a commission  basis, an adjustment  of 6%, based on 
the  companies  own  SG&A  rate  and  a  reasonable  amount  for  profits,  was 
deducted  from  the  prices  charged  by  the  related  company  to  independent 
customers  in the  Community.  This figure  was considered  reasonable  given  the 
degree of the related trader's involvement of the selling activities of the exporter. 
No  information  was  provided  which  would  indicate  that  this  figure  is 
inappropriate.  Thus,  for  the  purpose  of  definitive  determinations,  the  export 
prices were adjusted  accordingly. 

(41) 

In the provisional determinations (recital 56 of the provisional duty Regulation), 
some  adjustments  were  disregarded  in  view  of  their  insignificant  character. 
Upon  request  of  the  companies  concerned,  the  Commission  reconsidered  its 
appreciation.  It  appeared  that  in  some  cases,  the  insignificant  character  of  the 
respective adjustments  had been determined in relation to the export price or the 
normal  value  separately.  However,  in  accordance  with  previous  practice,  it 
appears to be more appropriate to consider adjustments  to be de minimis only if 

f) 

the difference  between the percentages to be deducted from the export price and 
the  normal  value  respectively  is  less  than  0.5  %.  On  this  basis,  certain 
adjustments  which were considered as insignificant  at the provisional stage were 
now taken into account. The calculations were revised accordingly. 

(42) 

In its provisional  determinations (recital  53 of the provisional  duty Regulation), 
the Commission rejected requests for adjustments  for credit costs on the grounds 
that no evidence was provided that the credit granted was part of the sales terms 
agreed with the buyers of the goods at the date of sale and therefore  could have 
affected  the price paid or payable on the domestic market. 

Two  Indonesian  companies  and  the  AIPI  reiterated  their  request  for  such  an 
adjustment  and stated that credit terms of 90 to 120 days are commonly accepted 
business  conditions  in  Indonesia  which  therefore  do  not  need  to  be  explicitly 
included  in the terms of sale. However, the only evidence presented  to  support 
this claim was a reference to the accounts receivable of the companies concerned 
which did not show such a clear pattern. Thus, it is not proven that prices were 
set on the basis of such alleged commonly accepted business conditions. 

Consequently, it is confirmed  by the Council that an adjustment  for credit costs 
is not warranted. 

(43) 

In  the  provisional  duty  Regulation  (recital  55)  requests  for  adjustments  for 
advertising  and promotion  expenses were rejected  because  such promotion  and 
advertising  costs belong to the category  of overheads and general expenses,  for 
which  allowances  are  not  generally  made.  Two  companies  reiterated  their 
request for an adjustment  for advertising and promotion expenses. They claimed 
that  these  cost  differences  between  export  and  domestic  sales  are  effectively 
allowable as OEM or level of trade adjustments. 

As regards an adjustment  for  sales made on an OEM basis, such claim  was not 
explicitly made in the responses to the questionnaire submitted by the companies 
concerned,  nor  was  it  substantiated  despite  specific 
instructions  in  the 
questionnaire to claim and substantiate any request for deductions  if applicable. 
Furthermore, the  substantive  requirements  for  such an adjustment  are  not  met: 

ze 

none of the export  sales of the Indonesian  exporters  concerned  were made  at a 
level  which  would  constitute  an  OEM  sale,  i.e.  normally  a  level  between 
manufacture  and  distribution..  These  sales  were  made  at  a  level  on  the 
Community  market  the  function  of  which  is,  in  substance,  only  that  of 
distribution. Thus, no appropriate (OEM) adjustment  is required in this respect. 

In  examining  this  OEM claim,  it was found  that the  substantive  requirements 
for a level of trade adjustment  were not met, as sales appeared to be made to a 
similar  mix  of  customers  on  both  the  export  and  the  domestic  market.  In  any 
event, the Indonesian exporters concerned did not make any distinction between 
sales  at  different  levels  of  trade.  In  fact,  no  significant  differences  appeared 
during the investigation in the levels of trade at which export and domestic sales 
were made. Therefore,  no level of trade adjustment  is necessary  on the basis of 
the information available. 

(44)  The  Indonesian  exporters  made  some  additional  claims  (concerning  namely 
allowances  made  to account  for  differences  in physical  characteristics,  the  rate 
applied for an allowance for duty draw back and the deduction of an amount for 
duty  draw  back  in  the  case  of  constructed  normal  value)  which  could  not  be 
taken  into  account,  because  they  could  not  be  verified,  were  not  supported  by 
direct evidence, or, after double checking, turned out to be unsubstantiated. 

b) 

Malaysia 

(45) 

In  the  provisional  determination  it  was  found  that  the  domestic  SG&A  figure 
used  for  the  construction  of  normal  value  included  direct  selling  expenses  for 
which adjustments  had to be made. However, no such deduction was  sufficiently 
substantiated  (recital  57  of  the  provisional  duty  Regulation)  and,  therefore, 
claims  for  adjustment  to  the  normal  value  for  direct  selling  expenses  were 
rejected.  However, adjustments  to the export price were made, where necessary, 
for  one  or  several  of  the  following  selling  expenses:  transport,  insurance, 
handling, loading and ancillary costs, credit costs and bank charges, guarantees, 
commissions paid to agents and salaries paid to salesmen. 

zi> 

(46)  The other Malaysian exporters considered that the comparison was unfair  since 
they  were  deprived  of  otherwise  justifiable  adjustments  (such  as  for  direct 
selling  expenses)  because  the  only  co-operating  Malaysian  producer  with 
domestic  sales  was  not  sufficiently  motivated  to provide  a proper  reply  to  the 
questionnaire and to ensure the necessary co-operation during the verification. 

The Malaysian producer in question actually replied to the questionnaire, agreed 
to  and  was  subject  to  a  verification.  Being  directly  related  to  an  exporter  of 
bicycles to the Community, it had a clear incentive to co-operate properly with 
the  verification.  However,  this  company  failed  to  provide  supporting  evidence 
for  its claims or gave contradictory  explanations. In addition, some  information 
which was not reported in the response to the questionnaire was discovered only 
during the verification. 

The Council nevertheless recognises that given the very special circumstances of 
this  case, it  is appropriate  to deduct  a reasonable  amount from the  constructed 
normal  values  of  those  three  Malaysian  exporters  who  are  not  related  to  the 
domestic  producer/seller  in  question.  The  calculations  have  been  revised 
accordingly.  As  regards  the  related  export  and  domestic  producers,  it  was  the 
responsibility  of  these  two  companies  to  provide  the  necessary  and  verifiable 
information  and supporting evidence which they failed to do. Therefore, no such 
additional adjustment  can be made to the constructed normal value of the related 
exporter. 

(47) 

In  the  provisional  determination,  no  adjustment  was  made  to  normal  value  to 
account  for  credit  costs  (recital  57  of  the  provisional  duty  Regulation). 
Malaysian  exporters  requested  such  adjustment  on  similar  grounds  as  those 
invoked in relation to the adjustment  for direct selling expenses. However, there 
is no evidence that, apart from  a discount scheme which was taken into account, 
additional credit was granted as part of the sales terms agreed with the buyers of 
the  goods  at  the  date  of  sale.  Therefore  there  is  no  valid  ground  for  an 
adjustment  to normal value for credit costs. 

(48) 

In the provisional determination, no adjustment  was made to the normal value to 
account for differences  in the level of trade. In their comments at disclosure  after 

2V 

the  provisional  duty  Regulation  was  published,  the  Malaysian  exporters 
requested  to  be  granted  an  'OEM-adjustment'  in  the  form  of  a  reduced  profit 
margin for the calculation of the constructed normal value. 

Such  claim  was  not  made  in  the  response  to  the  questionnaire  nor  was  it 
substantiated  despite  specific  instructions  in  the  questionnaire  to  claim  and 
substantiate  any  request  for  deductions 
if  applicable.  Furthermore,  the 
substantive requirements for such an adjustment  are not met: the majority  of the 
export  sales of the  Malaysian  exporters  were not made  at a  level  which would 
constitue  an  OEM  sale,  i.e.  normally  a  level  between  manufacture  and 
distribution.  These  sales  were  made  to  a  level  on  the  Community  market  the 
function  of  which  is,  in  substance,  only  that  of  distribution.  From  the 
information  available,  no  clear  and  distinct  pricing  pattern  existed  for  export 
transactions  to  the  manufacturer  concerned  as  compared  with  sales  to 
distributors  in  the  Community.  Thus,  no  appropriate  (OEM)  adjustment  is 
required in this respect. 

In  examining  this  OEM  claim,  it  was  it  was  found  that  the  substantive 
requirements for a level of trade adjustment were not met as sales appeared to be 
made to a similar mix of customers in both the export and the domestic market. 
In  any  event,  the  Malaysian  domestic  seller  did  not  make  any  distinction 
between  sales  to  wholesalers  and  retailers.  Furthermore,  no  significant 
differences  appeared  during  the  investigation  in  the  levels  of  trade  to  which 
export and domestic sales were made. Therefore  no level of trade adjustment  is 
necessary on the basis of the information available. 

(49)  The Malaysian exporters made additional  claims (concerning namely the nature 
of  'technical  assistance'  fees,  the  treatment  of  certain  commission  interests, 
double  counting  of  certain  commissions,  adjustment  for  forwarding  costs,  a 
rounding difference,  the allocation of packaging costs) which either could not be 
taken  into  account,  because  they  could  not  be verified,  were  not  supported  by 
direct  evidence,  or,  after  double  checking,  were  taken  into  account.  The 
calculations were revised accordingly. 

àS 

c) 

Thailand 

(50) 

In the provisional determination, no adjustment  was made to the normal value to 
account for differences  in the level of trade. In their comments at disclosure  after 
the provisional  duty  Regulation  was published,  Thai  exporters  requested  to be 
granted  an  'OEM-adjustment'  and  claimed  that  they  had  requested  such 
adjustment  from the beginning of the proceeding. 

In a covering letter which accompanied the questionnaire responses of three Thai 
companies, these  producers  requested  in  imprecise  terms  an  OEM  adjustment. 
Such claim was not explicitly made in the response to the questionnaire nor was 
it  substantiated  despite  specific  instructions  in  the  questionnaire  to  claim  and 
substantiate  any  request  for  deductions 
if  applicable.  Furthermore,  the 
substantive requirements for such an adjustment  are not met: the majority  of the 
export  sales  of  the  Thai  exporters  were  not  made  at  a  level  which  would 
constitute  an  OEM  sale,  i.e.  normally  a  level  between  manufacture  and 
distribution.  These  sales  were  made  to  a  level  on  the  Community  market  the 
function  of  which  is,  in  substance,  only  that  of  distribution.  From  the 
information  available  to  the  Commission,  it  appears that  no  clear  and  distinct 
pricing  pattern  existed  between  exports  to  the  manufacturer  concerned  as 
compared  with  sales  to  distributors  in  the  Community.  Thus,  no  appropriate 
(OEM) adjustment  is required in this respect. 

In  examining  the  OEM  claim,  it  was  it  was  found  that  the  substantive 
requirements  for a level  of trade adjustment  are not met as sales appeared  to be 
made to a similar mix of customers on both the export and the domestic market. 
In any event, the Thai exporters concerned did not make any distinction between 
levels  of  trade.  Furthermore,  no  significant  differences 
sales  to  different 
appeared during the investigation in the levels of trade, namely distributors and 
retailers, to which export and domestic  sales were made. Where domestic  sales 
were made directly to end-users this had no apparent effect  on prices. Therefore, 
no  level  of  trade  adjustment  is  necessary  on  the  basis  of  the  information 
available to the Commission. 

z& 

(51)  For the provisional  determinations, the Commission  partially  rejected  a request 
by one Thai company for an adjustment  to the normal value for the salaries paid 
to  its  salesmen  because  of  misleading  information  and  lack  of  supporting 
evidence.  The  company  reiterated  its  request  for  the  full  adjustment  and  gave 
new explanations. 

(52) 

However,  the  company  did  not  submit  supporting  evidence  for  its  new 
explanations.  Since  there  was  no  direct  evidence  available  to  support  the 
company's  claim  either,  the  partial  rejection  of  its request  is confirmed  by  the 
Council. 

In  the  provisional  duty  Regulation  (recital  65)  it  was  stated  that  a  number  of 
claims  for  adjustments  of  various  types  were  disregarded  in  view  of  their 
insignificant  character  (namely  adjustments  with  an  ad  valorem effect  of  less 
than  0.5%).  Some  Thai  companies  claimed  that,  in  fact,  not  all  insignificant 
adjustments  were to be disregarded.  The Commission re-examined  the situation 
and  found  that,  in  this  particular  case,  export  prices  are  compared  with 
constructed  normal  values  which  include  weighted  average  SG&A  and  profit 
margins. When calculating these SG&A and profit ratios it had to be taken into 
account  that  adjustments  for  the  same  cost  items  were  sometimes  either 
insignificant  or  significant  depending  on  the  respective  company.  In  this 
particular  case,  it  was  found  administratively  more  practicable  to  deduct  all 
justified  adjustments  whether  significant  or  not.  The  calculations  were 
accordingly re-examined and where necessary revised. The global value of these 
adjustments  was  between  0.37%  and  4.45%%  according  to  the  company 
concerned. 

(53)  The  Thai  exporters  made  additional  claims  (concerning  e.g.  adjustments  for 
credit  costs, deduction  of certain export  expenses, calculation  of  an  adjustment 
for  salesmen's  salaries,)  which  either  could  not  be  taken  into  account,  because 
they  could  not be verified  and  were not  supported  by  direct  evidence, or,  after 
double checking, were taken into account. Insofar as these claims could be taken 
into account, the calculations were accordingly revised. 

2} 

4. 

Dumping margin 

(54)  Like  the  weighted  average  dumping  margins  which  were  provisionally 
established  (recital  66),  definitive  dumping  margins  for  each  producer  were 
expressed as a percentage of the free-at-Community-frontier  price. 

(55)  Applying the same methodology as explained in the provisional duty Regulation 
(recital 66 of the said Regulation) and after having made the necessary revisions 
to the dumping calculations, the weighted average dumping margins for the fully 
co-operating producers are: 

a) 

b) 

Indonesia 
PT Insera Sena 
PT Jawa Perdana Bicycle Industry 
PT Wijaya Indonesia Makmur Bicycle Industries 

Malaysia 
Akoko Sdn. Bhd. 
Berjaya Cycles Sdn Bhd 
Greenworld  Systems Sdn Bhd 
Lerun Group Industries Berhad 
Rolls Rally Sdn Bhd 

c) 

- 

. 

Thailand 
Bangkok Cycle Industrial Co. Ltd 
Siam Cycles MFG. Co. Ltd 
Thai Bicycle Industry Co. Ltd 
Victory Cycle Co. Ltd 

0.4% 
27.7% 
21.9% 

23.1% 
37.3% 
27.7% 
37.3% 
25.3% 

17.7% 
38.9% 
13.0% 
13.3% 

(56)  For the two Indonesian companies which did not sufficiently  co-operate with the 
investigation,  the  methodology  applied  in  the  provisional  duty  Regulation 
(recital 68) is confirmed:  the dumping margin for the two companies concerned 
is based on the arithmetical average between the highest margin found for a fully 
co-operating  Indonesian producer and the residual  duty. The resulting  dumping 
margins are: 

2% 

PT Federal Cycle Mustika 

PT Toyo Asahi Bicycle Industries 

28.4 % 

28.4 % 

E. 

COMMUNITY INDUSTRY 

(57)  The AIPI and Thai producers questioned the correctness of the level of  support 

calculated by the Commission. 

The Council notes that those producers which expressly supported the complaint 
account  for  55.3%  of  the  Community  production  of  bicycles,  and  therefore 
represent  a major  proportion  of the Community  industry  within the meaning of 
Article  4  (5)  of  the  basic  Regulation  (recital  72  of  the  provisional  duty 
•  Regulation).  Those  producers  which  were  selected  for  a  sample  which  was 
necessary in view of the large number of producers and which fully  co-operated 
represented 36.5% of the'Community's bicycles production. 

The  AIPI  also  argued  that  companies  which,  in  their  opinion,  did  not  suffer 
injury  should not be considered as complainants. In response to this argument, it 
has  been  noted  that  the  question  of  whether  individual  Community  producers 
have been injured  is irrelevant when examining whether such producers  qualify 
as part  of  the  Community  industry  within  the  meaning  of  Article  4  (5)  of  the 
basic  Regulation.  Furthermore,  it  should  be  recalled  that  injury  has  to  be 
determined  on a global  basis, i.e.  for  the  Community  industry  as a whole  or a 
major proportion thereof and not for individual Community producers. 

(58)  The AIPI questioned both the legality of the use of a sampling technique and the 
actual  selection of the sample. In particular,  it has been claimed that the use of 
production  and  sales  data  led to a flawed  sample because  sales  and  production 
trends  are  also  the  basis  for  the  injury  determination  (recitals  88  -  90  of  the 
provisional duty Regulation). 

The Council  notes that the basic  Regulation does not explicitly  provide  for  the 
use of sampling techniques for the purpose of injury determinations. However, it 
does  not  require  the  Commission  to  investigate  each  complaining  Community 
producer  either  (Article  4).  In  accordance  with  previous  practice  and  for  the 

23 

reasons  already  indicated,  it  was  decided  to  select  a  sample  of  Community 
producers  on  which  injury  determinations  were  based.  The  Council  notes  that 
the  sample  was  selected  exclusively  according  to  the  size  and  geographic 
location  of the  companies  concerned.  The number  of  companies  selected from 
each  of  the  Member  States  thus  reflects  the  size  of  bicycle  production  in  that 
Member  State. No trends or financial data were taken into consideration  in the 
selection  which  was  exclusively  based  on  the  volume  of  production  of  the 
companies concerned during the investigation period. 

Therefore,  it  is concluded  that  the  Commission  was entitled  to  use  a  sampling 
technique,  which  yielded  a  representative  selection  of  Community  producers. 
The findings  and conclusions set out in recitals 72 to 74 of the provisional duty 
Regulation are therefore  confirmed. 

F. 

INJURY 

1. 

Cumulation 

(59)  As  no  comments  were  received  concerning  cumulation,  the  findings  and 
conclusions  set  out  in recitals  75 to  79 of the  provisional  duty  Regulation  are 
confirmed. 

2. 

Prices of dumped imports 

(60)  The  AIPI  claimed  that  Indonesian  bicycles  were  not  undercutting  prices  of 

Community industry bicycles. 

These  claims  are  contradicted  by  the  detailed  price  comparisons  made  by  the 
Commission  (recitals  82 - 86 of the provisional  duty  Regulation)  in respect  of 
which  the  following  comments  were  made  after  the  imposition  of  provisional 
measures: 

(61)  One  Indonesian  producer  argued  that  model  comparisons  should  have  been 
based  on  the  full  set  of  specifications.  However,  it  did  not  indicate  in  which 
respect  the  methodology  applied  by the  Commission  yielded  unreliable  results 
nor why a different  approach would have been more reliable. 

5 0 

(62)  One  Malaysian  company  argued  that  the  methodology  applied  was  unreliable 
because  the  value  of  the  parts  used  for  comparing  different  bicycle  models 
account  for  only  10-20%  of  the  total  value  of  the  bicycle  and  it  leads  to 
significant  fluctuations  in  the  undercutting  margins  found  for  two  comparable 
bicycle  groups.  However,  it  has  not  been  demonstrated  that  bicycle  models 
classified  in  the  respective  groups  were  actually  not  comparable  and  that  a 
different  methodology would yield significantly  different  results. Fluctuations in 
undercutting  margins as such may simply  indicate variable pricing patterns and 
therefore  do not prove that the comparison and grouping of certain bicycles was 
not justified. 

(63)  As  a  result  of  the  foregoing,  the  methodology  set  out  in  the  provisional  duty 

Regulation (recitals 82-86) is confirmed. 

(64)  Some technical  adjustments  were made to the undercutting  calculation upon the 

request of another Malaysian company and proprio motu by the Commission. 

(65)  The  resulting  individual  undercutting  margins  for  the  fully  co-operating 
producing  exporters  expressed  as  a  percentage  of  the  Community  producers 
prices,  undelivered  to  distributors,  vary  from  18.2%  to  41.4%  for  producing 
exporters  in  Indonesia,  from  29.7% to  38.4% for  those  in  Malaysia,  and  from 
15.3% to 30.7% for those in Thailand. 

G. 

SITUATION OF THE COMMUNITY INDUSTRY 

(66)  No  further  comments  were  received  concerning  the  injury  sustained  by  the 
Community  industry.  The findings and  conclusions  set  out  in  the  provisional 
duty Regulation (recitals 87-96) that the Community industry has been  suffering 
material  injury  within  the  meaning  of  Article  4  of  the  basic  Regulation,  are 
therefore  confirmed. 

H. 

CAUSATION 

(67)  Thai  exporters  claimed  that  the  precarious  profitability  situation  of  the 
Community  industry  cannot  be  related  to  dumped  imports  but  was  caused  by 

51 

high  investments  by  the  Community  industry  made  during  the  investigation 
period (recital 94 of the provisional duty Regulation). 

The increase of investments by  125% in the investigation period as compared to 
1992  can,  to  a large  extent,  be  attributed  to  two  Community  producers  which 
either  built  new  production  facilities  or  improved  existing  ones.  Even  if  these 
two  producers  were  excluded  from  the  profitability  determination,  the  average 
profitability  figure for the investigation period would only change marginally. 

(68)  As indicated  in the provisional  duty  Regulation  (recital  101), it was found  that 
bicycle  imports  reported  in  EUROSTAT  as coming  from  Vietnam  are  actually 
other  imports  originating  in  the  People's  Republic  of  China.  Indonesian 
exporters claimed that this fact  did not preclude  such imports from having had 
an injurious  effect.  Imports of bicycles declared as originating in Vietnam had a 
smaller total volume in  1993 than the imports under consideration. Furthermore, 
no indication  was found  that these bicycles were sold at prices as low as those 
for  bicycles from the  countries under  investigation.  Price information  available 
in EUROSTAT cannot be referred  to since the statistics  only distinguishes  two 
subheadings  which  do  not  reflect  the  variety  and  heterogeneity  of  bicycle 
specifications  and  accordingly  prices.  In  these  circumstances,  no  clear 
assessment of a possible injurious  impact of the imports allegedly  coming from 
Vietnam  can  be  made.  Although  these  imports  could  have  contributed  to  the 
difficult  state  of  the  Community  industry,  this  does  not  affect  the  conclusion 
made in the provisional  duty  Regulation  that  imports of bicycles  originating  in 
Indonesia,  Malaysia  and  Thailand  caused  material  injury  to  the  Community 
industry. 

(69)  Since no other new arguments were submitted in this respect, on the basis of the 
findings made  and conclusions  reached  in recitals  97 to  109 of the  provisional 
duty  Regulation  it is definitively  concluded  that the aggregate  dumped  imports 
from  the  three  countries  in  question,  given  the  substantial  increase  in  import 
volumes and considerable  degree of price undercutting, taken  in isolation, have 
caused material injury to the Community  industry. 

3 c 

I. 

COMMUNITY INTEREST 

(70)  Neither  new  evidence  nor  new  arguments  were  submitted  as  to  whether  the 

Community interest call for intervention. 

In  this  respect  the  Council  notes  that  without  measures  against  the  dumped 
imports and the resulting unfair  competition on the Community market, there is 
an imminent danger that even more Community producer will face the prospect 
of  closure.  Consumers  will  therefore  without  measures  have  at  least  in  the 
medium term less sources of supply. Although consumer prices of the imported 
products will  increase, the  global  effects  on the consumer will be limited  since 
there  is  still  a  variety  of  suppliers  who  are  not  subject  to  any  anti-dumping 
measures.  In this  respect  it  should  be  noted  that  no  comments  or  submissions 
were received from consumer organizations. 

In view of these considerations and for the reasons mentioned  in recitals  110 to 
117 of  the  provisional  duty  Regulation,  no  compelling  aspects  concerning  the 
Community  interest were found  on the basis of which the Council could clearly 
conclude that it is not in the Community interest to apply measures. 

J. 

DUTY CALCULATION 

(71)  The  AIPI  claimed  that  individual  duty  rates  should  have  been  established  for 
different  types  of  bicycles.  It  argued  that  the  application  of  weighted  average 
rates as established  in the provisional duty Regulation (recitals 66 and  119) has 
the effect  of setting the duty rates at a level above the dumping or injury  margins 
for some bicycle models in breach of Article 13 (3) of the basic Regulation. 

It is the normal practice  of the Community  institutions, in accordance  with the 
basic Regulation, to establish a single duty rate for the like product concerned. It 
has not been disputed in the present case that all types of bicycles originating in 
Indonesia,  Malaysia  and  Thailand  and  sold  in  the  Community  do  form  one 
single  like product (recital  12). There is therefore  no reason to deviate  from  the 
approach  followed  at the  provisional  stage. The ad valorem  duty  rates  are thus 
based on a weighted  average of the dumping margins established  for the bicycle 

33 

models sold for  export to the Community  and expressed  as a percentage  of the 
free-at-Community-frontier  price.  The  duty  amount  collected  for  a  particular 
bicycle  model  may  be  higher  or  lower  than  the  dumping  margin,  but  on  an 
overall  basis, the duty  rates  reflect  exactly  the  dumping  margins  found  for  the 
like product in strict accordance with  Article  13 (3) of the basic Regulation. In 
addition,  given  the  uncertainties  for  clearly  defining  types  or  categories  of 
bicycles  (recital  12  of  the  provisional  duty  Regulation),  setting  separate  duty 
rates  for  types  or  categories  would  render  the  enforcement  of  the  measures 
administratively impossible. 

(72)  For the purpose  of establishing  the level of definitive  duty, and in applying the 
same methodology already applied at the provisional stage, account was taken of 
the  dumping  margins  found  and  the  level  of  duty  necessary  to  eliminate  the 
injury  sustained by the Community industry. 

(73^ 

It was confirmed  at the  definitive  stage that  for  all  companies  the  undercutting 
margin  was higher  than  the  dumping  margin  found,  both  being  expressed  as a 
percentage  of the  CIF Community  frontier  price, and  that  given  the  precarious 
financial  situation  of the Community  industry, even higher rates of duty would 
be  required  to  fully  eliminate  injury  (recital  119  of  the  provisional  duty 
Regulation).  Consequently,  in  accordance  with  Article  13  (3)  of  the  basic 
Regulation,  the  level  of  the  duty  rates  should  be  based  on  the  level  of  the 
dumping margins. 

(74)  With  regard  to  one  Indonesian  company,  it  is  confirmed  that  the  dumping 
margin  established  is  de  minimis  and  this  company  should  consequently  be 
excluded  from  the  scope  of  the  duty  imposed  on  imports  originating  in 
Indonesia. 

(75) 

It  is  also  confirmed  that  for  producers  in  the  three  countries  concerned  who 
neither  replied 
to  the  Commission's  questionnaire  nor  otherwise  made 
themselves  known,  it  is appropriate,  for  the reasons  outlined  in recitals  (69) to 
(71) of the provisional duty Regulation to establish the level of definitive  duty at 
the weighted  average of the highest dumping margins found  for bicycle models 
exported to the Community in representative quantities. 

*[ 

K. 

DEVELOPMENTS AFTER THE INVESTIGATION PERIOD 

(76) 

from 

In the provisional  duty  Regulation  (recitals  122-125), the  Commission  rejected 
from 
requests 
the 
representatives  of 
investigation period should be taken into account. 

Indonesian,  Malaysian  and  Thai  companies  and 

import  developments  after 

these  countries,  that 

All Malaysian and Thai producers reiterated their claim that up-to-date trends of 
import  volumes  after  the  investigation  period  should  have  been  taken  into 
account.  They  contend  that  the  basic  Regulation  does  not  prevent  the 
Community  Institutions  from  doing  so,  and  that  such  extended  assessment  is 
necessary  to show the actual and persisting causation of injury  through dumped 
imports.  In  addition,  Thai  exporters  claimed  that  in  past  investigations  the 
Community  institutions  have  accepted  to take  into  consideration  developments 
after the investigation period. 

It is the Community institutions' constant practice, as now laid down in Article 6 
(1) of Regulation (EC) No 3283/94, to limit findings  to the investigation period 
unless the effects  of new circumstances are manifest, undisputed, lasting, and not 
open to manipulation or do not stem from deliberate action of interested parties. 

Concerning  the  alleged  decrease  of  import  volumes  after  the  investigation 
period, this may stem from deliberate strategies of the economic operators in the 
exporting countries and in the Community In addition, there is no assurance that 
imports  volumes  will  remain  at  such  levels.  Reference  was  also  made  to  a 
change  in  the  GSP  preferential  duty  rate  applying  to  the  imports  in  question 
which occurred in  1995. However, the possible effects  which the changes in the 
GSP system may have on prices in the Community is completely unknown. 

For these  reasons  it  is confirmed  that  in the present  case the  definitive 
the  investigation 

determination  should  be  based  on  the  findings  relating  to 
period. 

3J" 

L. 

GATT REQUIREMENTS CONCERNING DEVELOPING  COUNTRIES 

AND UNDERTAKINGS 

(77)  Malaysian  exporters  claim  that  a  more  lenient  treatment  in  the  application  of 
anti-dumping rules should have been granted to them because they are located in 
a  developing  country.  In  this  connection,  the  Malaysian  and  Thai  companies 
refer  to  Article  15  of  the  Agreement  on  Implementation  of  Article  VI  of  the 
General  Agreement  on  Tariffs  and  Trade  1994  ('1994  AD-Agreement':  'It  is 
recognized that special regard must be given by developed country Members to 
the  special  situation  of  developing country  Members  when  considering the 
application of  anti-dumping measures under this  Agreement. Possibilities of 
constructive remedies provided for by this Agreement shall be explored before 
applying anti-dumping duties where they would affect the essential interests of 
developing country Members. ') and complain that this Article was not respected. 
The  Malaysian  exporters  referred  in  this  respect  to  a  Report  of  the  GATT 
Working  Party  on  'Acceptance  of the Anti-dumping  Code'  (Report  adopted  on 
31 November  1975, 22S/27, 28, para 4) and to a Decision adopted by the GATT 
Committee  on  Anti-dumping  Practices  (ADP/2,  Decision  of  5  May  1980, 
27S/16, 17). 

It  follows  from  Article  18.3 of the  1994 AD-Agreement  that  Article  15 of the 
1994 AD-Agreement  is not applicable to the present proceeding.  In any event, 
Article  15  by  no  means  entails  an  obligation  for  the  Community  to  change 
calculation  methods  as was  confirmed  in the  recent  Cotton  Yarn  Panel  for  the 
former  Article  13  of  the  Agreement  on  Implementation  of  Article  VI  of  the 
General  Agreement  on  Tariffs  and  Trade  1979  (1979  AD-Code)  which  is 
similarly worded as Article  15 of the 1994 AD-Agreement. 

As  also  confirmed  in  the  Cotton  Yarn  Panel,  the  said  Decision  of  the  GATT 
Committee  on Anti-dumping  Practices  cannot  change the content  of Article  13 
of  the  1979  AD-Code.  The  report  mentioned  by  the  Malaysian  exporters  is a 
preparatory  document  which  has  no  intrinsic  legal  value  and  thus  does  not 
provide any guidance in the present case. 

3£ 

According to Article  15 of the  1994 AD-Agreement,  constructive  remedies are 
those  provided  for  'by  this  Agreement'  which,  in  practice,  are  undertakings. 
Actually  no  undertakings  were  offered  by  Indonesian  or  Thai  companies. 
Malaysian  companies  indicated  their  readyness  to  discuss  the  terms  of 
undertakings, but made a specific offer  only for a quantitative undertaking. 

As regards price undertakings, it would be impractical  and unrealistic to accept 
these  undertakings  in  the  present  case  because  of  the  enormous  number  of 
different  bicycle models and the frequent  changes of specifications  which would 
render monitoring undertakings impossible. 

As to quantitative undertakings, it was examined in the present case whether the 
quantitative  undertaking  offered  could  remedy  the  injurious  effect  of  dumping 
and  could  be  satisfactorily  monitored.  The  co-operating  Malaysian  exporters 
argued  that  a  non  injurious  volume  could  be  determined  by  reference  to  the 
criteria  contained  in  Article  5.8  of  the  1994  AD-Agreement,  namely  the  3% 
threshold  as  in  relation  to  the  total  imports  into  the  Community  of  the  like 
product, an offer  which, it is claimed, would reduce imports from  Malaysia to a 
negligible  volume.  However,  this  approach  ignores  tha  fact  that  the  injurious 
effect  of  dumped  bicycle  imports  from  Indonesia,  Malaysia  and  Thailand  was 
assessed  cumulatively.  Furthermore,  the  undertaking  was  offered  on  behalf  of 
Malaysian  exporters which do not account  for  the totality  of Malaysian  bicycle 
exports to the Community. In these circumstances, it is impossible to determine 
which  import  volume  to  be  allocated  to  the  exporters  in  question  could 
effectively  remedy  the  injurious  effects  of dumping  and  it  is  doubtful  whether 
such undertaking could be satisfactorily  monitored. 

Therefore, the Commission considers neither price nor quantitative undertakings 
acceptable in this case. Finally, it should be recalled that the Community would 
not be obliged under Article  15 to pursue this option in the circumstances of the 
present  case,  since  it  was  not  demonstrated  that  applying  anti-dumping  duties 
would affect  the essential interests of the exporting countries. 

34 

M. 

COLLECTION OF THE PROVISIONAL DUTY 

(78) 

In  the  light  of  the  seriousness  of  the  injury,  and  in  view  of  the  high  level  of 
dumping, the Council considers that the provisional  duty  should be  definitively 
collected at the level of the definitive duties. 

HAS ADOPTED THIS REGULATION: 

Article J 

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

1. 
within CN code 8712 00 and originating in Indonesia, Malaysia and Thailand. 

The rates of anti-dumping duty applicable to the  net-free-at-Community-frontier 

2. 
price, before duty, shall be as follows: 

2£ 

Country 

Products manufactured by 

Rate of 
duty 

Taric 
additional 
code 

Indonesia: 

-  P.T. Federal Cycle Mustika 
-  P.T. Jawa Perdana Bicycle Industry, Tangerang 
-  P.T. Toyo Asahi Bicycle Industries, Jakarta 
-  P.T. Wijaya Indonesia Makmur Bicycle 

28.4% 
27.7% 
28.4% 
21.9% 

Malaysia: 

Thailand: 

Industries, Surabaya 

-  other companies 

-  Akoko Sdn Bhd, Klang 
-  Berjaya Cycles Sdn Bhd, Kulim 
-  Greenworld Systems Sdn Bhd, Kuala Lumpur 

(previously Fairly Toraya Sdn Bhd) 

-  Lerun Group Industries Berhad, Petaling Jaya 
-  Rolls Rally Sdn Bhd, Pelabuhan Kelang 
-  other companies 

-  Bangkok Cycle Industrial Co. Ltd., Bangkok 
-  Siam Cycle MFG. Co. Ltd., Samuthprakarn 
-  Thai Bicycle Industry Co. Ltd., Samuthprakarn 
-  Victory Cycle Co. Ltd., Samuthprakarn 
-  other companies 

29.1% 

23.1% 
37.3% 
27.7% 

37.3% 
25.3% 
39.4% 

17.7% 
38.9% 
13.0% 
13.2% 
39.2% 

8859 
8861 
8859 
8862 

8863 

8864 
8865 
8866 

8865 
8867 
8868 

8869 
8870 
8871 
8883 
8872 

The  duties  shall  not  apply  to  imports  of  the product  specified  in  paragraph  1, 

3. 
manufactured  by P.T. Insera Sena, Sidoarjo, (Taric additional code 8860) 

4. 

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  (EC) 
No  2414/95  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, 

M-° 

ISSN 0254-1475 

-  COM(96) 112  final 

DOCUMENTS 

EN 

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Catalogue number  : CB-CO-96-122-EN-C 

ISBN 92-78-01732-9 

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V-7