Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 3905/88 as regards definitive anti- dumping duties on imports of polyester yarn originating in Taiwan and Turkey
Date: 1996-06-11
Institutions: European Commission
Subjects: Taiwan, Türkiye, anti-dumping duty, man-made fibre, textile fibre

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  11.06.1996 
COM(96)  228 final 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 
amending  Regulation  (EEC)  No  3905/88  as regards  definitive  anti-dumping  duties 
on imports  of  polyester  yarn  originating  in  Taiwan  and  Turkey 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

In  December  1988,  by  Regulation  (EEC)  No  3905/88,  the  Council  imposed  a  definitive 
anti-dumping  duty  on  imports  of  polyester  yarn  originating  in  the  Republic  of  Korea. 
Mexico,  Taiwan  and  Turkey. 

the 
In  October  1991,  the  Council  amended,  by  Regulation  (EEC)  No  2899/91, 
abovementioned  Regulation  and  repealed  the  definitive  anti-dumping  duty  imposed  on 
imports  into  the  Community  of  polyester  yarn  originating  in  Mexico. 

for  a  review,  which  was 

the 
In  June  1994,  following  a  request 
International  Rayon  and  Synthetic  Fibres  Committee  (CIRFS),  representing  the  majority 
of  Community  polyester  yarn  producers,  the  Commission  announced,  with  a  notice 
published  in the Official  Journal  of the European  Communities,  the initiation  of  a review 
of  Council  Regulation  (EEC)  No  3905/88  concerning  imports  of  polyester  yarn  from 
Turkey  and  Taiwan,  pursuant  to  Article  15  of  Regulation  (EEC)  No  2423/88,  the 
regulation  applicable 
(EC) 
No  384/96.  Imports  from  the  Republic  of  Korea  were  excluded  from  the  review  of  the 
measures,  which  consequently  lapsed.. 

to  Article  23  of  Regulation 

in  this  review  pursuant 

lodged  by 

The  investigation  covered  two  products:  partially  oriented  polyester  yarn  (POY)  and 
polyester  textured  filament  yarn  (PTY). 

(a)  The  investigation  on  POY  showed  that  imports  from  Taiwan  had  remained  at  a 
the 
negligible  de  minimis 
three  major  Taiwanese  producers  and  exporters  Consequently, 
there  is  no 
reasonable  indication  that  the  expiry  of  the  anti-dumping  measures  on  imports  of 
POY  originating  in  Taiwan  would  lead  to a recurrence  of  injury  or  threat  of  injury 
to  the  Community  industry';  the  measures  in  force  should  therefore  be  repealed 

though  no  measures  were  applicable  for 

level, 

However,  for  Turkey,  substantially  increased  imports  of  POY  at  consistently  low 
prices  during  the  investigation  period,  as  well  as  the  simultaneous  decline  in  the 
Community  industry's  performance,  leads  to  the  conclusion  that  the  expiry  of  the 
measures  could  only  worsen  the  situation  of  the  Community  industry  through  a 
recurrence  of  injury.  Therefore,  the  measures  in  force  for  imports  of  POY 
originating  in  Turkey  had  to  be  maintained  and,  in  the  light  of  the  findings  on 
dumping  in  the  current  investigation,  to  be  duly  adjusted 

(b)  As  far  as  imports  of  PTY  originating  in  Taiwan  and  Turkey  were  concerned,  it 
was  found  that  although  the  anti-dumping  measures  in  force  have  had  a  somewhat 
positive  effect  in  terms  of  the  volume  of  the  Turkish  and  Taiwanese  imports,  they 
did  not  prevent  the  pressure  on  Community  prices  from  continuing  Therefore, 
even  if  imports  from  other  third  countries  subject  to  anti-dumping  investigations 
may  have  had  some  injurious  effect  on  the  situation  of  the  Community  industry, 
the  fact  remains  that,  taken  in  isolation,  the  dumped  imports  from  Taiwan  and 
Turkey,  notwithstanding  the  existence  of  protective  measures,  have  continued  to 
materially  contribute  to  the  precarious  situation  of  the  Community  industry,  and 
that  in  these  circumstances,  to  allow  the  measures  to  expire  is  likely  to  further 

weaken  the Community  industry  through  a recurrence  of  injury  to this industry. 
Hence,  the  measures  in  force  for  imports  of  PTY  originating  in  Taiwan  and 
Turkey  had to be maintained  and, in the light of the findings  on dumping in the 
current investigation,  to be adjusted. 

5. 

It  is  therefore  proposed  that  the  Council  adopts  the  Regulation  annexed,  amending 
Council  Regulation  (EEC) No  3905/88  as last amended by  Council  Regulation  (EEC) 
No  2899/91,  imposing  definitive  anti-dumping  duties  on  imports  of  polyester  yarn 
originating  in the Republic  of  Korea,  Taiwan and Turkey. 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 
amending  Regulation  (EEC)  No  3905/88  as regards  definitive  anti-dumping  duties 
on  imports  of  polyester  yarn  originating  in  Taiwan  and  Turkey 

THE  COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to the  Treaty  establishing  the  European  Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against  dumped  imports from  countries  not  members  of  the European  Community(1),  and  in 
particular  Article  23 thereof, 

Having  regard  to  Council  Regulation  (EEC)  No  2423/88  of  11  July  1988  on  protection 
against  dumped  or 
the 
European  Economic  Community(2),  as last amended  by Regulation  (EC) No  522/94(3) and in 
particular  Article  15 thereof, 

countries  not  members  of 

subsidized 

imports 

from 

Having 
regard 
the  Advisory  Committee, 

to 

the  proposal 

submitted  by 

the  Commission  after  consulting 

Whereas: 

A. 

PREVIOUS  PROCEDURE 

(1) 

(2) 

B. 

(3) 

(i) 

(2) 

(3) 

(4) 

(5) 

(6) 

In  December  1988,  by  Regulation  (EEC)  No  3905/88(4),  the  Council  imposed  a 
definitive  anti-dumping  duty  on  imports  of  polyester  yarn  originating  in  the 
Republic  of Korea,  Mexico,  Taiwan  and  Turkey. 

On  1 October  1991, the Council  adopted  Regulation  (EEC) No 2899/91(5),  amending 
the  abovementioned  Regulation  and  repealing  the  definitive  anti-dumping  duty 
imposed  on  imports  into the  Community  of  polyester  yarn  originating  in Mexico. 

REVIEW  PROCEDURE 

Following the publication  in  June  1993  of  a notice(6) of the impending  expiry  of the 
measures  in  force,  the  Commission  received  a  request  for  a  review  lodged  by  the 
International  Rayon  and  Synthetic  Fibres  Committee  (CIRFS)  representing  the 
producers  of  allegedly  85% of  Community  polyester  yarn  output. 

O J N oL  56, 6.3.1996,  p.  1. 
O J N oL  209, 2.8.1988,  p.  1. 
O J N oL  66,  10.3.1994,  p.  10. 
OJ No  L  347,  16.12.1988,  p.  10. 
O J N oL  275,  2.10.1991,  p. 21. 
O J N oC  175, 26.6.1993, p. 9. 

(1) 

(5) 

(6) 

(7) 

(8) 

In  December  1993,  a  notice  of  intention  to  carry  out  a  review  of  the  anti-dumping 
measures  in  force  on  imports  of  polyester  yarn  originating  in  the  Republic  of  Korea, 
Taiwan  and  Turkey  was  published'7'. 

in  a  notice(X),  the  Commission  announced 

the  review  of 
On  16  June  1994, 
Regulation  (EEC)  No  3905/88,  pursuant 
(EEC) 
No  2423/88,  being  the  Regulation  applicable  in  this  review  pursuant  to  Article  23  of 
Regulation  (EC)  No  384/96,  and  hereinafter  referred  to  as  "the  Basic  Regulation". 

to  Article  15  of  Regulation 

Given  the  virtual  absence  of  Korean  imports  on  the  Community  market,  it  had  not 
been  shown  in  the  view  of  the  Commission  that  the  expiry  of  the  measures  would 
have  led  to  a  recurrence  of  injury.  It  was  therefore  decided  to  exclude  from  the 
review  the  measures  concerning  imports  originating  in  the  Republic  of  Korea,  which 
consequently  lapsed<9). 

The  Commission  officially  advised  the  producers,  exporters  and  importers  known  to 
be  concerned,  the  representatives  of  the  exporting  countries  and  the  complainant,  and 
gave  the  parties  directly  concerned  the  opportunity  to  make  their  views  known  in 
writing  and  to  request  a  hearing.  It  also  sent  questionnaires  to  all  parties  known  to 
be  concerned. 

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

Some  Turkish  and  Taiwanese  exporters  replied  to  the  questionnaire  and  made  their 
views  known  in  writing. 

No  importer  replied  to  the  Commission's  questionnaire. 

The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
purposes  of  a  determination  and  carried  out  investigations  at  the  premises  of  the 
following  companies: 

(a)  Community  producers 

Rhône  Poulenc,  France 
Iloechst  AG,  Germany 
Nylstar,  Germany 
Unifi,  Ireland 
Montefibre  Spa,  Italy 
Akzo  Fibres  and  Polymers  Division,  Netherlands 
La  Seda  de  Barcelona  S  A,  Spain 
Nurel  S  A,  Spain 
Exsa,  United  Kingdom 

O.I  No  C  340,  17  12.1993,  p.  15 
O.I  No  C  164,  16.6.1994,  p  4 
O.I  No  C  165,  17.6.1994,  p.  10. 

(b) 

Producers/exporters  in  the  countries  of  origin 

Taiwan 

Chung  Shing  Textile  Co.  Ltd,  Taipei 
Far  Eastern  Textiles  Ltd,  Taipei 
Hsin  Pao  Textile  Co.  Ltd,  Taipei 
Lanfa  Textile  Co.,  Taipei 
Lea  Lea  Entreprise  Co.  Ltd,  Taipei 
Nan  Ya  Plastics  Corporation,  Taipei 
Shingkong  Synthetic  Fibres  Corp.,  Taipei 
Tuntex  Distinct  Corp.,  Taipei 
Zig  Sheng  Ind.  Co.  Ltd,  Taipei 

Turkey 

Korteks-Mensucat  Sanayi  ve  Ticaret  A.S.,  Bursa 
Nergis-Tekstil  Sanayi  ve  Ticaret  A.S.,  Bursa 
Sasa-Artificial  and  Synthetic  Fibres  Inc.,  Adana 
Sifas-Sentetik  Iplik  Fabrikalari  A S .,  Bursa 

(9) 

(10) 

(11) 

C. 

1. 

(12) 

The  investigation  of  dumping  covered  the  period  from  1 July  1993  to  30  June  1994 
(the  "investigation  period"). 

All  parties  concerned  were  informed  of  the  essential  facts  and  considerations  on  the 
basis  of  which  it  was  intended  to  recommend  the  amendment  of  existing  definitive 
measures.  They  were  also  granted  a  period  within  which  to  make  representations 
subsequent  to  these  disclosures. 

Because  of  the  large  number  of  interested  parties,  the  volume  of  data  gathered  and 
analysed,  and  the  complexity  of  certain  issues,  in  particular  the  difficulties  inherent 
in  the  fact  that,  as  described  in  recitals  (12)  and  (13),  POY  is a semi-finished  product 
destined  for  the PTY  production,  the  investigation  has  exceeded  the  normal  period  of 
one  year  as  provided  for  in  Article  7(9)  of  the  Basic  Regulation. 

PRODUCT  UNDER  CONSIDERATION  AND  LIKE  PRODUCT 

DESCRIPTION  OF  THE  PRODUCT  CONCERNED 

The  products  which  are  covered  by  the  complaint  and  for  which  the  review 
investigation  was  initiated  are  partially  oriented  polyester  yarn  (POY)  falling  within 
CN  code  5402  42  00  and  polyester  textured  filament  yarn  (PTY)  falling  within 
CN  codes  5402  33  10  and  5402  33  90.  They  are identical  to the  products  which  were 
the  subject  of  the  previous  investigation. 

POY  is  a  feeder  yarn  used  mainly  to  produce  PTY,  which  is  in  turn  used  in  both  the 
weaving  and  knitting  sectors  to  make  polyester  or  polyester-and-cotton  fabrics 

There  are different  types  of POY  as well  as PTY,  depending  on the denier (weight), 
the  number  of  filaments  and the  lustre.  There are  also  different  qualities,  depending 
on the  efficiency  of the  production  process. 

(13) 

The original  investigation  was concluded  by measures imposed  by Regulation  (EEC) 
No  3905/88,  on POY  and PTY  separately.  In this  respect,  the present  investigation 
has confirmed  that the essential  process for obtaining PTY is texturization,  consisting 
mainly  of  twisting  and  drawing  POY,  which  imparts  to  PTY  its  essential 
characteristics.  However,  the  necessity  for  and costs  of further  processing  indicates 
that  POY  does  not  belong  to  the  same  category  of  product  as  PTY,  since  the 
added-value  required  to  produce  PTY  from  POY  is  substantial.  In  addition,  the 
end-use  of POY  and PTY  is different  and the two  products  are not  interchangeable. 
Consequently,  different  markets  for  each  product  exist. 

It  is worth  noting  that  the  manufacturing  processes  described  above  can  sometimes 
be  integrated  in  one  company  or  group,  or  can  be  undertaken  by  two  independent 
companies. Both situations (integrated or independent manufacturing)  exist in Taiwan 
and Turkey and in the Community. Part of the Community  production of POY is sold 
on the  Community  market  to  independent  texturizers  (see recital  (22)). 

(14) 

In view of the above,  it has been  concluded that POY  and PTY do not belong to the 
same  category  of  product  and  thus  have  to  be  regarded  as  two  distinct  products. 
These  findings  have  not  been  contested  by  any  interested  party.  Consequently,  the 
two  products have been  dealt  with  separately  in  the framework  of this  review. 

II. 

LIKE  PRODUCT 

POY 

(15) 

The investigation  showed that POY products sold on the domestic markets of Turkey 
and  Taiwan  were  "like  products"  relative  to those  exported  from  those  countries  to 
the  Community.  Similarly,  the  POY  manufactured  by  the  Community  industry  and 
sold  on  the  Community  market  and  those  exported  to  the  Community  from  the 
countries in  question  are  alike in  all  respects as regards their physical,  chemical  and 
technical  characteristics  and  end-uses. 

PTY 

(16) 

The  same findings  were made with  regard  to PTY  respectively  sold  on the  domestic 
markets  of  Turkey  and  Taiwan,  produced  and  sold  in  the  Community,  and  exported 
to the Community  from  the  countries  in  question. 

(17)  Consequently, in each case the products sold on the domestic market of the exporting 
countries, those exported  from  these countries to the Community  and those produced 
and  sold  in  the  Community  are  "like  products"  within  the  meaning  of  Article  2(12) 
of  the Basic  Regulation. 

D. 

I. 

(18) 

PARTIALLY  ORIENTED  POLYESTER  YARN  (POY) 

THE  SCOPE  OF  THE  REVIEW 

In Regulation (EEC) No 3905/88, three Taiwanese producers, Far Eastern  Textile Ltd, 
Nan  Ya  Plastics  Corporation  and  Tuntex  Distinct  Corp.,  were  not  subject  to  the 
anti-dumping  duty  imposed  on  imports  of  POY  from  Taiwan. 

These  Taiwanese  exporters  claimed  that  the  present  review  investigation  could  not 
cover  producers  expressly  exempted  from  the  anti-dumping  measures,  because  no 
dumping  was  found  in  their  case,  and  that  the  absence  of  existing  anti-dumping 
measures*led  to  the  conclusion  that  there  were  no  grounds  for  including  them  in 
its  scope. 

(19) 

Since  the  review  request  was  made  under  the  provisions  of  Article  15  of  the 
Basic  Regulation,  it has to be examined  whether  the expiry  of the measures  in  force 
would  lead  again  to  injury.  On  this  basis,  and  given  that  the  three  Taiwanese 
producers  concerned  were  exempted  from  the  measures  on  the  grounds  that  no 
dumping  had been  found  in their  case, they  should  be kept  outside the  scope  of this 
review  investigation. 

(20)  Consequently, this review does not cover imports of POY from  Tuntex Distinct Corp., 

Far  Eastern  Textile  Ltd,  or  Nan  Ya  Plastics  Corporation. 

H. 

COMMUNITY  INDUSTRY 

(21) 

In  defining  the Community  industry,  data  obtained  from  information  received  in  the 
replies to the questionnaires,  from  EUROSTAT  figures  and from  CIRFS  concerning 
output  of Community-produced  POY were used,  since not all the producers  active in 
the  Community  POY  market  cooperated  in  the  investigation. 

(22) 

The  complaining  Community  producers  were  found  to  represent  76%  of  the  total 
Community  POY  production  intended  for  sale  and  thus  a  major  proportion  of  that 
production. 

(23)  On  this  basis,  the  complaining  Community  producers  constitute  the  Community 

industry  within  the  meaning  of  Article  4(5)  of the  Basic  Regulation. 

in. 

THE  SITUATION  OF  THE  COMMUNITY  INDUSTRY 

(a)  Community  consumption 

(24) 

The  apparent  Community  consumption  increased  from  119 000  tonnes  in  1991  to 
122 000  tonnes  in  1992,  fell  back  to  119 000  tonnes  in  1993,  to  increase  again  to 
125 000  tonnes  in  the  investigation  period. 

(b)  Production,  production  capacity  and  capacity  utilization 

(25) 

The Community  industry's  production  for  sale increased  from  58  000 tonnes in  1991 
to  77  000  tonnes  in  1992,  fell  back  to  72 000  tonnes  in  1993,  to  increase  again 
to  76  000 tonnes  during  the  investigation  period. 

(26)  Over  the  last  three  years,  the  production  capacity  has  remained  the  same  and  the 

capacity  utilization  rate  has been  stable  at 80%. 

(27) 

(28) 

(29) 

(c) 

Sales  volume  and  market  share 

The  quantity  of  POY  sold  on  the  Community  market  by  the  Community  industry 
dropped  from  50 000  tonnes  in  1991 to  49 000 tonnes  in  1992 to  47  000  tonnes  in 
1993  and  46  000 tonnes  in  the  investigation  period,  despite  the increase  in  apparent 
Community  consumption,  noted  in  recital  (24). 

The  Community  industry's  market  share  changed  as  follows:  42%  in  1991, 40%  in 
1992,  39%  in  1993  and  36.5% during  the investigation  period.  Overall,  the  market 
share has declined by 5.5 percentage points while the apparent consumption  increased 
by  around  5 percentage  points. 

(d)  Price  movements 

Prices of the Community  industry  for  POY have fluctuated in line with the prices of 
the  raw  materials  PTA (Pure  Terephthalic  Acid),  DMT  (Dimethylterephthalate)  and 
Glycol.  The  upward  price  trend  of  POY  recorded  at  the  end  of  the  investigation 
period (first half of  1994) is the result of the worldwide shortage of raw materials and 
their  subsequent  price increases.  These price increases  occurred  consequently  for  all 
operators  in  the  market  at  the  same  time,  but  should  not  hide  the  fact  that  the 
Community  industry's  prices  remained  consistently  undercut  by the exporters'  prices 
during  the  investigation  period  (see  recital  (38)). 

(e) 

Profitability 

(30) 

The  Commission  found  that,  overall  and  from  1991  onwards,  the POY  Community 
industry  has  recorded  poor  financial  results.  The  situation  has  deteriorated 
considerably  from  1992  with  an  average  loss  of  22%  on  turnover  during  the 
suffered 
investigation  period.  All  complaining  Community  producers  have 
heavy  losses. 

(f) 

Employment  and  investment 

(31)  Given the integrated  nature  of the polyester yarn  industry,  it has not been  possible to 
isolate  employment  and  investment  data  for  POY  production  only.  Data  available 
concerning the industry  globally  indicates that there  has been  a steady  curtailment  in 
the 
is  not 
labour-intensive. 

labour  force  of  about  15%  since  1991,  even 

industry 

though 

Investments  by  the  complaining  Community  producers  have  been  reduced  in  some 
cases to  a level  below  that  needed  to  ensure  optimal  production. 

(g)  Conclusion 

(32) 

In  spite  of  the  measures  in  force,  an  overall  assessment  of  the  main  economic 
indicators  leads  to  the  conclusion  that  the  Community  industry  producing  POY 
continues  to  show  signs  of  economic  difficulties.  Its  situation  has  constantly 
deteriorated  since  1991, as is demonstrated  in  particular  by  a loss in  market  share of 
up to 5.5% over four  years, notwithstanding  an increase in Community  consumption 
the  same  period,  by  a  reduction  of  employment  and  by  substantial 
over 
financial  losses. 

IV. 

RECURRENCE  OF  INJURY 

(33) 

In  accordance  with  Article  15  of  the  Basic  Regulation,  the  Commission  examined 
whether  the  expiry  of  the  measures  in  force  would  lead  again  to  injury  or  threat  of 
injury  to the  Community  industry. 

TAIWAN 

(34) 

Imports of Taiwanese POY regressed from  2  812 tonnes in  1991 (2.4% market  share) 
to  1 117 tonnes  in  1992  (0.9%  market  share),  to  551  tonnes  in  1993  (0.5% market 
share)  and  to  448  tonnes  during  the  investigation  period  (0.4%  market  share).  It 
should  be  noted  in  this  respect  that  the  three  major  Taiwanese  producers  were  not 
subject to any anti-dumping duty.  Apart from  the imports from  these three producers, 
which  are  not  concerned  by  the  review  investigation,  the  Community  market  share 
held  by  the  remaining  imports  from  Taiwan  amounts  to  0.1% only. 
Information 
available suggests that the Taiwanese producers have re-oriented their exports to other 
third  countries  which  are  geographically  closer,  where  a  steady  growth  for  POY  is 
being  registered.  Furthermore,  these  producers  have  apparently  moved  to  a  greater 
extent  into the  downstream  product,  PTY. 

Consequently,  there  is  no  reasonable  indication  that  the  expiry  of  the  anti-dumping 
measures  on  imports  of  POY  originating  in  Taiwan  would  lead  to  a  recurrence  of 
injury  or threat  of  injury  to  the  Community  industry. 

TURKEY 

(a)  Volume  and  Community  market  share  of  imports  from  Turkey 

(35) 

(36) 

It was found  that  imports of  POY from  Turkey  have increased  substantially  between 
1991  and  the  investigation  period,  from  7 933  tonnes  to  22 436  tonnes.  This 
corresponds to an increase in market share over the same period from  6.7% to 17.9%. 

This development  has to be seen in the context of the setting-up of a PTY  production 
facility  in the Community  by  the largest  Turkish  producer  and  exporter  of  POY  and 
PTY.  Nevertheless,  a  significant  part  of the  exports  of  POY  to  the  Community  by 
this  Turkish  producer  were  destined  to unrelated  customers. 

(37) 

It  was  claimed  that  Turkish  imports  of  POY  merely  filled  the  gap  left  by  the 
decreasing  exports  of  POY  yarn  from  Taiwan.  This  is  factually  incorrect  since  the 
Taiwanese imports have continuously  decreased  from  less than 3 000 tonnes in  1991, 
while Turkish  imports increased  from  around  8 000 tonnes in  1991 to 22  400 tonnes 
during  the  investigation  period. 

(b)  Prices  of  the  imports 

(38)  On the basis of price information  available, a comparison has been made between  the 
weighted  average Community  industry's  selling price and the weighted  average  price 
of  the  imports  concerned  at the  same  level  of trade.  The Community industry's price 
was  at  ex-works  and,  the  prices  of  the  imports  were  at  free-at-Community  frontier, 
customs  cleared. 

This  comparison  showed  in  the  case  of  Turkey  an  undercutting  margin,  persisting 
throughout  the  entire  investigation  period,  higher  than  that  established  in  the 
original  investigation. 

(c) 

Impact  of  other  factors  on  the  situation  of  the  Community  industry 

(39)  Among all  imports of POY  in the Community  from  other third  countries,  only  those 
from  the USA  and  Switzerland  were of  significant  volume,  all  others taken  together 
being  negligible. 

However,  the  sales  volume  and  market  share  in  the  Community  of  the  US  imports 
have  steadily  decreased  between  1991  (6.9%  market  share)  and  the  investigation 
period  (1.9% market  share).  Imports  from  Switzerland  remained  relatively  stable 
(around  13%  market  share)  at  very  high  prices,  and  the  main  Swiss  exporter 
concerned  is a  subsidiary  of  a  complaining  Community  producer. 

It  was  alleged  that  the  Community  industry  did  not  make  the  investments  needed 
in order to remain competitive. In this regard, an industrial rationalization  process has 
been in operation for  some years among several  Community  producers.  This process, 
however,  requires  financial  resources  which  have  been  limited  due  to  the  existence 
of  low-priced  dumped  imports  on  the  Community  market. 

The  claim  was  made  that,  like  other  industrial  sectors  in  the  Community,  the 
producers of POY  suffered  from  the recession and not from  the Turkish  imports and, 
in  particular  that,  because  of  the  recession,  the  Community  producers  were  not  in a 
position  to reflect  the increasing costs of raw materials in their prices of POY. Here, 
it  has  to  be  noted  that  the  development  of  the  apparent  Community  consumption 
described  in  recital  (24)  above  does  not  reflect  any  recession  in  the  POY  market. 

Finally, it was asserted by the Turkish exporter that a capacity  utilization  rate of 70% 
allows  any  "fibres-business"  to  achieve  a breakeven  point.  This  statement  has  not 
been substantiated  by the information  gathered  in Taiwan  and among the Community 
industry's  producers.  According  to  this  information,  capacity  utilization  for  this 
industry  should  normally  reach  a rate of 90% in order to achieve breakeven.  Indeed, 
the  majority  of  Taiwanese  producers  report  utilization  rates  above  95%.  The 

(40) 

(41) 

(42) 

11 

Community  industry's utilization  rate was, throughout the period under  consideration, 
around  80%.  In  any  event,  the  capacity  utilization  factor  has  to  be  examined  in 
conjunction  with  other injury  factors  such as prices and volumes at which  production 
is  sold  before  any  decisive  conclusions  can  be drawn.  It  is clear that,  in  cases  such 
as  this,  even  a  90%  utilization  rate  could  result  in  a  loss-making  situation  if 
prices  of  the  Community  producers  were  severely  depressed  by  the  low-priced 
imports  concerned. 

(d)  Conclusion 

(43) 

In  these  circumstances,  it  appears  that  there  are  no  other  factors  but  the  imports  of 
POY  originating  in  Turkey  which  may  explain  the  difficult  situation  of  the 
Community  industry,  notwithstanding  the  anti-dumping  measures  in  force.  It  is 
therefore  concluded  that  the  expiry  of  these  measures  as  regards  Turkey  could 
only  worsen  the  situation  of  the Community  industry  through  a recurrence  of  injury 
to this  industry. 

V. 

DUMPING 

(44) 

The  continued  existence  of  dumping  was verified,  to  ascertain  firstly  whether  there 
were grounds for  the continuation  of measures against  POY from  Turkey  and,  if so, 
whether  any  change  in  the  dumping  margin  required  the  existing  measures  to  be 
amended  accordingly. 

(a)  Normal  value 

(45) 

(46) 

It was first examined whether the volume of sales of the sole Turkish producer  which 
had  exported  to  the  Community  during  the  investigation  period  on  the  domestic 
market  had  attained  at  least  5% of  the  volume  of the  exports  of  the  like  product  to 
the  Community  -  a  percentage  which  has consistently  been  considered  to  constitute 
sales in  sufficient  quantities  to  permit  a proper  comparison.  This  producer  achieved 
domestic  sales  representing  only  2.6%  of  the  quantity  exported  to  the  Community. 
Accordingly,  those  sales  were  considered  insufficient  to  establish  a  representative 
domestic  price,  and  normal  value  had  to  be  constructed  in  accordance  with 
Article  2(3)(b)(ii)  of  the Basic  Regulation. 

For  all  the  types  of  the  product  sold  for  export  to  the  Community  by  the 
Turkish  producer,  a  constructed  normal  value  was  calculated,  by  adding  to  the 
manufacturing  costs of  the  exported  types,  a reasonable  amount  for  selling,  general 
and administrative expenses (SG&A)  and a profit.  Since there were insufficient  sales 
of  POY  by  the  producer  concerned  on  the  domestic  market,  and  since  this  was  the 
only  producer/exporter  involved  in the investigation  which sold POY  on that  market, 
the  amount  for  SG&A  and  profit  was  calculated  by  reference  to  the  sales  made  by 
this  producer  in the  same business  sector,  in  Turkey,  in the  polyester  yarn  sector,  in 
accordance  with  Article  2(3)(b)(ii)  of  the Basic  Regulation. 

12 

(b) 

Export  prices 

(47) 

(48) 

The Turkish  producer  shipped  POY to independent  importers in  the Community  and 
to  one  related  importer  in  the  Community. 

Since  the  POY  imported  by  the  related  company  was  transformed  into  PTY  by  the 
same  company  and  sold  to  the  first  independent  buyer  as  such,  it  would  have  been 
necessary  to construct  an export  price for POY from  the resale price of PTY.  Given 
the  inherent  difficulties  of  such  an  exercise  and  taking  into  consideration  the  large 
quantities  sold  by  the Turkish  exporter  to independent  importers (more than  60% of 
its exports to the Community) it was considered  that the transactions between  related 
parties  should  be  disregarded  altogether;  export  prices  were  determined  exclusively 
on  the  basis  of the  prices  relating  to  transactions  with  independent  importers. 

(c)  Comparison 

(49)  Normal  value  by  product  type  was  compared  with  the  export  price  for  the 
corresponding  type,  on  a transaction-by-transaction  basis  at  the  ex-works  stage  and 
at  the  same  level  of trade. 

(50) 

(51) 

(52) 

(53) 

For the purpose  of  a fair  comparison,  normal  value was adjusted  in  accordance  with 
the  provisions  of  Article  2(9)  and  (10)  of  the  Basic  Regulation  to  take  account  of 
differences  directly  affecting  price comparability.  The adjustments  concerned  import 
charges and indirect taxes and differences  in selling expenses arising from  sales made 
under  different  conditions and terms of sale, namely  credit terms and transport  costs. 

(d)  Dumping  margins 

The  above  comparison  revealed  the  existence  of  dumping,  the  margins  of  dumping 
being  equal  to  the  amount  by  which  the  normal  value,  as  established,  exceeds  the 
price  for  export  to the  Community. 

The weighted average dumping margin for the Turkish producer concerned,  expressed 
as  a  percentage  of  the  free-at-Community-frontier  price,  customs  duty  unpaid,  is 
as  follows: 

Sasa-Artificial  and  Synthetic  Fibres  Inc. 

3.3%. 

In  the  case  of  Turkish  companies  which  cooperated  in  the  investigation  but  were 
found  neither  to  have  sold  POY  on  their  domestic  market  nor  to  have  exported  it 
during the investigation  period,  the weighted  average  dumping margin  found  for  the 
sole  company  which  did  export  during  the  investigation  period  is  considered 
appropriate,  since  it  takes  into  account  the  cooperation  of  the  companies  concerned 
by  distinguishing  them  from  those  which  did  not  cooperate  in the  investigation. 

the  dumping  margin  of  3.3% 

Accordingly, 
following  companies:  Korteks-Mensucat 
Nergis-Tekstil  Sanayi  ve  Ticaret  A.S. 

is  also  applicable 

to 

Sanayi 

ve  Ticaret  A.S. 

the 
and 

13 

(54) 

In the case of those Turkish  producers which failed  to make themselves known  or did 
not  reply  satisfactorily  to  the  Commission's  questionnaire,  the  dumping  margin  was 
determined  on  the  basis  of  the  facts  available  in  accordance  with  Article  7(7)(b)  of 
the  Basic  Regulation.  It  was  considered  that  the  most  reasonable  facts  were  those 
established  during the  investigation  and that,  in  order to avoid  giving a premium  for 
non-cooperation  and  to  ensure  that  the  anti-dumping  measures  introduced  afforded 
effective  protection  from  unfair  trade,  the  dumping  margin  attributable  to  those 
producers  should  be based  on the POY type with  the highest  dumping  margin  found 
for  the  sole  cooperating  Turkish  producer  which  had  exported  to  the  Community 
during  the  investigation  period.  On  that  basis,  the  POY  type  chosen  represented 
around  10% of all exports to the Community  by the Turkish producer  concerned,  and 
the  dumping  margin  established  for  Turkish  non-cooperating  companies  amounts 
to 6.8%. 

VI. 

COMMUNITY  INTEREST 

(55)  A determination  as to whether the Community  interest calls for intervention  needs to 
be  based  on  an  assessment  of  all  the  various  interests  taken  as  a  whole,  including 
those  of  the  producers,  users  and  consumers  in  the  Community. 
In  such  an 
examination,  the  need  to  eliminate  the trade-distorting  effects  of  injurious  dumping 
and  to  restore  effective  competition  needs to be given  special  consideration. 

(56) 

(57) 

It has to be recalled  that  in the previous investigation,  the adoption  of measures  was 
considered  to  be  in  the  interest  of  the  Community.  It  was  stated  that  the  measures 
would  have a fairly  negligible  effect  on the production  costs of the user industry  and 
no  serious  consequences  for  consumers. 

These  considerations  remain  valid  in  considering  the  extent  to  which  it  would  be  in 
the Community  interest to maintain  measures in force. No arguments were  submitted 
by the users as concerns the impact of the price of POY in the end product,  although 
questionnaires  were  sent  to  those  users  made  known  to  the  Commission. 
In  any 
event, given the range of the measures proposed and the figures  available with  regard 
to  the  weight  of  POY  in  the  manufacturing  of  PTY,  the  impact  of  the  reviewed 
measure  on the  prices  for  the  end  product  appears to be  negligible. 

(58)  On the contrary,  to allow  the measures to expire would  put the Community  industry 
at  a  risk,  since  it  would  suffer  increasingly  from  the  dumped  low  prices  of  the 
Turkish  imports,  being  thus  prevented  from  redressing  its  precarious  financial 
situation.  It  appears  therefore  that  the  interests  of  the  Community  industry  far 
outweigh  the  possible,  and  in  any  case  limited,  disadvantages  for  users  and 
final  consumers. 

(59)  On  that  basis  it  is  concluded  that  Community  interest  calls  for  the  maintenance  in 
force  of the  anti-dumping  measures,  duly  amended  to eliminate  the injurious  effects 
of  dumped  imports  originating  in  Turkey. 

14 

VIL  MEASURES 

Taiwan 

(60) 

By  virtue  of  the  reasons  given  in  recital  (34)  with  regard  to Taiwanese  imports,  the 
existing  anti-dumping  measures  on  those  imports  should  be  allowed  to lapse. 

Turkey 

(61) 

In order to  prevent  the recurrence  of injury  and to provide  adequate protection  from 
the 
continuing  injurious  dumping  by  Turkish  imports,  it  is  considered 
anti-dumping  duty  should  be  established  in  such  a way  as to  allow  the  Community 
industry  to  realize the  reasonable  profit  it has been  deprived  of through  the  negative 
impact  of  the  dumped  imports. 

that 

(62)  When  calculating  an  adequate  level  of  duty,  the  Council  had  to  consider  that  the 
precarious  situation  of  the  Community  industry  consists  mainly  in  a  steady  loss  of 
market  share  and  substantial  financial  losses  due  to  depressed  prices  resulting  from 
price undercutting.  It is thus necessary that the measures taken allow the  Community 
industry  to  make  a reasonable  profit  in the  future. 

(63) 

E. 

I. 

(64) 

In  this  respect,  the  Council  has  calculated  the  price  level  considered  adequate  to 
remove  injury  on  the  basis  of  the  weighted  average  cost  of  production  of  the 
Community  industry,  adding  a profit  of  6%  considered  reasonable  for  guaranteeing 
the  industry  productive  investment  on  a long-term  basis.  This  price  level  was  then 
compared  to  the  average  import  prices  on  a  free-at-Community  frontier  basis,  duty 
paid.  Since  the  result  of  this  comparison  shows  an  injury  margin  higher  than  the 
dumping margin established, the duty should be based on the dumping margin  found. 

POLYESTER  TEXTURED  FILAMENT  YARN  (PTY) 

THE  SCOPE  OF  THE  REVIEW 

In Regulation (EEC) No 3905/88, one Taiwanese producer, Tuntex Distinct Corp, was 
exempted  from  the  anti-dumping  duty  of  6.2%  on  imports  of  PTY  originating  in 
for 
Taiwan  because  an 
this  company. 

insignificant  dumping  margin  (0.31%)  was  found 

(65) 

For  the  same  reasons  as  those  set  out  in  recital  (19),  this  Taiwanese  company, 
Tuntex  Distinct Corp., has to be excluded from  the scope of .the review as far  as PTY 
is  concerned. 

U. 

COMMUNITY  INDUSTRY 

(66) 

to  represent  50%  of  the 

The  production  of PTY  by  companies  on  behalf  of which  the complaint  was  lodged 
was  found 
in  the  Community 
during  the  investigation  period  (1  July  1993  to  30  June  1994)  and  hence  a  major 
proportion  of  this  output.  Therefore,  the  complaining  companies  constitute  the 
"Community  industry"  within  the  meaning  of  Article  4(5)  of  the  Basic  Regulation. 
Those  complaining  companies  produced  PTY  from  in-house  POY  production,  with 
the  exception  of  one  company  which  purchased  POY  on  the  market. 

total  PTY  output 

15 

(67)  A  producer  in  the  Community  was  found  to  be  a  wholly-owned  subsidiary  of  a 
Turkish  exporter  of  POY,  the  upstream  product.  Although  not  cited  in  the  initial 
complaint,  this  producer  cooperated  in the  investigation.  It was  considered  whether 
this producer  operating in  the Community  should be excluded  from  the definition  of 
the Community  industry  within  the  meaning  of Article 4(5) of the Basic Regulation 

In this respect,  it  should be recalled  that the provisions of that  Article do not provide 
for  the  automatic  exclusion  of  Community  producers  related  to  the  exporters  or 
producers located in exporting countries, or producers which are themselves importing 
the  allegedly  dumped  product,  but  rather  impose  on the  Community  institutions  the 
obligation  to consider on a case-by-case  basis whether the exclusion  of any  producer 
is  warranted. 

(68) 

Following the previous practice of the Community  institutions, it was considered  that 
this  Community  producer,  through  its  relationship  with  the  producer/exporter 
concerned  in Turkey,  was shielded  from  the injurious  effects  of the dumped  imports. 
It  was  further  considered,  in  accordance  with  that  practice,  that  to  include  this 
producer  in the definition  of the Community  industry  would distort the assessment  of 
those effects.  Indeed, the fact that the Community  producer concerned produces PTY 
from  POY  bought  at transfer  prices from  the related  Turkish  exporter  found  to  have 
been dumping and causing injury  to the complainants renders the production cost data 
for  the  product  concerned  unreliable.  On  those  grounds,  it  was  considered  that  the 
producer  in the Community  concerned  had to be excluded  from  the definition  of  the 
Community  industry. 

For  the  remainder  of  Chapter  E,  the  term  "Community  industry"  therefore,  refers  to 
the  complaining  Community  producers  of  PTY  only. 

HI. 

THE  SITUATION  OF  THE  COMMUNITY  INDUSTRY 

(a)  Community  consumption 

(69) 

The  total  apparent  Community  consumption  of  PTY  had  increased  from  230  000 
tonnes  in  1991 to  237  000  tonnes  in  1992  and,  after  a decline to  221  000  tonnes  in 
1993,  increased  again  to  241  000  tonnes in the  investigation  period.  This  represents 
an  overall  increase  of  consumption  of  around  5% over  the  period  considered. 

(b)  Production,  production  capacity,  utilization  rate 

(70) 

The Community  industry's production  of PTY dropped  steadily  from  104 000 tonnes 
in  1991  to  92  000  tonnes  in  1993  and  recovered  to  95 000  tonnes  during  the 
investigation  period.  This represents  an overall  decrease in the Community  industry's 
production  of  8.6%,  while  Community  consumption  increased  by  5%  over  the 
same  period. 

16 

(71) 

(72) 

(73) 

(74) 

(75) 

(76) 

(77) 

The PTY  production  capacity  of the Community  industry  has increased  over  the last 
three years by  about  7%,  from  114 000 tonnes in  1991 to  122 000 tonnes  during  the 
investigation  period.  This  increase  in  PTY  production  capacity  is  specifically  the 
result  of  significant  investment  in  1992  and  1993  by  one  company,  related  to  a 
third-country  producer.  This  company  reduced  drastically  its  imports of POY  from 
the  parent  company  and  extended  its  production  of  POY  and  consequently  its  PTY 
capacity  in the  Community. 

The  utilization  rate  of  production  capacity  of  the  Community  industry  as  a  whole 
decreased  from  91% in  1991 to  78% in the  investigation  period.  Given  the fact  that 
the polyester  yarn  industry  is very  capital-intensive  (up to 90% utilization  rate being 
considered to be normal), the decreasing utilization rate has a significant  effect  on the 
allocation  of  fixed  costs. 

(c) 

Sales  volume  and  market  share 

The  quantity  of  PTY  sold  in  the  Community  by  the  complaining  Community 
producers  declined  from  about  87 000  tonnes in  1991  and  1992 to  83 000 tonnes  in 
1993, to increase again  to 87  000 tonnes during the investigation  period,  in a context 
of  growing  demand. 

The Community  industry's  share of the Community  market moved  as follows: 37.7% 
in  1991, 36.8% in  1992, 37.7% in  1993  and 36% during the investigation period.  The 
overall  relative stability  of sales led, however, to a slight decrease of the market  share 
due to  the  increase  in  Community  consumption. 

(d)  Price  evolution 

Prices  of  PTY  have  fluctuated  in  line  with  the  prices  of  the  raw  materials  used  for 
producing the upstream  product POY, namely PTA,  DMT, and glycol. The increasing 
price trend  of PTY recorded  at the end of the investigation  period (first  half of  1994) 
as compared  with  1993 (second half),  is the result of the worldwide shortage of those 
raw  materials  and  their  consequent  price  increases.  These  price  increases  thus 
occurred  for  all  operators  in  the  market  at the  same time. 

(e) 

Profitability 

It was found that, generally  from  1992 onwards, the Community industry has recorded 
deteriorating financial results.  The overall profitable  situation in  1991 has turned  into 
losses and has particularly  worsened during the investigation period, reaching average 
losses  of around  10% on  turn-over.  All  complaining  Community  producers  suffered 
heavy  losses,  or  decreasing  profitability. 

(0 

Employment  and  investment 

It  should  be  noted  that  though  the  polyester  yarn  industry  is  not  labour-intensive, 
the 
since  1991 
Community  industry. 

there  has  been  a  steady  curtailment 

in  employment  by 

Investments  by  the  Community  industry  were  reduced  in  most  cases  to  levels  not 
allowing  optimal  production. 

17 

(g)  Conclusion 

(78) 

In  spite  of  the  measures  in  force  on  imports  of  PTY  originating  in  Turkey  and 
Taiwan,  an  overall  assessment  of  the  main  economic  indicators  leads  to  the 
conclusion  that  the  PTY  Community  industry  continues  to  show  clear  signs  of 
economic  difficulties.  Its  situation  has  constantly  deteriorated  since  1991,  as  is 
demonstrated  in particular by  a decline of production  capacity  utilization  and  market 
share, notwithstanding  a certain  increase of  consumption  of PTY in the Community, 
and  also by  increasing  financial  losses. 

IV. 

RECURRENCE  OF  INJURY 

(79) 

In  accordance  with  Article  15 of  the  Basic  Regulation,  the  question  was  examined 
whether  the  expiry  of  the  measures  in  force  would  lead  again  to  injury  or  threat  of 
injury  to the  Community  industry. 

(80) 

(81) 

(82) 

(a)  Volume  and  market  share  of  imports  from  the  exporting  countries 

concerned 

Imports  of PTY from  Taiwan  have remained  stable since  1991 at an  annual  level  of 
around 7 000 tonnes.  The assessment of these imports in the light of the development 
of Community consumption  shows a market share of 3% in  1991, 2.9% in  1992, 3.2% 
in  1993 and  2.9%  during  the  investigation  period. 

Imports  of  PTY  originating  in  Turkey  decreased  from  4  504  tonnes  in  1991 
(1.9%  market share) to 3 406 tonnes in  1992 (1.4% market share) and to  1 546 tonnes 
in  1993 (0.7%) market  share), but  increased  to 2 348 tonnes  during  the  investigation 
period  (0.98%  market  share).  The  changes  in  these  imports  and  market  shares 
appears  to  have  been  somewhat  influenced  by  the  setting-up  of  a  PTY  production 
facility  in  the  Community  by  the  largest  producer  and  exporter  of  PTY  in  Turkey. 

(b)  Prices  of  the  dumped  imports 

In  order  to  examine  whether  price  undercutting  was  in  evidence,  all  the  types 
manufactured  by  the  Community  industry  and  those  imported  into  the  Community 
from  the countries  concerned  have been  divided  into three groups  according  to their 
denier.  A  weighted  average  Community-industry  selling  price  for  each  group  was 
then  compared  with  a  weighted  average  price  of  each  exporter  concerned  for  the 
comparable group at the same level of trade. The undercutting  margins thus obtained 
per  group were  then  weighted  in order  to reach  one margin  per  exporting  company. 
The Community  industry's  prices were taken  at an ex-works basis  and  the exporters' 
prices were  expressed  as free-at-Community  frontier,  customs  cleared. 

As far  as Turkey  is concerned,  this comparison  showed  an overall  weighted  average 
undercutting  margin  for  the  entire  investigation  period  of 33.7%. 

As regards  Taiwan,  an  overall  weighted  average  undercutting  margin  of  23.6%  for 
the entire investigation  period  was found,  ranging  from  0.9% to 34.6% according  to 
the  exporter. 

(c) 

Impact  of  other  factors  on  the  situation  of  the  Community  industry 

Other  imports 

(83) 

Imports  of  PTY  from  other  third  countries,  namely  Indonesia,  India,  Malaysia, 
Thailand,  the  USA,  South  Africa  and  Slovakia  were  claimed  to  have  influenced  the 
situation  of  the  Community  industry. 

(84)  Anti-dumping  investigations  concerning imports from  India, Indonesia,  Thailand  and 
Malaysia  are  currently  being  carried  out.  With  the  exception  of  imports  from  India, 
which have decreased continuously  since 1992 to reach during the investigation period 
a  volume  considered  to  be  negligible,  Community  market  share  of  the  other  three 
countries,  taken  together,  increased  significantly  from  1.7%  in  1991 to 9.6%  during 
the  investigation  period.  Prices  of  these  imports  into  the  Community  appear  to  be 
higher than Turkish  prices but lower than Taiwanese prices. However, no conclusions 
can  be  drawn  yet  as to  the  prices  and  the  possibility  of  dumping  by  these  imports, 
since  the  anti-dumping  investigations  are  in  progress. 

(85) 

Imports  of  PTY  from  the  USA,  although  still  significant  (4.1% market  share  in  the 
investigation  period) dropped  by  16% in volume between  1991 and the  investigation 
period.  As  to  imports  of  PTY  from  South  Africa,  they  increased  in  terms  of 
Community  market  share  from  1.07%  in  1991  to  1.47%  during  the  investigation 
period.  Eurostat  figures,  however,  do not provide  information  on  the types  of  PTY 
imported  and,  therefore,  no  conclusions  can  be  drawn  with  regard  to  the  prices  at 
which  imports  of  PTY  from  the USA  and  South  Africa  were  made. 

(86)  As  far  as  Slovakia  is  concerned,  imports  of  PTY  into  the  Community  reached  a 
market  share  in  the  investigation  period  of  3.1%.  However,  it  appeared  that  since 
1993, owing to an investment  of a Community  producer  in  Slovakia,  a major  part of 
imports  into  the  Community  originating  in that  country  was made  at transfer  prices 
between related parties.  It may reasonably be assumed that  such imports cannot have 
been  made  by  the  Community  producer  in  question  with  a view  to  adversely  affect 
its own profitability.  Consequently,  it is concluded that the Slovakian  imports cannot 
have  had  a  significant  impact  on  the  situation  of the  Community  industry. 

(87) 

It can therefore  be concluded  that  imports of PTY from  countries  other than  Taiwan 
and  Turkey,  for  which  injurious  dumping  is  being  investigated  following  evidence 
presented  by  the complainants,  namely  from  Indonesia,  Thailand  and Malaysia,  may 
have exacerbated  the already  unfavourable  situation of the Community  industry.  For 
the  other  abovementioned  countries,  for  which  no  anti-dumping  investigation  is  in 
course,  any  contribution  to the injury  suffered  by the Community  industry  cannot  be 
substantiated. 

Other  Community  producers 

(88) 

Since the Community  industry  represents  50% of the total  Community  production  of 
PTY,  it was considered  necessary  to examine the behaviour  of the other  Community 
producers of PTY  in the Community  and their possible impact on the situation of  the 
Community  industry. 

The  estimated  production  capacity  of  Community  producers  not  included  in  the 
Community  industry  has remained  stable  over  the last  four  years.  The  same  applies 
to their  actual  production,  which  showed  a slight  increase  similar  to the  Community 
industry's  production,  in  the  first  half  of  1994  only.  As  to  the  Community  market 
share of those other Community  producers,  it showed  during the investigation  period 
a  slight  decrease  similar  to  that  of  the  Community  industry. 

(89) 

Therefore,  it does not  appear that those producers' behaviour had  injurious  effects  on 
the  precarious  situation  of  the  Community  industry,  other  than  that  resulting  from 
normal  competition. 

Investment  level  and  recession 

(90) 

The  same  arguments  as  in  the  case  of  POY  relating  to  the  influence  of  insufficient 
investment  and  of  the  recession  on  the  situation  of  the  Community  industry  were 
made  by  the  Turkish  exporter  with  regard  to  PTY.  The  reasoning  set  out  in 
recitals  (40)  and (41) for  POY  also applies to PTY.  Investments by the  Community 
industry  have been limited by the lack of the necessary financial resources, due to the 
low-priced  dumped  imports  of  PTY,  and  the  development  of  apparent  Community 
consumption  of  PTY  does  not  reflect  any  recession. 

(d)  Conclusion 

(91)  Although  the  anti-dumping  measures  in  force  have  had  a  somewhat  positive  effect, 
in  terms  of  the  volume  of  the  Turkish  and  Taiwanese  imports  of  PTY  into  the 
Community,  they  have  not  prevented  the  pressure  on  Community  prices  from 
to 
continuing.  Therefore,  even  if  imports  from  other  third  countries  subject 
anti-dumping  investigations  may  have  had  some  injurious  effect  on  the  situation  of 
the Community  industry, the fact  remains that, taken in isolation, the dumped  imports 
from  Taiwan  and  Turkey,  notwithstanding  the  existence  of  protective  measures, 
have  continued 
the 
Community  industry. 

the  precarious  situation  of 

to  contribute  materially 

to 

(92) 

In these circumstances, to allow the measures to expire is likely  to waken  further  the 
Community  industry  through  a recurrence  of  injury  to this  industry. 

V. 

DUMPING 

(93) 

The  continuance  of  dumping  was  verified,  to  ascertain  firstly  whether  there  were 
grounds for  the continuation  of measures against  PTY from  Turkey  and  Taiwan  and, 
if  so, whether  any  change in  the  dumping  margins  required  the existing  measures  to 
be amended  accordingly. 

20 

(a)  Normal  value 

Turkey 

(94)  As far  as the  determination  of  normal  value  for  the Turkish  producers  is  concerned, 
it  was  first  established,  for  each  producer,  whether  its total  domestic  PTY  sales had 
been  made  in  sufficient  quantities  to  allow  a  proper  comparison  with  its  total 
PTY  exports  to  the  Community. 

(95)  Only  two  out  of  the  three  Turkish  producers  which  cooperated  in  the  investigation 
exported PTY to the Community  during the investigation period. These two producers 
were  found  to  have  sold  PTY  in  their  domestic  market  as  well  during  that  period. 
For  each  producer,  the  total  domestic  PTY  sales volume  was  higher  than  5% of  its 
total  export  sales volume to the Community.  Accordingly,  those domestic  sales were 
considered  to  have  been  made  in  sufficient  quantities. 

(96) 

For each of the PTY types  sold by the two Turkish producers on the domestic market 
and  found  to  be  identical  or  directly  comparable  to  types  sold  for  export  to  the 
Community,  it  was  also  considered  whether  domestic  sales  per  type  were  made  in 
sufficient  quantities. 

(97)  Domestic  sales  of  each  particular  type  were  found  to  have  been  made  in  sufficient 
quantities, as the volume of each type of PTY sold in Turkey during the investigation-
period  represented  5% or more of the volume of the comparable type sold for  export 
to the  Community. 

(98) 

It was subsequently  examined  for  both  producers whether the domestic sales of each 
type  of  PTY  could  be  considered  to  have  been  effected  in  the  ordinary  course  of 
trade,  by  looking  at the  proportion  of  profitable  sales of the type  in  question. 

(99)  Given  the high  inflation  rate  in  Turkey,  the methodology  for  assessing  the  ordinary 
course  of  trade  in  domestic  sales  was  applied  on  a monthly  basis,  as  follows: 

- 

- 

In  cases  where  the  monthly  volume  of  a  type  of  PTY  sold  at  a  net  sales  price 
equal  to  or  above  the  calculated  monthly  cost  of  production,  as  defined  in 
Article  2(3)(b)(ii) of the Basic Regulation, represented more than 80% of the total 
monthly  sales volume of that type, the normal  value was established  as a monthly 
weighted  average  of  all  domestic  sales  transactions  of  the  type  concerned  made 
in  each  month  of  the  investigation  period,  whether  profitable  or  not. 

In  cases  where  the  monthly  volume  of  a  type  of  PTY  sold  at  a  net  sales  price 
equal  to or above the calculated  monthly  cost of production  represented  less than 
80% but  still  a sufficient  quantity  of the total  monthly  sales volume  of that type, 
the normal  value was established  as a monthly  weighted  average of the  profitable 
domestic  sales  transactions  only  for  the  type  concerned  in  each  month  of  the 
investigation  period. 

21 

- 

In  cases  where  the  monthly  volume  of  a  type  of  PTY  sold  at  a  net  sales  price 
equal  to  or  above  the  calculated  monthly  cost  of  production  represented  an 
insufficient  quantity  of  the  total  monthly  sales  volume  of  that  type,  it  was 
considered  that  the  type  in  question  was  not  sold  in  the  ordinary  course  of  trade 
and  that  the  monthly  normal  value  had  therefore  to be  constructed. 

(100)  As  a  result  of  the  methodology  referred  to  above  for  one  Turkish  producer,  the 
monthly normal value for the type of PTY exported to the Community has been based 
on the monthly  domestic price of the comparable type, after  deducting from  the sales 
price  all  discounts  and  rebates  directly  linked  to  the  sales  under  consideration,  in 
accordance  with  Article  2(3)(a) of the Basic Regulation.  For the types  exported  by 
the  other  Turkish  producer,  the  monthly  normal  value  was based  for  the  first  seven 
months  of the  investigation  period  on  a monthly  constructed  normal  value,  as  more 
than  80% of  the  monthly  domestic  sales  were  made  at  a  loss,  and  for  the  last  five 
months of the investigation  period, normal value was based  on the monthly  domestic 
sales price of the comparable  types,  since domestic  sales in these latter  months were 
found  to  have  been  made  in  the  ordinary  course  of trade. 

(101)  The constructed  normal  value  was determined  by  adding to the  manufacturing  costs 
of  the  product  types  concerned,  a  reasonable  amount  for  selling,  general  and 
administrative  expenses  (SG&A)  and  profit. 

(102)  This amount was  established  for  the  Turkish  producer  concerned  by  reference  to the 
expenses incurred  and the  profit  realized  by  each  producer  on profitable  sales of the 
like  product  on the  domestic  market. 

Taiwan 

(103) 

(104) 

In  assessing  whether  domestic  sales  of  the  product  concerned  by  the  Taiwanese 
cooperating producers were made in sufficient  quantities to allow a proper comparison 
and  in the  ordinary  course  of  trade,  the Commission  applied  the  same  methodology 
followed  with  regard  to  the  Turkish  producers  (see  recitals  (94)  to  (98))  but  for  the 
whole  investigation  period  instead  of  on  a monthly  basis. 

It  was  found  that,  for  each  of  the  Taiwanese  producers  concerned,  both  the  total 
volume  of  domestic  sales  of  PTY  and  the  domestic  sales  volume  of  each  type  of 
PTY, were higher than  5% of the corresponding volumes of the like product  sold  for 
export to the Community.  As a consequence, total  domestic sales and domestic  sales 
of  each  product  type  were  considered  to  have  been  made  in  sufficient  quantities  to 
allow  a proper  comparison. 

(105)  It  was  also  found  that  out  of  a  total  of  32  types  of  PTY  sold  for  export  to  the 
Community  by  the  Taiwanese  producers  concerned,  only  for  16  types  had  the 
corresponding  like  product  been  sold  on  the  domestic  market  in  the  ordinary  course 
of trade.  Normal  value  was  therefore  established  for  these  types  on the  basis  of  the 
domestic  price  of  comparable  types,  after  deducting  all  discounts  and  rebates 
directly  linked  to the  sales under  consideration,  in accordance  with  Article  2(3)(a) of 
the Basic  Regulation. 

22 

(106)  For  the  remaining  16 types  of  PTY  sold  for  export  to the  Community,  normal  value 

needed  to be  constructed. 

(107)  For  each  of  the  Taiwanese  producers  concerned,  the  constructed  normal  value  was 
determined  by  adding  to  the  manufacturing  costs  of  the  product  types  in  question  a 
reasonable  amount  for  SG&A  and  profit.  This amount  was established  by  reference 
to  the  expenses  incurred  and  the  profit  realized  by  each  producer  on  the  profitable 
sales  of  the  like  products  on  the  domestic  market. 

(b) 

Export  prices 

(108)  Since all imports of PTY  originating  in Taiwan and Turkey  into the Community  were 
made  directly  by  independent  importers,  export  prices were  determined  on  the  basis 
of  the  prices  actually  paid  or  payable  for  the  product  sold  for  export  to  the 
Community,  in  accordance  with  Article  2(8)  of the Basic  Regulation. 

( 109)  In the case of one of the Taiwanese producers concerned, the Commission was unable 
to  use  its  reply  to  the  questionnaire  as  the  basis  for  establishing  export  prices.  The 
reply  was  deemed  unreliable  because  information  supplied  concerned  one  sales 
transaction only which could not be satisfactorily  verified.  It was therefore  considered 
that this company  did  not  export the product  concerned  to the Community  during the 
investigation  period. 

(c) 

Comparison 

(110)  Weighted  average  normal  value by  product  type was compared  with  the export  price 
for the corresponding  type,  on  a transaction-by-transaction  basis at an ex-works level 
and  at the  same  level  of trade. 

(111)  For  the  purpose  of  a fair  comparison,  normal  value was adjusted  in  accordance  with 
the  provisions  of  Article  2(9)  and  (10)  of  the  Basic  Regulation  to  take  account  of 
differences  directly  affecting  price comparability. These adjustments concerned  selling 
expenses  arising  from  sales  made  under  different  conditions  and  terms  of  sale. 
Adjustments  claimed  for  the  above  differences  were  limited  to  those  for  which 
satisfactory  evidence  was  submitted  that  they  had  a  direct  relationship  to  the  sales 
under  consideration. 

(d) 

Dumping  margins 

(112)  The  above  comparison  revealed  the  existence  of  dumping,  the  margins  of  dumping 
being  equal  to  the  amount  by  which  the  normal  value,  as  established,  exceeds  the 
price  for  export  to  the  Community. 

The weighted  average dumping margins by producer, expressed  as a percentage of the 
free-at-Community  frontier  prices,  customs  duty  unpaid,  are  as  follows. 

23 

Turkey 

Korteks-Mensucat  Sanayi  ve  Ticaret  A.S. 

Sasa-Artificial  and  Synthetic  Fibres  Inc. 

Taiwan 

Chung  Shing  Textile  Co.  Ltd 
Far Eastern  Textile 
Hsin  Pao  Textile  Co. Ltd 
Nan  Ya Plastics  Corporation 
Lea  Lea Entreprise  Co.  Ltd 
Lanfa  Textile  Co. 

7.6% 

8.7% 

5.5% 
6.6% 
0% 
10.6% 
12.9% 
16.1% 

(113)  For  the  reasons  given  in  recital  (53),  for  producers  which  cooperated  in  the 
investigation but were found  not to have exported  during the investigation  period,  the 
weighted  average  dumping  margin  found  for  the  cooperating  producers  which  did 
export  was  considered  appropriate. 

In the case of the Turkish  producers  hereby  concerned,  the  margin  amounts to  8.3% 
and  should  apply  to  the  company  "Nergis-Tekstil  Sanayi  ve  Ticaret".  In  the  case  of 
the  Taiwanese  producers  hereby  concerned,  the  margin  amounts  to  7%  and  is 
applicable to the following  companies:  Shingkong  Synthetic  Taiwanese Fibres Corp. 
and Zig  Sheng Ind.  Co.  Ltd. 

(114)  For  those  producers  in  the  exporting  countries  concerned  which  neither  replied 
satisfactorily  to  the  Commission's  questionnaire  nor  otherwise  made  themselves 
known,  the  dumping  margin  was  determined  on  the  basis  of  the  facts  available  in 
accordance  with  Article  7(7)(b)  of the  Basic  Regulation. 

In  this  respect,  the  most  reasonable  facts  available  were  considered  to  be  those 
established  during  the  investigation.  In  order  to  avoid  giving  a  premium  for 
non-cooperation  and to ensure that the measures introduced afford  effective  protection 
for the Community  industry  from  unfair  trade, it is considered appropriate to establish 
the  dumping  margin  for  the  non-cooperating  producers  in  each  of  the  countries 
concerned  at  the  level  of  the  highest  dumping  margin  found  for  the  cooperating 
producers in  the  country  in  question. 

the  low 

in  view  of 

is  8.7%.  However, 

On  this  basis,  for  Turkey,  the  highest  dumping  margin  found  for  a  cooperating 
level  of  cooperation  of 
producer 
Turkish  producers,  evidenced  by  the  fact  that  imports  of non-cooperating  producers 
represent  40%  of  total  imports  from  Turkey  during  the  investigation  period,  this 
dumping  margin  would  constitute  a  bonus  for  non-cooperation  in  this  proceeding. 
Accordingly,  it  is  considered  appropriate  to  calculate  the  dumping  margin  for 
non-cooperating  producers  in  Turkey  by  reference  to the  highest  dumping  found  for 
a type of PTY sold for  export to the Community  by the cooperating producers in that 
country.  This  dumping  margin  is  15.2%  and  corresponds  to  a  PTY  type  which 
represented  more than  3% of total  exports to the Community  during the  investigation 
period  by  one  of  the  cooperating  Turkish  producers.  Consequently,  the  dumping 
margin  for  non-cooperating  producers  in  Turkey  amounts to  15.2%. 

24 

With  regard  to  Taiwan,  the  highest  dumping  margin  found  for  a cooperating  producer 
in  that  country  is  16  1%.  This  dumping  margin  is  considered  appropriate  in  the  light 
of  the  high  level  of  cooperation  shown  by  Taiwanese  producers.  Indeed,  exports  of 
PTY  by  these  producers  represent  90%  of  total  Taiwanese  exports  to  the  Community 
during the investigation  period.  Consequently,  the dumping margin for  non-cooperating 
producers  in  Taiwan  amounts  to  16.1%. 

VI. 

COMMUNITY  INTEREST 

(115)  A  determination  as  to  whether  the  Community  interest  calls  for  intervention  should 
be  based  on  an  appreciation  of  all  the  various  interests  taken  as  a  whole,  including 
those  of  the  producers,  users  and  consumers 
in  the  Community.  In  such  an 
examination,  the  need  to  eliminate  the  trade  distorting  effects  of  injurious  dumping 
and  to  restore  effective  competition  should  be  given  special  consideration. 

(116) 

It  has  to  be  recalled  that  in  the  previous  investigation,  the  adoption  of  measures  was 
considered  to  be  in  the  interest  of  the  Community.  It  was  stated  that  the  measures 
would  have  a  negligible  effect  on  the  production  costs  of  the  user  industry  and  no 
serious  consequences  for  consumers. 

(117)  Those  considerations  remain  valid  in  considering  the  extent  to  which  it  would  be  in 
the  Community  interest  to  maintain  measures  in  force.  No  arguments  were  submitted 
by  the  users  as  to  the  impact  of  the  price  of  PTY  on  the  end  product.  Nevertheless, 
given  the  range  of  the  measures  proposed,  the  impact  of  the  reviewed  measures  on 
the  prices  for  the  end  products  -  mainly  fabrics  and  carpets  -  has  been  estimated  to 
be  moderate. 

(118)  On  the  contrary,  to  allow  the  measures  to  expire  would  put  the  Community  industry 
at  a  risk  since  it  would  suffer  increasingly  from  the  dumped  low  prices  of  Taiwanese 
and  Turkish  imports  without  being  able  to  redress  its  precarious  financial  situation. 

It  thus  appears  that  the  interests  of  the  Community  industry  by  far  outweigh  the 
possible,  and  in  any  case  limited,  disadvantages  for  users  and  final  consumers. 

(119) 

It  is  therefore  concluded  that  Community  interest  calls  for  maintenance  of  the 
anti-dumping  measures  in  force,  duly  amended  to  eliminate  the  injurious  effects  of 
dumped  imports  originating  in  Turkey  and  Taiwan  and  that  those  measures  should 
continue  to  take  the  form  of  anti-dumping  duties. 

VII.  MEASURES 

(120) 

In  order  to  provide  adequate  protection  from  continued  injurious  dumping  by  Turkish 
and  Taiwanese  imports  and  to  prevent  the  recurrence  of  injury,  it  is  considered  that 
anti-dumping  duties  should  be  established  in  such  a  way  as  to  allow  the  Community 
industry  to  realize  the  reasonable  profit  of  which  it  has  been  deprived  through  the 
negative  effects  of  the  dumped  imports. 

25 

(121)  When  calculating  the  adequate  amount  of  duty,  consideration  was  given  to  the 
precarious  situation  of  the  Community  industry,  which  consisted  mainly  in  loss  of 
market  share  and  substantial  financial  losses  due  to  depressed  prices  resulting  from 
price undercutting.  It  is thus  necessary  that the measures taken  allow the  Community 
industry  to  make  a reasonable  profit  in  the  future. 

(122)  In this regard,  the price level  considered  adequate to remove injury  was calculated on 
the  basis  of  the  weighted  average  cost  of  production  of  the  Community  industry, 
adding a profit  of 6% regarded  as reasonable for  guaranteeing the industry  productive 
investment  on  a long-term  basis.  This  price  level  was  then  compared  to  the  average 
import  prices  on  a free-at-Community-frontier  basis,  duty  paid. 

( 123)  Since the result of this comparison, for all producers in the countries concerned,  shows 
higher  injury  margins  than  the  respective  dumping  margins  established,  the  duties 
should  be based  on the  dumping  margins  found, 

HAS  ADOPTED  THIS  REGULATION: 

Article 

Articles  1 and  2 of  Regulation  (EEC)  No  3905/88  are  replaced  by  the  following: 

"Article 1 

1. 

2. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  partially  oriented 
polyester yarn  (POY)  falling  within  CN  code  5402 42 00  and  originating  in  Turkey. 

The  rate  of  the  duty  applicable  to  the  net,  free-at-Community-frontier  price,  before 
customs  clearance,  shall  be  as  follows: 

COUNTRY 

MANUFACTURER 

RATE  OF 
DUTY 

ADDITIONAL 
TARIC  CODE 

Turkey 

Sasa  Artificial  and 
Synthetic  Fibres  Inc., 
Adana 

3.3% 

8895 

Korteks-Mensucat  Sanayi 
ve  Ticaret  A S .,  Bursa 

Nergis-Tekstil  Sanayi  ve 
Ticaret  A S .,  Bursa 
Others 

3.3% 

3.3% 

6.8% 

8895 

8895 

8536 

26 

3 

4. 

1. 

2. 

Definitive  anti-dumping  duties on  imports of  partially  oriented  polyester  yarn  (POY) 
falling  within  CN  code  5402  42  00  and  originating  in Taiwan  shall  no longer  apply. 

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

Article 2 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  polyester  textured 
filament  yarn  (PTY)  falling  within  CN  codes  5402  33  10  and  5402  33  90  and 
originating  in  Turkey  and  Taiwan. 

The  rate  of  the  duty  applicable  to  the  net,  free-at-Community-frontier  price,  before 
customs clearance,  shall  be  as  follows: 

COUNTRY 

MANUFACTURER 

RATE OF 
DUTY 

ADDITIONAL 
TARIC  CODE 

Taiwan 

Turkey 

12.9% 

10.6% 

7% 

7% 

6.6% 

5.5% 

16.1% 

8.7% 

8.3% 

7.6% 

8893 

8162 

8163 

8163 

8894 

8161 

8164 

8166 

8167 

8892 

15.2% 

8170 

Lea  Lea  Enterprise  Co. 
Ltd,  Taipei 
Nan-Ya  Plastics 
Corporation, 
Taipei 
Shingkong  Synthetic 
Fibres  Corp.,  Taipei 
Zig  Sheng  Ind.  Co  Ltd, 
Taipei 
Far  Eastern  Textile  Ltd, 
Taipei 
Chung  Shing  Textile Co. 
Ltd,  Taipei 
Others 

Sasa-Artificial  and 
Synthetic  Fibres  Inc., 
Adana 
Nergis-Tekstil  Sanayi  ve 
Ticaret.  A.S.,  Bursa 
Korteks-Mensucat 
Sanayi  ve  Ticaret.  AS., 
Bursa 
Others 

27 

with  the  exception  of  imports  which  are  manufactured  and  sold  for  export  to  the 
Community  by the following  Taiwanese companies, which  shall not be subject  to any 
anti-dumping  duty: 

TAIWAN 

MANUFACTURER 

Tuntex  Distinct  Corp., 
Taipei 
Hsin  Pao  Textile  Co. 
Ltd,  Taipei 

RATE OF 
DUTY 
0% 

ADDITIONAL 
TARIC  CODE 
8160 

0% 

8160 

3. 

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

Article  2 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in 
the Official  Journal  of the European  Communities. 

This Regulation  shall be binding  in its  entirety  and  directly  applicable in  all  Member  States. 

Done  at Brussels, 

For  the  Council 
The  President 

28 

ISSN 0254-1475 

COM(96) 228  final 

DOCUMENTS 

EN 

02 

il 

Catalogue number  : CB-CO-96-239-EN-C 

ISBN 92-78-04451-2 

Office  for  Official  PubHcations  of the European  Communities 

L-2985  Luxembourg