Proposal for a COUNCIL REGULATION (EC) amending Council Regulation (EEC) No 54/93 imposing a definitive anti- dumping duty on imports of synthetic fibres of polyesters originating in India and the Republic of Korea
Date: 1996-07-10
Institutions: European Commission
Subjects: India, South Korea, anti-dumping duty, man-made fibre, textile fibre

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  10.07.1996 
COM(96) 334 final 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

amending Council Regulation (EEC) No 54/93 imposing a definitive  anti-dumping 
duty on imports of synthetic fibres of polyesters originating in India and the 
Republic of Korea 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 

2. 

3. 

4. 

5. 

The Council, by Regulation  (EEC) 54/93,  imposed  a definitive  anti-dumping  duty 
on  imports  of  synthetic  fibres  of  polyesters  originating,  inter alia,  in  India.  This 
regulation  established  a residual  duty of 7.2% which  is applicable to exporters  not 
co-operating or not known when the original investigation took place. 

Pursuant to Article  11(4) of the Basic Anti-Dumping Regulation, each new exporter 
has  the  right  to  request  that  an  individual  duty  calculation  be  carried  out  in  its 
regard.  The  Commission  received  such  an  application  from  the  Indian  company 
Bongaigaon Refinery  & Petrochemicals Ltd (hereafter  'Bongaigaon') which claimed 
that it was a new exporter. 

Subsequently, the Commission, by Regulation  (EC) No 2566/95, initiated a review 
proceeding with regard to Bongaigaon, repealed the anti-dumping duty imposed on 
imports  of  the  product  concerned  manufactured  by  this  company  and  directed 
customs  authorities  to  register  such  imports. The  investigation  was  limited  to the 
examination  of the situation of Bongaigaon  as no request for  a review of the  injury 
findings had been received. 

The dumping margin found  amounted to  17.5% and the injury  margin  amounted to 
13.0%. As the dumping margin  was higher than the injury  margin, the level  of the 
duty was based on the latter. 

The current  review  led to the particularity that the individual  "newcomer" duty rate 
was higher  than  the  residual  duty  initially  established.  The principle  that  a review 
requested  by an  interested  party  may  lead  to  a result  less  favourable  to  that  party 
than the status quo ante has however consistently been applied in other cases. 

Consequently, it is proposed that: 

a) 

an individual anti-dumping duty of  13.0% be imposed on Bongaigaon and 

b) 

the anti-dumping  duty at this rate be collected  retroactively  on  imports  from 
Bongaigaon which were subject to registration. 

1/ 

COUNCIL REGULATION (EC) 

amending Council Regulation (EEC) No 54/93 imposing a definitive  anti-dumping 
duty on imports of synthetic fibres of polyesters originating in India and the 
Republic of Korea 

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^),  and in particular Article  11 (4) thereof, 
Having regard to the proposal  submitted by the Commission after  consultating  the 
Advisory Committee, 
Whereas : 

A. PREVIOUS PROCEDURE 

„ 

(1)  By Regulation  (EEC)  No  54/93(2),  the  Council  imposed,  inter alia,  a  definitive 
anti-dumping duty of 7.2%  on imports of synthetic staple fibres  of polyesters,  not 
carded,  combed  or  otherwise  processed  for  spinning,  commonly  referred  to  as 
polyester  synthetic  fibres,  currently  classifiable  within  CN  code  5503  20 00 and 
originating  in  India,  with  the  exception  of  imports  from  five  Indian  exporters 
specifically  mentioned  which  were  either  subject  to  a  lesser  rate  of  duty  or  no 
duty at all. 

0)  OJNoL  56, 06.03.1996, p.  1. 
(2)  OJNoL 
9,  15.01.1993, p.  2. 

Z 

B.  PROCEDURE 

(2)  The  Commission  received  an  application  for  a  review  of  the  measures  currently 
in  force  from  the  Indian  company  Bongaigaon  Refinery  &  Petrochemicals  Ltd. 
(hereafter  'Bongaigaon'  or  'the  company1).  Bongaigaon  claimed  that  it  was  not 
related to any of the exporters  or producers  in India which are subject  to the anti 
dumping measures on the product,  and that it had not exported the product during 
the  period  of  investigation  on  which  the  measures  are  based.  Furthermore,  the 
company  claimed  that  it  had  actually  exported  the  product  concerned  to  the 
Community  and that it had also entered  into irrevocable contractual  obligations  to 
export significant  quantities to the Community. 

(3)  Bongaigaon  provided,  on  request,  evidence  which  was  considered  sufficient  to 
justify  the  initiation  of  a  review  in  accordance  with  the  provisions  of  Article 
'Basic 
11(4)  of  Regulation  (EC)  No  384/96  (hereafter  referred  to  as  the 
Regulation').  By  Regulation  (EC)  No  2566/95(3),  the  Commission,  after 
consultating  the Advisory  Committee,  initiated a review  of Regulation  (EEC)  No 
54/93 with regard to Bongaigaon and commenced  its investigation. 

By Regulation (EC) No 2566/95, the Commission also repealed the  anti-dumping 
duty  imposed  by  Regulation  (EEC)  No  54/93  with  regard  to  imports  of  the 
product  concerned  produced  and exported  to  the Community  by  Bongaigaon  and 
directed  customs authorities,  pursuant to Article  14(5) of the Basic Regulation,  to 
take appropriate steps to register such imports. 

(3) 

OJNoL  262, 01.11.1995, p. 28. 

^ 

(4)  The product  concerned  in this review  is the same  as the one under  consideration 

in Regulation (EEC) No 54/93. 

(5)  The  Commission  officially  advised  Bongaigaon  and  the  representatives  of  the 
exporting  country.  Furthermore,  it  gave  the  parties  directly  concerned  the 
opportunity  to  make  their  views  known  in  writing  and  to  request  a  hearing  but 
did not receive any reaction in this respect. 

The  Commission  sent  a  questionnaire  to  Bongaigaon  and  received  a  proper  and 
timely  reply.  The  Commission  sought  and  verified  all  information  it  deemed 
necessary  for  the purposes  of the procedure and carried  out  a verification  visit  at 
the premises of Bongaigaon,  India. 

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

1995. 

(7)  The  same  methodology  as  that  used  in  the  original  investigation  was  applied 

where circumstances had not changed. 

C. RESULTS OF THE INVESTIGATION 

1. New exporter  qualification 

(8)  The  investigation  confirmed  that  Bongaigaon  had  not  exported  the  product 
concerned  during  the  period  of  investigation  on  which  the  measures  subject  to 
review  are  based,  i.e.  from  1 January  1990 to  31  August  1990.  Exports  of  the 
product  concerned  to the Community  started,  in fact,  only  during  the  company's 
financial  year  1993/94. 

5 

In  addition,  it was found  that  Bongaigaon had  no links,  either  direct  or  indirect, 
with the exporters  involved  in the previous procedure. 
Accordingly,  it  is  confirmed  that  the  company  should  be  considered  as  a  new 
exporter  in  the  sense  of  Article  11(4)  of  the  Basic  Regulation  and  that  its 
individual dumping margin should be determined. 

2.  Dumping 

i) Normal value 

9)  Although the company's  total domestic  sales of  the  like product constituted  more 
than 5 % of the volume of export sales to the Community  it was found  that for  the 
product  type  sold  to  the  Community  the  domestic  sales  volume  for  the 
corresponding  type  was  below  this  threshold  and  the  prices  could  not  be 
considered  representative for the market concerned. 

As  the  company  has  produced  and  sold  on the  domestic  market,  in  the  ordinary 
course  of  trade,  other  types  of  the  like  product  than  the  one  exported  to  the 
Community,  normal  value  was  constructed  in  accordance  with  Article  2(3)  and 
the  first  sentence  of  Article  2(6)  of  the  Basic  Regulation.  Consequently,  normal 
value  was  calculated  on  the  basis  of  all  costs  of  production  incurred  by 
Bongaigaon  when  producing  the  product  type  in  question  plus  a  reasonable 
amount  for  selling,  general  and  administrative  expenses  and  profits,  both 
established  on  the basis  of  the  company's  domestic  sales  of  all  types  of  the  like 
product in the ordinary course of trade. 

£> 

ii) Export price 

(10)  Export  sales  of  the product  concerned  were made directly  to unrelated  importers 
in the  Community.  Export  prices  were  therefore  determined  on  the  basis  of  the 
prices actually  paid by these unrelated  importers,  in accordance  with Article  2(8) 
of the Basic Regulation. 

in) Comparison 

(11)  For  the  purpose  of  a  fair  comparison  between  normal  value  and  export  price, 
account was taken of  differences  affecting  price  comparability  as provided  for  in 
Article  2(10)  of the  Basic Regulation,  namely  import charges  and  indirect  taxes, 
discounts,  transport  and  insurance  expenses,  commission  and  credit  costs.  The 
comparison was made at an ex-works level. 

(12)  Bongaigaon  requested  that adjustments  should be made for  the following  benefits 
received  for  its  export  performance  but  not  granted  in  respect  of  its  domestic 
sales: 

Reduction of Corporate Tax due to export sales based on 
the Indian Income Tax Act, 
Benefit  for  an Export House, 
Market Development Assistance following  the Federation 
of Indian Export Organizations Scheme. 

The  claim  was rejected  as Bongaigaon  could  not demonstrate  that  these  benefits, 
which  accrued  to  the  company  only  after  the  investigation  period  and  which 
resulted in a reduction of its selling, general and administrative expenses, had any 
direct  and  measurable  effect  on  prices  and  price  comparability  in  the  sense  of 
Article 2(10) of the Basic Regulation. 

+ 

iv) Dumping margin 

(13)  The  comparison  showed  the  existence  of  dumping  with  respect  to  the  synthetic 
fibres  of  polyesters  exported  by  Bongaigaon.  The  dumping  margin,  being  equal 
to  the  amount  by  which  normal  value  exceeded  the  price  for  export  to  the 
Community,  was  established  on  the  basis  of  a  comparison  of  the  constructed 
normal  value as defined  in recital  (9) with  the  weighted  average  of prices  for  all 
export  transactions of  the product  concerned  to the Community  during  the period 
mentioned  in  recital  (6).  Expressed  as  a  percentage  of  the  free-at-Community-
frontier  price, the dumping margin amounted to  17.5%. 

3.  Injury 

(14)  No request for  a review of the findings on injury  was made and there is no reason 
to  doubt  that  the  level  of  injury  found  in  the  original  investigation  has  not 
decreased. 

D. AMENDMENT OF THE MEASURES BEING REVIEWED 

(15)  In  accordance  with  Article  9(4)  of  the Basic Regulation,  the amount  of  the anti 
dumping  duty  should  not  exceed  the  dumping  margin  established  and  should  be 
less  if  a  lesser  duty  would  be  adequate  to  remove  the  injury  to  the  Community 
industry. 

% 

(16)  In  the  present  case,  the  dumping  margin  established  exceeds  the  injury  margin, 
The  latter  was  calculated  by  applying  the  same  methodology  as  in  the  original 
investigation.  This  methodology  is described  in  detail  in  recitals  (50)  to  (54)  of 
Regulation  (EEC)  No  1956/92(4).  The  injury  margin  found  amounted  to  13.0%. 
The  anti-dumping  duty  to  be  imposed  should  therefore  correspond  to  the  injury 
margin  established  and  Council  Regulation  (EEC)  No  54/93  should  be  amended 
accordingly. 

E.  RETROACTIVE LEVYING OF THE ANTI-DUMPING DUTY 

(17)  As  the  review  has  resulted  in  a  determination  of  dumping  in  respect  of 
Bongaigaon,  the  anti-dumping  duty  applicable  to  this  company  shall  also  be 
levied  retroactively  up  to  the date  of  the  initiation  of  the  review  against  imports 
which,  pursuant  to Article  3 of  Regulation  (EC)  No  2566/95,  have been  subject 
to registration. 

F. DISCLOSURE AND DURATION OF MEASURES 

(18)  Bongaigaon was informed  of the facts  and considerations  on the basis of which  it 
was intended to propose the amendment of Regulation  (EEC) No 54/93 and  were 
given  an  opportunity  to  comment.  The  Commission  also  officially  advised  the 
complainants mentioned  in the initial  investigation. 

(4)  OJ No L 1*7,  lé.  07.1992, p. 25. 

Bongaigaon  made their views  known in writing.  They  requested  that the  rate of 
profit  should  not be based on the domestic  sales  of  all  types  of  the  like product 
made  in  the  ordinary  course  of  trade.  They  also  repeated  their  claim  for 
adjustments concerning 

the  Reduction  of  Corporate  Tax  due  to  export  sales  based  on  the  Indian 
Income Tax Act and 

Benefit for an Export House. 

These requests had to be rejected for the reasons set out in recitals 9 and 12. 

(19)  This review  does  not affect  the date on which Regulation  (EEC)  No  54/93  will 

expire pursuant to Article 11(2) of the Basic Regulation. 

HAS ADOPTED THIS REGULATION : 

Article 1 

Article  1(2) of Regulation (EEC) No 54/93 is hereby amended as follows: 
under (a) the following  shall be added at the end of the text: 

" Bongaigaon Refinery  & Petrochemicals Ltd. 

13,0% (Taric additional code: 8873);" 

J.C 

Article 2 

The  anti-dumping  duty  shall  also  be  levied  retroactively  up  to  the  date  of  the 
initiation  of  the  review  against  those  imports,  which,  pursuant  to  Article  3  of 
Regulation (EC) No 2566/95, have been subject to registration. 

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, 

For the Council 

^1-1 

ISSN 0254-1475 

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