Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of certain ring binder mechanisms originating in Malaysia and the People's Republic of China and collecting definitively the provisional duties imposed
Date: 1996-12-16
Institutions: European Commission
Subjects: China, Malaysia, anti-dumping measure, book trade, customs regulations

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  16.12.1996 
COM(96)690  final 

Proposal  for a 

COUNCIL REGULATION  fEQ 

imposing definitive anti-dumping duties on imports of certain ring binder 

mechanisms  originating in Malaysia and the People's Republic of China and 

collecting definitively  the provisional duties imposed 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

(1)  The  Commission,  by  Regulation  (EC)  No  1465/961,  imposed  provisional  anti 
dumping duties on imports into the Community of certain ring binder  mechanisms 

originating in Malaysia and the People's Republic of China. 

(2)  Certain  interested  parties, Community  producers, exporters,  importers,  as well  as 

users of the product concerned, submitted comments in writing. Those parties who 

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

Commission  considered  all  the  views  expressed  before  drawing 

its  final 

conclusions. 

(3)  After  a  further  evaluation  of  the  facts,  it  was  decided  to  grant  one  Chinese 

exporter,  namely  World  Wide  Stationery, 

individual 

treatment, 

thereby 

establishing  an individual  dumping  margin  and, consequently,  an  individual  anti 

dumping duty. 

(4)  Subsequent  to  the  imposition  of  provisional  measures,  the  Commission  further 

examined  matters  deemed  relevant  in analysing  the  issue  of  Community  interest. 

Having  examined  a wide  variety  of aspects and the various  interests  involved,  no 

compelling  reasons have  come  into  light which would  lead to the conclusion  that 

the  imposition  of  definitive  measures  would  not  be  in  the  interest  of  the 

Community. 

(5) 

In the light of the above, the Commission confirmed  its provisional  conclusions to 

the  effect  that  ring  binder  mechanisms  originating  in  Malaysia  and  the  People's 

Republic  of  China  were  being  dumped  in  the  Community  and  were  causing 

material  injury  to  the  Community  industry,  and  concluded  that  it  is  in  the 

Community  interest  to  take  protective  measures  in  the  form  of  definitive  anti 

dumping  duties  and  to  collect  definitively  the  provisional  duties  at  the  duty  rate 

definitively  imposed. 

1 OJ No L  187, 26.7.1996, p. 47. 

(6)  The  Chinese  exporter  which  had  been  granted  an  individual  treatment  indicated 

beyond  the  specified  time  limits  its  willingness  to  offer  an  undertaking.  The 

Commission  considered  that,  due to the high  number  of  ring  binder  mechanisms 

types  exported  by  the  company  concerned,  an  undertaking  in  this  case  would  be 

virtually  impossible  to  set  up  and  to  monitor.  No  formal  undertaking  offer  from 

the part of the exporter was finally  received. 

(7)  World  Wide  Stationery  being  granted  individual  treatment,  the injury  elimination 

level  specific  to  that  company  was  established  at  32.5%.  As  a  consequence,  the 

definitive  average  injury  elimination  level  for  all  other  companies  in  China  was 

established  at 39.4%. 

(8) 

It was established  that the imposition  of an ad valorem duty  on mechanisms  with 

17 or  23  rings,  at  the  same  rate  as the  one  applicable  to  other  mechanisms,  was 

likely  to  have  non  desirable  effects  due  to  the  difference  in  price  between  these 

two  categories. In this respect,  it was found  that the  setting  up of measures  in the 

form  of a variable  duty based  on a minimum  price  was appropriate.  Based  on the 

price  comparisons  which  were  carried  out,  a  CIF  minimum  import  price  of  325 

ECU per  1000 pieces  for  17 and 23 ring mechanisms  was considered  adequate  to 

remove the injury  caused by the dumped imports. 

(9) 

In  accordance  with  Article  9  of  Council  Regulation  (EC)  No  384/96,  the 

Commission  therefore  proposes  that  the  Council  impose  definitive  anti-dumping 

duties  on  imports  of  ring  binder  mechanisms  originating  in  Malaysia  and  the 

People's  Republic  of  China.  In  the  light  of  the  extent  of  the  injury,  it  is  also 

recommended  that  the  Council  collect  the  provisional  anti-dumping  duties  to  the 

extent of the amount of the definitive  duties imposed. 

io 

COUNCIL REGULATION  (EC) 

of 

imposing definitive  anti-dumping duties on imports of certain ring binder 

mechanisms originating in Malaysia and the People's Republic of China 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  384/96  of  22  December  1995  on 

protection  against  dumped  imports  from  countries  not  members  of  the  European 
Community1, and in particular Articles 9 and 23 thereof, 

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

Advisory  Committee, 

Whereas: 

I.  PROVISIONAL  MEASURES 

(1)  By  Commission  Regulation  (EC)  No  1465/962  provisional  anti-dumping  duties 
were  imposed  (hereinafter  referred  to  as  'the  provisional  duty  Regulation')  on 

imports  into the Community  of certain ring binder mechanisms  falling  within  CN 

code  ex  8305  10  00  and  originating  in  Malaysia  and  the  People's  Republic  of 

China. 

1 OJ No L 56, 6.3.1996, p. 1 

2  OJ No L  187, 26.7.1996, p. 47. 

II. SUBSEQUENT  PROCEDURE 

(2)  Following  the  imposition  of  the  provisional  anti-dumping  measures,  certain 

interested parties submitted comments in writing. 

(3)  Those  parties  who  so  requested  were  granted  an  opportunity  to  be  heard  by  the 

Commission. 

(4)  The  Commission  continued  to  seek  and  verify  all  information  deemed  necessary 

for its definitive  findings. 

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

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

duties  and  the  definitive  collection  of  amounts  secured  by  way  of  provisional 

duties.  They  were  also  granted  a  period  within  which  to  make  representations 

subsequent to this disclosure. 

(6)  The  parties'  oral  and  written  comments  submitted  by  the  interested  parties  were 

considered,  and,  where  deemed  appropriate, 

taken 

into  account 

in 

the 

Commission's  definitive  findings. 

III. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

(7)  For  the  purpose  of  its  preliminary  findings,  the  Commission  considered  ring 

binder  mechanisms  (hereinafter  referred  to  as  'RBM')  produced  and  sold  in  the 

Community,  RBM  produced  and  sold  in  Malaysia,  and  those  exported  to  the 

Community  from  Malaysia  and the People's  Republic  of  China  as  'like  products', 

within  the  meaning  of  Article  1 (4)  of  Regulation  (EC)  No  384/96  (hereinafter 

referred  to  as  the  'basic  anti-dumping  Regulation'),  because  they  are  either 

identical or have characteristics closely resembling each other. 

(8)  One  importer,  also  producer  of  the  downstream  product  (that  is, manufacturer  of 

ring  binder  files  and  other  stationery  products)  reiterated  arguments  it  had  made 

previously,  namely  that mechanisms  with  17 and 23 rings are not  like products  in 

relation  to  'standard'  two  to  four  ring  mechanisms  and  should,  therefore,  be 

excluded  from  the scope of the proceeding. 

(9) 

In support of its claim, the importer argued that only mechanisms with 2 to 4  rings 

were  mentioned  in the complaint,  leaving  aside  17 and 23 ring  mechanisms  from 

the list of allegedly dumped products. 

Although  it is true that,  in the calculations  set out in the complaint  as prima  facie 

evidence of dumping and resulting injury,  only models with 2 to 4 rings were used 

as examples,  it should  also be recalled  that,  in the product  description  outlined  in 

the  complaint,  all  ring  mechanisms,  with  2 rings  or  more,  were  included.  In  this 

respect,  it  should  be  noted  that  RBM  with  e.g.  6,  13 or  16 rings  are  sold  on  the 

Community  market. 

(10)  It  has  been  argued  that,  in  addition  to  the  number  of  rings,  17  and  23  ring 

mechanisms  have distinguishing physical  characteristics, in particular  higher  base 

length  and  width,  which  make  them  more  wear  resistant  than  other  mechanisms, 

and therefore  significantly  different. 

Having  examined  this  issue  it  was  found  that  variations,  if  any,  could  be 

considered  comparable  to the ones already existing among the different  models of 

2  or  4  ring  mechanisms  themselves.  Therefore,  it  is  considered  that  there  is  no 

other  significant  physical  difference  than  the  number  of  rings  between  17 to  23 

ring mechanisms on the one hand and other ring mechanisms on the other hand. 

(11)  It  has  been  further  argued  that  the  manufacturing  methods  used  and  the  costs  of 

production  of  17  and  23  ring  mechanisms  differed  significantly  from  those 

relating to other mechanisms. 

It should be noted that the operations and the machinery necessary to  manufacture 

the  rings,  fix  them  to  the  blades  and  assemble  the  blades  into  the  mechanism's 

cover  are  essentially  the  same  for  all  types  of  RBM.  The  higher  content  of  raw 

materials  and the ring fixing  operation  which has to be repeated  in the  case  of  17 

and  23  ring  mechanisms  cause  a  difference  in  production  costs.  However,  this 

difference,  although  significant,  is  not  out  of  proportion  with  those  observed 

between  small  and  large  types  of  mechanisms  with  fewer  rings.  Therefore,  the 

particular  manufacturing  operations,  if  any,  and  the  resulting  costs  relating  to  17 

and  23  ring  mechanisms  are  not  such  as  to  alter  their  similarity  to  other 

mechanisms. In any event, with regard to differences  in the manufacturing  process 

that  may  have  been  used,  following  consistent  practice  of  the  Community 

Institutions, all such differences  are irrelevant in the analysis of the like product. 

(12)  It  has  also  been  alleged  that  mechanisms  with  17  or  23  rings  were  expensive 

enough for them to be considered as belonging to a separate market  segment. 

Although  a  significant  price  difference  between  mechanisms  with  17 or  23  rings 

and  similar  mechanisms  with  fewer  rings  could  be  established,  it  is  considered 

that given the similarity  in use and customer,  substitution  effects  could  take  place 

if  the  products  were  to  experience  sufficiently  diverging  price  evolutions.  It 

should  therefore  be concluded  the market  segment  for  mechanisms  with  17 or  23 

rings  does  not  possess  sufficiently  separate  characteristics  to  be  excluded 

altogether from the scope of the investigation. 

(13)  It  was  argued  that  differences  also  arose  in  the" use  of  binders  with  different 

mechanisms.  Whereas  binders  with  "standard"  mechanisms  are  allegedly 

primarily  aimed  at paper where the customer  himself punches  holes, binders  with 

17 and  23 ring mechanisms  are used to collect  pre-punched  paper  due both to  the 

price of the special hole puncher and the few pages it can punch at a time. 

However,  it  should  be  noted  that  certain  types  of  binders  such  as  organisers  or 

catalogues,  using  ring  mechanisms  with  2 to  6 rings  covered  by  this  proceeding, 

also  use  pre-punched  paper  already  inserted  in  the  finished  product,  or  pre 

punched  additional  pages, and that punchers  for  some of these  are not  necessarily 

available  to  the  customer.  In  addition,  pre-punched  paper  for  2  to  4  ring 

mechanisms  is  available  and  sold  in  significant  quantities  in  the  Community,  in 

particular  for  school  use  (which  is  also  the  main  market  for  the  17  and  23  ring 

mechanisms). It can therefore  be concluded  that  17 and 23 ring  mechanisms  have 

a similar use as other types of mechanisms. 

(14)  It was also argued that lever arch mechanisms which fall within the same CN code 

as RBM and are excluded  from  the scope of this proceeding, are more similar to 2 

ring mechanisms than  17 and 23 ring mechanisms. 

In  this  respect,  the  physical  characteristics  and  the  market  for  lever  arch 

mechanisms  were found  to be sufficiently  distinct  from  those  of ring  mechanisms 

to  justify  these  lever  arch  mechanisms  being  excluded  from  the  complaint  and 

from  the scope of the proceeding. 

(15)  Having  examined  the  arguments  put  forward,  it  is confirmed  that  17 and  23  ring 

binder  mechanisms  have  characteristics  closely  resembling  those  of  other  RBM, 

and  are therefore  like products  to other  RBM within the meaning  of Article  1 (4) 

of the basic anti-dumping Regulation. Accordingly, the above claim is  rejected. 

IV.  DUMPING 

A. Market economy third country 

(16)  At  the  time  of  initiation,  one  importer  had  objected  to  the  choice  of  Malaysia  as 

analogue  market  for  the  establishment  of  normal  value  with  respect  to  the 

People's  Republic  of  China.  As  his  arguments  were  not  substantiated  nor  any 

alternative country was proposed, the Commission notified  this interested party on 

22 November  1995 that his objections  had to be rejected.  In a letter which  reached 

the Commission  on 27 November  1995, the same importer proposed to use cost of 

production  of an Italian producer, which was not part of the Community  industry, 

for  the  establishment  of  normal  value  in  the  People's  Republic  of  China.  Since 

this  letter  was  received  20  days  beyond  the  deadline  set  out  in  the  Notice  of 

Initiation,  the  suggestion  could  not  be  taken  into  account.  After  being  disclosed 

the  essential  facts  and  considerations  underlying  the  imposition  of  provisional 

measures,  the  importer  repeated  his  arguments.  Although  the  request  was  made 

beyond  any  time  limit  applicable  to  the  selection  of  a  market  economy  third 

country, the  Commission  examined whether a change in methodology  would  have 

an  impact  on  the  level  of  the  duty.  For  this  purpose,  and  given  the  fact  that  the 

cost  of  production  of  one  single  producer  could  not  be  considered  representative 

for  the  situation  of  other  Community  producers,  the  Commission  interpreted  the 

claim as a request to use the Community  as analogue market for  the  establishment 

of  normal  value  for  the  exports  from  the  People's  Republic  of  China.  The 

Commission  then  compared  the  target  prices  established  for  the  Community 

industry  (its  actual  prices  being  below  cost  of  production)  on  an  average  to 

average  basis  with  the  Chinese  export  prices.  This  dumping  calculation  showed 

that  adopting  this  methodology  would  have  no  impact  on  the  level  of  the  duty 

finally  proposed  by  the  Commission  since  under  either  method  the  dumping 

margin found  clearly exceeded the injury  elimination  level finally established. 

Given  the  above  considerations  and  taking  into  account  thai,  in  accordance  with 
Article  2  (7)  of  the  basic  anti-dumping  Regulation,  if  appropriate,  a  market 
economy country  subject  to the same investigation could be used, the  Commission 

that 

the  selection  of  Malaysia  was  not  unreasonable  for 

concluded 
the 
establishment  of normal  value  and that there was no reason to  change this  choice 
of analogue  country. 

1.  Normal  value 

B. Malaysia 

(17)  One  importer  argued  that  the  Malaysian  domestic  sales,  representing  5.8%  of 

quantities  exported to the Community, were not sufficiently  representative  for  the 

establishment  of  normal  value. In this  respect,  the  Commission  applied  Article  2 

(2)  of  the  basic  anti-dumping  Regulation,  according  to  which  a  domestic  sales 

volume  of  5% is considered  as a sufficient  quantity,  for  the representativeness  of 

the domestic market. 

(18)  It was also argued by the same importer that there is only a limited competition  on 

the  Malaysian  market  and that  consequently  domestic  prices  are higher  than  they 

would  be  under  normal  competitive  conditions.  The  Commission  had  already 

looked  into  that  matter  when  selecting  Malaysia  as  an  appropriate  analogue 

country  and  addressed  the  argument  in  recital  10  of  the  provisional  duty 

Regulation.  As no new  argument  nor  evidence  was put  forward,  the  Commission 

confirmed  that  a  certain  degree  of  competition  on  the  Malaysian  market  is 

warranted  by the presence  of RBM originating  in the People's  Republic  of  China. 

Therefore,  it  could  be  concluded  that  Malaysia  is  a  reasonable  choice  for  the 

establishment  of normal value in the People's Republic of China. 

2.  Dumping  margin 

(19)  No  other  arguments  having  been presented  which could  lead to  a modification  of 

the  dumping  determination;  the  Commission  considers  that  the  methodology  of 

the dumping  calculation  and the provisional  findings  as described  in recitals  18 to 

26  of  the  provisional  duty  Regulation  are  to  be  confirmed.  Consequently,  the 

dumping margin for Malaysia is definitively  established at 42.8%. 

C. People's Republic of China 

1.  Normal  value 

(20)  Two  Chinese  exporters  claimed  an  adjustment  to  normal  value,  because  of 
differences  in the  cost  structure  due to  low  labour  costs  in the  People's  Republic 
of China and differences  in the technology  of the production operations. 

As far as labour costs are concerned, the Commission services note that the reason 

for  using  a  third  market  economy  country  is  the  lack  of  reliable  cost  and  price 

information  in  the  non-market  economy  country  concerned.  Therefore,  it  is 

groundless  to  argue  that  certain  costs  are  lower  in  the  non-market  economy 

country than  in the analogue country and that adjustments  to normal  value  should 

be made, when applying this normal value to the non-market economy  country. 

With  respect  to  the  different  technology,  the  Commission  services  consider  that 

the production  process employed  to manufacture  a particular  product  is  irrelevant 

as  long  as  the  physical  characteristics  and  use  of  the  product  are  similar.  In  this 

case,  the  alleged  differences  did  not  lead  to  any  significant  differences  in  the 

essential  physical  characteristics  of  the  product  concerned.  Therefore, 

in 

accordance with Article 2 (10 (a)) of the basic anti-dumping  Regulation, the claim 

had to be  rejected. 

(21)  Two  interested  parties  argued  that  they  were  not  able  to  comment  on  the 

Commission's  calculation  of  normal  value,  as  the  absolute  figures  regarding  the 

calculation of normal value established in the analogue country were not disclosed 

to the  Chinese  exporters, on the grounds of confidentiality.  In its disclosure  letter 

to  these  parties,  the  Commission  had  attached  all  calculation  sheets  relevant  for 

these companies and set out in detail the methodology  applied by the  Commission 

for the establishment  of normal value, due regard being given to the protection  of 

confidential  information,  in  accordance  with  Article  20  (4)  of  the  basic  anti 

dumping  Regulation.  The disclosure of the detailed  absolute figures  would  violate 

the  legitimate  right  of  an  interested  party  to  confidential  treatment  and  was  not 

necessary  for  the understanding  of the calculation.  Therefore,  the  argument  could 

not be accepted. 

2.  Export  price 

(22)  One exporter claimed that excessive amounts were deducted  from  the export  price 

for deferred  rebates found  at the related importer's premises. 

The  Commission  notes  that  this  company,  in  replying  to  the  Commission's 

questionnaire,  had  failed  to  report  such  rebates,  which  were  found  by  the 

Commission's  officials  during 

the  on-spot 

investigation.  Therefore, 

the 

Commission  had  to  determine  the  deductions  on  the  basis  of  the  data  collected 

8 

there. Moreover, the exporter's claim refers to an estimated  figure  of such rebates, 
whereas the amounts actually  deducted by the Commission  were those verified  in 
the investigation. 

(23)  One exporter  claimed that the  margin  of profit  deducted  by  the  Commission  was 

too high, in comparison with the actual net profit  realised by its related  importer. 

Due  to  the  association  agreement  between  the  two  companies,  the  Commission 

could not take into account for the construction of a reliable export price the  profit 

margin  shown  in  the  related  importer's  accounts.  In  line  with  the  Commission's 

practice, it was considered reasonable to use actual data of independent  companies 

importing  the  product  concerned  into  the  Community.  In  determining  the  profit 

margin  normally  achieved  by  these  companies,  only  the  product  concerned  was 

taken  into  account.  Therefore,  the  7.8% profit  margin  does not  include  any  profit 

margins achievable on stationery products other than ring binder mechanisms. The 

determination  of  the  profit  margin  was  made  on  the  basis  of  the  independent 

importers'  data which were verified  at their premises, due account  being taken  of 

their different  sale volumes. 

3.  Comparison 

(24)  Two  interested  parties  enquired  about  and  partly  disputed  the  level  of  trade 

adjustment  which  the  Commission  took  into  account,  to  compare  the  Malaysian 

Normal  Value  and  Chinese  export  prices. One party  claimed  that  such  allowance 

should have been more substantial. 

The  Commission  notes  that  none  of  the  exporters  concerned  had  ever  claimed 

such  an  allowance  during  the  different  phases  of  the  investigation  and  that  the 

Commission  considered  on its own initiative that, in view of a fair  comparison,  it 

was  appropriate  to  grant  it  in  this  case.  In  the  absence  of  any  specific  evidence 

provided  by  any  of  the  exporters  concerned,  the  Commission  considered  it 

appropriate, in order to determine the amount of such an allowance in a reasonable 

way, to base its calculation on its practice in similar situations. 

4.  Individual  treatment 

(25)  World  Wide  Stationery  (hereinafter  referred  to  as  'WWS'),  which  had  at  a  very 

early  stage  applied  for  individual  treatment,  reiterated  its  request  after  the 

imposition of provisional measures. 

After  a  further  evaluation  of  the  facts,  the  Commission  services  concluded,  after 

verification  in  Hong  Kong,  that  individual  treatment  could  be  granted  to  this 

company, in view of the substance and implementing modalities of the production 

agreement  between  WWS  and  the  representatives  of  the  local  authorities  in  the 

People's  Republic  of  China.  According  to  this  agreement,  the  company  based  in 

Hong  Kong  seemed  to master the production  operations  in the  People's  Republic 

of  China,  since  it  only  paid  to  the  local  Chinese  authorities  a transformation  fee 

per  ton  for  the  products  exported.  The  machinery  used  in  the  operations  in  the 

People's  Republic  of  China  was  owned  by  WWS  and  appeared  as  assets  in  its 

financial  accounts.  WWS  also  seemed  to  be  in  control  of  the  supply  of  raw 

materials  as well  as of all  sales  of the product  concerned.  In these  circumstances, 

it was considered appropriate to establish for  World Wide Stationery  an individual 

dumping margin and to determine an individual anti-dumping  duty. 

(26)  The  related  companies  Champion  Stationery  Manufacturing  Co. and  Sun  Kwong 

Metal  Manufacturer  Co.  Ltd,  considered  by  the  Commission  as  one  single 

company  for  the  reason  explained  in  recital  5  (b)  of  the  provisional  duty 

Regulation,  did  not  reiterate  their  request  of  individual  treatment  and  did  not 

submit  any  further  argument  in  this  respect  after  the  imposition  of  provisional 

measures.  Therefore,  the  Commission  confirms 

its  provisional  findings  as 

reported  in  recitals  37  to  39  of  the  provisional  duty  Regulation,  by  which  the 

request of individual treatment had been  rejected. 

(27)  In  its  reply  to  the  final  disclosure,  Bensons  criticised  in the  name  of  WHS  Hong 

Kong  that  WWS  alone  should  benefit  from  individual  treatment.  It  alleged  that 

WHS  would  have  also  fulfilled 

the  conditions  set  by  the  Commission  for 

individual  treatment  and  would  therefore  also  be  eligible  for  this  treatment.  The 

Commission, however, notes that WHS did not ask for individual treatment  within 

the  specified  time  limits, and  only raised  the question  of individual  treatment  at a 

very  late stage of the investigation. Thus, the Commission was not in a position to 

verify,  with  regard  to  WHS, the  substantive  conditions  applicable,  in view  of  the 

statutory  deadlines  applicable  to  this  proceeding.  Consequently,  the  Commission 

was unable to propose individual treatment for WHS. 

10 

5.  Dumping margin 

(28)  The  Commission  considers  that the methodology  of the dumping  calculation  and 

the  provisional  findings  as  described  in  recitals  27  to  36  of  the  provisional  duty 

Regulation are to be  confirmed. 

World  Wide  Stationery's  individual  dumping  margin  amounts  to  96.6%.  The 

definitive  dumping  margin  for  the  other  exporters  of  the  People's  Republic  of 

China as a whole amounts to 129.22%. 

V.  COMMUNITY  INDUSTRY 

(29)  As regards the Community  industry, the treatment of imports from Hungary  made 

by one EC producer, including the issue of the non-preferential  rules of origin, has 

been  questioned  by  several  exporters  and  one  importer,  without,  however,  their 

claims in this respect being  substantiated. 

As  explained  in  the  provisional  duty  Regulation  (recital  43),  the  Commission 

accepts  the  fact  that  a  majority  of  the  products  in  question  clearly  originate  in 

Hungary  : this  is the  case,  for  instance, when  all  parts  used  come  from  Hungary 

and/or  substantial  processing  takes place there. Accordingly,  these products  were 

excluded  from  the  Community  production,  and,  consequently,  played  no  role  in 

the  definition  of  the  Community  industry.  Sales  of  these  products  (which  are,  in 

fact,  made in Hungary) have indeed not been taken into account amongst the  sales 

of the Community  industry when assessing the injury this industry  suffered. 

Conversely,  products  merely  assembled  in  Hungary  from  Austrian  parts  were 

considered  part of Community production  since the assembly  operation which the 

products  had  undergone  in  Hungary  did  not  confer  Hungarian  origin  on  the 

finished  products.  This  determination  was  based  on  the  non-preferential  rules  of 

origin  applicable,  as  it  is  the  Institutions'  practice  to  base  in  principle  their 

conclusions  in  anti-dumping  investigations  on  these  rules.  The  use  of  the 

preferential  rules  of  origin  set  out  in Article  1 of protocol  IV  to  the  EU-Hungary 

Association  Agreement  would be neither appropriate nor warranted  in the  context 

of an anti-dumping  proceeding. 

(30)  In  conclusion,  the  finding  in  the  provisional  duty  Regulation  that  the  two 
in 

complainant  Community  producers  constitute 
accordance with Article 4 (1) of the basic anti-dumping Regulation is  confirmed. 

the  Community 

industry 

11 

VI.  INJURY 

A.  Preliminary  remark 

(31)  As regards the methodology  used for the establishment  of injury,  set out in recital 

46  of the  provisional  duty  Regulation,  it  should  be recalled  that  the  Commission 

analysed data relating to the period  1992 to September  1995, and the  geographical 

scope of the investigation over this period was the Community  as composed  at the 

time of the initiation i.e. including all fifteen  Member States. 

(32)  Several  exporters  repeated  the  argument,  which  the  Commission  had  already 

addressed  in recital 46 of the provisional  duty Regulation, that, for  the purpose  of 

determining  injury,  data  relating  to  the  Austrian  industry  can  only  be  taken  into 

account  insofar  as  they  relate  to  the  period  after  1 January  1995,  when  Austria 

became a Member of the European Union. One exporter argued that the  combined 

provisions  of Articles  3(4) and  4 of the  Agreement  on  Implementation  of  Article 

VI  of  GATT  1994 would  exclude  non-members  countries  from  the  definition  of 

the  domestic  industry,  and  several  exporters  argued  that  neither  Article  VI  of 

GATT  1994, nor the EEA Agreement, would justify  the Commission's  decision to 

establish  injury  relying,  in  part,  on  data  concerning  Austria  and  relating  to  the 

period between January  1992 and December  1994. 

In  addressing  this  argument,  it  should  be  noted  that  the  Agreement  on 

Implementation  of  Article  VI  of  GATT  1994  requires  that  any  imposition  of 

measures on a given territory be based on a formal  investigation  into the effects  of 

the  alleged  dumping  within the  same territory.  Thus, the  investigation  carried  out 

in  this  case  covered  all  fifteen  Member  States.  This  was  made  possible  in 

particular  given  the  integration  of  the  market  subject  to  the  analysis  prior  to  the 

enlargement of the Community. 

It  is confirmed,  therefore,  that  the  Austrian  producer  has  been  rightly  considered 

as part of the  Community  industry  (as defined  in accordance  with  Article 4 (1) of 

the  basic  anti-dumping  Regulation)  and  as  being  entitled  to  act  as  complainant. 

For  this  reason,  it  is confirmed  that,  in order  to  assess  the  injury  suffered,  trends 

had  to  be  established  for  the  Community  industry  as  defined  at  the  time  of 

initiation of this proceeding, over a number of years. 

12 

B.  Community  consumption 

(33)  On  the  basis  of  estimates  for  the  annual  per  head  consumption  of  binders,  one 

importer argued that the consumption of RBM on the Community market was 400 

million  units  and  not  283  million  units  as  stated  in  the  provisional  duty 

Regulation. 

It  should  be  recalled  that  the  Commission  based  its  provisional  findings  on  the 

information  received  from  the  exporters,  importers  and  Community  producers. 

Due to the high level of co-operation in this case, the data for  all major  companies 

present  on the market have been analysed, no party  being  able to  give  indications 

on  a  producer/importer  which  would  have  been  overlooked  during 

the 

investigation  period  and  whose  sales  could  explain  the  difference  between  the 

Commission's  evaluation  and  the  different  alleged  market  size.  It  is  therefore 

considered  that  the  data  obtained  from  the  companies  in  this  case  offer  a  more 

accurate  base  for  the  calculation  of  the  Community  consumption  than  a  mere 

estimate  based  on  per-head  consumption  rates.  Therefore,  the  findings  set  out  in 

recital 47 of the provisional duty Regulation are  confirmed. 

C.  Factors and considerations  relating to the dumped  imports 

(34)  One  exporter  submitted  that  a  quality  difference  should  be  taken  into  account  in 

order to ensure a fair comparison between its export sales of the like product  in the 

Community  and  sales  by  the  Community  industry.  The  exporter  claimed  that  it 

produces  RBM  with  a  narrower  base  which  are  allegedly  some  12  to  17.5  % 

cheaper  than  the  wide  base  mechanisms  sold  by  the  complainants.  The  exporter 

concerned  claimed  that  this  should  be  taken  into  account  in  the  form  of 

adjustments  when calculating the degree of price undercutting. 

Having  examined  the allegation  of the exporter,  the Commission  has verified  that 

only  models  with  similar  width  (within  1 mm  difference)  were  compared,  and 

found  that,  in  any  event,  no  consistent  price  differences  could  be  established 

between  mechanisms  with  different  widths.  For  these  reasons,  the  findings 

outlined  in  recitals  52  to  54  and  the  methodology  described  at  recital  84  of  the 

provisional  duty Regulation are  confirmed. 

13 

D.  Situation of the Community  industry 

(35)  One exporter argued that the Community industry's negative trends on production, 

sales  and  employment  were  caused  by  the  progressive  relocation  of  a  former 

British producer to the Far East. 

It  should  be  noted  that,  as  the  producer  in  question  ceased  its  manufacturing 

operations  in the Community  in  1991, it has not been included  in the definition  of 

the  Community  industry  for  the  purpose  of  this  proceeding,  and  the  injury 

indicators  established  in  this  case  do  not  rely  on  its  data.  Consequently,  this 

argument was  rejected. 

(36)  No  additional  substantiated  arguments  have  been  presented  in  relation  to  the 

findings  set out in recitals 55 to 62 of the provisional duty Regulation. 

E.  Conclusion on injury 

(37)  In the light of the above and in the absence of other arguments, it is confirmed  that 

the  Community  industry  has  suffered  material  injury  within  the  meaning  of 

Article 3 of the basic anti-dumping  Regulation. 

VII.  CAUSATION 

(38)  One  exporter  argued  that  the  injury  suffered  by the  Community  industry  was  due 

to the restructuring it had undergone. 

As explained  in the provisional  duty Regulation, and in particular in its recitals 61 

and  65, the  actual  situation  shows  rather  that  the  Community  industry  has  been 

prevented  from  benefiting  from  its restructuring  since, in the  face  of the  dumped 

imports,  it  could  neither  achieve  positive  financial  results  nor  obtain  stability  of 

market  share.  It  is  therefore  considered  that  the  injury  suffered  has  not  been 

caused  by the  Community  industry's restructuring, and this argument  was, for  this 

reason,  rejected. 

(39)  The  same  exporter  reiterated  its  argument  that  the  injury  suffered  by  the 
Community  industry  was  caused  by  the  partial  shift  to  Hungary  of  one  of  the 
Community producer's operations. 

14 

As no new evidence substantiating this allegation has been submitted, the findings 

set out in recital 71 of the provisional duty Regulation are confirmed. 

(40)  The  allegation  that  the  injury  suffered  is  resulting  from  past  anti-competitive 

practices, which had been put forward before the provisional duty Regulation, has 

been reiterated by a number of parties. 

The parties making these allegations did not provide any evidence in this respect, 

and it should be recalled that no complaint has been lodged with any competition 

authority  within the Community.  For this reason  such an allegation  could  not be 

taken into account. 

(41)  In conclusion, as no new arguments were received  in connection with the  findings 

in  recitals  67  to  74  of  the  provisional  duty  Regulation,  these  findings  are 

confirmed. 

VIII. COMMUNITY  INTEREST 

A. General 

(42)  It should be recalled from recitals 75 et seq of the provisional duty Regulation that 

an  appreciation  of  all  the  various  interests,  including  the  interests  of  the 

Community  industry  and users was made, and that the  Commission  provisionally 

concluded  that  there  were  no  compelling  reasons  not  to  take  action  against  the 

imports  in  question.  Subsequently,  a  further  examination  of  matters  deemed 

relevant in analysing the issue of Community  interest took place. 

B.  Impact on users 

1.  Introduction 

(43)  Several  interested  parties  reiterated  their  arguments, presented  in  recital  77  to  80 

of  the  provisional  duty  Regulation,  that  anti-dumping  measures  would  affect  the 

situation of EC binder  manufacturers. 

2.  Information  collection 

(44)  The  conclusions  set  out  below  are based  on  submissions  received  from  a  variety 
of  interested  users, twenty  seven  companies  overall, the quantitative  data  existing 
or  being  meaningful  for  nine  of  these  which  represented  17%  of  the  annual 

15 

apparent  Community  consumption  of  RBM.  The  reliability  of  this  data,-where 

possible, was verified  during company visits. 

3.  Industrial impact on the downstream industry 

(45)  In  establishing  the  size  of  the  downstream  industry  which  could  be  affected  by 

measures  on  RBM,  the  part  of  the  stationery  companies  dealing  with  office 

products  other  than  binders  should  be  excluded.  On  the  basis  of  the  annual 

Community  binder  production  and  of  the  productivity  ratios  found 

in  the 

submissions,  it  is  considered  that  the  employment  in  the  Community  binder 

industry amounts to 6000 employees. 

(46)  A  to  the  structure  of  the  binder  industry,  the  existence  of  two  categories  of 

products,  standard  and  custom  made,  was  established.  On  the  basis  of  the 

productivity  level  for  these two  categories, and  on the  market  shares  of  the  users 

concerned,  it  is  considered  that  the  custom-made  binder  business  represents  one 

third of the Community binder industry in volume and 50% of its total  turnover. 

(47)  Some  parties  argued  that  anti-dumping  measures  on  RBM  would  exclude  the 

imported  RBM  from  the Community  market,  so that the  sources  of  supply  would 

be reduced  to the two  Community  producers. It has been  further  argued  that,  due 

to the large size of one of the two Community  producers, the supply market  could 

become  a  monopoly  in  the  near  future.  It  should  be  noted,  however,  that  the 

difference  in  size  of  the  two  Community  producers  is  limited  and  not  such  as  to 

lead to the disappearance of one of them being likely. Moreover,  no new  evidence 

in respect  of the  first  part  of  this  argument  was  received.  The  findings  set  out  in 

recital 78 of the provisional duty Regulation are therefore  confirmed. 

4.  Direct financial  impact on the downstream industry 

(48)  First, it has been alleged that for  certain particular types of binders, the RBM  was 

the source of up to 30% of the manufacturing  cost of a binder. 

In  this  respect,  it  was  found  that  the  mechanism  is  a  major  component  of  a 

finished  binder,  and  that  the number  of rings  and  size  have  a  strong  influence  on 

its proportion of the cost of the finished  binder. Given this variety, it is considered 

that a meaningful  analysis of the cost influence  of the RBM could not be based  on 
any  particular  model  of  binder,  but  should  be  done  on  a  global  basis  for  each 

company, taking into account the actual product mix of its sales. 

16 

It  was  therefore  considered  that  the  total  cost  for  the  RBM  supply  for  a* given 

company  should be examined in the light of the total value of its binder sales. This 

resulted  in  a  weighted  average  ratio  of  10.8%  ("cost  ratio"),  which  was  fairly 

homogeneous  for  the companies  examined.  Although  differences  existed  between 

companies  dedicated  to  the  production  of  standard  binders  in  comparison  with 

others  dedicated  to  custom-made  production,  no  company  showed,  on  average,  a 

ratio higher than  13%. 
•v 

(49)  As  far  as  the  possible  price  impact  of  the  RBM  on  standard  made  products  is 

concerned,  one  submission  received  after  the  final  disclosure  refers  to  a  14.4% 

cost ratio. This  is allegedly  derived  from  the  fact  that the price  of  a custom  made 

binder is twice as high as the one of a standard made binder, and that the cost ratio 

for them should therefore  be half of the one for standard made. 

This approach totally  neglects the fact  that these two categories  of binders  are not 

necessarily  manufactured  with 

the,  same  mechanisms.  Special 

types  of 

mechanisms, in small series, are expensive and used in custom-made binders. This 

means  that  both  terms  of  the  cost  ratio  are  different,  and  that  although  the  cost 

ratio for  standard  made binders is higher than the one for  custom  made binders, it 

is  not  twice  as  high.  As  explained  in  recital  48  above,  no  higher  cost  ratio  than 

13%  could  be  found.  Furthermore,  some  companies  are  exclusively  dedicated  to 

standard made products. 

(50)  Secondly,  and  partly  on  the  basis  of  the  above-mentioned  allegation  on  the  cost 

ratio, it has been alleged that the imposition of anti-dumping measures would  have 

a serious adverse impact on the financial situation of the binder  manufacturers. 

These  allegations  concerning  the  foreseeable  impact  of  measures  have  been 
examined  in detail. As far as selling prices for RBM are concerned, it is likely that 
the  Community  industry,  with  a 35% market  share, would  not  be  able to  increase 
its  prices  above  a  certain  limited  level,  (which  can  be  estimated  below  10%), 
without  risking  to  strengthen  its  current  downward  trend  in  respect  of  market 
share.  In  addition,  imports  from  countries  not  concerned  by  this  proceeding 
represent  9%  of the  RBM market,  and  it is expected  that these  producers  will  not 
be willing  or  able to command  price increases. As for the imports  from  Malaysia, 
it  should  be  recalled  that  the  injury  elimination  level  foreseen  for  this  country  is 

considerably  lower  than  for  the  People's  Republic  of  China.  The  market  share  of 

17 

mechanisms  with  Chinese  origin being 45%, it was established  that  even rf these 

mechanisms  were  to  experience  a  20% price  increase  at  resale  level  and  those 

originating  in  other  countries  than  the  People's  Republic  of  China  the  price 

increases assumed in this paragraph, the average price increase on the market as a 

whole would be an estimated 12%. 

Consequently,  in  view  of  the  average  cost  ratio  established  in  recital  48,  it  is 

considered  that the overall  impact on the turnover  likely to be experienced  by the 

binder industry following the imposition of measures would be 12% of 10.8%, i.e. 

1.3%). Even  in the unlikely  event  of a full  reflection  of the  highest  anti-dumping 

duty  proposed  in the  RBM resale  price  ,  i.e.  39.4% on  CIF  or  29.9% at RBM 

resale  level,  an  impact  of  not  more  than  3.2% on the  binder  producers'  selling 

prices can be foreseen. 

(51)  It has also been  argued that the increased  costs for binders  could  not be  reflected 

in price increases of the final product due to the binder offer  exceeding the market 

demand,  to the changes  in the binder  distribution  and to the fear  of reduction  in 

demand. 

In  the  light  of the  fact  that  the average  binder  price  increase  which  would  take 

place  at  a  retail  or  business  customer  level  would  be  below  1% (see recital  50 

where  ex-factory  price increase for binders is estimated  at  1.3%), it is considered 

that  no  significant  contraction  in  demand  is  likely  to  be  caused  and  that  the 

impact, if any, on the situation of the consumers of the binders will be minimal. In 

addition,  it  should  be noted  that  substitutes  to binders  which  would  be in such a 

competitive  situation  that  they  would  replace  them  following  the  slightest  price 

evolution  do  not  appear  to  exist.  Some  companies  in  the  binder  business  have 

even confirmed  that no change of the pattern of consumption  could be foreseen in 

the next 5 to  10 years. 

It  is concluded,  therefore,  that  neither  the relatively  strong  competition  amongst 

binder producers nor the emergence of substitute products within the EC are likely 

to  prevent  the  binder  producers  from  increasing  their  prices  in  line  with  their 

costs,  in consideration  in particular  of the limited  size  of the increase  needed  to 

reflect the impact of the anti-dumping duties of the magnitude  proposed. 

18 

5.  Competition from third countries 

(52)  Several  interested  parties  reiterated  their  arguments,  outlined  in  recital  79  of  the 

provisional  duty  Regulation,  that  anti-dumping  measures  would  affect  EC  binder 

manufacturers'  competitive  position  vis-à-vis  binder  producers  located  in  third 

countries.  These  exporters  could  benefit  from  lower  mechanism  costs  and  global 

supply policies of certain large standard binder distributors whose influence  on the 

market  is  increasing.  It  was  alleged  that  this  could  result  in  the  Community 

downstream  industry  losing  market  share  and  thus  being  tempted  to  relocate  its 

production  in  neighbouring  countries.  In  addressing  this  allegation  it  should  be 

recalled  that  the  binder  market  can  be  divided  into  two  segments,  namely  the 

custom-made and standard made binders. 

(a) custom-made  products 

(53)  It  should  be  stressed  again  that,  for  the  part  of  the  market  which  is  business-to-

business  oriented,  it  is  fundamental  that  producers  are  situated  close  to  the 

customers, and have flexibility in production in order to meet the required  demand 

and  service.  Moreover,  for  this  type  of  product,  the  impact  of  the  RBM  on  the 

final  price  can  be  lower  than  the  calculated  average  established  at  recital  48.  It 

should  be  stressed,  therefore,  that  the  issue  of  the  competitive  position  for  this 

segment  of  the  market  is  mainly  relevant  in  terms  of  the  existence  of  imported 

standard  products  for  later  customisation.  In  this  context,  there  are  imports  of 

finished  polypropylene  presentation  products  from  the  Far  East,  including  the 

smallest binder models. As to the substitutability  which could  exist  between  these 

products  and  the  cu"stom  made  binders,  however,  it  should  be  stressed  that  a 

custom  made  binder  is not  simply  a standard  binder  with  a printed  logo.  Custom 

made  binders  indeed  rely  on  a variety  of  different  raw  materials  and  assembling 

techniques used  to produce  a small number of totally  individualised  products.  For 

public  relations  purposes,  a  switch  from  this  particular  custom-built  product  to  a 

standard  binder  after  the mere addition  of a logo would require  such  an  important 

price difference  that such evolution is not likely to be caused  by the effect  of anti 

dumping measures. 

(b) standard  made products 

(54)  As  far  as  the  standard  binder  manufacturers  in  the  Community  are  concerned,  it 
has  been  alleged  that  their  market  was  driven  by  the  influence  of  binder 
large  chains  of 
distribution.  This  distribution 

is  increasingly  marked  by 

19 

superstores running supply policies taking advantage of the world  lowest purchase 

price  for  comparable  products,  these  policies  being  only 

limited  by  the 

transportation  costs.  In  this  respect,  it  was  established  that  road  transport  costs 

over a normal  distance within  one Member  State or between  a neighbouring  non-

EC  country  and  the  Community  would  not  be  below  5%  of  the  value  of  the 

product.  Over  a  longer  distance,  between  non-EC  countries  and  the  EC,  if 

maritime transport had to be used, transport  costs could  reach  10% of the  product 

value. 

(55)  As  a consequence  of the maximum  cost  ratio  referred  to  at  recital  49  above,  it  is 

considered  that the foreseeable  price impact on the standard made binder  industry 

would be limited to  13% (standard made maximum cost ratio) times  12% (average 

price increase), equal to  1.6%. 

On this basis, the  analysis  should  distinguish  between  competition  from  Norway, 

the CEEC, and Far Eastern countries. 

(b. 1) Competition from Norway 

(56)  It  has  been  alleged  that  imports  from  Norway  constituted  the  greatest  current 

threat  to  the  EC  binder  industry,  as  imports  from  this  country  were  already 

significant  and increasing. 

No complaint  or substantiated  evidence having been submitted  in respect of  unfair 

trading practices, it would seem reasonable to consider that the EC-binder  industry 

has  identical  or  similar  ex-factory  costs  as  their  competitors  in  Norway.  The 

Commission  consider  that  the  cost  increase  that  the  EC  binder  producers  could 

experience  would  still  allow them  to be  competitive,  since the transport  costs  for 

the  EC  sales  of  their  Norwegian  competitors  in  this  case  would  be  at  least  three 

times higher (5%) than this foreseeable  cost increase (1.6%). 

(b.2) Competition from the CEEC 

(57)  The Central  and Eastern European  Countries (CEEC) have been alleged to be in a 

competitive  situation  to  build  up  a  binder  industry  able  to  compete  on  the  EC 

market. 

In this respect,  it  should  be noted  that until  now the  size of the binder  industry  in 
these  countries  remained  small  and  the  import  statistics  for  office  products  show 
low imports. Nevertheless, neither the  growth  of this  industry  nor  its  comparative 

20 

advantage  in  terms  of  labour  costs  can  be  denied.  The  reduction  -in  the 

manufacturing  cost which can be obtained  in these countries  in comparison to the 

Community  outweighs  the  necessary  transportation  costs  to  the  Community 

market. 

However,  it  should  be  considered  that  the  creation  of  an  export-oriented  binder 

industry  in  neighbouring  countries  would  result  from  the  relocation  of  EC 

producing  operations. Although  reference  to business plans  for  a production  shift 

to these  countries  has been made, the elements received  by the  Commission  only 

consisted  of  the  comparison  of  current  labour  costs  and  transportation  costs.  On 

this  basis,  even  before  the  introduction  of  any  anti-dumping  measure  on  RBM, 

these comparisons  would  militate in favour  of immediate relocation  of the  binder 

industry. This shows that, in taking a management decision to relocate  production, 

a  firm  also  weighs  other  important  factors.  In  this  context,  the  cost  of  shifting 

production  facilities  in  themselves  and,  above  all,  the  uncertainty  linked  with 

rapidly expanding countries have to be factored  in. 

It  is  considered  that  in  such  decisions  to  shift  production  to  the  CEEC,  the 

possible  impact of a price increase on RBM, due to its limited amount of  1.6% on 

average,  could  only  play  a  minor  role,  if  any.  Consequently,  no  compelling 

evidence has been received  showing that the imposition  of a duty  on RBM  would 

lead to the relocation of the binder industry in the CEEC and to an important  surge 

of imports originating in these countries. 

(b.3) Competition from the Far East 

(58)  One exporter  submitted  information  according to which  finished  binders  from  the 

Far East could be imported below their Community cost of production. 

Eurostat  import  statistics  show that  imports  of  plastic  office  products  originating 

in  these  countries  are  relatively  low  and  stable.  Accordingly,  nearly  all  binder 

manufacturers  in  the  Community,  small  companies  as  well  as  important  ones, 

minimise the competitive impact of these imports. 
It  is therefore  considered  that  the  competitive  situation  between  Far  Eastern  and 
EC binder producers described above is unlikely to be altered by the imposition of 
measures on the Community  imports of RBM. 

(c) Conclusion  on competition from third countries 

(59)  In  conclusion,  it  could  not  be  established  that  the  imposition  of  anti-dumping 
measures  on  RBM  would  be  such  as  to  significantly  affect  the  EC  binder 

21 

manufacturers* competitive  situation vis à vis binder producers located outside the 
Community.  This conclusion  stands both in respect  of custom  made  and  standard 
made binders. 

C.  Impact on the Community  industry 

(60)  Concerning  the  consequences  for  the  Community  industry  of  an  absence  of  anti 

dumping  measures,  it  was  established  at  the  provisional  stage  (recital  76  of  the 

provisional  duty  Regulation)  that  this  would  lead  to  a  further  worsening  of  the 

Community  industry's  financial  situation.  The  recurrent  losses  since  1992  would 

continue despite the far-reaching  restructuring already carried out. 

It should  be added  that the heavily  depressed  net equity  situation  and the  amount 

of short term debt would become unsustainable. From a commercial point of view, 

any reduction  in the product range offered  by the Community  industry  in reaction 

to depressed prices would be no solution. Indeed, should Community producers be 

tempted  to  do  so,  they  would  lose  one  of  their  competitive  advantages  and, 

because  of  a  dispersed  customer  industry,  would  not  be  able, to  reach  the  high 

volumes  in  production  and  sales  necessary  in  this  type  of  industry.  Industrially, 

the  investments  in automation  have been both  important  and  successful,  resulting 

in a highly competitive industry at a world level. With the level of automation  and 

integration  reached,  certain equipment  such as metal treatment  installations  being 

unique  in  each  company,  it  would  not  be  sustainable  to  abandon  certain  product 

lines without worsening the situation of the remainder. 

For  these  reasons,  and  as  a  consequence  of  the  unfair  competition  from  the 

dumped  imports,  production  in  the  Community  would,  within  a  short  period  of 

time, no longer have viable prospects and would cease altogether. 

D.  Conclusion 

(61)  In  the  light  of  the  above,  the  conclusions  drawn  by  the  Commission  in  the 
provisional  duty  Regulation  concerning  Community  interest  are  confirmed. 
Indeed,  having  examined  a  wide  variety  of  aspects  and  the  various  interests 
involved,  no  compelling  reasons  have  come  into  light  which  would  lead  to  the 
conclusion  that  adopting  definitive  measures  would  not  be  in  the  interest  of  the 

Community, in accordance with Article 21 of the basic anti-dumping  Regulation. 

22 

IX.  ANTI-DUMPING  MEASURES 

A.  General 

(62)  It  should  be  recalled  that  the  detailed  calculations  used  to  establish  the  injury 

elimination  level  at  the  provisional  stage  were  based  on  the  price  level,  per 

category  of  models  with  the  same  specific  characteristics,  (based  on  a  weighted 

average  cost  of  production  including  profit)  of  the  Community  industry's  best 

selling  models  (60% by  volume).  This  was  then  compared  to  the  resale  price  of 

the  imported  products,  or  where  appropriate  to  the  CIF  import  price  adjusted  to 

customer delivered level, for each corresponding category. In order to ensure a fair 

comparison,  only  categories  with  the  same  basic  characteristics  were  compared, 

and  it  was  considered  that  for  matching  categories  the  duty  should  cover  the 

difference  between  the  calculated  non-injurious  price  level  and  the  actual  selling 

prices  of  the  imports  into  the  Community.  The  per-category  price  increase  thus 

established  was then  expressed  as a percentage  of the  free-at-Community  frontier 

price  of  the  imported  goods  for  each  category.  A  single  injury  elimination  level 

for  each country  subject  to the proceeding  was then established  by calculating  the 

weighted average of the per-category injury  elimination level. 

(63)  In  this  regard,  one  importer  claimed  that  the  Commission,  by  using  for  the 

comparison  between  the  dumping  margin  and  the  injury  elimination  level  an 

approach based on an average, failed  to examine the different  situations  prevailing 

in  the  different  market  segments.  It  asked  the  Commission  to  compare,  for  each 

segment  of  the  market  (e.g.  2-rings  mechanisms),  the  injury  elimination  level 

found  with  the dumping  margin, and to retain  only the lesser  margin  per  segment 

in the calculation of the final average of a single duty for all segments. 

It  has  to  be  noted  in  this  respect  that  the  calculation  method  used  in  this  case 

complies  with  the  requirements  of  Article  9  (4)  of  the  basic  anti-dumping 

Regulation  and  with  previous  practice  concerning  the  calculation  of  a duty  lower 

than  the  dumping  margin  in  cases  where  such  a  duty  is  adequate  to  remove  the 

injury  to  the  Community  industry.  This  approach  is justified  by  the  fact  that  the 

present  anti-dumping  investigation  covers  sales  of  one  like  product  within  which 

various categories and models have been found to compete with each other. 

23 

(64)  Under  these  conditions,  the  injury  elimination  level  methodology  as  set-out  in 

recitals 82 to 84 of the provisional duty Regulation are  confirmed. 

B.  Level and form of the duties 

(65)  Based  on  the  above  conclusions  on dumping,  injury,  causal  link  and  Community 

interest,  it  was  examined  what  form  and  level  the  anti-dumping  measures  would 

have  to  take  to  remove  the  trade-distorting  effects  of  injurious  dumping  and  to 

restore fair competitive conditions on the Community RBM market. 

(66)  Since  the  level  of  prices  at  which  the  injurious  effects  of  the  imports  would  be 

removed  was  lower  that  the  dumping  margin  of  both  exporting  countries 

concerned,  the  injury  elimination  level  was  used  in order  the  determine  the  level 

of measures. 

(67)  The granting of individual treatment to World Wide Stationery was found to  affect 

the  provisional  findings.  The  methodology  described  above  has  been  applied  to 

calculate  the  individual  injury  elimination  level  of  this  company,  for  which  a 

32.5% injury  elimination level was established. 

(68)  The  reduced  injury  elimination  level  for  World  Wide  Stationery  resulted  in  an 

increase,  from  35.4%  to  39.4%,  of  the  injury  elimination  level  for  all  other 

exporters from  the People's Republic of China . 

(69)  On  this  basis,  definitive  anti-dumping  duties,  in  the  form  of  ad  valorem  duties, 

would be imposed as follows: 

-  Malaysia: 

-  People's Republic of China: 

World Wide Stationary: 

Residual  duty for all other companies: 

Rate of duty 

10,5% 

32.5% 

39.4% 

C.  Form of the duty for mechanisms with 17 and 23 rings 

(70)  It  has  been  however  submitted  that  the  imposition  of  an  ad  valorem  duty  on  17 
and  23  ring  mechanisms,  at  the  same  rate  as  the  one  applicable  to  other 

24 

mechanisms,  was  inappropriate  in  the  light  of  the  difference  in  price  between 
these two categories. 

In this context,  it  should  be noted  that the  import  price  in respect  of  mechanisms 

with  17  or  23  rings  is  substantially  higher  than  the  average  import  price  for  all 

mechanisms. In these  circumstances,  in the light of the exclusive  nature  of  some 

of  the  uses  of  these  mechanisms  and  the  ease  with  which  these  products  can  be 

identified,  it  is  considered  that,  on  balance,  in  calculating  the  injury  elimination 

level,  due  consideration  should  be  given  to  the  particularly  high  price  of 

mechanisms  with  17  and  23  rings  and  to  the  intensity  of  competition  between 

certain  segments  of  the  market  by  ensuring  that 

it 

is  not  affected  by 

disproportionate  price  discrepancies.  This  could  be  achieved  by  ensuring  that  17 

and  23 ring  mechanisms  are imported  above a certain price  level  adequate,  as  for 

other  RBM,  to  remove  the  injury  caused  by  the  dumped  imports.  In  these 

circumstances, the setting up of measures  in a form  different  from  an ad  valorem 

duty  was  considered  appropriate.  Based  on  the  price  comparisons  which  were 

carried  out  (see  recital  62)  it  is  considered  that,  by  ensuring  that  the  CIF  import 

price for mechanisms with  17 or 23 ring be raised at the minimum of 325 ECU per 

1000 pieces, the requirements mentioned above are  fulfilled. 

X.  UNDERTAKING 

(71)  In  accordance  with  Article  8  (2)  of  the  basic  anti-dumping  Regulation,  the 

deadline  for  the representations  following  the final disclosure was  also  applicable 

to  possible  undertaking  offers.  The  Chinese  exporter  which  had  been  granted  an 

individual  treatment,  sent  a  letter  shortly  after  this  deadline  indicating  its 

willingness to offer  an undertaking. 

In  this  respect,  it  is  considered  that,  due  to  the  high  number  of  RBM  types 

exported  by  the  company  concerned,  an  undertaking  in  this  case  would  be 

virtually  impossible  to  set  up  and  to  monitor.  No  formal  undertaking  offer  from 

the part of the exporter was finally  received. 

XI.  COLLECTION  OF THE PROVISIONAL  DUTIES 

(72)  In  view  of  the  magnitude  of  the  dumping  margins  found  for  the  exporting 
producers  and countries, and in light of the seriousness of the injury  caused  to the 

25 

Community  industry,  it  is considered  necessary  that the  amounts  secured  by  way 

of  provisional  anti-dumping  duties  for  transactions  involving  the  product 

concerned should be definitively  collected at the level of the definitive  duties. 

(73)  As  regards  World  Wide  Stationery,  the  collection  of  provisional  anti-dumping 

duties should be limited to the rate of duty definitively  imposed, i.e. 32.5%. 

(74)  Where  it  could  be  shown,  to  the  satisfaction  of  customs  authorities,  that  the 

securities were made in relation to  17 or 23 ring mechanisms, the collection of the 

amounts secured should be limited to the duty definitively  imposed  for these types 

of RBM, if lower than the one secured, 

HAS ADOPTED THIS  REGULATION: 

Article I 

1.  Definitive  anti-dumping  duties  are hereby  imposed  on  imports  of certain  ring  binder 
mechanisms falling  within CN code ex 8305  10 00 originating in Malaysia and the People's 
Republic of China. 

For the purpose of this Regulation, ring binder mechanisms consist of two rectangular  steel 

sheets  or  wires  with  at  least  four  half  rings  made  of  steel  wire  fixed  on  it  and  which  are 

kept together by a steel cover.  They  can be opened  either by pulling the half rings  or with 

a small steel-made trigger mechanism fixed to the ring binder mechanism. 

2. 

The rate of  duty  applicable to the net  free-at-Community-frontier  price, before  duty, 

shall be as follows: 

a) for  mechanisms  with  17 and  23 rings  (Taric  code:  8305  10 00 20)  originating  in  the 

People's  Republic  of  China  and  Malaysia,  the  amount  of  duty  shall  be  equal  to  the 

difference  between the minimum  import price of ECU  325 per  1000 pieces  and the  free 

at Community-frontier  not cleared through customs price. 

b) for mechanisms  other than those with  17 or 23 rings (Taric code: 8305  10 00 10) 

Rate of duty 

Taric additional  code 

Malaysia 

10.5% 

26 

People's Republic of China: 
World Wide Stationary 
all other companies 

32.5% 
39.4% 

8934 
8900 

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

apply. 

Article 2 

1. 

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

(EC) No  1465/96 shall be definitively  collected: 

a)  For  the  amounts  secured  for  which  it  can  be  established,  to  the  satisfaction  of  the 

customs  authorities,  that  they  related  to  imports  of  mechanisms  with  17 or  23  rings,  the 

amount  collected  shall  be equal  to the one secured,  but  limited to  an amount  calculated  in 

accordance  with  the  provisions  of Article  1 (2) (a), if lower that the  one  secured.  If  it  can 

not  be  established  that the  amounts  secured  related  to mechanisms  with  17 or  23 rings, b) 

shall apply. 

b) For the amounts secured in respect of mechanisms other than those with  17 and 23 rings, 

the  collection  shall  be  at  the  duty  rate  definitively  imposed  if  lower  or  equal  to  the  one 

secured. In the other case, the collection shall be limited to the one secured. 

2.  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, 

For the Council 

ISSN 0254-1475 

COM(96) 690 final 

DOCUMENTS 

EN 

02  11 

Catalogue  number  :  CB-CO-96-701-EN-C 

ISBN  92-78-13716-2 

Office  for  Official  Publications  of the European  Communities 

L-2985  Luxembourg