Proposal for a COUNCIL REGULATION (EC) extending the definitive anti-dumping duty imposed by Council Regulation (EEC) No 2474/93 on bicycles originating in the People's Republic of China to imports of certain bicycle parts from the People's Republic of China, and levying the extended duty on such imports registered under Regulation (EC) No 703/96
Date: 1996-12-16
Institutions: European Commission
Subjects: China, anti-dumping duty, spare part, tariff exemption, two-wheeled vehicle

'•«SffW! 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  16.12.1996 
COM(96)689  final 

Proposal  for  a 

COUNCIL  REGULATION HEC) 

extending the defimtive anti-dumping duty imposed by Council Regulation  (EEC) 

No 2474/93 on bicycles originating in the People's Republic of China to imports of 

certain bicycle parts from the People's Republic of China, and levying the extended 

duty on such imports registered under Regulation (EC) No 703/96 

(presented  by  the  Commission) 

Explanatory  Memorandum 

1. 

The  Commission,  by  Regulation  (EC)  No  703/96,  initiated  an  investigation 

into  the  circumvention  of  the  anti-dumping  duties  imposed  on  imports  of  bicycles 

originating  in  the  People's  Republic  of  China  by  imports  of  bicycle  parts  originating 

in that country  and used in the assembly of bicycles in the European  Community. 

2. 

The  Commission  carried  out  investigations  on  the  premises  of  7  companies, 

two  of  which  turned  out  to  be  Community  producers  and  5  of  them  circumventing 

assemblers. Non-co-operation  was substantial. 

3. 

Following  the on-the-spot  investigation,  it was established  that the  assemblers 

concerned fulfilled  the conditions of Article  13 as follows: 

-their assembly operations  started or substantially increased  since the  initiation 

of the original anti-dumping  investigation, 

-60%  or  more  of  the  total  value  of  the  parts  of  the  assembled  product  were 

concluded to be of Chinese origin, 

-the  value  added  to  the  parts  brought  in  for  these  assembly  operations  was 

found  to be below 25 %, 

-there was evidence that the remedial effects  of the duty were undermined  (the 

sales prices of the assembled bicycles were found  to undercut  the non-dumped 

export prices of Chinese bicycles in the original investigation  period by 14.5% 

on average) and, 

- there was evidence of dumping in relation to the normal  values established in 

the  original  investigation  (the dumping  margins  were  found  to  range  from  16 

to 53%). 

4. 

The  Commission  informed 

interested  parties  of  the  essential  facts  and 

considerations  on  the  basis  of  which  it  was  intended  to recommend  the  extension  of 

the original anti-dumping  duty. 

U 

5. 

The  oral  and  written  comments  by  the  parties  were  considered  and  where 

appropriate, the Commission's findings were modified to take account of them. 

6. 

The  Commission,  in  accordance  with  Articles  13,  14  and  15  of  the  basic 

Regulation  and after  consultation with the Advisory Committee is now proposing to 

extend  the  anti-dumping  duty  imposed  on  imports  of  bicycles  originating  in  China 

(30.6%)  to essential  bicycle parts  originating  in  or consigned  from  China  when  the 

non-Chinese origin of the parts cannot be proven. 

7. 

The essential bicycle parts are finished  frames  and forks, sets of gears, sets of 

brakes, pre-assembled handlebars and complete wheels. 

8. 

It  is  also foreseen  to exempt  imports  which  do not constitute  circumvention 

from the extension of the measure. 

/a 

Council Regulation (EC) No 

of 

extending the definitive anti-dumping duty imposed by Council Regulation (EEC) 
No 2474/93 on bicycles originating in the People's Republic of China to imports of 
certain bicycle parts from the People's Republic of China, and levying the extended 
duty on such imports registered under Regulation (EC) No 703/96 

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 13 and 14 thereof, 

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

Whereas: 

OJ No L 56, 6. 3  1996, p.  1 

|  , 

A. 

PROCEDURE 

(1) 

By  Regulation  (EC)  No  703/962  the  Commission  initiated  an  investigation  into 
the circumvention  of the anti-dumping  duties imposed by Council  Regulation  (EEC)  No 
2474/93 of 8 September  19933 on imports of bicycles originating in the People's  Republic 
of China by imports of parts originating in that country which are used in the assembly of 

bicycles in the Community, and directed customs authorities, pursuant to Article  14 (5) of 

Regulation  (EC) No  384/96, to register  imports of bicycle  frames,  forks,  rims  and  hubs, 

which constitute the principal components of a bicycle. 

(2) 

The  products  concerned  by  this  investigation  are  bicycle  parts  and  accessories 

from  the  People's  Republic  of  China  which  are used  in  the  assembly  of  bicycles  in  the 

European  Community.  These  products  are  currently  classifiable  within  the  CN  codes 

ranging from  8714 91  10 to 8714 99 90. 

(3) 

The  Commission  officially  advised  the representatives  of  the  People's  Republic 

of  China  about  the  initiation  of  the  investigation  and  sent  questionnaires  to  the  EC 

companies  concerned  mentioned  in  the  complaint  and  to  other  EC  companies  which 

made themselves  known  to the Commission  or were named by the complainant  at a later 

stage. 

2 OJ No L 98, 19. 4.  1996, p. 3 
3 OJ No L 228, 9. 9.  1993, p. 1 

(4) 

The investigation covered the period  1  April  1995 to 31 March  1996. 

(5) 

Of  the  companies  mentioned  in  the  complaint,  or  subsequently  named  by  the 

complainant  and  those  which  made  themselves  known  within  the  40  days  set  by 

Regulation  (EC)  No  703/96,  the  Commission  received  complete  replies  from  the 

following: 

-Helmig, Overath, Germany 

-Moore Large & Co, Derby, United Kingdom 

-One + One, Oostvoorne, The Netherlands 

-Promiles, Villeneuve d' Ascq, France 

-Reece, Birmingham, United Kingdom 

-Splendor, Naninne, Belgium 

-Starway, Luynes, France 

-Tandem, Brigg, United Kingdom 

The  Commission  sought  and  verified  all  information  it  deemed  to  be  necessary  and 

carried  out  investigations  at  the  premises  of  the  above  companies.  Of  these  companies, 

Tandem  and  Promiles  were found  to be  genuine  Community  producers  and  Helmig  was 

found  to be an importer. 

(6) 

Companies  which  requested  to  be  heard  within  the  time  limit  set  by  Regulation 

(EC) No 703/96 were granted a hearing. 

(7) 

The following  Community producers requested a certificate  of  non-circumvention 

pursuant to Article  13 (4) of the Basic Regulation: 

-Batavus, the Netherlands 

-BH, Spain 

-Cycleurope, France 

-Dawes, UK 

-Promiles, France 

-Hercules, Germany 

-Mercier, France 

-MICMO, France 

-Raleigh, UK 

-Tandem, UK 

The  following  companies  came  forward  outside  the  40  days  set  by  Regulation 

(8) 
(EC) No 703/96 and also requested a certificate of non-circumvention: 

-Buchel, Germany 
-Horlacher, Germany 
-Monark Crescent, Sweden 
-Pantherwerke, Germany 
-Quantum, France 
-PRO-FIT Sportartikel GmbH, Germany 
-Tekno Cycles, France 
-TNT, Spain 

B. 

SCOPE OF THE INVESTIGATION 

(9) 
As regards parts used in circumvention operations, Article  13 (1) and (2) provide 
for  anti-dumping  duties  in  force  to  be  extended  to  imports  of  parts from  the  country 
subject  to  the  measures,  i.e.  they  can  either  originate in  or  be  consigned from  that 
country.Interested  parties  importing  the  concerned  parts  from  China  were  therefore 
offered,  for those parts consigned from  China, the possibility to prove an eventual non-
Chinese origin. 

The scope of the investigation covered bicycle parts imported into the European 
Community from China which are assembled into finished bicycles for sale  in the 
European Community under conditions which, according to the complainant's 
allegations, fulfil  the criteria set out in Article 13 (1) and (2) (a), (b) and (c) of the Basic 
Regulation: 

C. 

RESULTS OF THE  INVESTIGATION 

1. 

Nature of the circumvention practice 

(10) 

The investigation  has established that of the 8 companies identified  in recital (5) 

above 4 assemblers ordered during the investigation period almost complete bicycles in a 

disassembled  form  from  the producers in China. For the corresponding shipments to 

Europe the suppliers ensured that parts destined for the same assembler were spread 

across different  containers, sent on different  dates and sometimes unloaded at  different 

ports. By this practice which is rather costly and implies important additional  logistical 

constraints, the assemblers avoided that the imported parts were classified  in accordance 

with Rule 2 (a) of the General Rules for the Interpretation of the Nomenclature of the 

Common Customs Tariff  (hereafter  CCT) as finished bicycles which would have been 

subject to the anti-dumping  duty. 

One of the companies mentioned in recital (5) applied the above described  modus 

operandi for about 75 per cent of its total assembly of bicycles during the investigation 

period. However, during that period it changed its sourcing pattern and started  towards 

the end of that period to assemble these bicycles by using more than 40% of parts 

originating in non-Chinese countries, which it purchased either directly  from 

manufacturers  located in those countries or from  subsidiaries of these  manufacturers 

located in the Community  (see recital 17). 

In order to ensure that certain imported subassemblies of bicycle parts would not be 

classified  in accordance with Rule 3 (b) of the General Rules for the Interpretation  of the 

Nomenclature of the CCT as finished bicycles, some assemblers have asked for and 

received from  national Customs authorities binding tariff  information  classifying  these 

assemblies as parts and thus obtaining official  assurance that the anti-dumping  duty 

would not be applied to these subassemblies. 

2. 

Conditions of Article 13 

(i) 

Change in the pattern  of trade 

(11)  Between  1992 and the investigation period, imports of bicycles (in. units)  from 

China into the Community decreased by more than 98%, which represents a decrease of 

1.5 million units, whereas, for example, imports of finished bicycle frames, the main 

bicycle part imported by assembly operations, increased by more than  146% (in units) in 

the same period,  which represents an increase of about 521.000 units. This  substitution 

effect  is corroborated by the data gathered during the on-the-spot investigation: the output 

of bicycles assembled from  sets from  the People's Republic of China by the five 

investigated companies -based on the practice described above at recital (10)- increased 

by 80%, which represents for these assemblers alone an increase of  about  110.000 units 

between  1992 and the investigation period. 

(ii) 

Insufficient  due cause or economic justification 

(12)  Two of the investigated companies argued that they started assembling bicycles in 

the Community due to the end of year suspension of the preferential  rates for  import 

duties for bicycles originating in China under the General System of Preferences  for 

developing countries in  1991 and  1992 and not because of the imposition of anti 

dumping duties. However this argument is not convincing. The shipping arrangements as 

described in recital (10) are costly and imply important additional logistical  constraints 

which, in themselves, were not, on economic grounds, needed to benefit  from the GSP as 

long as not suspended. On the contrary, it is reasonable to conclude that in the view of the 

high dumping margins relevant to these operations, their timing, volume of output, the 

purchasing arrangements  and the small degree of value added, these operations, as well as 

the three others, had, within the meaning of Article  13 of the basic Regulation, 

insufficient  due cause or economic justification  other than the imposition of an anti 

dumping duty.. 

(iii)  Start or substantial increase of operations 

(13)  For  all  5  companies  concerned,  their  assembly  operations,  or  their  imports  of 
bicycle  parts  from  China  with  a  view  to  bicycle  assembly,  started  in  or  substantially 
increased since 1992-93, when the original investigation was taking place/ 

(iv) 

60% of the total value of the parts constituting the assembled product 

It has been established for the five assemblers which ordered almost complete 

(14) 
bicycle sets in the People's Republic of China, that all the parts for these sets were 
consigned from China. Three of these companies admitted as it had been declared to 
customs that all parts imported from China were of Chinese origin. 

The two other assemblers alleged that more than 40 per cent of the parts used in the 
assembly of bicycles based on these sets were originating in other countries. It has 
however been established that the parts sets ordered by these two companies were 
consigned from China and that parts of EC origin were only used to a limited - in fact 
negligible - extent in the assembly of bicycles out of these sets. 

(15)  For some of the parts consigned from China, these two assemblers presented 

Chinese certificates  of origin (Form A) to the Customs in order to benefit  from 

preferential  treatment for the Chinese goods falling under the GSP while the rest of the 

goods consigned from  China were declared as being of non-Chinese origin and were thus 

subject to the normal third country duty. As regards the parts claimed to be of non-

Chinese origin -but which were consigned from China- it should be noted that the 

assemblers were unable to prove to the Commission the non-Chinese origin of these 

parts. These two companies, however, although having been given extended deadlines  for 

collecting authentic documentation like certificates  of origin, invoices of producers and 

transport documents, were unable to give sufficient  evidence during the on-spot 

verifications  which could have proven the origin of the non-Chinese parts, as declared on 

the invoices by their Chinese supplier, the said origin having been declared to customs on 

importation of these parts. The verification  on the premises of these two companies 

revealed that they had imported complete wheels which were assembled in the People's 

Republic of China. These wheels, however, appeared on the suppliers invoice as tyres, 

tubes, rims, hubs, freewheel  etc. with different  origins and were accordingly  declared to 

customs at importation as individual parts with a specific  origin for each part. 

The Commission  services could only conclude therefore that in the absence of evidence 

to the contrary, all parts which were consigned from China were of Chinese origin and 

that, under these circumstances, 60% or more of the total value of the parts used in the 

assembly of bicycles out of these parts were of Chinese origin. 

(16)  Furthermore, it was established during the on-spot verification  that the value of 

identical parts of sets consigned from  China which these two companies had declared to 

customs authorities on importation varied from one shipment to another for no apparent 

reason. This "erratic pricing" has prevented the exact determination of the value of the 

parts concerned. 

(17)  One assembler, which used during the investigation period sets ordered in China 

for about 75 % of its output of bicycles, could show that it used for the assembly of the 

remaining 25 % of its output more than 40 % of parts originating in other countries than 

China. By the end of the investigation period (March  1996) this company  started to 

assemble bicycles, which were previously ordered as sets from China, using parts of non-

Chinese origin which were directly purchased from the manufacturers  or their 

Community  subsidiaries (see recital  10). For these bicycles the assembler was finally  able 

to demonstrate during the on-spot verification  that the models assembled in this way 

between March and October  1996 contained more than 40 % of parts originating in 

countries other than the People's Republic of China. The Commission  services, therefore, 

established that this assembler, even though 75 % of its output during the investigation 

period contained initially more than 60 % of parts originating in the People's Republic of 

China, had reduced since March  1996 its share of Chinese parts below 60 % of the total 

value of parts of the assembled product due to the changed circumstances in the purchase 

of the non-Chinese parts. 

(v) 

25% rule on the added value to the parts  brought in 

(18) 

For all 5 companies concerned,  the value added in the European  Community on a 

per model  basis  to the parts  brought  in was  found  to vary between  only  10 and  16 % of 

the  manufacturing  cost  of  a complete  bicycle,  and  was  therefore  clearly  below  the 25% 

threshold set by Article  13 (2) (b). 

10 

3. 

Undermining of the remedial effects of the duty and evidence of dumping 

(i) 

Undermining 

(19) 

In order to determine whether the remedial effects  of the anti-dumping  duty had 

been undermined in terms of sales prices, a comparison was made of the sales prices of 

bicycles assembled in the Community from Chinese parts, and sold in the Community in 

the investigation period by the co-operating assemblers ("assembled bicycles"), with the 

"non-dumped" export prices of Chinese bicycles in  the original investigation period (i.e. 

actual export prices, duty paid, plus anti-dumping duty). 

(20) 

Following exactly the method applied in the original investigation, the 

comparison was made between identical or comparable groups of bicycles. Weighted 

average prices were determined for each group and adjustments  to these prices were 

made, in order to ensure that the comparison was made at the same level of trade, on the 

same net price basis, and with comparable delivery terms. Subsequently, it was 

determined for each group, whether the sales prices of assembled bicycles have undercut 

the non-dumped export prices of Chinese bicycles in the original investigation period. In 

order to determine an average margin, the sum of the undermining margins for  those 

groups for which undermining was established was expressed as a percentage of the total 

non-dumped  import value (CIF Community border) of Chinese bicycles, as established in 

the original investigation, for all groups which were included in the comparison. 

11 

With respect to the groups of bicycles used in the comparison, 77 % of the total sales 

volume of the assemblers concerned were found  to be models equivalent to those o*f the 

original investigation period, and were consequently used for the comparison. More than 

90 % of the sales used for the comparison were found to have undercut the non-dumped 

export prices in the original investigation  period. 

(21)  Overall, the comparison  showed that the sales prices of assembled bicycles have 

undercut the non-dumped export prices of Chinese bicycles in the original  investigation 

period by on average  14.5 %. 

(22)  The existence of undermining in terms of sales quantities flows directly from  the 

finding  that the import volume of Chinese bicycles in the original investigation  period 

has largely been replaced, in terms of quantities, by the imports of bicycle frames of 

Chinese origin, as determined in recital (11). 

In this context, it should be noted that due to the considerable level of  non-co-operation 

from  the assemblers, (see recital (25)) there was no direct information  available 

concerning the total sales quantity of bicycles assembled in the Community. However, 

the Commission found that  the volume of bicycles sold by the small number of co 

operating assemblers alone in the investigation period actually amounted to 24 % of the 

sales of comparable Chinese bicycles in the original investigation period, whereas these 

co-operating assemblers accounted for only  13 % of the total imports of frames  of 

Chinese origin in the investigation period of the circumvention investigation. Thus the 

figures  available from  the co-operating assemblers fully  support the conclusion that the 

sales of bicycles assembled in the Community from Chinese parts have largely  replaced 

imports of finished  Chinese bicycles. 

12 

(23) 

In the light of the foregoing, it is determined that the sales of bicycles  assembled 

in the Community from  parts originating in or consigned from  China have undermined 

the remedial effects  of the anti-dumping measures in question, both in terms of sales 

prices and quantities. 

(ii) 

Evidence  of Dumping 

(24)  Dumping  was  calculated  on  the  basis  of  most  popular  models  of  assembled 
bicycles for  each company, which represented  from  50 to  100% of their  turnover4.  These 
models  were  compared  to  the  normal  values  previously  established  (Taiwan  being  the 

reference  country  in the original investigation), using the same 8 criteria  (i.e. category of 

the  bicycle,  material  of  the  frame,  number  of  gears, dérailleurs,  crank-gear,  gear  levers, 

brake sets and hubs) in a manner as reasonable as possible. 

In view  of the fact  that  normal  values  had been established  at FOB Taiwan  level  for  the 

exporters concerned, resale prices in the EC had to be made comparable to this level. The 

actual comparison was thus made FOB China/ FOB Taiwan. 

Dumping was found  to range from  16 to 53% for the companies concerned. 

4. 

Non-co-operating assembly  operations 

(25) 

In view  of  the  significant  change  in  the  pattern  of  trade  described  in  recital  (11) 

above  and  in  the  absence  of  co-operation  by  many  undertakings,  there  is  no  reason  to 

believe that the non-co-operating  companies have contributed to the circumvention  of the 

anti-dumping  duties in force to any lesser extent than the co-operating companies. 

4 For one of the companies, the comparison  was based on the turnover of assembled  models sold to 
unrelated companies only since this company did not succeed in giving the Commission  sufficiently 
accurate information  to link related transactions to final  sales in a reliable manner. 

13 

The anti-dumping  duty  should  therefore  not only be extended  to co-operators  but  also  to 

non-co-operators.  Any  other  treatment  would  actually  give  a  premium  to  non-co-

operators,  a  paradox  even  more  unacceptable  in  the  field  of  circumvention  than  in  a 

conventional  dumping  case.  However,  the  measures  taken  will  have  to  be  designed  in 

such  a  way  as  to  affect  only  the  imports  of  parts  used  in  assembly  operations  by 

circumventing  assemblers. 

D. 

PROPOSED  MEASURES 

1. 

Nature of the measures: 

Extension of the duty 

(26) 

In view of the findings  made, the anti-dumping duty in force on complete bicycles 

(30.6%)  should  be  extended  to  certain  bicycle  parts  originating  in  or  consigned  from 

China with the exception  of those parts of proven non-Chinese origin. 

The investigation  has shown that the imports of pre-assembled, pre-treated  or pre-painted 

parts  is  typical  of  assembly  operations.  Community  producers  do, by  and  large,  treat  or 

paint  the  parts  they  import  and  do  not  import  pre-assembled  bicycle.  A  case  in  point  is 

the example of complete wheels, as opposed to the imports of rims and hubs for example. 

14 

(27)  Therefore, in order to minimise the risk of affecting  imports which do not 

constitute circumvention, in particular imports of non-essential parts, the extension" of the 

duty should be limited to essential parts (see column I of the table below), i.e. 

-painted or anodised or polished and/or lacquered frames  (including when brakes and 

gears are attached) 

- painted or anodised or polished and/or lacquered forks (including when brakes are 

attached) 

- pre-assembled  wheels (with or without tubes, tyres and sprocket) 

-pre-assembled  handlebars (when they are presented with a stem, brake and/or gear lever 

attached) 

-complete sets of gears (i.e. rear and front  dérailleurs, crank gear and  freewheel) 

-complete sets of brakes (i.e. brakes and brake levers) 

15 

Product 

CN Code 

Extension of 

Initial 

Subsequent 

measures 

Registration 

Collection 

Frames 

8714 91 10 

I 

X 

painted or anodised 

or polished  and/or 

lacquered 

other 

8714 9130 

painted or anodised 

or polished  and/or 

X 

lacquered 

other 

8714 92 10 

8714 93 10 

III 

x 

x 

II 

X 

X 

x 

x 

Forks 

Rims 

Hubs 

Sets of Gears: 

ex 8714 99 50 

8714 99 50 

8714 96 30 

8714 93 90 

Sets of Brakes: 

ex 8714 94 30 

8714 94 30 

8714 94 90 

Complete wheels 

Handlebars 

ex 8714 99 90 

ex 8714 99 10 

X 

x 

X 

x 

16 

2. 

Collection of the duty on imports entered under registration 

(28)  The  collection  of  the  duty  on  imports  under  Registration  as  per  Cornmission 
Regulation (EC) N°703/96 should only be made on those parts which are  also described 
in recital (27) above. 

(29)  Companies  which  are  exempted  from  the  application  of  the  extended  anti 
dumping  duty  as  indicated  in  recital  (32)  below  should  also  be  exempted  from  the 
collection of the duty on imports under registration. 

E. 

EXEMPTION FROM THE EXTENSION OF THE DUTY 

(30)  Article  13 (4) of the basic Regulation  provides  that products  shall be exempted 
from  the  measure  where  they  are  accompanied  by  a  certificate  of  non-circumvention. 
Where an authorization was granted during the circumvention investigation  the duty on 
imports which have been registered in accordance with Article 2 of Regulation  (EC) No 
703/96 should not be collected. 

(31)  The issue of certificates requires prior authorisation by the Commission, or by the 
Council  if  granted  when  extending  the  measure. An authorisation  can  only  be  granted 
following a thorough appraisal of the facts. 

17 

(32)  The  Commission  has  received  applications  for  such  certificates  from 

the 

companies  mentioned  in  recital  (7)  which  contacted  the  Commission  following  the 

initiation  of the investigation. These applications were received before  the deadline set in 

Regulation  703/96  for  parties  to  make  themselves  known.  Most  of  these  applicants  are 

Community  producers  which  were  part  of  the  Community  industry  in  the  previous 

investigations. The others which had not participated  in the original proceeding, could be 

identified  as  Community  producers  on  the  basis  of  their  replies  to  the  questionnaire, 

which  were verified  on-the-spot.  The  anti-dumping  duty on bicycles  from  China  should, 

therefore,  not be  extended  to imports  of essential  bicycle parts  used  in  the  operations  of 

these companies. 

In addition, the Commission considered it also appropriate not to extend the anti 

dumping duty on bicycles from  China to the parts used in the operations of the company 

which has reduced  since March  1996 its share of Chinese parts below 60 % (see recitals 

10,  17) since this company could not be considered to be circumventing the anti-dumping 

duty in force from  this time on. 

(33) 

Further  applications  were  made  by  the  parties  mentioned  in  recital  (8),  which 

approached  the  Commission  after  the  deadline  set  in  Regulation  703/96  for  parties  to 

make  themselves  known.  It  is  noted,  that  no  deadline  is  set  by  Article  13(4)  for 

applications for certificates  of  non-circumvention. 

The  Commission  sent  questionnaires  to  these  companies  immediately  upon  receipt  of 

their  applications.  The  Commission  has  however  not  yet  been  able  to  verify  whether 

these  parties  are  assemblers  or  importers,  and  whether  the  operations  in  which  the 

imported goods are used fall within Article  13 (2) of the basic Regulation. Furthermore, it 

cannot be excluded  that, in the present case, more companies might apply for a  certificate 

of non-circumvention  once the measure has been extended. 

In  order  to  ensure  therefore  that,  notwithstanding  late  application  by  the 
(34) 
companies  concerned,  parties  not  circumventing  the duty  are  duly  exempted  from  the 
extension  of  the  duty  to  imports  of  parts,  the  adoption  of  this  Regulation  should  not 
prevent  the  Commission  from  investigating  pending or  future  requests  with  a view  to 
authorising the exemption of imports from the extended duty. Where a company applied 
for  a certificate  of  non-circumvention  during  the  investigation,  an  eventual  exemption 
should  take  effect  as  from  the  date  of  initiation  of  the  present  circumvention 
investigation. Where a company applies for a certificate after the extension of the duty an 
eventual  exemption  should  only take effect  from  the date of  the request.  On the other 
hand, it must be ensured that where, after examination of an operation,  circumvention is 
found to take place, the extended duties due can be effectively  collected (see recital 43). 

(35)  The operation of the system for granting an authorisation  and for the subsequent 
issue  of  certificates  is  not  fully  set  out  in  Article  13 (4)  of  the basic  Regulation.  It  is 
therefore  appropriate  to  provide  for  detailed  rules  on  the  implementation  of  the 
exemption  system  to  be  adopted  by  a  Commission  Regulation.  In  this  respect  the 
following should be noted: 

(36)  The  granting  of  an  authorisation  depends  on  the  goods  not  being  used  in  an 
assembly operation which constitutes circumvention, as laid down in Article  13 (2) of the 
basic Regulation. Therefore, where assemblers do not import directly, a procedure must 
be devised  permitting  to ascertain  whether or not imports of essential  bicycle parts are 
used for circumvention purposes. 

19 

(37)  To this end, it is appropriate  to use the exisiting  mechanism  of  end-use control 
according to customs law, i.e. Article 82 of Regulation (EEC) No 2913/925 (Community 
Customs Code) and Articles 291 et seq. of Regulation (EEC) No 2454/936 (Implementing 
provisions)  and  to  apply  it  mutatis  mutandis within  the  framework  of  the  anti-
circumvention  legislation  to  the  issue  of  authorisations  for  certificates  of  non-
circumvention in accordance with Article 13 (4) of the basic Regulation. 

(38)  The end-use by reason of which imports should benefit  from  an exemption  from 
the anti-dumping duty shall be defined by reference, (i) to assembly operations found not 
to be circumventing, and (ii), by reference  to the use of essential bicycle parts in  small 
quantities  by small  scale operators, notably for replacement  purposes,  which  should be 
presumed not to constitute circumvention. In the latter case, imports of essential bicycles 
parts will have a rather limited economic significance, and will be unlikely to undermine 
the  effect  of  the  existing  duty  in  terms  of  the  quantities  of  bicycles  that  might  be 
produced from such imported parts(Article 13(2)(c) of the basic Regulation). 

In order to allow intermediaries, which do not import essential bicycle parts directly, to 
purchase  these parts  from  importers  and to resell  them to non-circumventing  assembly 
operations, such transactions should also be monitored under the end-use control system. 

5O J N o L 3 0 2,  19.10.1992, p. 1 
6O J N o L 2 5 3,  11.10.1993, p. 1 

20 

(39)  Finally,  the  system  should  also  allow  to  exempt  direct  imports  by  non-
circumventing assembly operations from the extended duty. 

In order to achieve the necessary flexibility to adjust the exemption system where 
(40) 
needed, it is appropriate to entrust to the Commission the setting up and the operation of 
such  system  within  a framework  set by the Council,  and  after  consulting  the  advisory 
Committee. 

(41) 
In this respect, and with a view to pending or future  applications, the Commission 
should be charged to establish within such a system lists of companies exempted from the 
extended  duty, after  having examined,  pending or new requests  for certificates  of non-
circumvention. 

(42) 
In  order  to  create  an  incentive  to  abstain  from  circumventing  practices,  the 
management of the exemption system has to provide for the possibility of reviewing the 
situation  of  those  companies  which  have  been  found  circumventing,  but  which  have 
changed their operation to the extent that the conditions of circumvention  are no longer 
fulfilled.  Similarly,  it  must  be  possible  to  revoke  exemptions  which  are  no  longer 
justified.  Finally,  any  new  operation  should  also  have  the  possibility  to  request  an 
investigation by the Commission with a view to an exemption from the duty. 

21 

(43)  Provision  should  be  made  for  the  possibility,  if  appropriate,  of  imports  to  be 
conditionally exempted from the extended duty while the operations in which they are to 
be used are under examination.  However, in order to ensure that, where an operation is 
found circumventing, the extended duty can be effectively  collected, customs authorities 
shall be enabled to require the provision of a security if necessary. 

(44)  Since this is the first case in which anti-dumping measures are being extended and 
where exemptions  are being granted pursuant to Article  13 (4) of the basic  Regulation, 
provision  has  also  to  be  made  that  the  Commission  may  adapt  the  exemption  system 
where necessary to take account of experience gained with the operation of that system. 

F. 

PROCEDURE 

(45) 
Interested  parties  were informed  of the essential  facts  and considerations  on the 
basis  of  which the  Commission  intended  to extend  the definitive  anti-dumping  duty in 
force to the parts concerned and have been given the opportunity to comment. 

Interested  parties  have  also  been  informed  about  the  main  features  of  the  exemption 
system which will be established (see recital 37). 

22 

HAS ADOPTED THIS  REGULATION 

Article 1 

'Essential bicycle parts' within the meaning of this Regulation are: 

Painted,  anodised,  polished  and/or lacquered  bicycle  frames  currently  classifiable 

under CN code ex 8714 91 10, 

Painted,  anodised,  polished  and/or  lacquered  bicycle  forks  currently  classifiable 

under CN code ex 8714 91 30, 

Sets of gears consisting of 

rear and front dérailleurs (CN code 8714 99 50), 

a crank gear (CN code 8714 96 30), and 

a free-wheel  (CN code 8714 93 90), 

whether  or  not  presented  together,  and  currently  classifiable  under  CN  code 

ex 8714 99 50, 

Sets of brakes consisting of 

brakes (CN code 8714 94 30), and 

brake levers (CN code 8714 94 90), 

whether  or  not  presented  together,  and  currently  classifiable  under  CN  code 

ex 8714 94 30 

Complete  wheels with or without  tubes, tyres  and  sprockets  currently  classifiable 

under CN code 8714 99 90, also if presented as parts, and 

Pre-assembled  handlebars  currently  classifiable  under  CN  code  8714  99  10, 

whether or not presented with a stem, brake and/or gear levers attached. 

23 

Article 2 

1. 

The  definitive  anti-dumping  duty  imposed  by  Regulation  (EC)  No  2474/93  on 

imports  of  bicycles  falling  within  CN  code  8712  00  and  originating  in  the  People's 

Republic  of  China  is hereby extended  to imports  of essential  bicycle parts  originating  in 

the People's Republic of China. 

2. 

Essential  bicycle parts  which are consigned  from  the People's  Republic  of  China 

shall  be considered  to  originate  in that country  unless  it can be  proven  by production  of 

an  origin  certificate  issued  in  accordance  with  the  origin  provisions  in  force  in  the 

Community that the parts in question originate in another specific  country. 

Where  essential  bicycle  parts  are  consigned  from  a  country  other  than  the  People's 

Republic  of  China,  customs  authorities  may,  in  the  event  of  serious  doubts  concerning 

their  origin,  require  production  of  an  origin  certificate  issued  in  accordance  with  the 

origin provisions in force in the Community certifying  that the parts in question  originate 

in a country other than the People's Republic of China. 

3. 

The  duty  extended  by  Paragraph  1  shall  be  collected  on  imports  of  essential 

bicycle parts originating  in the People's  Republic of China registered  in accordance  with 

Article  2  of  Regulation  (EC)  No  703/96  and  Article  14  (5)  of  Regulation  (EC)  No 

384/96. 

4. 

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties 

shall apply. 

24 

Article 3 

1. 
The  Commission  shall,  after  consulting  the  Advisory  Committee,  adopt  by 
Regulation  the  necessary  measures  to  authorise  the exemption  of  imports  of  essential 
bicycle  parts  which  do  not  circumvent  the  anti-dumping  duty  imposed  by  Regulation 
(EEC) No 2474/93 from the duty extended by Article 2. 

2. 

The Commission Regulation shall, in particular, provide for: 

authorisation  of the exemption  and control  of imports of  essential  bicycle parts 
used by companies whose assembly operations are  not circumventing, 

authorisation  of  the exemption  and control of other imports of essential  bicycle 
parts,  in  particular  by  companies  which  do  not  circumvent,  or  with  regard  to 
imports which can be presumed not to circumvent, . 

rules  governing  the  functioning  of  such  exemptions  in  accordance  with  the 
relevant customs provisions, and 

exchanges  of  information  between  customs  authorities  and  the  Commission 
concerning the operation of such exemptions. 

25 

3. 

The Commission Regulation shall also provide for: 

the examination  of whether the conditions of non-circumvention  are fulfilled,  in 

a) 
particular in case of requests by: 

assembly  operations  by  parties  which  made  themselves  known  during  the 
investigation  but after  the time-limit  set out in Article 3 of Regulation  (EC) No 
703/96, 

assembly operations which started using essential bicycle parts for the production 
or assembly of bicycles only after  the investigation  period  set out in Regulation 
(EC) No 703/96, 

assembly  operations  which  had  been  found  to  be  circumventing  during  the 
investigation, 

other  assembly  operations  using  essential  bicycle  parts  for  the  production  or 
assembly of bicycles by parties which had not made themselves known during the 
investigation, and 

26 

the necessary  procedural  provisions  for  such examination,  and  in  particular  the 
b) 
conditions under which future requests for an examination will be accepted. To this end, 
where essential bicycle parts are declared for free circulation by an assembly operation in 
respect  of  which  an  examination  by  the  Commission  is  pending,  the  Commission 
Regulation shall also make provision that: 

the payment of the customs debt incurred for the anti-dumping duty extended or 
to be  collected  pursuant  to  Article  2 be  suspended  pending  the  outcome  of  the 
examination by the Commission, 

where  upon  examination  the  operation  is  found  to  be  non-circumventing,  the 
customs debt arising pursuant to Article 2 be extinguished, and 

in other cases, the suspension of the customs debt be lifted. 

The Commission may also provide that customs authorities may require the provision of 
a security when considered necessary to ensure the effective  payment of the customs debt 
in case the suspension is being lifted. 

4. 
Following an examination, under paragraph 3 the Commission may decide, where 
justified,  after  consulting  the  Advisory  Committee,  to  authorise  the  exemption  of  the 
operation concerned from the extension of the measures provided for by Article 2. 

5. 
Authorisation  for  exemptions  granted  pursuant  to  the  Commission  Regulation 
shall  have  retroactive  effect  to  the  date  of  initiation  of  the  present  circumvention 
investigation, provided the party concerned made itself known during that investigation. 
It  shall  have  retroactive  effect  to  the  date  of  the  request  for  an  authorisation  in  other 
cases. 

27 

The Commission shall also take the necessary steps to to revoke an authorisation 

6. 
for exemption, where justified and after consulting the Advisory Committee. 

The  Commission  may  amend,  after  consulting  the  Advisory  Committee,  the 
7. 
Regulation adopted pursuant to Paragraph 1 in the light of experience with its operation. 

Article 4 

Customs authorities are hereby directed to discontinue registration pursuant  to Article 2 
of  Regulation  (EC)  No  703/96  and  Article  14  (5)  of  Regulation  (EC)  No  384/96  of 
bicycle frames,  forks, rims and hubs falling  within CN codes 8714 91  10, 8714 91 30, 
8714 92 10 and 8714 93 10 respectively. 

Article 5 

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 

The President 

28 

ISSN 0254-1475 

COM(96) 689 final 

DOCUMENTS 

EN 

02  n 

Catalogue  number  :  CB-CO-96-700-EN-C 

ISBN  92-78-13705-7 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

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