Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of unwrought, unalloyed zinc originating in Poland and Russia and definitively collecting the provisional duty imposed
Date: 1997-09-03
Institutions: European Commission
Subjects: Poland, Russia, anti-dumping duty, import, zinc

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 03.09.1997 
COM(97)440  final 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing a definitive anti-dumping duty on imports of unwrought, unalloyed 

zinc originating in Poland and Russia and definitively collecting the 

provisional duty imposed 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

1.  Attached  is  a  proposal  for  a  Council  Regulation  imposing  definitive  anti 

dumping duties on imports of unwrought, unalloyed zinc originating in Poland 

and  Russia.  The  proposed  regulation  also  makes  provision  for  the  definitive 

collection  of  the, provisional  anti-dumping  duty  imposed  by  Commission 

Regulation (EC) No 593/97 of 25 March 1997 (*). 

2. 

This  proposal  should  be  assessed  together  with  a  Commission  Decision 

accepting the undertakings offered by two Polish exporters which co-operated in 

the investigation. 

3. 

The proposed act basically confirms the provisional findings of the Commission 

as  regards  issues  such  as  the  like  product,  dumping,  injury,  causation  and 

Community  interest.  Some  of  these  findings,  however,  have  been  slightly 

adjusted,  in  particular  the  price  undercutting  calculation  and  the  dumping 

calculation.  As a result, the definitive  duties will be somewhat  lower than the 

provisional ones. 

4.  Commission  Regulation  (EC)  No  593/97  imposed  a  provisional  duty  for  a 

period  of  six  months  and  entered  into  force  on  5  April  1997.  Definitive 

measures  should  therefore  be  adopted  and  published  before  the  provisional 

duties would lapse, i.e. not later than 4 October 1997. 

OJ No L 89, 4. 4. 1997, p. 6 

COUNCIL REGULATION (EC) No 

/97 

of 

1997 

imposing a definitive  anti-dumping duty on imports of unwrought, unalloyed 

zinc originating in Poland and Russia and definitively  collecting the 

provisional duty 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 

Community  (*),  as  amended  by  Regulation  (EC)  No  2331/96  (2),  and  in  particular 

Articles 8, 9 and 23 thereof, 

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

Advisory Committee, 

Whereas: 

A.  PROVISIONAL  MEASURES 

1.  By means of Commission Regulation (EC) No 593/97 ( ), hereinafter  referred  to as 

'the provisional duty Regulation', a provisional anti-dumping duty was imposed on 

imports of unwrought, unalloyed zinc falling  within CN codes 7901  11 00, 7901 12 

10 and 7901  12 30, originating in Poland and Russia. 

O J N o L 5 6,  6. 3. 1996, p. 1. 
OJNoL317,  6.  12. 1996, p. 1. 
O J N o L 8 9,  04.04.1997, p. 6 

B.  SUBSEQUENT PROCEDURE 

2.  All  interested  parties  co-operating  in  the  investigation,  the  complainant  and  the 

Polish  and  Russian  authorities,  received  disclosure  in  writing  concerning  the 

essential facts and considerations on the basis of which provisional measures were 

imposed. 

, 

3.  Within  the  time  limits  set  in  the  provisional  duty  Regulation,  the  Polish 

government,  the  two  co-operating  Polish  producers/exporters  listed  in  the 

provisional  duty  Regulation, hereinafter  referred  to as "the exporters",* as well as 

two importers, have submitted comments in writing. 

4.  All  parties  which  so  requested  were  granted  an  opportunity  to  be  heard  by  the 

Commission services. 

C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

5.  The Polish government, the co-operating Polish exporters and an importer of zinc 

originating in Russia raised the question whether their product and the products of 

the  European  producers  could  be  considered  one  like  product,  given  certain 

differences  in  physical  characteristics  and  the  fact  that  they  fall  within  three 

different  CN codes. 

6. ÎAS laid down in recitals (9) to (15) of the provisional duty Regulation all grades of 

unwrought, unalloyed zinc closely resemble each other.  The grades are alike as far 

as  their  technical  and  physical  characteristics  (minimum  content  of  zinc  for  all 

grades: 98.5 %) and their main uses (e.g. brass industry) are concerned. In addition, 

prices  for  all  grades  are  based  on  the  LME  quotations  for  Special  High  Grade 

(SHG) zinc  which  indicates  that  they  are  considered  as one  like  product  by the 

market. 

7.  The  existence  of  limited  differences  in  the  zinc  content  (Special  High  Grade 

(SHG), High Grade (HG), Good Ordinary Brand (GOB)) and in the impurities (in 

particular cadmium), between zinc produced by Community producers and Polish 

zinc, which was invoked by the exporters, does not invalidate this finding, as both 

HG and  GOB  zinc  -  which  are  manufactured  by  the  exporters  -  and  SHG zinc 

manufactured by the Community industry, compete directly in the market segment 

where they are used (hot-dip galvanising, production of brass, production of alloys 

other than casting alloys). It should also be noted that a sizeable proportion of the 

zinc produced  by  the  Community  industry  is  GOB zinc  and  therefore  competes 

directly with Polish GOB and HG zinc as well as with SHG zinc produced by the 

Community industry. 

8.  The provisional  findings  laid down in recitals (9) to (15) of the provisional  duty 

regulation are therefore  confirmed. 

D.  DUMPING 

a) Poland 

9.  Whereas  the  methodology  used  to  calculate  the  dumping  margins  was  not 

challenged  in  general,  the  Polish  co-operating  companies  raised  some  specific 

questions  concerning  cost  of  production,  the  ordinary  course  of  trade  test  and 

adjustments. 

m 

(i) Normal Value 

a) Cost of production 

lO.One Polish company requested  some changes in the calculation  of its production 

costs  for  the  purpose  of  establishing  normal  value.  The  company  claimed,  in 

particular, that the costs and/or revenues relating to certain by-products  were not 

excluded from the  calculation  of  the  production  cost  for  zinc  while  this  should 

allegedly have been done. This claim for correction could not be granted since the 

calculation of the production costs was based on the data provided by the company 

in the questionnaire response and duly verified  during the on-spot verification.  In 

addition  and  more  generally,  it  should  be noted  that  for  the  purpose  of  an anti 

dumping proceeding the cost of production as recorded in the company's  ledgers 

will, normally, be the basis for the determinations in accordance with Article 2 (5) 

of the Basic Regulation.  Any proposals for a cost allocation methodology  different 

from  the one normally applied by the company concerned, has to be claimed within 

the time limits specified  in the Notice of Initiation, in order to allow for  a proper 

verification on the spot. This was, however, not done by the company concerned. 

11 .The  company  furthermore  claimed  that  the  monthly  cost  of  production figures 

were not representative since certain non-recurrent cost items were not spread out 

over  the  entire  investigation  period.  In  this  respect,  it  should  be  noted  that  the 

Commission has based its calculation on data provided  by the company.  As the 

initial submissions of the company regarding its production costs did not reflect an 

appropriate  allocation  of  (non-recurrent)  costs,  the  company  provided,  at  the 

request of the Commission, a revised version which was verified  and used for the 

determinations.  Consequently, there is no need to revise the calculations again. 

12.Finally, this company alleged that in a high inflation environment it would be more 

appropriate  to  calculate  an  average  cost  of  production  per  tonne  for  the  whole 

investigation period and to adjust the average cost level by monthly inflation rates 

to arrive at monthly costs of production. This claim could not be granted as it was 

found  to be possible within the accountancy  system  of the company  to establish 

reasonably  the  actual  cost  of  production  incurred  on  a  monthly  basis.  These 

monthly  costs,  which  were  based  on  the  questionnaire  response  and  the 

information verified during the on-spot verification, were consequently used in the 

determinations. 

b) Sales in the ordinary course of trade 

13.One  company  raised  some  questions  as  regards  the  determination  whether 

domestic sales were made in the ordinary course of trade.  The company disputed, 

in  particular,  the  exclusion  of  certain  non-profitable  transactions  from  the 

calculation of the normal values. 

14.1n  this  respect,  it  should  be  recalled  that  the  Commission  established  for  the 

provisional  duty  Regulation  whether  domestic  sales transactions  of the  company 

are in the ordinary course  of trade, in accordance with Article 2 (4) of the Basic 

Regulation.  Since  the  inflation  rate  of  Poland  was  significant  during  the 

investigation  period, calculations were carried out on a monthly basis in order to 

allow for a comparison of sales transactions and production costs at - as nearly as 

possible - the same time (see recitals 17 to 19 of the provisional duty Regulation). 

15.Whereas this approach was not contested in general, the company claimed that in a 

high  inflation  environment  the  monthly  average  production  costs  should  not  be 

compared  with  individual  sales transactions, but  with  monthly  average  domestic 

selling prices.  The company alleged that the approach applied by the Commission 

would almost automatically  lead to a larger number of sales at the beginning of a 

period  being  at  a  loss  which  would  lead  to  their  unwarranted  exclusion.  This 

argument is contradicted  by the findings  of the investigation.  An analysis carried 

out by the Commission  showed that contrary to the allegation of the company no 

clear pattern of profitable sales transactions at the end of a month, or transactions at 

a loss at the beginning of the month, could be established. 

16.Furthermore,  it  was  claimed  that  certain  sales  at  a  loss  should  not  be  excluded 

since the period  for  recovery  of losses is at least  six months, in accordance with 

Article  2 (4)  of the Basic Regulation.  With regard  to one exporter  it was  found, 

however, that during the whole  investigation period  (one year) more than 20 % of 

its sales were at a loss when comparing the monthly production costs with monthly 

sales  transactions.  Consequently,  the  exclusion  of  the  sales  at  a  loss  is  justified 

since the transactions were not in the ordinary course of trade. These sales at a loss 

were  made  in  substantial  quantities  and  a  sufficient  recovery  from  the  losses  as 

required by Article 2 (4) of the Basic Regulation could not take place. 

17.For the  other  co-operating  company,  it  was  established  that  -  on  a  yearly  basis  -

less than  20  % of their  sales during the investigation  period  was  at a  loss. It was, 

therefore,  decided  to  include  the  sales  at  a  loss  in  the  calculation  of  the  normal 

value which slightly reduced the normal value of this company. 

(ii) Export price 

18.One of the Polish companies claimed that the total amount of its export turnover to 

the Community is higher than that applied by the Commission for its determination 

of  the  export  prices.  This  argument  was  rejected  as  the  calculation  made  by  the 

company  concerned  was  not  based  on  the  exchange  rates  attached  to  the 

questionnaire sent by the Commission. 

(Hi) Comparison between normal value and export price 

19.One company  requested  that their normal value should be established  on the basis 

of  domestic  sales  to  customers  buying  more  than  2000  tons  per  year  since 

customers  on  the  export  market  (EC)  would  also  buy  more  than  2000  tons.  This 

claim could not be accepted  since it was not claimed  in the questionnaire  response 

and no additional verification  visits could be carried  out after  the imposition  of the 

provisional duty. Therefore,  it could not be established whether the company  really 

applied a consistent quantity-related discount policy on the domestic market. 

20.Both  Polish  exporters  repeated  their  requests  made  prior  to  the  imposition  of 

provisional  duties  for  an  adjustment  for  differences  in  the  level  of  trade.  In  this 

regard it was, however, noted that no new arguments were presented to substantiate 

this claim. Therefore the findings, as laid down in recital 24 of the provisional duty 

regulation, are confirmed. 

(iv) Dumping margins 

21.Taking  into  consideration  the changes  in the  normal  value  for  one  company  as 

indicated above, the other findings for Poland as laid down in recitals  17 to 28 of 

the  provisional  duty  regulation  are «confirmed  and  the  recalculated  dumping 

margins, expressed as a percentage of the free-at-Community-frontier prices, are as 

follows: 

Huta Cynku 'Miasteczko Slaskie', Miasteczko Slaskie 

14.4% 

Kombinat Gorniczco-Hutniczy Boleslaw, Bukowno 

5.2% 

The  dumping  margin  applicable  to  non-cooperating  producers/exporters  remains 

unchanged at the level of 14.4 %. 

b) Russia 

(i) Normal Value 

22.Since Russia is considered to be a non-market economy country for the purpose of 

anti-dumping proceedings (cf. Article  2 (7) of the Basic Regulation which refers to 

Regulation  (EC) No 519/94 ( )), its normal value was established  by reference  to 

the  normal  value  found  in  an  analogue  country  (in  this  proceeding  Poland,  see 

recital 29 of the provisional duty Regulation). As the normal value for this country 

was  revised,  the  normal  value  used  for  the  calculations  relating  to  Russia  was 

revised accordingly. 

OJ No L 67,  10. 3.  1994, p. 89 

mÊÊÊÊmÊÊÊÊÊmÊÊÊÊÊÊÊÊÊÊmiÊÊÊÊmm P. 9 

(ii) Export price 

23 .One importer  of Russian zinc alleged that Eurostat  statistics for  Russia might be 

incorrect due to wrong origin declarations and requested that its export transactions 

should form  the basis of the export prices. This claim could not be granted since 

the allegations  were not  sufficiently  substantiated  and could  -at this  stage of the 

proceeding  -  not  bé  verified.  The  allegations  would  anyhow  only  invalidate  a 

portion of Eurostat data. 

(Hi) Comparison between normal value and export price 

24.This  company  further  claimed  that  Polish  and  Russian  zinc  are not  of the  same 

quality  and, therefore,  an adjustment  for  physical  differences  should  be made. In 

this respect,  it was noted, however, that the normal value was established  on the 

basis of the company  producing  the same quality  as the majority  of the  Russian 

zinc producers. Consequently, an additional adjustment was not warranted. 

(iv) Dumping margins 

25.Taking into account the revised normal value established for the reference country 

and considering that the other findings for Russia as laid down in recitals 29 to 34 

of  the  provisional  duty  Regulation  are  confirmed,  the  recalculated  dumping 

margin,  expressed  as  a  percentage  of  the  free-at-Community-frontier  prices, 

amounts to: 

Russia 

6.9 %. 

p. 10 

E.  INJURY 

a)  General Injury Factors 

26.The  comments  made  by  the  exporters  in  respect  of  the  provisional  findings 

regarding injury factors were limited to price undercutting. The Polish Government 

alleged,  however,  that  there  was  little  or  no  injury,  arguing  from  the  fact  that 

Community  producers  were  using  almost  full  capacity.  However,  this  argument 

does  not  invalidate  the  statement  made  in  recital  51  of  the  provisional  duty 

Regulation, i.e. that the investigation showed that, because of the special nature of 

the  production  process  and  the  high  fixed  costs  linked  to  the  production  of 

unalloyed, unwrought zinc, capacity must be as fully  used as possible, even when 

this means that sales of the final products would afterwards  be made at a loss. As 

stated  in that  recital, there are also high variable costs incurred  (e.g. high energy 

consumption  for  start-up)  if  production  is  interrupted. 

It  cannot  therefore  be 

accepted that the fact that, in the present case, the Community producers' capacity 

would have been almost fully  used during the investigation period  should  lead to 

the conclusion that they were not suffering material injury. 

27.0ne  of the  importers referred  to at recital  3 above  submitted  that  an increase of 

stocks of GOB could not have been caused by imports of HG zinc originating in 

Russia  and  objected  to  the  cumulative  assessment  made  for  Poland  and  Russia 

arguing that Russia only produced HG zinc. These arguments disregard, however, 

that GOB and HG zinc compete with each other in the market segment of hot-dip 

galvanizing  and  brass  manufacturing  where  they  are  used.  Moreover,  the 

conditions of competition between zinc originating in Poland and zinc originating 

in Russia are similar as neither HG zinc nor GOB zinc are traded at the LME and 

both  grades,  as  well  as  slightly  more  expensive  SHG  zinc,  can  be  used  in  this 

market segment. 

»p. 11 

28.The  provisional  findings  pertaining  to,  in  particular,  consumption  on  the 

Community market, production, sales and profitability  of the Community industry 

and employment  in the Community  industry, as laid down in recitals 37, 38, 40 

through 45, and  50 through  60 of the provisional  duty  Regulation,  are  therefore 

confirmed. 

b)  Price undercutting 

29.Further to the comments made by the exporters and one of the importers referred to 

at recital 3 above, the provisional findings  concerning the Community producers' 

prices have been reconsidered. As regards the premium of 3 % on the "LME price 

(recital 47 of the provisional duty Regulation), it was noted that the publications of 

the International Lead and Zinc Study Group confirm that during the investigation 

period zinc was being sold at a premium. The premium of 3 % or US$ 30 on an 

average LME price of US$ 1000/ton, paid during the investigation period, does not 

appear  either  excessive  or  unreasonable,  taking  into  consideration,  for  instance, 

that loading costs at the LME warehouse (which are paid by the buyer but need not 

to be paid in case of direct sales  outside the LME) amounted already to US$15/ton. 

30.This premium of 3 % reflects  the facts that the pripe charged by EC producers in 

case  of  direct  sales  to  industrial  users  is  not  identical  to  the  LME  price,  but 

somewhat  higher  to  cover  selling  costs  and  the  costs  of both  currency  and  zinc 

hedging, and that buyers accept to pay a slightly higher price e.g. if they are certain 

to obtain the specific brand of a given producer or if transport costs are lower than 

those  from  an  LME-approved  warehouse.  The* premium  includes  all  costs 

associated with the marketing and technical service offered  to the customer, which 

are incurred by the producer. For the buyer, direct sales have the advantage that the 

cost of the warrant, the cost of moving the metal from  an LME warehouse to the 

truck and the broker's fee, which would have to be paid in case of sales through the 

LME, need not be paid. 

Ip. 12 

3 l.In this respect, it is worth noting that the cost of hedging included in this premium 

could  not  have  been  inflated,  as  this  cost  included  administrative  costs,  the 

payment of broker's fees  and finance charges only,  while profits  or losses  arising 

out  of  hedging  were  separated out of the calculations  in order to  allow  for  a fair 

comparison. 

32.The exporters and one of the importers.referred to at recital 3 above objected to the 

Commission's assumption that the prices of the three grades of zinc were identical, 

claiming  that the prices  of  HG and GOB zinc  were  lower than the price  of  SHG 

zinc which had been used for the calculation (as the LME price is a price for SHG 

zinc). According to the exporters, account should be taken of the difference  in price 

between the three grades of zinc. As the prices published by the International Lead 

and Zinc Study Group show that, during the investigation period there was indeed 

a  very  small  differential  between  the  prices  of  SHG,  HG  and  GOB  zinc  it  is 

appropriate to take account of this difference  in price. While HG zinc was found to 

have  been  sold  at  a  rebate  of  maximum  0.3  % on  the  price  of  SHG  zinc,  the 

differential  between GOB and SHG was just below  1  % of the price of SHG zinc. 

33.One  of the  exporters  claimed  that allowance  should  be  made  for  the  fact  that  its 

GOB  zinc  has  a much higher cadmium  content  than Community  produced  GOB 

zinc and proposed that the market value of this difference,  assessed on the basis of 

the cost of refining,  should be added to its export prices  in order to carry out the 

undercutting calculation on a fair basis. 

34.While  the  exporter  concerned  showed  that  Community  producers'  zinc  did  meet 

the  CEN  1179  standard  and  its  (unrectified)  GOB  zinc  did  not,  the  documents 

submitted  by  this  exporter  did  not  enable  the  Commission  services  to  make  a 

precise assessment  of the prices of non-Polish  GOB  zinc with the same cadmium 

content  as  the  zinc  exported  by this  exporter  and  sold  in the  Community  market 

during the investigation period. The Community  industry provided information  on 

the costs of rectification  (i.e. upgrading, by means of distillation, of GOB zinc not 

meeting  the  CEN  1179  standard  into  both  SHG  and  GOB  zinc  with  a  standard 

cadmium content) that could be allocated to the elimination of excessive cadmium, 

tp.  13 

if this rectification  took place immediately after  the refining  of zinc concentrates. 

However,  the  specific  costs  which  should  be  allocated  to 

the  elimination  of 

excessive  cadmium  in  case  of  a  rectification  undertaken  in  another  plant  after 

completion of the process of refining  zinc concentrates into unrectified  GOB zinc 

(likely  to  be  disproportionately  high)  could  not  be  established  precisely,  as  the 

exporter  and  the  Community  industry  supplied  contradictory  information  also 

relating  to  the  question  as  to  what  extent  it  is,  in  this  situation,  economically 

realistic  to  carry  out  such  a  rectification  with  a  view  to  removing  excessive 

cadmium from unrectified GOB zinc. 

35.Nevertheless,  since  the  high  cadmium  content  (and  the  health  hazards  resulting 

therefrom)  prevents  certain  users  from  using  the  zinc  without  rectification, 

although  the  investigation  showed  this  is  not  the  case  for  all  users,  the  price 

differential  between  high  cadmium  GOB zinc  and  GOB  zinc  meeting  the  CEN 

1179 standard had to be assessed. To tm\end, on the one-hand, it should be noted 

that it is not possible to conclude that the average market value* of zinc having a 

lower, "standard" cadmium content would coincide with the price of the exporter's 

zinc increased by the refining costs (as it is unlikely that these refining  costs could 

always be entirely reflected in the price and thus fully passed on to any customer). 

On the other hand, the information  submitted by the exporter (which showed that 

there  was  a  differential  between  the  price  of  its  GOB  zinc  and  the  LME  price 

exceeding  the  differential  of  1  %  between  the  prices  of  GOB  and  SHG  zinc 

published  by  the International  Lead and Zinc  Study  Group) and the  Community 

industry  demonstrates  that  a reasonable  average  price  differential  between  GOB 

zinc  with  a  high  cadmium  content  and  GOB  zinc  with  a  cadmium  content  not 

exceeding the limit of the CEN standard could be established, which is the basis for 

an adjustment of the export price of the Polish exporter concerned. 

36.1n addition, the exporters claimed that a difference  in level of trade should be taken 

into account as Polish export sales would have been made to traders only. As stated 

in recital  46 of the provisional  duty Regulation, the undercutting  calculation  was 

made  using  the  price  in  the  Community  market  of  zinc  manufactured  by 

>p.  14 

Community  producers,  established  taking  into  account  that  considerable  direct 

sales  exist from zinc  refiners  to  both industrial  users  and  traders,  which  are  not 

taking place through the LME.  This means that both sales to industrial  users and 

sales to traders were  taken into  account  and that the calculated  price  charged  by 

Community producers in the Community market, which was found to be somewhat 

higher than the  LME price, constitutes  an average price  for both categories.  It  is 

therefore  considered  appropriate that the price  undercutting calculation  should  be 

corrected on this point by adding a reasonable margin for the trader to the export 

prices used. 

37.The exporters also claimed that an adjustment  should be made for transport costs 

within  the  Community  and  one  of  them  submitted  that the  export  prices  of  the 

exporters should have been compared to the LME price of the month prior  to the 

month  in  which  the  transaction  took  place.  For  the  purpose  of  the  price 

undercutting  calculation, a comparison was made between the ex-works  prices  of 

Community  producers  and  tlje  export  price  of  Polish  zinc  (cleared  through 

customs, at the Community frontier) during each of the months of the investigation 

period. Therefore, it does not appear appropriate to make any further adjustment. 

c)  Conclusion on Injury 

38.Taking into account the small difference  in price between the three grades of zinc, 

the  difference  in  the  level  of  trade,  and,  for  one  of  the  exporters,  the  higher 

cadmium  content  of  GOB  zinc  originating  in  Poland,  the  price  undercutting 

margins were recalculated as follows: 

Huta Cynku 'Miasteczko Slaskie', Miasteczko Slaskie 

Kombinat Gorniczco-Hutniczy Boleslaw, Bukowno 

Other Polish producers/exporters 

Russia 

14.0 %. 

6.6 % 

14.0 % 

5.2 % 

p.  15 

39. Apart from these modifications, the provisional  findings  laid down in recitals 37 to 

60 of the provisional duty Regulation are  confirmed. 

F.  CAUSATION 

40. One  of  the  importers  referred  to  at  recital  3  above  made  some  comments  on  the 

Commission's findings  essentially based on the assumption that HG and GOB zinc 

would  not  be  competing  with  each  other.  As  this  assumption  is  incorrect,  no 

sufficiently  substantiated  comments  were  made  on  the  provisional  findings 

concerning  the  causal  link  between  dumping  of  zinc  originating  in  Poland  and 

Russia and injury  to the Community producers, recitals 61 to 70 of the provisional 

duty Regulation are herewith  confirmed. 

G.  COMMUNITY  INTEREST 

41.No  representations  concerning  Community  interest  were  submitted  by  industrial 

users or their representative  associations. The exporters pointed  out, however,  that 

stocks in LME warehouses had decreased  since the end of the investigation  period 

and that prices might go up shortly, as supply would fall  short of demand. 

42.In  this  regard  it  should  be  noted  that  a  direct  linkage  exists  between  the  price  of 

zinc  concentrates  (i.e.  the  raw  material  used  by  zinc  refiners)  and  the  price  of 

refined  zinc.  Therefore,  any  price  increase  of  refined  zinc  at  LME  level 

automatically corresponds to an increase in the cost of raw material for  Community 

producers.  Accordingly,  no  remedial  effect  can  be  expected  from  an  increase  of 

the price of refined  zinc at that level and no such price evolution  can be such as to 

render measures unwarranted in the present case. 

43.One of the importers referred  to at recital  3 above argued that the interests of final 

consumers  had  not  been  properly  assessed.  In this  regard,  it  should  be  noted  that 

the Commission has found  that the effect  of measures on user industries  should  be 

minimal.  It  may  therefore  be  assumed  that  no  major  price  increases  for  final 

consumers will occur. 

p. 16 

44.The same importer, which claimed that Russian smelters would produce zinc for it 

in  accordance  with  a  tolling  agreement,  also  alleged  that  measures  would  be 

against  the  Community  interest  because  some  major  Community  producers  had 

bought  zinc  originating  in  Russia.  This  allegation  was  however  not  sufficiently 

substantiated. In addition, it should be recalled in this respect, that Article 4 (1) (a) 

does not provide for the automatic exclusion of producers which themselves import 

the dumped product. 

45.The provisional findings regarding the Community interest assessment (recitals 71 

to 75 of the provisional duty regulation) are confirmed. 

H.  DEFINITIVE MEASURES 

a)  Undertakings 

46.Subsequent  to  the  imposition  of  provisional  anti-dumping  duties  and  the 

submission of their comments on the Commission's provisional  findings, the two 

co-operating  Polish exporters offered  an undertaking under Article 8 of the Basic 

Regulation.  By offering  these undertakings, each of the exporters commits itself, 

inter alia, to  respect  minimum  prices  for  the  different  grades  of  exported  zinc, 

which prices are directly linked to the LME prices for SHG zinc, during a specified 

period of reference. 

47.These undertakings should eliminate the injurious effects of dumping as envisaged 

by  Article  8  (1)  of  the  basic  anti-dumping  Regulation  and  can  be  monitored 

effectively.  The Commission consulted the Advisory Committee on the acceptance 

of these undertakings and no objections were raised. The undertakings offered  were 
/EC  (5). The  investigation 

subsequently  accepted  by  Commission  Decision  97/ 

should therefore be terminated in respect of these exporters. 

See p. 

of this Official  Journal. 

p. 17 

b)  Definitive Duty 

48.A residual  duty  on imports  of zinc originating  in Poland  should be  imposed.  This 

residual duty is deemed necessary  in order to prevent that non-co-operating  parties 

will  benefit  from  their  non-co-operation.  Moreover,  although  in  the  present  case 

the exporters have contested the figures  concerning  exports of zinc from Poland to 

the EC that  were used by the  Commission,  they  were not able to  explain  whether 

the  discrepancy  between  these  figures  and  their  own  exports  represented  indirect 

exports to the EC of their  own products  or exports  of other  zinc. The  rate of  duty 

should  correspond  to  the  injury  margin,  since  that  margin  was  found  to  be  lower 

than the dumping margin. 

49.Russian  producers/exporters  did  not  co-operate  in  the  investigation.  It  was 

therefore  argued  that  the  rate  of  duty  for  Russia  should  be  at  least  as  high  as  the 

rate of duty found  for the non-co-operating  Polish companies. This claim could not 

be  accepted  as  the  rates  of  duty  are  normally  calculated  on  the  basis  of  data 

established  for  each  of  the  respective  countries.  Consequently  and  since  the 

findings  for Russia were only revised in respect of the normal value established  for 

the market  economy  reference  country,  it  is necessary  to impose  a definitive  anti 

dumping  duty  on  imports  of  zinc  originating  in  Russia  at  the  injury  elimination 

level as the injury margin is lower than the revised dumping margin. 

I.  DEFINITIVE COLLECTION OF PROVISIONAL  DUTY 

50.One of the importers referred  to at recital  3 above, a company  established  after  the 

publication  of  the  notice  of  initiation,  requested  that  its  uncleared  stocks  held  in 

bonded warehouse  on 5 April  1997 be exempt from  the definitive  collection of the 

provisional  anti-dumping  duty,  arguing 

that, 

in 

the 

light  of 

its  specific 

circumstances,  it would  have been  its  legitimate  expectation  that  no  duties  would 

be imposed. However, since the imposition of provisional anti-dumping duties took 

place  further  to  a  duly  announced  investigation,  importers  are,  in  principle,  not 

p. 18 

entitled to an exemption on this point. The specific  circumstances  invoked by the 

importer are not such that an exception to this rule would be justified. 

51.As  the  co-operating  Polish  producers/exporters  undertook  to  respect  the 

undertakings as from 20 June 1997, subject to their acceptance by the Commission, 

it  is  appropriate  not  to  collect  the  provisional  anti-dumping  duties  on  zinc 

manufactured  by these  exporters  which  offered  these  undertakings,  and  released 

into free circulation on or after that date. As regards imports of zinc  manufactured 

by  these  exporters,  which  took  place  before  20 June  1997, the  provisional  anti 

dumping duties should, however, be collected at the rates that would have applied 

had  the  undertakings  not  been  accepted  (i.e.  5.2  %  for  Kombinat  Gorniczco-

Hutniczy Boleslaw, Bukowno, and  14.0 % for Huta Cynku  'Miasteczko  Slaskie', 

Miasteczko Slaskie). 

52.Regarding  imports  of  zinc  originating  in  Poland  and  manufactured  by  other 

producers  than the two  co-operating  ones, and  all  imports  of  zinc  originating  in 

Russia, the provisional  anti-dumping  duties should  be definitively  collected  only 

up  to  the  rate  of  the  definitive  anti-dumping  duties,  i.e.  14.0  %  and  5.2  %, 

respectively. 

J.  FINAL PROVISIONS 

53.The  Community  industry  concerned  has  been  informed  of  the  main  facts  and 

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

of definitive measures including the acceptance of undertakings and did not object. 

54.The exporters have been informed of the main facts and considerations underlying 

the  intended  Commission  proposal  for  definitive  measures. They  have  not  made 

any further comments. 

fP-19 

55.In accordance with the Europe Agreement with Poland (6), the Association Council 

and the Polish  government  have been  supplied with  all relevant  information  and 

have been informed  in advance of the outcome of the investigation  laid down in 

this Regulation  and the Commission Decision accepting the undertakings  offered 

by the exporters. The Polish government explicitly expressed  its satisfaction  with 

the solution found for the two co-operating Polish exporters. 

56.1n accordance  with the Interim  Agreeement  with the  Russian  Federation  (7), the 

Russian government has been supplied with all relevant information  and has been 

informed  in  advance  of  the  outcome  of  the  investigation  laid  down  in  this 

Regulation, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A definitive  anti-dumping  duty  is hereby  imposed  on  imports  of  unalloyed, 

unwrought zinc falling within CN codes 7901 11 00, 7901 12 10 and 7901 12 

30 originating in Russia and Poland. 

2. 

For  the  product  referred  to  in  paragraph  1  originating  in  the  Russian 

Federation,  the  rate  of  the  anti-dumping  duty  applicable  to  the  net,  free-at-

Community-frontier  price, before duty, shall be 5.2 %. 

3.  ••  For the product referred to in paragraph  1  originating in Poland, the rate of the 

anti-dumping  duty  applicable  to  the  net,  free-at-Community-frontier  price, 

before  duty, shall be  14.0 % (Taric additional  code  8900) except  for  imports 

manufactured  and sold for export to the EC by 

- Kombinat Gorniczco-Hutniczy Boleslaw, Bukowno 

OJNoL348,31.  12. 1993, p. 2 
OJNoL247,  13. 10.  1995, p. 1 

p. 20 

(Tarie additional code 8965) or 

- Huta Cynku "Miasteczko Slaskie", Miasteczko Slaskie 

(Tarie additional code 8093), 

which shall be exempt from the duty, 

provided  these  imports are accompanied  by a certificate  EUR.  1 issued  after 

19 June  1997, in which the name and address of either company  are filled in 

under the heading "exporter" and the EC or one of its Member States is filled 

in  as  country  of  destination,  and which  is  certified  by  the  Polish  authorities 

and  issued  in  accordance  with  the  provisions  of  the  Europe  Agreement 

establishing  an  Association  between  the  European  Communities  and  their 

Member States, on the one part, and the Republic of Poland, on the other part. 

4. 

Unless otherwise specified, the provisions in force concerning customs duties 

shall apply. 

Article 2 

1. 

The  amounts  secured  by  way  of the  provisional  anti-dumping  duty, imposed 

pursuant  to  Regulation  (EC) No  593/97  shall  be  definitively  collected  at the 

rate  of  the  duties  definitively  imposed  on  imports  of  unwrought,  unalloyed 

zinc  originating  in  Poland  and  Russia,  respectively.  However,  without 

prejudice  to  paragraph  2,  the  provisional  anti-dumping  duty  imposed  on 

imports  originating  in  Poland  manufactured  and  exported  by  Kombinat 

Gorniczo-Hutniczy  Boleslaw,  Bukowno,  shall  be definitively  collected  at the 

rate of 5.2%. 

The  amounts  secured  in  excess  of  the  definitive  rate  of  anti-dumping  duty 

shall be released. 

2. 

Provided  that it is  demonstrated that zinc  of  Polish  origin was  manufactured 

by  either  Huta  Cynku  "Miasteczko  Slaskie",  Miasteczko  Slaskie,  or  by 

I P. 21 

Kombinat  Gorniczo-Hutniczy  Boleslaw,  Bukowno,  and  released  into  free 

circulation  on  or  after  20  June  1997,  the  provisional  duty  shall  not  be 

definitively collected. 

v 

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, ________  1997. 

For the Council 

The President 

IP-22 

ISSN 0254-1475 

COM(97) 440 final 

DOCUMENTS 

EN 

02  08  11 

Catalogue  number  :  CB-CO-97-450-EN-C 

ISBN  92-78-24335-3 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

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