Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of certain footwear with textile uppers originating in the People's Republic of China and Indonesia
Date: 1997-10-01
Institutions: European Commission
Subjects: China, Indonesia, anti-dumping duty, dumping, footwear industry

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 01.10.1997 
COM(97) 498  final 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing a definitive anti-dumping duty on imports of certain footwear with textile 

uppers originating in the People's Republic of China and Indonesia 

(presented by the Commission) 

I-  v.-',v 

EXPLANATORY MEMORANDUM 

(1)  The  Commission,  by  Regulation  (EC)  No  165/97l  ,  imposed  provisional  anti 

dumping  duties  on  imports  into  the  Community  of  certain  footwear  with  textile 

uppers originating in the People's Republic of China and Indonesia. 

• 

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

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)  The  Commission  accepted  the  claim  by  one  Indonesian  exporter  regarding  the 

omission  in the dumping calculation  of a factor  affecting  price comparability, and 

consequently revised downwards its calculations of normal value and dumping for 

both Indonesia and for China since Indonesia was used as the analogue country for 

the purpose of calculating normal value in respect of China. 

(4) 

In addition,  following  the submissions  received  and  a further  analysis  of  the data 

available, the Commission considered that the adjustment  used at provisional stage 

to take into account the difference  of level of trade between the CIF imports and the 

Community  producers'  delivered  sales in the calculation  of  the  injury  elimination 

levels ought to increased. 

1 OJ  No L 29, 31.1.1997, p.3. 

A 

(5)  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. 

(6) 

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

the  effect  that  the  footwear  concerned  originating  in  Indonesia  and  the  People's 

Republic  of  China  was  being dumped  in the Community  and  was 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. 

(7)  The adjustments  in the calculations  presented  above affect  the provisional  findings, 

to the effect  that the individual  duty rates for the cooperating Indonesian  companies 

are reduced  to a range from  0% to  14.1%, as well  as the residual  injury  elimination 

levels  which  amount  to  15.4% for  Indonesia  and  61.2% for  the  People's  Republic 

of China. 

(8) 

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 certain  footwear  with  textile uppers  originating  in the People's 

Republic  of  China  and  Indonesia.  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. 

/)  <X 

COUNCIL REGULATION  (EC) No 

191 

of 

imposing a definitive  anti-dumping duty on imports of certain footwear  with textile 

uppers originating in the People's Republic of China and Indonesia 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European  Community, 

Having  regard  to  Council  Regulation  (EC)  No 384/96  of  22  December  1995  on 

protection  against  dumped  imports  from  countries  not  members  of  the  European 

Community^ and in particular Article 9 thereof, 

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

Advisory  Committee, 

Whereas: 

A. 

PROVISIONAL  MEASURES 

(1)  By  Commission  Regulation  (EC)  No  165/97^  (hereinafter  referred  to  as  'the 

provisional  duty  Regulation')  provisional  anti-dumping  duties  were  imposed  on 

imports  into  the  Community  of  certain  footwear  with  textile  uppers  falling  within 

Combined  Nomenclature  (CN) codes  6404  19 10 and  ex  6404  19 90  originating  in 

the People's  Republic  of China and Indonesia. 

OJ  No  L  56,  6.3.1996,  p.  1 Regulation  as  amended  by  Regulation  (EC)  No 2331/96  (OJNoL317. 
6.12.1996,  p. 1). 

OJ No L 29, 31.1.1997, p.3. 

B. 

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 oral and written comments submitted by the interested parties  were considered, 

and,  where  deemed  appropriate,  taken  into account  in the Commission's  definitive 

findings. 

C.  PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

1. 

Product  under  consideration 

(7)  For  the  purpose  of  its  preliminary  findings,  the  Commission  considered  "non-

sports"  footwear  with  outer  soles  of  rubber  or  plastics  and  uppers  of  textile 

materials,  intended  for  use  either  indoor  or  outdoor  (falling  within  CN  codes 

6404  19  10 and ex  6404  19 90), as one single category of products.  In this  regard, 

certain  interested  parties  claimed  that  slippers  and  outdoor  footwear  were  too 

different,  in particular  in terms of use, to belong to the same category  of products. 

(8) 

In this respect, it is worth recalling that most light outdoor shoes of the kind under 

consideration  can  replace  slippers  (they  can  be  and  are  used  indoors)  and  are 

therefore  in  direct  competition  with  slippers.  Accordingly,  it  is  confirmed  that 

slippers and outdoor footwear  of the kind under consideration  should be regarded 

as one single category of products. 

(9)  Making reference to the exclusion, at provisional stage, of certain types of footwear 

sometimes  known  as  "espadrilles",  several  interested  parties  have  requested,  on 

various  grounds,  the  further  exclusion  of  certain  allegedly  very  specific  products 

from the scope of the proceeding.  These claims are analysed below. 

a) 

Neoprene shoes 

(10)  Several  importers  requested  the exclusion  of certain  types of  footwear  sometimes 

known  as "diving boots", made of neoprene and used for certain  water sports such 

as diving.  Indeed,  neoprene  is a material  which  is generally  strengthened  with a 

textile  coating  when  used  for  manufacturing  footwear,  with  the  result  that  the 

constituent  material  of  the  upper  having  the  greatest  external  surface  area  is  the 

textile material, and thus the footwear concerned classifiable  under the CN heading 

6404.  In  addition,  since certain  water  sports, such  as diving,  are  not  considered 

expressly  as  a  "sporting  activity"  within  the  meaning  of  the  Combined 

Nomenclature,  the  neoprene  shoes  concerned  were,  it  was  claimed,  classifiable 

under CN code 6404 19 90, although  such a specific  product  would not belong to 

the single category of products under consideration. 

(11)  Having  investigated  this  issue  in  more  detail  the  Commission  found  that-the 

neoprene  shoes  in  question  are  sold  in  water  sport  equipment  stores  and  not  in 

footwear  stores  and  clearly  belong  to  a  distinct  market.  Their  physical 

characteristics  and  the  use  which  they  are  intended  for,  make  them,  in  the 

consumer's perception, a clearly distinct product from those belonging to the single 

category of "non-sports footwear with textile uppers" under consideration. 

(12)  Asked  to  react  on  this  issue,  the  representatives  of  the  complaining  Community 

industry  raised  no  objections  but  indicated  that,  should  an exclusion  be  granted, 

their  main  concern  would  be  that  the  description  of  the  footwear  concerned  be 

sufficiently  precise in order to avoid any circumvention of duties. 

(13)  For  all  the  above  reasons  and  in  consideration  of  the  fact  that  the  footwear 

concerned is clearly identifiable  by the customs authorities, it is considered that the 

neoprene shoes sometimes known as "diving boots" or "water sports boots" should 

be excluded from the scope of the proceeding. 

b ) 

"Trekking shoes " 

(14)  Within the meaning of the Combined Nomenclature "trekking" is not considered as 

a  sporting  activity  and  therefore  trekking  shoes  with  textile  uppers  generally  fall 

within CN code 6404  19 90.  Certain parties requested that this product be excluded 

from  the scope  of  the proceeding, on two grounds.  The first ground was based on 

the  fact  that  the  product  in  question  would  be  sold  at a high,  non  dumped, price. 

Moreover, certain importers claimed that they could have legitimately expected that 

trekking  shoes  would  not be subjected to measures because the Spanish  version of 

the notice  of  initiation^ had translated,  in the list  of  exclusions  contained therein, 

the  words  "cross-country  ski  footwear"  by  "boras  de  senderismo",  the  Spanish 

equivalent of "trekking shoes". 

O J N o C 4 5,  22.2.1995, p. 2. 

(15)  As  to  the  first  ground,  it  has  to  be  noted  that  the  information  made, available, by 

cooperating  exporters  and  used  by  the  Commission  for  the  investigation  of 

dumping did not confirm the absence of dumping on this type of footwear. 

(16)  As  regards  the  second  ground,  i.e.  the  allegedly  legitimate  expectation  of  certain 

importers that trekking shoes would not be subjected to measures  (stemming  from 

the  fact  that  the  Spanish  version  of  the  notice  of  initiation  had  mis-translated  the 

words  "cross-country  ski  footwear"),  this  argument  cannot  be  accepted  for  the 

following reasons: 

Reference  should  first  be  made  to  the  Court  of  Justice's  jurisprudence 

(Anklagemyndigheden  vs. Schumacher and others, Judgement of  27 October  1981, 

case 250/80), according to which it is appropriate, where provisions  are affected by 

a disparity between  Various language versions, to place them within  the context of 

the totality of  the Community rules concerned and to interpret them with particular 

regard to their objectives. 

It has  been  a long standing approach of Community  institutions  to set  up a closed 

list  of  so-called  "sporting  activities"  within  the  framework  of  the  Combined 

Nomenclature.  More precisely, it was quite clear that the wording  of  the notice of 

initiation  was  a  mere  quotation  of  the  provisions  of  subheading  note  1  (b)  of 

Chapter  64  of  the  Combined  Nomenclature,  in  the  Spanish  version  of  which  the 

words  "ski-boots  and  cross-country  ski  footwear"  are  translated  by  the  words 

"calzado para esquiar" and not by the words "botas de esquî, senderismo". 

(17)  Finally, it has to be stressed that the footwear with textile uppers of the type-called 

"trekking  shoes" is widely produced  in  the EC, was aimed  by the complaint  and 

clearly  fell  within  the scope of  the investigation.  Indeed,  most  of  these products 

may also be used, and are actually used, for other purposes than the "technical" one 

which they are supposed to be intended for, which confirms  their belonging to the 

single category of product under consideration. 

Accordingly,  it  is  considered  that  the  so-called  "trekking  shoes"  should  remain 

within the scope of the proceeding. 

c) 

Medical shoes 

(18)  Orthopaedic  shoes, i.e.  intended  to correct  a specific  and permanent disability or 

physical abnormality, belong to chapter 90 of the Combined Nomenclature and are 

not  covered  by  the  present  investigation.  The  product,  falling  within  CN  code 

6404 19 90, for  which an exclusion  was claimed is a medical footwear  of the type 

sold  in chemists'  stores, not per pair but per  "foot'',  and which  is not  specifically 

adapted  to  a  given  person  but  is  intended  for  anybody  having  for  instance  a 

sprained or broken ankle.  This claim was made on the grounds that such a specific 

product could not belong to the single category of products under consideration. 

(19)  It is clear that the medical shoes in question belong to a different  market (they are 

not  sold  in footwear  stores but by chemists).  In addition,  they  are marketed  in a 

very specific way (per "foot" and not per pair, and in specific shapes in order to fit a 

plaster  rather  than  a  foot),  which  makes  them,  in  the  consumer's  perception,  a 

clearly  distinct  product  from  those  belonging  to  the  single  category  of  product 

under consideration. 

(20)  Asked  to  react  on  this  issue,  the  representatives  of  the  complaining  Community 

industry argued that some production of medical footwear exists in the Community 

but  did  not  oppose  the  conclusion  that  the  shoes  in  question  were  sufficiently 

specific,  in  terms of physical characteristics  and uses, for  them  to fall  outside the 

single category of "non-sports footwear with textile uppers" under consideration. 

(21)  For  all  the  above  reasons  (and  in  consideration  of  the  fact  that  such  a  specific 

product  is clearly iâentifiable  by the customs authorities), it  is considered  that the 

medical  footwear  of  the type sold  in chemists' stores, not  per  pair but  per  "foot", 

should be excluded from the scope of the proceeding. 

d) 

"Disposable" slippers 

(22)  The party having claimed the exclusion of "disposable" slippers explained that the 

footwear  in  question,  which  is imported  at a very low unit  price,  is generally not 

sold  to  final  consumers  but  given  away  (e.g. by certain  hotels  to  their  guests  or 

certain  airlines to their passengers).  These circumstances were claimed to result in 

the  footwear  concerned  to  fall  outside  the  single  category  of  products  under 

consideration. 

(23)  Asked to comment on this issue, the representatives of the complaining Community 

industry  argued  that  the  concept  of  "disposable"  (or  "not  for  sale")  was  rather 

subjective  and  that  the  footwear  in  question  was  clearly,  in  terms  of  physical 

characteristics and uses, a slipper belonging to the single category of products under 

consideration. 

(24)  The  footwear  in  question  has  indeed  physical  characteristics,  application  and  uses 

which  do  not  differ  from  those  of  other slippers.  While  at  importers'  level  the so-

called  disposable  slipper  seems  to belong to a distinct market  (the claim  was  made 

by  a  company  dealing  with  "inflight  and  hotel  service  products",  and  not  by  a 

footwear  distributor),  the situation  is much  less clear at consumer's  level  since  the 

product  in  question  is purely  and  simply interchangeable  with  a slipper of  the type 

under  consideration. 

(25)  For the above reasons, it is considered  that the so-called  disposable  slippers'should 

remain  within  the scope of the proceeding. 

2. 

Like  product 

a) 

Arguments  based on the existence of different production  methods 

(26)  The  question  of vulcanised  footwear,  already raised  at provisional  stage (see recital 

18  of  the  provisional  duty  Regulation),  has  again  been  addressed  by  certain 

interested  parties. 

In  particular,  allegations  were  reiterated  that  the  Community 

industry  did  not  produce  in  sufficient  quantities  shoes  with  vulcanised  soles  and 

that  its production  is rather  concentrated  on injection  moulding.  The  results  of  the 

further  examination  carried out are the following. 

(27)  Whilst  it  is  clear  that  the  vulcanisation  process  is  different  to  that  of  injection 

moulding,  it  should  be  recalled  that  the main  relevant  criteria  in  the  determination 

of  the  "like  product"  are  based  on  the general  technical  or  physical  characteristics 

and  the use  or functions  of products  and not the method  used  for  their  production. 

In this context,  minor differences  resulting  from  different  production  processes  are 

generally  disregarded. 

* 

(28)  As  to  the  technical  arguments  raised  by  various  parties,  namely  the  fact  that 

vulcanisation  means  rubber while  injection  means  inter  alia PVC,  thus  differences 

of access  to the raw material, visual differences  (PVC is more  "shiny"  than  rubber) 

and  smell  (rubber  has  a typical  smell  but  PVC  has  none)  and  different  dissolving 

and melting  properties,  it cannot  be denied  that differences  in nature  exist  between 

the chemical  and  physical  reactions  taking place during  the manufacturing  process 

of  these  types  of  footwears  However,  it  should  be  kept  in  mind  that  synthetic 

rubber  is  generally  used  in  the  manufacture  of  footwear.  Thus  the  raw  materials 

involved  in  these  processes,  i.e.  synthetic  rubber  and  PVC,  are  all  petrochemical 

derivatives,  manufactured  wherever  one  is  able  to  manage  the  industrial  process 

concerned  (e.g. Europe, USA, Middle East). 

Synthetic  rubber  is  indeed  available  in  all  parts  of  the  world,  one-of  the  main 

applications being the tyre industry.  The argument of better access to raw materials 

for  producers  of  vulcanised  footwear  in developing  countries  cannot  therefore  be 

considered  as  relevant,  as  this  may  make  the  manufacturing  process  more  cost 

effective  but  has  no  impact  on  the  fact  that  the  product  concerned  is  alike  the 

Community  product.  It  should  also  be  noted  that,  to  differentiate  the  shoes  in 

question,  the  parties  had  to  invoke  criteria  which  go  far  beyond  usual  criteria 

corresponding to normal use:  If PVC, unlike rubber, does indeed melt, it is above 

80°C, well  above  normal conditions during use.  Similarly, customers  would not, 

under normal conditions, perform a dissolving test before buying. 

(29)  As  regards  the  alleged  decline  in  the  production  of  vulcanised  footwear  in  the 

Community, it has to be stressed that this aspect was raised by certain importers at a 

very  advanced  stage  of  the  proceeding.  However,  the  evidence  so  far  received 

shows that  this production  process is still  used in the Community  (for  instance in 

Spain  where a number  of producers have declared  that  they could  still  produce a 

total  of  22  million  pairs/year  of  this  type  of  shoe)  and  that  there  are  numerous 

producers in the Community willing and able to produce vulcanised footwear. 

The investigation  has also shown that, contrary to allegations made by a number of 

parties,  vulcanised  footwear  imported  from  the  People's  Republic  of  China  and 

Indonesia  is sometimes  sold as a branded product, packed  in a cardboard  box and 

sold  in  specialised  shoe  shops  whilst  Community  produced  injection  moulded 

footwear  can  be  sold  as  a  non-branded  product,  in  plastic  bags  and  in  discount 

stores. 

10 

(30)  The  conclusion  to  be  drawn  from  the  above  is  that  notwithstanding  technical 

differences  in  the  manufacturing  process  used,  vulcanised  footwear  is  in  direct 

competition  with injection  moulded footwear.  Indeed, these types of footwear  are 

so  similar  in  all  respects  that  the  average  consumer  would  not  be  able  to 

differentiate  them. 

There  is  thus  no  reason  to  consider  that  vulcanised  footwear  produced  in  the 

People's Republic of China and Indonesia and exported to the Community is not a 

like product to injection  moulded footwear produced in the Community, within the 

meaning  of  Article  1(4) of  Regulation  (EC) No 384/96  (hereinafter  referred  to as 

'the Basic Regulation'). 

b) 

Arguments based on the alleged existence of different "product segments " 

(31)  Certain  parties  have  reiterated  that  imported  and  Community  produced  footwear 

belong to different  product segments which do not compete with each other.  They 

claimed  that  footwear,  imported  at a price higher  than  the average,  would  not be 

alike,  within  the  meaning  of  Article  1(4)  of  the  Basic  Regulation,  to  footwear 

imported below or at the average price. 

(32)  This issue has been  the source of repeated and seemingly contradictory  statements 

by importers, some of them claiming that they import low quality footwear that they 

simply could not find in the Community, while others claimed that they order in the 

People's Republic of China or in Indonesia sophisticated products manufactured in 

accordance with their own specifications, design and sometimes raw materials. 

11 

This contradiction simply shows that the People's Republic of China and Indonesia 

are in fact capable of producing, do indeed produce, and export to the Community, 

the full  range of  products on offer in the market.  This is not apparent from import 

statistics  because  the  average  prices  are  driven  by  the  bulk  of  imports  which  is 

indeed  made  of  low-priced  footwear.  The  imports  in  question  and  the  products 

manufactured  by the Community industry are therefore alike within the meaning of 

Article  1(4) of the Basic Regulation. 

c) 

Conclusion 

(33)  In the  light  of  the  above,  it  is  confirmed  that footwear  subject  to  this  proceeding 

produced  in  the  People's  Republic  of  China  and  Indonesia  and  exported  to  the 

Community  is  a like  product  to  footwear  produced  in  the  Community  within  the 

meaning of Article  1(4) of the Basic Regulation.  Similarly, footwear  subject to the 

current  investigation  produced  in  Indonesia  is  a  like  product  to  the  footwear 

produced and exported from the People's Republic of China to the Community. 

D.  DUMPING 

1. 

Indonesia 

(a) 

Normal value 

(34)  The Indonesian  exporters  contested the Commission's  use, in  constructing  normal 

value,  of  a  profit  margin  established  on  the  basis  of  one  company's  profitable 

domestic  sales of a product other than the product concerned,  in this case footwear 

with  leather  or plastic  uppers.  They alleged  that this  profit  margin  was  excessive 

and not representative of the industry. 

12 

In addition,  as the profit  margin  had  been used  in the construction  of  normal  value 

for  all  companies  in  the  sample  for  Indonesia, the normal  values  and  by  extension 

the dumping margins  were allegedly excessive and unfair.  They contended  that  the 

use of the profit  margin  of 7% deemed acceptable by the Commission  in the case of 

the Community  industry should have been used. 

(35)  This  argument  could  not  be  accepted.  Firstly,  Article  2 (6) (b)  of  the  Basic 

Regulation  provides  that  where  there  are  no  domestic  sales  of  the  product 

concerned,  the  SG&A  and  profit  used  in  the construction  of  normal  value  can  be 

established  on the basis of the actual amounts applicable to production  and sales of 

the  same  general  category  of  products  for  the  exporter  or  producer  in  question  in 

the domestic  market of  the country of origin.  This was the methodology  applied in 

the case of the company  referred  to at recital 34 of the present  Regulation. 

In  the  case  of  two  of  the  sampled  companies  which  had  neither  domestic  sales  of 

the  product  concerned  nor  of  the  same  general  category  of  product,  normal  value 

had  to  be  established  in  accordance  with  Article  2  (6)  (c)  of  the  Basic  Regulation 

i.e.  any  other  reasonable  method.  It  was  held  that  in  the  circumstances  of  this 

investigation  the  most  reasonable  method  was  to  use  the  SG&A  and  profit  found 

for the company  referred  to at recital 34 of the present  Regulation. 

Secondly,  the  7% profit  margin  used in the calculation  of  a non-injurious  price  for 

the  Community  industry  is the minimum  that the Commission  considers  necessary 

to  remove  the  injury  suffered  by the Community  industry  and  has  thus  nothing  to 

do with  the profit  margin  used in the construction  of normal  value, which  has to be 

based  on  the  actual  profit  achieved  on  the  Indonesian  market.  In  this  regard,  it 

should  be  noted  that  the  European  Court  of  Justice  has  consistently  indicated  that 

preference  should  be given  to the use of actual profit  margins  in the construction  of 

normal  value. 

13 

(36)  One  of  the  Indonesian  companies  included  in  the  sample  contended  that-  in 

calculating  its  normal  values, the Commission  should  have used  the cost  estimates 

which  they  had  submitted  during  the  on  the  spot  verification. 

In  this  context,  it 

should  be  pointed out  that  the company  concerned  did  not  have  a cost  accounting 

system,  and  had  only  cost  estimates  which  had  been  used  to  make  price  offers  to 

potential  customers.  The  latter  were  the  costs  reported  in  their  response  to  the 

questionnaire. 

This  claim  had  to  be  rejected  since  the  company  was  unable  to  demonstrate  the 

correctness  of  the  cost  estimates.  Furthermore,  for  some  of  the  models,  no 

information  at  all  regarding  cost  was  available.  Moreover,  no  information  beyond 

direct  material  cost  was  available  for  any  of  the  models.  Therefore,  the  approach 

adopted  in  the provisional  duty Regulation,  i.e. to recalculate  costs  by  reallocating 

the  total  cost  of  sales,  exclusive  of  SG&A  and  profit,  over  the  models  concerned 

using the turnover in the company's own accounts is confirmed,  as this was deemed 

to  be  the  most  appropriate  method  for  establishing  the  costs  of  each  model  of 

footwear. 

(b) 

Export  price 

(37)  In  the  absence  of  any  comments  on  the  establishment  of  export  prices  the 

provisional  determinations  are hereby  confirmed. 

14 

(c) 

Comparison 

-  -

(38)  The  Indonesian  exporter  whose  profitable  domestic  sales  were  used  in  the 

construction  of  normal  value  for  Indonesia  and  referred  to  in  recital  34  of  the 

present Regulation  claimed that the Commission omitted to take account of a factor 

affecting  price  comparability  as  provided  for  in  Article  2  (10)  of  the  Basic 

Regulation  by  not  granting  an  allowance  to  normal  value  for  credit  costs.  As  the 

» 

Commission  established  that  this  adjustment  was  indeed  omitted,  it  has  now 

reviewed  its calculations  accordingly.  As the SG&A  of  this  company  was used  in 

the construction  of  normal  value for  the other Indonesian  companies  in  the sample, 

a reduction  of their normal  value was also required  to reflect  the allowance  granted. 

All dumping calculations have been adjusted  accordingly. 

(39)  The company  referred  to at recital  36 of the present  Regulation  contended  that  the 

dumping  margin  had  been  created by averaging the costs  of  individual  models  and 

the  application  of  an  artificially  high  profit  margin  in  the construction  of  normal 

value.  It claimed  that  the use of  averaging  meant  that  normal  values  were  inflated 

and  all  low  priced  exports  dumped. 

It  further  contended  that  the  use  of  the 

individual  normal  values  it had submitted  and the application  of  a reasonable  profit 

would have led to a finding  of no dumping. 

In  view  of  the  circumstances  outlined  in  recital  36  of  the  present  Regulation,  the 

Commission  considered  that,  in order to arrive at a reasonably  accurate  calculation 

of costs  it had no alternative other than to recalculate the costs using the  company's 

own  accounting  records and to reallocate the total cost of sales, exclusive of  SG&A 

and profit,- over the models concerned. 

15 

(d) 

Dumping  margins 

(40)  The  methodologies  used  to  calculate  definitive  dumping  margins  are  the  same  as 

those  used  for  the  calculation  of  the  provisional  dumping  margins.  However, 

dumping  margins  have  been  amended  in order  to  take  account  of  the  allowance  to 

normal value now granted as described in recital 38 of the present  Regulation. 

(i) 

Cooperating companies in the sample 

(41)  The  margins  thus  established  and  expressed  as  a  percentage  of  the  cif  price  at 

Community  frontier  are the  following: 

-  P.T. Dragon 

-  P.T. Emperor Footwear 

-  P.T. Sindoll Pratama 

4.0% 

0.0% 

24.9%. 

(ii) 

Cooperating producers/exporters  not investigated 

(42)  In view of the above changes in the dumping margins of the cooperating  companies 

in  the  sample,  the  margin  established  for  the  two  cooperating  companies  not 

investigated,  expressed  as  a percentage  of  the  cif  price  at  Community  frontier,  is 

now definitively  established at 14.2%. 

(iii) 

Residual  dumping margin 

(43)  In view of the above changes in the dumping margins of the cooperating  companies 

in  the  sample,  the  margin  established  for  definitive  determinations,  expressed  as a 

percentage of the cif price at Community  frontier,  is now 39.7%. 

16 

2. 

People's Republic of China 

(a) 

Individual  treatment 

(44)  The Chinese exporters  argued that the Commission  did  not  sufficiently  motivate its 

rejection  of  the  requests  for  individual  treatment  by  the  cooperating  Chinese 

exporters.  They  insisted  that  individual  treatment  be  granted  for  definitive 

determinations.  * 

It should be reiterated that it is the Commission's policy to calculate  a country-wide 

duty for  non-market  economy countries except in those cases  where companies  can 

demonstrate  independence  from  the  State.  However,  none  of  the  companies 

concerned  were  able  to  adequately  demonstrate  such  independence  since  they  all 

had  links  to  the  Chinese  State,  either  directly  or  via  Provincial  or  municipal 

authorities.  In the absence of any further  information  on this  issue, the  provisional 

findings  with  regard  to  the non-acceptance  of  the requests  for  individual  treatment 

are hereby  confirmed. 

(b) 

Normal  value 

(45)  The  Chinese  exporters  alleged  that  they  received  insufficient  information  by  the 

Commission  regarding  the Indonesian  shoes used  for  comparison  with  the  exported 

Chinese  models.  They  alleged,  in  particular,  that  insufficient  information  was 

disclosed 

to  them  concerning  raw  materials  used  and  production  processes 

employed  in  the  production  of  the  Indonesian  shoes  to  enable  them  to  claim 

adjustments  for differences  in physical characteristics. 

17 

In this regard,  it should  be pointed  out that, in an effort  to come  up  with  the-fairest 

model  comparison,  the Commission  made repeated  efforts  to get  information  from 

the Chinese  exporters  concerning  the design  and make up of,  and  material  used  in, 

the  models  which  they  exported  to  the  Community.  Despite  this,  the  Chinese 

exporters only supplied  very partial information.  Accordingly, the Commission had 

to  make  its  assessment  of  comparability  on  the  basis  of  the  information  available 

and  as  was  the  case  for  provisional  measures,  the  Indonesian  models  used  were 

those  found  to  be  similar  or,  in  the  absence  of  similar  models,  those  most  closely 

resembling  the  Chinese  models  exported  to  the  Community  by  the  Chinese 

companies  in  the  sample.  All  the  information  upon  which  the  comparison  was 

based was made available to the Chinese exporters. 

(c) 

Export  price 

(46)  In  the  absence  of  any  comments  on  the  establishment  of  export  prices  the 

provisional  determinations  are hereby  confirmed. 

(d) 

Comparison 

(47)  Since Indonesia  was the analogue country used to establish the normal  value for the 

People's  Republic  of  China,  the  single  margin  for  the  People's  Republic  of  China 

was  also  adjusted  downwards  to  reflect  the  granting  of  the  allowance  for  credit. 

costs,  to  Indonesian  normal  values  referred  to  in  recitals  38  and  40  of  the  present 

Regulation. 

(e) 

Dumping margin 

-  -

(48)  The  Chinese  exporters  questioned, 

in  some 

instances, 

the  Commission's 

comparison  of  weighted  average  normal  values  to  Chinese  export  prices  of 

individual  export  transactions  to the Community.  They claimed  that  export  prices 

did not sufficiently  differ  amongst different  purchasers, regions or time periods and 

that  consequently,  in  accordance  with  Article  2 (11)  of  the  Basic  Regulation,  both 

export  price  and  normal  value  should  be  compared  on  a  weighted  average  basis. 

Having  reviewed  its  calculations,  the  Commission  found  that  the  differences  in 

prices  were  small  and  that  for  the  purposes  of  definitive  determinations  weighted 

average  normal  values  should  indeed  be compared  with  weighted  average  export 

prices. 

On  that  basis,  the  single  dumping  margin  calculated  for  the  People's  Republic  of 

China, expressed  as a percentage of the cif price at Community  frontier,  was  found 

to be  133.2%. 

E.  COMMUNITY  INDUSTRY 

(49)  Certain  parties  have  reiterated  and  expanded  their  allegations  according  to  which 

the  Commission  would  have  failed  to  establish  the  representative  nature  of  the 

Community  industry  providing  evidence  of  injury.  This  was  based  on  the  alleged 

non  reliability  of  the  "total  Community  production"  figure  used  and  entailed  a 

criticism  of  the  sampling  technique  applied  by the  Commission.  The  justification 

of  the  "anonymous  treatment"  granted  to  certain  Community  producers  was  also 

questioned. 

19 

1. 

Total  Community  production 

(50)  It has to be  recalled  that  the  level of support  for  the complaint  was checked  before 

initiation.  The total estimated EC production  volume of the like product, on  which 

the  standing  of  the  68  complaining  Community  producers  was  assessed,  was 

subsequently  re-examined  (in  respect  of  1991  until  1994)  at  the  premises  of 

national footwear  federations  and confirmed  to be accurate. 

Moreover,  it has to be stressed that the "total production" figure  of the like product, 

on which the standing was assessed, was set at the maximum possible production in 

the  Community.  Indeed,  due to the lack  of  reliable  data,  no examination  could  be 

carried  out 

in  order 

to  determine,  in  accordance  with 

the  provisions  of 

Article 4 (1) (a)  of  the Basic Regulation,  whether  the production  volume of  certain 

non-complaining  producers  should have been excluded from  the "total  production" 

figure,  on  the  grounds  that  their  core  business  would  be  importing  rather  than 

producing within the EC. 

Such  would-be  Community  producers,  of  which  some  are  known  to  have  made 

considerable  imports,  are  also  known  to  produce  in  the  EC  a  relatively  large 

number  of pairs.  Had  sufficient  information  in this respect  been  made available, it 

is  likely  that  part  of  this  Community-produced  volume  would  have  been  excluded 

from  the  total  production  figure.  Conversely,  the  "core  business"  test  was  carried 

out  vis-à-vis  the  28  companies  in  the  "first  group"  as  defined  at  recital  6  of  the 

provisional  duty  Regulation  and  all  were  found  (as  explained  at  recital  55  of  the 

provisional  duty Regulation) to have their core business in the Community. 

(51)  The  representative  nature  of  the  investigated  Community  industry,  assessed  in  a 

reasonable way and on the basis of fully  accurate figures,  is therefore  confirmed. 

20 

2. 

Sampling 

. 

-  -

(52)  In this respect,  it has to be recalled  that given  the  very large number of potential 

parties to the proceeding, the notice of initiation of the present proceeding explicitly 

mentioned the fact that the investigation could be conducted by means of sampling. 

As a result,  from  the beginning of the investigation,  cooperation  was  sought  (via 

national  federations)  from  a  limited  number  of  Community  producers  selected 

amongst the 68 companies supporting the complaint. 

Meaningful  replies  were  received  from  28  producers,  amongst  which,  for 

verification  purposes, 9 were selected and their replies subjected to in depth on-spot 

verifications  (this  latter  group  of  producers  is  referred  to  as  "the  verification 

sample" in the provisional duty Regulation). 

The  28  companies  in  the  first  group  do  account  for  slightly  more  than  25% of 

Community output of the like product, thus qualifying,  in the absence of declared 

opposition to the complaint, as the Community industry.  This should be viewed as 

an  exceptional  circumstance,  stemming  from  the  fact  that  the  first  group  was 

originally set up with a view to (inter alia) accounting for more than 25% of output. 

This, however, is not required by the Basic Regulation, and should be considered as 

an additional  check  on the representativity  of  the Community  industry,  instead of 

the fulfilment  of a legal requirement. 

(53)  Concerning the representativity of the investigated Community industry, it has to be 

stressed that the injury  findings  were based on verified  information  collected  from 

various appropriate sources, all representative of the Community industry: 

21 

•  Production,  sales,  market  share  and  employment  in  the  Community-  were 

established  at  the  level  of  each  national  footwear  federation  and  thus  cover  the 

entire  Community  production  of  the  like  product.  This  fact  clearly  contradicts  the 

allegation  made  by an  interested  party  further  to the final  disclosure  and  according 

to  which  figures  relating  to the Italian  footwear  federation  had  been  omitted  when 

overall  injury  indicators were established; 

•  General  trends  concerning  prices,  costs  and  profitability  were  established  at  the 

level of the 28 cooperating producers in the first group; 

•  Undercutting  and  underselling  exercises  were  carried  out  on  the  basis  of  fully 

verified  price  and  cost  data  collected  from  the  9  companies  in  the  verification 

sample,  which  are  representative  in  terms  of  size  and  product  range  as  well  as 

located  in major  producing Member States. 

3.  Anonymous treatment of the 9 companies in the verification  sample 

(54)  Certain  parties  have  reiterated  and  expanded  their  allegations  according  to  which 

the  Commission  would  have  granted  without  any  justification  an  "anonymous 

treatment"  to  the  9  companies  in  the  verification  sample.  These  parties  have 

claimed  that  complaining  domestic  industries  should  be  prepared  to  face  any  kind 

of  "commercial  retaliation"  and  have  requested  that  at  least  the  names  of  the  28 

companies  in the first  group be disclosed. 

(55)  In this respect,  it has to be stressed again that the anonymous treatment  at stake*was 

granted  because the threat exerted  went far beyond what would  be for  importers the 

normal  exercise  of  their  freedom  of  sourcing  and  what  could  be  considered  as 

"normal" in commercial  relations.  The limited protection  so granted  was  moreover 

considered  particularly  appropriate  in  the  context  of  a  sampling  exercise,  where  a 

few  selected  companies  are  particularly  exposed  although  they  represent,  and  act 

for the benefit  of, & much larger group. 

(56)  As  regards  the  28  companies  in  the  first  group,  the  company  names  on  the  non 

confidential  questionnaire  responses  had 

in  general  been 

replaced  by  an 

identification  symbol and most national footwear  federations  (which transmitted  the 

answers)  had  listed  separately  the  names  of  the companies  having  replied,  without 

of course disclosing  the correspondence  between  the identification  symbols  and the 

names  in  the  list.  It  should  thus  be  stressed  that  all  interested  parties  have  had 

access  to  the  non-confidential  data  provided  by  both  the  28  producers  in  the  first 

group  and,  in a separate  file,  to the verified  and confirmed  data of  the  9 companies 

in the verification  sample. 

(57)  Given  that  the  questionnaire  responses  of  the  28  companies  in  the  first  group  as 

well  as  the  lists  established  by federations  had  been  made  accessible  to  all  parties 

before  the Commission  became aware of the above pressures, it was considered  that 

the files  in question, which permitted the identification  of 22 (out of 28) companies, 

could  not  be made anonymous ex post and should  thus continue  to be accessible in 

an  unaltered  form.  Under  these  circumstances,  it  was  considered  appropriate  to 

include, in the final  disclosure  sent to all parties, the list of  the 28 companies  in the 

first  group,  whilst  the  name of the 9 companies  in the verification  sample  was kept 

undisclosed. 

23 

F. 

INJURY 

1.  Cumulative assessment of the effects of the dumped imports 

(58)  Certain  parties  have claimed  that  the  impact  of  Indonesian  and  Chinese  imports 

should  not  be  cumulatively  assessed.  In  particular,  it  has  been  alleged  that  two 

conditions, which ought to be fulfilled  to make cumulation possible, were not met: 

(59)  Firstly,  it has been  argued  that in order to determine, for  the purpose  of applying 

Article 3 (4) of the Basic Regulation, whether the margin of dumping established in 

relation  to  the  imports  from  each  country  (for  which  cumulation  with  others  is 

considered)  was more than de minimis,  the Institutions should not take account of 

residual  margins  but  should  rather  rely  on  the  margins  found  for  cooperating 

exporters.  This assertion  cannot be accepted, in particular  in consideration  of the 

low level of cooperation obtained from Indonesian exporters.  In addition, it is also 

worth noting that the margins of dumping established in respect of two Indonesian 

cooperating  exporters  (out  of  three  selected  in  the  sample)  were  more  than  de 

minimis. 

(60)  Secondly,  it has been  argued  that certain  differences  in conditions  of  competition 

(allegedly evidenced by average import prices per pair, said to be markedly higher 

in the case  of Indonesia when compared to the People's  Republic  of  China) were 

such  as  to  make  cumulation  unwarranted.  In  this  respect,  although  the  alleged 

differences  are somewhat confirmed at Eurostat level, it was considered that: 

- these differences  are not such as to allow a clear distinction  to be made between 

the Indonesian  and Chinese pricing policies, (in particular when the average prices 

of both  Indonesia and the People's Republic of China are compared  to that of the 

other third countries supplying the Community market, which are much higher than 

the average prices of both countries under investigation); 

24 

-  a  detailed  examination  of  the  available  information  shows  that  imports  from 

Indonesia,  as  well  as  those  from  the  People's  Republic  of  China,  cover  the  full 

range of prices; and 

-  on the  basis  of  the  information  available, the most plausible explanation  of the 

existing difference  is a slightly different  product mix rather than a clearly  different 

pricing policy. 

(61)  Accordingly, the provisional findings  in this respect (as set out at recitals 64 to 69 

of the provisional duty Regulation) should be confirmed. 

2.  General injury factors 

(62)  Since  no  new  representations  were made by any interested  parties  as regards the 

provisional  assessment  of  general  injury  factors  (such  as, inter alia, consumption 

on the Community  market, production, sales, profitability  and employment  of the 

Community industry), no re-examination of the findings concerned was undertaken. 

3.  Undercutting calculation 

(63)  It has been alleged that undercutting was not always practised, if at all, at the level 

indicated in the provisional duty Regulation.  Certain parties have shown during the 

hearings  samples  of  allegedly comparable  models where imported  ones (generally 

manufactured  in  accordance  with  the  importer's  own  specifications  and  design) 

were more expensive than Community-produced ones. 

25 

Although  these statements may be true in some particular cases, it has to be stressed 

that  they  were  not  confirmed  on  a broader  basis  by the  investigation  into  both  the 

exporters'  prices for certain models and Eurostat prices.  In these circumstances, the 

Commission  considered  it  appropriate,  for  the  purpose  of  establishing  definitive 

findings,  to  continue  to  rely  exclusively  on  the  detailed  and/or  global  information 

collected  (and  verified  to  the  maximum  extent  possible)  in  the  course  of  the 

investigation,  on  the  basis  of  which  the  existence  of  price  undercutting  has  been 

positively  established. 

(64)  It  has  been  clairned  that  the  adjustment  for  differences  in  level  of  trade  was 

insufficient  and ought  to be revised.  In particular,  evidence  was  provided  showing 

that  the  13% adjustment  granted  at provisional  stage to take account  of  differences 

in level  of trade between  importers and Community producers' clients, only covered 

intra EC transport and other ancillary costs. 

A  further  analysis  was  carried  out,  concentrating  on  the  importers  for  which 

corroborated  data  relating  to  this  adjustment  had  been  provided,  i.e.  the  five 

cooperating  importers  named  in  the provisional  duty  Regulation.  These  importers 

had  been  the  subject  of  a  verification  visit  and  together  represented  14.8% of  the 

import volume concerned during the investigation  period. 

26 

It could be verified  that three of them had not sourced  the product  concerned "in a 

significant  way from Community producers during the investigation period, but had 

rather the same customers as the Community producers.  It was therefore concluded 

that,  to be compared  in  a fair  way, import prices had to be adjusted  for  the costs 

incurred between the importation and the point when the products actually reached 

the customers, and for a reasonable profit.  For this purpose, all costs which could 

be allocated  to the product concerned were taken  into account, with  the exception 

of those which  appeared  to be part of the production  costs (such  as raw materials 

provided by the importer to the producer in the exporting country) and thus to have 

been included in the customs value of the goods as reported in Eurostat. 

Conversely, two of the five importers appeared to be customers of the Community 

producers,  and  thus  only  their  costs  from  CIF  to  delivered  duty  paid  at  their 

warehouse level (DDP) were taken into account, as this corresponded to the level of 

trade where the Community producers' prices and costs had been established. 

For  each  importer,  the  relation  between  the average.import  price  for  the product 

concerned  and  the  costs  mentioned  above  was  examined.  It  resulted  from  this 

analysis  that,  to adjust  the CIF price to a level of  trade comparable  to that of the 

Community  producers'  deliveries,  two  elements  had  to  be  taken  into  account. 

Indeed, although  a part of the costs can be considered  as proportional  to the value 

of the goods, an adequate adjustment  was found  to require also a fixed  amount per 

pair, to reflect  the costs incurred inevitably by any importation, independently from 

the goods' value. 

27 

(65)  On the basis of the evidence examined  it was found  that, in order to be compared in 

a  fair  way  to  the  Community  producers'  prices and costs, the CIF import  price  for 

the  product  concerned  had  to  be  adjusted  20% upwards  and  then  increased  by  an 

amount of 0.2 ECU per pair, plus the normal customs duty rate. 

(66)  Calculations  have  been  amended  accordingly,  resulting  in  the  confirmation  of  the 

existence  of  the  undercutting  practices  established 

in  the  provisional  duty 

Regulation.  On  a  category-by-category  basis  as  for  the  cooperating  exporters 

subject 

to  a  provisional  anti-dumping  duty,  average  undercutting  margins, 

expressed  as a percentage of the Community  industry's  prices, were found  to be in 

excess of  10% for Indonesia and 30% for the People's Republic of  China. 

4.  Conclusion on injury 

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

as  was  established 

in  recital  (84)  of  the  provisional  duty  Regulation,  the 

Community  industry has suffered  material  injury  within the meaning of Article 3 of 

the Basic  Regulation. 

G. CAUSATION 

(68)  Most  exporters  and  importers  raised  again  the  case  of  imports  from  Vietnam  as 

being  a cause of  the injury  suffered  by the Community  industry.  In  this respect, it 

has to be stressed  that at the time of the lodging of the complaint  Vietnam's  known 

share  of  the  market  was  relatively  limited.  The  increase  which  took  place 

afterwards  was already noticeable during the investigation  period, where the market 

share  held  by  the  products  originating  in  Vietnam  was,  however,  much  more 

limited  than  that of Chinese products.  It follows  from  the above  that  the effects  of 

Vietnamese  imports  could  not have broken  the causal  link  established  between  the 

imports  subject  to  the  current  investigation  and  the  injury  suffered  by  the 

Community  industry. 

28 

(69)  Since  no  other  potential  cause  of  injury  has  been  put  forward  with-substantiated 

evidence, the provisional findings  in this respect as set out at recitals  85 to 95 of the 

provisional  duty Regulation are therefore  confirmed. 

H.  COMMUNITY  INTEREST 

1. 

Impact on  consumers 

(70)  Although  no  representations  have  been  received  either  from  consumers  or 

consumer  organisations  following 

the  publication  of 

the  provisional  duty 

Regulation,  some  parties  have  argued  that  anti-dumping  measures  would  seriously 

affect  the  Community  consumers  and,  among  these,  in  particular  those  with  the 

lowest  income. 

This  argument  concerning  the  foreseeable  impact  of  measures  on  the  consumers' 

buying  price  has  been  examined  in  detail.  The  results  of  this  examination  are  as 

follows: 

(a) 

Impact  in absolute terms 

(71)  Firstly,  as  far  as  footwear  prices  to  distributors  are  concerned,  it  is  likely  that  the 

Community  industry,  with  a  29%  market  share  and  a  4.82  ECU  per. pair  average 

price, would not be able to increase its prices above the 4.4% necessary to reach the 

reasonable profit  as defined  in the provisional duty Regulation  (recital  106) without 

running  the risk of  worsening  its current strong downward  trend in terms of  market 

share. 

In  addition,  imports  from  countries  not  concerned  by  this  proceeding 

represent  21.4%  of  the  market  for  the  product  concerned  and  it  is  expected  that 

producers  in  these  third  countries  will  not  be  willing  or  able  to  command 

significant  price increases. 

29 

As for  Indonesia,  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 

average  price  of  the  imports  being  2.34  ECU  per  pair.  The  market  share  of 

footwear  originating  in  the  People's  Republic  of  China  being  39.9%,  (with  an 

average  price  of  1.65  ECU  per  pair)  and  in  view  of  the  duty  rate  proposed,  the 

average  maximum  foreseeable  impact  of  the  measures  proposed  on  the  market  of 

the footwear  concerned as a whole amounts to 0.5 ECU per pair. 

Thus,  only  if  distribution  chooses  to  keep  its  margins  unchanged  and  charges  the 

entirety of  its increased  costs to the consumers, would the latter have in turn to pay 

the  corresponding  amount  of  0.5  ECU  per  pair.  Since  the  average  per  head 

consumption  of  the  footwear  concerned  in  the  Community  is  below  one  pair  per 

person  per  year,  the  impact  of  the  proposed  measures  for  the  consumer  remains 

clearly  marginal. 

(b) 

Impact  in relative terms, effect of price on consumption 

(72)  In relative terms, the basis of the calculations was the average price of the  footwear 

concerned  at  delivered-warehouse  distributor  level,  namely  3.6  ECU  per  pair, 

which  takes  into account, for  the imports, the adjustment  for  differences  in level of 

trade  referred  to in  recital  65 of the present Regulation.  Using the lowest  mark-up 

found  among  the  distribution  channels  analysed  below,  i.e.  125%, it  is  estimated 

that the average price for  the consumer of the product  concerned  is above 8.1  ECU 

per  pair.  As  a  consequence,  the  impact  on  the  consumer  price  of  fully  reflected 

duties would be below  6.2%. 

30 

This  percentage  should,  as  explained  above,  be  examined  in  light  both-of  the 

absolute  value  of  the  increase  (0.5  ECU  per  pair)  and  the  general  evolution  of 

prices.  Indeed,  over  the  four  years  examined,  and  due  to  the  penetration  of  the 

dumped  imports,  the average  market price at delivered-warehouse  distributor  level 

decreased  in  nominal  terms, this decrease  being of  more  than  11%  when  corrected 

from  the general  inflation  rate. 

(73)  It  should  be  added  that,  even  if  consumers  do  compare  the  prices  which  are 

simultaneously  offered  in  different  shops,  they  are  generally  less  sensitive,  as 

regards  the  product  under  investigation,  to  developments  in  the  general  level  of 

prices.  Indeed, the above mentioned decrease in prices did not influence  the global 

consumption  of  the product  concerned  in the  same  proportion  (as  would  have  had 

happened  if consumers had reacted on a "constant budget" basis). 

This  can  be  explained  by  a certain  saturation  which  can  be  observed  for  products 

which  are consistently  sold  at such  low prices  that  consumers  are unlikely  to  react 

to  a  limited  overall  change  in  the  Jevel  of  prices..  ' Even  if  the  pattern  of 

consumption  is  not  necessarily  symmetric  in  the  short  term,  it  is  doubtful  that, 

everything  else  being  equal,  the  full  reflection  of  the  duty,  i.e.  a  maximum  price 

increase of  6.2%, will cause a relative contraction  in demand of more than  1.6  %. 

(74)  In the absence of any other element or reaction from  consumer organisations, it was 

therefore  concluded  that  the  impact  of  the proposed  measures  on  the  consumer  of 

the footwear  concerned  was likely to be minimal. 

31 

2. 

Impact on the distribution 

(a) 

Impact on the distribution as a whole 

(75)  It  has  been  argued  that  the  imposition  of  measures  would  have  a  strong  negative 

impact  on  the  importers.  More  globally,  diverging  views  have  been  expressed  on 

the  situation  of  the  whole  distribution  chain  which,  it  has  been  argued,  was  an 

activity  with  a  far  greater  significance  in  the  Community  than  the  footwear 

production, in terms of both turnover and employment. 

It  should  be  recalled  first  that,  by  nature,  on  a  given  geographic  territory, 

distribution  will  have  a higher  turnover  than  the  manufacturing  companies  it  buys 

from,  by  the  mechanical  effect  of  its  distribution  margin. 

Secondly,  the 

employment  figures  for  the  footwear  distribution  in  general,  where  all  types  of 

footwear  are sold, cannot  be compared  with those of the Community  production of 

the  product  concerned  only,  which  were  disclosed 

in  the  provisional  duty 

Regulation  (recital  81). 

However,  the  importance  of  the  distribution  companies  for  the  footwear  sector  in 

general  and  this analysis in particular has to be stressed,  notably  in consideration  of 

the  value  added  by  these  companies. 

In  examining  the  possible  impact  of  the 

measures  on  the  distribution,  care  was  taken  to  clearly  differentiate  general 

considerations,  having  an  indirect  bearing  on 

the  product  concerned,  and 

considerations specific  to the product concerned. 

As  consumers  do  not  buy  shoes  in  significant  quantities  outside  the  Community, 

negative  consequences  of anti-dumping  duties for  the distribution  as a whole could 

only  result  from  a  significant  reduction  of  consumption  and  therefore  of  turnover, 

or  a downward  pressure  on  distribution  margins  to precisely  minimise  an  increase 

in consumer prices (and a decrease in consumption). 

32 

As explained  above, in  light  of  the foreseeable  impact  of possible  measures-on*the 

consumers  of  the  product  concerned,  it  can  be  considered  as  highly  unlikely  that 

consumption  of  the  product  concerned  would  drop  significantly,  even  if  the 

distribution  sector were not to reduce its current margins. 

Taken  as  a  whole,  it  can  therefore  be  concluded  that  the  effects  of  possible 

measures  on the distribution, limited for the sake of argument to that of the product 

concerned,  will be very limited.  Care was however taken to analyse this conclusion 

in light of the structure of footwear  distribution  in the Community. 

(b) 

Structure  of the footwear  distribution in the Community 

(76)  Among  the  footwear  distribution  in  the  EC,  four  different  channels  of  sale  to  the 

end  customer  are  generally  identified.  These  are  the  branded  chains,  the 

independent  retailers,  the  non-specialised  supermarkets,  and,  as  a  fourth  category, 

the other types of generally non-specialised  distribution  (clothing and general stores 

for example). 

(i) 

The independent  retailers 

(77)  The  traditional  distribution  channel  consists  of  independent  retailers,  generally 

buying from  wholesalers.  In the evolution  of the distribution  however,  wholesalers 

tend  to  disappear  as  retailers  enter  into  a  closer  relationship  with  a  more  limited 

number  of  producers, or tend to group in purchase associations  while keeping  their 

independence. 

33 

As far  as  the  retailers  themselves  are concerned,  they  face  an  adverse  competitive 

situation  due to both their individual  lack of price control  on suppliers  and the high 

margins  they  require  to  cover  the  fairly  high  costs  of  the  city  centres  (150%  to 

200%).  In  fact,  they  have  lost  ground  in  a  certain  number  of  Member  States  to 

more  recent  forms  of  distribution  falling  within  the  other  three  categories,  in 

particular the branded chains. 

However,  as  a consequence  of  their strong  presence  in  some  other  Member  States 

and their situation  at the upper end of the market where they maintain  a continuous 

commercial  relationship  with  their customers,  it should  be  noted  that  they are still, 

at  least  in  terms  of  value  added  and employment  (over  250 000 persons), the  most 

important  distribution  channel  in  the  Community,  although  probably  not  the  first 

one in terms of market share (in volume). 

(ii) 

The branded chains 

(78)  These chains, sometimes  involved  into a production  activity  in the Community,  are 

generally  the  property  of  one  or  two  large  companies  in  each  country,  owning 

several brands  and operating on the whole market range.  They operate  out-of-town 

super or discount stores, which can resist, because of their sales volume, prices and 

specialisation,  the non-specialised  supermarkets'  pressure. 

34 

The  branded  chains  also  sell  through  in-town  shops  replacing  the-  independent 

retailers with  less costly, standardised shops corresponding to the need, for a part of 

the  customers'  purchases,  to  have  a  more  adequate  buying  environment  than 

discount  halls.  Different  brands  are  allocated  different  market  segments,  to  the 

effect  that when  two companies are present on the market, or even  among the same 

company,  upmarket  brands  suffer.  Due  to  their  purchasing  power,  their  access  to 

world  supply  (they  import  on  their  own  account)  and  the  relatively  low  margins 

they operate  with, generally  around  25% of the cost  of  sales  for  the central  trading 

arm  and  100%  on  average  for  the  shops,  they  are  able  during  their  period  of 

introduction  on  the market  to rapidly gain  market  share  and  obtain  growth  rates in 

excess of 5% per year. 

(iii) 

The non-specialised  supermarkets 

(79)  Important  in  terms  of  volume,  but  less  in  terms  of  value  on  the  total  footwear 

market  due  to  the  low  average  price  of  their  sales,  non-specialised  supermarkets 

have  a strong  influence  at  the  lower end  of  the  market.  Although  they  sometimes 

buy  directly  from  suppliers  located  outside  the  Community,  they  usually  rely  on 

specialised  importers  for  their  imports,  which  constitute  an  important  part  of  their 

footwear  sales.  Their  traditional  mark-up  is  around  100%, but  it  can  range  from 

around  60%  on  promotional  operations  to  over  130%  on  some  Community 

productions.  Due  to  the  supplementary  step  of  the  importer  and  the  fixed  part  of 

the costs  incurred,  imports from  the countries concerned  through  this  sales  channel 

usually  reach the end-customer at a price 3 times higher than the CIF level. 

35 

(iv)  Other sales channels 

-

(80)  Other channels  of  sale, such  as mail order companies  or garment  stores, gained a 

significance  in  certain  Member  States  but  not  such  as  for  a  given  type  to  have 

acquired  an  importance  on  a Community-wide  basis.  In  certain  Member States, 

specialised  mail-order  firms  have  a cost  structure  similar  to  the  branded  chains. 

Community-wide  apparel chains of "small" shops also introduce footwear  in their 

stores as a fashion  branded item, generally with higher margins than on their usual 

articles.  Due to the fashion aspect of these sales, they constitute competition for the 

branded  chains, generally  less marked however than  the one due  to  large general 

city centre stores. 

(c) 

Specific impact of the proposed measures on the various sales channels 

(81)  As  regards  the  independent  retailers,  which  still  constitute  the  largest  source of 

employment  in  the  Community  footwear  distribution,  the  general  conclusion 

presented in recital 75 of the present Regulation is strengthened by the fact that they 

usually have a low proportion of their supplies of the product concerned originating 

in  Indonesia  or  the  People's  Republic  of  China. It  should  be  added  that  they are 

grouped in a confederation  representing 8 Member States on a representative level, 

and that no submission opposing the possible imposition of anti-dumping measures 

was received from this source or any other. 

36 

(82)  The companies owning branded chains have for their part contested the need-forthe 

imposition  of  anti-dumping  duties.  Although  the  general  conclusion  is  also 

applicable  to  them,  the  fact  that  some  of  them  rely  more  than  the  independent 

retailers  on  the dumped  imports  for  the supply of  the product  concerned  explains 

why,  within  the distribution,  they could  fear  a negative  effect  of  the  measures  on 

their comparative competitive situation. 

The direct effect  of possible measures on the financial  situation of these companies 

will  be  negligible  if  the  amount  of  the  duty  were  to  be  fully  passed  on  to  the 

consumer.  Indirect  financial  effect:;  could  only  be  expected  if,  due  to  this  price 

increase,  consumers  would  reduce  their  purchases  of  the  product  concerned". 

However, should this happen, it would only be to a limited extent, even if the  1.6% 

average given in recital 73 was slightly exceeded in the branded chains. 

Moreover,  the product concerned  is never sold separately  in specialised  shops and 

due  to  its  particularly  low  prices,  represents  less  than  10% of  the  turnover  of  the 

companies  operating  branded  chains  and having  cooperated.  In  this  perspective, 

even  a small  contraction  in the demand for the product concerned,  which  appears 

unlikely, would have a negligible impact on the companies as a whole, in particular 

if  the  demand  is  at least  partly reoriented  to footwear  with, a higher  price,  with a 

likely higher margin in absolute terms. 

(83)  As  far  as  non  specialised  supermarkets  or  other  non-specialised  stores  are 

concerned,  in view  of the even more limited extent to which their sales rely on the 

product  concerned,  their  situation  should  not  be  affected  by  the  imposition  of 

measures even in the case of the market evolution envisaged above. 

37 

(84)  The situation of the importers supplying these non-specialised distribution channels 

was examined,  as they imported  in some cases a more important portion  of  their 

turnover  from  the  countries  concerned  than  their  clients.  These  companies  are 

generally run with a very limited  and flexible  structure allowing them to sell only 

when the trading margin they foresee covers the costs incurred.  Their expertise on 

the market  and their  ability  to design  and  sell  are not  affected  by the country of 

origin of the goods.  The anti-dumping measures having an impact on the footwear 

distribution  as  a whole, these  importers  will  be  able  to benefit  from  any  market 

situation, and continue to supply their clients with Chinese or Indonesian imports, 

or any non-dumped product, as well as Community-produced ones. 

(85)  In  conclusion,  it  could  not  be  established  that  the  imposition  of  anti-dumping 

measures  on  the footwear  concerned  would be  such  as to  affect  significantly  the 

financial situation of either the footwear distribution as a whole or of a part of it. 

3 

Impact on the Community industry and its suppliers 

(86)  The argument  according to which the measures would have no positive effect  on 

the situation  of  the Community  industry  due to the  shift  of  supply  to  other  third 

countries has been presented again. It has been argued moreover that the situation 

of  the  textile  footwear  industry  in  this  respect  was  comparable  to  that  of  the 

synthetic handbags manufacturers  and that  accordingly  the Council  should  also in 
the present case refrain  from taking measures4. 

4  See recitals  105 and  106 of Council  Regulation  (EC) No.  1567/97 (OJ No L208, 2.8.1997, p.31.) 

38 

Shift  of  supply  between  various  countries  has  been  an  important  factor  on  the 

footwear  market for a number of years.  In this regard, it should  be noted  that the 

Community  industry has been able, by its automation  and rationalisation,  to partly 

compensate, by its own increase in exports, for the constant change of country from 

which varying volumes were imported in the Community.  This could however not 

be  the  case  for  the  massive  surge  in  dumped  imports  from  the  two  countries 

concerned  in the present proceeding.  As  far as the alleged parallelism between  the 

present  proceeding  and  the  synthetic  handbags  case  is  concerned,  it  should  be 

stressed that the significant  market share still  held by the complainant  Community 

industry in this case, the nature of the capital holders in most exporting companies, 

as  well  as  the  important  industrial  investment  necessary  to  produce  footwear, 

clearly  exclude  any  reasonable  and  meaningful  comparison  between  the  two 

industries. The Council  cannot  accept therefore  that for the sake  of  consistency,  it 

should refrain from taking measures in the present case. 

(87)  It  has  been  argued  again  that,  should  measures  be  imposed,  this  would  have 

negative  consequences  on  the  footwear  machine  manufacturers  which  would  be 

limited in their sales to Indonesia and the People's Republic of China. 

As  far  as  the  machine  suppliers  are  concerned,  it  should  be  noted  that  the 

Community industry is clearly investing in automation, and in the injection  process 

in  particular.  This  automation  is  linked  with  investments  in  machines  and  in 

moulds  produced  in  the  Community,  which  continue  to create  a virtuous  circle  of 

technological  improvement.  No  evidence  has  been  received  on  the  other  hand 

showing  that  exporters  in  Indonesia  or  the  People's  Republic  of  China  are  main 

clients of the Community equipment manufacturers. 

(88)  .No  new  evidence  having  been  submitted  in  respect  of  these  arguments,  the 

conclusions  presented in recitals 99 and  104 of the provisional  duty Regulation are 

accordingly  confirmed. 

39 

4. 

Quantitative restrictions on slippers 

(89)  It  has  again  been  claimed  that  slippers  should  not  be  subjected  to  anti-dumping 

measures because they are already, if Chinese, subjected to an effective quota. 

As  regards  the  principle,  it  has  to  be  recalled  that  following  an  anti-dumping 

investigation  which  has  shown  that  measures  are  warranted  (with  a  view  to 

remedying  a  price-related  injury),  the  imposition  of  such  measures  should  be 

considered without reference to the existence of any quantitative restrictions which 

may be applicable to the products in question.  In addition, it should be recalled that 

more than 75% of the footwear concerned by this investigation is not subject to any 

quantitative restrictions. 

5.  Conclusion concerning Community interest 

(90)  As  a  conclusion,  and  having  examined  all  the  various  interests  involved,  it  is 

considered  that  there  are  no  compelling  reasons  not  to  take  action  against  the 

dumped  imports  in  question.  The  conclusions  set  out  in  recital  105  of  the 

provisional duty Regulation are therefore confirmed. 

40 

I. 

ANTI-DUMPING  MEASURES 

1. 

Injury elimination level 

(a)  General considerations 

(91)  It  should  be  recalled  that  the  calculations  used  to  establish  the  injury  elimination 

level at the provisional  stage were based on two different  sets of price comparisons. 

As far  as the cooperating exporters were concerned, the prices of the most exported 

models  were  compared  to  the  Community  industry's  corresponding  non-injurious 

prices  on  the  basis  of  a  grouping  into  16 so-called  families  of  footwear.  For  the 

vast  majority  of  imports,  however,  in  the  absence  of  cooperation  from  any 

exporters,  the  injury  elimination  level  had to be calculated  on  an  average basis  for 

the CN codes concerned, this approach having been called the  category-by-category 

comparison. 

(92)  It has been  argued  that, in performing  these comparisons, the Commission  failed  to 

take into account the alleged differences  between  vulcanised  and  injected  footwear. 

Further  to what has been  explained  at recitals 26 to 30 of the present  Regulation, it 

is  considered  that  there  are  no  global  differences  between  vulcanised  and  injected 

footwear  which are such as to significantly  affect  global price comparisons. 

Indeed, the difference  in the manufacturing  processes used for  the production  of the 

soles  of  two  comparable  models  does  not  induce  a different  consumer  perception. 

As  far  as  the  cooperating  exporters  are  concerned,  in  the  case  where  imported 

vulcanised  models  were  compared  to  Community-produced  injected  footwear 

.because  these  were  the  most  similar  models  found,  the  exporters  were  given  the 

opportunity  to  comment  on  the  basis  of  the  documents  and  non-confidential  files 

available to them, and none of them contested the comparison  made. 

41 

(93)  Exporters  from  the  People's  Republic  of  China  claimed  that  the  descriptive 

elements  of  the  Community  produced  models  used  for  comparison  purposes  were 

insufficient.  In  this  respect,  it should be recalled  that  the exporters  were  provided 

with  copies  of  the  non-confidential  files  where  photographs  of  the  Community-

produced  models used  as a reference  in each family  were provided.  This was  done 

in addition  to the  written  explanations  given  and  the calculation  sheets  included  in 

the disclosure. 

(94)  Following  the  .claim  made  by  importers,  and  in  order  to  perform  the  price 

comparisons  in  the, calculation  of  the  injury  elimination  level,  CIF  import  prices 

were  adjusted  to  the  duty-paid,  customer-delivered  price  level  by  using  the 

adjustment  methodology  used  for  the  undercutting  assessment,  as  presented  at 

recital 65 of the present  Regulation. 

(95)  Some  importers  argued  that the calculations  of the residual  duty  rates  could  not  be 

understood  in  the  form  they  were presented  in  the disclosure  of  the  essential  facts 

and considerations  on the basis of which provisional  measures  were  imposed.  This 

was, at least for  a part, due to the fact that the Community producers'  non-injurious 

prices were not given in the disclosure. 

It was subsequently decided that these average non-injurious  prices for the  footwear 

concerned,  which  resulted  from  calculations 

involving  several  Community 

producers,  could  be  disclosed  to  facilitate 

the  understanding  of 

the  price 

comparisons,  without  risking  a  breach  of  confidentiality. 

The  provisional 

calculations  being  however  affected  by the change  in  the  level  of  trade  adjustment 

presented  above, disclosure of details concerning the provisional  calculations  could 

not  be  regarded  as  of  major  interest.  As  a consequence,  detailed  explanations  on 

the injury  elimination  level, including all figures  and charts, were given  in the  final 

disclosure sent to the parties. 

42 

(96)  It  was  argued  by certain  importers  that,  even  if  it  could  be  admitted  that  injurrous 

dumping  in  respect  of  footwear  with  an  import  price  below  three  US  dollars  was 

taking  place,  this  was  not  the  case  for  more  sophisticated  footwear.  The  latter 

category,  according  to  the  importers  in  question,  should  be  attributed  a 0%  injury 

elimination  level. 

In  this  respect,  it  should  be  recalled  that,  although  huge  volumes  are  indeed 

imported below 2.5 ECU (equivalent to 3 US dollars), these imports covered, in the 

sample  of  the  importers'  transactions  examined,  only  48%  of  the  value  of  the 

imports  concerned.  The  fact  that  a majority  of  the  import  turnover  was  above  the 

alleged  price  break  shows  that,  in  reality,  the  imports  of  the  product  concerned', 

though  made  at  extremely  low  prices  when  compared  to  what  they  would  be  if 

normal competitive conditions prevailed, are spread over a continuous price scale. 

Moreover, 

the  non-injurious  price 

levels  established 

for 

the 

investigated 

Community  producers  were  also  both  below  and  above  the  alleged  price  break, 

adjusted  to  the  appropriate  customer-delivered  level  (3.7  ECU),  depending  on  the 

shoe  type. 

In  the  absence  of  any  other  evidence  relating  to  this  aspect  of  the 

market, this claim should therefore be rejected. 

(97)  No  other  remarks  having  been  submitted,  the  general  injury  elimination  level 

methodology,  as. established  in  recitals  106  to  112  of  the  provisional  duty 

Regulation,  are therefore  confirmed. 

The  change  in  the  level  of  trade  adjustment,  however,  affects  the  provisional 

findings,  as set out below. 

43 

(b)  Indonesia 

-  -

(98)  In conformity  with the methodology set out in the provisional  duty Regulation, the 

revised  injury  elimination  levels  for  the cooperating  companies  in  the  sample  for 

Indonesia,  expressed  as  a percentage  of  the  CIF  import  price,  ranged  from  0  to 

31.5%, with an average to be applied to cooperating companies outside the sample 

of  14.1%.  By the same token, the revised residual  margin, established on the basis 

of Eurostat statistics, was found to be 15.4%. 

(c)  People's Republic of China 

(99)  In accordance with the methodology set out in the provisional  duty Regulation, the 

revised  single  injury  elimination  level  for  the  People's  Republic  of  China  was 

found to be 61.2%. 

2.  Duty 

(100) One of  the cooperating  Indonesian companies  not included  in  the  sample  objected 

to the fact that it had been attributed a duty based on the weighted average dumping 

margin found for the sample. 

This  argument  could  not  be  accepted  since  Article  9(6)  of  the  Basic  Regulation 

provides  that,  where  the  Commission  has  limited  its  examination  in  accordance 

with  Article  17,  any  anti-dumping  duty  imposed  on  cooperating  companies  not 

included  in  the sample  shall  not exceed  the.weighted average  margin  of  dumping 

established  for the parties in the sample.  Moreover,  it will  be recalled from recital 

23 of the provisional  duty Regulation that the Indonesian companies concerned had 

agreed to this methodology. 

44 

(101) Since the residual  injury elimination level for Indohesia and the People's Republic 

of China, as well as the individual  level for PT Sindoll Pratama,  is lower than the 

corresponding  dumping  margins, the anti-dumping  duty should  be based  on these 

levels.  For  the  other  cooperating  exporters  in  Indonesia,  the  anti-dumping  duty 

should be based on the dumping margins established above. 

(102) The anti-dumping duty rates, applicable to the net, free at Community frontier price 

before duty should therefore be as follows: 

Country 

Manufacturer and exporter 

Rate of duty 

PEOPLE'S REPUBLIC OF CHINA  All companies 

INDONESIA 

PT Dragon 

61.2% 

40% 

PT Emperor Footwear Indonesia  0% 

PT Sindoll Pratama 

PT Bosaeng Jaya 

PT Volmacarol 

All other companies 

0% 

14.1% 

14.1% 

15.4% 

J.  COLLECTION OF THE PROVISIONAL DUTIES 

(103) In view of the magnitude of the dumping margins found for the exporting producers 

and  countries,  and  in  the  light  of  the  seriousness  of  the  injury  caused  to  the 

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

provisional  anti-dumping  duty  under  Regulation  (EC)  No  165/97  should  be 

definitively  collected  at  the  rate  of  the duty definitively  imposed.  However,  the 

amounts  for  which  it  can  be  established,  to  the  satisfaction  of  the  customs 

authorities,  that  they  related  to  imports  of  shoes  excluded  from  the  scope  of  the 

present  proceeding,  as  described  under  Article  1  (3) (b)  and  (c)  of  the  present 

Regulation, should be released in their totality. 

45 

K.  NEW EXPORTING  PRODUCERS 

(104) Pursuant  to  Article  11(4)  of  the  Basic  Regulation,  a  new  exporter's  review  to 

determine  individual  dumping  margins cannot  be initiated  in this  proceeding  with 

regard to Indonesia as sampling was used in the original investigation. However, in 

order  to  ensure  equal  treatment  between  any  new  exporting  producers  and  the 

companies  cooperating  in this  investigation,  it is considered  that provision  should 

be  made  for  the  weighted  average  duty  imposed  on  the  latter  companies  to  be 

applied  to  any  new  exporting  producers  which  would  otherwise  be  entitled  to a 

review pursuant to Article  11 (4), 

HAS ADOPTED THIS REGULATION: 

Article 1 

1.  A  definitive  anti-dumping  duty is  hereby  imposed  on  imports  of  footwear  falling 

within CN code 6404  19  10 and, with the exceptions  described below,  of  footwear 

falling  within  CN code ex 6404  19 90 (Taric code  6404  19 90 * 90),  originating in 

the People's Republic of China and Indonesia. 

2. 

The  rate  of  the  definitive  anti-dumping  duty  on  the  basis  of  the  net,  free-at-

Community-frontier price, before duty, shall be: 

46 

Country 

Products  manufactured 

rate of duty 

Taric 

by 

(%) 

Additional 

Codes 

People's Republic of China 

All companies 

61.2% 

-

Indonesia 

All companies 

15.4% 

8900 

with the exception of: 

P.T. Dragon 

4.0% 

8941 

P.T. Emperor Footwear 

Indonesia 

P.T. Sindoll Pratama 

P.T. Bosaeng Jaya 

P.T. Volmacarol 

0.0% 

0.0% 

14.1% 

14.1% 

8942 

8942 

8943 

8943 

The duty shall not apply to: 

a)  shoes  sometimes  known  as  "espadrilles",  which,  for the purpose  of the present 

Regulation,  are shoes with canvas uppers and unheeled  plaited  fibre  soles, whether 

or  not strengthened  with  rubber  or plastics  over  a variable  surface,  which  are not 

thicker than  2.5 cm (Taric code 6404 19 90 * 10); 

b) shoes sometimes known as "diving boots" or "water sports boots", which, for the 

purpose  of  the  present  Regulation,  are  shoes  with  an  upper  made  of  neoprene, 

whether  laminated  on one or both  sides  with  textile  material,  where  the neoprene 

•thickness  is of 2.5mm  or more, covering  the entirety  of  the foot,  with  an abrasion-

resistant  sole  ,  and  designed  for  certain  water  sports  such  as  diving  (Taric  code 

6404  19 90*20); 

47 

c)  shoes  sometimes  known  as  "medical  shoes",  which,  for  the  purpose "of "the 

present  Regulation,  are shoes  which, although  not  manufactured  according  to the 

individual medical need of one person, are designed for easing the recovery during 

or after a therapy or a medical operation, as for example shoes to walk while having 

a plastered  or banded foot.  These shoes do not cover the foot  entirely and have a 

wide opening which enables even a banded foot to fit inside. They are sold not per 

pair, but individually,  and show at the same time more than one of the  following 

characteristics: 

- The closing device can be adjusted to the bandage or plaster size 

- Special internal soles or pads can be inserted for medical purposes 

- The design of the sole is such that it prevents certain harmful  contacts from the 

foot with the ground, but at the same time bans a non medical use of the shoe 

-  The  design  is  functional  and  does  not  use  decorations  or  other  fashionable 

accessories 

(Taric code 6404 19 90 * 30); 

4.  Where any Indonesian.party provides sufficient  evidence to the Commission that it 

did not export the goods described in paragraph  1 during the investigation  period, 

that it is not related to any exporter or producer subject to the measures imposed by 

this Regulation and that it has exported the goods concerned after  the investigation 

period, or that it has entered into an irrevocable contractual  obligation to export a 

significant  quantity to the Community, then the Council, acting by simple majority 

on  a  proposal  submitted  by  the  Commission,  after  consulting  the  Advisory 

Committee, may amend paragraph 2 by attributing that party the duty applicable to 

cooperating exporting producers not in the sample, i.e. 14.1%. 

48 

5.  Unless  otherwise  specified,  the  provisions  in  force  concerning  duties  and  other 

customs practices shall  apply. 

Article 2 

1. 

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

(EC)  No  165/97  shall  be  definitively  collected  at  the  rate  of  the  duty  definitively 

imposed,  with  the exception  of  the amounts  for  which  it can  be established,  to the 

satisfaction  of  the  customs  authorities,  that  they  related  to  imports  of  shoes 

described under Article  1  (3) (b) or (c), which shall  be integrally  released. 

2. 

Amounts  secured  in  excess  of  the  definitive  rate  of  anti-dumping  duty  shall  be 

released. 

Articled 

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 

49 

ISSN 0254-1475 

COM(97) 498  final 

DOCUMENTS 

EN 

02  11 

Catalogue number  :  CB-CO-97-502-EN-C 

ISBN  92-78-25132-1 

Office  for Official  Publications of the European Communities 

L-2985  Luxembourg 

so