Proposal for a Council Regulation (EC) repealing Regulation (EEC) No 611/93 imposing a definitive anti- dumping duty on imports into the Community of certain electronic microcircuits known as DRAMs originating in the Republic of Korea
Date: 1997-11-10
Institutions: European Commission
Subjects: South Korea, anti-dumping duty, import policy, microelectronics

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.11.1997 
COM(97) 568 final 

Proposal for a 

COUNCIL REGULATION (EC) 

repealing Regulation (EEC) No 611/93 imposing a definitive anti-dumping duty on 
imports into the Community of certain electronic microcircuits known as DRAMs 
originating in the Republic of Korea 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

(1) 

It is hereby proposed that the Commission submit to the Council the attached  draft 
Regulation  according  to  which  the  anti-dumping  duty  on  imports  of  DRAMs 
(dynamic  random  access  memories)  originating  in  the  Republic  of  Korea  will  be 
respectively. 
repealed  and 
Consequently,  the  corresponding  undertakings  offered  by  Korean  exporters  and 
accepted by the Commission will have no further purpose. 

the  anti-dumping  proceeding  be 

terminated 

(2)  As regards imports of DRAMs originating in Japan, a proposal is being made to the 
Commission  to  terminate  the  proceeding  thus  allowing  the  measures  currently  in 
force to expire. 

(3)  The attached proposal to repeal the anti-dumping duty results from  the withdrawal 
by  the  complainant  of  its  support  for  the  continuation  of  the  measures.  The 
complainant  considered  it  appropriate  to  take  this  step  in  view  of  the  envisaged 
negotiation  of  voluntary industry-to-industry  agreements between the complainant 
Community  industry  and  the  Japanese  and  Korean  associations  of  DRAM 
producers,  the  aim  of  which  is  to  prevent  the  future  occurrence  of  injurious 
dumping  and  to ensure that,  should  any anti-dumping  investigation  be  initiated,  it 
may  be  carried  out  expeditiously.  These  negotiations  are  welcomed  by  the 
Commission. The Community industry has committed itself to notifying  any  future 
agreement to the competition services of the Commission. 

(4)  Several Community users of DRAMS have requested that the anti-dumping duty be 
repealed retroactively  as from  10 March  1997, i.e. the date on which the duty was 
reinstated  after  expiry  of  the  suspension  of  measures.  In  this  respect,  it  is 
considered that no general  principles  of Community  law justify  this request  in  the 
present case. 

(5) 

Interested  parties  were  informed  of  the reasons  why  it  is  intended  to  propose  the 
repeal  of  the  anti-dumping  duty.  After  having  considered  all  the  various  interests 
involved  taken  as  a  whole,  it  was  concluded  that  the  repeal  of  the  anti-dumping 
duty and the termination of the proceeding is not against the Community interest. 

(6)  The Advisory  Committee of Member  States was duly consulted  and a majority  of 
delegations  expressed  support  for  the  Commission's  proposal.  Nevertheless,  four 
Member  States objected  to the termination  of  the proceeding  on the grounds  that 
termination  would  be  premature  at  present  since  the  negotiations  between  the 
Community  industry  and  the  Japanese  and  Korean  associations  of  DRAM 
producers have yet to be concluded.  However, given the withdrawal of support by 
the  complainant,  the  only  appropriate  course  of  action  is  to  terminate  the 
proceeding immediately. 

(7) 

It  is  therefore  proposed  that  the  Commission  adopt  the  attached  proposal  for  a 
Council Regulation and transmit it to the Council, together with the attached report 
on the consultation of the Advisory Committee. 

A 

Proposal for a 

COUNCIL REGULATION (EC) 

repealing Regulation  (EEC) No 611/93 imposing a definitive anti-dumping duty on 
Imports into the Community  of certain electronic microcircuits known as  DRAMs 
originating in the Republic of Korea 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European'Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on 
protection  against  dumped  imports  from  countries  not  members  of  the  European 
Community,1  as  amended  by  Regulation  (EC)  No  2331/96,2  and  in  particular  Article 
il(3) thereof, 

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

Whereas: 

A.  PREVIOUS  PROCEDURE 

(1)  By Decision 93/157/EEC,3 the Commission  accepted undertakings  from  ail known 
Korean  DRAM  producers  which  exported  this  product  to  the  Community.  The 
Council, by Regulation  (EEC) No 611/93,4-imposed a residual  duty on imports of 
DRAMs  originating  in  the  Republic  of  Korea  in  order  to bring  non-co-operating 
parties  within  the  scope  of  the  measures  against  the  dumping  of  DRAMs  and  to 
underpin the undertakings. 

(2) 

In  June  1995,  the  Commission  decided  to  suspend  the  above  anti-dumping 
measures  for  a  period  of  nine  months.5  In  March  1996,  the  suspension  was 
extended by the Council for a further period of 12 months.6 

Bo  REVIEW INVESTIGATION 

(3) 

In  July  1995,  the  Commission  initiated  on  its  own  initiative  an  interim  review 
concerning  imports  of  DRAMs  originating  in  Japan  and  the  Republic  of  Korea 
pursuant  to  Article  11(3)  of  Council  Regulation.  (EC)  No  384/96  (hereinafter 
referred to as the 'Basic Regulation').7 

C.  PRODUCT UNDER CONSIDERATION  • 

OJNoL56,6.3.  1996, p. 1. 
OJNoL317,6.  12. 1996, p. 1. 
OJ No L 66, 18. 3.1993, p. 37. 
OJN0L66,  18.3. 1993,p. 1. 
Commission Decision (95/197/EC), OJ No L 126,9. 6. 1995, p. 56. 
Council Regulation (EC) No 399/96, OJ No L 55,6. 3.1996, p. 1. 
OJ Mo C1S1,  15. 7. 1995, p. 13. 

I 

(4)  The  product  concerned  by  this  investigation  is  dynamic  random  access  memories 
(DRAMs),  whether  in  processed  wafer  form  or  dice  form,  assembled  or  further 
processed  onto  modules,  manufactured  using  variations  of  Metal  Oxide 
Semiconductor  (MOS)  process  technology,  including  CMOS  and  BiCMOS  etc., 
and including, without limitation, product variations using DRAM  technology  such 
as  VRAMs,  Pseudo  SRAMs,  S-DRAMs  (synchronous  DRAMs),  MDRAMs 
(multibank  DRAMs),  R-DRAMs  (RAMBUS-DRAMs),  of  all  densities  (including 
future  densities), irrespective of access speed, configuration,  frame  or package, etc. 

(5)  The  product  is  currently  classifiable  under  the  following  CN  codes:  8542  13 11, 
8542  13  13,  8542  13  15,  8542  13  17,  8542  19  01,  8542  19  05  (for  finished 
DRAMs), 8542  13 01 (for  DRAM wafers),  8542  13 05 (for  DRAM dice or chips), 
8548 90 00, 8473 30  10 and  8473 50  10 (for  DRAM  modules, DRAM boards and 
DRAM cards). 

D.  DEFINITION OF THE COMMUNITY  INDUSTRY 

(6)  The  Community  industry  concerned by this review consists of Motorola Ltd (UK), 
Siemens  (D)  and  Texas  Instruments  Italia  (I).  All  of  them  co-operated  in  this 
investigation  and  are  members  of 
the  European  Electronic  Component 
Manufacturers'  Association  (EECA), which lodged the original complaint. 

(7)  The  collective  output  of  the  above-mentioned  Community  industry  constitutes  a 
major proportion of the total Community production of DRAMs in accordance with 
Article 4(1) of the Basic Regulation. 

E.  WITHDRAWAL  OF SUPPORT TO THE  PROCEEDING 

(8) 

In July  1997, the Community industry  withdrew  its support  for  the continuation  of 
the existing  anti-dumping  measures, (both  with  respect  to imports  from  Japan  and 
from  Korea). The complainant considered it appropriate to take this step in view of 
the  envisaged  negotiation  of  voluntary  industry-to-industry  agreements  between 
the complainant  Community  industry  and the Japanese  and  Korean  associations of 
DRAM producers, the aim of which is to prevent the future  occurrence of  injurious 
dumping  and  to ensure  that,  should  any  anti-dumping  investigation  be  initiated,  it 
may be carried out expeditiously. The Community  industry has committed  itself  to 
notify  the agreements, if any, to the Commission under the competition rules. 

F. REPEAL OF THE ANTI-DUMPING DUTY AND TERMINATION OF 
THE PROCEEDING 

(9) 

It follows  from  the principle expressed in Article 9(1) of the Basic Regulation  that 
when the Community industry withdraws its support to the continuation of the anti 
dumping  measures,  the  proceeding  must  be  terminated  unless  such  termination 
would not be in the Community interest. The investigation  has not brought  to light 
any  aspects  which  would  support  the  continuation  of  the  measures  in  these 
circumstances. 

(10)  In  view  of  the  above,  the  Commission  informed  the  interested  parties  of  its 
intention  to propose to the Council to repeal  the anti-dumping  duty in force  and to 

3> 

terminate  the  proceeding  following 
arguments were raised concerning the Community interest aspects. 

the  withdrawal  of  support.  No  further 

(11)  However,  several  Community  users  of  DRAMs  have  requested  that  ths  anti 
dumping  duty  be  repealed  and  the  proceeding  be  terminated  retroactively  as  from 
10 March  1997, i.e. the  date on  which  the  anti-dumping  duty  was  reinstated  after 
expiry  of  the  suspension  of  the  measures.  As  a consequence,  anti-dumping  duties 
paid after  this date would have to be reimbursed. 

(12)  The users have argued that, following  the reinstatement of the anti-dumping  duties 
in  March  1997,  they  could  not  always  avoid  paying  anti-dumping  duty  by 
purchasing  DRAMs  through  sales  channels  covered  by  the  undertakings.  These 
parties  have  further  claimed  that,  due  to  the  reference  price  system  of  the  price 
undertakings,  (which  were  likewise  reinstated  in  March  1997),  they  had  to  pay 
higher prices for DRAMs purchased in the Community than competitors  in the rest 
of the world. The users concerned have claimed  that these circumstances  have  had 
a negative impact on their competitiveness. 

that 

it  had  been  envisaged  by 

(13)  The  users  also  referred  to  the  disclosure  of  the  preliminary  findings  of  the 
Commission's  services.  They  noted 
the 
Commission's  services  that,  as  regards  Japan,  a  lower  residual  duty  should  be 
imposed with retroactive effect  from  10 March  1997,  the date of  the  reinstatement 
of  the  anti-dumping  measures.  Had  the  investigation  been  concluded  in  this  way, 
the difference  between  the initial and the final  duty rate would have been  refunded 
to importers which would have paid anti-dumping duty. The users have argued  that, 
if retroactivity  was considered justified  on  the hypothesis  that the measures  would 
be  reimposed,  then  retroactivity  would,  a  fortiori,  be  justified  where 
the 
investigation was being concluded by the termination of the proceeding. 

(14)  With  regard  to  the  above-mentioned  request,  it  is  considered  thai,  as  the  Basic 
Regulation  does  not  provide  for  the  retroactive  termination  of  proceedings,  this 
request could only be accepted if justified  by general principles of Community  law. 

.  However, none of these principles apply in the current case. 

(Î5)  In  one  anti-dumping  proceeding,  the  review  was  terminated  retroactively  on  the 
grounds  that  the  anti-dumping  measures  had  been  prolonged  by  more  than  three 
years due to the long duration  of the (sun-set)  review  investigation8.  However,  the 
facts  of  this  case  are  not  comparable  to  the  current  proceeding,  since  this  is  an 
interim review which took place during the normal  five  year period. Moreover,  the 
anti-dumping  measures  in  the  current  proceeding  were  suspended  between  lune 
1995  and  March  1997 s  i.e.  for  all  but  a  few  months  of  the  period  by  which  the 
measures were prolonged by the review. The  Community user industry,  which had 
requested  and  has  benefited  from  this  suspension,  thus  cannot  be  considered  to 
have been unduly burdened by this review  investigation. 

(16)  As  regards  the  argument  raised  by  the' users  in  respect  of  imports  through  sales 
channels subject to the residual duties, such difficulties  are inherent to the structure 
of the measures, and cannot be considered as-justifying  a retroactive termination. 

Council Regulation (EEC) No 2655/93, OJ No L 244, 30.9.1993, p. 1 

V 

(17)  Moreover, it cannot be accepted that the users were unduly burdened  if,  as claimed, 
they  had  to  purchase  Japanese  and  Korean  DRAMs  at  prices  above  the  prices 
outside  the  Community,  due  to  the  reference  price  system.  The  reference  prices, 
which were continuously  amended to reflect  changes in normal value, ensured only 
that  imports  covered  by  the  undertakings  were  not  made  at  dumped  prices,  and 
sales in third markets at prices below the reference  prices can therefore be assumed 
to have been dumped. The fact that dumping in third countries has enabled  users in 
those countries  to enjoy  a competitive  advantage  over  users  in  the Community  is 
not considered a relevant argument for the retroactive repeal of the residual duties. 

(18)  Furthermore, it is considered that the users' request cannot be based on the fact that 
the  Commission  had,  in  disclosing  its  provisional  findings  in  the  investigation, 
indicated  that,  in  the  event  of  a  final  determination  that  the  likelihood  of  a 
recurrence  of  dumping  and  injury  justified  the  reimposition  of  measures,  the 
amended  anti-dumping  duty  for  Japan  could  be  imposed  retroactively.  The 
provisional  character  of  these indications  was  understood  by  all  interested  parties, 
so that legitimate expectations could not arise on these grounds. 

(19)  In  addition,  retroactive  termination,  giving  rise  to  the  reimbursement  of  anti 
dumping  duties  paid  as  from  10  March  1997,  would  discriminate  against  those 
exporters  which  adhered  to  the  reference  prices  set  under  the  undertakings,  and 
against those importers who have purchased at these prices. This would be the case 
in particular, if,  as the users have submitted, thé prices in the Community had been 
higher than the world market prices, due to the reference price system. 

(20)  Finally,  it  should  be  noted  that  any  anti-dumping  duty  paid  may  always  be 
reimbursed  through  a request  for  a refund,  pursuant  to  Article  11(8) of  the  Basic 
Regulation 

(21)  In the light of the above, the request  for  the retroactive  repeal  of the  anti-dumping 

duty is rejected. 

(22)  After  having considered  all the various interests  involved  taken  as a whole, it was 
concluded  that  the  anti-dumping  duty  on  DRAMs  from  the  Republic  of  Korea 
should  be  repealed  and  that  the proceeding  thereby  terminated.  Consequently,  the 
corresponding  undertakings  offered  by  Korean  exporters  and  accepted  by 
Commission Decision (93/157/EEC) have no further  purpose. 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation  (EEC) No  611/93 is hereby  repealed  and  the proceeding  concerning  imports 
of DRAMs originating in the Republic of Korea terminated. 

Article 2 

This Regulation shall enter into force on the day of its publication in the Official Journal 
of the European Communities. 

r 

This  Regulation  shall  be  binding  in  its  entirety  and directly  applicable  in  all  Member 
States 

Done at Brussels, 

For the Council 

£ 

REPORT ON THE RESULTS OF THE CONSULTATION OF THE 

ANTI-DUMPING COMMITTEE ON 23 JULY  1997 

I/262/97-EN 

Subject: 

Anti-dumping proceeding concerning imports of DRAMs 
(dynamic random access memories) originating in Japan and the 
Republic of Korea - termination of the proceedings and repeal 
ot the anti-dumping duties in force 

1)  The  present  anti-dumping  review  investigation  was  initiated  on  15  July  1995. 
The  basic  regulation  applicable  is  Council  Regulation  (EC)  N°  384/96  of  22 
December  1995  on  protection  against  dumped  imports  from  countries  not 
members of the European Community. 

2)  The  Commission  presented  its conclusions  in  the  above  mentioned  investigation 
to  the  members  of  the  Anti-Dumping  Advisory  Committee  on  23  July  1997, 
where it proposed that the proceedings be terminated. The Commission's  proposal 
was based  on the  withdrawal  of  support  for  the continuation  of  the  measures  by 
the  complainant  in  the  proceedings.  Their  decision  is  to  be  seen  against  the 
background of the prospect of securing an industry-to-industry  agreement  on data 
collection  between  the  complainant  Community  industry  and  the  Japanese  and 
Korean  associations  of  DRAM  producers,  by  means  of  which  the  future 
occurrence  of  dumping  should  be  prevented  and  any  anti-dumping  investigation 
expeditiously  carried  out.  The  withdrawal  of  support  is  considered  by  the 
Community  industry a means to facilitate  the négociations concerning the above-
mentioned  agreement. 

3)  At  the  meeting  the  following  Member  States  expressed  support  for 

the 
Commission's  proposal:  Ireland,  Denmark,  Sweden,  Finland,  Belgium,  United 
Kingdom,  Holland,  France,  Greece,  Luxembourg  and  Spain.  Whereas  Italy, 
Germany, Austria and Portugal opposed the Commission's proposal. 

4)  Lack  of  unanimity  centered  around  the  perceived  influence  the  decision  to 
terminate could have on the ongoing negotiations for the industry-to industry data 
collection scheme. 

5)  In view  of the  above mentioned  opposition  on the part  of  certain  Member  States 
to the Commission's  proposal, the matter  is consequently  referred  to the Council 
further  to Article 9(2) of Council Regulation (EC) N° 384/96. 

6)  Enclosed  are the Council  Regulation  repealing the  anti-dumping  duty on  imports 
of  DRAMs  originating  in  the  Republic  of  Korea  and  the  Commission  Decision 
terminating  the  anti-dumping  proceeding  concerning  DRAMs  originating  in 
Japan. It is proposed  that  the Council  adopt  the Regulation.  With  respect  to  the 
Commission  Decision,  in  accordance  with  Article  9(2)  of  the  above  mentioned 
regulation,  the  proceedings  shall  stand  terminated  if,  within  one  month,  the 
Council, acting by a qualified majority has not yet decided otherwise. 

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