98/19/EC: Commission Decision of 6 January 1998 terminating the anti-dumping proceeding concerning imports of video tapes in cassettes originating in Hong Kong and the Republic of Korea
Date: 1998-01-06
Institutions: European Commission
Subjects: Hong Kong, South Korea, anti-dumping duty, anti-dumping legislation, import, video cassette

13. 1. 98

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Official Journal of the European Communities

L 7/47

COMMISSION

COMMISSION DECISION

of 6 January 1998

terminating the anti-dumping proceeding concerning imports of video tapes in
cassettes originating in Hong Kong and the Republic of Korea

(98/19/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

to as Regulation 2423/88). As a result of one of
these reviews, no measures were imposed on the
imports concerned; in the others, variable and ad
valorem duties were imposed (6).

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 23(1) thereof,

(3)

Having regard to Council Regulation (EEC) No 2423/88
of 11 July 1988 on protection against dumped or sub-
sidised imports from countries not members of the Euro-
pean Economic Community (3), and in particular Articles
9(1) and 15,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

A. PROCEDURE

The Council, by Regulation (EEC) No 1768/89 (4),
imposed a definitive
anti-dumping duty on
imports of video cassettes originating in the
Republic of Korea and Hong Kong and terminated
anti-dumping proceeding with regard to
the
imports of video tape reels originating in those
same countries.

At the same time, the Commission accepted an
undertaking offered by one Hong Kong exporter,
Wing Shing Cassette Mfg Ltd (5).

At the request of Hong Kong companies which
had not exported during the original investigation
subsequently
period, newcomer
carried out, pursuant
to Article 14 of Council
Regulation (EEC) No 2423/88 (hereinafter referred

reviews were

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ L 209, 2. 8. 1988, p. 1.
(4) OJ L 174, 22. 6. 1989, p. 1.
(5) OJ L 174, 22. 6. 1989, p. 30.

the

a notice

Following
of
publication of
impending expiry of the measures in force (7), a
request for a review of the Regulation imposing
the anti-dumping measures was lodged by the
European Chemical
(Cefic),
acting on behalf of two producers of video cassettes
in the Community, allegedly representing 45 % of
total Community production.

Industrial Council

Cefic claimed in its request that the expiry of the
measures would lead to a recurrence of injury and
that, despite the measures in force, continued and
aggravated injurious effects from imported video
cassettes from South Korea and Hong Kong were
being felt, due to the low prices of these imports
resulting from increased dumping. The evidence
presented was considered sufficient, and in May
1994, the Commission gave notice of its intention
to carry out a review (8).

(4)

It should be recalled that in 1991 anti-dumping
measures were adopted with regard to the same
product originating in the People’s Republic of
China (9).

These measures expired on the grounds that the
Community industry failed to cooperate in the
recently conducted expiry review investigation (10).

(6) OJ L 343, 7. 12. 1990, p. 1;
OJ L 139, 22. 5. 1992, p. 1;
OJ L 182, 2. 7. 1992, p. 6.
(7) OJ C 344, 22. 12. 1993, p. 3.
(8) OJ C 142, 25. 5. 1994, p. 2.
(9) OJ L 293, 24. 10. 1991, p. 12.
(10) OJ L 304, 7. 11. 1997, p. 19.

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13. 1. 98

B. REVIEW INVESTIGATION

 BASF Magnetics France, SA, Levallois-

(5)

(6)

(7)

(8)

(9)

By a notice published in September 1994 (1), the
Commission announced the initiation of a review
investigation in accordance with Article 15 of
Regulation 2423/88.

The Commission officially advised the complain-
ant Community industry, the exporters and the
importers known to be concerned and the repres-
entatives of the exporting countries, and gave the
parties directly concerned the opportunity to make
their views known in writing and to request a
hearing.

The Commission sent questionnaires to the parties
known to be concerned and received replies from
the two Community producers on behalf of which
the review request had been lodged, from three
Korean exporters and from importers
in the
Community related to two of the Korean exporters.
Only one Hong Kong exporter cooperated by
submitting a questionnaire response, from which it
appeared that the company had not been exporting
the product concerned during the investigation
period, as defined in recital 11 below. No other
Hong Kong exporters sent in questionnaire replies,
although a number of companies in Hong Kong
indicated that they were no longer exporting video
cassettes to the Community.

The Commission received a submission from the
Hong Kong government.

(11)

The questionnaire response submitted by one of
the two Community producers was considered to
contain insufficient information; in addition, the
company failed to submit
a non-confidential
version of its questionnaire response. Therefore, for
the determination of injury, the Commission could
not
information
into consideration the
supplied by this producer [see also recital (17)].

take

forward by the
On the basis of a request put
Korean exporters,
the three cooperating Korean
exporters concerned and the Community industry
met and exchanged views,
in accordance with
Article 7(6) of Regulation 2423/88.

(10) During the investigation, the Commission sought
and verified all information it deemed necessary
for the purposes of a determination and carried out
verification visits at the premises of the following
companies:

(a) Community producer:

 BASF Magnetics, GmbH, Mannheim
(Germany), and its related sales companies,

(12)

(1) OJ C 260, 17. 9. 1994, p. 10.

Perret (France),

 BASF, plc, Wembley, Middlesex (United

Kingdom),
(hereinafter
Magnetics);

jointly referred to as BASF

(b) Producers/exporters in the Republic of Korea:

 SKC Ltd, Seoul,
 Kolon Industries Inc., Seoul,
 LG Electronics Inc., Seoul;

(c) Importers in the Community related to Korean

producers/exporters

Germany:

 Kolon International GmbH, Frankfurt,
 SKC Europe GmbH, Frankfurt,
 LG Electronics Deutschland GmbH,

Willich,

United Kingdom:

 Kolon Industries

Inc., London (branch

office),

 LG Electronics UK Ltd, Slough;

France:

 LG GoldStar France SARL, Marne La

Vallée.

The investigation period applied in the present
proceeding was from 1 July 1993 until 30 June
1994. For the purposes of establishing whether the
Community industry had suffered injury caused by
the imports in question, the period from 1989, the
year in which the measures under review were
adopted, to the end of the investigation period was
analysed. However, in that analysis, account had to
be taken of two factors: first, for the period before
1991, the import data are only available in weight,
and it is only from 1991 that more detailed statist-
ical information has become available in respect of
imports of video cassettes in units (both in volume
and value), thus permitting a better analysis of the
imports and their impact. Secondly, as outlined in
recital 18, a significant change in the structure of
the Community industry occurred in 1991, and
consequently the analysis of the performance of
the Community industry could only be done in a
from 1991
meaningful manner using figures
onward.

Consequently, the period between 1991 and the 30
June 1994 has provided the principal basis on
injury to the
which the existence of material
Community industry has been examined.

The investigation exceeded the indicative period of
one year mentioned in Article 7(9)(a) of Regulation
2423/88, in the main due to the voluminous data
to be analysed for a commodity product such as
video cassettes which are sold in many varieties (i.e.
different qualities and playing lengths), and the

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Official Journal of the European Communities

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fact that the quantity of transactions was extremely
large. Furthermore, extensions were granted for
replying to questionnaires upon request
from
various parties, including the Community industry.
the Commission had to ask some
In addition,
parties to provide additional information on crucial
issues.

Another element which influenced the invest-
igation was the change of ownership of one of the
complainants, as explained below (recital 18),
which could have affected the continuation of the
investigation. These negotiations, which led to the
sale of BASF Magnetics to the Korean KOHAP
group, were started in 1996 and came to a conclu-
sion in January 1997.

Therefore, and in line with the findings of the
Regulation under review, it was found that video
cassettes originating in Korea and Hong Kong and
those sold in the Community by the Community
industry, form a like product within the meaning
of Article 2(12) of Regulation 2423/88.

D. COMMUNITY INDUSTRY

(14) At

investigation,

the time of

the
the original
Community industry on behalf of which the
complaint had been lodged, consisted of
four
producers. These producers were Agfa-Gevaert AG,
BASF Magnetics GmbH, Magna Tonträger Produk-
tions GmbH and PDM Magnetics.

C. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

(13)

The product which is covered by this
review
investigation is video tape in cassettes, prepared for
video
recording but not
recorded upon (i.e.
cassettes) operating under VHS standard,
falling
under CN code (ex) 8523 13 00.

As stated in Commission Regulation (EC) No
4062/88 (1) imposing provisional duties on video
cassettes
from Hong Kong and Korea, video
cassettes are in general manufactured under licence
from JVC (Japan Victor Company). They are used
in video cameras to take video films, or in video
cassette recorders to record and play back televi-
sion programmes, as well as pre-recorded movies
or films taken with a video camera. Video cassettes
may differ in relation to the length of the tape
inserted in the cassette and the quality of the tape
used, but can be considered as one category of
products.

The investigation has shown that video cassettes
produced and sold on the respective domestic
market of Hong Kong and Korea and those
exported to the Community from these countries
have the same basic technical and physical charac-
teristics, and have identical uses. The same is true
when comparing the imported video cassettes from
these countries into the Community and the video
cassettes produced and sold by the Community
industry. Furthermore,
customer
perception and sales channels, video cassettes from
Hong Kong and Korea, and video cassettes sold by
the Community industry are competing directly
with each other.

in terms of

(1) OJ L 356, 24. 12. 1988, p. 47.

After the imposition of the measures under review,
Magna Tonträger Produktions GmbH ceased
production of video cassettes. The production of
Agfa-Gevaert was taken over by one of the other
Community producers (BASF Magnetics GmbH).
Furthermore, the production of PDM Magnetics
was taken over by another company, Sauerland-
Kunststoffe GmbH & Co., KG (hereinafter Sauer-
land). As a result, of the four complainant com-
panies in the original investigation, two remained:
BASF Magnetics and Sauerland. These two produ-
cers represented some 45 % of total production of
video cassettes in the Community.

(15) One of the exporters claimed that, based on Article
4(5) of Regulation 2423/88, BASF Magnetics
should have been excluded from the definition of
the Community industry, since BASF Magnetics
was itself an importer of video cassettes. It was
established during the investigation, however, that
imports by BASF Magnetics from one of the coun-
tries concerned had indeed taken place in the past,
but at low levels and during a limited period of
time. The imports of video cassettes took place on
an OEM basis, and consisted of specific orders for
a particular market of a Member State where price
competition was most severe. The volume of the
in relation to total sales (at
imports was small
around 4 % for one year) and had been undertaken
by the Community producer in an attempt
to
defend itself against fierce competition, including
that from low priced imports, on that particular
market. No
imports were made by BASF
Magnetics during the investigation period.

it was considered that BASF
For these reasons,
Magnetics should not be excluded from the defini-
tion of
in the sense of
Article 4(5) of Regulation 2423/88.

‘Community industry'

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Official Journal of the European Communities

13. 1. 98

(16)

short of

Furthermore, it was claimed by Korean exporters
that there was production in the Community by
assemblers of video cassettes which should have
been considered as part of the total production in
this output
the Community. The inclusion of
the Community producers
would mean that
requesting the review would fall
the
required major proportion of Community produc-
tion. However, when assessing the level of repres-
entativeness, it was considered, that the output of
companies involved in mere assembly operations
could not be regarded as genuine Community
production. The value added in the assembly
process of video cassettes is indeed limited. In
addition, none of these assemblers claimed to be a
Community producer. Consequently, only BASF
Magnetics and Sauerland could be considered to be
Community producers.

possible, since individual sales data from other
market participants could not be obtained and
secondly, official import statistics present data by
weight (and not in units).

a

after

(20) As regards the level of consumption, it appeared
that
in preceding years,
steady rise
Community consumption reached a peak in 1992
at 394 million units. On the basis of data available
for 1993 and 1994, it was estimated that consump-
tion in the investigation period was at 380 million
units.

the situation of

One of the two above companies, i.e. Sauerland,
submitted an insufficient reply to the question-
this producer
naire. Therefore,
could not be taken into consideration for
the
purpose of the injury findings. It was found that
the remaining cooperating Community producer,
BASF Magnetics, representing by far the largest
part of the total output of these two producers.

(21)

for the purpose of

(17) On the basis of the above factors, it was concluded
that
this proceeding, BASF
Magnetics, alone fulfilled the requirements of
Article 4(5) of Regulation 2423/88 and thus was
considered as the Community industry within the
meaning of this Article.

(18)

It is noted that after the investigation period, on 22
January 1997, change in ownership of BASF
Magnetics occurred, and BASF Magnetics became
part of the Korean KOHAP group. Subsequently
the name of BASF Magnetics GmbH was altered to
company
EMTEC Magnetics GmbH.
expressed its continued support
to the review
request and the ongoing investigation.

This

E. INJURY

1. Community

consumption
cassettes

of

video

(19)

The most appropriate way to determine develop-
ments on the Community market was to carry out
an analysis in unit terms. As regards Community
consumption,
figures coming
it was found that
from independent market research, and supplied
by the Community industry, constituted the most
reliable source,
the
calculation of apparent consumption was not

for two basic reasons; First,

2. Factory relating to the imports

(a) Volume and market share of imports

import

It is recalled that the information available to the
Commission from Eurostat covers a CN heading
which includes video tape in cassettes as well as
video tape on reels. Therefore, the Communities’
official
statistics cannot give a precise
picture of the level of imports of video tape in
cassettes taken in isolation. For this reason, it was
found necessary to consider other
sources of
information alongside Comext, such as official
export statistics from the countries concerned, and
other Community import data, containing more
detailed information. These other Community
import data, giving individual statistics for each
type of video cassettes, are only available however
from 1991, and conclusions drawn on this basis
can therefore only relate to the period after 1991.

The Community industry claimed that the assess-
ment of imports from Hong Kong should include
imports from Macao, as these were allegedly of
Hong Kong origin and were simply exported
through Macao. However,
investigation
conducted in 1994 by the Commission showed
that the imports from Macao in question should be
considered as being of Chinese origin. Con-
sequently, there were no grounds to view imports
from Macao as originating in Hong Kong.

an

(in

tonnes)

dropped

the volume of

is noted that
Eurostat
by

With regard to imports from both Hong Kong and
Korea,
imports
it
under CN heading
recorded
8523 13 00
drastically
following the imposition of the original measures
in 1989 as compared to 1988: in 1988, imports
from Hong Kong were at 8 289 tonnes and fell to
1 314 tonnes in 1989, i.e. a drop of 84 %. Imports
from Korea were at 17 511 tonnes
in 1988,
compared to 11 491 tonnes in 1989, i.e. a decline
of 34 %.

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Between 1989 and the end of the investigation
period, imports form Hong Kong under the above
CN code remained at a very low level, being at
1 279 tonnes
in the investigation period. For
Korea, imports showed in fact an increase between
1989 and 1990/1991 (from 11 491 tonnes
to
20 938 tonnes), but steadily declined afterwards to
13 500 tonnes showing an overall decline of 23 %
between 1988 and the investigation period.

As far as the development of imports in units is
concerned, it appeared on the basis of data avail-
able that imports from Hong Kong remained at
low levels between 1991 and the investigation
period (4,8 million units). For Korea,
imports
declined from 37,3 million units in 1991 to 26,7
million units in the investigation period, i.e. a fall
of 28 %.

were most commonly imported and which rep-
resented the majority (more than 75 %) of
the
cassettes imported from the countries concerend
during the investigation period.

It was established for these two types of cassettes
that prices of imports from Hong Kong in fact
increased between 1991 and the investigation
period, by 57 % for the E-180 model and by 17 %
for the E-240 model. For Korea, prices of imports
of
the E-180 model showed a certain increase
(9 %) and prices of the E-240 model remained
stable.

Price undercutting

(25)

(26)

(22) As mentioned above (recital 19), Community
consumption of video cassettes is expressed in
units, whereas official import statistics present data
by weight. Since not all imports of video tape from
Hong Kong and Korea under the relevant customs
code necessarily
in
consisted of
cassettes,
the statistics of Comext could not be
used to establish market share. Consequently, in
order to assess the market share of the dumped
imports, the information available from the above
mentioned sources regarding imports in units was
used.

video tape

That assessment showed that between 1991 and
1993, the market share for Hong Kong remained
below 1 %, increasing to just 1,3 % in the invest-
igation period, as a result of a slight increase in
imports against a decrease in consumption. For
Korea, market share decreased from 9,8 % in 1991
to 7 % in the investigation period.

(23)

The above evaluation of imports from the coun-
tries concerned and their market shares demon-
strated that in general, imports from the countries
concerned had decreased significantly over
the
period considered.

(b) Prices of the imports

Price developments

(24) Given the fact that the data from Comext cover
video tape in cassettes as well as video tape on
reels, and the fact that these data covered a mixture
of all types of video cassettes, import price data
from Comext would not be meaningful.

An evaluation was therefore made using the infor-
mation available in units. This was based on the
two types of cassettes (E-180 and E-240) which

the

sales

examined whether

It was
in the
Community of video cassettes originating in Hong
Kong and Korea were made at prices which
undercut the prices of the Community producers.
This analysis was done on the basis of sales made
in three Member States which were considered
representative given that their consumption of the
product concerned accounted for more than two
thirds of overall Community consumption.

investigation. Moreover,

It was found that for imports from Korea there was
a certain amount of undercutting in two of the
three Member States which were analysed, at levels
varying between different types of video cassettes.
For imports from Hong Kong, it was not possible
to establish any particular level of undercutting as
none of the exporters in Hong Kong cooperated in
the
the Community
industry was not able to provide any further
evidence of sales on the Community market of
video cassettes originating in Hong Kong, which
in itself can be explained by the very low level of
imports and market share held by imports from
Hong Kong. Therefore, in accordance with Article
7(7)(b) of Regulation 2423/88, findings were made
on the facts available to the Commission.

commonly

appropriate

cassette most

It was considered that statistical data provided the
most
information. The
source of
import figures, which were analysed for the two
imported,
types of
investigation period
showed that during the
imports from Hong Kong were sold at prices very
similar to those of imports from Korea. Although a
higher anti-dumping duty is applicable to imports
from Hong Kong, 21,9 % , as opposed to 3,8 %
it was nevertheless concluded that
for Korea,
imports from Hong Kong were also sold at prices
which to a certain degree undercut those of the
Community industry.

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13. 1. 98

3. Factors

relating

the Community

to
industry

(27)

(28)

the Community
In describing the situation of
industry, account had to be taken of the fact that
in 1991 the acquisition of Agfa by BASF AG took
place. A comparison with prior years would, there-
fore, not be meaningful, as explained in recital 11.
Given that the Community industry in the sense of
Article 4(5) of Regulation 2423/88 consists of a
single
relating to that
company are, for reasons of confidentiality, given
only in relative terms.

company,

figures

the

(a) Sales volume and market share

Between 1991 and 1993, sales of
the product
concerned by the Community industry decreased
by some 27 %. However, between 1993 and the
investigation period, an increase of nearly 6 % was
recorded. The same trend applied to its market
share, which after a decrease between 1991 and
1993, rose in the investigation period by 10 index
points.

(b) Sales prices, turnover and profitability

(29) As to the sales prices of the Community industry, a
decrease of more than 20 % between 1991 and the
investigation period was noted. This decrease was
accompanied by a larger decrease of the cost of
production. Some of this cost reduction was real-
ised through the closing of one of the plants used
for a part of video cassette production. The closure
was due to a decision to outsource a particular part
of
the production process. Even though the
Community industry had lost turnover as a result
of decreasing sales and lower selling prices, it was
able, as a result of important cost reductions, to
achieve a significant improvement of its financial
situation. From the period 1991/92, financial losses
were progressively eliminated, with a situation of
around break-even reached in the investigation
period. However, in spite of this positive trend, the
financial situation of the Community industry was
still unsatisfactory in the investigation period.

(c) Production, capacity and capacity utilisation

(30)

Taking into consideration the abovementioned
acquisition by BASF AG of Agfa in 1991, an
increase in total production was recorded for 1992.
Between 1992 and 1993, production dropped by
19 %, but increased again between 1993 and the
investigation period (by 3 %). Capacity utilisation,
according to BASF Magnetics, could be adjusted in

(35)

(31)

(32)

(33)

line with production requirements at any given
time, resulting in a stable utilisation of the capacity
available.

(d) Personnel employed

reduced

industry

Between 1991 and the investigation period, the
the workforce
Community
involved in the production and sales of video
cassettes by more than 40 %. This reduction of
employment was to a significant degree the result
of closure of the production site referred to above,
which alone led to the disappearance of more than
450 jobs.

(e) Conclusion

The examination of the above mentioned indic-
ators shows that negative developments occurred
during the period 1991-1993. However, the situ-
ation of the Community industry has been more
positive between 1993 and the investigation period,
showing signs of a recovery and an improving
trend. Nevertheless, in spite of the improvement,
the financial position of the Community industry
remained unsatisfactory, notably as
its
financial performance.

regards

F. CAUSATION

The Commission investigated whether the volumes
and prices of the imports concerned were respon-
sible for the situation of the Community industry,
and had an impact
thereon to a degree which
enables it to be classified as material injury within
the meaning of Article 4(1) of Regulation 2423/88.
Care was taken to ensure that any effects on the
situation of the Community industry caused by
other factors was not attributed to the imports
concerned.

(34) As

far as Hong Kong is concerned,

imports
strongly decreased from 1988 levels and, during
the investigation period, held only a 1,3 % market
share. As a result, it cannot, in the specific circum-
stances of the case, be maintained that imports
from Hong Kong continued to have an impact
which can be classified as material on the situation
of the Community industry.

In respect of Korea, imports also diminished, with
a market share of 7 % in the investigation period,
compared with a market share of about 9,8 % in
1991. This loss of market share was, in percentage
terms,
the
Community industry.

recorded for

than that

stronger

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(36) As to the developments of import prices for video
cassettes of Korean origin,
slightly
increasing trend was observed while for cassettes
originating in Hong Kong,
import prices rose
significantly.

stable

a

(37)

The investigation also showed that the downward
movement in BASF’s sales prices was accompanied
by an even stronger decrease in its costs of produc-
tion, leading to an improvement of the company’s
financial situation.

(40)

(38) As regards imports from third countries, some of
them increased their import volumes substantially
over the period examined. Between the year of the
adoption of the measures (1989) and the invest-
igation period, imports in particular from India,
Macao, Malaysia, Singapore, Taiwan, Thailand and
Turkey increased from 4 415 tonnes to 21 310
tonnes. Between 1991 and the investigation period,
the number of units imported from these countries
went from nearly 32 million units to 82 million
units. In terms of market share, this represents a
move from an 8,5 % to 21,7 %,
to which the
market shares of the USA (2,2 %) and of Japan
(6,7 %) in the investigation period must be added.
It is also important to note that an assessment for
the investigation period showed that prices of
imports from these countries were considerably
below those of
imports from Hong Kong and
Korea and consequently undercutting substantially
those of the Community industry.

In summary, at the same time that imports from
from
other countries were increasing,
Hong Kong and Korea were falling.

imports

(39)

It should be noted that a number of other (non-
complainant) producers exist in the Community
together with a certain number of assemblers of
video cassettes. None of
these other producers/
assemblers presented themselves in support of the
request lodged on behalf of BASF Magnetics and
Sauerland.

On the basis of the facts available, it was deter-
mined that in the investigation period some 40 %
(in terms of market share) of
the Community
market was supplied by imported video cassettes,
remaining 60 % accounted for by
with the
including the
suppliers within the Community,
Community industry. It
is therefore likely that
competitive pressure from these other Community
sources has played a considerable part in the price
decline on the Community market, to which the
Community industry was forced to align. In this
respect, it should also be noted that competition
from suppliers within the Community increased
since Saehan Media, one of the Korean exporters

subject to the measures under review, set up a
production plant in Ireland in order to supply the
market from within the Community.

Conclusion on causation

In the light of the above, it is concluded that the
combined imports from Hong Kong and Korea
did not, in isolation, have an impact on the situa-
tion of
the Community industry which can be
classified as material. The fact that the Community
industry did not obtain better results appears rather
to be attributable to imports from other third
countries and competition from other
sources
within the Community.

G. RECURRENCE OF INJURY

(41)

In accordance with Article 15 of Regulation 2423/
88, it was assessed whether the expiry of the meas-
ures would be likely to lead to a recurrence of
injury.

In the light of the following arguments and the
above analysis, the following was considered:

imports

countries

 As regards the volume of imports, the above
mentioned factors show the existence of low
imports
from Hong Kong, and decreasing
imports from Korea. In the light of this and
the
and
from other
competition from other sources, it cannot be
expected that imports from Hong Kong and
Korea will again increase to injurious levels
should the existing measures expire. Regarding
the claim of the Community industry that the
potential for exports from Hong Kong could be
demonstrated by imports from Hong Kong
origin being shipped through Macao, this al-
legation could not be accepted, for the reasons
outlined in recital 21.

Furthermore, it is worth recalling that imports
from Korea are subject to relatively low anti-
dumping duties and that, although these duties
have in themselves had a remedial effect, it can
not be expected that their disappearance would
in the foreseeable future, have a strong impact
on the export behaviour of the Korean produ-
cers and lead to significantly higher quantities
imports of video cassettes originating in
of
Korea.

 As

regards price depression,

limited
volumes and higher prices of the imports from
Hong Kong and Korea in comparison with
imports from other countries, and the strong
sources within the
competition from other

the

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Official Journal of the European Communities

13. 1. 98

Community, do not suggest that the expiry and
the anti-dumping measures concerning these
two countries will have an appreciable price
depressing effect on the Community market.

(42)

In view of the fact that the length of the invest-
igation has substantially exceeded the normal time
period, and in view of the changes in the structure
of the Community industry mentioned in recital
18 it was deemed appropriate to assess whether the
foregoing developments were sustained after the
investigation period:
revealed a
further fall for the imports from Hong Kong to a
level of 0,5 % market share in 1996 in the market
in
the 15 Member States and a drastic fall
of
imports from Korea which fell to a market share of
0,5 % in 1996 (in the Community of 15). At the
same
the Community industry showed
further signs of recovery.

this assessment

time,

From the above factors, the conclusion is drawn
that it cannot be expected that, as a result of the
the current anti-dumping measures,
expiry of
imports originating in Hong Kong and Korea will
have
the
injurious
Community industry which could be qualified as
material.

renewed

impact

on

a

H. DUMPING

In view of the above conclusions, i.e. that imports
from Hong Kong and Korea have not had an
impact which can be classified as material, and the
fact that a recurrence of injury as a result of a
lapsing of the measures is not expected, the condi-
tions for a continuation of the current measures
have not been met. The existence or not of a
particular level of dumping for imports from indi-
vidual sources could not alter
the conclusions
reached and has, therefore, not been established.

I. CONCLUSION

(43)

(44)

injury

competition

(45) Given the above findings, it is considered that any
existing
the Community
suffered by
industry has not, to a degree which allows it to be
classified as material, been caused by dumped
imports of video cassettes from Hong Kong and
Korea but by imports from other third countries
and
non-complainant
Community operators. Furthermore, as set out in
recitals (41) to (43) it can not be expected that, as a
result of the expiry of the current measures, there
will be a recurrence of injury, or a threat of injury,
caused by imports from these two countries. It is
anti-dumping
considered
proceeding concerning imports of video tapes in
cassettes originating in Hong Kong and the
Republic of Korea should be terminated, and that

therefore

from

that

the

review were imposed.

 As to the existence of unused capacity in the
countries subject to this proceeding, the statis-
tics have shown that imports from Hong Kong
have been at very low levels since the measures
under
It cannot be
expected that, for this extended period of time,
a significant production capacity has remained
in place. This conclusion is strengthened by an
analysis of Hong Kong export statistics, which
show that world-wide exports from Hong Kong
have strongly decreased since 1988. This is also
an indication that its production capacity has
also diminished. In this regard, it is noted that
the estimate made by the Community industry
of idle production capacity in Hong Kong of
28 million units has not been supported by
evidence.

As to Korean production capacity,
it should
first of all be recalled that production capacity
fell as a result of the relocation of production
by Saehan to a site within the Community.
Furthermore, the investigation showed that the
average production capacity utilisation of the
three cooperating producers, which in the
investigation period accounted for the quasi
totality of exports
to the Community, was
above 80 %. On the basis of these factors, it is
concluded that, although the unused capacity
would still represent a significant amount of
increasing
video cassettes,
production and exports does not exist. In addi-
tion, no circumstances exist, such as the impo-
sition of anti-dumping duties by third coun-
tries, which clearly indicate that the remaining
production potential would be directed towards
exports
in
Korean exports
to the Community would
indeed indicate the contrary, as the invest-
igation showed a strong decrease in the volume
of imports from Korea between 1992 and the
investigation period, and a decrease in its
market share, a trend which is confirmed by
developments in more recent years.

to the Community. The trends

large scope for

 As regards stocks, the investigation showed that
with average stocks being at slightly over 8 %
of production for
the co-operating Korean
firms, no important excess volumes existed.

13. 1. 98

EN

Official Journal of the European Communities

L 7/55

videocassettes originating

the anti-dumping measures in force should expire
forthwith. This conclusion is reinforced by the fact
that anti-dumping measures applicable to imports
of
in the People’s
Republic of China have expired as mentioned in
recital (4) and that any discriminatory treatment of
imports originating in Korea and Hong Kong
should be avoided.

HAS DECIDED AS FOLLOWS:

Sole Article

The anti-dumping review proceeding concerning imports
into the Community of video tapes in cassettes, falling
within CN code ex 8523 13 00 originating in Hong
Kong and the Republic of Korea is terminated.

(46)

The Commission communicated its conclusions to
the Community industry, which expressed its
disagreement on particular points and on the
conclusion reached. However, after examination of
the information and arguments provided,
the
Commission confirms the above conclusion.

(47)

The Member States did not raise any objections to
the termination of the review proceeding.

Done at Brussels, 6 January 1998.

For the Commission

Leon BRITTAN

Vice-President