Council Regulation (EC) No 467/98 of 23 February 1998 imposing a definitive anti-dumping duty on imports of certain footwear with uppers of leather or plastics originating in the People's Republic of China, Indonesia and Thailand
Date: 1998-02-23
Institutions: Council of the European Union
Subjects: China, Indonesia, Thailand, anti-dumping duty, footwear industry, import

28. 2. 98

EN

Official Journal of the European Communities

L 60/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 467/98

of 23 February 1998

imposing a definitive anti-dumping duty on imports of certain footwear with
uppers of leather or plastics originating in the People’s Republic of China,
Indonesia and Thailand

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) and in particular Article 9(4) thereof,

Having regard to the proposal submitted by the Commis-
sion after consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

the European Communities (2),

On 22 February 1995, the Commission announced
by means of a notice published in the Official
the
Journal of
initiation of an anti-dumping proceeding with
regard to imports into the Community of certain
footwear with uppers of leather or plastics origin-
ating in the People’s Republic of China, Indonesia
and Thailand and commenced an investigation.

the Footwear

The proceeding was initiated as a result of a
complaint lodged by the European Confederation
of
Industry (CEC) on behalf of
national footwear federations whose complainant
members (188 in total) accounted for a major
proportion (namely 53 %) of
the Community
production of the footwear subject to this invest-
igation. The complaint contained evidence of
dumping of the said product and of material injury
resulting therefrom which was considered suffi-
cient to justify the initiation of a proceeding.

The Commission officially notified the exporters
and importers known to be concerned and their
representative associations, as well as the represent-
atives of the exporting countries involved, of the

(4)

(5)

initiation of the proceeding. All parties directly
concerned were given the opportunity to make
their views known in writing and to request a
hearing within the time limit set out in the notice
of initiation.

of

exporting

authorities

The
countries
the
concerned as well as a number of exporters,
Community importers, their representative associ-
ations and trade associations made their views
known in writing. All parties who so requested
within the time limit were granted a hearing.

In view of the large number of Community produ-
cers which were party to the complaint, and in
conformity with Article 17 of Council Regulation
(EC) No 384/96 (hereinafter referred to as ‘the
Basic Regulation'), it was considered appropriate to
limit the investigation to a number of these produ-
cers which could reasonably be investigated within
the time available. In this context, the question-
naires used to collect data and thus permit an
evaluation of
any injury to the Community
industry, were addressed to the national producers’
federation in the Community and to 89 of the 188
Community producers expressly supporting the
complaint. Of these 89 Community producers, 87
submitted complete and meaningful replies. For
verification purposes, given the difficulty
in
carrying out detailed on-the-spot investigations in
the abovementioned 87 Community
respect of
producers
‘the first
referred to as
(hereinafter
group'), 15 of those Community producers (herein-
after referred to as ‘the verification sample') were
selected and their responses subjected to in-depth,
on-the-spot verifications.

(6)

The Commission also sent questionnaires to the
following:

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Regula-

tion (EC) No 2331/96 (OJ L 317, 6. 12. 1996, p. 1).

(2) OJ C 45, 22. 2. 1995, p. 2.

(cid:190) the Chinese, Indonesian and Thai producers/

exporters listed in the complaint,

L 60/2

EN

Official Journal of the European Communities

28. 2. 98

(cid:190) the Hong Kong exporters

listed in the

complaint,

(cid:190) the authorities of

the exporting countries

concerned,

(cid:190) the exporters who, while not
themselves

complaint, made
requested a questionnaire.

listed in the
known and

to the questionnaire were
In total, 13 replies
received from producers/exporters in Indonesia, 17
from producers/exporters in the People’s Republic
of China and three from producers/exporters in
Thailand.

to limit

the Basic Regulation,

In view of this number of replies, 33 in total, the
Commission proposed, in accordance with Article
17 of
its invest-
igation to a reasonable number of cooperating
producers/exporters representing the largest repres-
entative volume of production which could reason-
ably be investigated within the time available.
Agreement was
reached with the cooperating
producers/exporters on the selection of a sample of
four
People’s
Republic of China and seven from Indonesia.
Given that, in total, only three producers/exporters
from Thailand cooperated, all three were investi-
gated.

producers/exporters

from the

In addition, the Commission sent questionnaires to
all known importers. Replies were received from
14 such importers.

The Commission sought and verified all the in-
formation it deemed necessary for the purpose of a
determination of dumping and injury, and carried
out investigations at the premises of the following
companies:

(7)

(8)

(9)

(10)

(a) Community producers

The verification sample referred to in recital 5
consisted of a total of 15 Community producers
situated in France, Italy, Portugal, Spain and
the United Kingdom, which are all Member
States with a significant production of the foot-
these
wear
Member States accounted for 89 % of
total
Community production of the product in ques-
tion in 1994,
i.e. the investigation period as
defined in recital 13.

investigation. Together

under

The 15 Community producers in the verifica-
tion sample requested that their identities be
kept confidential on the grounds that some of
them had been threatened with commercial
retaliation by certain customers who where at
the same time importers and major retailers in
the Community. The investigation confirmed
that certain Community producers had been
subjected to severe commercial pressure to stop
cooperating in the investigation and to with-
draw their support for the complaint. Accord-

it was considered appropriate not

to
these 15 Community

ingly,
disclose the names of
producers.

The representatives of certain exporters and
importers have criticised the granting of such
anonymity on the grounds that complaining
domestic industries should be prepared to face
any kind of ‘commercial retaliation'. In this
the an-
it has to be stressed that
respect,
onymous treatment was granted because the
threat exerted went far beyond what could be
considered as ‘normal' in commercial relations.
The limited protection so granted was, more-
over, considered particularly appropriate in the
context of a sampling exercise, where a few
selected Community producers are particularly
exposed as they represent, and act
the
benefit of, a much larger group. The identities
of the 87 Community producers in the first
group were, however, disclosed to the parties
having so requested.

for

(b) Unrelated importers/distributors

(cid:190) Atlex SA, Rouen (F),

(cid:190) British Shoe Corporation Ltd, Leicester

(UK),

(cid:190) Chasseurop SA, Le Havre (F),

(cid:190) Groupe Andr(cid:130) SA, Paris (F),

(cid:190) Intermedium BV, Hoofddorp (NL).

(c) Related importer

(cid:190) Nick’s Sports and Leisure Footwear Ltd,

Warrington (UK).

(d) Exporters/producers in Indonesia

(cid:190) PT Dragon,

(cid:190) PT Emperor Footwear Indonesia,

(cid:190) PT Fortune Mate,

(cid:190) PT Golden Adishoes,

(cid:190) PT Indosepamas Anggun/PT Primashoes

Ciptakreasi,

(cid:190) PT Kingherlindo.

(e) Exporters/producers in Thailand

(cid:190) Bangkok Rubber,

(cid:190) CK Shoes,

(cid:190) PSR Footwear.

(f) Exporter in Hong Kong

(cid:190) Grosby (China) Ltd.

(11)

Parties were informed of the essential facts and
considerations on the basis of which it was
intended to recommend the imposition of defin-
itive anti-dumping duties. They were also granted a
period within which to make representations
subsequent to the disclosure.

28. 2. 98

EN

Official Journal of the European Communities

L 60/3

(12)

(13)

The parties’ representations were considered, and
the Commission altered its conclusions where
appropriate.

The investigation of dumping covered the period
from 1 January 1994 to 31 December 1994 (here-
inafter referred to as ‘the investigation period'). The
examination of
injury covered the period from
1991 to the investigation period. In addition, for
the purpose of the additional examination referred
to in recitals 138 to 143, certain developments
occurred in 1995 and 1996 which were also taken
into account.

The geographical scope of the investigation was
the Community as constituted at the time of initi-
ation of the proceeding, that is to say all 15 Mem-
ber States.

(14) Owing to the volume and complexity of the in-
formation gathered from many different sources
and, in particular, in the light of the numerous
types of footwear covered by the investigation and
the need to carry out an additional examination to
evaluate the effects of the Community-wide quota
imposed in the course of the investigation period
on imports of the footwear concerned originating
the invest-
in the People’s Republic of China,
igation exceeded the normal duration provided for
in Article 6(9) of the Basic Regulation. Pursuant to
Article 24 of
the Basic Regulation this invest-
igation is indeed not subject to the mandatory time
limits provided for in Article 6(9).

technical features such as hermetic pads containing
gas or fluid, mechanical components which absorb
or neutralize impact or materials such as low-
density polymers, which can be classified for
customs purposes in all the abovementioned CN
codes, is covered by this proceeding.

(16)

For practical purposes and in order
to appro-
priately gather and handle the data collected, each
of the above mentioned CN codes was considered
as one ‘category'. Four categories were thus formu-
lated as follows:

Category 1: CN code ex 6403 99 93 (i.e.

‘unisex'

adults (cid:190) leather uppers)

Category 2: CN code ex 6403 99 96 (i.e. men’s (cid:190)

leather uppers)

Category 3: CN code ex 6403 99 98 (i.e. womens’s

(cid:190) leather uppers)

Category 4: CN code ex 6402 99 98 (i.e. women’s

(cid:190) plastic uppers)

(17) Although the footwear falling within any of the
above categories can cover a wide range of styles
and types, as well as be produced by different
production methods, their essential characteristics,
their uses and consumer perception thereof remain
basically the same. Therefore, for the purposes of
this proceeding and in accordance with consistent
Community practice,
regarded as
forming one product.

they were

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

2. Like product

1. Description of the product under consid-

eration

(15)

under

product

The
this
proceeding is ‘non-sports' footwear, not covering
the ankle, with insoles of a length of 24 cm or
more:

consideration

in

(cid:190) with outer soles of rubber, plastics or composi-
tion leather and uppers of
falling
within CN codes ex 6403 99 93 (if not identifi-
able
ex
6403 99 96 (if for men) and ex 6403 99 98 (if
for women),

as men’s or women’s

footwear),

leather,

(cid:190) with outer soles of

rubber or plastics and
uppers of plastics, for women (falling within
CN code ex 6402 99 98).

It should be noted that no footwear for use in
sporting activities, with a single or multi-layer non
injected moulded
from
synthetic materials specially designed to absorb the
impact of vertical or lateral movements and with

sole, manufactured

(18) As regards the footwear produced and sold domest-
ically in Indonesia and Thailand, where such sales
had taken place and information in that respect
had been made available, the investigation showed
that such products were either alike in all respects
to, or closely resembling, those exported to the
Community from the countries in question.

(19)

Similarly, footwear subject to the current invest-
igation produced in Indonesia and exported to the
Community was considered to be a like product to
the footwear produced and exported from the
People’s Republic of China to the Community.
This is particularly relevant in the light of the fact
that Indonesia has been used as the analogue
country for the determinaton of normal value for
the People’s Republic of China as set out in re-
citals 42 and 43.

(20)

The investigation also established that the footwear
produced in the Community and that imported
from the three countries concerned were similar as
far as their overall design, general characteristics

L 60/4

EN

Official Journal of the European Communities

28. 2. 98

and uses are concerned. While there may be some
minor differences between the product imported
from the countries concerned and the Community
production,
the
substantial characteristics, properties, perception
and uses of the product.

these diffferences do not affect

encourage circumvention of any anti-dumping
measures by enabling related producers/exporters
to the Community
to channel
their exports
through the related producer/exporter
the
producer/exporter within the same group) with the
lowest duty.

(or

(21)

(22)

In this respect, certain parties have claimed that
footwear
and Community-produced
imported
belong to different product segments which do not
compete with each other. They argued that foot-
wear, 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.

they import

them claiming that

The issue has been the source of repeated and
seemingly contradictory statements by importers,
some of
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, Indonesia
or Thailand sophisticated products manufactured
in accordance with their own specifications, design
and sometimes raw materials. This contradiction
shows that the People’s Republic of China, Indo-
capable of
nesia
producing, and do indeed produce and export to
the Community, the full range of products on offer
on the market. The argument
footwear
imported from the three countries concerned and
that produced in the Community belong to
different product segments cannot
therefore be
accepted.

and Thailand are

in fact

that

(23) Accordingly, footwear subject to this proceeding
produced in the People’s Republic of China, Indo-
nesia
the
Community was considered to be a like product to
footwear produced in the Community within the
meaning of Article 1(4) of the Basic Regulation.

and Thailand

exported

and

to

C. DUMPING

1. General

(24)

consistent practice of

It has been the
the
Community Institutions (hereinafter referred to as
the ‘Institutions')
to consider related producers/
exporters, or producers/exporters within the same
group, as one economic entity and to establish a
single dumping margin (and, where appropriate, a
for those producers/exporters. This
single duty)
practice has been adhered to in this proceeding.
Calculating individual dumping margins and anti-
dumping duty rates in such circumstances might

2. Indonesia

(a) Sampling

(25) As mentioned in recital 7, sampling as provided
for in Article 17 of the Basic Regulation was used
and seven Indonesian producers/exporters were
selected as the sample,
in agreement with the
cooperating producers/exporters.

(26)

(27)

(28)

In accordance with Article 9(6) of the Basic Regu-
lation it was agreed with the other Indonesian
producers/exporters which cooperated with the
investigation but which were not included in the
sample, that they would be attributed the weighted
average dumping margin established for the produ-
cers/exporters in the sample.

The producers/exporters selected in the sample
and which fully cooperated with the investigation
were informed that they would be given their own
dumping margin (and, where appropriate,
their
own individual duty rate).

(b) Normal value

In order to establish normal value for each of the
in the
seven Indonesian producers/exporters
sample, it was first determined whether the total
domestic sales of the footwear concerned by each
producer were representative when compared to
their total sales of the footwear concerned exported
to the Community. In accordance with Article 2(2)
of
are
normally considered representative when the total
domestic sales volume of the like product sold by
each producer represents at least 5 % of its sales
consideration
the product under
volume
exported to the Community. A further repres-
entativity test was then carried out on a model by
model basis.

the Basic Regulation, domestics

sales

of

in the

(29) Only one of the cooperating Indonesian produ-
cers/exporters
sample had sufficient
domestic sales of two models of the like product in
the ordinary course of trade in the investigation
period within the meaning of Article 2(2) and (4) of
the Basic Regulation to enable normal value to be
calculated on such a basis. Given that all these

28. 2. 98

EN

Official Journal of the European Communities

L 60/5

sales were profitable, normal value was therefore
calculated on the basis of
the prices paid or
payable on the domestic market for all these sales.
Normal value for this company’s other models was
constructed, in accordance with Article 2(3) and (6)
of the Basic Regulation, by adding to their manu-
facturing costs, the selling, general and adminis-
trative expenses (hereinafter referred to as ‘SG&A')
and profit found for the two models referred to
immediately above.

ance with Article 2(10) of the Basic Regulation for
differences affecting price comparability, whenever
these were claimed and duly justified. In con-
sequence, adjustments were made, where appro-
insurance,
priate,
handling, loading and ancillary costs, credit costs,
bank charges, guarantees/warranties and levels of
trade.

for differences

in transport,

(30)

It was

The other six Indonesian producers/exporters in
the sample did not have sufficient domestic sales
of the footwear concerned during the investigation
period within the meaning of Article 2(2) of the
Basic Regulation.
therefore considered
appropriate to construct normal value on the basis
of Article 2(3) of the Basic Regulation by adding to
the manufacturing cost of each model exported to
the Community a reasonable amount for SG&A
and for profit. In this respect, it was considered, in
accordance with Article 2(6)(a) of the Basic Regula-
tion, that the amounts of SG&A and profit of the
producer/exporter which did have
sufficient
domestic sales (see preceding recital) should be
used to construct normal value for the six other
Indonesian producers/exporters in the sample.

(34)

In the case of one of the Indonesian producers/
exporters in the sample, a level of trade allowance
was claimed. The producer/exporter contended
that such an allowance was warranted because its
export sales to the Community were made in large
quantities to distributors and wholesalers, whilst its
domestic sales were allegedly made in small quant-
ities to retailers and traders. Upon further exam-
ination during the on-the-spot investigation, it was
established that the domestic purchasers were in
and wholesalers. Con-
fact
sequently, this claim was rejected, since normal
value and export price were at the same level of
trade and no adjustment was therefore required or
warranted.

also distributors

(31) One producer/exporter which had agreed to be
included in the sample, did not provide costs by
model, despite several requests to do so. Since it
was
therefore impossible to calculate domestic
profitability and constructed normal values for this
in
producer/exporter,
recital 41 were
the
in
dumping margin for
accordance with Article 18 of the Basic Regulation.

facts available as set out
applied in establishing

this producer/exporter

(c) Export price

(32)

Exports for six of the seven producers/exporters
included in the sample were made directly to inde-
pendent importers in the Community. The export
prices of
these producers/exporters were estab-
lished by reference to the prices paid or payable
for the footwear sold, in accordance with Article
2(8) of the Basic Regulation. The export price of
one Indonesian producer/exporter included in the
sample, which sold via a related company in
Taiwan, had to be adjusted (see recital 36).

(d) Comparison

(33)

For the purpose of ensuring a fair comparison
between normal value and the export prices of the
producers/exporters in the sample, due allowance
in the form of adjustments was made in accord-

(35) An allowance was also claimed by two of the Indo-
nesian producers/exporters in the sample as their
export sales were, in contrast with their domestic
sales, allegedly made on an OEM brand basis. This
was verified in detail by the Commission during
the on-the-spot investigations and it was clearly
established that, for export sales, there were distinct
sales channels with consistently lower prices for
OEM customers. Since the difference in level of
trade for OEM customers could not be quantified
because of the absence of the same sales channels
on the domestic market in Indonesia, a special
adjustment has been granted, in accordance with
the Basic Regulation, by
Article 2(10)(d)(ii) of
deducting from the own brand constructed normal
values, an amount corresponding to 10 % of the
gross profit margin.

(36) One Indonesian producer/exporter sold footwear
for export to the Community through a related
trading company located in Taiwan. It has been
determined that because of
relationship
between the two companies, the prices charged by
the producing company to the trading company
are not reliable. To establish a reliable export price
to the Community from Indonesia,
the price
charged from Taiwan to the Community was

the

L 60/6

EN

Official Journal of the European Communities

28. 2. 98

adjusted to an ex-Indonesia level. As the related
trader’s functions can be considered similar to
those of a trader acting on a commission basis, an
adjustment of 5 %, based on information supplied
by the company itself, was therefore deducted from
the prices charged by the related company to inde-
pendent customers in the Community. This figure
was considered reasonable given the degree of the
related trader’s involvement in the selling activities
the exporter. No information was provided
of
which would indicate that the use of this figure is
inappropriate. Thus,
export prices were
the
adjusted accordingly.

(e) Dumping margins

(37)

(38)

To calculate the dumping margin of each Indo-
nesian producer/exporter in the sample, a compar-
ison was made between weighted average normal
values and the weighted average export prices of
the producers/exporters, since it was clearly estab-
lished that there was no pattern of export prices
which varied significantly between either different
purchasers, regions or time periods, in accordance
with Article 2(11) of the Basic Regulation.

The comparison showed the existence of dumping
of the footwear concerned during the investigation
period by all of the producers/exporters included
in the sample. Because of the relationship between
P.T. Indosepamas Anggun and P.T. Primashoes
Ciptakreasi, these producers/exporters were treated
as one company and a single margin calculated
therefore,
in accordance with the Institutions’
established practice as set out in recital 24.

The individual dumping margins for these produ-
cers/exporters, thus established and expressed as a
percentage of the CIF price at Community frontier
are:

(cid:190) PT Dragon:

(cid:190) PT Emperor Footwear:

(cid:190) PT Fortune Mate:

(cid:190) PT Golden Adishoes:

(cid:190) PT Indosepamans Anggun/
P.T. Primashoes Ciptakreasi:

15,9 %

2,0 %

14,9 %

18,6 %

12,7 %

(40)

(41)

available were
for which facts
Kingherlindo)
applied. This company’s dumping margin was
disregarded in establishing the weighted average
margin for the sample in accordance with Article
9(6) of the Basic Regulation. The dumping margin
thus established and expressed as a percentage of
the CIF price at Community frontier was 12,3 %.
The producers/exporters
to which this margin
applies are:

(cid:190) PT Bosaeng Jaya

(cid:190) PT Karet Murni Jelita

(cid:190) PT Koryo International

(cid:190) PT Lintas Adhikrida

(cid:190) PT Universal Wisesa

(cid:190) PT Volmacarol

For those producers/exporters in Indonesia which
neither replied to the Commission’s questionnaire
nor made themselves known, the dumping margin,
has in accordance with Article 18 of the Basic
Regulation, been determined on the basis of the
the unusually high
facts available. In view of
degree of non-cooperation in this case on the part
of
(more than
74 %), the absence of other reliable information
from independent sources and in order to avoid
considered
rewarding non-cooperation,
appropriate to base the residual dumping margin
on the highest margin of dumping alleged in the
complaint, i.e. 50 %.

Indonesian producers/exporters

it was

In determining the dumping margin for
the
producer/exporter referred to in recital 31 (P.T.
Kingherlindo), it was considered that the partial
cooperation it had shown should be distinguished
from the total non-cooperation of the producers/
exporters referred to in recital 40. Accordingly, it
was decided that the margin calculated for this
producer/exporter should be lower than the margin
the non-cooperating producers/
calculated for
exporters. Its margin was therefore based on the
arithmetic average of the residual margin and the
weighted average margin calculated for the sample,
i.e. 31,1 %.

3. People’s Republic of China

(a) Choice of analogue country

(39)

The dumping margin for the cooperating produ-
cers/exporters which were not selected was based
on the weighted average margin of the individual
dumping margins established for each producer/
exporter in the sample, with the exception of the
producer/exporter referred to in recital 31 (P.T.

(42)

In accordance with Article 2(7) of the Basic Regu-
lation, normal value was based on data collected
from producers in a market economy country (the
‘analogue country').

28. 2. 98

EN

Official Journal of the European Communities

L 60/7

(43)

In the complaint, Thailand was proposed as the
most appropriate analogue country. However, the
choice of this country was opposed by a number of
importers as well as the Chinese producers/ex-
porters on the grounds that the levels of economic
development in the People’s Republic of China
and Thailand were dissimilar. Two trade bodies,
the Foreign Trade Association (FTA) and the
Federation of
the European Sporting Goods
Industry (FESI) put forward Indonesia, as did the
Chinese producers/exporters. A number of other
countries were also proposed at various stages of
the proceeding by
certain interested parties
without, however, providing evidence justifying
why any one of these countries should be given
preference over another.

Having examined the information available in
respect of all the countries suggested, it was finally
considered that, in accordance with Article 2(7) of
the Basic Regulation, Indonesia was a reasonable
choice of analogue country as there appeared to be
a large number of suppliers in that market and a
certain degree of similarity between the production
processes employed there and in the People’s
Republic of China. Furthermore, no significant
differences were apparent as regards the access to
raw materials. In addition, sales on the Indonesian
domestic market were also representative when
compared to exports from the People’s Republic of
China to the Community. Moreover, Indonesia had
been proposed by the Chinese producers/exporters
themselves and no objection was raised by the
Community producers on the Commission’s inten-
tion in this respect.

(b) Individual treatment

(44)

it

In accordance with Article 9(5) of the Basic Regu-
lation,
is the Institutions’ policy to calculate
country-wide dumping margins for non market-
economy countries, except
for those producers/
exporters who can demonstrate that they should be
granted individual treatment, i.e. that their export
prices should be established separately and their
dumping margin be calculated individually.

the Chinese producers/exporters which
(45) All of
replied
questionnaire
to
the Commission’s
requested individual treatment. In examining the
merits of these claims, the Commission sought to
verify whether
the producers/exporters which
cooperated in this proceeding enjoyed a degree of
independence from the State,
legal and factual
comparable to that which would prevail
in a
market economy country and which would justify
a departure from the principle of determining a
single country-wide dumping margin. To this end,
ownership,
detailed
management, control, determination of commer-
cial and business policies were addressed to the
responding
producers/exporters. None of

questions

regarding

the

the

producers/exporters, with the sole exception of
Grosby (China) Limited, were able to show, to the
satisfaction of the Commission, that their opera-
tions were sufficiently independent
from the
Chinese authorities to qualify for individual treat-
ment. Their requests were consequently rejected
and the producers/exporters informed accordingly.

(46) Grosby (China) Limited was a legal entity incor-
porated under Hong Kong law but manufacturing
the like product in a production facility in the
People’s Republic of China. No legal entity existed
in the People’s Republic of China but the capital
goods physically present there were included as
assets in the accounts of the Hong Kong company.

In

the

State.

particular

The Commission carried out on-the-spot verifica-
tions at the premises of the company in Hong
Kong in order to examine the circumstances under
relations with the
which it operated and its
Chinese
company
concerned was able to show, to the satisfaction of
the Commission, that the management and control
of the factory, both in terms of production and
marketing, was clearly in their hands and that their
operations were sufficiently independent from the
Chinese Authorities. It was also established that
the export prices to the Community and the
marketing policies were determined by the Hong
Kong company without any interference from the
Chinese State.

treatment

individual

In view of the above, it was considered possible to
grant
to Grosby (China)
Limited and, consequently, to calculate a separate
dumping margin as an exception to the principle
of calculating country-wide dumping margins in
respect of non market-economy countries
as
required by Article 9(5) of the Basic Regulation.

(c) Country-wide dumping margin for the People’s

Republic of China

(47)

In total, 17 exporters in the People’s Republic of
China replied to the Commission’s questionnaire.
The producers/exporters concerned however rep-
resented only 14,3 % of total exports from the
People’s Republic of China and it was con-
sequently decided, in view of the particularly high
level of non-cooperation, to establish the margin of
dumping for the People’s Republic of China on
the basis of Article 18 of the Basic Regulation, i.e.
on the basis of the facts available.

the Commission first

In order
to calculate the single country-wide
margin of dumping for the People’s Republic of
China,
the
dumping margin of the 16 cooperating producers/
exporters to which individual treatment was not
granted (see (i) below). Secondly, the Commission
established the dumping margin for the non-co-
operating producers/exporters (see (ii) below).

calculated,

L 60/8

EN

Official Journal of the European Communities

28. 2. 98

the
country-wide dumping margin for
The
People’s Republic of China was then calculated as
the average of these two dumping margins (see (iii)
below).

(50)

(i) D u m p i n g m a r g i n f o r
p r o d u c e r s / e x p o r t e r s

c o o p e r a t i n g

those Chinese exported models for which
For
there was no like domestically sold Indonesian
model, the constructed value was established by
adding a reasonable amount for SG&A expenses
and profit to the manufacturing cost of comparable
exported Indonesian models. The SG&A and profit
margin were established on the basis described in
recitals 29 and 30.

Sampling

Export price (cid:190) calculation of export price

(48) As mentioned in recital 7, sampling, as provided
for in Article 17f the Basic Regulation, was used in
respect of the 17 cooperating producers/exporters
in the People’s Republic of China. Four producers/
exporters were selected,
in agreement with the
cooperating producers/exporters concerned.

However, as one of
these producers/exporters,
Grosby (China) Limited, was subsequently granted
individual
it was removed from this
sample (see recital 46).

treatment,

Accordingly,
the three remaining producers/ex-
porters included in the sample for the People’s
Republic of China are:

(cid:190) Fujian Footwear

and Headgear

Import &

Export Corporation,

(cid:190) Zhejiang Animal By-Products Import & Export

Corporation,

(cid:190) Zhangjiang Yitai.

Normal value

the domestic prices

(49) Normal value for the Chinese producers/exporters
included in the sample was calculated on the basis
in Indonesia and on
of
constructed normal values established for
the
producers/exporters included in the sample for
Indonesia, in accordance with Article 2(7) of the
Basic Regulation.

of

the

detailed

specifications

It should be noted that the three Chinese produ-
cers/exporters concerned had been requested to
give
footwear
exported to the Community. Only limited infor-
mation was provided by the producers/exporters
and the Commission consequently had to estab-
lish, on the basis of the facts available, which Indo-
nesian models were identical or, in the absence of
identical models, those Indonesian models which
most
resembled the Chinese models
exported to the Community. On this basis, the
Commission was able to find comparable models
for models representing 34,7 % of the total exports
from the three producers/exporters concerned. For
these models, the normal values established for the
purpose of determining the Indonesian dumping
margins could therefore be used.

closely

(51)

(52)

(53)

The investigation showed that the exports of the
three Chinese producers/exporters in the sample
were made directly to independent customers in
the Community.
therefore, possible to
establish export prices on the basis of prices
actually paid or payable, in accordance with Article
2(8) of the Basic Regulation.

It was,

Comparison

For the purpose of ensuring a fair comparison
between normal value and the export prices of the
producers/exporters in the sample, allowance in
the form of adjustments was made in accordance
with Article 2(10) of the Basic Regulation for duly
justified differences affecting price comparability.
Consequently, adjustments were made for differ-
ences in physical characteristics, transport, insur-
ance, handling, loading and ancillary costs, packing
and credit costs.

Dumping margin

calculated a dumping
The Commission first
margin for each of the three producers/exporters in
the sample. For this purpose,
the Commission
made a comparison between normal value at ex-
works level and the export prices of the cooper-
ating Chinese producers/exporters at FOB level,
ex-Chinese frontier. This comparison was based on
the weighted average selling price of each model of
footwear manufactured by the producers/exporters
in the sample and exported to the Community
investigation period for which a
during the
comparable model of footwear could be found.

(54)

In the absence of any significant variations in
export prices either by region, purchaser or time
period, the normal value was compared with the
export price on a weighted average basis in accord-
ance with Article 2(11) of the Basic Regulation.

The comparison showed the existence of dumping
of
the footwear concerned originating in the
People’s Republic of China and exported by the
producers/exporters
the
Community during the investigation period. The
weighted average dumping margin, expressed as a
percentage of the CIF Community frontier price,
amounts to 45,2 %.

sample

the

in

to

28. 2. 98

EN

Official Journal of the European Communities

L 60/9

(ii) D u m p i n g m a r g i n f o r n o n - c o o p e r -

(iii) C o m p a r i s o n

a t i n g p r o d u c e r s / e x p o r t e r s

(55)

The dumping margin for
the non-cooperating
producers/exporters was established on the basis of
the facts available in accordance with Article 18 of
the Basic Regulation. In this particular case, given
the unusually high level of non-cooperation and in
the absence of other reliable information from
the most appropriate facts
independent sources,
available have been considered to be the highest
dumping margin alleged in the complaint. The
dumping margin established on this basis was
50 % of the CIF Community frontier price.

(iii) C o u n t r y - w i d e

d u m p i n g m a r g i n
o f
R e p u b l i c

P e o p l e ’ s

t h e

f o r
C h i n a

(59)

(60)

For the purpose of ensuring a fair comparison
between normal value and export price, an allow-
in
ance in the form of adjustments was made,
accordance with Article 2(10) of the Basic Regula-
tion for differences in transport and insurance.

(iv) D u m p i n g m a r g i n

In the absence of any significant variations in
export prices either by region, purchases or time
period, the normal value was compared with the
export price on a weighted average basis, in accord-
ance with Article 2(11) of the Basic Regulation. On
this basis, the dumping margin for Grosby (China)
Limited was found to be 1,3 %.

(56) As

indicated in recital 47, a single dumping
margin was calculated for the People’s Republic of
China by using the weighted average of
the
margins established for the cooperating producers/
exporters (i.e. 45,2 %, see recital 54) and the non-
cooperating producers/exporters
see
recital 55).

(i.e. 50 %,

The dumping margin thus established for all
producers/exporters in the People’s Republic of
China, except Grosby (China) Limited, expressed
as a percentage of the CIF Community frontier
price, was 47,6 %.

(61)

(d) Dumping margin for Grosby (China) Limited

(i) N o r m a l v a l u e

(57) As far as Grosby (China) Limited was concerned, it
should be noted that normal value was calculated
in the same way as that of the other cooperating
producers/exporters in the People’s Republic of
China, i.e. on the basis of prices or constructed
values of comparable models produced in the
analogue country, i.e. Indonesia.

(ii) E x p o r t p r i c e

(58)

the

(UK),

export

Since Grosby (China) Limited made its export sales
via a related importer, Nick’s Sports and Leisure
Footwear Ltd
price was
constructed pursuant to Article 2(9) of the Basic
Regulation, i.e. on the basis of the price at which
the imported products were first resold to an inde-
pendent buyer. Adjustments were made for all
costs incurred between importation and resale and
for profits accruing, in order to establish a reliable
export price, at the Community frontier level. A
profit margin of 5 % was used since this was the
profit margin found for the independent importer
which had the most similar trading structure to
that of Nick’s Sports and Leisure Footwear Ltd
(UK) and had been the subject of an on-the-spot
verification visit.

4. Thailand

(i) D u m p i n g m a r g i n f o r
p r o d u c e r s / e x p o r t e r s

c o o p e r a t i n g

(a) Normal value

In order to establish normal value for each of the
three cooperating Thai producers/exporters, it was
first determined whether the total domestic sales of
the footwear concerned by each producer/exporter
were representative when compared to their total
sales of the footwear concerned exported to the
Community. In accordance with Article 2(2) of the
Basic Regulation, domestic sales are normally
considered representative when the total domestic
the like product sold by each
sales volume of
producer represents at least 5 % of its sales volume
of the product under consideration exported to the
Community.

(62) None of

the producers/exporters had sufficient
domestic sales of the footwear concerned during
the investigation period within the meaning of
Article 2(2) of the Basic Regulation. It was con-
to construct
sequently considered appropriate
normal value on the basis of Article 2(3) of the
Basic Regulation by adding to the manufacturing
cost of each model exported to the Community a
reasonable amount for SG&A and for profit. Two
of the producers/exporters were related and one of
these two related producers/exporters sold sports
shoes and sports wear,
the same general
category of products, on the Thai domestic market.
The SG&A and profit for these two producers/
exporters was established by reference to the
domestic sales of
these products in accordance
with Article 2(6)(b) of the Basic Regulation. In the
absence of any domestic sales of
the product
concerned, or the same general category of prod-
ucts by the third cooperating Thai producer/
exporter, their SG&A and profit was, in accordance
with Article 2(6)(c) established on any other

i.e.

L 60/10

EN

Official Journal of the European Communities

28. 2. 98

reasonable basis, in this case the SG&A and profit
established for the other two cooperating produ-
cers/exporters referred to immediately above.

(63) One of

the three cooperating Thai producers/
exporters produced and exported shoes partly
made from raw materials which it obtained free of
charge from its customers in the Community.
Because the prices of the raw materials were not
divulged to the producer/exporter, it was unable to
report
them in its manufacturing costs. As the
producer/exporter had no domestic sales, normal
value had to be constructed. In the absence of full
information on raw material costs the Commission
constructed normal value by using the available
company’s manufacturing costs and the SG&A and
profit as established in the preceding recital. Since
both the constructed value and the export price
reported by this producer/exporter excluded the
same
costs, both were directly
comparable.

raw material

(b) Export price

(64)

The investigation showed that, except in the case
referred to in recital 67, exports were made directly
to independent customers
in the Community.
Export prices were consequently established on the
basis of the prices actually paid or payable.

(c) Comparison

(65)

For the purpose of ensuring a fair comparison
between normal value and the export prices of the
producers/exporters, due allowance in the form of
adjustments was made in accordance with Article
2(10) of
the Basic Regulation for differences
affecting price comparability, whenever these were
claimed and duly justified. In consequence, adjust-
ments were made, where appropriate, for differ-
ences in transport,
loading
and ancillary costs, credit costs, bank charges, guar-
antees/warranties and levels of trade.

insurance, handling,

(66) An allowance was also claimed by one of the Thai
producers/exporters as their export sales were, in
contrast to their domestic sales, allegedly made on
an OEM brand basis. During the investigation it
was clearly established that export sales were made
at a different level of trade than domestic sales. An
allowance was consequently granted by deducting
from the own brand constructed normal values, an
amount corresponding to 10 % of the gross profit
margin in accordance with Article 2(10)(d)(ii) of the
Basic Regulation.

(67) One Thai producer/exporter

sold footwear

for
export to the Community through a related trading
company located in the USA. It has been deter-
mined that because of the relationship between the
two companies, the prices charged by the Thai
producing company to the US company were not
reliable. To establish a reliable export price to the
Community from Thailand, the price charged to
the Community was adjusted to an ex-Thailand
level. As the related company’s functions can be
considered similar to those of a trader acting on a
commission basis, an adjustment of 5 % was
deducted from the prices charged by the related
company
in the
Community. This figure was considered reasonable
given the degree of the related trader’s involvement
in the selling activities of the exporter. No infor-
mation was provided which would indicate that
this figure is inappropriate. Thus, the export prices
were adjusted accordingly.

independent

customers

to

(68)

(69)

(d) Dumping margins

a

To calculate the dumping margin of each cooper-
ating Thai producer/exporter,
the Commission
made, in accordance with Article 2(11) of the Basic
comparison between weighted
Regulation,
average normal values and the weighted average
export prices of the producers/exporters since it
was clearly established that there was no pattern of
export prices which varied significantly between
different purchasers, regions or time periods.

The comparison showed the existence of dumping
of the footwear concerned during the investigation
period by one of the three cooperating producers/
established and
exporters. The margin thus
expressed as a percentage of
the CIF price at
Community frontier is:

(cid:190) CK Shoes: 1,4 %

The investigation revealed that the two other coop-
erating Thai producers/exporters were related, one
producer/exporter holding shares of the other. In
addition, shares of one of these producers/exporters
were held by a company in the USA. Both produ-
cers/exporters exported the product concerned to
the Community during the investigation period.

Although these producers/exporters maintained
separate production facilities only one dumping
margin was calculated therefor in line with the
Institutions’ established practice as
in
recital 24.

set out

The margin thus established was:

(cid:190) PSR Footwear/Bangkok Rubber Company:

0 %.

28. 2. 98

EN

Official Journal of the European Communities

L 60/11

(ii) D u m p i n g m a r g i n f o r n o n - c o o p e r -

a t i n g p r o d u c e r s / e x p o r t e r s

(they are all
Member States).

located in the major producing

(70)

For those producers in Thailand which neither
replied to the Commission’s questionnaire nor
made themselves known, the dumping margin has,
in accordance with Article 18 of the Basic Regula-
tion, been determined on the basis of the facts
available. In view of the unusually high degree of
non-cooperation in this case on the part of Thai
producers/exporters (99 %), the absence of other
reliable information from independent sources and
in order to avoid rewarding non-cooperation, it was
considered appropriate
residual
dumping margin on the highest margin of
dumping alleged in the complaint, i.e. 50 %.

to base

the

D. COMMUNITY INDUSTRY

(71) As mentioned in recital 5, in view of the large
number of Community producers which were
party to the complaint, it was considered appro-
priate to collect data concerning the Community
industry from three sources, namely the national
producers’ federations in the Community, the 87
Community producers in the first group and the
verification
15 Community producers
sample. Injury indicators were then considered at
the most appropriate level (i.e. on the widest basis
for general indicators and on a narrower basis for
those which could only be collected from indi-
vidual companies).

in the

Accordingly:

(cid:190) Production, sales, market share and employ-
ment in the Community were established at
the level of each national footwear federation
and thus cover the entire Community produc-
tion of the like product,

(cid:190) General

trends concerning prices, costs and
profitability were established at the level of the
87 Community producers in the first group,
which were selected with a view to covering, in
as balanced a way as possible, the four cat-
egories of product under consideration, as well
as reflecting the various company sizes and
production structures in the main producer
Member States,

(cid:190) Price undercutting and injury-elimination level
calculations were carried out on the basis of
fully verified price and cost data collected from
the 15 Community producers in the verifica-
tion sample, which are representative in terms
of size and product range as well as location

(72) Certain parties have claimed that the above meth-
odology was deficient on the grounds that it would
depart from the provisions of both Articles 5(4)
and 4(1) of
the Basic Regulation, according to
which the representative nature of the investigated
Community industry would have necessarily to be
established on the basis of the ‘major proportion'
test, and thus any evidence of injury would have to
be based on data provided by producers rep-
total Community
resenting at
production of the like product. In particular, it was
argued that
the ‘total Community production'
figure used for assessing the representativity of the
188 complaining Community producers would not
be reliable.

least 25 % of

The sampling exercise carried out by the Commis-
sion was also questioned on the alleged grounds
that the decision to resort to sampling was taken at
an advanced stage, in response to an insufficient
cooperation from the complaining industry during
the initial stages of the investigaiton.

1. Total Community production

(73)

It should first be stressed that the level of support
for the complaint was established before initiation
the
of
the investigation. During the course of
investigation it was established that
the 188
complaining Community producers continued to
represent more than 25 % of
total Community
output (namely 53 %). Therefore, the complaining
Community producers represent a major propor-
tion of total Community output of the like product
within the meaning of Article 4(1) of the Basic
Regulation.

Morevoer, it has also to be stressed that the ‘total
Community production' figure of the like product
was set at the maximum possible level. Indeed, due
to the lack of reliable data, no examination could
be carried out in order to determine whether, in
accordance with the provisions of Article 4(1)(a) of
the Basic Regulation, 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
than producing within the
importing rather
Community.

Such would-be Community producers, some of
which are known to have made considerable
imports, are also known to produce relatively large
quantities in the Community. Had sufficient, infor-
mation in this respect been made available, it is

L 60/12

EN

Official Journal of the European Communities

28. 2. 98

likely that part of this ‘total Community produc-
tion' would have been excluded. Such reduction
would have increased the share of Community
production of the complaining Community produ-
cers. Conversely, the investigation established that
out of the 188 complaining Community producers,
87 (i.e.
the Community producers in the ‘first
group' as defined at recital 5 were neither related
to any producers/exporters nor themselves signi-
ficantly importing the product covered by this
investigation.

2. Sampling

(74)

initiation of

In this respect, it has to be recalled that given the
to the
very large number of potential parties
proceeding,
this
the notice of
proceeding explicity mentioned the fact that the
investigation could be conducted by means of
sampling. As a result, from the initial stages of the
investigation, cooperation was sought (via national
producers
from 89 Community
federations)
selected amongst the 188 Community producers
supporting the complaint.

(76)

(77)

way and in conformity with the relevant provisions
of the Basic Regulation.

E. INJURY

1. General remark

To the extent possible, all Eurostat figures used in
the calculations detailled below (relating to import
volumes, values and thus prices per pair) were
corrected on the basis of data available (provided
by the Taric database), in order to exclude footwear
involving special technology (none of which, as
explained in recital 15,
covered by this
proceeding).

is

2. Consumption in the Community

In calculating the total Community consumption
the
subject
of
following data were added together:

investigation,

footwear

to this

Meaningful replies were received from 87 produ-
cers (referred to as ‘the first group' in recital 5),
from which,
for verification purposes, 15 were
selected and their replies subjected to in-depth
on-the-spot
latter group of
producters is referred to as ‘the verification sample'
in recital 5).

verifications

(this

It should be noted that the provisions of the Basic
Regulation do not require in the case of sampling
that relevant data be collected from Community
producers representing a major proportion of total
Community production as defined in Articles 4(1)
and 5(4) of the Basic Regulation. Rather, Article
17(1) of the Basic Regulation provides for the poss-
ibility of collecting data from a sample which is
representative of
the Community industry. The
very purpose of such sampling provisions is to
allow for a situation in which the share of produc-
tion represented by such sampled Community
producers could, depending on the circumstances,
be
total
less
substantially
Community production.

25 % of

than

In any event, the 87 Community producers in the
first group alone were found to account for 25,7 %
of Community output of the like product, thus
qualifying, in the absence of declared opposition to
the complaint, as the Community industry.

3. Conclusion

(75)

In the light of the above, it is concluded that the
representative
investigated
Community industry was assessed in a reasonable

nature

the

of

producers

(cid:190) the total sales volume in the Community of all
Community
product
concerned (using information obtained from
the Community footwear producers’ national
federations
for
exports outside the Community as per Euro-
stat), and

in combination with data

the

of

(cid:190) the total imports into the Community of the
product
countries
including the People’s Republic of China,
Indonesia and Thailand.

from third

concerned

On this basis, Community consumption of
the
product concerned was found to have declined
from 327 million pairs in 1991 to 307 million
pairs in the investigation period, a decrease of
approximately 6 %.

3. Volume and market

share of dumped

imports during the investigation period

(78)

The total volume of
the footwear
subject to the present investigation originating in
the People’s Republic of China was 28,6 million
pairs in the investigation period.

imports for

imports

The total volume of
the product
concerned originating in Indonesia stood at 15,9
million pairs in the investigation period whilst the
corresponding figure for Thailand was 11,8 million
pairs.

for

Calculated on the basis of Community consump-
the
tion (see preceding recital),
Community market held, during the investigation
period, by Chinese imports was 9,3 % whilst that
of Indonesia was 5,2 % and Thailand 3,9 %.

the share of

28. 2. 98

EN

Official Journal of the European Communities

L 60/13

4. Cumulation

(79)

In accordance with Article 3(4) of the Basic Regu-
lation, an examination was made as to whether or
not the effect of the dumped imports from the
three countries concerned should be assessed
cumulatively.

corresponds to an increase in combined market
share from 11,8 % in 1991 to 18,4 % during the
investigation period.

6. Prices of dumped imports and undercut-

ting

As can be seen from the preceding recital, the
individual volume of imports from the People’s
Republic of China and Indonesia and their market
shares
in the Community (9,3 % and 5,2 %
respectively) were not negligible during the invest-
igation period. Furthermore, dumping margins
which were more than de minimis were estab-
lished for both countries (see recitals 56 and 38 to
41).

Similarly, although not as large as that of the other
two countries concerned by this investigation and
in spite of a slight decline over the period 1991 to
1994, the Thai market share in the Community
was 3,9 %, i.e. more than de minimis, as was the
residual dumping margin of 50 % established for
this country (see recital 70).

(80)

The investigation also showed that the conditions
of competition on the Community market for the
footwear imported from the People’s Republic of
China, Indonesia and Thailand are similar. Indeed,
the Chinese, Indonesian, Thai and Community
products are:

(cid:190) interchangeable from the consumer’s point of

view,

(cid:190) offered for sale in the same geographical areas

of the Community,

(cid:190) sold through the same distribution channels,

(cid:190) simultaneously present on the Community

market,

(cid:190) generally aimed at the same segment of the
Community footwear market (i.e. the low to
lower-middle priced part of the market).

In addition,
the Chinese, Indonesian and Thai
products are sold at prices found to undercut the
Community industry’s prices (see recital 86).

(81) On this basis, it is considered that cumulation is
the
warranted and, accordingly,
dumped imports from all three countries should be
assessed jointly for the purpose of injury analysis.

the effect of

5. Cumulated volume,
and

developments

cumulated market
dumped

of

share
imports

(82)

The total volume of imports from the People’s
Republic of China, Indonesia and Thailand taken
together rose from 38,6 million pairs in 1991 to
56,3 million pairs during the investigation period,
a significant increase of more than 45 %. This

(83) Given the different product mixes which can occur
within each of the four CN codes in question (see
recital 17), any general examination of the evolu-
tion of
the import prices of dumped imports
between 1991 and 1994 using only the cor-
responding categories of footwear should be viewed
with caution. To this end, using information
received from importers and importers’ organisa-
tions, the investigation showed that there had been
a gradual shift to more sophisticated, up-market
types of
footwear being imported, with a cor-
responding overall increase in import prices.

(84) As regards price undercutting, comparisons were
first made on a category-by-category basis between
the CIF import price (as reported by Eurostat, after
correction in order to exclude footwear involving
special
technology as explained in recital 76),
adjusted to duty paid, customer-delivered levels
and the selling prices in the Community of the
Community producers at the same level of trade
(i.e. to distributors/wholesalers).

producers/exporters

A second undercutting exercise was also carried
out by selecting those Chinese, Indonesian and
Thai models exported to the Community in the
greatest volumes by the three Thai cooperating
producers/exporters and the Chinese and Indo-
nesian
dumping
samples (grouped into 17 representative so-called
‘families' of footwear, for example; men’s lace-up
comparing
adjusted,
and
town shoes)
customer-delivered
the
price
Community to those of identical or comparable
models produced by the Community producers in
the verification sample.

their
levels within

the

in

(85)

In adjusting import prices
to the duty paid,
customer-delivered level, account was taken of the
normal duty rate or the duty rate applicable under
the GSP (as appropriate), as well as a margin for all
unloading,
transport and other ancillary costs
incurred specifically in relation with the imports,
together with the profits achieved by the importers.
On the basis of the evidence examined in respect
of the product concerned 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 2 % upwards, reflecting the variable costs
incurred, and then increased by an amount of ECU
0,96 per pair, reflecting the average fixed amount
of costs incurred, plus the customs duty.

L 60/14

EN

Official Journal of the European Communities

28. 2. 98

(86)

The two methods used to determine undercutting
described in recital 84 resulted in the establish-
ment of average undercutting margins (expressed
as a percentage of
the Community industry’s
prices) in excess of 25 % for the People’s Republic
of China and of 10 % for both Indonesia and
Thailand.

(91)

the Community minus
Community).

exports

outside

the

Turnover

in sales

value of

The decline
the product
concerned was found to be 16 % between 1991
and the investigation period. Such a decline,
although less marked than in terms of volume, was
nevertheless significant.

Market share

(92) On the basis of consumption figures as determined
in recital 77 and using data obtained from national
federations and Eurostat,
the
market share of the Community producers on the
Community market went down from 64,5 % in
1991 to 53,3 % during the investigation period.

it was found that

Prices of the Community producers

(93) As explained in recital 83 concerning the prices of
imports, it is considered that given the different
product mixes which can occur within each of the
four CN codes in question, any general exam-
ination of the evolution of the import prices of
dumped imports between 1991 and 1994 using
only the categories of footwear should be viewed
with caution. This also applies when analysing on
this aggregate level data relating to the Community
industry.

On a category basis, the investigation did, however,
show certain trends in the Community producers’
prices since it was found that only the Community
producers’ weighted average selling price of the
product belonging to category 1 (‘unisex' footwear)
went up by a significant amount between 1991 and
the investigation period. This price increase is
likely to result from the fact that this category
includes a very large proportion of fashion foot-
wear, very popular with young people, which have
been very much in demand during recent years.

the prices of

On the other hand,
the products
belonging to the other categories either remained
stable or only went up slightly, but in any case this
increase has been below the average level of infla-
tion for the period under consideration and does
not reflect the increase in the production costs.
The conclusion can therefore be drawn that prices
have been suppressed.

Profitability

7. Conclusion concerning the volume of
dumped imports and their effect on prices
in the Community

(87) As has been shown above, there was a significant
increase of more than 45 % in the combined
volume of dumped imports from the three coun-
tries in question between 1991 and the invest-
igation period. Consumption, however, declined by
about 6 % over the same time scale.

Even though certain increases in import prices
which reflected the evolution of the product-mix
where observed over the four year period under
examination,
these prices were nevertheless at
highly dumped levels which significantly undercut
the prices of the Community producers.

8. Situation of the Community industry

Preliminary remark

(88) As concerns the type of data given below, it should
be noted that not all economic factors collected at
the level of individual Community producers in
the first group and the verification sample were
found to have a bearing on the state of
the
Community footwear industry for the determina-
tion of injury. For example, because production
takes place to order, stocks were usually not held
and consequently were found to have very little
meaning in the injury analysis, as was the case with
capacity and capacity utilisation (since idle capacity
cannot be strictly allocated only to the like
product). Thus, in accordance with Article 3(5) of
the Basic Regulation, in the analysis of the situ-
ation of
the Community industry, only those
economic factors which were found to have a
bearing on the state of this particular industry were
taken into consideration.

Production

(89)

The information received from the national federa-
tions showed that production in the Community
fell from approximately 259 million pairs in 1991
to 224 millions pairs in the investigation period, a
drop of 14 %.

Sales volume

(90)

The data obtained from the national federations
and Eurostat showed a massive decline in sales
volume of 22 % between 1991 and the invest-
igation period (calculated using total production in

(94)

The profitability (in relation to turnover) on sales
for the
in the Community of
Community produces in the first group increased
slightly from +6,8 % in 1991 to +7,3 % during
the investigation period. The Community produ-

the like product

28. 2. 98

EN

Official Journal of the European Communities

L 60/15

cers in the verification sample also confirmed this
relatively stable trend with margins going up from
+8,1 % to +8,2 %. The Community producers’
capacity to maintain their profitability in the face
of the abovementioned price suppression is the
result of a considerable effort of rationalisation and
cost
the surviving
Community producers.

reduction on the part of

are

More importantly, the cost structure of this partic-
ular industry explains the fact that its operating
businesses
either profitable or disappear.
Indeed, with direct expenses (raw materials and
labour etc.) representing up to 80 % of the cost of
a shoe, footwear is only made to order, after a
direct costing showing a sufficient profit for each
order. In this situation, no company can show
losses for more than a few months without being
forced to close down. This explains why the
Community producers in the first group and the
verification sample were, on average, not
loss
making.

This cost structure together with the increasing
leverage of a number of large retailers-importers
who are able to select and change their source of
supply for any order on the sole basis of price (in
the case of the People’s Republic of China, Indo-
nesia
are key
elements and explain the extreme vulnerability of
this labour intensive industry which has no means,
over an extended period of time, to resist sustained
pressure from low-priced, dumped imports.

and Thailand dumped prices)

Community industry had therefore no choice but
to try to maintain profitability at the expense of
market share. This was still feasible and profit-
ability remained stable at around 7 % over the
period covered since, despite a fall of more than 11
percentage points in their market share since 1991,
the Community producers still held 53 % of the
Community market in 1994.

Employment and company closures

(95)

company

developments

In the light of the above, the analysis of employ-
closures
and
ment
appeared to be particularly relevant. Information
received from the national federations showed that
employment in the sector producing the footwear
under investigation declined from about 127 250
people in 1991 to 114 000 people in the invest-
igation period, a drop of approximately 10 %.

As concerns the number of Community producers
manufacturing the footwear subject to the current
investigation which ceased production between
1991 and 1994, details of the closure of 67 factories
in seven Member States (Belgium, France, Italy, the

Netherlands, Portugal, Spain and the United
Kingdom) were received from national producers’
federations. Given that some Member States do not
keep detailed statistics for very small companies,
the true figure on company closures may have
been much higher.

9. Conclusions on injury

(96) All of the economic indicators mentioned above,
based on information supplied by the national
footwear producers federations clearly show that
the Community producers’ situation has deteri-
orated between 1991 and the investigation period
(i.e. as regards production, sales volume, market
share, employment and company closures).

(97)

Figures from individual companies (such as those
relating to profitability), examined at the end of the
injury analysis period, relate to ‘survivors' and thus
the most resilient producers. It follows that such
data understate the level of injury as a whole as far
as the entire Community production of the foot-
wear under investigation is concerned. It is only
when the global situation is examined that the
disapperarance of producers,
the reduction in
production, sales and employment and thus the
full extent of the injury becomes evident.

‘well-being' of

In addition, any apparent
the
Community producers belonging to the first group
or the verification sample may also have come
about due to their taking over part of the market
share previously held by the Community producers
which went out of business during the four year
period under examination. These Community
their
producers have also been obliged to shift
production towards
footwear
which, up until the present time, have been less
subject to the pressure exerted by dumped imports
(e.g. fashion footwear which has formed one of the
‘niches' on the market).

certain types of

In this respect, it has been claimed by a number of
interested parties that the Community producers
have very successfully engaged in a strategy of
specialisation in up-market fashion products. The
result of this is alleged to be that the Community
producers no longer have the capacity to make
the type
large volumes of
produced in the exporting countries concerned by
this proceeding. It is true, that, given the advan-
tages of
their geographical proximity to the
Community markets and their ability to make
quick delivery to meet rising, and very often short-
lived, consumer demand for fashion footwear, it is
to this sector that many of the Community produ-
cers have retreated with all or part of their output.

low-cost product of

L 60/16

EN

Official Journal of the European Communities

28. 2. 98

Some producers have had to relinquish altogether
production of less fashionable, cheaper and less
value-added but high volume lines to the imports
from outside the Community, whilst others have
tried to produce a mixture of fashion footwear and
high volume, ‘classic' lines. These ‘classic' lines are
indeed the only ones generating the volumes
required
and
for maintaining
commercial structure of a viable size.

an industrial

(98)

therefore concluded that, overall,

the
It was
Community producers of
the footwear under
investigation have suffered injury which is suf-
ficient for it to be classified as material.

2. Effect of other factors

(102) Consideration has also been given to the question
of whether factors other than the dumped imports
from the People’s Republic of China, Indonesia
and Thailand might have caused, or contributed to,
the material
injury suffered by the Community
industry in order to ensure that any injury caused
by other factors is not attributed to the dumped
imports.

(a) Imports from other third countries

F. CAUSATION

(99)

In accordance with Article 3 of the Basic Regula-
tion, it was examined whether the material injury
suffered by the Community industry was caused by
the Chinese,
Indonesian and Thai dumped
imports, or whether other factors had caused or
contributed to that injury.

1. Effect of the dumped imports

(100)

In examining the effects of the dumped imports, it
has to be borne in mind that, because of the nature
of
the products concerned and the leverage of
certain large distributors, the Community footwear
market is, at least at wholesale level, transparent
and price sensitive. Moreover, as mentioned in
recital 80, the imports of dumped products from
the countries concerned are affecting mainly the
lower to lower-middle end of the market, which is
generally recognised as being the most sensitive to
price variations and, consequently,
the segment
where sales at low prices have inevitably substitu-
tion effects.

In addition, it should be recalled that the footwear
subject to this proceeding which is produced in the
Community and the equivalent footwear imported
from the People’s Republic of China, Indonesia
and Thailand are in direct competition with each
other since they are sold through the same sales
and there
channels
the
are
consumer,
few perceptible or significant differ-
ences in quality between the imported products
and the products produced in the Community.

very often,

for

(103) The question whether

imports

from countries
other than the three currently under investigation
injury
may have contributed to the material
suffered by the Community industry was
first
examined. In this respect, particular reference was
made by certain interested parties to imports into
the Community from Vietnam. Eurostat data
showed (after correction in order to exclude foot-
wear involving special technology as explained in
the volume of
recital 76)
imports in the
that
Community of
the products concerned from
Vietnam increased very significantly from approxi-
mately 30 000 pairs in 1991 to 15,9 million pairs
in 1994.

information on the product mix,

Given the surge in the volume of imports from
Vietnam, it cannot be denied that these imports
may also have had a detrimental effect on the
situation of the Community industry. However, as
concerns the prices of these imports, given the lack
of
it was not
possible to establish reasonable data upon which
conclusions could be drawn.
therefore
considered that
the evidence produced to date
concerning the pricing of Vietnamese exports to
to warrant
the Community was
extending the scope of the current investigation to
Vietnam.

insufficient

It was

share of all

third countries

(104) Moreover, it should be noted that the Community
market
including
Vietnam, but excluding the People’s Republic of
China, Indonesia and Thailand, increased by 12 %
between 1991 and 1994, whereas the market share
of the three countries concerned by this invest-
igation increased more substantially, i.e. by 46 %,
during the same period.

(101)

In this context it was found that the increasing
in
volume and market share of
conjunction with the
significant undercutting
found, coincided with the loss of market share and
general decline of the Community industry.

those imports,

It was accordingly concluded that the low-priced,
dumped imports from the countries concerned are
linked to the deteriorating situation of
the
Community industry.

(105)

It is therefore concluded that, even if imports from
other third countries may have contributed to the
injury suffered by the Community industry, their
impact cannot be considered as such as having
link between the dumped
broken the causal
imports from the three countries concerned and
the material
injury suffered by the Community
industry.

28. 2. 98

EN

Official Journal of the European Communities

L 60/17

(106)

(107)

(b) Intra-Community competition

It has been argued by several interested parties that
there was significant internal competition in the
Community between producers in Italy, Portugal
and Spain and producers in the other Member
States and it was for
this reason that certain
Community producers found themselves in an
adverse economic situation. The competitive evalu-
ations of some Member States’ currencies and the
Commission’s decision not to allow the payment
of State aid to the Italian footwear industry (1) on
the ground, inter alia, of its good health, have also
been cited as further indication that any injury the
Community industry might have suffered has been
largely self-inflicted.

should

be made

In addressing the above arguments, however, a
distinction
fair
competition and unfair competition and it should
be recalled that, within the framework of a single
to ensure that
market,
competition
producers
remains fair.

there are mechanisms

between Community

between

the injury
in the assessment of
In addition,
suffered by the Community industry, the situation
of the Community producers of the products in
question in all Member States where these types of
footwear are produced in significant quantities has
this assessment
been considered. The results of
reflect the situation of the Community industry as
a whole. Accordingly, the aggregated data used for
injury assessment would compensate
the
for
in the Community
if any,
internal differences,
industry’s performance. In this respect, it is, for
instance, worth noting that if internal competition
had been the only driving force on the market, the
Community industry’s market share would not
have experienced a decline from 64,5 % in 1991 to
53,3 % in 1994 as the loss of market share by
some would have been the gain of the others.

The investigation has shown that the diminishing
production, market
share, and employment of
producers in some Member States have in no way
been compensated by an improvement of
the
situation of producers in other Member States, as a
number of interested parties have argued.

It must also be stressed that the Commission’s
decision not to allow the granting of a State aid to
the Italian footwear industry was based on an
assessment of this industry as a whole, as opposed
to the segment of the market concerned by the
present
this decision
was based on the impact
that such a measure
might have had on the functioning of the internal

investigation. Furthermore,

(1) Commision Decision 96/542/EC (OJ L 231, 12. 9. 1996, p.

23).

market and specifically acknowledges, inter alia,
the difficult situation of employment in this sector
in all Member States.

(108) Further to the final disclosure, certain interested
parties have argued that, in view of the fact that
certain Community producers reported strongly
negative developments in recent years while others
maintained their turnover, the injury suffered by
the Community industry might result from dispar-
ities in the quality of the companies’ management,
and not from the impact of the dumped imports
concerned.

(109)

some companies perform better
and it

In this respect, it should be stressed that, due to
differences in their product range, it is normal that
not all companies are as acutely confronted with
the competition from the low-priced, dumped
imports. It is also normal that, in a competitive
market,
than
the number of
its precisely
others
that
producers which
Community
competition exists. Moreover, no evidence of
mismanagement
(relating for instance to invest-
ment or employment policies) was found in the
course of
stated above,
internal competition cannot, in particular, be the
cause of the overall decrease in market share of the
Community industry and therefore considered as a
factor breaking the causal
link between the
dumped imports and the injury suffered by the
Community industry.

the investigation. As

ensures

(c) Recourse to subcontracting of labour intensive

operations

(110)

In addition, it was also argued that a number of
Community producers have transferred some of
their more labour intensive operations to third
countries with low labour costs,
thereby con-
tributing to the overall
injury suffered by the
Community industry, particularly with regard to
employment. In this regard, it is considered that
the fact that some producers have had to resort to
such a course of action, which is a defensive step
taken in order to keep costs at levels which enable
them to compete with the low-priced imports, is
additional evidence of the pressure exerted by the
dumped imports.

3. Conclusions on causation

(111) Although certain factors other

than dumped
imports from the countries concerned may have
the
contributed
Community industry, it is nevertheless concluded
that a causal
link exists between low-priced,
dumped imports from the People’s Republic of

suffered

injury

the

by

to

L 60/18

EN

Official Journal of the European Communities

28. 2. 98

China, Indonesia and Thailand, taken in isolation,
and the material injury suffered by the Community
industry. This conclusion is based on the various
elements set out above and in particular the level
of price undercutting, the significant market share
gained by these countries (and the corresponding
loss in market share suffered by the Community
industry) and the huge increase in the quantities
concerned which resulted in a great number of
producers situated in the Community being forced
to close. This conclusion is moreover strengthened
by the fact
the
Community footwear industry producing the prod-
ucts concerned is not in question, as evidenced,
inter alia, by the achievements of the Community
producers
the
export markets
Community (exports in volume by the Community
industry indeed rose by 25 % between 1991 and
1994).

the overall efficiency of

outside

that

on

G. COMMUNITY INTEREST

(112) On the basis of all evidence submitted, an exam-
ination was made of whether, despite the conclu-
sion on dumping and injury caused thereby,
compelling reasons existed which would lead to
the conclusion that it was not in the Community
interest to impose measures in this particular case.
For this purpose, and pursuant to Article 21(1) of
the Basic Regulation, the impact of possible meas-
ures for all parties concerned as well as the con-
sequences of not taking measures were examined.

In making such an appreciation, the need to elim-
inate the trade distorting effects of
injurious
dumping and to restore effective competition was
given special consideration.

1. Impact on the Community industry and its

suppliers

(a) Interest of the Community industry

(113) Without measures to correct

the effect of

the
dumped Chinese, Indonesian and Thai imports, it
is considered inevitable that the position of the
Community producers would further deteriorate.
More Community producers,
and finally the
Community industry as a whole, would begin to
losses, with the result that there
incur financial
would be further factory closures and considerable
job losses in addition to those resulting from ra-
improvements. It
tionalisation and technological

should also be borne in mind that if fewer produ-
cers are present on the Community market,
competition may be reduced commensurately.

(114) Certain interested parties argued that, given the
mobility of the footwear industry world-wide, anti-
dumping measures against the People’s Republic
of China, Indonesia and Thailand would have no
positive effect on the situation of the Community
industry owing to a likely shift of supply to other
cheap labour third countries such as Bangladesh,
India or Vietnam. It has been argued moreover that
the situation of the industry producing footwear
with uppers of leather or plastics was comparable
in this respect to that of the synthetic handbags
manufacturers and that accordingly the Council
should also in the present case refrain from taking
measures (1).

imports

(115) 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 com-
pensate for the importers’ constant search of coun-
tries with the lowest
labour costs. This could
however not be the case in the face of the surge in
dumped
countries
from the
concerned by this proceeding. As far as the alleged
parallelism between the present proceeding and
the synthetic handbags case is concerned, it should
be stressed that the substantial 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 foot-
wear, clearly exclude any reasonable and mean-
ingful comparison between the two industries. The
Council cannot accept therefore that for the sake
of consistency, it should refrain from taking meas-
ures in the present case.

three

In addition, the fact that producers/exporters could
transfer their production facilities to other coun-
tries in order to avoid payment of anti-dumping
duties is not, in itself, a sufficient reason for the
Council not to impose measures in a case where
exports have been found to have been dumped on
and to have caused
the Community market
material injury to the Community industry. Were
such a situation to arise, the Community industry
could lodge a complaint requesting, for instance,
the initiation of an anti-dumping proceeding
against such imports or the initiation of circum-
vention investigation in accordance with Article 13
of the Basic Regulation.

It was further argued that if measures were to be
imposed, Chinese, Indonesian and Thai producers/
exporters would switch to the production of those
types of footwear where the Community producers
have a technological and fashion-related advantage,
thereby causing further injury to the Community
industry.

(116)

(1) See recitals 105 and 106 of Council Regulation (EC) No

1567/97 (OJ L 208, 2. 8. 1997, p. 31).

28. 2. 98

EN

Official Journal of the European Communities

L 60/19

Leaving aside the fact that this type of argument
cannot lead to the conclusion that the Council
should refrain from adopting measures in the pres-
injurious dumping, there is nothing to
ence of
that, even in the absence of measures,
suggest
producers/exporters in the abovementioned coun-
tries will not, in the future, decide to expand the
range of
footwear which they manufacture and
export. Indeed, a number of submissions by im-
porters pointed out that a trend towards higher
quality imported goods, with correspondingly
higher prices had been observed. As has been
mentioned previously,
trend had already
started before the investigation period.

this

(a) Impact in absolute terms

it

(120) Firstly, as far as footwear prices to distributors are
concerned,
is likely that, given the level of
competition and the number of suppliers either in
the Community (where the Community industry
still has a 53,3 % market share), or in third coun-
tries not concerned by this proceeding (imports
from which total a 28,3 % market share), these
suppliers would not be able to significantly
increase their prices without running the risk of
losing market share.

(b) Interest

of

the
Community industry (with raw materials and
machinery)

companies

supplying

(117)

It has been a notable feature of this investigation
that
raw
the Community producers (and their
material or component suppliers etc.)
in many
tend to be grouped together
Member States
geographically. The closure of one factory can
therefore have an adverse knock-on effect on other
companies in the area in particular with regard to
employment.

(118)

It has been argued that,
should measures be
imposed, this would jeopardise Community foot-
wear machinery producers’ sales to the People’s
Republic of China, Indonesia and Thailand.

As far as the suppliers of
footwear production
machinery are concerned, no evidence has been
received showing that producers/exporters in the
People’s Republic of China, Indonesia or Thailand
are the main or most
the
Community equipment manufacturers.

important clients of

it

should be noted that

In any event,
the
Community industry is clearly investing in auto-
mation, and in the injection process in particular.
This automation, which contributes to the techno-
logical
the footwear manufac-
turing process in the Community, is linked with
investments in machines and moulds produced in
the Community.

improvement of

(121)

2. Impact on consumers

(119) Although no representations were received from
consumer organisations following the publication
of the notice of initiation of this proceeding, some
parties have argued that anti-dumping measures
would seriously affect Community consumers,
particularly those with the lowest income.

As for Indonesia and Thailand, it should be borne
in mind that the injury-elimination levels estab-
lished for these countries are considerably lower
than for the People’s Republic of China,
their
average import price being during the investigation
re-
period ECU 6,97 and ECU 7,16 per pair
spectively. Given that the market share of footwear
originating in the People’s Republic of China is
9,3 %, (with an average price of ECU 5,47 per pair
during the investigation period) and in view of the
duty level proposed, the average maximum foresee-
able impact of the measures proposed on the price
of the footwear concerned as a whole amounts to
ECU 0,4 per pair.

Thus, consumers would only have to pay an addi-
tional amount of ECU 0,4 per pair if distributors
decide to keep their margins unchanged and pass
the increased costs on to the consumer. Since the
average consumption of the footwear concerned in
the Community is below one pair per person per
year, the impact of the proposed measures on the
average consumer’s annual budget would be clearly
marginal.

(b) Impact in relative terms, effect of price on

consumption

In relative terms, the basis of the calculations was
the average price of
the footwear concerned at
delivered-warehouse distributor level, namely ECU
13,5 per pair, which takes into account, for the
imports, the adjustment for differences in level of
trade referred to in recital 85 of this Regulation.
Using the lowest mark-up found among the
distribution channels analysed below, i.e. 125 %, it
the
is
consumer of the product concerned is above ECU
30 per pair, including all costs and duties incurred
between importation and sale
final
customer. As a consequence, the impact of the
anti-dumping duties on the price to the consumer
would amount to approximately 1,3 %.

estimated that

average price

the

the

for

to

This argument concerning the foreseeable impact
of measures on the consumers’ buying price has
been examined in detail. The results of this exam-
ination, which as been based on the information
available, are as follows:

This percentage should, as explained above, be
examined in the light both of the absolute value of
the increase (ECU 0,4 per pair) and the general
evolution of prices over the injury investigation
period. Indeed, over the four years examined, and

L 60/20

EN

Official Journal of the European Communities

28. 2. 98

due to the penetration of the dumped imports, the
average market price
delivered-warehouse
distributor level decreased in absolute terms, this
decrease being of more than 10 % when adjusted
in order to take into consideration the general
inflation rate.

at

(122)

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
invest-
igation, to developments in the general level of
prices. Indeed,
the abovementioned decrease in
prices did not prevent the global consumption of
the product concerned decreasing by 6 %.

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 level of prices. It is therefore doubtful that the
full reflection of the duty, i.e. a maximum price
increase of 1,3 %, will have any significant impact
trends of demand on the
on the
Community market.

current

(123)

In the absence of any other element or reaction
from consumer organisations, it was concluded that
the impact of
the proposed measures on the
consumer of the footwear concerned was likely to
be minimal.

3. Impact on distribution

(a) Impact on distribution as a whole

(124)

It has been argued that the imposition of measures
would also have a strong negative impact on
importers. More generally, diverging views have
been expressed on the situation of the whole foot-
wear distribution chain which, it has been argued,
is an activity with a far greater significance in the
Community than footwear production, in terms of
both turnover and employment.

footwear,

for a given quantity of

It should first be pointed out that, by its very
nature,
the
distribution chain will have a higher turnover than
the manufacturing companies it buys from, simply
by virtue of its distribution margin. Secondly, the
employement figures for footwear distribution in
general, which include sales of all types of foot-
wear, cannot be compared with those of
the
Community production of the product concerned
only.

in

As final consumers in the Community do not buy
the
shoes
significant
anti-
Community, negative
dumping duties for distribution as a whole could
only
reduction of
consumption and therefore of turnover, or a down-

quantites
consequences

significant

from a

outside

result

of

ward pressure on distribution margins in order to
minimise an increase in consumer prices and a
decrease in consumption.

As explained above, in the 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 as a result of
the distribution
anti-dumping measures, even if
sector were to maintain its current margins.

Taken as a whole, it can therefore be concluded
the effects of possible measures on the
that
distribution chain will be very limited. Care was
however taken to make an in-depth analysis in the
light of the structure of footwear distribution in the
Community.

(b) Structure of
Community

footwear distribution in the

(125) Footwear

in

the

distribution

Community
comprises four different channels of sale to the
end customer: branded retail chains, independent
retailers, non-specialised supermarkets and other
types of generally non-specialised distribution, for
example clothing stores.

(i) I n d e p e n d e n t

r e t a i l e r s

generally buying

retailers,
In the

(126) The traditional distribution channel consists of
from
independent
wholesalers.
evolution of 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
purchasing associations while retaining their inde-
pendence.

individual

As far as the retailers themselves are concerned,
they face an adverse competitive situation due to
both their
lack of price control on
suppliers and the high margins of between 150 %
to 200 % that are required to cover the fairly high
costs of operating in urban, often upmarket, areas.
In fact, they have lost ground in a certain number
of Member States to more recent forms of distribu-
tion falling within the other three categories and in
particular the branded chains.

However, as a consequence of their strong pres-
ence in some other Member States and their situ-
ation at the upper end of the market where they
maintain a continuous commercial
relationship
with their customers, it should be noted that inde-
pendent retailers are still, at least in terms of value
added and employment (over 250 000 persons), the
most
in the
Community, although probably not the largest one
in terms of market share in volume.

important distribution channel

28. 2. 98

EN

Official Journal of the European Communities

L 60/21

(ii) B r a n d e d r e t a i l c h a i n s

chains, although to a lesser extent than the large
general city centre stores.

(127) These chains, which are sometimes also involved
in production in the Community, are generally
owned by one or two large companies in each
country, which in turn own several brands and
operate across
range. They
the whole market
operate from out-of-town super or discount stores,
which, because of their sales volume, prices and
specialisation, can resist the non-specialised super-
markets’ pressure.

(128)

The branded retail chains also sell through town
centre shops replacing the independent retailers
standardised premises which
with less costly,
accommodate the need, on the part of
some
customers, for an alternative retail buying environ-
ment
to discount stores. Due to their leverage,
their access to world supply since they import on
their own account and the relatively low margins
with which they operate, generally around 25 % of
the cost of sales for the central trading arm and
100 % on average for the shops, branded retail
chains are able to gain market share rapidly once
they enter a market and to achieve growth rates in
excess of 5 % per year.

(iii) N o n - s p e c i a l i s e d s u p e r m a r k e t s

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 super-
markets 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 products. Due to the additional level
of the importer and the fixed part of the costs
imports from the countries concerned
incurred,
through this
sales channel usually reach the
consumer at a price which is three times higher
than the CIF level.

(iv) O t h e r

s a l e s c h a n n e l s

acquired

importance

(129) Other sales channels, such as mail order com-
panies or garment stores, have gained significance
in certain Member States but none of these has
a
individually
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 foot-
wear in their stores as a fashion branded accessory,
generally with higher margins than on their usual
clothing articles. Due to the fashion aspect of these
sales, they are in competition with the branded

on

(c) Specific impact of the proposed measures on the

various sales channels

(130) As regards the independent retailers, which still
in
constitute the largest source of employment
Community footwear distribution,
the general
conclusion presented in recital 124 is strengthened
by the fact that a low proportion of their supplies
of the product concerned usually originates in the
People’s Republic of China, Indonesia or Thailand.
It should be added that they are grouped in a
confederation representing eight 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 on their behalf.

(131) The companies owning branded chains have
contested the need for the imposition of anti-
dumping duties. Although the general conclusion
is also applicable to them, the fact that some of
them rely on the dumped imports for the supply
the product concerned more than the inde-
of
pendent retailers explains why, within the distribu-
tion chain, they could fear a negative effect of the
measures on their comparative competitive situ-
ation.

The direct effect of possible measures on the
financial situation of these companies would be
negligible if the amount of the duty were to be
fully passed on to the consumer. Indirect adverse
financial effects could only be expected if, due to
this price increase, consumers were to significantly
reduce their purchases of the product concerned.
However, should this happen, it would only be to a
limited extent, as explained in recital 122.

Moreover, the product concerned is never the sole
source of revenue for these specialised shops and,
due to its particularly low prices, represents less
the cooperating
the turnover of
than 12 % of
companies operating branded chains.
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 re-oriented to footwear with a
higher price, with probably a higher margin in
absolute terms.

(132) 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.

L 60/22

EN

Official Journal of the European Communities

28. 2. 98

(133) The situation of

the importers supplying these
non-specialised distribution channels was exam-
ined, as the portion of their turnover based on
products imported from the countries concerned
was found to be significant. 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 footwear distribu-
tion as a whole, these importers will be able to
benefit from any market situation, and continue to
supply their clients with Chinese, Indonesian or
Thai imports, or any non-dumped products, as well
as Community-produced ones.

(134)

In conclusion, it could not be established that the
imposition of anti-dumping measures on the foot-
wear concerned would be such as to affect signi-
ficantly the financial situation of either the foot-
wear distribution chain as a whole or of a part of it.

4. Conclusion
interest

concerning

Community

(EC) No 519/94 (1),
period.

i.e. during the investigation

interpretation of

(137) The Community Institutions cannot subscribe to
this point of view which, they consider, is based on
an incorrect
the rationale of
Regulation (EC) No 519/94. That Regulation intro-
duced a new trade regime which led to the aboli-
tion of some 4 617 national restrictions provided
for under the previous regime vis-(cid:133)-vis non-market
economy countries, almost all of which concerned
the People’s Republic of China. These restrictions
were replaced by Community quotas for seven
Chinese products and Community surveillance for
26 other products.

Overall, these autonomous quotas, restricted to a
few particularly sensitive products, cannot be
considered as an exception to some hypothetical
liberal trading regime with the People’s Republic
of China but are part of the means of achieving the
goal of a more liberal and, above all, more uniform
trading regime with the People’s Republic of
China, while any action under the Basic Regula-
tion is directed against injurious dumping.

Indeed,

question.

(135) Having examined all the various interests involved,
for
is considered that positive reasons exist
it
taking measures and that there are no compelling
the dumped
reasons not
to take action against
imports
the
leaving
in
Community industry without adequate protection
against the injurious dumping would add to the
difficulties of this industry and could lead to its
disappearance
the
Community. The limited price increase resulting
anti-
for consumers
dumping measures can by no means be considered
to be of the same magnitude as the cost of the total
disappearance of a major Community industry.

from the imposition of

relocation

outside

or

defence

instrument.

Accordingly, the injury which the imposition of
anti-dumping measures would attempt to remedy
has not been addressed by means of another
commercial
Therefore,
following an anti-dumping investigation which has
shown that measures are warranted with a view to
remedying injurious dumping, the imposition of
such measures may be considered, irrespective of
the existence of any quantitative restrictions which
may be applicable to the products in question.
This conclusion had however to be subjected to a
further analysis, from an economic angle.

Finally, in view of, inter alia, the time which has
elapsed since the completion of the investigation
of dumping and injury, it is considered appropriate
that definitive anti-dumping duties on the imports
of the product concerned be directly imposed, i.e.
without resorting to the intermediate step of provi-
sional duties.

H. DEFINITIVE DUTY

1. Simultaneous application of anti-dumping
measures and quantitative restrictions

(a) Legal aspects

(136) Certain interested parties argued that no anti-
dumping measures should be imposed on imports
of the products subject to the present investigation
originating in the People’s Republic of China since
they are already subject
to a Community-wide
quantitative quota imposed by Council Regulation

(b) Economic aspects (impact of the quotas on

import trends)

(138) Data available when preliminary findings were
established (restricted to 1995) showed that, after
the end of the investigation period, import volume
from the People’s Republic of China had decreased
appeared to have
significantly, while prices
increased.

to warrant

considered as

circumstances were

suf-
These
an additional
ficiently exceptional
examination, on the basis of the most recent data
available, of the trends in imports which occurred
after the investigation period. During the time
needed to carry out this additional examination, it
to impose any
was considered appropriate not
provisional measures.

(1) OJ L 67, 10. 3. 1994, p. 89.

28. 2. 98

EN

Official Journal of the European Communities

L 60/23

(139)

In order to examine the import trends for the
product concerned in the two years following the
imposition of the quota, consideration was given to
some methodological points:

First, since the quota is allocated on an annual
basis and for calendar years, estimates on the basis
of partial data corresponding to only some months
of 1996 were considered as insufficiently accurate.
analysis detailed below was
Accordingly,
the
carried out on the basis of
full-year data
concerning both 1995 and 1996 and could only be
completed when such data were available for 1996.

Secondly, Regulation (EC) No 519/94, as amended,
while imposing quantitative restrictions on certain
falling within the same nomenclature
footwear
subheadings as those concerned by the present
proceeding, excluded from these restrictions foot-
wear involving ‘special technology', which is by
definition sold at least at ECU 9 (originally ECU
12) per pair at CIF level. As explained in recital 15,
footwear intended for the same use and with the
same characteristics as footwear involving special
technology, but
its price, was
irrespective of
excluded from the present anti-dumping invest-
igation.

(140) For the years 1995 and 1996, footwear involving
technology was excluded from the total
special
imports reported under the CN codes concerned,
on the basis of TARIC data, in order to establish
the import volumes and values for the product
concerned. In the absence of complete TARIC
statistics before 1995, corrections were made for
previous years,
taking that year as a reference.
When comparing figures concerning imports from
the People’s Republic of China in 1995 and 1996
with those referring to the years prior to the impo-
sition of the quota, two conclusions can be drawn:

As foreseen, the quota had an obvious impact on
import volumes from the People’s Republic of
China, which declined most noticeably between
1994 and 1995 from 28,6 to 16,1 million pairs. In
more detail, import volumes decreased for all four
categories of the product concerned, corresponding
to the four CN codes, between 1994 and 1995.
However, the volumes imported increased again
between 1995 and 1996, where they reached 19,1
million pairs.

Furthermore, and more significantly in the context
of an anti-dumping proceeding, prices were not
found to have increased as a consequence of the
implementation of the quota. Although one could
have expected prices to rise in parallel
to the
decrease in import volumes imposed by the quota,
the average
no such thing happened.

Indeed,

import price remained stable following the imposi-
tion of the quota, ranging from ECU 5,75 per pair
in 1993, peak year for the volumes, to ECU 5,69
per pair in 1996. For none of the four categories
the
concerned could a change in the trend of
import price from the People’s Republic of China
be observed. It should also be noted that, of the
exporting countries concerned, the Chinese price
levels are, by far, the lowest.

(141) Within the four CN codes analysed, it could not
be established either that a progressive shift
to
footwear involving special technology, which was
excluded from the investigation and highly priced,
had taken place, which could have explained the
stagnation of the import price for the remaining
products.
footwear
involving special technology in the total imports of
the codes concerned remained stable between 1995
and 1996 both in volume and value terms.

the proportion of

Indeed,

(142) As far as Thailand and Indonesia are concerned, no
significant change in the overall trends of their
imports and of the competitive conditions on the
market could be established which would contra-
dict the findings detailed in recitals 78 to 87.

(143)

(144)

concerned originating

In the light of the above, it has been concluded
that the impact on import trends of the quantit-
ative restrictions applicable to imports of the foot-
in the People’s
wear
Republic of China is not such as to justify a global
reconsideration of
in the
present case, anti-dumping measures are warranted.
However, as explained below,
is considered
appropriate that, for the determination of the form
for the measures, the above described trends be
taken into account.

the conclusion that,

it

2. Injury elimination level

(a) Methodology

In accordance with Article 9(4) of the Basic Regu-
lation, an examination was carried out with a view
to determining the level of duty which would be
adequate to remove the injury suffered by the
Community
of
as
dumping.

consequence

industry

a

the export
it was considered that
Accordingly,
price of dumped imports should be increased to a
non-injurious price level corresponding to the
Community industry’s cost of production and a
reasonable profit
(hereinafter referred to as the
‘non-injurious price'). As far as the cost of produc-
tion is concerned, it was considered appropriate to
take as a reference the cost of production of the
Community producers in the verification sample.

L 60/24

EN

Official Journal of the European Communities

28. 2. 98

As far as the profit margin is concerned, it was
considered that a margin of 7 % on turnover could
be regarded as an appropriate minimum, taking
into account the need for long-term investment
the amount which the
and, more particularly,
Community industry itself was able to maintain as
a minimum during the four year period under
examination (1991-1994), at
its
market share.

the expense of

(145) As explained in recital 16, at the outset of the
investigation it was considered appropriate to
divide the product in question into categories, and
perform price comparisons on the basis of these
categories. However, as mentioned in recital 84,
during the course of the investigation it appeared
that, as far as the cooperating producers/exporters
were concerned, greater certainty in the product
matching could be achieved by using an even
more detailed product split. To this end, the most
exported models of the Chinese and Indonesian
producers/exporters in the samples and the most
exported models of the cooperating Thai produ-
cers/exporters were selected and separated into 17
families of footwear.

In order to calculate the injury-elimination margin,
the CIF import price, adjusted to duty paid,
customer-delivered levels was compared to the
non-injurious price of the Community producers
at the same level of trade. Given the high level of
non-cooperation
countries
from all
concerned, this calculation was carried out on a
category-by-category basis
co-
operating producers/exporters, on a family-by-
greater precision
family basis whenever
conferred a benefit to them for their cooperation.
It should be noted that import prices were adjusted
to the duty paid, customer-delivered level by using
the adjustment methodology used for the under-
cutting assessment, as set out at recital 85.

and, only

three

the

for

definitive anti-dumping duty for all other imports
originating in the People’s Republic of China.

(c) Indonesia

(148)

co-
injury-elimination margins
Individual
operating producers/exporters in the sample for
Indonesia, expressed as a percentage of CIF price,
were found to range from 0 % to 99,5 %, with an
average to be applied to the cooperating producers/
exporters outside the sample of 33,6 %.

for

For the producers/exporters in the sample, these
margins were found to be, in all cases except two
and PT Indosepamas
(PT Golden Adishoes
Anggun/P.T. Primashoes Ciptakreasi), higher than
the respective dumping margins established. In
accordance with Article 9(4) of the Basic Regula-
tion, the level of the definitive anti-dumping duty
for all cooperating producers/exporters in Indo-
nesia should therefore be based on the dumping
margins established, with the exception of:

(cid:190) PT Golden Adishoes, whose injury-elimination
margin, lower than its dumping margin, was
found to be nil and should thus result in any
definitive anti-dumping duty for this company
being set at 0 %,

and

(cid:190) PT Indosepamas Anggun/PT Primashoes
Ciptakreasi, whose common injury-elimination
margin (2,6 %) was lower than their dumping
margin and should thus constitute the basis for
the definitive anti-dumping duty applicable to
both producers/exporters as explained in recital
24.

(b) People’s Republic of China

(146) Since the dumping margin established for Grosby
(1,3 %) and
(China) Limited was de minimis
should thus result in any definitive anti-dumping
duty for this company to be set at 0 %, no injury-
elimination level calculation was carried out for
Grosby (China) Limited.

(147) As far as other exports from the People’s Republic
of China are concerned, the residual injury-elim-
ination margin was found to be 46,0 %, which is
lower than the established dumping margin and
should therefore, in accordance with Article 9(4) of
the Basic Regulation, constitute the basis for the

that

nor made

(149) As regards the producer/exporter referred to in
recital 31 (PT Kingherlindo) for which facts avail-
able had to be applied, it was also considered in
this context
the partial cooperation it had
shown would have to be distinguished from the
total non-cooperation of those producers in Indo-
nesia which neither replied to the Commission’s
questionnaire
known.
However, since a calculation based on the same
methodology as the one used for dumping calcula-
tions (see recital 40) would have resulted in the
injury-elimination margin
the
company to amount to 26,9 %, i.e. to be higher
than the one found for non-cooperating producers/
exporters, it was considered appropriate to align PT
Kingherlindo’s injury-elimination margin on the
residual
as
explained in the following recital, amounted to
20,3 %.

injury-elimination margin, which,

themselves

applicable

to

28. 2. 98

EN

Official Journal of the European Communities

L 60/25

(150) The injury-elimination margin for non-cooperating
producers/exporters in Indonesia was found to be
than the residual
20,3 % and therefore lower
dumping margin of 50 % established for
this
the residual anti-dumping
country. Accordingly,
duty for imports originating in Indonesia should
be established on the basis of this injury-elimina-
tion margin.

effect on the price of the least injurious imports of
more sophisticated footwear. Therefore, while the
quota has obviously created a safety net against
sudden and potentially injurious surges in imports
of the product concerned, a variable duty appears
to be particularly appropriate as a complementary
safety net against
these
imports.

the injurious prices of

(d) Thailand

cooperating

(151) Since the dumping margins established for the
three
producers/exporters
Thai
(namely CK Shoes and PSR Footwear/Bangkok
Rubber Company) were found to be either nil or
de minimis and should thus result in any definitive
anti-dumping duties for these producers/exporters
being set at 0 %, no injury-elimination level calcu-
lations were carried out
for producers/exporters
concerned.

(152) For Thai non-cooperating producers/exporters, the
injury-elimination margin was found to be 24,7 %,
i.e.
lower than the residual dumping margin of
50 % established for this country. Accordingly, the
residual anti-dumping duty for imports originating
in Thailand should be established on the basis of
this injury-elimination margin.

3. Form of definitive duties

(153) On the basis of the analysis detailed in recitals 138
to 143, it appeared that while the imposition of the
quota had the obvious desired effect of limiting
import volumes of the product concerned origin-
ating in the People’s Republic of China and thus
the cumulated volumes originating in the three
countries concerned, it had no apparent effect on
the prices of the imports in question, which can
therefore be assumed to have remained injurious.
This effect arises mainly from the concentration of
imports on the low to lower-middle end of the
range.

(154)

In these circumstances, it was considered that an
ad-valorem duty would disproportionately affect
relatively expensive footwear, while having a lesser
effect on the low to lower-middle end sector.
Conversely, a variable duty, based on a minimum
price, would precisely target
the injurious price
element
left unremedied by the quota. Accord-
ingly, it was considered that the definitive anti-
dumping duty should take the form of a variable
duty based on a minimum price.

(155) As far as the level of

the minimum price is
concerned, the following considerations were taken
into account:

the effects of

On the Community industry side, it was consid-
ered that
the proposed measures
should allow the average import price, when
adjusted to the delivered importer warehouse level
(in accordance with the methodology presented in
recital 85), to be equal to the average non-injurious
price established for the calculation of the injury
for the product concerned as
elimination level
145, which
and
explained
amounted, on a weighted average basis for the four
categories concerned, to ECU 9,6 per pair on a
delivered basis.

in recitals

144

(156) As regards the imported products and their price
breakdown, Eurostat information on both import
volumes and average prices was analysed in greater
detail in the light of data relating to individual
export transactions provided by cooperating produ-
cers/exporters and importers. On this basis it was
established that, by setting the minimum price at
ECU 5,7 per pair on a CIF basis, the price break-
down of imports would be changed to the effect
that the foreseeable average import price for prod-
ucts originating in the People’s Republic of China
would be ECU 7,5 per pair at CIF level, equivalent
to the non injurious price of ECU 9,6 per pair at a
delivered-warehouse-importer level.

Indeed, both in volume and value terms, a majority
of the total imports and a part of the imports in
the proposed
each category took place under
minimum price. The increase in the price of these
predominant imports resulting from the imposi-
tion of the variable duty is thus expected to have a
strong influence on the average foreseeable import
price. In doing this analysis, care was taken to
ensure that the effect of the quotas on the import
volumes, as presented in recital 140, be reflected in
an appropriate way.

Such a measure will
indeed encourage price
increases relating to the bulk of imports, which are
concentrated at the low to lower-middle end sector.
The expected price increase will thus take place in
the product range most affected by the dumped
imports, while at the same time minimising the

(157) The data available in relation with products origin-
ating in Indonesia and Thailand were for certain
categories too limited to be considered as repres-
entative of the total imports from these countries.
However, the general conclusions presented in the
preceding recital could be confirmed to the effect
that some imports originating in these countries

L 60/26

EN

Official Journal of the European Communities

28. 2. 98

take place during the investigation
did in fact
period below the level foreseen for the minimum
price. It could also be confirmed that the setting of
the minimum price at ECU 5,7 per pair for Indo-
nesia and Thailand would, in line with the conclu-
sions drawn in recitals 150 and 152, ensure that
imports be made, on average, at non-injurious
price levels.

(158) As regards producers/exporters for which indi-
vidual duty rates were foreseen,
it is considered
that the duty applicable should be the one based
on the minimum price, if such a duty is lower than
the one resulting from their individual ad valorem
duty rate.

those producers/exporters

For all
for which a
dumping margin of less than 2 %, i.e. de minimis,
was established, no duty shall apply thereto in
accordance with Article 9(3) of the Basic Regula-
tion.

to reflect price differences, at

(159) Further to the final disclosure, certain interested
parties, while opposing any measures, have ques-
tioned the appropriateness of a duty based on a
single minimum price applicable to all four cat-
egories of footwear concerned and claimed that, in
order
two
different minimum prices, one for the category of
footwear with uppers of plastics, the other for the
three categories of footwear with leather uppers,
should be set. Conversely, in the knowledge of the
above claim, other interested parties have before-
hand opposed any split mainly on the ground that
it would result in an increase of the minimum
price applicable to footwear with leather uppers.

least

(160)

It cannot be denied in this respect that average
import prices relating to footwear with uppers of
plastics are lower than those relating to footwear
with leather uppers. However, it should be stressed
that imports of both types also spread over wide
and overlapping price ranges. Moreover, they are
is often beyond the
one like product and it
consumer’s perception capacity to differentiate
plastic material from leather. In this context, it can
be expected that
the measure will have a very
limited impact, if any, on the usual hierarchy of
categories
four
prices
concerned. It is therefore considered that a variable
duty based on a single minimum price constitute
an appropriate and reasonable way to obtain the
footwear
expected average price increase for all
categories concerned.

footwear

amongst

the

(161) The

of

the

representatives

complaining
Community industry expressed concern about the
remedial effect one could expect from an anti-
dumping duty based on a minimum price in the
case of imports which are spread over a wide price

range. They accordingly requested that an ad
valorem duty be considered instead.

(162) The Council cannot agree with this

line of
reasoning and confirm that the various considera-
tions detailed in recitals 153 to 157 should have an
influence on the form of the measures and will be
appropriately taken into account by the setting up
of a variable anti-dumping duty based on a
minimum price. Such a measure will indeed not
lead to the automatic collection of a duty but
should nevertheless result, for imports originating
in the three countries concerned, in average price
increases which are consistent with the conclusions
of the injury-elimination level calculations.

(163) The definitive anti-dumping duty should therefore

be calculated as follows:

(a) People’s Republic of China: for all producers/
exporters, with the exception of Grosby (China)
Limited,
for which a de minimis dumping
margin was found, the duty should be equal to
the difference between the minimum price of
ECU 5,7 per pair
free at
Community frontier, before duty, price per
pair.

and the net,

(b) Indonesia: for all producers/exporters, with the
exception of P.T. Golden Adishoes, whose
exports were found to have been sold at prices
above the injury-elimination level,
the duty
should be equal to the difference between the
minimum price of ECU 5,7 per pair and the
net, free at Community frontier, before duty,
price per pair.

the

For
following cooperating Indonesian
producers/exporters, the duty should be equal
to the following rates or
to the difference
between the minimum price of ECU 5,7 per
pair and the net, free at Community frontier,
before duty, price per pair, whichever is the
lowest:

PT Emperor Footwear

PT Indosepamas Anggun

PT Primashoes Ciptakreasi

PT Dragon

PT Fortune Mate

PT Bosaeng Jaya

PT Karet Murni Jelita

PT Koryo International

PT Lintas Adhikrida

PT Universal Wisesa

PT Volmacarol

PT Kingherlindo

2,0 %

2,6 %

2,6 %

5,9 %

14,9 %

12,3 %

12,3 %

12,3 %

12,3 %

12,3 %

12,3 %

20,3 %

28. 2. 98

EN

Official Journal of the European Communities

L 60/27

(c) Thailand: for all producers/exporters, with the
exception of Bangkok Rubber, CK Shoes and
PSR Footwear, for which no or de minimis
dumping margins were found, the duty should
to the difference between the
be
minimum price of ECU 5,7 per pair and the
net, free at Community frontier, before duty,
price per pair.

equal

valorem, duty rate (12,3 %) applicable, as an altern-
ative to the variable duty, to the latter producers/
exporters to be applicable to any new exporting
producers which would otherwise be entitled to a
review pursuant to Article 11(4),

HAS ADOPTED THIS REGULATION:

I. NEW EXPORTING PRODUCERS

Article 1

(164) Pursuant to Article 11(4) of the Basic Regulation, a
review to determine individual
new exporter’s
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 producers/exporters
cooperating in this investigation but not selected
is considered that provision
in the sample,
the weighted average, ad
should be made for

it

1. A definitive anti-dumping duty is hereby imposed
footwear falling within CN codes ex
on imports of
6402 99 98 (TARIC code 6402 99 98 * 90), ex 6403 99 93
(TARIC code 6403 99 93 * 90), ex 6403 99 96 (TARIC
code 6403 99 96 * 90) and ex 6403 99 98 (TARIC code
6403 99 98 * 90), originating in the People’s Republic of
China, Indonesia and Thailand, except as regards the
footwear described in paragraph 3.

2.

The definitive anti-dumping duty shall be:

Country

Products manufactured by

Variable or ad valorem duty

People’s
Republic
of China

All producers/exporters

Equal
to the difference be-
tween a minimum price of
ECU 5,7 per pair and the net,
free at Community frontier
price per pair, before duty

with the exception of:
Grosby (China) Limited

0 %

Indonesia

All producers/exporters

Equal
to the difference be-
tween a minimum price of
ECU 5,7 per pair and the net,
free at Community frontier
price per pair, before duty

TARIC
Additional
Codes

8900

8759

8900

with the exception of:
PT Golden Adishoes

and of the following
producers/exporters:

0 %

8759

Equal to the following rates or
to the difference between a
minimum price of ECU 5,7
per pair and the net, free at
Community frontier price per
pair, before duty whichever is
the lowest:

PT Emperor Footwear

PT Indosepamas Anggun

PT Primashoes Ciptakreasi

PT Dragon

2,0 %

2,6 %

2,6 %

5,9 %

8760

8761

8761

8763

L 60/28

EN

Official Journal of the European Communities

28. 2. 98

Country

Products manufactured by

Variable or ad valorem duty

PT Fortune Mate

PT Bosaeng Jaya

PT Karet Murni Jelita

PT Koryo International

PT Lintas Adhikrida

PT Universal Wisesa

PT Volmacarol

PT Kingherlindo

14,9 %

12,3 %

12,3 %

12,3 %

12,3 %

12,3 %

12,3 %

20,3 %

Thailand

All producers/exporters

Equal
to the difference be-
tween a minimum price of
ECU 5,7 per pair and the net,
free at Community frontier
price per pair, before duty

with the exception of:
Bangkok Rubber

CK Shoes

PSR Footwear

0 %

0 %

0 %

TARIC
Additional
Codes

8764

8765

8765

8765

8765

8765

8765

8762

8900

8766

8766

8766

3.
The duty shall not apply to footwear for use in sporting activities, with a single or
multilayer moulded, not injected sole, manufactured from synthetic materials specially
designed to absorb the impact of vertical or lateral movements and with technical features
such as hermetic pads containing gas or fluid, mechanical components which absorb or
neutralise impact or materials such as low-density polymers (TARIC codes 6402 99 98 * 11
and 6402 99 98 * 19, 6403 99 93 * 11 and 6403 99 93 * 19, 6403 99 96 * 11 and 6403 99 96 * 19
and 6403 99 98 * 11 and 6403 99 98 * 19).

4. Where any Indonesian party provides sufficient evidence to the Commission that it
did not export the goods described in paragraph 1 to the Community during the invest-
igation period, that it is not related to any exporter or producer subject to the measures
it has exported the goods concerned to the
imposed by this Regulation and that
Community 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, as
an alternative to the variable duty, the ad valorem duty rate applicable to cooperating
exporting producers not in the sample, i.e. 12,3 %.

5. Unless otherwise specified, the provisions in force concerning duties and other
customs practices shall apply.

Article 2

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

28. 2. 98

EN

Official Journal of the European Communities

L 60/29

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

Done at Brussels, 23 February 1998.

For the Council

The President

R. COOK