98/225/EC: Commission Decision of 19 March 1998 terminating the reinvestigation commenced pursuant to Article 12 of Council Regulation (EC) No 384/96 of the anti-dumping measures applicable to imports of microwave ovens originating in the Republic of Korea
Date: 1998-03-19
Institutions: European Commission
Subjects: South Korea, anti-dumping duty, anti-dumping legislation, economic analysis, furnace, import

20. 3. 98

EN

Official Journal of the European Communities

L 85/29

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 19 March 1998

terminating the reinvestigation commenced pursuant to Article 12 of Council
Regulation (EC) No 384/96 of the anti-dumping measures applicable to imports
of microwave ovens originating in the Republic of Korea

(98/225/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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
the European
Community (1), as amended by Regulation (EC) No 2331/
96 (2), and in particular Article 12 thereof,

not members

of

After consulting the Advisory Committee,

Whereas:

(1)

(2)

A. PROCEDURE

1. Measures in force

In January 1996, the Council, by Regulation (EC)
No 5/96 (3),
anti-dumping
imposed definitive
duties on imports of microwave ovens (hereinafter
referred to as ‘MWOs') originating inter alia in the
Republic of Korea.

2. Request for a review

On 5 December 1996, a request
for a review,
pursuant to Article 12 of Regulation (EC) No 384/
96 (hereinafter referred to as the ‘Basic Regulation'),
of
to
imports of MWOs originating in the Republic of
Korea was lodged on behalf of: Cefemo (France),

anti-dumping measures

applicable

the

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ L 2, 4. 1. 1996, p. 1.

its two parent companies,
acting on behalf of
(France);
namely AEG (Germany) and Brandt
Candy (Italy); DeLonghi
(Italy); and Moulinex
(France). The collective output of MWOs of these
Community producers constituted a major propor-
tion of the total Community production of that
product within the meaning of Article 5(4) of the
Basic Regulation.

In the request, it was alleged that the abovemen-
tioned anti-dumping measures concerning MWOs
from the Republic of Korea had led to no move-
ment, or insufficient movement, in resale prices or
subsequent selling prices in the Community. To
the complainants submitted sufficient
that end,
evidence on resale prices and subsequent selling
prices before and after imposition of
the anti-
dumping duties.

B. REVIEW INVESTIGATION PURSUANT TO
ARTICLE 12 OF THE BASIC REGULATION

1. Initiation of the investigation pursuant to

Article 12

On 18 January 1997, the Commission announced
by a notice published in the Official Journal of
the European Communities (4), the initiation of a
review pursuant to Article 12 of the Basic Regula-
tion of the anti-dumping measures applicable to
imports of MWOs originating in the Republic of
Korea, and commenced an investigation.

(3)

(4)

(4) OJ C 19, 18. 1. 1997, p. 3.

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Official Journal of the European Communities

20. 3. 98

(5)

(6)

(7)

The Commission officially advised the producers/
exporters known to be concerned, the representa-
tives of the exporting country and the complainant
Community producers, of
the
review. Interested parties were given the oppor-
tunity to make their views known in writing and to
request a hearing within the time limit set out in
the notice of initiation.

the initiation of

The Commission sent questionnaires to all ex-
porters known to be concerned, namely, Samsung
referred to as
Electronics Co., Ltd (hereinafter
‘SEC'), Daewoo Electronics Co., Ltd.
(hereinafter
referred to as ‘DWE'), LG Electronics Inc. (herein-
after referred to as ‘LGE'), and Korea Nisshin Co.,
Ltd.
‘Nisshin'). The
referred to as
Commission received replies from DWE, SEC and
their related importers as well as from LGE within
the time limit set. LGE declared that it had not
exported the product concerned to the Community
during the investigation period of the review (here-
inafter referred to as the ‘IP').

(hereinafter

Nisshin abstained from replying to the question-
naire. Consequently, in accordance with Article 18
of the Basic Regulation, Nisshin was considered to
be a non-cooperating party and was informed
accordingly. Findings for Nisshin were based on
the best facts available.

(8)

The Commission carried out verification visits at
the premises of the following companies:

(a) Producers/exporters in the Republic of Korea

(cid:190) Samsung Electronics Co., Ltd, Seoul,

(cid:190) Daewoo Electronics Co., Ltd, Seoul,

(cid:190) LG Electronics Inc., Seoul.

(b) Importers related to the producers/exporters

(cid:190) Samsung Electronics France,

(cid:190) Samsung Electronics United Kingdom,

(cid:190) Daewoo Electronics SA, France,

(cid:190) Daewoo Electronics Sales UK.

(9)

Questionnaires were also sent
to independent
importers known to have imported MWOs from
the Republic of Korea so as to ascertain the resale
prices and/or
the
product concerned before and after the imposition
of the anti-dumping duties. The following inde-
pendent importers received questionnaires:

selling prices of

subsequent

(cid:190) Amfo Electronics BV, Netherlands,

(cid:190) Comet, United Kingdom,

(cid:190) Dixons, United Kingdom.

(10)

(11)

(12)

investigation period (hereinafter
‘OIP') and the IP.

referred to as

Interested parties were informed of the essential
facts and considerations on the basis of which the
Commission intended that the anti-dumping meas-
ures in force should remain unchanged and that
the investigation concerning the review should be
terminated, and were given an opportunity to
comment. The parties’ oral and written comments
were considered and, where appropriate, the find-
ings have been changed accordingly.

The IP of the review investigation covers the period
from 1 January to 31 December 1996. Information
relating to the IP was used not only to determine
the level of resale and subsequent selling prices
after the imposition of anti-dumping measures but
also to reassess export prices and to recalculate
dumping margins.

In establishing whether or not resale and subse-
quent selling prices had moved sufficiently, the
price levels pertaining to the IP were compared to
the corresponding price levels during the OIP
which had covered the period from 1 October 1992
to 30 September 1993.

(13) Owing to the volume of the data gathered and
examined, in particular in view of the high number
of related importers and sales subsidiaries involved,
the complexity of the analysis of the movement of
the resale and subsequent
the
numerous changes in the models exported in both
that normal
investigation periods and the fact
values had to be re-examined,
the investigation
exceeded the normal period of six months provided
for in Article 12(4) of the Basic Regulation.

selling prices,

2. Registration of imports

(14)

In their replies to the questionnaires, two Korean
producers/exporters
on
provided
revised normal values pursuant to Article 12(5) of
the Basic Regulation.

information

to the questionnaire,

(15) Accordingly, in April 1997, following receipt of the
the Community
replies
industry submitted a request in accordance with
Article 14(5) of the Basic Regulation so as to make
imports into the Community of MWOs subject to
registration. The request was based on the grounds
that, since the re-examination of normal values
could entail a longer reinvestigation period, it was
necessary to register imports pending the outcome
of the reinvestigation.

However, none of these importers submitted in-
formation on their resale prices during the original

(16) On 25 June 1997, having concluded that sufficient
grounds existed, the Commission, after consulta-
adopted
the Advisory Committee,
tion

of

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L 85/31

Regulation (EC) No 1144/97 (1) making imports of
MWOs originating in the Republic of Korea
to registration in order to ensure that,
subject
should the reinvestigation result
in increased
the amended anti-dumping measures
dumping,
could subsequently be
those
imports from the date of such registration.

applied against

3. Product concerned

(17)

The product concerned by the request and for
which the review was initiated is the same as in the
original investigation, namely microwave ovens for
domestic use, currently classifiable within CN code
8516 50 00.

between the OIP and the IP were taken into
account.

(b) Comparison

(22)

(23)

The
abovementioned benchmark prices were
compared to the resale price of MWO models sold
during the IP, which, although not identical to
those sold in the OIP, were considered comparable
in terms of their main characteristics.

The comparison revealed that, on a weighted
average basis, the resale prices charged by DWE
and SEC during the IP undercut the benchmark
prices significantly.

4. Movement

of

resale
Community

prices

in

the

(24)

(18)

(19)

(a) Determination of the resale prices before and
after the imposition of anti-dumping measures

In order to establish whether the measures had led
to any movement or sufficient movement,
the
Commission sought information on resale prices
and subsequent selling prices of MWOs in the
Community before and after the imposition of
anti-dumping measures.

In this connection, the two cooperating Korean
producers/exporters, namely DWE and SEC, which
had exported the product
concerned to the
Community during the IP, provided information
on resale prices for certain MWO models consid-
ered comparable to those exported and resold in
the Community during the OIP by their related
importers.

(20) Although information with regard to resale prices
and/or subsequent selling prices was requested
from independent importers known to have resold
MWOs imported from the Republic of Korea
before and after the imposition of anti-dumping
measures, no such information was made available
to the Commission. As a result, findings had to be
made on the basis of the available information of
the resale prices charged by the related importers.

(21)

In its determination of whether or not resale prices
had moved sufficiently,
the Commission estab-
lished, on a model basis, a benchmark price which
could have been expected following the imposition
of the anti-dumping measures, by adding to the
resale prices of MWOs per model during the OIP,
the applicable amount of the anti-dumping duty.
In establishing the benchmark price, any changes
in the selling, general and administrative expenses
(hereinafter referred to as ‘SG&A') incurred by the
in the Community
related sales

subsidiaries

(1) OJ L 166, 25. 6. 1997, p. 1.

(c) Conclusion

The Commission concluded that the resale prices
had not moved sufficiently to reflect the adoption
of the anti-dumping measures and, therefore, that a
reassessment of export prices was warranted.

(25) With regard to the above findings, one exporter
argued that the decline in resale prices since the
imposition of anti-dumping measures was mainly
caused by changes in technology and consumer
preferences in the Community leading to changes
in the trading patterns and cost savings, which in
their turn were reflected in significant changes of
normal values which ought
to be taken into
account. To this end, both exporters had supplied
complete information on revised normal values
within the time limits set out by the Basic Regula-
tion.

(26)

In the light of the above, having determined that a
reassessment of export prices was warranted, the
Commission proceeded to extend the scope of the
investigation in accordance with Article 12(5) of the
Basic Regulation in order to include in the re-
examination the normal values of MWOs exported
by DWE and SEC.

(27) With regard to LGE, the investigation showed that
no exports of MWOs had, indeed, been made to
the Community during the IP. As a result, the
Commission concluded that the reassessment of
export prices was not appropriate for that company.

5. Reassessment of export prices

(28)

(29)

Pursuant to Article 12(2) of the Basic Regulation,
the Commission reassessed export prices in accord-
ance with Article 2(8) and (9) of that Regulation.

In cases where export sales were made direct to
independent importers in the Community, export
prices were determined on the basis of the prices
paid or payable by these unrelated importers, in
accordance with Article 2(8) of the Basic Regula-
tion.

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(30)

In accordance with the provisions of Article 2(9) of
the Basic Regulation, where exports were made to
companies related to the exporting producer and
located in the Community export prices were
constructed on the basis of the price at which the
imported product was first resold to an independ-
ent buyer, with adjustments for all costs incurred
between importation and resale,
including anti-
dumping duties paid and a reasonable margin for
profit. In the absence of any new information that
profitability in this business sector had changed, it
was considered reasonable to retain the profit
margin of 5 % used in the original investigation.

(31)

The SG&A expenses reported by the related impor-
ters were adjusted, when necessary, for costs related
to MWO sales which were borne by the importer
but paid by the producer/exporter, in accordance
with Article 2(9) of the Basic Regulation.

(32)

(33)

(34)

6. Recalculation of dumping margins

(a) Normal value

to recalculate the dumping margins
In order
pursuant to Article 2(2) of the Basic Regulation, the
Commission first established whether
the total
domestic sales of MWOs by each of the two produ-
cers/exporters concerned were representative as
compared to their export sales to the Community.
It was found that both companies had domestic
sales volumes substantially in excess of their export
sales to the Community.

Subsequently,
it was examined whether each
producer/exporter sold, on its domestic market,
MWO models which were comparable to the
exported models. It was found that several models
were not comparable as they differed not only in
their main characteristics, namely in capacity, func-
tioning and operating system, but also in numerous
other technical aspects. Since, for these models, no
comparable models could be found by the other
cooperating producer/exporter either, normal value
had to be constructed for such models.

the

remaining models,

For
the Commission
considered, on a model-by-model basis, whether
sales in the domestic market were made in suffi-
cient quantities and in the ordinary course of trade,
as far as price was concerned. It was found that
both companies had certain models for which
domestic sales volumes were below 5 % of the
comparable export sales. Thus, for these models

(35)

(36)

(37)

(38)

normal value was also constructed in accordance
with Article 2(3) of the Basic Regulation.

trade. In this connection,

The Commission then turned to consider whether
those other models which were sold domestically
in sufficient quantities, were also sold in the or-
dinary course of
the
Commission used information on the cost of
production provided by the company for each
model sold domestically. For certain models sold
on average at a loss, normal values also had to be
constructed. For other models sold on average
above unit cost, normal value was established on
the basis of the weighted average selling price of
only the profitable sales, as these sales ranged
between 80 % and 10 % of the total sales volume
of the relevant model concerned.

for

In constructing the normal value, each producer’s/
exporter’s manufacturing cost
the MWO
models exported to the Community, plus each
producer’s/exporter’s SG&A expenses as incurred
for all sales of the like product on the domestic
market, and a reasonable margin for profit, were
taken into account. The margin of profit was estab-
lished on the basis of all MWO models which were
sold profitably and in representative quantities by
each producer on the domestic market.

in establishing normal value for

the
Finally,
comparable MWO models sold domestically in
sufficient quantities and in the ordinary course of
trade, the weighted average domestic prices of each
of the models were used.

(b) Comparison

The weighted average normal value by model, as
determined above, was compared at an ex-factory
level with the export price on a weighted average
basis.

For the purpose of ensuring a fair comparison, due
allowance in the form of adjustments was made for
differences affecting price comparability. Those
allowances which were claimed and demonstrated
to affect price comparability were granted in
accordance with Article 2(10) of the Basic Regula-
tion. Thus, adjustments were made in respect of
physical characteristics, import charges and indirect
taxes, rebates,
transport and other related costs,
credit, after-sales costs as well as for differences in
level of trade.

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(i) 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

(39) As far as the cooperating producers/exporters were
concerned,
the comparison between the re-ex-
amined normal values and the reassessed export
reveal any increased dumping
prices did not
margins for either company as compared with
those found in the initial investigation.

(43)

(44)

(40)

(41)

(ii) 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

In the case of Nisshin and any other Korean
exporting producer which either failed to reply to
the questionnaire or did not make itself known,
findings were to be made on the basis of the facts
available, pursuant to Article 18 of the Basic Regu-
lation.

it was found that

In this respect, however,
the
export volume to the Community during the IP
reported by SEC and DWE covered the totality of
the imports of MWOs from the Republic of Korea
as recorded by Eurostat. In those circumstances, the
recalculation of dumping margins for the non-
cooperating producers/exporters did not appear
necessary.

C. TERMINATION OF THE INVESTIGATION

(42)

Since the comparison of reassessed export prices
and re-examined normal values has not shown any

increased dumping margins, the review investiga-
tion should be terminated without changing the
anti-dumping measures in force,
in accordance
with Article 12 of the Basic Regulation.

The Advisory Committee has been consulted.

the above,

the Commission,

In the light of
in
accordance with Article 12 of the Basic Regulation,
concludes that the anti-dumping measures in force
should remain unchanged and that the reinvestiga-
tion pursuant to Article 12 should be terminated,

HAS DECIDED AS FOLLOWS:

Sole Article

The reinvestigation concerning imports of microwave
ovens falling within CN code 8516 50 00 and originating
in the Republic of Korea is hereby terminated.

Done at Brussels, 19 March 1998.

For the Commission

Leon BRITTAN

Vice-President