Proposal for a Council Regulation (EC) imposing definitive anti-dumping duties on imports into the Community of personal fax machines originating in the People's Republic of China, Japan, the Republic of Korea, Malaysia, Singapore, Taiwan and Thailand
Date: 1998-03-31
Institutions: European Commission
Subjects: Far East, anti-dumping duty, facsimile, import, telecommunications equipment

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 31.03.1998 

COM(1998) 193  final 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing definitive anti-dumping duties on imports into the Community of personal 

fax machines originating in the People's Republic of China, Japan, the Republic of 

Korea, Malaysia, Singapore, Taiwan and Thailand 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

Subject: 

Anti-dumping proceeding concerning imports of personal  fax 
machines originating in the People's Republic of China, Japan, 
Republic of Korea, Malaysia, Singapore, Taiwan and Thailand 

1) 

2) 

It is hereby  proposed  that the  Council  adopts  the  attached  Regulation  imposing 
definitive  anti-dumping  duties  on imports  of personal  fax  machines  originating 
in the above-mentioned  countries. 

The  proceeding  was  initiated  on  1  February  1997.  Provisional  anti-dumping 
duties were imposed  on  1 November  1997 by Commission  Regulation  (EC) N° 
2140/971. 

3)  After  imposition  of  the  provisional  duties,  comments  were  received  in  writing 
and  parties  who  so requested  were  granted  hearings.  All  comments  were  taken 
into  consideration.  On  this  basis,  the  definitive  determinations  were  made  and 
disclosure of the definitive  findings  was made available to all interested parties, 
which were given the opportunity to comment. Again, the Commission  carefully 
studied the comments made and revised its calculations where appropriate. 

4) 

Product  definition:  The  product  definition  is  restricted  to  thermal  paper  and 
thermal  transfer  fax  machines.  Fax  machines  using  ink-jet,  laser  and  LED 
printing  technology,  and  portable  fax  machines, to  be  used  in  connection  with 
mobile telephone sets only, are excluded. 

5)  Dumping:  Substantial  dumping  margins  were  found  for  all  exporters  from  the 
countries concerend.  Taking  account of the comments received  after  imposition 
of  the  provisional  duties,  level  of  trade  adjustments  were  made  where 
appropriate and substantiated by evidence. 

6) 

7) 

Injury:  The  Community  Industry  has  suffered  material  injury,  indicated  by 
substantially  decreasing  sales  volumes  and  market  shares,  low  production 
capacity utilisation rates, considerable financial  losses and loss of employment. 

Causation  of  injury:  Substantial  undercutting  was  established  for  the  exporting 
countries  concerned,  except  for  Japan  and  Singapore.  Significantly  declining 
import  price  trends  were  found  for  all  exporting  countries  concerned.  Both 
undercutting  and  declining  price  trends  have  caused  a  situation  of  price 
suppression  on  the  Community  market  which  prevented  the  Community 
Industry  from  increasing  its  prices  to  a  profitable  level.  The  dumped  imports 
from  all  exporting  countries  concerned  have  thus  caused  material  injury  to  the 
Community  Industry. 

8)  Community  interest: The likely impact of the imposition/non-imposition  of anti 
dumping  measures  was  assessed  with  regard  to  the  Community  industry, 
importers and consumers. 

OJL  297, 31.10.1997, p. 61 

9) 

The  Community  Industry  was  found  to  be  viable  and  the  investigation  showed 
that,  without  the  removal  of  dumping  from  the  Community  market,  it  would 
discontinue its production activities in the EU. 

10)  As  regards  importers,  the  imposition  of  anti-dumping  duties  would  not  have  a 
significant  impact,  since  personal  faxes  are  only  a  very  small  part  of  their 
overall business. 

11)  Particular  attention  was  given  to  the  effect  of  measures  on  consumers.  The 
assessment  of the consumer  interests  in this  case was hampered  by the  non-co 
operation  from  the  European  consumer  associations,  including  BEUC.  In  this 
respect,  the  data  collected  during  the  investigation  suggest,  that,  after  the 
imposition  of  AD-duties,  no  price  increase  would  occur  for  personal  fax 
machines produced  in the Community  (which can be expected  to supply  around 
50%  of  the  market),  since  the  Community  producers  are  likely  to  keep  prices 
stable in order to increase their sales volumes and market shares. 

12)  As to  imported  products, the  price  increase  due to  anti-dumping  duties,  for  the 
large majority  of exporters (accounting  for around  70% of all imports) would be 
moderate, i.e. between  3% and 9% (or between  7 and 27 ECU per unit).  Such a 
price increase would refer to the useful  lifetime  of the product of around  5 years, 
which further  diminishes the effect  on consumers. 

13) 

In comparison to the overall costs of anti-dumping  duties for the consumers, the 
investigation  showed  that  an  estimated  4000  jobs  in  the  Community  (for  all 
Community  producers,  i.e.  Philips,  Sagem,  and  producers  related  to  certain 
exporters)  would  be  saved  or,  at  least,  positively  affected  by  the  imposition  of 
definitive  anti-dumping duties. 

14)  Member  States  were  consulted  in  the  Anti-Dumping  Committee  of  5  March 

1998. 

15)  The  Regulation  imposing  definitive  measures  must  be published  not  later  than 

30 April  1998, due to the binding deadlines to which this proceeding is subject. 

w 

COUNCIL  REGULATION  (EC) No  ... 

of 

imposing definitive  anti-dumping duties on imports into the Community  of personal 
fax machines originating in the People's Republic of China, Japan, the Republic of 
Korea, Malaysia, Singapore, Taiwan 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  as amended by Regulation (EC) No 2331/96,2 and in particular  Article 9(4) 
thereof, 

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

Whereas: 

A. 

PROCEDURE 

(1)  Provisional  anti-dumping  duties  were 

imposed  on  1  November  1997  by 

Commission Regulation (EC) No 2140/973 ("provisional  duty Regulation"'). 

Following  the  imposition  of  the  provisional  anti-dumping  duties,  the  Community 
industry,  two  exporters'  associations,  a  number  of  producers/exporters  and 
importers  submitted  comments  in  writing.  All  parties  who  so  requested  were 
granted a hearing. 

(2)  The  Commission  continued  to seek and verify  all  information  it deemed  necessary 
for  the  definitive  findings,  and  carried  out  investigations  at  the  premises  of  a 
number  of importers related to exporters  from  the countries  concerned.  The  parties 
were informed  of the essential  facts  and considerations  on the basis of which it was 
intended  to  recommend  the  imposition  of  a  definitive  anti-dumping  duty  and  the 
collection of amounts secured by way of the provisional  duty. The parties were also 
granted a reasonable period within which to make representations  subsequent to the 
disclosures. 

B.  PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

(3)  The  proceeding  covers  personal  or  consumer  fax  machines  (hereinafter  called 
"personal  fax  machines"  or  "product  concerned").  These  machines  are  mainly 
intended  for  the  transmission  and  reception  of  paper  documents  using  a  telephone 
signal,  are  often  used  at  home  or  as  a  personal  desktop  set  and  usually  offer 

O J N o L 5 6 , 6.  3.  1996, p. 1. 
OJNoL317,  6.  12. 1996, p. 1. 
OJL  297, 31.10.1997, p. 61 

fb 

additional  facilities  for  communication.  In  addition  to  the  fax  function  and 
telephone(s) and/or connection(s) for a telephone set or cordless hand-set, they may 
or may not include a paper feeder  and offer  one or more of the following  functions: 
a cassette or digital answering function,  a copy function  or an intercom facility.  The 
above list is not exhaustive. 

(4)  For the purpose of its preliminary findings, the Commission  distinguished  personal 
or consumer fax machines  from  professional  fax machines by virtue of their  weight 
and  size.  Only  fax  machines  with  a  weight  of  5  kilograms  or  less  and  with 
dimensions  (width  x  depth  x  height)  of  the  main  body  measuring  470  mm  x  450 
mm x  170 mm  or  less, were considered  as personal  or consumer  fax  machines  for 
the  purposes  of  the  present  investigation.  For  the  purpose  of  assessing  the  weight 
and  dimensions,  the  paper  load  and  other  consumables,  as  well  as  any  cordless 
hand-sets,  were  excluded.  It  was  furthermore  considered  that,  at  present,  fax 
machines using ink-jet  or laser printing technologies  are aimed  only at  professional 
use  and  consequently  the  machines  using  these  technologies  were  excluded  from 
the application of the provisional anti-dumping  duty. 

(5)  Personal fax machines are currently classifiable  under CN code 8517 21 00. 

1. 

Characteristics  of professional  fax machines 

(6)  After  the  imposition  of the provisional  anti-dumping  duties, exporters  argued  that, 
for  the  product  definition,  the  criteria  of weight  and  size were  inappropriate,  since 
they would soon lead to the inclusion of professional  (office)  fax machines. 

(7)  However,  the  investigation  has  shown that  the product  definition  based  on  weight 
and  size  did  not, with  respect  to the  investigation  period,  result  in the  inclusion  of 
professional  faxes. Nor  did  any  interested  party  claim that,  between  the  end  of  the 
investigation  period  and  December  1997,  there  were  any  professional  faxes 
available  on the Community  market which would  come within the weight  and  size 
criteria.  As to  future  developments,  no  substantiated  submission  was  made  by  the 
interested  parties,  nor  were  any  findings  established  in  the  investigation  which 
would suggest that such professional  machines would be introduced into the market 
during  the  period  of  application  of  anti-dumping  duties.  It  is  therefore  concluded 
that  the  criteria  of  weight  and  size  would  not,  in  the  near  future,  lead  to  the 
inclusion of professional  fax machines into the scope of the proceeding. 

interested  parties,  examine  expeditiously  whether 

Should  this  nevertheless  happen,  the  Commission  will,  on  the  basis  of  an 
these  fax 
application  by 
machines  fall  under  the  product  definition  of  the  present  proceeding  and  will 
inform  the  interested  parties  and  the  customs  authorities  of  the  Member  States 
accordingly. 

2. 

Printing  technologies 

(8) 

It  was  further  argued  that  personal  fax  machines  using  printing  technologies  other 
than  thermal  sensitive,  (i.e. machines  using  thermal-transfer,  ink-jet,  laser  or  LED 
printing technologies)  should be excluded. 

2.1  Thermal transfer  faxes 

(9) 

In respect of this argument, the investigation has shown the  following: 

Physical and technical  characteristics 

(10)  In weight  and  size  and  their  essential  technical  features,  thermal  transfer  faxes  are 
similar or identical to the thermal paper models. The only difference  is the printing 
technology  and,  resulting  therefrom,  the  paper  used.  Both  thermal  transfer  and 
thermal paper technologies  use heat to transfer  information  onto paper via  a  single 
print head. Both print heads are almost  identical. It would therefore  in principle  be 
possible  to  print  thermal  paper  with  a  thermal  transfer  print  head.  Moreover,  the 
electrical  components to control the print heads are identical. Essential  elements  of 
the  thermal  printing  technology  are  thus  the  basis  for  the  newer  thermal  transfer 
technique.  In  that  respect,  it  was  found  that  thermal  transfer  is  the  result  of  the 
normal product development of thermal paper printing technology. 

Use and consumer  perception 

(11)  Both  product  types  have,  in  general,  similar  designs  and  visual  aspects,  and 
handling  is  simple  for  both.  It  has  been  shown  that  private  users  and  small/home 
offices  use both thermal paper faxes and thermal transfer  faxes. 

The  differences  in  printing  technology,  i.e.  the  better  printing  quality  of  thermal 
transfer  faxes, and the advantages of using plain paper, are taken into  consideration 
by the consumers only as one aspect among all the technical features  available. The 
main  objective  of  the  consumer  in  purchasing  a  fax  machine  remains  that  of 
obtaining  a  device  for  his  personal  use  capable  of  transmitting  and  receiving  fax 
messages. In comparison, the printing technology  used for the two product types in 
question is, from the consumer perspective, just an ancillary  element. 

Sales  channels 

(12)  In  the  investigation  period,  thermal  paper  and  thermal  transfer  faxes  were,  in 

general, sold through the same sales channels. 

Conclusion 

(13)  In view of the above, it is considered  that thermal  paper  faxes  and thermal  transfer 

fax machines form one product. 

2.2 

Ink-jet,  laser, LED printing  technologies and portable  faxes 

(14)  As  to  fax  machines  using  ink-jet,  laser  or  LED  printing  technology,  the  definitive 
determinations  have  confirmed  that  these  machines  are,  in  general,  substantially 
different  to  personal  faxes  in  respect  of  physical  and  technical  characteristics  (in 
particular  in  view  of  weight/size  and  performance),  that  they  are  designed  for 

professional  rather than personal use, and that they are, to a significant  extent, sold 
through different  sales channels. 

(15)  In view of these  differences,  fax  machines  using  ink-jet,  laser  and  LED printing 
technology  cannot  be  considered  as  like  products  to  the  product  under 
consideration. 

(16)  Some interested parties have further  argued that certain new types of portable fax 
machines to be used in connection with mobile telephone sets which were, in the 
investigation  period,  not  yet  available  on  the  Community  market,  would  be  for 
professional  use  only  and  should  therefore  be  excluded  from  the  scope  of  the 
proceeding. 

(17)  On  the  basis  of  the  information  available,  it  is  considered  that  portable  fax 
machines,  to  be  used  only  in  connection  with  mobile  phones,  have  different 
physical and technical characteristics and will indeed be for professional  use only. 
Thus,  these  machines  do  not  fall  within  the  definition  of  the  product  under 
consideration.  Therefore,  on the basis  of  an application  by  interested  parties, the 
Commission will examine expeditiously whether such portable fax machines, once 
they  are introduced  into the  Community,  fall  under the product  definition  of the 
present  proceeding  and  will  inform  thé  interested  parties  and  the  customs 
authorities of the Member States accordingly. 

3.  Conclusions 

(18)  The  provisional findings are  confirmed,  whereby  the  product  definition  shall  be 
based on the weight and size criteria, as defined in the provisional duty Regulation. 

(19)  Furthermore,  it  is  confirmed  that  the  product  concerned,  within  the  meaning  of 
Article  1(4) of the Basic Regulation,  is thermal  paper fax  machines  and thermal-
transfer fax machines. 

(20)  Fax  machines  using  ink-jet,  laser  or  LED  printing  technology,  and  portable  fax 
machines to be used only in connection with mobile phones shall be excluded from 
the scope of the proceeding. 

C.  DUMPING 

1.  Level of co-operation 

(21)  The  level  of  co-operation  by  the  producers/exporters  in  this  proceeding  was 
particularly  low in Malaysia, Thailand, Taiwan, Japan and China, since the export 
volume  to  the  Community  covered  by  the  co-operating  producers/exporters 
represented only a small fraction of the total exports from the countries concerned. 

(22)  The information provided by the co-operating producers/exporters was verified and 
in the  majority  of cases was taken  into  account. Nevertheless,  in  some cases the 

investigation  revealed  that  part  of  the  information  submitted  was  inaccurate, 
unsubstantiated  or insufficient,  and consequently  it had to  be disregarded.  In  these 
situations  the  Commission  based  its  definitive  findings  on  the  facts  available, 
pursuant to Article  18 of the Basic Regulation. 

2. Market economy  countries 

2.1 Normal  value 

Application  of Article  18(1) of the Basic Regulation 

(23)  The  Singapore  producer/exporter  contested  the  Commission's  decision  to  apply 
facts  available pursuant to Article  18(1) of the Basic Regulation  for the  assessment 
of  its  normal  value  (see  recital  (66)  of  the  provisional  Regulation).  The  company 
alleged that the unreported  transactions made on the domestic market would be  for 
re-export to a third  country. Moreover, they  claimed that, pursuant  to Article  18(4) 
of the Basic Regulation, they  should have been informed  by the Commission  of its 
decision,  as  no  opportunity  to  provide  further  explanations  was  offered.  The 
company  also  disputed  the  method  used  by  the  Commission  to  establish  normal 
value  on  the  basis  of  the  facts  available  because  it  considered  that  the  evidence 
collected  on-spot  (invoices  referring  to  the  unreported 
transactions)  should  have 
been used instead of the highest reported resale price. 

The  investigation  revealed  that  the  sales  in  question  were  actually  made  on  the 
domestic market and had not been reported as such by the company. Moreover,  the 
company  was asked to provide evidence  supporting  that the  sales  in question  were 
not  destined  for  domestic  consumption  but  were  actually  exported  outside 
Singapore. Despite repeated requests, the company did not provide any evidence of 
a  subsequent  re-export  to  a third  country.  At  a hearing  requested  by  the  company 
subsequent to the verification  visit, no satisfactory  explanation was provided. 

(24)  Concerning  the method  applied  by the  Commission  to establish  normal  value  with 
regard to these transactions, the facts  used to assess the normal value were  verified 
and  are  reasonable  in  the  light  of  the  company's  partial  non  co-operation.  The 
provisional findings of the Commission, as set out in recital (66) of the  provisional 
Regulation, are therefore  confirmed. 

(25)  One Korean producer/exporter  for  which  it was decided  to apply  facts  available  in 
order to assess its material costs, pursuant to Article  18 of the Basic Regulation  (see 
recital (32) of the Provisional Regulation) claimed that this decision was  unjustified 
and  that  the  costs  of  material,  as  reported  in  its  questionnaire  reply,  should  have 
been  used  instead.  Furthermore,  it  considered  that  the  method  used  by  the 
Commission  to  adjust  the  normal  value  as  a  consequence  of  the  partial  non  co 
operation was flawed. 

(26)  The  investigation  revealed  that  the  material  costs  reported  contained  serious 
inconsistencies  and could  not, therefore,  be accepted. No  further  explanations  were 
provided  by  the  company  justifying  the  inconsistencies.  With  regard  to  the 
methodology  used  to  establish  the  facts  available,  it  should  be  pointed  out  that  a 

conservative  approach was applied for  the adjustment  of material  cost by using  the 
smallest difference  found between the lowest and the average material values. 

Constructed normal value (SG&A) 

(27)  The  single  co-operating  Thai  producer/exporter,  which  had  no  domestic  sales, 
contested the method used to establish  selling, general and administrative  expenses 
(SG&A) and profit  when constructing normal value. As stated in recital  (77) of the 
provisional  Regulation  and  in  accordance  with  Article  2(6)(c)  of  the  Basic 
Regulation,  in  the  absence  of  any  domestic  sales,  the  Commission  decided  to 
construct  normal  value  by  adding  to  the  company's  manufacturing  costs  the 
weighted  average  domestic  SG&A  and profit  established  on  all  profitable  sales  of 
the co-operating exporters in Taiwan. The company claimed #that it formed  an entity 
with  the  co-operating  Taiwanese  producer/exporter  and  that  in  view  of  this 
relationship, SG&A and profit  should have been determined on the basis of the first 
method  set  out  in Article  2(6) of the Basic  Regulation  which  would  be,  according 
to  that  Taiwanese  company. 
to 
Alternatively,  should  Article  2(6)(c)  of  the  Basic  Regulation  be  applied,  the 
company  requested  that  only  the  SG&A  and  profit  of  its  related  Taiwanese 
company should be used, due to the  close links between the two. 

the  actual  data  pertaining 

the  company, 

(28)  It. should  be  noted  that,  according  to  Article  2(6)  of the  Basic  Regulation,  SG&A 
expenses  and profit  margin to be used  in a constructed  value  are those  incurred  or 
made  on the domestic  market  of the  exporting  country,  i.e. Thailand.  However,  in 
the  absence  of  information  on  domestic  sales  of  fax  machines  in  Thailand  by  the 
company  concerned  or  by  any  other  company,  and  given  that  no  information  was 
available  on  SG&A  expenses  and  profit  of the  same  general  category  of products, 
as provided for under Article 2(6)(a) or (b) of the Basic Regulation, recourse had to 
be  made  to  Article  2(6)(c),  i.e. to  base  SG&A  and  profit  on  any  other  reasonable 
method.  In  this  respect  it  was  considered  that  the  weighted  average  SG&A  and 
profit  incurred  or  realised  by  all  co-operating  exporters  on  the  Taiwanese  market 
constituted  an  appropriate  and  reasonable  basis,  since  Taiwan  is  a  competitive 
market  where  a  substantial  number  of  firms  operate,  and  constituted  the  best 
approximation  available  to the  Commission  of the  conditions  of  sales  on the  Thai 
market for the product  concerned. 

(29)  To  use,  as  suggested  by  the  Thai  producer,  solely  the  SG&A  and  profit  of  the 
Taiwanese  company  with whom  it is related  does  not  provide  a more  appropriate 
basis. Indeed, the sales of the Taiwanese related company  in isolation represented  a 
relatively small fraction  of the Taiwanese market. 

Comparison 

Import charges 

(30)  In recital  (37) of the provisional  Regulation  the  Commission  stated  that claims  for 
allowances  for  import  charges  made  by  Korean  producers/exporters  were  rejected 
since  these  claims  were  calculated  on  an  average  basis  for  all  products  and  the 
relationship  between  the  duty  paid  and  the  specific  model  of  fax  machine 
concerned  was  not  demonstrated.  Three  Korean  producers/exporters  claimed  that 
this  decision  was  unreasonable.  They  requested  that  the  Commission  services 

should  not  insist  on  precise  calculations  by  model,  but  instead  accept  an  overall 
allocation  of  duties  paid.  Furthermore,  they  claimed  that  a  duty  drawback 
adjustment  would  have  to  be  granted  irrespective  of  the  fact  whether «or  not 
domestic models included parts purchased  locally. 

(31)  It  must  be  stressed  that  it  is  a  primary  requirement  for  the  granting  of  such  an 
allowance  that evidence  is provided  that the parts  have  not  been  purchased  locally 
since  otherwise,  no  import  duty  has  been  paid  for  such  parts.  In  one  case,  the 
exporter  was  able  to  demonstrate,  at  least  in  part,  to  the  satisfaction  of  the 
Commission  that  the  adjustment  was justified.  The  adjustment  was  made  only  to 
the extent that the claim was demonstrated. 

Level of trade 

a) Difference  in the functions  performed 

to  this  position,  re-affirming 

(32)  The  two  Japanese  and  the  Singapore  producers/exporters,  as  well  as  one  of  the 
Korean  companies  claimed  a  domestic  allowance  for  differences  in  level  of  trade 
based  on  Article  2(10)(d)  of  the  Basic  Regulation,  which  has  been  provisionally 
rejected  on  the  grounds  stated  in  recitals  (49)  and  (71)  of  the  provisional 
that  the 
Regulation.  The  companies  objected 
difference  in  functions  performed  domestically  and  on  the  export  side  would 
automatically  correspond  to  a  different  level  of  trade  and  that  therefore,  an 
adjustment  should  be  granted  to allow a proper  comparison  between  normal  value 
and  export  price.  In  support  of their  argument,  the  companies  claimed  that,  when 
constructing  the export price pursuant to Article 2(9)  of the Basic Regulation,  it  is 
the  Institutions'  policy  to deduct  all  the  costs, incurred  by  the  related  importers  in 
the Community  from  the price paid to the first independent  customer thus  bringing 
the  export  price  to  an  ex-factory  level. Hence, they  state  that,  in  order to  obtain  a 
normal value at a comparable level of trade, the same categories  of expenses  which 
are  incurred  on  the  domestic  market,  plus  a  corresponding  profit  based  on  that 
obtained on domestic  sales should also be excluded, pursuant to Article 2(10)(d) of 
the Basic Regulation. 

(33)  This  argument  cannot  be  accepted,  since  it  ignores  an  essential  requirement  of the 
Basic  Regulation  in that  respect,  i.e. that  the  levels  of trade  at  which  the  sales  are 
performed  domestically  and on the export market must be defined  by the  claimant, 
and in particular how this eventual difference  affects  price  comparability. 

(34)  It should be recalled that the Institutions'  practice to reconstruct  the export price by 
deducting  the  costs  incurred  by  the  related  importers  from  the  price  to  unrelated 
importers  brings  the  Community  border  price  to  the  level  of  a  sale  to  an 
independent  customer.  Since, in the  present  case, the  resale  price  from  the  related 
importers  to  the  independent  customers  was  found  mainly  to  be  at  the  level  of 
prices  charged  to  large  retailers  and  distributors,  a  deduction  of  the  importers' 
expenses in selling to such customers results in a price which is at a level further  up 
in  the  sales  chain.  It  is  consequently  to  consider  the  export  price  after  re 
construction equivalent to a price charged to a distributor. 

(35)  As  to  the  companies'  claim  that,  because  costs  were  deducted  to  reconstruct  the 
export  price  a  similar  deduction  should  be  made  to  the  domestic  price,  this  is 

considered per  se not warranted.  Since in the present case the reconstruction  of the 
export  price  led  to  a  level  of  trade  corresponding  to  that  of  a  distributor,  this 
corresponded  to  the  domestic  level  of  trade.  The  fact  that  certain  costs  may  be 
incurred  on the domestic  market  in selling to distributors which are not  incurred  in 
the  similar  export  level  is  linked  to  the  specific  structure  or  circumstances  of  the 
markets  under  consideration,  but could not per  se lead to  an adjustment  when  it  is 
clear that prices are made to a similar type of customers, i.e. distributors. 

(36)  The  Japanese  and  Korean  companies  claimed  that  the  average  domestic  price 
cannot be used as a normal value because these sales took place at several  different 
levels  of  trade,  only  one  of  which  corresponded  to  the  export  level.  The 
Commission  examined  the  situation  in detail  but  was  unable  to  conclude  that  the 
exporters'  claim was substantiated  in that no clear breakdown  could be provided by 
the  companies  either  in  terms  of  different  costs  or  prices  to  demonstrate  such 
different  levels  domestically.  What  the  Commission  was  able  to  establish,  in 
contrast, was that the prices to all domestic clients were approximately  the same to 
the various groups of customers, a factor  which suggested  that  levels of trade  were 
not  different.  In  any  event,  given  that  domestic  prices  to  all  groups  of  customers 
were similar, and given that one group of these corresponded to the level of trade of 
the  export  customers  (distributors),  a  level  of  trade  adjustment  was  not  justified. 
Normal  value  would  be  the  same  whether  based  on  sales  to  one  group  or  to  all 
customers. 

(37)  In the case of Singapore  domestic sales were allegedly  all made to a single  level of 
trade,  i.e.  distributors.  It  must  be  recalled  that  normal  value  was  established 
pursuant to Article  18(1) of the Basic Regulation, due to the company's omission to 
report  a  substantial  number  of  domestic  transactions  of  the  product  concerned, 
which prevented a more detailed verification  of the domestic levels of trade. On the 
basis  of  the  information  available  to  the  Commission,  no  difference  was  found 
between domestic and export levels of trade. 

(38)  For  the  above  reasons,  normal  value  was  established  on  the  basis  of  all  domestic 
sales and  it was considered  that the  adjustments  for  differences  in  level  of trade  as 
requested  by  the  Japanese,  Singapore  and  Korean  producers/exporters  were  not 
justified. 

(39)  Nevertheless,  in  circumstances  not  covered  by  an  adjustment  for  differences  in 
level  of  trade  as  defined  by  Article  2(10)(d)(i)  of  the  Basic  Regulation,  Article 
2(10)(d)(ii)  allows  the  granting  of  a special  adjustment  when  certain  functions  are 
shown to relate to a level of trade other than the one used for the comparison. In the 
present  case, the investigation revealed that while the adjustment  for  differences  in 
level  of  trade  could  not  be  granted,  the  function  of  advertising  should  receive  a 
special  consideration 
in  the  light  of  Article  2(10)(d)(ii).  The  Commission 
examined,  in  particular,  whether  the  companies  concerned  incurred  advertising 
expenses  to  encourage  sales  at  levels  of  trade  other  than  the  one  used  for  the 
comparison.  It  was  found  indeed  that,  for  the  companies  concerned  certain 
advertising  expenses  related,  in the  present  case, to  a  level  of  trade  other  than  the 
one  used  in  the  comparison.  In  consequence,  it  was  decided  pursuant  to  Article 
2(10)(d)(ii) of the Basic Regulation, to exclude from  the computation  of the normal 

value  those  advertising  expenses  incurred  in domestic  sales  which  relate  to  a  level 
of trade other than distributors. 

b) OEM sales 

(40)  One  producer/exporter  in  Taiwan,  one  in  Thailand  and  two  in  Korea  disputed  the 
rejection  of their  claim for an adjustment  for differences  in levels of trade based on 
OEM export sales. 

(41)  The  requested  level  of  trade  adjustment  could  not  be  granted  since  no  clear  price 
pattern  could  be  established  between  the  alleged  sales  channels.  In  certain  cases, 
prices  for  OEM  models  were  found  to  be  higher  than  for  own  brand  sales.  In  the 
case  of  one  Korean  company  it  was  also  found  that  the  customer  classification 
given was inaccurate and therefore  had to be disregarded.  In the Taiwanese  market, 
OEM  domestic  sales  did  not  reveal  any  consistent  price  difference  compared  to 
own brand sales. 

(42)  In the case of the Thai producer, which had no domestic  sales and exported only on 
an  OEM  basis, normal  value  was  constructed  using  the  average  SG&A  and  profit 
of  the  Taiwanese  market,  for  which,  as  explained  above,  no  adjustment  of  this 
nature was required. Consequently, the claim is rejected. 

Commissions 

(43)  The Thai company disputed the fact that a 5% commission had been deducted  from 
the  price  to  the  first  independent  purchaser  in  the  Community  to  account  for  the 
participation  of  its Taiwanese  related  company  in these  transactions.  According  to 
them  only  directly related  selling expenses  should  be deducted  and. therefore  there 
would  be  no  legal  basis  to  apply  this  5%  commission  which  was  allegedly  not 
actually  incurred. 

(44)  The  investigation  confirmed  that  all  exports  by  the  Thai  producer/exporter  to  the 
Community  were  made  via  a related  company  in  Taiwan.  It  has  been  determined 
that  because  of  the  relationship  between  the  two  companies,  the  transfer  prices 
charged  by  the  Thai  producer  to  the  related  Taiwanese  company  were  not  on  an 
arm's-length  basis.  It  was  verified  on-spot  that  there  was  a  mark-up  between  the 
transfer  price  and  the  price  paid  by  the  first  independent  customer  in  the 
Community.  This  difference  was  intended,  at  least  partially,  to  cover  the  costs 
incurred  by  the  related  company  for  the  activities  performed  for  the  purpose  of 
exporting  the  product  concerned.  As  the  related  Taiwanese  company's  functions 
can  be  considered  similar  to  those  of  a trader,  an  adjustment  of  5% was  deducted 
from  the price  to the  first  independent  customer  in the  Community.  This  figure  is 
considered  reasonable  given  the  degree  of  the  related  company's  involvement  in 
the selling activities of the Thai  producer/exporter. 

(45)  One company  in  Singapore  claimed  an adjustment  for  commissions  paid  to  related 
companies in Japan. This claim was already rejected  on the grounds stated in recital 
(73)  of  jthe  provisional  Regulation.  The  company  objected  to  this  position  re 
affirming  that the adjustment  was needed  because of the  significant  role  played  by 

two  Japanese  related  companies  both  in  the  production  and  the  marketing  of  the 
product concerned in Singapore. 

(46)  The  issue  was re-examined.  The investigation  established  that  the  amount  claimed 
related  in  fact  to  royalties  and  profit  transfers  which  the  two  related  Japanese 
companies received.  Such payments cannot be considered  as commission  payments 
within  the  meaning  of  Article  2(10)(i)  of the  Basic  Regulation.  Consequently,  the 
request for an adjustment  had to be rejected. 

(47)  However,  with  regard  to  export  sales,  it  was  found  that  the  Japanese  companies 
entirely managed such sales. The function  of the Singapore company was limited to 
invoicing  the  goods  and  to  arranging  the  shipping.  Therefore,  since  the  related 
companies'  functions  can be considered  similar  to. those  of a trader,  an  adjustment 
of  5%  was  deducted  from  the  price  to  the  first  independent  customer  in  the 
Community,  in  order  to  account  for  their  involvement  in  the  selling  and 
administrative activities of the Singapore producer. The level of the adjustment  was 
determined  at  5%  since  the  actual  expenses  incurred  by  the  Japanese  related 
companies  were  not  reported  in  the  reply  to  the  questionnaire,  although  this  was 
specifically  requested, and consequently could not be verified  on-spot. 

Credit costs 

(48)  In  recital  (39)  of  the  provisional  Regulation  it  was  stated  that  the  allowances 
claimed for credit cost by all Korean companies were rejected  since the claims were 
made  on the basis  of  a so called  "open  account",  i.e. a revolving  payment  system, 
without  evidence of an agreement  between  supplier and buyer of the product  at the 
date  of  sale.  Three  Korean  producers/exporters  claimed  that  this  would  not  be  in 
line with traditional  Commission practice. On this basis, a credit cost adjustment  to 
normal  value  representing  at  least  a  credit  period  of  30  days  should  have  been 
granted. 

(49)  It  is  the  Institutions'  practice  to  accept  an  allowance  for  credit  costs  where  the 
exporter  shows  that  the  payment  terms  were  a  factor  taken  into  account  in  the 
determination  of  the  prices  charged,  in  accordance  with  Article  2(10)(g)  of  the 
Basic  Regulation.  An  adjustment  will  therefore  only  be  granted  for  the  number  of 
days shown to be agreed at the date of the sale, as only the expenses relating to that 
number of days can be considered  to have influenced  the price. Such an  agreement 
does  not  exist  were  payments  were  made  on  an  open  account  basis  and 
consequently the claim could not be accepted. 

Warranty costs 

(50)  One  Korean  producer/exporter  claimed  that  a  more  reasonable  estimate  of  an 
allowance  for  differences  in  warranty  costs  should  be  made  by  including  certain 
expenses  allegedly  incurred  in fees  paid  to independent  agents  and  salaries  paid  to 
repairmen. 

(51)  The  investigation  revealed  that  the  reported  warranty  expenses  for  the  domestic 
market  were  overstated  and  consequently  that  they  were  an unreliable  basis  to  the 
assessment  of  the  adjustment.  For  the  provisional  determination  it  was  decided  to 
base  the  allowance  for  warranty  costs  only  on  the  actual  costs  incurred  for 

10 

providing  customers  free  of  charge  with  spare  parts.  In  the  absence  of  any  new 
evidence  which  could justify  an  increase  of  the  allowance  for  warranty  expenses 
the provisional findings are hereby  confirmed. 

Other factors 

(52)  A  Taiwanese  company  repeated  its  request  for  a  specific  allowance  to  be  made 
pursuant  to  Article  2(10)(k)  of  the  Basic  Regulation,  by  deducting  salesmen's 
salaries, advertising  expenses  and rent from  normal  value, since  it  considered  that 
most of the expenses incurred with these functions  related to domestic sales. 

(53)  The  Japanese  and  Singapore  producers/exporters  also  requested,  as  an  alternative, 
in  case  of  rejection  of  the  claim  for  a  level  of  trade  adjustment  (see  supra),  that 
other  specific  allowances  —like  salesmen's  salaries,  advertising  expenses,  etc.~ 
should  be  deducted  from  normal  value.  The  Singapore  company  objected  to  the 
rejection  of this claim (see recital  (72) of the provisional  Regulation)  claiming  that 
the  request  for  evidence  on  the  difference  in  prices  paid  by  the  customers  on  the 
domestic  market  provided  in  Article  2(10)(k)  is  merely  provided  as  an  example, 
and therefore  is not imperative. 

(54)  All  companies  which  made  the'  claim  under  Article  2(10)(k)  of  the  Basic 
Regulation,  failed 
to.  provide  evidence  of  significant  and  consistent  price 
differences  as  required  by  that  provision.  To  show  only  a  difference  in  costs 
between the export  and the domestic  sales departments  of the  same company  is an 
insufficient  basis  for  a  claim  for  differences  in  price  comparability,  let  alone  to 
demonstrate an impact on prices. Furthermore, the assumption that the request for a 
difference  in  prices  is  given  as  an  example  is  incorrect,  since  subparagraph  (k) 
reinforces  the two requirements  set in the general part of Article 2(10) of the Basic 
Regulation,  i.e. that the  adjustments  listed  in  (a) to  (k) can  only  be  granted  if  it  is 
claimed  and  demonstrated  that  they  affect  prices  and  price  comparability.  In  the 
absence  of  any  evidence  showing  that  these  conditions  were  met  in  this  specific 
case, the claim had to be rejected. 

3. Non-Market  economy  countries 

3.1 

Individual  treatment 

(55)  The  companies  to  which  individual  treatment  was  not  granted,  contended  that  the 
provisional  Regulation  was  inadequately  motivated  in  this  respect.  Furthermore, 
they  reiterated  their request  for  individual  treatment  on the grounds that they  were 
independent from the control of the Chinese State. 

(56)  It  should  be  noted  that,  pursuant  to  Article  9(5)  of  the  Basic  Regulation  a  single 
country  wide  duty  is  established  for  non-market  economy  countries.  The  granting 
of  individual  treatment  to  certain  exporters  remains  consequently  an  exception  to 
the  rule.  Each  producer/exporter  who  wishes  to  benefit  from  this  exception  has  to 
demonstrate the absence of interference  by the State. Two of the Chinese producers 
were  able  to  demonstrate  that  they  fulfilled  all  the  criteria  to  obtain  individual 
treatment.  In relation to the three  remaining  Chinese  producers  such  independence 

11 

was  not  demonstrated  by  the  companies,  therefore  the  Institutions  had  no  option 
but to apply them the countrywide duty. 

3.2  Model  comparison 

(57)  Chinese  producers/exporters  contested  the  fact  that  normal  value  was  partially 
based  on models  of a Korean producer  in respect  of which  Article  18 of the  Basic 
Regulation  was  applied.  These  exporters  claimed  that  the  use  of  a  normal  value 
found  for a non co-operating company would be unfavourable  to them. 

(58)  The  issue was re-examined  and, given that Article  18 of the  Basic  Regulation  was 
applied  to  the  establishment  of  normal  value,  these  models  were  finally  excluded 
from  the calculation. 

(59)  One of the Korean companies with production  both in China and Korea,  contended 
that  the  normal  value  for  one  of  their  China  produced  models,  should  have  been 
established  by reference  to the constructed  value of the  same model produced  by it 
in Korea. 

(60)  The  request  has  been  rejected  since  facts  available  were  applied  on  the  basis  of 
Article  18  of  the  Basic  Regulation  to  establish  the  normal  value  of  the  related 
Korean  producer/exporter,  and,  as  explained  above,  these  models  have  been 
excluded from the determination of the Chinese normal value. Furthermore, it must 
be  stressed  that  normal  value  should  be  based  on  data  obtained  in  the  analogue 
country as a whole, if possible, and not only on sales of one particular producer. 

3.3  Comparison 

Level of trade 

(61)  Chinese  producers/exporters  continued  to  request  an  adjustment  for  differences  in 

level of trade on the grounds that their export sales were made to OEMs. 

(62)  As described  above, an analysis of Korean domestic  sales prices of OEM  sales and 
sales  of  own-brand  product  showed  that  any  difference  in  levels  of  trade  in  this 
respect  was  not  reflected  in  consistent  and  distinct  differences  in  prices.  In  the 
absence of price differences  between OEM sales and own brand  sales in Korea  and 
since  the  Chinese  normal  value  has  been  based  on  the  Korean  domestic  market, 
there were no grounds to make an  adjustment. 

Commissions 

(63)  Three  Japanese  companies  are  involved  in the  proceeding  concerning  China  since 
they  exported  fax  machines  of  Chinese  origin  to  the  Community.  Their  fully 
owned  subsidiaries  in  Hong  Kong  appeared  to  have  either  a  subcontracting 
agreement  with  a  Chinese  company  for  production  (or  assembly)  in  China  or  a 
company  set-up (legal entity) in China. In the provisional  calculation a mark-up  for 
the  activities  performed  in  Hong  Kong  and  Japan  was  deducted  in  the  form  of 
commission.  The  Chinese  producers/exporters  claimed  that  this  deduction  of  5% 
from  the  export  price  was  not  correct  since  this  would  not  relate  to  an  actual 
commission payment. 

12 

(64)  As the related Japanese  companies'  functions  can be considered  similar to those  of 
a trader acting on a commission basis, an adjustment  of 5% has been deducted  from 
the  price  to  the  first  independent  customer  in  the  Community.  This  figure  is 
considered  reasonable  given  the  degree  of  the  related  companies'  involvement  in 
the selling and administrative activities of the Chinese producers. 

it  should  be  stressed 

(65)  Article 2(10)(i) of the Basic Regulation  sets out that an adjustment  has to be made 
for  differences  in commissions  paid  in respect  of  the  sales  under  consideration.  In 
this  respect, 
the 
producer/exporter  invoices  directly  its  customer  in  the  Community  and  pays  a 
commission  to  the  parties  involved  in  arranging  the  sales  transaction  or  if  the 
producer/exporter  invoices the intermediary  which  in turn invoices to the  customer 
in  the  Community.  The  latter  arrangement  is  merely  a  different  way  of  ensuring 
that the intermediary receives its commission. In accordance with the Council's and 
the Commission's consistent practice, the claim could not, therefore, be accepted. 

it  makes  no  difference 

that 

if 

4. Dumping margin for companies  investigated 

4.1 Dumping  margin for  co-operating companies 

(66)  According  to  Article  2(11)  of  the  Basic  Regulation,  the  dumping  margin  was 
established  on the basis of a comparison of a weighted  average normal value with a 
weighted average export price of all export transactions to the Community. 

4.2  Dumping  margin for  non co-operating companies (residual dumping margin) 

(67)  In the  absence  of any  comments  by the  interested  parties  it is decided  to apply  the 
method  set  out  in  recital  (28)  of  the  provisional  Regulation,  i.e.  for  each  of  the 
exporting  countries  the  company  with  the  highest  dumping  margin  was  selected 
and  the  highest  dumped  model  produced  and  sold  by  this  company  in  significant 
quantities  was  identified.  The  residual  dumping  margin  was  determined  on  the 
basis  of  the  weighted  average  margin  established  for  this  model,  expressed  as  a 
percentage of the CIF import price at the Community  border. 

4.3  Dumping  margins 

Republic of Korea 

(68)  For 

the  co-operating  producers/exporters 

the  -definitive  dumping  margins, 

expressed as a percentage of the CIF import price at the Community border, are: 

Samsung Electronics Co. Ltd, Seoul 

Daewoo Telecom Ltd, Seoul 

Nixxo Telecom Co., Ltd, Seoul 

Tae II Media Co., Ltd, Seoul 

19.8% 

11.6% 

7.5% 

9.2%. 

(69)  The  residual  dumping  margin  for  Korea,  expressed  as  a  percentage  of  the  CIF 

import price at the Community border, is 25.1% 

Japan 

(70)  For 

the  co-operating  producers/exporters 

the  definitive  dumping  margins, 
expressed as a percentage of the CIF import price at the Community border, are the 
following: 

Brother Industries, Ltd., Nagoya: 

Tottori  Sanyo Electric Co., Ltd., Tottori: 

49.2% 

124.2% 

(71)  The  residual  dumping  margin  for  Japan,  expressed  as  a  percentage  of  the  CIF 

import price at the Community border, is  130.2% 

Taiwan 

(72)  For 

the  co-operating  producers/exporters 

the  definitive  dumping  margins, 
expressed as a percentage of the CIF import price at the Community  border, are the 
following: 

Kinpo Electronics, Inc., Taipei 

Sampo Corporation, Taipei 

6.0% 

56.2%. 

(73)  The  residual  dumping  margin  for  Taiwan,  expressed  as  a  percentage  of  the  CIF 

import price at the Community border, is 60.8%. 

Singapore 

(74)  For the co-operating producer/exporter the definitive  dumping margin, expressed as 
a percentage of the CIF import price at the Community border, is the  following: 

Matsushita Graphic Communication  Systems (S) Pte., Ltd., Singapore 

30.1%. 

(75)  The  residual  dumping  margin  for  Singapore,  expressed  as a percentage  of the  CIF 

import price at the Community border, is 68.2%. 

Thailand 

(76)  For the co-operating producer/exporter the definitive  dumping margin, expressed as 
a percentage of the CIF import price at the Community border, is the  following: 

Cal-Comp Electronics (Thailand) Co. Ltd., Bangkok 

10.4%. 

(77)  The  residual  dumping  margin  for  Thailand,  expressed  as  a  percentage  of  the  CIF 

import price at the Community border, is 22.6%. 

Malaysia 

(78)  The  residual  dumping  margin  for  Malaysia,  expressed  as  a percentage  of  the  CIF 

import price at the Community border, is  124.2% 

The People's Republic of China 

14 

(79)  The  definitive  dumping  margin  for  China,  expressed  as  a  percentage  of  the  CIF 

import price at the Community border, is 51.6%. 

(80)  The  definitive  dumping  margins  for  the  companies  which  received  individual 
treatment,  expressed  as  a  percentage  of  the  CIF  import  price  at  the  Community 
border, are as follows: 

Murata Machinery (H.K.) Ltd., Hong Kong (products originating in China): 21.2%; 

Highsonic Industrial Ltd., Hong Kong, (products originating in China): 

23.2%. 

D.  COMMUNITY  INDUSTRY 

(81)  After  the  imposition  of  provisional  anti-dumping  duties,  some  interested  parties 
have  claimed  that the  complainant  Community  producer  should  not  be  considered 
as the "Community  Industry",  in view of the non-co-operation  of the  second  large 
Community  producer.  However,  in  the  investigation  it  was  determined  that  the 
complainant  Community  producer  represents  a  major  proportion  of  the  total 
Community  production,  pursuant  to  Article  4(1)  of  the  Basic  Regulation.  This 
producer  is  thus  considered  as  the  Community  Industry  for  the  purpose  of  this 
proceeding. 

E. 

INJURY 

1.  Cumulative assessment of the effects  of the dumped imports 

(82)  The Japanese  exporters have argued that the  Commission  should  not  assume  non-
co-operation with regard to around  10 Japanese fax producers, which had refused  to 
co-operate  with  the  Commission  in  this  proceeding  and  had  not  replied  to  the 
these 
questionnaires  sent  to  them  by  the  Commission's  services,  because 
companies  allegedly  ceased  exports  to  the  Community  prior  to  the  investigation 
period.  The  import  trends  for  Japan  should  be  based  on  the  data  submitted  by  the 
Japanese Manufacturers'  Association CIAJ for these non-co-operators  in the course 
of  the  proceeding,  and  on  the  data  submitted  by  the  2  co-operating  Japanese 
exporters.  These  data  would  show  a  significant  decline  of  Japanese  imports  from 
1993 to  1996. In view of these trends, imports from Japan should be de-cumulated. 

(83)  An exporter  of Chinese products argued that the Chinese exports  should have  been 
de-cumulated,  since  Chinese  exporters  have  focused  on  OEM  customers,  whereas 
the  other  exporting  countries  have  aimed  at  the  consumer  market.  This  exporter 
also  claimed  that  different  injury  margins  were  found  and  different  pricing 
strategies  would  have  been  applied  by the  exporters  from  different  countries.  This 
would justify  de-cumulation,  since it would  indicate a lack of competition  between 
these products. 

(84)  Furthermore,  exporters  have  argued  that  the  Japanese  and  Singapore  average 
prices were between 40% and 48% higher than the overall  average for all  exporting 
countries  concerned.  This  would justify  de-cumulation  for  these  countries,  since  it 

15 

would  indicate that the products  did not compete  with those  of the other  exporting 
countries  concerned. 

(85)  The  conditions  to  cumulate  imports  for  the  purpose  of  the  injury  determination, 

pursuant to Article 3(4) of the Basic Regulation, are as follows: 

(a)  the  dumping  margins  established  in relation  to  each  country  are  more  than  de 

minimis as defined  in Article 9 (3); 

(b) the volume of imports from  each country is not negligible; and 

(c)  a cumulative  assessment  of the  effects  of the  imports  is appropriate  in  light  of 
the  conditions  of competition  between  imported products and the conditions  of 
competition between the imported products and the like Community  product. 

1.1  Dumping  margins 

(86)  As outlined above, the dumping margins found  for each of the exporting countries 

are more than de minimis in the sense of Article 9(3). 

1.2 

Import  volumes 

(87)  With respect to import volumes from Japan, in the absence of reliable, verified  data 
from  all  Japanese  exporters,  they  are,  for  the  purpose  of  the  definitive  findings, 
established  on  the  basis  of  Eurostat  data.  Since  Eurostat  data  do  not  distinguish 
between  business  and  personal  faxes,  the  import  volume  of  personal  faxes  was 
determined  by applying  the ratio between  business  and  personal  faxes  of  Japanese 
origin established  during the investigation  for co-operating  unrelated  importers  and 
importers  related  to  Japanese  exporters.  This  indicated,  for  the  parties  concerned, 
that 41.1 % (in units) of all fax machines of Japanese origin sold in the  Community 
in  the  investigation  period  were  personal  faxes.  The  import  volume  for  Japan  for 
the  period  under  consideration  was  thus  determined  to  be  equal  to  41.1  %  of  the 
total imports from  Japan as reported by Eurostat. 

(88)  Indeed, the Japanese  import volumes cannot be based  on the data submitted  by the 
Japanese  Manufacturers'  Association  CI A J  since  a  substantial  part  of  this  data 
refers  to  non-co-operating  Japanese  exporters  which  refused  to  reply  to  the 
questionnaires  sent  to  them  by  the  Commission's  services  and  thus  prevented  the 
Commission  from  obtaining  and  verifying  the  relevant  data.  Furthermore,  no 
evidence  has  been  submitted  to  show  that  no  imports  of  personal  fax  machines 
other  than  those  of  the  2  co-operating  Japanese  exporters  have taken  place  during 
the  investigation  period.  These  exporters  have  thus  failed  to  prove  the  alleged 
strongly declining export trends. 

(89)  Therefore,  the  provisional  determinations  are  confirmed,  whereby  the  import 
volumes  from  Japan have to be established  on the basis of facts  available, pursuant 
to Article  18 of the Basic Regulation. 

The import volumes thus established for the Japanese exports remain  significant. 

16 

1.3  Conditions  of competition 

Sales  channels 

(90)  With respect to the argument that Chinese exporters focussed  on OEMs and that the 
sales  channels  thus  had  to  be  considered  different,  there  was  substantial  non-co 
operation  from  Chinese producers. Therefore,  no  general  conclusions  in respect  of 
Chinese exports can be drawn from  the situation of the co-operating exporters only. 
Furthermore,  the  Commission  has  established  that  most  co-operating  parties  from 
all  exporting  countries  concerned  sell  the  product  concerned  in  the  EU  to  several 
categories of customers, including OEM customers. 

(91)  This also applies to the Community  Industry. The proportion of sales to the various 
categories  of  customers  is  naturally  different.  However,  this  does  not  change  the 
fact that these parties compete with each other, and there would be no justification, 
even had there been full  co-operation, to de-cumulate  the Chinese  exports  on these 
grounds. 

Prices 

imports, 

(92)  With  respect  to  the  argument  concerning  higher  prices  for  Japanese  and 
Singaporean 
that  Japanese  and 
the  Commission  has  established 
Singaporean personal fax machines imported  into the Community  have, in general, 
a  higher  number  of technical  features  and  are more  at the high  end  of the  product 
range than those from  the other exporting countries. Therefore,  it is normal that the 
average  import  prices  for  these  two  countries  are  higher.  Nevertheless,  Japanese 
and  Singapore  products  did  compete  with  those  of  the  other  exporting  countries 
which  also  exported,  though  to  a  lesser  extent,  high-end  product  types,  and  they 
competed  with  those  of  the  Community  Industry,  which  is  shown  by the  fact  that 
they have identical  or similar physical  and technical  characteristics, that they  serve 
the same use, and that they were sold through the same or similar sales channels. 

Although  the  Singaporean  and  Japanese  exporters  have,  overall,  not  or  not 
significantly  undercut  the  sales prices of the  Community  Industry  (see below  2 (a) 
price undercutting), the falling  export prices from  Singapore  and Japan had  a price 
suppressing  effect  which  had  the result  that  the  Community  Industry  was  not  in  a 
position to rise its prices to a profitable  level. 

Therefore, the conditions of competition are similar. 

1.4  Conclusions 

(93)  In view of the above, the conclusions of the provisional findings are  confirmed, 
whereby the conditions to cumulate imports for the purpose of the  injury 
determination, pursuant to Article 3(4) of the Basic Regulation, are  fulfilled. 

General injury  factors 

General remark 

17 

(94)  On  the  basis  of  the  representations  received  after  the  imposition  of  provisional 
measures  and  further  investigations,  a  number  of  the  general  injury  factors  have 
now been definitively  established. 

Consumption 

(95)  After  the imposition of the provisional  anti-dumping  duties, the consumption  in the 

Community  is now established as follows. 

(96)  It  grew  from  around  1.1 mio  units  in  1993  to  2.5mio  units  in  1996  (investigation 

period), an increase of  around  130%. 

Cumulated volumes, market shares 

(97)  Furthermore, the following  trends were established  for the cumulated  imports  from 

the countries  concerned: 

(i)  In  the  period  1993  to  1994,  the  exporting  countries  increased  their  sales 
volume  by  33.7%, but  their  market  shares  decreased  by  11.4  %-points  (from 
62.5% to 51.1%). 

(ii)  In  the  period  1994  to  1996,  the  import  volume  of  the  exporting  countries 
increased  by  76.9%, and  their  market  shares  went  up  from  51.1 % to  64.3  %, 
i.e. by  13.2 %-points. 

Prices 

(a) 

Price  undercutting 

(98)  After  the imposition  of the provisional  anti-dumping  duties, it was established  that 

there was no price undercutting for the (only) exporter from  Singapore. 

(99)  For  the  other  co-operating  exporters,  the  provisional  findings  are  confirmed 
whereby  price  undercutting  was  found  for  the  model  groups  on  which  the 
determination  was  based.  The  undercutting  margins  established per  model  group 
range  between  1.3%  and  41.8%.  The  weighted  average  undercutting  margin  in 
relation to the total  imports per country  are definitively  determined  as follows:  PR 
China  18.5%,  Japan  0.3%,  Taiwan  4.5%,  Singapore  0.0%,  Korea  9.2%,  Thailand 
10.9%,  Malaysia  41.8%.  The  weighted  average  undercutting  margin  for  all 
countries concerned  is 8.4%. 

(b) 

Sales  prices 

(100) In the period  1993 to  1994, the sales prices of the co-operating  exporters  decreased 
on average by  11% and, between  1994 and  1996, the decrease amounted to 26.1 %, 
on average. The Japanese and  Singaporean  exporters  also  showed  decreasing  price 
trends in this period. 

Situation of the Community  Industry 

18 

(101) On  the  basis  of  the  comments  received  after  imposition  of  the  provisional  anti 

dumping duties and further  investigations, the following was established: 

(102) In the period 1993 to 1994, the Community Industry's sales volumes rose by  140 % 
and  the  market  shares  went  up  by  7.7  %-points  (from  16.3%  to  24%).  This 
positive development was based on the investment made in  1993. 

(103) On the other hand, in the period  1994 to 1996, the sales volume of the  Community 
industry decreased by  14.7 % and its market share decreased from  24.0% to  14.5%, 
i.e. by  9.5%-points. 

(104) In  the  period  1994  to  1996,  the  quantities  produced  and  the  production  capacity 
utilisation decreased  substantially  as a result of decreasing  sales volumes and  sales 
prices  decreased  by  17.5 %. In the same period,  employment  fell  by 21.7%. In the 
same  period,  the  financial  results  decreased  and,  in  the  investigation  period, 
showed  a  two-digit  loss  (%)  on  turnover.  The  Community  Industry  was  not  in  a 
position  to  increase  its prices  to  a profitable  level,  due  to  the  price  depression  on 
the Community market. 

4. 

Conclusions 

(105) In the light of the above, it is concluded  that the  Community  industry  has  suffered 

material  injury. 

F.  CAUSATION OF INJURY 

1.  Dumped  imports 

(106) The  penetration  of  the  Community  market  by  imports  at  dumped  prices  sold 
through  the  same  distribution  channels  and  into  the  same  (transparent)  market, 
coincided  with a loss of market  shares and a deterioration  of the  financial  situation 
of the Community  Industry. This industry, throughout the investigation period, sold 
at  prices  substantially  below  cost  of  production.  It  had  not  been  in  a  position  to 
increase  its prices to  a profitable  level  due to the price  suppression  on the  market. 
The  price  suppressing  effect  was  caused  by  the  undercutting  exporters  and  by  the 
Japanese  and  Singaporean  exporters  taken  together,  the  latter's'  export  prices  also 
showing  a continually  decreasing  trend. Therefore,  the Community  Industry  had to 
face, at the same time, dumped imports from  Japan and  Singapore  for products that 
were  generally  in the higher  segment  of the market,  and  dumped  imports  from  the 
other exporting  countries, concerning  more the lower  segment  of the market  where 
competition is mainly led by price. 

2.  Other factors 

(107) After  the  imposition  of  provisional  anti-dumping  duties,  it  was  argued  that  the 
injury  suffered  by the Community  industry  might have been caused  by  Sagem, the 
second largest Community  producer. 

19 

(108) In this respect, data obtained during the investigation indicates that  Sagem's market 
share,  which  had  increased  from  1993  to  1994,  considerably  decreased  between 
1994  and  the  investigation  period.  Furthermore,  statistical  information  indicates 
that  on Sagem's main market  (France), this company  normally  charged the  highest 
prices within  a group of comparable  models. On the basis  of this  information,  it  is 
considered  unlikely  that  Sagem  has  to  any  significant  extent  contributed  to  the 
injury  suffered  by the Community  Industry. 

(109) With  respect  to  imports  from  countries  not  subject  to  the  investigation,  the 
provisional  findings  had established  that there were, in the investigation  period, no 
significant  imports. No substantiated comments were raised in this respect. 

3. 

Conclusions 

(110) In  the  light  of  the  above,  it  is  considered  that  the  dumped  imports  from  the 
exporting  countries  concerned  have  caused  material  injury  to  the  Community 
Industry. 

G. 

COMMUNITY  INTEREST 

(111) After  the  imposition  of  provisional  anti-dumping  duties,  it  was  argued  that  anti 
dumping  duties  would  unduly  burden  consumers  and  thus  be  against  the 
Community  interest.  In  consequence,  further  investigations  have  been  undertaken 
and the following  findings have been established. 

4.  Community Industry and other Community  producers 

(112) It was established in the investigation that the Community Industry is viable, which 
is, inter alia, shown by continued  investment and the development  of its own plain-
paper (thermal-transfer)  personal fax machine which will shortly be introduced  into 
the market.  It  can be  expected  that this  industry  would  discontinue  its activities  in 
the  Community  if  no  measures  against  dumping  were  taken,  in  view  of  the 
magnitude  and  duration  of  financial  losses  suffered  due  to  dumped  imports. 
Without  measures,  the  price-depressive  effect  of  the  dumped  imports  would 
continue  and  frustrate  all  efforts  of the  Community  industry  to become  profitable. 
As a result, around  370 jobs directly  linked to the product  concerned  would  be lost 
in  the  Community.  On  the  other  hand,  the  imposition  of  measures  would  enable 
this industry to maintain and even develop its activities in the EU. 

(113) Furthermore, it is considered that the imposition  of anti-dumping  duties is likely  to 
positively  affect  directly  and  indirectly  around  4000  jobs,  i.e.  around  1000 
employees  within  all  Community  producers  (Philips,  Sagem  and  the  Japanese 
transplants), and  indirectly  a further  3000 jobs  in the area of manufacturing  related 
servicing/supply  (based  on  industry  evaluations  for  this  sector  that  1  industrial 
employment would entail at least 3 support jobs). 

5.  Unrelated  importers/traders 

20 

(114) The  investigation  has  shown  that,  for  unrelated  importers  and  traders,  the  product 
concerned  represented,  in  general,  only  a  small  part  of  the  overall  business,  on 
average  1% of total  turnover.  For the  co-operating  importers,  no  employment  and 
no significant  investment was directly related to the product concerned. All but one 
of  these  companies  explained  that  anti-dumping  duties  would  not  have  a  major 
impact on overall sales, profits  and employment. 

6. 

Consumers 

(115) On the basis  of the definitive  anti-dumping  duties  imposed,  the  average  consumer 
price  increase,  for  products  imported  from  the  countries  concerned,  would  be 
around  12 %, based  on the assumption that exporters  subject  to high  anti-dumping 
duties,  i.e.  duties  between  40%  and  89%,  would  discontinue  their  exports  to  the 
Community market, whereas the remaining exporters would continue selling on the 
Community  market.  The  individual  price  increase  for  exporters  subject  to  anti 
dumping duties below the average, accounting for  around  70 % of the exports  from 
the countries concerned, would even be lower, namely  between  3% and  9 %. For a 
product  with  a useful  lifetime  of  around  5 years, the  average  yearly  charge  due  to 
anti-dumping  duties  would  thus be around  6 ECU. These  relatively  minor  charges 
would  still  be  partly  neutralised  by  the  normal  price  decreases  for  the  product 
concerned. 

(116) Apart  from  the  above-mentioned  price  increases  for  imported  products,  the 
consumer  will  be  able  to  rely  on  a  growing  market  supply  from  all  Community 
producers.  It  can  be  expected  that  the  market  share  of  all  Community  producers 
would  rise  from  around  35% in  1996 to  around  50% after  the  imposition  of  anti 
dumping  duties. These  Community  producers  are likely to keep their prices  stable, 
in order to obtain the benefits  of higher market  shares and  sales volumes which, in 
turn, would lead to reduced per-unit- costs and improved financial  results. 

(117) The  European  consumers'  association  (BEUC),  although  invited  to  do  so,  did  not 

participate and did not submit comments. 

(118) In view of the above, it is considered that the charge to the consumers as a result of 
anti-dumping  duties  for  personal  fax  machines  imported  from  the  countries 
concerned,  is  moderate  compared  to  the  benefits  of  securing  the  continuation  of 
industrial  activities  and  employment  requiring  high  qualifications 
the 
Community. 

in 

7. 

Information  Society 

(119) It  was  argued,  that  the  imposition  of  anti-dumping  duties  would  affect  the 

development of the Information  Society. 

(120) In  this  respect,  it  is  explicitly  stated  in  the  1996  Singapore  Agreement  on 
Information  Technology  Products  that  this  Agreement  does  not  in  any  respect 
interfere  with  the  right  to  impose  anti-dumping  measures,  where  applicable. 
Furthermore,  it is considered  that the  small  impact  on the  consumers,  as  indicated 
above, will not negatively influence  the demand for the product  concerned. 

8. 

Impact of anti-dumping measures on competition 

21 

(121) The  imposition of anti-dumping  duties on those exporters  for  which high  dumping 
and  injury  margins  were  established,  and whose exports  would  be  subject  to  high 
anti-dumping duties, is likely to lead to a drop in sales volume and market share  for 
these  parties.  However,  for  the  majority  of  exporters  concerned  the  impact  of  the 
duties  will  be  moderate  and  it  is  not  expected  that  these  exporters  would  be 
significantly  affected  in respect of their competitive  situation.  Therefore,  there  will 
be  still  a considerable  number  of  strong  competitors  of  the  Community  producers 
on the market. 

9. 

Conclusions 

(122) In  the  light  of  the  above,  it  is  considered  that  there  are  no  compelling  reasons 

against the imposition of anti-dumping duties. 

H. 

DEFINITIVE DUTY 

1. 

-Injury  margins 

(123) For the purpose  of  determining  which level  of duty would  be necessary  to  remove 
the  injury  caused  to  the  Community  Industry  by  the  dumped  imports,  it  was 
considered that a price level based on the Community Industry's  cost of  production 
plus  a  reasonable  profit  should  be  calculated.  A  profit  margin  of  10.7  %  on 
turnover  was regarded  as an appropriate  minimum. It  is also  considered  that,  as to 
its  present  and  future  situation,  there  is  and  will  be  a  need  for  intensive  and 
increased  R&D  efforts,  in  particular  in  view  of  further  miniaturisation  and  future 
telecommunications 
product  generations  adapted 
technology.  In  addition,  the  above  profit  margin  is  sufficient  to  provide  the 
resources  for  the  investment  necessary  to  produce  the  new  product  types  and  to 
provide a reasonable return on the capital already  invested. 

to  new  developments 

in 

( 124) Furthermore,  it  is  considered  that  this  profit  margin  is  in  line  with  the  profit 
margins  found  for  sales  of the  exporters  concerned  on their  domestic  markets,  and 
it is also in line with the profit  margins used in past anti-dumping  cases for  similar 
industries  (e.g.:  cases  concerning  small  screen  CTVs,  audio  cassettes,  video 
cassette  tapes,  magnetic  discs,  aluminium  electrolytic  capacitors,  TV  camera 
systems: profit  rates between  10 and  12% on turnover were used in these cases). 

(125) The  injury  elimination  level  was  calculated  by  comparing  the  weighted  average 
import price, duly  adjusted  for  differences  concerning payment  and delivery  terms, 
and  on  the  same  level  of  trade,  with  the  non-injurious  price  of  the  Community 
Industry,  established  as  indicated  above.  The  amounts  resulting  from 
this 
calculation  were  expressed  as  a  percentage  of  the  weighted  average,  free-at-
Community-border value of the imported  goods. The injury  margins determined  on 
that basis are as follows: 

~>~> 

COUNTRY 

COMPANY 

INJURY MARGIN  % 

JAPAN 

Brother Industries Ltd. 

7.0 

-

Tottori Sanyo Electric Co. Ltd 

Others 

PR CHINA 

Highsonic Industrial Ltd., Hong Kong. 

Murata Machinery Ltd. 

Others 

KOREA 

Daewoo Telecom  Ltd. 

Tae II Media Co. Ltd. 

Samsung Electronics Co. Ltd. 

Nixxo Telecom Ltd. 

' 

Others 

SINGAPORE 

Matsushita Graphic Communication 

Systems (S) Pte. Ltd. 

Others 

TAIWAN 

Kinpo Electronics Inc. 

Sampo Corporation 

Others 

THAILAND 

Cal-Comp Electronics (Thailand) Co. Ltd. 

Others 

MALAYSIA 

All (no-co-operation) 

2. 

Definitive  duties 

28.1 

34.9 

59.3 

23.5 

74.2 

61.6 

50.8 

17.4 

54.8 

73.1 

7.7 

39.5 

32.4 

35.8 

36.6 

40.7 

47.3 

89.9 

(126) The  definitive  anti-dumping  duties  are  set  at  the  level  of  the  dumping  margins 
found,  or  at  the  level  of  the  injury  margins,  if  the  latter  are  lower.  These  duties, 
expressed  as a percentage  of the  free-at-Community-border  prices,  amount  to: 

COUNTRY 

COMPANY 

DEFINITIVE  DUTY 

JAPAN 

Brother Industries  Ltd. 

7.0% 

Tottori Sanyo Electric Co. Ltd 

Others 

PR CHINA 

Highsonic Industrial Ltd., Hong Kong. 

Murata Machinery Ltd. 

Others 

KOREA 

Daewoo Telecom Ltd. 

Tae II Media Co. Ltd. 

Samsung Electronics Co. Ltd. 

Nixxo Telecom Ltd. 

Others 

SINGAPORE  Matsushita  Graphic  communication  Systems 

(S) Pte. Ltd. 

Others 

TAIWAN 

Kinpo Electronics Inc. 

Sampo Corporation 

Others 

THAILAND 

Cal-Comp Electronics (Thailand) Co. Ltd. 

Others 

MALAYSIA 

All 

28.1% 

34.9% 

23.2% 

21.2% 

51.6% 

11.6% 

9.2% 

17.4% 

7.5% 

25.1% 

7.7% 

39.5% 

6.0% 

35.8% 

36.6% 

10.4% 

22.6% 

89.9% 

I. 

COLLECTION OF THE PROVISIONAL  DUTIES 

(127)  In  view  of  the  magnitude  of  the  dumping  margins  found  for  the  exporting 
producers  and  countries, and  in the  light  of the  seriousness  of the  injury  caused  to 
the  Community  industry,  it  is  considered  necessary  that  the  amounts  secured  by 
way  of  provisional  anti-dumping  duties  for  transactions  involving  the  product 
concerned should be definitively  collected at the level of the definitive  duties. 

24 

HAS ADOPTED THIS REGULATION: 

Article 1 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  fax  machines 
with a weight of 5 kilograms or less and with dimensions (width x depth x height) 
of the main body measuring 470 mm x 450 mm x  170 mm or less, except for  such 
fax  machines  using  ink-jet  or  laser  or  LED  printing  technology,  falling  within 
CN code 8517 21 00 (TARIC code 8517 21 00  10) and originating  in the People's 
Republic  of  China,  Japan,  Republic  of  Korea,  Malaysia,  Singapore,  Taiwan  and 
Thailand. 

The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-
Community-border  price, before  duty, shall be as follows  for products  originating 
in: 

Country 

Definitive  duty 

TARIC 

The People's Republic of China 

Japan 

Republic of Korea 

Malaysia 

Singapore 

Taiwan 

Thailand 

(%) 

51.6 

34.9 

25.1 

89.8 

39.5 

36.6 

22.6 

additional  code 

8900 

8900 

8900 

8900 

8900 

8900 

The  above  rates  shall  not  apply  to  the  products  manufactured  by  the  companies  listed 
below, which shall be subject to the following  anti-dumping duty rates: 

Country 

Company 

Definitive 
duty  (%) 

TARIC 

additional  code 

The 
People's 
Republic 
of China 

- Murata Machinery (H.K.) Ltd., 

(Hong Kong) 

- Highsonic  Industrial 
Ltd.,(Hong  Kong) 

21.2 

23.2 

8458 

8459 

2D 

Japan 

- Brother Industries Ltd. 

- Tottori Sanyo Electric Co. Ltd 

R.of 
Korea 

- Daewoo Telecom Ltd. 

- Tae 11 Media Co., Ltd. 

- Samsung Electronics Co. Ltd. 

- Nixxo Telecom Co., Ltd. 

Singapore 

- Matsushita Graphic  Communication 

Systems (S) Pte., Ltd. 

Taiwan 

- Kinpo Electronics, Inc. 

- Sampo Corporation 

Thailand 

-  Cal-Comp  Electronics  (Thailand)  Co. 
Ltd. 

7.0 

28.1 

11.6 

9.2 

17.4 

7.5 

7.7 

6.0 

35.8 

10.4 

8430 

8431 

8434 

8435 

8436 

8437 

8438 

8439 

8442 

8457 

3. 

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties 
shall apply. 

Article 2 

1.  The  Commission  shall,  upon  receipt  of  a  duly  substantiated  application  by  an 
interested  party,  and  after  consulting  the  Advisory  Committee,  adopt  by  regulation 
the  necessary  measures  to  exclude  from  the  scope  of  application  of  the  present 
regulation  professional  fax  machines  which  come within the weight  and  size  criteria 
as provided for in Article  1  of the present Regulation, and portable fax machines to be 
used only in combination with a mobile telephone set. 

2.  Where  upon  examination,  the  application  is  found  to  be justified,  the  customs  debt 
arising  pursuant  to  Article  1  of  the  present  regulation  shall  be  extinguished  with 
retroactive effect  to the date of the introduction of the application. 

Article 3 

1.  The  amounts  secured  by  way  of  provisional  anti-dumping  duty  under  Commission 
Regulation  (EC)  No  2140/97  shall  be  definitively  collected  at  the  rate  definitively 
imposed. 

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

released. 

Article 4 

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

26 

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

Done at Brussels, 

For the Council 

27 

ISSN 0254-1475 

COM(98)  193 final 

DOCUMENTS 

EN 

02  11  10  15 

Catalogue  number  :  CB-CO-98-203-EN-C 

ISBN  92-78-32610-0 

Office  for Official  Publications of the European  Communities 

L-2985  Luxembourg 

2Sr