Commission Regulation (EC) No 773/98 of 7 April 1998 imposing a provisional anti-dumping duty on imports of certain unbleached cotton fabrics originating in the People's Republic of China, Egypt, India, Indonesia, Pakistan and Turkey
Date: 1998-04-07
Institutions: European Commission
Subjects: anti-dumping duty, cotton, import, originating product, textile product, third country

9. 4. 98

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Official Journal of the European Communities

L 111/19

COMMISSION REGULATION (EC) No 773/98

of 7 April 1998

imposing a provisional anti-dumping duty on imports of certain unbleached
cotton fabrics originating in the People’s Republic of China, Egypt, India,
Indonesia, Pakistan and Turkey

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 not members of
the European Com-
munity (1), as amended by Regulation (EC) No 2331/96 (2),
and in particular Article 7(1) thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

On 11 July 1997, the Commission announced by a
notice published in the Official Journal of the
European Communities (3), hereinafter referred to
as the ‘notice of initiation’, the initiation of an
anti-dumping proceeding with regard to imports
into the Community of certain unbleached cotton
fabrics originating in the People’s Republic of
China, Egypt,
Indonesia, Pakistan and
Turkey and commenced an investigation.

India,

The proceeding was initiated as a result of a
complaint lodged by the Cotton and Allied Textile
the EU (Eurocoton) on behalf of
Industries of
Community
a major
representing
producers
proportion of Community production of the like
product. In this respect, references to ‘Community
production’ relate to production destined for the
non-captive market of the product concerned.

that

The non-captive market of the product concerned
is that constituted by open-market sales of un-
bleached cotton fabrics,
is by Community
weavers’ sales to independent buyers. In contrast,
the
those
is
transactions that take place within the scope of an
integrated group,
is where they weave un-
bleached cotton and, in a further production step,
finish and/or make up the cloth.

captive market

constituted by

that

It is the practice of the Community institutions, as
confirmed by the Court of Justice, to exclude from
the analysis of injury sales on the captive market
when a clear separation exists between both the
captive and the free market. Since the captive

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ C 210, 11. 7. 1997, p. 13.

production is not sold on the free market, it does
not compete directly with imports of
the like
product.

injury
In those instances, since the analysis of
relates
to the Community industry as defined
according to Article 4 of Regulation (EC) No
384/96 (hereinafter referred to as the ‘Basic Regula-
tion’), that is to say excluding the sales on the
captive market, and since Article 4 refers to Article
5(4) which establishes the rules on standing,
it
follows that the requirement concerning standing
must also be assessed by reference to production
sold on the free market.

The complaint contained sufficient evidence of
dumping of the product originating in the coun-
tries indicated above, and of material
injury re-
this evidence was considered
sulting therefrom;
sufficient to justify initiating a proceeding.

The Commission officially advised the procedures,
exporters and importers known to be concerned,
the represenatives of the exporting countries, and
the complainant, and gave the parties concerned
the opportunity to make their views known in
writing and to request a hearing within the time
limits set out in the notice of initiation.

A number of producers/exporters in the countries
concerned and a number of importers made their
views known. All
interested parties who so
requested were granted a hearing.

In view of the large number of Community produ-
cers manufacturing the product concerned in the
Community and supporting the complaint, and in
conformity with Article 17(1) of the Basic Regula-
tion, it was considered appropriate to make use of
sampling techniques and send questionnaires to
and receive information from a representative
sample of Community producers.

In view of the large number of producers/exporters
in the exporting countries concerned, sampling was
also used and the Commission sent out question-
naires to and received detailed information from a
representative sample of producers/exporters.

The number of unrelated importers that made
themselves known within the deadlines laid down
in the notice of initiation and wished to cooperate
was too large to be investigated within the time
available. Therefore, the Commission decided to
resort to a sample of unrelated importers. Interested

(4)

(5)

(6)

(7)

(8)

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Official Journal of the European Communities

9. 4. 98

unrelated importers were invited to provide in-
formation on turnover, purchases and employment
relating to both total company and the product
concerned for the year 1996 on the basis of which
the Commission sampled eight unrelated importers
located in the following three Member States,
which were considered most
representative in
terms of volume of imports: the United Kingdom,
Germany and Italy. Questionnaires were sent to the
sampled unrelated importers. Four responses were
received within the time limits.

(9)

Interested parties were invited to comment on the
selected were
sampling
disclosed
substantive
comments were received from interested parties on
this approach.

parties. No

the
those

companies

and
to

(10)

The following unrelated importers were selected:

— United Kingdom:

— Broome & Wellington,

— Joshua Wardle Ltd,

— Premier Textiles Ltd,

— Claremont Fabrics;

— Germany:

— Itochu Deutschland GmbH,

— KLW Textilvertrieb GmbH,

— Spain:

— Hilados y Tejidos Puigner(cid:155), SA;

— Portugal:

— Incotex-Ind ´ustria e Com(cid:130)rcio de T(cid:136)xteis,

Lda;

— Belgium:

— Le Compte Textielfabrieken NV;

(b) Producers/Exporters

— Egypt:

— Misr Spinning and Weaving Co., Mehalla

el-Kubra,

— Misr Fine Spinning and Weaving Co., Kafr

el-Dawar,

— Misr El Amria Spinning and Weaving Co.,

Alexandria;

— India:

— Century Textiles & Industries Ltd, Bombay,

— Mafatlal Industries Limited, Bombay,

— Coats Viyella India Ltd, Bangalore,

— Vardhman Spinning & General Mills Ltd,

Ludhiana,

— Virudhunagar Textile Mills Ltd;

— G. Koppermann & Co. GmbH;

— Indonesia:

— Italy:

— New Nicoltex SRL.

(11)

The Commission sought and verified all the infor-
mation it considered necessary for the purpose of a
provisional determination of dumping and injury
and carried out investigations at the premises of the
following companies:

(a) Community producers

— Germany:

— Ettlin Gesellschaft

f(cid:129)r

Spinnerei

und

Weberei AG,

— Velener Textilwerke Grimmelt Wevers &

Co. GmbH,

— H. Hecking S(cid:148)hne,

— F. A. K(cid:129)mpers GmbH & Co.;

— Italy:

— Tessiture Niggeler & K(cid:129)pfer SpA,

— Standartela SpA;

— France:

— (cid:144)ts des Fils de V. Perrin,

— Tenthorey,

— SA HGP GAT,

— Fil. et Tis. de Saulxures;

— PT Argo Pantes, Jakarta,

— PT Daya Manunggal, Jakarta,

— PT Eratex, Jakarta,

— PT Apac Inti Corpora, Jakarta,

— PT Eratex Djaja, Surabaya;

— Pakistan:

— Lucky Textile Mills, Karachi,

— Diamond Fabrics Ltd, Sheikhupura, Lahore,

— Nishat Mills Ltd, Faisalabad,

— Kohinoor Raiwind Mills Ltd, Lahore,

— Kohinoor Weaving Mills Ltd, Lahore;

— Turkey:

— Birlik Mensucat Ticaret ve Sanayi Isletmesi
AS Kayseri (‘Birlik Mensucat’), Kayseri,

— S(cid:148)ktas Pamuk ve Tarim (cid:154)r(cid:129)nlerini Deger-
lendirme Ticaret ve Sanayi AS (‘S(cid:148)ktas’),
S(cid:148)ke,

— Tureks,

— Teksmobili,

— Alfa.

(12)

The investigation period for the determination of
dumping was from 1 January 1996 to 30 June
1997. The examination of injury covers the period
from 1 January 1993 to 30 June 1997.

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B. PRODUCT

proceeding cannot,
accepted.

therefore, at

this

stage, be

1. Product under consideration

(b) Handloom cotton fabrics

(13)

(14)

least 85 % cotton,

flat unbleached cotton
The proceeding covers
fabrics containing at
is
those fabrics composed of cotton obtained from
orthogonal interlacing, on plane looms, of textile
yarns, and destined primarily for use in the
clothing, linen and furniture industries, currently
classifiable under CN codes 5208 11 90 to 5208 19
and 5209 11 to 5209 19.

that

This product is produced in a great variety of types
or constructions, according to a combination of the
count (weight) of the yarn used, the number of
threads used in both warp and weft and the way
yarns are interlaced.

(15) All types of the product under consideration are
produced basically on the same machinery and all
of them can generally be produced to order.

(16)

(17)

(18)

Several requests have been presented for the exclu-
sion of certain types of unbleached cotton fabrics
from the scope of the proceeding. These requests
make reference to specific uses
and specific
constructions, some of which are allegedly not
manufactured in the Community. They include
ring-spun (conventional) yarn,
fabrics made of
handloom fabrics,
jacquard and stretch fabrics,
fabrics for embroidery and fabrics weighing under
100 gr/m2.

(a) Cotton fabrics manufactured with ring-spun

yarn

Some parties have claimed that fabrics made of
ring-spun yarn should be considered a different
product from those fabrics made from open-end
yarn, in view of their different resistance. It was
also argued that since there existed no Community
production of fabrics made of ring-spun yarn, those
fabrics should be excluded from the scope of the
proceeding.

The Commission found, however, that the essential
characteristics and uses both of fabrics made of
ring-spun yarn and fabrics made of open-end yarn
remain the same, since the difference in resistance
cannot be considered significant. In addition, infor-
mation received from the sampled Community
producers shows that there is production of fabrics
made of ring-spun yarn in the Community. This
has been confirmed by the spinners participating
in the Community interest investigation, 50 % of
which spin ring-spun yarn. The exclusion of fabrics
the
made of ring-spun yarn from the scope of

(19) Handloom fabrics are those woven on looms
operated purely by hand or foot. Although the use
in itself
of different production methods is not
relevant to the definition of a product, handloom
fabrics have physical characteristics different from
those of other unbleached cotton fabrics, notably as
a result of a less regular and looser weave, as well as
a limited width (generally less than 1 metre). This
difference leads to a different consumer perception
of handloom fabrics reinforced by the fact
that
such products are often sold through particular
sales channels, different from those of Community
producers and exporters for their other fabrics.

(20) Consequently the Commission has provisionally
should be
concluded that handloom fabrics
excluded from the scope of the proceeding and,
therefore, those products should be exempted from
the payment of the duties if accompanied by a
certificate of handloom origin issued by the appro-
priate authorities of the exporting country.

(21)

(22)

(c) Jacquard and stretch cotton fabrics

Some parties claimed that
jacquard and stretch
fabrics should be considered a different product.
The two particular constructions (‘jacquard’ and
‘stretch’) were analysed and found to contain at
least 85 % cotton. They were therefore considered
to be covered by the proceeding.

(d) Unbleached cotton fabrics used for embroidery

Furthermore, it was claimed that unbleached cotton
fabrics used for the purpose of embroidery should
be excluded from the scope of
the proceeding,
because of their specific characteristics and their
particular use. The Commission has provisionally
found that most embroiderers use fabrics which
weigh less than 100g/m2, fall under a specific CN
code and are similar to gauze. Gauze is not covered
by the complaint on the basis of which the current
proceeding has been initiated. It should be noted
that gauze is used for medical purposes only,
whereas unbleached cotton fabrics weighing less
than 100g/m2 can also be used for purposes other
than embroidery. Given this apparent interchange-
ability of use, it is provisionally considered that the
essential physical characteristics of unbleached
cotton fabrics used for embroidery cannot be con-
from cloth used for other
sidered so different
purposes as to justify exclusion from the scope of
the proceeding. This issue will be further invest-
igated.

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(e) Unbleached cotton fabrics weighing under

100 g/m2

the countries concerned. However, the matter will
be further investigated.

(23)

It was claimed that fabrics weighing under 100
g/m2 should be excluded from the scope of the
proceeding, since they are similar to gauze. The
Commission has provisionally concluded that,
since the essential physical characteristics and
general use remain the same, as compared with
unbleached cotton fabrics weighing more than 100
g/m2,
it does not seem possible to exclude this
product from the scope of the proceeding. This
issue will be further investigated.

(f) Other requests for exclusion

(24) Other requests for exclusion from the scope of this
proceeding were either insufficiently substantiated
or are covered by the definition of the product
under consideration,
their essential
physical characteristics, general use and consumer
perception.

in view of

(25)

(26)

(27)

2. Like product

The Commission found that the unbleached cotton
fabrics produced by the Community industry and
sold on the Community market were similar or
to the unbleached cotton fabrics
comparable
produced in the countries concerned and exported
to the Community and those sold on their
domestic markets (1).

Some parties claimed that the unbleached cotton
fabrics manufactured and sold by the Community
industry are not comparable to those produced and
exported to the Community by the exporting coun-
countries
tries
concerned allegedly consist of basic commodity
constructions, of a low quality, whereas
those
manufactured in the Community are allegedly
specialised and sophisticated products.

concerned.

from the

Imports

In this respect, it should be recalled that is the
standard practice of the Commission to consider
that differences in the quality of a product, where
are not
the basic
normally an element that determines the existence
or not of a like product.

characteristics

similar,

are

(28) Moreover, the constructions manufactured and/or
offered by the Community industry seem to corres-
pond largely to the ones imported from the coun-
tries concerned. For this reason it does not, at the
present stage, seem possible to conclude that the
Community manufactured products are substan-
tially different from the products imported from

(1) The People’s Republic of China is excepted.

(29) Accordingly, the Commission has concluded that
exported from the
unbleached cotton fabrics
People’s Republic of China,
Indonesia,
Egypt, Pakistan and Turkey are like products to the
unbleached cotton fabrics manufactured in the
Community by Community producers, within the
meaning of Article 1(4) of the Basic Regulation.

India,

C. DUMPING

1. Exporters and producers in the countries of

origin

(a) Sampling

In view of the large number of exporters in the
countries concerned, the Commission decided to
apply sampling techniques
in accordance with
Article 17 of the Basic Regulation.

In order to enable the Commission to select a
sample, exporters and representatives acting on
their behalf were requested to make themselves
known within three weeks of the initiation and to
provide some basic information on their domestic
and export turnover for the period of investigation.
The authorities of the countries concerned were
contacted by the Commission.

(b) Cooperating companies

For each country,
the cooperating
companies not selected in the sample is given in
Annex I.

the list of

The companies listed in Annex I were informed
average dumping margin and anti-
that
the
the sample for each
dumping duty,
country, weighted on the basis of
the export
turnover to the Community, would be attributed to
them, except for China and Egypt, where a single
margin was calculated for all exporters.

if any, of

(c) Selection of the sample

For the People’s Republic of China, Egypt, Indo-
nesia, Turkey and Pakistan,
the
sample was made in agreement with the repres-
entatives of
the companies, associations and/or
governments concerned.

the choice of

a

Indonesian exporters did not want
reserve
company (a company which replaces a selected
company when the latter subsequently fails to
co-operate sufficiently with the Commission) and
were informed that
this did not constitute a
problem as long as the companies in the main
sample did cooperate sufficiently.

(30)

(31)

(32)

(33)

(34)

(35)

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(36) No agreement could be reached with Indian ex-
porters which refused to agree to the inclusion of
their largest exporter in the sample. The Commis-
sion, consequently, accepted the selected exporters
proposed by Indian exporters but included their
largest exporter in the definitive sample.

(37)

(38)

The companies selected in the sample which fully
cooperated with the investigation received their
own dumping margin and individual duty rate.
the
When two related companies are part of
sample, a common dumping margin,
resulting
from a weighted average of
individual
dumping margins, is applied. When only one of
several related companies is selected, the dumping
margin of
applied to the
is
this
cooperating related companies.

company

their

their

The Commission selected reserve companies for
Egypt, India and Pakistan. The companies which
were included in the sample only as reserves were
informed that, although they would have to reply
reply
to the Commission’s questionnaire,
would not be examined unless the non-cooperation
of one or more companies selected in the sample
would make it no longer representative. They were
also informed that they would receive the average
dumping margin and average anti-dumping duty
rate, if any, of the sample for each country unless
they were selected to replace a company in the
sample, in which case they would have their own
duty rate.

(39) Concerning

one

Indonesia,

PT
Tyfountex, which had been selected to form the
reserve sample,
refused to be included in the
reserve sample and was subsequently informed that
it would be considered as a non-cooperating party.

company,

Country

Companies in the sample

India

— Century Textiles & Industries Ltd

— Mafatlal Industries Ltd

— Coats Viyella India Ltd

— Vardhman Spinning & General

Mills Ltd

— Virudhunagar Textile Mills Ltd

Indonesia

— PT Argo Pantes

— PT Daya Manunggal

— PT Apac Inti Corpora

— PT Eratex Djaja

Pakistan

— Lucky Textile Mills

— Diamond Fabrics Ltd

— Nishat Mills Ltd

— Kohinoor Raiwind Mills Ltd

— Kohinoor Weaving Mills Ltd

Turkey

— Birlik Mensucat

— S(cid:148)ktas Pamuk Ve Tarim (cid:154)r(cid:129)nle-
rini Degerlendirme Ticaret Ve
Sanayii AS

— Tureks

— Alfa

— Teksmobili

(40)

The Commission sent questionnaires to the fol-
lowing companies finally selected in the sample:

Country

Companies in the sample

People’s
Republic of
China

— Chinatex Cotton Yarns & Fabrics
Import & Export Corporation

— Shanghai

Textiles
Export Corporation

Import &

— China Jiangsu Textiles Import &
Export (Group) Corporation

Egypt

— Misr Spinning and Weaving Co.,

Mehalla el-Kubra

— Misr Fine Spinning and Weaving

Co., Kafr el-Dawar

— Misr

el-Amria

Spinning

&

Weaving Co.

(d) Individual examination within the context of

sampling

(41)

The Commission’s services received nine requests
for individual examination within the dealines, five
of which were accompanied by a reply to the ques-
tionnaire, as required by Article 17(3) of the Basic
Regulation.

(42) After reviewing the requests and having regard to
Article 17(3) of the Basic Regulation, the Commis-
sion came to the conclusion that it was not in a
individual examination in the
position to grant
present proceeding. This decision was motivated by
the fact that the increased workload resulting from
the individual examination requests would not
allow the Commission to complete its investigation
within the statutory time limit now set by the Basic
Regulation. The
concerned were
companies
informed accordingly and were invited to provide
their comments.

(43) Companies which filed a complete reply to the
questionnaire within 37 days from initiaton, or
came forward within the three weeks set for the
selection of the sample, but whose request for indi-

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9. 4. 98

vidual examination was rejected, were considered to
be cooperating and were attributed the average
dumping margin and anti-dumping duty rate es-
tablished for the sample.

(48)

2. Methodology

(a) Companies forming part of the same group

(44)

It has been the consistent practice of the Commis-
sion to consider related companies, or companies
belonging to the same group, as one single entity,
and to establish,
therefore, one single dumping
margin. Calculating individual dumping margins
might encourage circumvention of anti-dumping
measures
rendering them ineffective) by
enabling related producers to channel their exports
to the Community through the company with the
lowest dumping margin. The dumping margin
found for a sampled company forming part of a
group was therefore applied to the non-sampled
companies of
the same group involved in the
production and sale of the product concerned.

(thus

(45) Also in accordance with this principle,

two
sampled companies located in Indonesia belonging
to the same group were regarded as one single
entity. Two sampled related companies located in
Pakistan were regarded as one single entity as well.

(b) Normal value

(i) Representativeness

(46)

The Commission first examined whether
the
domestic sales of grey cotton fabrics by each
company were representative. This was the case
when the total volume of such sales was greater
than or equal to 5 % of the total volume of export
sales to the Community.

(ii) Type comparability

(47) Due to the great number of types of the product in
question, grey cotton fabrics produced in the coun-
tries concerned were classified by a ‘product control
number’ according to their construction. Each
product control number gave information about the
count (or weight) of the yarn and the number of
threads, for both warp and weft. It also gave infor-
mation about the construction of the fabric. Finally,
it showed whether the type was exported or sold
domestically, as well as the intended use of the
product (dyeing, pocketing, printing) according to
its quality.

the Commission found

Since there were no differences in the basic charac-
teristics of the different types and qualities of grey
cotton fabrics,
that
domestic and export
types were like products
within the meaning of Article 1(4) of the Basic
Regulation and could be compared wherever their
control number was the same. Following this rea-
soning, comparisons could be made between types
sold on the domestic market in India and types
exported by Chinese companies.

(49)

The Commission therefore, found that domestic
and export
types which had the same product
control number were comparable products.

(iii) Type specific representativeness

(50) Domestic sales of a particular type were considered
sufficiently representative when the volume of grey
cotton fabrics of that type sold on the domestic
market during the investigation period represented
5 % or more of the volume of grey cotton fabrics
of
to the
Community.

the comparable type sold for export

(iv) Ordinary course of trade test

(51)

The Commission subsequently examined whether
the domestic sales of each type could be regarded
as being made in the ordinary course of trade, by
looking at the proportion of profitable sales of the
type in question:

— in cases where the volume of grey cotton fabrics
sold at a net sales price equal to or above the
calculated cost of production represented more
than 80 % of the total sales volume, the normal
value for this type was established as a weighted
average price of all domestic sales transactions
during the investigation period, whether prof-
itable or not,

— in cases where the volume of grey cotton fabrics
sold at a net sales price equal to or above the
calculated cost of production represented less
than 80 % but more than 10 % of the total
sales volume, the normal value for this type was
established on the basis of a weighted average
price of profitable domestic sales transactions
only,

— in cases where the volume of grey cotton fabrics
sold at a net sales price equal to or above the
calculated cost of production represented less
than 10 % of the total sales volume,
it was
considered that the type was not sold in the
ordinary course of trade and that the domestic
price did not provide an appropriate basis for
establishing normal value.

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(v) Normal value based on actual domestic

(c) Export price

price

(52) When the requirements set out above were met,
normal value was based for each type on the basis
of the prices paid or payable, in the ordinary course
of trade, by independant customers in the domestic
in
market of
Article 2(1) of the Basic Regulation.

the exporting country as set out

(vi) Normal
value

value based on constructed

(53)

In cases where domestic prices did not provide an
appropriate basis for establishing normal value, the
latter was based on constructed value.

(54) Due to the number of different types and the great
variety of factors to be considered when assessing
one particular type produced by one particular
company (for example origin, mix of raw cotton
and type of loom used), constructed normal value
was consistently chosen in preference to the
domestic prices of another producer.

(55)

(56)

The constructed value was determined by adding to
the manufacturing costs of the exported types, duly
adjusted when the actual costs differed from those
reported,
selling,
general and administrative (SG & A) expenses and a
reasonable margin for profit.

reasonsable percentage for

a

this purpose,

For
the Commission services
examined whether the SG & A expenses incurred
and the profit realised by each of the producers
concerned on the domestic market could be used
within the terms of the Basic Regulation:

— actual domestic SG & A expenses incurred by
the domestic sales of the like product were used
when the domestic
the
company concerned could be regarded as rep-
resentative. Where this criterion was not met,
the weighted average of SG & A expenses was
used,

volume of

sales

— the actual domestic profit margin realised on
the like product was used
domestic sales of
when the volume of grey cotton fabrics sold at a
net sales price above the calculated cost of
production represented more than 10 % of the
total domestic sales volume of
the company
concerned. Whereas this criterion was not met,
use was made of the profit margins weighted
average of the other companies which fulfilled
that criterion.

(57)

In all cases where exports of grey cotton fabrics
in the
were made to independent customers
Community, the export price was established in
accordance with Article 2(8) of the Basic Regula-
tion, that is on the basis of export prices actually
paid or payable.

(58) However, in cases where there was no actual export
price or when it was considered to be unreliable
because the sale was made to a related party, an
export price was constructed pursuant to Article
2(9) of the Basic Regulation, that is on the basis of
the price at which the imported products were first
resold to an independent buyer.

(59)

In such cases, adjustments were made for all costs
incurred between importation and resale and for
profits accruing,
in order to establish a reliable
export price at the Community frontier level.

(d) Comparison

(60)

For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordance with Article 2(10) of the Basic Regulation.

(61) Accordingly, allowances for differences in transport,
insurance, handling charges, packing costs, credit,
discounts and warranty have been granted where
applicable and justified.

(e) Dumping margin

(i) Dumping margin for companies invest-

igated

(62) According to Article 2(11) of the Basic Regulation,
the weighted average normal value by type, deter-
mined as set out in section 2(b), was compared with
the weighted average export price, determined as
set out in section 2(c). Whenever it was established
that there was a pattern of export prices which
differed significantly among different purchasers,
regions or time periods and that the abovemen-
tioned method did not reflect the full degree of
dumping, the weighted average normal value was
compared with the prices of all individual transac-
tions to the Community.

(ii) Dumping margin

for

cooperating

companies not in the sample

(63) Cooperating companies which were not inlcuded
in the sample received the average dumping
margin of the companies in the sample, weighted
on the basis of export turnover to the Community.

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(64)

(65)

(iii) Dumping margin for non-cooperating

companies

The level of cooperation ranged from 87 % to
100 % for all the countries concerned, except for
Turkey. For those countries with a very high level
of cooperation,
it was decided to give to non-
cooperating companies the margin of the company
with the highest dumping margin in the sample. In
cases of a single duty for all companies in the
sample (China and Egypt), this duty was applied to
the non-cooperating companies.

For non-cooperating companies in Turkey, where
the level of cooperation did not reach 50 %, a re-
sidual dumping margin was determined on the
basis of the facts available. Of the company with
the highest dumping margin, the type with the
highest dumping margin which had representative
export sales was identified. The residual dumping
margin was determined on the basis of
the
weighted average margin of this type, expressed as
a percentage of the cif import price at the Commu-
nity border.

3. Indonesia

(a) Level of cooperation

(66)

Four companies were selected as the sample. Two
of the four companies were related and formed part
of the same group.

(67) As a result of the on-the-spot verifications it was
found that three of the four companies were either
providing misleading information or showed partial
non-cooperation which necessitated the application
of Article 18 of the Basic Regulation.

(68)

(69)

The application of Article 18 resulted in the use of
the facts available to the Commission for domestic
prices, manufacturing costs, export prices and dif-
ferences in physcial characteristics (different grades)
which affected prices and price comparability.

The remaining company submitted two substantial
modifications to its questionnaire response before
the on-the-spot verification. However, during the
on-the-spot verification it was found that the final
rely to the questionnaire was substantially incorrect
which made it impossible to perform a dumping
calculation. Since this company was part of a group
of companies, the dumping margin was established
sampled company
another
on the basis of
belonging to the same group of companies (see
section 2(a)).

(b) Impact of Article 18 of the Basic Regulation

on the sample

(70)

It should be noted that in accordance with Article
the Basic Regulation, sampling was used
17 of

because of the large number of companies involved
in this investigation. The choice of the sample was
made in agreement with the representatives of the
companies and the association concerned and
included the four companies mentioned above.

(71) One company, PT Tyfountex, had been selected as
the reserve sample. However, the company refused
to be included in the reserve sample and was sub-
sequently informed that it would be considered as a
non-cooperating party. Faced with the fact that the
Indonesian representatives did not want a reserve
the Commission proceeded with the
sample,
selected sample without having a reserve company.
At the same time it was made clear that if full
cooperation was not forthcoming from the compa-
nies in the sample, at any stage of the proceeding,
there would be no possibility to replace the non-
cooperating companies in that sample by a reserve
company and this could have far reaching implica-
tions for all Indonesian companies.

(72) Article 17(4) of the Basic Regulation states that
where there is a degree of non-cooperation by all of
the parties selected which is likely materially to
the investigation, a new
affect
sample may be selected. However, if there is insuf-
ficient time to select a new sample, the relevant
provisions of Article 18 shall apply.

the outcome of

(73)

In view of the fact that it was not possible to select
a new sample and conclude the investigation
within the time limits and the refusal of any Indo-
nesian company to serve as a reserve sample, the
dumping margins for the companies selected in the
sample were established on the basis of the facts
available. However, in order not to penalise unduly
the
the other producers to which the result of
sampling should apply, it was provisionally decided
to use the duty rate mentioned in the complaint
(13,5 %, which is the dumping margin found by
the Commission in the previous proceeding) as
the cooperating com-
information available for
panies not included in the sample. In view of the
particular situation of the sample selected for provi-
sional measures, the selection of a new sample for
definitive measures, if any, is being examined by
the Commission.

(c) Normal value

(74)

The procedures and methodologies followed by the
Commission to assess the normal value of products
originating in Indonesia were the same as those set
out in section 2(b), except where,
in accordance
with Article 18, information available was used for
certain elements of the normal value.

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(i) Normal value based on actual domestic

price

(75) On the basis of the method referred to in section
2(b), it was not possible to estabish normal value on
the basis of the domestic price of comparable types
in accordance with Article 2(2) of the Basic Regula-
tion.

(ii) Normal
value

value based on constructed

(83)

(76)

(77)

(78)

(79)

For all types of the product concerned sold for
export to the Community by the three companies
for which a dumping calculation was made, normal
value was calculated, in accordance with Article 2(3)
of the Basic Regulation, on the basis of constructed
value.

This was done by adding the companies’ own
domestic SG & A expenses and domestic profit
margin to the manufacturing cost of the exported
types, in accordance with Article 2(6) of the Basic
Regulation.

(d) Export price

The procedures and methodologies followed by the
Commission in assessing the export of products
originating in Indonesia were the same as those set
out in section 2(c).

Exports by all the companies in the sample were
made to independent importers in the Community.
The export prices were established, in accordance
with Article 2(8) of
the Basic Regulation, by
reference to the prices paid or payable for the
product concerned sold for export to the Com-
munity.

(e) Comparison

(80)

For the purpose of ensuring a fair comparison
between normal value and export price, due al-
lowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordance with Article 2(10) of the Basic Regulation.

(81) Accordingly, allowances for differences in transport,
and
handling
commissions have been granted where applicable
and justified.

costs, packing

charges,

credit

credit costs. However,
the investigation revealed
that the amounts of credit costs were inflated by
applying an artificially high interest rate. An adjust-
ment was therefore only granted on the basis of an
interest rate for short-term loans found in the
audited accounts of the companies concerned.

(f) Dumping margin

The procedures and methodologies followed by the
Commission in assessing the dumping margin of
products originating in Indonesia were the same as
those set out in section 2(e), except for the coopera-
ting companies not part of the sample.

(i) Dumping margin for companies invest-

igated

(84)

The comparison shows the existence of dumping
in respect of all the companies in the sample. The
dumping margins expressed as a percentage of the
free-at-Community-frontier price CIF level are the
following:

— Group Argo Pantes (PT Argo Pantes

and PT Daya Manunggal)

— PT Eratex Djaja Ltd

— PT Apac Inti Corpora

31,8 %,

29,7 %,

19 %.

(ii) Dumping margin

for

cooperating

companies not in the sample

(85)

For cooperating companies not in the sample (see
section 2(b)), it was provisionally decided, in ac-
cordance with Article 17(4) and Article 18 of the
Basic Regulation, to use the information available,
the dumping margin
which in this
is
mentioned in the complaint. Expressed as
a
percentage of the free-at-Community-frontier price
CIF level, the margin is 13,5 %.

case

(iii) Dumping margin for non-cooperating

companies

(86)

For non-cooperating companies,
the dumping
margin was assessed on the basis of the margin of
the company with the highest dumping margin in
the sample. Expressed as a percentage of the free-
at-Community-frontier price CIF level, the margin
is 31,8 %.

4. Turkey

(i) Allowance for credit costs

(a) Level of cooperation

(82) An adjustment to normal value was claimed by the
three Indonesian exporters/producers in respect of

(87)

Five companies provided a reply to the question-
naire for producers/exporters and were investigated.

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9. 4. 98

(88)

The investigation revealed that one of those five
companies was not a producer but a trader which
was buying the product
from an independent
producer included in the sample in order to export
it to the Community. It is the consistent policy of
the Commission to calculate anti-dumping margins
only for producers. The purchases of this trader
were therefore used to establish the anti-dumping
margin of the producer concerned.

companies were added to the manufacturing costs
of
the exported types concerned. For the third
company, which had no representative domestic
sales, in accordance with Article 2(6), normal value
was constructed by adding to the manufacturing
costs of its exported types the weighted average of
the domestic SG & A costs and the domestic profit
margin determined for the two companies with
representative and profitable domestic sales.

(89) One of

the selected companies did not

fully
cooperate in the proceeding. It was found that
neither the reported costs of manufacturing nor the
reported exported quantities were reliable.

(90)

(91)

(92)

Since that company supplied misleading and un-
reliable information, it was decided to regard the
company as a non-cooperating party.

In view of the poor level of representativeness of
the selected cooperating companies, the selection
of a new sample for definitive measures, if any, is
being examined by the Commission.

(b) Normal value

The procedures and methodologies followed by the
Commission in assessing the normal value of
products orginating in Turkey were the same as
those set out in section 2(b). Due to high inflation,
however, a monthly normal value for each type was
calculated for Turkey.

(i) Normal value based on actual domestic

price

(93) After assessing the representatives of domestic sales,
type comparability and type-specific represent-
ativeness,
and after performing the ordinary-
course-of-trade test, as set out in section 2(b), the
Commission calculated monthly normal values on
the basis of actual domestic prices (on average for
the cooperating companies: one type for the first
company, two types for the second company and
none for the third company) in accordance with
Article 2(2) of the Basic Regulation.

(ii) Normal
value

value based on constructed

(94)

In all other cases, normal value had to be calcu-
lated, in accordance with Article 2(3) of the Basic
Regulation, on the basis of a constructed value for
the products exported to the Community. The
constructed normal value was established, as set out
in section 2(b), for each month of the period of
investigation. Monthly SG & A expenses and a
monthly domestic profit margin of two of the three

(c) Export price

(95)

The procedures and methodologies followed by the
Commission in assessing the export price of
products originating in Turkey were the same as
those set out in section 2(c).

(96) All sales of grey cotton fabrics made by Turkish
companies on the Community market were made
to independent customers
in the Community.
Consequently the export price for the companies
was established by reference to the prices actually
paid or payable.

(d) Comparison

(97)

For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordance with Article 2(10) of the Basic Regulation.

(98) Accordingly, allowances for differences in transport,
packing costs, charges, credit costs and commis-
sions have been granted where applicable and justi-
fied.

(i) Allowance for credit costs

(99) An adjustment to normal value was claimed by one
Turkish exporter/producer in respect of credit costs
linked to payment terms. However, it was found
that, although payment terms are indeed stated on
the invoice, domestic sales are made on the basis of
an open account system. Since no evidence was
provided that the payment terms were linked to
prices, it was decided not to grant any allowance for
credit costs.

(ii) Allowance for currency conversion

(100) One of the companies requested that an allowance
for currency conversion
be made to account
(Article 2(10)(j) of the Basic Regulation) in view of
the high inflation rate in Turkey and the corres-
ponding steady currency depreciation.

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(101) However, it is considered that the depreciation has
already been accounted for by making adjustments
by calculating normal value on a monthly basis and
using monthly average exchange rates. The claim
was therefore rejected.

(e) Dumping margin

(102) The procedures and methodologies followed by the
Commission in assessing the dumping margin of
products originating in Turkey were the same as
those set out in section 2(e).

(i) Dumping margin for

companies

in-

vestigated which cooperated

(103) The comparison shows the existence of dumping
in respect of two of the companies in the sample.
The dumping margins expressed as a percentage of
the free-at-Community-frontier price CIF level are
the following:

— Birlik Mensucat

— Tureks

— Teksmobili

11 %,

10,4 %,

1,6 %.

(ii) Dumping margin
companies not

for
in the sample

cooperating

(104) Cooperating companies (see sections 1(b) and 1(d))
receive the average dumping margin of the sample.
Since the dumping margin found for Teksmobili
was below 2 %, its dumping margin was not taken
into consideration for establishing the average
dumping margin of
the sample. Expressed as a
percentage of the free-at-Communty-frontier price
CIF level, the margin is 11 %.

(iii) Dumping margin for non-cooperating

companies

(105)

In view of the low level of cooperation of Turkey,
the other non-
the dumping margin of
cooperating companies was assessed on the basis of
the best information available (see section 2(e)).

all

(106) Expressed

as

free-at-
percentage
Community-frontier price CIF level, the margin is
14,29 %.

the

of

a

attributed. A distinction was only made between
cooperating and non-cooperating exporters.

(a) Normal value

(108) The procedures and methodologies followed by the
Commission in assessing normal value were the
same as those set out in section 2(b).

(i) Normal value based on actual domestic

price

(109) After assessing representativeness of domestic sales,
type comparability and type specific representative-
ness, and after performing the ordinary-course-of-
trade test, as set out in section 2(b), the Commis-
sion concluded that, in the case of one company,
normal value for seven types could be based on
actual domestic price, in accordance with Article
2(2) of the Basic Regulation.

(ii) Normal
value

value based on constructed

(110) For all other types sold for export to the Com-
munity by the one company mentioned in section
5(a), and all types sold for export to the Com-
munity by the other two companies, the normal
in accordance with
value had to be calculated,
Article 2(3) of the Basic Regulation, on the basis of
a constructed value for the products exported to the
Community. The constructed normal value per
type was established as set out in section 2(b).

(111) Since only one company had sufficient profitable
sales of
the product concerned during the in-
vestigation period, it was decided to use the profit
margin of that company and to apply it to the
other two companies in order to construct normal
value. Therefore,
the
the
constructed normal value was based on manufac-
turing costs plus its own SG & A costs and profit
margin. For the other two companies, their own
manufacturing and SG & A costs and the profit
margin of the company with sufficient profitable
domestic sales were used to construct normal value.

company

first

for

(b) Export price

5. Egypt

(107) Three companies were investigated in Egypt. Due
to the fact that the three investigated companies
State-owned and
indirectly
were directly
managed by the Government,
it was decided to
treat those companies as a group. Therefore, no
individual dumping margins and duty rates were

or

(112) The procedure and methodologies followed by the
Commission in assessing the export price of
products originating in Egypt were the same as
those set out in section 2(c).

(113) All exports of grey cotton fabrics to the Com-
munity by the three companies were made directly
to independent
the
export price of those companies was established by

customers. Consequently,

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reference to the prices actually paid or payable to
them for the grey cotton fabrics sold, in accordance
with Article 2(8) of the Basic Regulation.

of the free-at-Community-frontier price CIF level,
the margin is the following: 20,6 %.

(c) Comparison

6. Pakistan

(114) For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordance with Article 2(10) of the Basic Regulation.

(115) Where applicable and justified, adjustments were
made for differences in transport and insurance,
packing costs, credit costs and commissions.

(i) Allowance for credit cost

(116) All

three companies claimed an adjustment
for
credit costs in respect of normal value. For two
companies this claim had to be rejected because it
appeared that the payment terms on the domestic
market were in fact based on the open account
system, that is to say no evidence was provided that
the payment terms were linked to prices.

(d) Dumping margin

(i) Method

(117) For the reasons set out in section 2, it was decided
to calculate only one dumping margin for all
cooperating companies. The procedures for asses-
sing the dumping margin were the same as those
set out in section 2(e).

(118)

Individual dumping margins were calculated for
the three companies investigated and the average,
weighted on the basis of export turnover to the
Community, applied to all cooperating companies.

(ii) Dumping margin for
companies whether
sample

all cooperating
the

not

in

or

(119) The dumping margin for cooperating exporters
free-at-

expressed
Community-frontier price CIF level is 20,6 %

percentage

the

of

as

a

(a) Level of cooperation

(121) Five companies were selected in the sample for
Pakistan, as set out in section 1(c) and were in-
vestigated. Individual dumping margins were calcu-
lated for two non-related companies whereas a
weighted average dumping margin was established
for two other related companies. The remaining
company was
a non-cooperating
company and the same margin was applied to it as
to the cooperating company with the highest
margin (see below).

regarded as

(122) The three non-related companies and the two
related companies selected were part of different
groups of companies. In each of these groups there
were companies involved, in a varying degree, in
the production and sale of the product concerned.
For the purpose of provisional determinations, the
above-mentioned margins will apply also to the
other companies which form part of
the same
group (see section 2(a)).

(123) Article 18 of the Basic Regulation was applied to
one company which had provided misleading
information. The dumping margin of that company
was consequently not taken into account in deter-
the
mining the average dumping margin for
cooperating companies (see section 2(e)). However,
it was found that this had no excessive effect on the
representativeness of the sample since the company
taken out acounted for less than one third of the
exports of the initial sampled companies.

(b) Normal value

(124) The procedures and methodologies followed by the
Commission in assessing the normal value of
products originating in Pakistan were the same as
those set out in section 2(b).

(i) Normal value based on actual domestic

price

(iii) Dumping margin

for

the

non-co-

operating companies

(120) In view of the high level of cooperation of Egypt,
the dumping margin for non-cooperating com-
panies was set at the level of the margin of the
company with the highest dumping margin in the
sample (see section 2(c)). Expressed as a percentage

(125) After assesing the overall

and

representativeness of
domestic sales, type comparability and type-specific
representativeness,
the
ordinary-course-of-trade test, as explained in point
2(b), the Commission found that three companies
in the sample had representative domestic sales of
the product concerned during the investigation
period.

performing

after

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(126) The representative domestic sales of

the three
companies were found to be in the ordinary course
of trade. However, for one company, there was only
one type sold domestically which was comparable
to the exported types whereas for another company,
two types sold domestically were comparable to the
exported types. The third company had no com-
parable type. In those circumstances, the Commis-
sion concluded that normal value for Pakistan
should be constructed in all cases except for one
type for one company and two types for another
company, which are based on the prices paid in the
ordinary course of trade by independent customers
in the exporting country.

(ii) Normal
value

value based on constructed

(127) For all but three types of the product concerned
to the Community by the four
sold for export
cooperating companies selected, normal value was
calculated, in accordance with Article 2(3) of the
Basic Regulation, on the basis of constructed value.

(128)

In the case of the three companies with domestic
sales, this was done by adding the companies’ own
domestic SG & A expenses and domestic profit
margin to the manufacturing cost of the exported
types, in accordance with Article 2(6) of the Basic
Regulation.

value

(129) The other cooperating company in the sample did
not have domestic sales. In accordance with Article
2(6), normal
companies was
constructed by adding to the manufacturing costs
of their exported types the weighted average of the
domestic SG & A costs and the domestic profit
margin determined for the three companies with
representative and profitable domestic sales.

these

for

(c) Export price

(130) The procedures and methodologies followed by the
Commission’s services to assess the export price of
products originating in Pakistan were the same as
those set out in section 2(c).

(131) Exports by all the cooperating companies in the
im-
sample were made directly to independent
porters in the Community. The export prices were
established, in accordance with Article 2(8) of the
Basic Regulation, by reference to the prices paid or

payable for the product concerned sold for export
to the Community.

(d) Comparison

(132) For the purpose of ensuring a fair comparison
between normal value and export price, due al-
lowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordane with Article 2(10) of the Basic Regulation.

(133) Accordingly, allowances for differences in transport,
handling charges, credit cost and commissions have
been granted where applicable and justified.

(i) Allowance for import charges

(134) An adjustment to normal value was claimed by all
Pakistani exporters/producers in respect of import
charges and duties borne by materials, physically
incorporated in the like product when intended for
consumption, and refunded on export of
the
product under considration pursuant to Pakistani
legislation. However, the investigation revealed that
the amounts of import charges and duties refunded
exceeded the amounts actually included in the cost
of raw materials utilised. Therefore, in accordance
with Article 2(10)(b) of the Basic Regulation, the
adjustment was restricted to the amounts actually
included in the cost of the raw materials.

(e) Dumping margin

(135) The procedures and methodologies followed by the
Commission in assessing the dumping margin of
products originating in Pakistan were the same as
those set out in section 2(e).

(i) Dumping margin

for

cooperating

companies investigated

(136) The comparison shows the existence of dumping
in respect of all the companies in the sample. The
dumping margins expressed as a percentage of the
free-at-Community-frontier price CIF level are the
following:

— Sapphire Group (Diamond Fabrics

Ltd, Amer Fabrics Ltd)

— Nishat Group (Nishat Mills Ltd,

Nishat Fabrics Ltd)

— Kohinoor Group (Kohinoor Raiwind

Mills Ltd, Kohinoor Weaving
Mills Ltd)

15,6 %,

32,5 %,

11,7 %.

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(ii) Dumping margin
companies not

for
in the sample

cooperating

(137) Cooperating companies (see sections 1(b) and 1(d))
receive the average dumping margin of the sample.
Expressed
free-at-
percentage
Community frontier price CIF level, the margin is
19,2 %.

the

of

as

a

(iii) Dumping margin for non-cooperating

companies

(138)

In view of
the high level of cooperation of
Pakistan, the dumping margin for non-cooperating
companies was set at the level of the margin of the
company with the highest dumping margin in the
sample (see section 2(c)). Expressed as a percentage
of the free-at-Community frontier price CIF level,
the margin is 32,5 %.

7. India

to

(139) All five companies selected in the sample for India
for producers/
replied
the questionnaire
exporters. The information provided by those
companies was
dumping
margins were calculated for the five companies
selected in the sample.

Individual

verified.

(a) Normal value

(140) The procedures and methodologies followed by the
Commission’s services to assess the normal value of
products originating in India were the same as
those set out in section 2(b).

(i) Normal value based on actual domestic

price

(141) After assessing representativeness of domestic sales,
type comparability and type specific representative-
ness and after performing the ordinary course of
trade test, as set out in section 2(b), the Commis-
sion’s services concluded that normal value for 23
types of unbleached cotton fabrics sold for export
to the Community by the five companies could be
based on the actual domestic price of comparable
types, in accordance with Article 2(2) of the Basic
Regulation.

the products exported to the Community, in accor-
dance with Article 2(3) of the Basic Regulation. The
constructed value was determined according to the
method described in section 2(b).

For three companies having sufficient profitable
sales, the constructed normal value was based on
their own manufacturing costs plus their own SG &
A and their profit margin. For the remaining two
companies having insufficient profitable domestic
sales, their own manufacturing costs and SG & A
expenses plus the weighted average profit margin
companies with sufficient profitable
of
domestic sales were used to construct normal value.
Where necessary, the SG & A expenses as reported
were corrected.

the

(b) Export price

(143) The procedures and methodologies followed by the
Commission’s services in assessing the export price
of products originating in India were the same as
those set out in section 2(c).

(144) All five companies in the sample had export sales
made directly to independent
importers in the
Community or had sales to independent parties in
to the Community.
India destined for export
Consequently, the export price of those transac-
tions was established by reference to the prices
actually paid or payable by independent importers
to the Indian producers for the grey cotton fabrics
sold.

for

(145) One Indian company also sold part of its produc-
tion to the Community through three related
trading companies. The export prices
the
products
sold via the related companies were
reconstructed by reference to the prices actually
paid or payable to them by the first independent
customer, less a reasonable profit margin and SG &
A costs attributed to those companies, in accord-
ance with Article 2(9) of the Basic Regulation. The
profit margin was provisionally estimated at 5 % in
the absence of any information being made avail-
able by independent importers in the Community.

(c) Comparison

(ii) Normal
value

value based on constructed

(142) For all other types sold for export to the Commu-
nity by the companies, the normal value had to be
calculated on the basis of a constructed value for

(146) For the purpose of ensuring a fair comparison
between normal value and export price, due al-
lowance in the form of adjustments was made for
differences which were claimed and demonstrated
to affect price comparability in accordance with
Article 2(10) of the Basic Regulation.

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(147) Accordingly, allowances for import charges and
indirect taxes, for discounts and rebates, for trans-
port,
insurance, handling and ancillary costs, for
packing, for credit, for commissions and for the
purchase cost of export licences were made.

(i) Allowance for level of

trade

trade of

for an
(148) All companies claimed an adjustment
alleged difference in the level of
their
exports and domestic sales. The claims were made
on the ground that they sold mainly to distributors
on the Community market, and mainly to end-
users on their domestic market, and that
the
volume of the average transaction on the domestic
market was smaller than to the Community. One
company claimed also that all deductions made for
SG & A expenses incurred by its related importers
deducted from the export price to the first unre-
lated buyer when constructing the export price
should be automatically granted as an allowance for
level of trade on normal value. However, none of
the companies was able to demonstrate a consistent
difference in price levels according to the alleged
different levels of trade. In view of the above, no
adjustment was granted for level of trade.

(ii) Allowance for import charges

(149) All Indian companies claimed an adjustment for
indirect taxes borne by the like product and by
materials physically incorporated therein, when
intended for consumption in India and refunded in
respect of the products exported to the Commu-
nity. As those claims were based on the amounts
refunded on the export sales rather than on the
amounts borne by the product when intended for
consumption in India,
the adjustments claimed
were reduced accordingly.

adjustment for salesmen’s salaries. Since none of
the companies was able to show that those factors
affect price
claims were
rejected.

comparability,

those

(d) Dumping margin

(i) Method

(152) The procedures and methodologies followed by the
Commission’s services in assessing the dumping
margin of products originating in India were the
same as those set out in section 2(e).

(153) For two Indian companies, the calculations were
based on a comparison of weighted average normal
values with weighted average export prices. For the
other companies,
the weighted average normal
value was compared with the prices of each indi-
vidual transaction to the Community.

(ii) Dumping margin for

companies

in-

vestigated

(154) The comparison shows the existence of dumping
in respect of all the companies in the sample. The
dumping margins expressed as a percentage of the
import free-at Community frontier price CIF level
are the following:

— Century Textiles and Industries Ltd

15,0 %

— Coats Viyella India Ltd

— Mafatlal Industries Ltd

— Vardhman Spinning & General Mills

Ltd

14,7 %

16,9 %

4,9 %

— Virudhunagar Textile Mills Ltd and

its related company Thiagarajar Mills
Ltd

5,9 %.

(iii) Allowance for currency conversion

(iii) Dumping margin

for

cooperating

companies not in the sample

(150) All Indian companies claimed that the Commis-
sion should depart from its normal practice and use
the exchange rates of forward foreign currency sales
rather than the exchange rates on the date of
invoice. As no direct
link between the sales of
foreign currencies and the export sales involved
existed, the Commission used the exchange rates
on the date of invoice.

(iv) Allowance for other

factors affecting

(156)

price comparability

three Indian
(151) On the basis of Article 2(10)(k),
companies claimed an adjustment
for advertise-
ment and publicity and two companies claimed an

(155) Cooperating companies (see sections 1(b) and 1(d))
receive the weighted average dumping margin of
the sample. Expressed as a percentage of free-at-
Community-frontier price CIF level, the margin is
13,2 %.

(iv) Dumping margin for non-cooperating

companies

In view of the high level of cooperation of India,
the dumping margin for non-cooperating com-
panies was set at the level of the margin of the
company with the highest dumping margin in the
sample (see section 2(e)). Expressed as a percentage
of the free-at-Community-frontier price CIF level,
the margin is 16,9 %.

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8. People’s Republic of China

Indian exporters, that is those selected in the main
sample.

(157) Since China is not a market-economy country, it
was necessary to compare the export prices of the
Chinese exporters with the domestic prices or costs
of production of a third market-economy country.
India was proposed by the complainant. Since it is
the largest exporter with the highest number of
producers, and since no substantiated evidence in
favour of another analogue country was put forward
by the interested parties, India was chosen by the
Commission as an appropriate market-economy
the purpose of establishing
third country for
normal value, in accordance with Article 2(7) of the
Basic Regulation.

(158) Three exporters were selected in the sample for
China and were sent a questionnaire. They were
State-owned organisations.

(c) Export price

(162) The procedures and methodologies followed by the
Commission in assessing the export price of
products originating in China were the same as
those set out in section 2(c).

(163) One of the companies had a related importer based
in Germany, which dealt with part of their exports
the transactions made
to the Community. For
through the related importer the export prices were
constructed on the basis of
the price paid or
payable by the first independent customer for the
product concerned, less the SG & A costs and a
reasonable amount for profit, in accordance with
Article 2(9) of
the Basic Regulation. The profit
margin was provisionally estimated at 5 % on
turnover.

(a) Individual treatment

(d) Comparison

(159) All three sampled exporters requested that indivi-
dual dumping margins be established in their
regard, claiming that they enjoyed full autonomy
and were responsible for their profits and losses.

to
(160) Following established practice with respect
exports from a State trading country,
individual
treatment can be applied solely in cases where the
exporter concerned has provided evidence that it
operates outside the influence of
the national
authorities and according to market economy
conditions. In the present proceeding no evidence
to this effect was submitted. In those circum-
stances,
individual dumping
margins were not appropriate and that a single
dumping margin had to be established on the basis
the weighted average (according to export
of
the dumping
turnover
margins of the sample.

to the Community) of

it was decided that

(b) Normal value

(164) For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences affecting price comparability in ac-
cordance with Article 2(10) of the Basic Regulation.

(165) Where applicable, adjustments were made on the
export price to take account of credit costs, trans-
port, packing and commission.

(166) On the normal value side, all allowances granted to
the Indian exporters (see section 7(c)) were also
deducted in the case of China.

(e) Dumping margin

(167) Weighted average normal value by type, as deter-
mined for India under section 7(a), was compared
with the export price, as determined under section
8(c), both adjusted in accordance with section 8(d).
The methodology applied was that described in
section 2(e).

(i) Dumping margin for China

(161) Normal value for the Chinese exporters was calcu-
lated on the basis of the normal values established
for the co-operating Indian companies (see section
7(a)). In this context, the Indian types used were
those sold on the domestic market which were
found to have the same construction number (see
also section 2(b)) as the Chinese types exported to
the Community. In view of
the difficulties in
finding a representative quantity of comparable
types, the Commission used normal values of all

(168) The comparison, as described in section 8(d), shows
the existence of dumping in respect of the three
Chinese producers. In the absence of individual
treatment for any of the companies concerned, a
single dumping margin was calculated for China,
which is the average of the margins found for the
three companies, weighted on export turnover. The
dumping margin expressed as a percentage of the
CIF import price at
the Community border is
15,7 %.

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9. Dumping margins

Companies in the sample

Cooperating
companies

Non-cooperating
companies

People’s Repub-
lic of China

Single margin

15,7 %

None

Egypt

India

Single margin

20,6 %

20,6 %

15 %

13,2 %

16,9 %

— Century Textiles & Industries Ltd
— Mafatlal Group (Mafatlal

Industries
Limited + The Mafatlal Fine Spin-
ning & Manufacturing Company Ltd) 16,9 %
14,7 %
4,9 %
5,9 %

— Coats Viyella India Ltd
— Vardhman Spinning & Gen. Mills Ltd
— Virudhunagar

Indonesia

— Group Argo Pantes (PT Argo Pantes

13,5 %

31,7 %

+ PT Daya Manunggal)

— Apac Inti Corpora
— Eratex Djaja

— Diamond Fabrics Ltd
— Nishat Mills Ltd
— Kohinoor Raiwind Mills Ltd
— Kohinoor Weaving Mills Ltd

— Birlik Mensucat
— Tureks
— Teksmobili

31,7 %
19 %
29,7 %

15,6 %
32,5 %
11,7 %
11,7 %

11 %
10,4 %
1,6 %

Pakistan

Turkey

19,2 %

32,5 %

10,9 %

14,2 %

D. COMMUNITY INDUSTRY

(169)

In view of the large number of producers sup-
porting the complaint (hereinafter called the ‘Com-
munity industry’) and wishing to cooperate with
the Commission,
the Commission decided to
investigate injury on the basis of a sample of
Community producers which could reasonably be
investigated within the time available. In the notice
of initiation it was announced that the sample used
in the previous proceeding would be the basis for
the selection. In order to select the sample, the
Commission requested the complainant to present
company-specific production and sales data of the
product concerned for the year 1996.

(170) On the basis of that information the Commission
selected 14 companies,
representing 7 Member
States, to which questionnaires were addressed. In
the selection, the following criteria were consid-
ered: number of companies per country, according
to the relative importance of the country; main
producing Member States; various company sizes
and production structures. The companies included
in the sample represented around 52 % of total

Community production of the product concerned
during the investigation period.

(171) Parties concerned which, following the notice of
initiation, had expressed their wish to be consulted
by the Commission on the final selection of the
sample were thus given disclosure of the sampled
companies and of the methodology used for their
selection.

The following producers were selected for
sample:

the

Germany:

— Ettlin Gesellschaft f(cid:129)r Spinnerei und Weberei

AG,

— Velener Textilwerke Grimmelt Wevers & Co.

GmbH,

— Hecking S(cid:148)hne,
— A. K(cid:129)mpers GmbH & Co;

Italy:

— Tessiture Niggeler & K(cid:129)pfer SpA,
— Standartela SpA;

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France:
— (cid:144)ts. des Fils de V. Perrin,
— Tenthorey,
— SA HGP GAT,
— Fil. et Tis. de Saulxures;

Spain:
— Hilados y Tejidos Puigner(cid:155), S.A.;

Portugal:
— Incotex - Ind ´ustria e Com(cid:130)rcio de T(cid:136)xteis, Lda;

Belgium:
— Le Compte Textielfabrieken NV;

Austria:
— Linz Textil GmbH.

(172) Linz Textil was excluded from the sample due to
its inability to provide the requested data, although
expressly supporting the proceeding.

E. INJURY

1. Preliminary remark

(173) For the purpose of the analysis of the injury aspects
of the case, the Commission analysed data relating
to the period from 1 January 1993 to 30 June
1997.

(174)

In order to enable yearly comparisons to be made,
the respective calendar years 1993 to 1996 have
been compared to a period covering July 1996 to
June 1997, which for the purpose of the establish-
ment of trends in injury, causation and Community
interest analyses is hereinafter referred to as the
Injury Investigation Period (IIP).

(175) The geographical scope of the investigation over
the period from January 1993 to June 1997 was
the current Community of 15 Member States.
Injury has been analysed by reference to the non-
captive market, since it has been found that a clear
separation exists between the captive and non-cap-
tive markets for unbleached cotton fabrics in the
Community.

2. Community consumption

(176) Between 1993 and 1996 the apparent Community
consumption, as calculated by adding the produc-
tion of Community producers (1) to imports (2) and
deducting exports (3),
from
around 273 000 tonnes to around 308 000 tonnes.

increased by 12,7 %,

(1) Source: CITH, Euratex and Eurocoton.
(2) Source: Eurostat and the statistical offices of Sweden, Finland

and Austria for the years prior to 1995.

(3) Source: Eurostat and the statistical offices of Sweden, Finland

and Austria for the years prior to 1995.

In 1994 consumption amounted to around 312 790
tonnes and in 1995 it amounted to around 282 200
tonnes.
In the IIP consumption amounted to
around 297 600 tonnes.

3. Cumulative assessment of the effects of the

imports concerned

(177) The Commission examined whether imports from
all countries concerned should be assessed cumula-
tively pursuant to Article 3(4) of the Basic Regula-
tion.

(178)

In this respect Turkish exporters have argued that
exports of unbleached cotton fabrics from Turkey
should not be cumulated with the rest of the coun-
tries concerned, in view of the decline of exports
from Turkey, their decreasing share of the Com-
munity market and differences in export prices as
compared to the other countries concerned.

(179) Similarly, Egyptian exporters have argued that
exports from Egypt should not be cumulated with
the rest of the countries concerned, in view of the
decrease in their absolute and relative level of
exports and their different market behaviour.

it

(a)

is determined that

(180) The Commission has examined these arguments,
taking account of the conditions of Article 3(4) of
the Basic Regulation, according to which the
effects of imports ‘shall be cumulatively assessed
only if
the margin of
dumping established in relation to the imports
from each country is more than de minimis as
defined in Article 9(3) and that
the volume of
imports from each country is not negligible; and (b)
a cumulative assessment of
the
imports is appropriate in the light of the conditions
of competition between imported products and the
conditions between the imported products and the
like Community product.’ On this basis, the fol-
lowing provisional conclusions have been made:

the effects of

(a) Turkey

(181) With respect

to the dumping margin and the
volume of imports, they cannot at this stage be
considered de minimis or completely negligible.
With respect to the appropriateness of a cumulative
assessment in the light of the conditions of compe-
tition, the following provisional findings have been
made:

Volumes and market shares: between 1993 and the
IIP, exports from Turkey have decreased by 40 %,
from around 9 300 tonnes in 1993 to around 5 600
tonnes in the IIP. Their share of the Community
market has decreased by 44 points between 1993
and the IIP, that is from 3,4 % in 1993 to 1,9 % in

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the IIP. This trend is confirmed by the export
figures of the nine first months of 1997 (3 205
tonnes). This points, on an annual basis,
to a
further decline of 21 % for 1997 compared to the
the
representing around 1,5 % share of
IIP,
Community market. The decrease should be seen
in the light of the non-existence of quota restric-
tions between Turkey and the Community.

regards

the prices of

Prices: As
the product
concerned as reported by Eurostat, there was an
increase of 9 % between 1993 and 1996. In 1996
Turkish prices were the highest of the countries
concerned; between 1996 and the IIP prices
increased by a further 1 %. With respect to price
undercutting, provisional
to an
average of 5,6 %. However, the representativeness
of the sample on which this figure is based still
needs to be further verified (see below). On average,
this provisional figure is the lowest of all countries
under investigation.

figures point

(182)

(183)

(184)

it has been found that there has
In conclusion,
been a decrease in the volume of
imports, a
decrease in the share of the Community market as
well as a price increase in Turkish imports in the
period under investigation. However, the undercut-
ting provisionally established is not insubstantial,
even though it is based on a sample the representa-
tiveness of which is doubtful. For these reasons, it
is provisionally considered appropriate to reject the
Turkish request for non-cumulation and to cumu-
late imports from Turkey with the rest of the coun-
tries concerned. Nevertheless,
the issue will be
further investigated.

(b) Egypt

Imports from Egypt have remained fairly stable at
around 13 000 tonnes between 1993 and 1996.
Between 1996 and the IIP there was an increase in
imports from 12 800 to 14 600 tonnes,
is
14 %. Furthermore, their share of the Community
market has remained stable at around 5 %.

that

from Egypt

It has also been found that imports of unbleached
followed a similar
cotton fabrics
pricing pattern to that of Indian, Chinese, Pakistani
and Indonesian imports. When considered in isola-
tion,
the volumes exported from the countries
concerned are not negligible. Imports from the
third countries concerned compete with each other
and with the like product manufactured by the
Community industry, given their similar import
and pricing trends.

4. Volume and market share of the dumped

imports

(186) The

imports

from the

volume of

countries
concerned increased by 13 % between 1993 and
1996,
from 117 224 tonnes in 1993 to around
131 693 tonnes in 1996. Between 1996 and the IIP
(a period during part of which provisional measures
countries
were
concerned decreased by 24 % from around 131 693
tonnes in 1996 to around 100 385 tonnes in the
IIP.

from the

in force)

imports

(187) The import trends should be considered in the
light of the following factors: firstly, quotas appli-
cable to most of the countries concerned, which
limit the volumes of their imports to a fixed level,
the flexibility of the quotas being limited; secondly,
a certain stocking effect that appears to have taken
place in 1996, partly owing to the new anti-
dumping complaint lodged that year and the reac-
tion of the market, which anticipated the possible
imposition of duties; thirdly, the opposite effect of
sales out of stocks, and therefore reduced imports
during 1997, a period during part of which provi-
sional anti-dumping duties were in force.

(188) The share of

the Community market held by
imports from the countries concerned decreased
between 1993 and 1994 from 42,8 % to 40,5 %,
further decreased in 1995 to around 39 % and
increased in 1996 to 42,7 %. In the IIP the share of
the Community market held by imports from the
countries concerned decreased to 33,7 %.

5. Prices of the dumped imports

(189) Examination of trends of weighted average export
prices from the countries concerned, as provided by
Eurostat, shows that export prices from the coun-
tries concerned increased from ECU 3/kg in 1993
to ECU 3,2/kg in 1994. Prices further increased to
ECU 3,6/kg in 1995 and they decreased to ECU
3,4/kg in 1996. In the IIP prices increased to ECU
3,5/kg.

(190) The Commission has examined whether the produ-
cers/exporters
in the countries concerned are
undercutting the prices of the Community produ-
cers. The analysis covered the investigation period
(1 January 1996 to 30 June 1997).

(185)

In view of these circumstances, it is provisionally
considered appropriate to cumulate imports from
Egypt with the rest of the countries concerned.

the price undercutting,

the
For the analysis of
exported unbleached cotton fabrics as well as those
manufactured in the Community by the Com-
munity industry have been grouped in categories

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according to four criteria considered to have the
highest impact on the cost of production, namely
count of yarn in warp and weft, number of thread
in warp and weft.

Exporters’ prices have been duly adjusted to CIF
value and duty paid. Where appropriate, a level of
trade adjustment has been granted based on infor-
mation gathered from the responses to the unre-
lated importers’ questionnaires. Community produ-
cers’ prices have been adjusted to ex-works level.

the weighted average
Within each category,
ex-works prices of the Community producers have
been compared to the weighted average export
prices of each producer/exporter concerned.

further investigated. In particular, an attempt will
be made to select a new sample.

6. Situation of the Community industry

(a) Preliminary remark

(193) For the injury analysis, two sets of data have been
assessed: data at the level of all complainants, that
is the Community industry and data at the level of
the sampled companies.

(b) Data relating to the Community industry as a

whole

(191) The undercutting margins

expressed as a percentage of
producers’ prices, are as follows:

found per country,
the Community

(194) Between 1993 and 1996, production of unbleached
cotton fabrics
industry
decreased from around 85 600 tonnes to around
83 200 tonnes, that is by around 3 %. In the IIP,
production increased by 5 %,
to around 87 500
tonnes.

the Community

by

— People’s Republic of China: between 20 % and

24 %, on average 21,7 %;

— Egypt: between 24 % and 35 %, on average

27,8 %;

— India: between 3 % and 35 %, on average

26,9 %;

— Indonesia: between 18 % and 36 %, on average

29,2 %;

— Pakistan: between 9 % and 19 %, on average

13,3 %;

— Turkey: between 0,1 % and 21,2 %, on average

5,6 %.

(192) For Turkey, the calculation showed the following
particularities. Doubts about the representativity of
the four sampled companies chosen from Turkish
exporters result from the following factors. Firstly,
one company did not cooperate. Secondly, one
company was found to be exporting mainly one
type of fabric for which the price comparison was
the undercutting margin
particularly difficult;
found for this company amounts provisionally to
0,1 % (the company has a de minimis dumping
margin). The third company for which an under-
cutting margin of 21,2 % was established only
accounts for around 5 % of total exports by the
sampled companies. The fourth company, whose
exports account for around 50 % of the sample, has
an undercutting margin of 5,5 %. These results
deviate substantially from the results found in the
previous investigation. In view of the limitations in
the sample, while it was considered sufficient at the
provisional stage to use the information currently
available, the question of price undercutting will be

(195) While Community consumption rose by 12,6 %
between 1993 and 1996, total sales by the Com-
munity industry decreased by around 1,4 %, from
74 000 tonnes to around 73 000 tonnes. The corres-
ponding share of the Community market decreased
from 27 % to 24 %, a decline of 11 % in relative
terms over the period.

(196) Between 1996 and the IIP, sales of the Community
industry increased to 77 000 tonnes,
is an
increase of 5 %, while the share of the Community
market increased to 26 %, the period of application
of anti-dumping measures largely coincided with
that in which these increases occurred.

that

(197) Between 1993 and 1995, 88 company closures took
place in the Community, with a loss of
total
employment of around 8 600 employees. Between
January 1996 and July 1997, 24 companies were
closed with a loss of total employment of around
2 500 employees. This loss in employment would
amount to around 4,5 % of the total captive and
non-captive employment
in weaving of cotton
fabrics. These data relate to Community producers
and non-captive production of
with captive
; 50 % cotton,
it not being possible to make
and non-
specific allocations between captive
captive production.

(c) Data relating to the

sampled Community

producers

(i) Production

(198) Production of the sampled Community producers
decreased by 6,3 % between 1993 and 1996, from
around 52 000 tonnes in 1993 to around 48 700
tonnes in 1996. In the IIP, production increased to
52 000 tonnes.

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The trends of
the average monthly production
show a decrease of 8 % between 1993 and 1996,
with an increase of 20 % between 1996 and June
1997, coinciding with the period of imposition of
provisional anti-dumping measures.

(ii) Capacity

(199) Maximum production capacity, as measured in
machine hours per year of the sampled producers,
decreased from 18,1 million hours per year in 1993
to 16,9 million hours per year in 1996, a decrease
of 7 %. Between 1996 and the IIP, production
capacity increased from 16,9 million hours per year
to 17,3 million hours per year.

to capacity utilisation,

With respect
the actual
machine hours worked decreased from 15,4 million
hours in 1993 to 15,3 million hours in 1996.
Between 1996 and the IIP, actual machine hours
increased to around 16 million hours.

During this period the sampled Community produ-
cers have rationalised production in the form of a
reduction of capacities and modernisation of the
machinery.

(iii) Stocks

(200) Stocks of the sampled producers increased between
1993 and 1996 by around 54 %, from around 3 800
tonnes to around 5 900 tonnes. During the IIP,
stocks decreased to 2 800 tonnes.

(iv) Sales volumes

(201) Sales of the product concerned by the sampled
Community producers decreased by 5,8 % between
1993 and 1996,
from around 52 000 tonnes to
around 49 000 tonnes. During the IIP, sales rose to
53 000 tonnes.

The average monthly evolution of sales shows a
decrease of 5 % between 1993 and 1996, from an
average of 4 336 tonnes/month in 1993 to 4 110
tonnes/month in 1996. Between 1996 and the IIP,
the average monthly sales of the sampled Com-
munity producers increased by 8 %, to an average
of 4 422 tonnes/month, partly coinciding with the
period
anti-dumping
measures. While in 1996 the average monthly sales
amount to 4 110 tonnes/month, during the first six
months of 1997 the average monthly sales amount
to 5 250 tonnes/month.

application

the

of

of

(v) Prices

(202) The analysis of the development of prices of the
sampled Community producers shows an increase
of 8 % between 1993 and 1994, a further increase
of 13 % between 1994 and 1995. Between 1995
and 1996, prices increased by 4 %. Between 1996
and the IIP, prices decreased by 2 %.

(203) The trends of the Community producers’ prices
have to be seen in the light of two main factors
that have influenced the costs of Community
(a) prices of raw cotton, and (b) costs
producers:
arising as a result of making frequent changes in
constructions and weaving shorter series, due to the
pressure of imports from the countries concerned
on certain constructions.

(204) With respect to raw cotton — main input in the
manufacture of fabrics and accounting for around
one-third of the total manufacturing costs — price
trends have been examined. Between 1993 and
1994, the price of raw cotton in the world market
increased by 48 %; between 1994 and 1995, raw
cotton prices increased by a further 15 %. Between
1995 and 1996, prices of raw cotton decreased by
15 %. Between 1996 and the IIP, raw cotton prices
increased by 10 %.

(205) A comparison of the two trends would imply that
the rise in prices of fabrics failed to match even the
rise in the cost of the raw cotton. Account should
be taken of the fact that the increase in the cost of
the raw material only has an impact on the price of
the unbleached fabric between six months and one
year later, due to advance purchases.

(206)

the costs of

It should also be noted that
the
Community producers also increased during the
period from 1993 to 1996 for the same reasons as
those given in recitals 203, 204 and 205,
thus
preventing Community producers from benefiting
from economies of scale and thus reaching a prof-
itable situation.

(207)

It is provisionally concluded, therefore, that despite
an increase in the prices of
the Community
industry, Community producers failed to match the
increase in the manufacturing costs. This situation
can be regarded as one of price suppression.

(vi) Investments

(208) Between 1993 and the IIP,

the sampled Com-
munity producers increased their rate of
invest-
ments from around ECU 7 million to around ECU
13 million, that is by 76 %, representing around
4 % and 5,5 % on turnover, respectively. The rate
of investments has been maintained even at a time
when profitability was negative, in order to main-
tain competitiveness.

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(vii) Profitability

2. Effect of the dumped imports from the

countries concerned

(209) Between 1993 and 1996, the profitability of the
deteriorated.
sampled Community
Indeed, the weighted average profit decreased from
around 0 % in 1993 to around –2 % in 1996.
During the IIP, which partly coincided with the
period of imposition of provisional anti-dumping
measures, the losses decreased to 1 %.

producers

(viii) Employment

(210) The total number of employees in the sampled
Community producers decreased from 5 352 in
1993 to 4 932 in 1996, a decrease of 8 %. In the
IIP, the number of employees amounted to 4 965.

7. Conclusion regarding injury

(211) The examination of

the above-mentioned injury
factors shows that between 1993 and 1996 the situ-
the Community industry deteriorated.
ation of
Indeed, during
the Community
this period,
industry suffered decreases in production, in sales
in the Community, in profitability and in employ-
ment. During the same period, stocks increased.

(212) Although between 1996 and the IIP, the Commu-
nity industry’s production and sales increased and
stocks decreased,
it appears that the recovery is
principally attributable to the provisional anti-
dumping measures in place between November
1996 and May 1997. Furthermore, the limited dura-
tion of the measures did not allow the Community
industry to regain profitability, the financial situ-
ation of the Community industry still being neg-
ative.

F. CAUSATION

1. Introduction

(214)

In examining the effects of the dumped imports, it
was
the
found that, between 1993 and 1996,
increase in the imports of unbleached cotton
fabrics from the countries concerned, of 12 %, and
their high share of
the Community market, of
around 43 %, coincided with a deterioration of the
financial
the Community industry,
whose share of the Community market decreased
from 28 % to 26 %.

situation of

(215) The market for unbleached cotton fabrics is highly
price-sensitive due to the type of product which, in
general, can be characterised as a commodity, the
great product interchangeability and the transpa-
rency of the market.

(216) Examination of trends of the Community produ-
cer’s prices shows considerable price suppression
between 1993 and 1996. Price suppression caused
by the imports concerned was most apparent
between 1995 and 1996, when Community produ-
cers were only able to increase their prices by 4 %
(despite prices already having been suppressed over
the previous two years); during the same period,
prices of the imports from the countries concerned
decreased by 6 %.

(217) Furthermore,

it should be borne in mind that,
during the period of
imposition of provisional
measures on imports from the countries concerned,
there were clear signs of recovery of the Com-
munity industry, as shown below.

(218)

It is therefore considered that in such a price-sens-
itive market, the pressure exerted by the imports
concerned in the form of price undercutting caused
price suppression for the Community producers
leading to financial
it is
considered that one of the causes of the material
injury suffered by the Community producers is the
price undercutting.

losses. For this reason,

(213) Pursuant to Article 3(6) and (7) of the Basic Regula-
tion,
the Commission has examined whether
imports of unbleached cotton fabrics originating
from the countries concerned have caused injury to
the Community industry to a degree that enables it
to be classified as material. Known factors other
than the dumped imports, which could at the same
time be injuring the Community industry, were
also examined to ensure that possible injury caused
by those other factors is not attributed to the
dumped imports.

3. Effects of other factors

(a) Quotas and voluntary export restraints

(219) Some parties have argued that imports from the
countries concerned cannot be the cause of any
injury suffered by the Community industry, since
they are subject to quotas imposed in the context
of the Multifibre Arrangement (MFA).

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(220)

Imports of unbleached cotton fabrics from the
countries concerned, except Turkey, are currently
governed by a number of trade agreements. Exports
from India, Indonesia,
the People’s Republic of
China and Pakistan are subject to import quotas.
Volumes imported from Egypt are the subject of
voluntary export restraints.

(221) The product concerned by the current proceeding
falls under product Category 2 of the old MFA
system as taken over by the WTO Agreement on
Textile and Clothing. That category covers un-
bleached and bleached plain-weave fabric contain-
the
ing more than 50 % of cotton. Therefore,
proportion of exports of unbleached fabrics from
the countries concerned covered by Category 2
quota may vary from year to year. Furthermore, the
in
for
quota
switching quota allocations between different cat-
egories, making advance use of them, as well as
carrying over certain quantities between years.

system allows

flexibility

some

(222) However, quotas restricting import volumes do not
necessarily preclude the causation of injury to the
Community industry, in the form of price suppres-
sion or price depression, their aim being only to
restrict the quantities imported. Despite the exist-
ence of quotas, average prices of India, Indonesia,
Pakistan and the People’s Republic of China
decreased between 1995 and 1996 by 5 %.

(223)

In this respect, it should be noted that, despite the
existence of quotas and import restrictions, imports
of unbleached fabrics from the countries concerned
which are subject
to trade arrangements have
substantially increased from around 107 000 tonnes
in 1993 to around 121 000 tonnes in the IIP. It
appears
concerned have
countries
increased the proportion of unbleached fabrics
within the total exports of the products covered by
Category 2.

that

the

(224) Furthermore,

the high and increasing import
volumes from the countries concerned were sold at
prices which significantly undercut Community
producers’ prices.

(225) Given those factors, it can provisionally be con-
sidered that the existence of quotas and voluntary
export restraints does not preclude the imports
concerned from being a cause of
injury to the
Community industry.

(227)

Imports of unbleached cotton fabrics from third
countries rose from around 76 245 tonnes in 1993
to around 97 300 tonnes in 1996, having peaked at
around 104 600 tonnes in 1994. In the IIP, imports
the product concerned from third countries
of
increased to around 113 000 tonnes. The share of
the Community market held by those imports
increased from 28 % in 1993 to 32 % in 1996. In
the IIP, it further increased to 38 %.

information shows

(228) As to the prices of imports from third countries,
that on
available Eurostat
average, prices charged by third countries are
higher than the prices of the countries concerned.
In 1993, the weighted average prices of imports
from third countries — as reported by Eurostat —
were 15 % higher than the weighted average prices
from the countries concerned. In 1996 the dif-
ference amounted to around 6 %.

(229)

If Russia and United Arab Emirates (UAE) are
excluded,
the prices of unbleached fabrics from
other third countries in 1993 were 22 % higher
than those of the countries concerned. In 1996 the
difference amounted to around 13 %.

(230) Furthermore,

in 1996 only four countries had a
share of the Community market greater than 2 %,
namely Estonia (2,6 %), Russia (3 %), UAE (3 %)
and Thailand (4 %).

(231) Between 1993 and 1996, imports of the product
concerned originating in Estonia have steadily
increased from around 2 000 tonnes in 1993 to
around 6 900 tonnes in 1996, while their share of
the Community market has increased from around
1 % to around 2,6 %. Their prices have increased
from ECU 2/kg to around ECU 3,1/kg.

(232) Between 1993 and 1996 imports of the product
concerned originating in Russia remained stable at
the
around 8 000 tonnes, while their share of
Community market
at 3 %.
Available Eurostat data show that their prices re-
mained relatively stable at around ECU 2,5/kg.

remained stable

(b) Imports from third countries

(233)

(226) Certain interested parties have further alleged that
any injury suffered by the Community industry has
been caused by imports from third countries not
covered by the proceeding.

Imports from UAE substantially increased, reaching
a share of the Community market of around 3 %.
The issue of possible fraud in the declaration of the
is
origin of
currently being investigated. The prices of those
exports have remained stable at around ECU 3/kg
between 1993 and 1996.

those unbleached cotton fabrics

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9. 4. 98

(234) As regards Thailand, exports remained stable at
around 12 000 tonnes between 1993 and 1996 and
their share of the Community market remained at
4 %. It is worth noting that prices of those imports
as reported by Eurostat fluctuated between ECU
4/kg and ECU 4,5/kg, well above the prices
charged by the exporters
from the countries
concerned.

(235) As

regards

third countries other

than Estonia,
Russia, United Arab Emirates and Thailand, each
country individually has a small
the
Community market
average prices
between 1993 and 1996 remained at levels which
countries
are higher
those other third
concerned. In 1996 prices of
countries were 10 % higher than those of
the
countries concerned.

than those

and their

from the

share of

(236)

In the light of the foregoing,
it is provisionally
concluded that, although imports from Estonia,
Russia and United Arab Emirates might also be
causing injury to the Community industry, they
link between the
have not broken the causal
imports from the countries concerned and the
material
the Community
suffered by
industry.

injury

4. Conclusion on causation

(237) The negative situation of the Community industry
coincided with an increase in the imports from the
countries concerned (until
the provisional anti-
dumping measures were imposed in November
1996) and substantial price undercutting by those
imports.

(238) The possibility cannot be ruled out

that other
factors, notably imports from Russia and United
Arab Emirates (due to their increasing market share
and low prices) and other low-cost third countries
considered together (due to their important and in-
creasing market share) have exerted pressure on the
prices of the Community industry and have con-
sequently contributed to the negative situation of
the Community industry.

(239) However, even if certain other

third countries
might have contributed to the negative situation of
the Community
taken in isolation,
imports from the countries concerned have caused
material injury to the Community industry.

industry,

G. COMMUNITY INTEREST

1. The Community

interest

investigation:

information gathering

(240) Pursuant to Article 21 of the Basic Regulation, in
order to assess properly the Community interest,
the Commission has carried out an investigation

into the likely effects of
imposition of
economic operators concerned.

the imposition/non-
anti-dumping measures on the

(241) The subsequent analysis is based on the informa-
tion submitted by all interested parties, where duly
substantiated by evidence.

(242) The Commission sent out specific requests for
information in the form of questionnaires. They
were addressed to 52 interested parties which were
deemed representative of the different sectors of
the textile industry directly concerned by the
product under
spinners,
weavers, importers-traders, finishers, converters and
makers-up.

investigation, namely:

(243) Some interested parties have claimed that such an
approach constitutes a breach of the Basic Regula-
tion, since the latter does not provide for sampling
in the context of the examination of the Com-
munity interest.

(244) However,

the approach used cannot be charac-
terised as sampling. Contrary to the procedure
followed under Article 17 of the Basic Regulation,
all arguments submitted by the interested parties,
where substantiated by evidence, have been taken
into account. It was in order to be able to obtain
information in a systematic way allowing the
Commission to respond to the different issues at
stake and to complete and verify the information
obtained that
specific
requests for information to a limited number of
parties.

the Commission made

(245) The Commission requested all

interested parties
that had made themselves known to provide in-
formation concerning production, sales, employ-
ment and imports for the year 1996.

(246) Within each type of activity, companies were
selected from different Member States, according to
the relative importance of
that activity in the
respective country. Within each country, and where
available, companies were selected according to
their turnover of
the product concerned in the
Community, within the categories of large, small
and medium. In this respect the size of a company
was considered to be indicative of its ability to
negotiate prices.

(247) Within each type of activity, the number of com-
panies selected therefrom varies according to the
weight of the category with respect to the total
volume of turnover reported for that country. With
respect to the selection of the companies, the fol-
lowing criteria carried weight: activity being carried
out on commission basis or not, degree of integra-
tion of the company and geographical location.

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(248) The

the

identity of

selected companies was
disclosed to interested parties who had the oppor-
tunity to comment on it. Substantiated comments
were duly taken into account.

2. Economic operators concerned

(249) The categories of economic operators concerned by
the current proceeding are identified below. It
should be emphasised that a large proportion of the
industry is vertically integrated, covering one or
more of the activities listed below.

(a) Upstream industry: spinners

(250) They transform the raw cotton into yarn through a
highly automated process. The yarn is then used
for weaving the fabric.

(b) The Community industry: weavers

(256) The Community industry is mainly composed of
small and medium-sized companies. The produc-
is highly automated and capital-
tion process
intensive. Substantial economies of
are
achieved when weaving large volumes of the same
construction.

scales

(257) Unbleached cotton fabrics are an intermediate
product with a high degree of standardisation and
price sensitivity, especially in the most common
constructions, but subject to fashion changes and,
in niche areas of the market which require unusual
constructions, demand may be for limited quant-
ities only.

(258) Employment

to

the

corresponding

product
concerned, of both the integrated and non-in-
tegrated Community weavers, amounted to 40 000
in 1996. The employment attributable to the non-
integrated producers of the product concerned in
the Community would amount to around 12 000.

(251) They weave yarn into fabrics.

(b) Viability of the Community industry

(c) Users

(252) Finishers: woven fabric is bleached, printed, dyed
or otherwise transformed. These activities
are
generally, but not always, performed by the same
company.

(253) Makers-up: the finished cloth is cut and sewn to
make garments, household goods, or
industrial
goods by makers-up. This is a labour-intensive
stage, where the production processes are not
normally automated.

(d) Importers-traders/converters

(254) They

supply

and
the Community’s
makers-up with cloth, either imported or purchased
the
in the Community; converters also recruit
services of finishers to have the fabrics processed to
the requirements of makers-up.

finishers

3. The Community industry

(a) Nature and structure

of

the Community

industry

(255) Total captive and non-captive production of the
product concerned amounted to around 317 000
tonnes in 1996. Total non-captive production of
in the Community
the
amounted to around 92 000 tonnes in 1996. The
complaining Community industry accounts
for
around 90 % of this figure.

concerned

product

(259) The Community industry is viable and competitive.
This provisional assessment is based on an appreci-
ation of the following elements:

(i) Degree of

investments and machinery

replacement

(260) The average rate of replacement of the machinery
is around seven years. The companies invest in the
latest and fastest technology in order to benefit
from economies of scale and to be able to offer a
product that is price competitive.

(ii) The

commitment of

the Community
industry to the development of new
technology

(261) This is apparent from the participation of some of
the sampled Community producers in new R&D
projects developing new spinning methods (1),
which will have consequential benefits for weaving.

(iii) Development of new constructions for

new uses

(262) Community producers are constantly developing
new constructions. This is necessary in order to
remain in the business by offering new products
where competition from third countries is initially
very low.

(1) This project is currently being developed under the auspices

of the Community research programme BRITE.

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9. 4. 98

(iv) Export performance

Example: Company 4 (Portugal)

(263) Exports of the product concerned by the Com-
munity industry have remained relatively stable at
around 10 000 tonnes between 1993 and the IIP.

(c) Effects of the past imposition of measures on

the Community weavers

(264) The Commission has examined the effects that the
imposition of provisional measures
in the last
proceeding had on the Community industry. The
effect of the measures should be seen in the light
of the fact that they had a limited duration of six
months. As already explained above, between 1996
and the IIP the sampled Community producers
increased their production and sales and decreased
their stocks.

(i) Increase in sales volumes

(265) The imposition of anti-dumping duties on the
product concerned resulted in an increase in sales
volumes, more noticeable in the case of
those
companies manufacturing standard commodity
products. The increase in the quantities
sold
to reduce costs
allowed Community producers
through economies of scale, with a positive effect
on profitability.

Example: Company 1 (Germany)

Firm orders placed with the company for
the
period from November 1996 to May 1997
increased when compared with the same period
from 13 300 tonnes to
the previous year,
over
20 000 tonnes, a rise of 52 %.

the

same

company,

the monthly

For
sales
increased, between November 1996 and May 1997
compared with the same period over the previous
year, from 1 900 tonnes a month to 2 800 tonnes a
month, a rise of 47 %.

two of

Sales volume of
the main imported
constructions (20 (cid:253) 20 and 30 (cid:253) 30) manufac-
tured by this company increased by over 180 %
between January to March 1996 and the same
period in 1997, from around 31 tonnes to around
90 tonnes.

(ii) Reduction of
concerned

stocks of

the product

(266) The provisional anti-dumping measures resulted in
a reduction of stocks. This is more noticeable in
the case of companies specialised in the manufac-
ture of standard constructions, such as 20 (cid:253) 20, 30
(cid:253) 30 and 40 (cid:253) 40.

Example: Company 1 (France)

stocks at

The level of
the end of May 1996
increased by 1 % when compared with the same
date in 1995. At the end of May 1997, the level of
stocks had decreased by 58 % when compared with
the same date in 1996.

Example: Company 2 (France)

The level of stocks for this company at the end of
May 1996 decreased by 5 % when compared with
the same date in 1995. At the end of May 1997, the
level of
stocks had decreased by 34 % when
compared with the same date in 1996.

Example: Company 3 (Italy)

The level of stocks for this company at the end of
May 1996 had increased by 474 % when compared
with the same date in 1995. At the end of May
stocks had decreased by 60 %, when
1997,
compared with the same date in 1996, that is from
2,9 million metres in 1996 to 1 million metres in
1997.

Example: Company 2 (France)

(iii) Prices of the product concerned

The impact of the measures in the form of increase
in sales was evaluated in relation to two construc-
tions, representing around 60 % of sales of the
product concerned by that company in 1996.
Between November 1995 to May 1996 and
November 1996 to May 1997,
these
from around
constructions
3 400 tonnes to around 4 300 tonnes.

increased by 28 %,

sales of

Example: Company 3 (Italy)

Between November 1995 to May 1996 and the
same period in 1996/97, the company increased
total sales of the fabrics concerned by 35 %, from
12 million metres to 16,2 million metres.

(267) Between 1996 and the IIP, weighted average prices
of the sampled Community producers decreased by
2 %. This would indicate that
the benefit of
measures for the Community producers, at least in
the short term, would consist of an increase in the
volumes sold. These figures appear to contradict
that Community producers would
the argument
take the opportunity to raise their prices by an
amount equal to the anti-dumping duty.

(268)

It
the
is therefore provisionally concluded that
sampled Community producers benefited from the
limited period when measures were in place, as
they increased production and sales and reduced
stocks.

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(d) Arguments raised by interested parties

(i) Competition from other imports

(275) Their limited capacity is also evident from the low
quota Category 2 utilisation of some of these third
countries in 1996 (Czech Republic, Malaysia, Brazil,
Romania, Hungary, Poland).

It has been alleged that Community weavers would
not benefit from anti-dumping duties since imports
of unbleached cotton fabrics from the countries
concerned would be substituted with imports of the
same product from third countries.

(276)

Imports from other third countries are also subject
to trade agreements. Imports from third countries
are equally subject to quotas or voluntary export
restraint arrangements, in particular Russia (quota
utilisation of 91 % in 1996), Thailand (97,4 %) and
Malaysia (75 %).

(269)

(270)

from third countries

it should be noted that imports
In this respect,
from third countries have increased during the
period 1993 to 1996, when no measures were in
place (except for the last two months of 1996).
Imports
increased from
around 76 000 tonnes in 1993 to peak at around
Imports decreased to
104 500 tonnes
around 90 000 tonnes
and further
increased to around 97 400 tonnes in 1996. During
the IIP,
increased to around 113 000
tonnes.

in 1995,

in 1994.

imports

(271) The trend in 1995 and 1996 appears to show that
imports from other third countries as alternative
sources of supply do not have a durable character,
probably because of the limited capacities and, in
some cases, lower quality standards.

(272) Nevertheless

third countries,

the
Community industry, have benefited from the
imposition of provisional anti-dumping measures,
in terms of sales and market shares.

as well

as

(273) Furthermore,

imports from other third countries
remained highly fragmented between 1993 and
1996: in 1993 around 70 % of total imports from
other third countries was accounted for by 22
countries (the rest was shared by no less than 88
countries) and only two countries had a Com-
munity market share greater than 2 % (Russia and
Thailand). In 1996 imports from other third coun-
tries amounted to around 97 400 tonnes. Around
75 % of this was exported by 22 countries, only
four of which had a share of
the Community
market higher than 2 % (Estonia, 2,6 %, Russia,
3,4 %, Thailand, 5,4 %, and United Arab Emirates,
4,3 %).

(274) The fragmented nature of imports from other third
countries (over 100 countries represent a share of
32 % of the Community market in 1996) would
appear to justify the conclusion that, currently, only
limited capacity is available in each third country.
Consequently there are limited prospects for these
countries to constitute an alternative source of
supply
countries
concerned, (6 countries with a share of 43 % of the
Community market).

from the

imports

the

to

(277) Apart

imports from other
(representing around 76 % of

from Russia, United Arab Emirates and
third
Zimbabwe, prices of
countries
total
exports from all third countries) are on average
higher than those of imports from the countries
concerned. In 1993 import prices from those other
third countries were 26 % higher than those of the
countries concerned, the difference being 14 % in
1996.
the difference amounted to
around 6 %.

In the IIP,

(278)

(279)

In the case of Russia,
it has been alleged that
unbleached fabrics are generally of lower quality
than those of the countries concerned and other
third countries. In the case of the United Arab
Emirates, the increase in its exports could be due to
fraud in the declaration of
these
unbleached cotton fabrics which is currently being
investigated.

the origin of

third countries,

It is provisionally concluded that, given the frag-
mented nature of imports, the limited capacities
their
available in the individual
price level and the existence of quotas and trade
arrangements, it is not likely that imports from the
countries concerned would constitute a durable and
stable alternative source of
to
prevent the Community industry from benefiting
from any anti-dumping measure.

supply such as

(ii) Import substitution:

finished products

(280) Some interested parties have claimed that

the
imposition of
any anti-dumping measures on
imports of unbleached cotton fabrics will result in a
shift of imports towards finished fabrics, thus neg-
ating any possible benefit
to the Community
industry. In order to support their argument, parties
pointed to the increase in the imports of finished
fabrics between January
and April 1996 as
compared with the same period in 1997.

(281)

Imports of finished fabrics between 1993 and 1996
show a progressive increase in absolute amounts,
from around 45 000 tonnes in 1993 to around
47 500 tonnes in 1996. This trend is also evident
concerning finished fabrics with a content of less
than 85 % cotton, where imports rose from around

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9. 4. 98

4 700 tonnes in 1993 to around 7 000 tonnes in
1996, all this occurred at a time where no anti-
dumping measures were in place. Between 1996
and the end of the IIP, imports of finished fabrics
rose from 47 500 tonnes to 53 000 tonnes.

time examined. This is further confirmed by an
analysis of the figures corresponding to the period
where measures were in place.

(282) A comparison of the import figures of finished
fabrics in the period November 1996 to May 1997
(period of appliction of provisional measures) and
the same period in 1994, 1995 and 1996 shows that
imports of finished fabrics increased from around
25 500 tonnes in the period 1993 to 1994 to
around 32 000 tonnes in the same period in 1996
to 1997.

(284) Between 1993 and 1996 imports of dyed and
printed fabrics have increased; between 1996 and
the IIP imports of dyed and printed fabrics have
remained relatively stable. It can be concluded that
the imposition of an anti-dumping duty on imports
of unbleached fabrics will not cause a shift towards
imports of dyed and printed fabrics. Thus it can
provisionally be concluded that any increase in the
imports of these fabrics over the period 1993 to the
IIP and for the future will be due to the develop-
ment of the textile trade in the exporting countries
towards higher value added products.

(283)

Imports of finished fabrics both A 85 % cotton
and : 85 % cotton have increased in the past
years, probably coinciding with the development of
finishing facilities in third countries. It would be
difficult to assume that this evolution is solely or
mainly due to any anti-dumping measure, since no
measures were in place during the great part of the

(285) Between 1993 and 1996 imports of bleached fabrics
decreased from 13 000 to 10 300 tonnes. Between
1996 and the IIP,
imports of bleached fabrics
the other
increased more than the average of
finished products, from around 10 300 to around
15 000 tonnes.

(286) The increase of around 5 000 tonnes between 1996 and the IIP breaks down as follows:

Imports bleached
fabrics

Volume
(tonnes)

Prices (ECU/kg)
bleached

Price (ECU/kg)
unbleached fabrics

1996

IIP

1996

India and Pakistan

2 700

5 700

Other countries concerned

1 500

2 500

4,7

5,5

Other third countries

6 000

7 100

8

Source: Eurostat

IIP

4,6

5,8

7,2

1996

3,3

3,4

3,6

IIP

3,4

3,5

3,5

(287) The cost of bleaching is directly related to the weight of the fabric. For a 120 g/m2 fabric,
the cost of bleaching amounts to around ECU 0,6/kg. The cost increases by around 10 to
15 % in the case of a 200 g/m2 fabric. Since the average weight of imports of bleached
fabrics is between 130 and 200 g/m2 and, therefore, the cost of bleaching can be estimated
at around ECU 0,8/kg, the economic viability of switching to imports of bleached fabrics
appears to be barely justified:

IIP

Price
(ECU/kg)
of unbleached
fabrics
(Eurostat)

Estimated
15 %
anti-dumping
duty

Estimated
cost of
bleaching
in EC
(ECU/kg)

Estimated
total costs of
unbleached
fabric
imported and
bleached in
EC (ECU/kg)

Price
(ECU/kg)
imported
bleached
fabric
(Eurostat)

India and Pakistan

Other countries concerned

Other third countries

3,4

3,5

3,7

0,5

0,5

No
duty

0,78

0,78

0,78

4,7

4,8

4,5

4,6

5,9

7,2

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(288)

the prices of

It should be noted that
imported
bleached fabrics are in all cases higher than the
prices of imported unbleached fabrics plus an es-
timated anti-dumping duty of 15 %, except as
Import prices of
regards
bleached fabrics are also higher than the import
prices of unbleached fabric plus an anti-dumping
duty of 15 % and the cost of bleaching in the
Community.

and Pakistan.

India

(289)

It appears that there would be no economic justif-
ication for the importation of bleached fabrics in
the case of countries concerned other than India
and Pakistan, as well as for other third countries
concerned.

In the case of India and Pakistan, the economic
justification, albeit possible, would appear to be
minimal considering that bleaching constitutes an
integral part of an activity, which comprises, inter
alia, printing and even making-up; the necessary
quality control and observance of customer require-
ments would limit the possibility of switching to
imports of bleached fabrics in any signficant extent.
information provided by certain
In this respect
parties
imports of bleached fabrics
during the period of application of provisional
measures have proved too costly, because of the low
quality of the imported bleached fabrics.

shows

that

(290) Furthermore, information available to the Commis-
sion indicated that fraud could have taken place in
the declaration of
some pre-bleached fabrics
(so-called fugitive dyed fabrics, currently classifiable
as unbleached fabrics) as bleached fabrics. It
is
possible, therefore, that the increase observed in the
trend of imports of bleached fabrics is less accen-
tuated than appears to be the case.

(291)

is provisionally concluded,

it
It
would not appear economically justified in view of
the prices and costs observed during the IIP for the
imposition of an anti-dumping duty to result in a
surge in imports of bleached fabrics.

therefore,

that

The lack of economic justification for importing
bleached fabrics appears to be at odds with the
observed increase in the imports of bleached fabrics
of around 5 000 tonnes between 1996 and the IIP,
even if fraud could be taking place. This issue will
be further investigated.

(292) Moreover, finished fabrics are also subject to quan-
titative restrictions and therefore a possible shift in

imports from grey fabrics to finished fabrics would
be limited to the amount of the quotas established.

Bleached fabrics are part of quota Category 2,
which includes all unbleached and finished fabrics
A 85 % cotton and : 85 % cotton. Dyed and
printed fabrics are part of subquota Category 2a,
specifically printed and dyed
which includes
fabrics, as well as coloured yarn, also A 85 % and
: 85 % cotton. Subquota Category 2a fixes,
import ceilings that cannot be exceeded: no trans-
fers are possible from Category 2 to Category 2a.

Imports of finished fabrics from India, Pakistan,
Indonesia and the People’s Republic of China are
subject to quotas. Imports of finished fabrics from
Egypt are limited by voluntary export restraints.
Imports of finished fabrics from Turkey have not
been subject
to quotas since 1996. Imports of
finished fabrics from other main third exporting
to
countries of
quotas.

these products are also subject

(293)

total Community consumption of

Imports of bleached fabrics represent around 2 %
finished
of
fabrics. As mentioned above, they are part of the
MFA quota Category 2, which includes all un-
bleached and finished fabrics of both A 85 %
cotton and : 85 % cotton.

The quota Category 2 is being utilised at quite high
rates (63 %). Indeed, the existence of the quota has
not impeded a high rate of market penetration by
imports of unbleached cotton fabrics A 85 %
(74 % of total non-captive Community consump-
tion).

The rates of utilisation of the quota in 1996 for
India, Indonesia, Pakistan and the People’s Re-
public of China ranged between 76 and 106 %. For
Egypt, subject to voluntary export restraints, the
rate of utilisation of the amounts fixed for Category
2 in 1996 was 77 %.

further

Even if,
to the imposition of an anti-
dumping duty of 15 %, the Category 2 quota could
hypothetically be totally used for the importation
of bleached fabrics instead of unbleached ones, the
lack of economic justification of such a switch
makes the realisation of this possibility unlikely.

(294) Printed and dyed fabrics are covered by Category
2a. The quota in Category 2a is being utilised at
lower levels (40 %). This lower utilisation coincides
with a lower import penetration of printed and
dyed fabrics (around 8 % of market penetration). It

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9. 4. 98

that

thus,

the Community market

appears,
for
finished fabrics is mainly served by Commuity fin-
ishers;
to be explained by their
know-how, adaptability to fashion changes and
quality.

this appears

(295) Opened quotas in Category 2a (96 000 tonnes)
around 82 % of
total Community
represent
finished fabrics of Category 2a. The
imports of
quota covers almost all
so-called ‘low-cost ex-
porters’, the other main exporters being the United
States of America, Switzerland and Japan. Turkey
has not been subject to quotas since 1996. The rate
of utilisation of the quota amounted to 41 % in
1996. In 1996,
imports of finished fabrics form
low-cost countries represented around 3 % of the
total Community consumption of finished fabrics.

to
(296) The seven main exporting countries subject
quotas accounted for around 55 % of
the total
quota amounts. Those seven countries rank among
the ten main exporters of finished fabrics to the
Community. The utilisation of the quota for the
year 1996 for India, Indonesia, Pakistan and the
People’s Republic of China ranged between 48 to
82 %. No subquota Category 2a exists for Egypt.

(297) The unused quota of

finished fabrics for 1996
amounted theoretically to 55 000 tonnes, corres-
ponding to 7 % of total Community consumption
of finished fabrics of ; 50 % cotton. However, the
maximum possible margin of expansion is es-
timated at around 20 000 to 25 000 tonnes, repres-
enting
total Community
consumption of finished fabrics, since some coun-
tries are currently unable to produce (ex-Yugoslavia,
Croatia, Bosnia-Herzegovina. . .), some countries no
longer produce finished fabrics (Hong Kong, Singa-
pore. . .), some other countries are already pro-
ducing at their maximum capacity (CEECs. . .).

3,6 % of

around

(298) Therefore, it would appear that the expansion of
to
imports of
quotas would not exceed 25 000 tonnes (3,6 % of
total Community consumption of finished fabrics).

finished fabrics currently subject

(299) The quota for Eastern European countries has
disappeared as of 1998. However, a significant
expansion of exports of finished fabrics from these
countries would require massive foreign invest-
ments in those countries, which traditionally do
not possess the necessary know-how in this area, an
event that is not likely to take place in the medium
term.

(300) The quota for Turkey disappeared as from 1996.
However, the switch from unbleached fabrics to
finished fabrics appears to have already taken place
in the period between 1994 and 1996, when no

anti-dumping measures were in place, (except for a
very short period, namely the last two months of
1996).

(301) As regards Egypt, a considerable increase in the
exports of finished fabrics seems unlikely, since
Egypt does not appear
to have the necessary
know-how, in particular in view of its past export
trends.

(302)

(303)

It has been provisionally established that imports of
finished fabrics have increased at a time where no
anti-dumping duties were applicable.

It has also been estabished that during the period
of application of provisional anti-dumping duties,
imports of printed and dyed fabrics
remained
relatively stable.

(304) As regards bleached fabrics, the increase in imports
imposition of provisional
during the period of
anti-dumping duties appears
to lack economic
justification as a means to avoid any possible anti-
dumping duty.

(305) Any possible shift

to
finished fabrics would be limited by the existence
of quantitative restrictions.

from unbleached fabrics

(iii) Limited capacities

available

in the

Community

(306) Some parties have claimed that, if measures were
imposed, Community producers would not benefit
from them since they are already producing at
maximum capacity, and thus, supply shortages will
occur.

(307)

It should be noted that in the weaving sector capa-
city can be increased and decreased with a certain
degree of flexibility. Capacity depends mainly on
the number of machines (looms) available, their
speed and the machine hours worked; labour does
not play a predominant role since the industry is
highly automated.

(308) As

capacity

regards weaving looms,

can be
increased and decreased according to the number
the looms. In adverse economic
and speed of
conditions producers tend to reduce the number of
machines and replace them with the fastest techno-
logy in order to decrease unit costs. Capacity can
therefore be increased/decreased with a certain
flexibility.

(309) Between 1993 and 1996 the number of machine
hours worked by the sampled Community produ-
cers decreased by 7,5 %. However, between 1996
and the IIP, the number of machine hours worked
increased by 3 %. Capacity can therefore be
increased by increasing the number of machine
hours worked.

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L 111/49

(310) Moreover, weaving of the product concerned shares
equipment and labour with other types of fabrics
(polycotton, synthetics. . .). Therefore, the utilisation
of capacity can be adjusted to the requirements of
the market. In this respect, it has been found that
there are no physical
limitations to production
capacity. The main cost of entering the market or
expanding within it is the capital investment neces-
sary to purchase the machinery (the average cost of
a loom is between ECU 100 000 and 150 000).

(311) Furthermore, no supply

shortages have been
observed during the period of application of the
previous anti-dumping measures. The trends of the
apparent consumption in the Community show
that between 1993 and 1995 apparent consumption
increased moderately by 3 %. Between 1995 and
1996, apparent consumption increased by around
9 % probably induced by surge in imports fol-
lowing the announcement of
the anti-dumping
measures. Between 1996 and the IIP apparent
consumption moderately decreased by 3 %, but
this nevertheless represented an increase of 5 %
over 1995.

(iv) Conclusion

(312)

(313)

(314)

It is provisionally concluded that there is an in-
creasing tendency to import finished fabrics, which
is likely to continue in the future with or without
the imposition of measures. It is concluded that the
imposition of duties might have accelerated this
trend concerning bleached fabrics. According to
the information available, a switch towards imports
of bleached fabrics as a means to avoid any anti-
dumping duty on imports of unbleached fabrics
does not seem to be economically justified. It is
also concluded that a possible surge in imports of
finished fabrics would be strictly limited by the
existence of specific quotas on these products, as
well as by the comparative advantage held by
Community finishers in terms of know-how.

It is also not considered likely that Community
producers will be prevented from benefiting from
anti-dumping measures due to any limitation in
capacities.

In view of the foregoing, it is not expected that an
increase in imports of finished fabrics following the
imposition of any anti-dumping measures will
impair any beneficial effect
to the Community
producers.

(e) Possible effect of taking measures

(315) The effects observed as a result of the imposition of
provisional measures during the period November
1996 to May 1997 provide guidance as to the
possible
anti-dumping
measures in the present proceeding.

imposing

effects

of

(316)

a

as

increase,
allowing Community producers

It can be expected that, firstly, Communtiy produ-
cers will increase their share of the Community
market
increased sales.
consequence of
Secondly, it can be expected that the utilisation of
leading to an increase in
capacity will
production,
to
reduce unit costs. Concerning prices, although a
certain price decrease was observed during the
period of application of the previous provisional
measures, in the longer term it can be expected
that prices will increase moderately, although not
by the amount of any duty. As regards capacity, it is
the Community producers will
expected that
increased
increase utilisation,
production, allowing them to reduce unit costs. In
conclusion it
the increase in
production and sales, on the one hand, and the
decrease in unit costs, on the other hand, will allow
Community producers to regain profitability.

in the form of

is expected that

(f) Possible effect of not taking measures

(317)

If measures are not taken, it is expected that the
downward trend observed for the period between
1993 and 1996 will continue.

(318)

(319)

Information provided by

In this respect a further erosion of the profitability
of the Community industry would endanger this
activity with the result of company closures and job
losses.
sampled
the losses
Community producers indicated that
experienced over the past three years have been
sustained by drawing on reserves. Should this situ-
ation continue in the future, it is expected that the
companies would not be able to remain present in
the sector.

the

In the cotton industry the existence of non-
integrated weavers constitutes an alternative to the
integrated weavers and to the import of cotton
fabrics and contributes to the overall flexibility of
the sector as well as to its global competitiveness.
Should such an alternative source of supply disap-
pear, this will have negative consequences not only
on the spinners, but also on the downstream
industry as a whole.

4. The supplier industry: spinners

(a) Situation of the spinning industry

(i) General data

relating to Community

spinners

(320) Total Community production of

cotton yarn
(majority and non-majority cotton) amounted to
around 805 000 tonnes in 1996 (1). The Community

(1) Source: CITH (Category AMF No 1), figures only available for

EU-12.

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9. 4. 98

downstream industry
outlet of
since it absorbs around 95 % of production.

the principal
the total Community yarn production,

constitutes

(321) The

corresponding employment

amounted to
around 68 000 employees in 1996, covering both
integrated and non-integrated spinners, employ-
ment by the non-integrated spinners being es-
timated at around 20 400 (1). The employment of
non-integrated spinners of A 85 % cotton yarn
has been estimated at around 9 800.

(322) Yarn consumption in the Community in 1996
amounted to around 1 million tonnes. The
consumption corresponding to yarn of A 85 %
cotton amounted to around 758 000 tonnes and
that of : 85 % cotton amounted to around
243 000 tonnes (2).

(ii) Further

analysis of data

relating to

Community spinners

(323) The spinners responding to the Community in-
terest questionnaire decreased their production of
yarn A 85 % cotton from around 38 000 tonnes in
1995 to around 35 000 tonnes in 1996. The spin-
ners considered produced open-end and ring-spun
yarn.

(324) The Community

of

sales

companies
decreased from around 37 000 tonnes in 1995 to
around 31 500 tonnes
value
decreased from around ECU 107 million in 1995
to around ECU 98 million in 1996.

in 1996.

these

Sales

(325) Between 1996 and the IIP, partly coinciding with
the period of imposition of provisional measures,
production increased from around 35 000 tonnes to
around 35 500 tonnes. Sales volume increased from
around 31 500 tonnes to around 32 600 tonnes.
Sales value increased from ECU 98 million to
around ECU 108 million.

(326) The companies suffered weighted average losses
amounting to 3,7 % in 1995 and to 4,6 % in 1996.

(327)

Investments decreased from ECU 8,7 million in
1995 to around ECU 5,8 million in 1996, that is a
decrease of around 33 %.

(328) Total employment of

the spinners considered
decreased from around 2 240 employees in 1995 to
around 1 800 employees in 1997.

Community consumption of A 85 % yarn is
destined for use in the Community weaving
industry. In view of the share of the Community
@ 85 % cotton yarn market held by Community
is considered that
yarn manufacturers (70 %),
around 30 % of the spinners’ output is dependent
upon Community weavers. Therefore, a major
the
decline in the Community production of
product
affect
Community spinners.

concerned would

substantially

it

(330) This is also evident from the development of the
sales and production trends of the spinners whose
data were further analysed, which followed the
general trend of Community weavers.

(331) Given this interdependence, a decline in Com-
munity production of the product concerned would
most probably significantly affect Community
spinners. In those circumstances it can be assumed
that any improvement of Community weaving will
positively affect Community spinners in view of
their interdependence.

5. Integrated producers

(a) Nature and structure of the industry

(332)

Integrated producers are those including among
their activities weaving and any of the upstream or
downstream activities up to the level of made-up
goods. These companies use their production of
unbleached cotton fabrics as an input into a down-
stream activity.

(333) Total Community production of

the product
concerned during 1996 amounted to 317 000
tonnes. The part of production attributed to in-
tegrated weavers
to around 224 500
tonnes.

amounts

(334) The employment represented by these integrated
weavers has been estimated at around 24 000
employees.

(b) Effect of
measures

the

imposition/non-imposition of

(b) Effect of
measures

the

imposition/non-imposition of

(335)

(329) Around 95 % of total Community production of
is destined for the
total

yarn (A 85 % and : 85 %)
Community downstream industry. 44 % of

(1) Source: Euratex.
(2) Source: Euratex, CITH and Eurostat.

that

It has been argued, on the one hand,
in-
tegrated producers would benefit from the imposi-
tion of measures, since their finished or ready-
made products currently compete with finished or
ready-made products benefiting from unbleached
fabrics
Should
imported
integrated producers
measures not be imposed,
would continue to suffer a cost disadvantage that
could lead to the cessation of in-house weaving
altogether.

dumped prices.

at

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(336) On the other hand, the argument has been raised
that integrated producers need access to cheap raw
in their mix of own-produced and
materials
in order to
imported unbleached cotton fabrics,
to imports of
remain competitive with respect
ready-made articles at low prices.

(337)

In this respect the following should be mentioned:

— Those

integrated producers not

importing
unbleached fabrics would indeed benefit from
measures, since their main competition takes
place against
these imports, allowing other
Community producers to offer the ready-made
articles at lower prices.

— For

the integrated producers importing un-
bleached fabrics, the impact of measures would
vary according to their dependence on imports
from the countries concerned.

subject

— Ready-made products such as bed linen are
already
to anti-dumping measures,
therefore imports of unfairly priced bed-linen
from low-cost third countries do not currently
constitute a real threat to integrated producers
at the level of ready-made goods. It should be
noted that the bed linnen sector accounts for
around 30 % of the making-up industry of the
product concerned.

— Captive production of the product concerned
represented in 1996 around 60 % of the total
A85 % grey cotton processed by the Com-
munity finishing industry, thus explaining the
importance of the integrated producers in this
context.

88 % of total finishing activities were carried out
on commission. Assuming that
this percentage
might be lower in other countries, it appears reas-
onable to assume that between 65 % and 70 % of
finishing activities in the Community are
total
carried out on commission.

The finishing industry is capital
intensive and
highly price competitive. The finished product,
although in some cases fairly standardised (simple
patterns and colours), give wide scope for differenti-
ation and high value-added work. It follows fashion
to a great extend and, therefore, designs tend to
interested
vary from year to year. Furthermore,
parties have mentioned the following as important
in assessing competitiveness: quality,
lead time,
delivery reliability, rapidity of response (possibility
to alter the product in the course of work), proxi-
mity to customers, service, as well as the possibility
to finish small quantities of fabric.

is on this basis that

It
fabrics finished in the
Community can generally be expected to maintain
an advantage compared to imported finishing
fabrics.

The market penetration of imports is very weak
(around 10 % of total consumption in 1996), where
so-called low-cost countries represent around 6 %
and countries such as the United States of America,
Switzerland and Japan represent around 4 %.

(339) The total

amount of

the product concerned
processed by the Community finishing industry in
1996 amounted to around 533 000 tonnes.

(340) The

consumption of

in the
Community in 1996 can be broken down as
follows:

finished fabrics

6. The

downstream industry:

finishers,

converters, importers and makers-up

Community consumption of finished fabrics

(in tonnes)

(a) Finishers

(i) Nature and structure of

the finishing

industry

(338) Finishers transform the unbleached fabric into a
finished fabric (bleached, dyed, printed). They can
work on commission or be integrated in a group
performing related upstream or downstream activ-
ities. Those working on commission obtain the raw
material from a middleman — converter — and do
not take ownership of the fabric.

The balance between commission finishers and
non-commission finishers has been estimated on
the basis of information relating to Italy, which
represented around 35 % of
finishing
activities in the Community in 1996. In 1994,

the total

1995

1996

IIP

508 305 533 008 517 331

unbleached
Consumption
fabrics (captive and non-cap-
tive production and imports-
exports)

Imports of
(from countries concerned)

finished fabrics

19 251 20 705 25 564

finished fabrics
Imports of
(from other third countries)

30 195 26 617 27 827

Exports finished fabrics

99 506 105 316 112 963

Consumption finished fabrics 458 245 475 014 457 759

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9. 4. 98

(341) An examination of

the Community finishing
market in 1996 shows a low degree of penetration
of imports from third countries. Indeed, imports of
finished fabrics
from the countries concerned
amounted to around 4 %, the share of third coun-
tries being 6 %. Community finishers had a share
of 90 % of the Community finishing market.

around ECU 178 million. Between 1996 and 1997
the turnover increased to around ECU 185 million,
that is by around 4 %.

The amount of fabrics finished remained stable at
around 12 900 tonnes between 1995 and 1997.

(342) Total employment in the finishing sector in 1996
has been estimated at around 134 000 employ-
ees (1). Employment in the finishing sector corres-
ponding to A85 % cotton fabrics of all origins has
been estimated at around 27 000 employees. When
considering this figure, account should be taken of
imports from the countries under
the fact
investigation constitute only 43 % of
the raw
(unbleached cotton A85 %) used as an
material
input by this sector.

that

(ii) Further

analysis of data

relating to

Community finishers

(343) The analysis carried out in this section relates to
the information provided by the interested parties
who responded to the questionnaire sent by the
Commission in order to verify specific aspects of
the Community interest investigation.

— Commission finishers

(344) Turnover

relating

to the product

concerned
decreased by 3,1 % between 1995 and 1996, and
increased by 15 % between 1996 and 1997, a
period partially covered by the provisional anti-
dumping measures.

The volume of fabrics processed by these commis-
sion finishers — expressed in metres — decreased
by 6,7 % between 1995 and 1996 and increased by
7,3 % between 1996 and 1997.

The weighted average profitability of these com-
panies decreased from 15 % in 1995 to 14 % in
1996.

Total employment represented by these companies
decreased from 1 308 in 1995 to 1 234 in 1997.

— Non-commission (pure non-commission fin-
ishers and finishers integrated in making-up
activities are included)

(345) The turnover of the finishing activities relating to
the product concerned decreased by around 1,1 %
between 1995 and 1996, from ECU 180 million to

(1) Source Euratex.

The trends of weighted average profitability found
for these finishers between 1995 and 1996 were as
follows: for pure finishers it decreased from around
8 % to around 5 %;
for downstream integrated
finishers profitability increased from 1,1 % to
2,3 %. It should be noted that profitability relates
to total company return on sales and cannot be
directly
product/activity
to
concerned.

attributed

the

Total employment represented by these finishers
decreased from 2 463 employees in 1995 to 2 339
employees in 1996 and to 2 219 employees in
1997.

(iii) Impact of

the imposition of an anti-

dumping measure

(346) The Commission has examined the increase in the
prices of unbleached cotton fabrics further to the
imposition of the past provisional measures.

The information submitted by the different co-
operating interested parties shows that the price
increase of
imported unbleached cotton fabrics
from all origins amounted to 5,6 % between 1996
and 1997, despite the fact that the amount of the
duty provisionally imposed was on average around
15 %. For the calculation of the price increase, data
it
submitted by one respondent was not used:
showed that, on average, prices of the unbleached
cotton fabrics purchases by this company had
decreased between 1996 and 1997 by 3,3 %; since
this company purchased in 1996 around 87 % of
the unbleached fabrics from Community sources, it
was considered appropriate to exclude it from the
calculation of the price increase.

During the same period the average prices of
imports from other third countries as quoted by
Eurostat decreased by around 1 %, whilst the prices
practised by Community producers decreased on
average by around 2 %. This contradicts the argu-
ment raised that, should anti-dumping duties be
imposed, other
and European
third countries
weavers would take the opportunity of increasing
their own prices by the amount of the duty.

(347)

In order to assess the effect of the imposition of
anti-dumping measures on the price of finished
fabrics, the Commission has analysed firstly the

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increase of

average cost
the unbleached cotton
fabrics sold to the finishers and, secondly, the cost
of the unbleached fabrics as a percentage of the
total production cost of a finished fabric.

According to the responses to the Community
interest questionnaire, it appears that between 1996
and 1997 the cost of unbleached imported cotton
increased by
fabrics
5,6 %, the majority of which originated from the
six countries concerned.

from the different origins

all
On average, unbleached cotton fabrics of
origins, sold to these finishers increased in price by
2,2 %. This contradicts the argument raised by
certain parties that all the prices of unbleached
cotton fabrics would increase by the amount of the
anti-dumping duty imposed.

The same responses to the questionnaires show
that the cost of unbleached fabric has an impact on
the total cost of the finished fabric of between
16 % and 52 %, depending on the value added by
the different finishing operations, the impact being
41 % on average.

A mechanical
two above
application of
mentioned would have resulted in an increase of
the cost of the finished fabrics of 0,9 % (2,2 %
multiplied by 41 %).

the

(348) The same responses from non-commission fin-
ishers show that prices of finished fabrics between
1996 and 1997, coinciding with the impositon of
anti-dumping measures,
around
5,6 %. This increase in prices of finished fabrics
has to be compared with a normal annual price
increase in between 1 % to 2 %.

increased by

From the above mentioned elements it can safely
be concluded that the increase in the price of the
finished fabrics has been higher than the me-
the provisional anti-dumping
chanical effect of
duty on the cost of the unbleached cotton fabric
and the normal annual price increase. This leads to
the conclusion that the finishing sector has been
able not only to pass the duty on to the next step
of the chain, but also to increase its profit.

Indeed, the analysis of the average profit achieved
by non-commission finishers on the product
concerned show that, although it decreased from
7,4 % in 1995 to 6,1 % in 1996, profitability with
respect to the product concerned increased between
1996 and 1997 from 6,1 % to 6,6 % on average.

finished fabric but, rather, that part of the duty was
borne by the importers and that, as regards the
proportion of the duty passed on to finishers, they
not only passed on their share of the duty in full to
makers-up, but in some instances increased prices
still further. Thus, the provisional duties did not
damage the ability of finishers to maintain or even
to increase,
their profit on the finished fabrics
incorporating the product concerned.

(350) As to the impact of the past provisional measures
on the situation of commission finishers,
it has
been argued that,
if anti-dumping measures are
imposed, imports of finished fabrics will increase,
negatively
by
leading to a reduction of the volumes finished. This
would in turn negatively affect
the profitability,
even risking the continuation of the activity.

commission finishers

affecting

Information provided by commission finishers
shows that volumes finished decreased by 6 %
between 1995 and 1996, and increased by 7,5 %
during 1997, regaining the level of 1995.

The downturn in the volume processed suffered in
1996 appears to be due to the uncertainty created
by the previous anti-dumping investigation rather
than by the imports of finished fabrics. During
1996 imports of finished fabrics decreased by 4 %,
when compared with 1995,
and the volume
processed by commission finishers also decreased
by around 6 %. On the other hand,
imports of
finished fabrics increased during 1997 and the
volumes
finished by commission finishers also
increased by 7 %.

(351) As

since

seen above,

increase in the cost of

an anti-dumping duty
imposed would not directly translate into a me-
the finished
chanical
product and since the most
low-cost
competitors of the Community are strictly limited
by the quotas on finished fabrics, this shows that
the risk of market penetration does not constitute
an actual threat.

important

In this respect it should be mentioned that the
penetration of the market by imports from third
countries in the finished fabrics sectors is the
lowest of the textile sectors, including captive and
non-captive markets: yarn (25 %), unbleached
fabrics (43 %), made-up goods (40 %), whereas the
import penetration in the finished fabrics sector
amounted to 10 %.

(iv) Conclusion

(349)

It can be concluded, firstly, that the full amount of
the anti-dumping duty provisionally imposed was
not passed on to makers-up through the cost of the

(352) On the basis of the information received, it has
been observed that the impact of the measures on
lead the Commission to
the sector does not

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9. 4. 98

confirm the allegations made by interested parties.
Indeed, during 1997 commission finishers have
been able to maintain the volume of
fabrics
finished despite a certain increase in the imports of
finished fabrics. Secondly, non-commission fini-
shers and coverters have been able to increase their
prices beyond the mechanical effect of the increase
in prices of unbleached fabrics imported from the
countries concerned. This increase in prices has
furthermore resulted in an increase in the profitabi-
lity of the product concerned. It also appears that
the risk of market penetration by imports of
finished fabrics does not constitute an actual threat.

product concerned will not be such as to put their
economic activity at risk.

(c) Makers-up

(i) Nature and structure of the industry

(358) Making-up is the stage where the finished fabric is
transformed into a ready-made article, ranging from
garments and household items to industrial items.

(b) Importers-traders

(i) Data

relating

to

the

representative

importers-traders

(353) The importers-traders responding to the question-
naire on Community interest
represent around
15 % of total import from the countries concerned,
that is around 16 000 tonnes.

(354) Between 1995 and 1997 imports of unbleached
cotton fabrics from the countries concerned rep-
resented 65 % and 67 % respectively of
total
from all
imports of unbleached cotton fabrics
sources. Imports from other third countries repre-
sented 36 % in 1995 and 33 % in 1997 of total
imports from all sources. It appears,
that,
contrary to some allegations made, importers have
continued to source their needs of unbleached
fabrics from the countries concerned.

thus,

(355) Sale prices of unbleached fabrics in the Com-
munity by these importers increased by around
9 % between 1996 and 1997. It appears, thus, that
importers absorbed part of the amount of the duty.

(356) Total company profitability decreased from 5 % in

1995 to 4 % in 1996.

(ii) Conclusion

(357) Based on the experience of the previous period of
application of provisional anti-dumping measures,
it is provisionally concluded that if anti-dumping
measures are imposed, importers will absorb part of
the duty and will pass the rest to the next step of
the chain, whether a converter or an independent
finisher. In view of the possibility to pass on part of
the duty and the mix of products imported from
origins covered and not covered by a possible anti-
dumping measure, it is considered that the possible
the
impact of measures on importer-traders of

It is the stage where the highest value is added,
ranging on average from around 25 % to 70 %.

Employment
cotton fabrics has been estimated at
390 000 employees in 1996.

involved in the making-up of all
around

(ii) Effects

on the

imposition of

anti-

dumping measures

(359) Some parties have claimed that the imposition of
anti-dumping duties on unbleached cotton fabrics
from the countries concerned lead to an increase in
the costs of the makers-up resulting in a loss of
competitiveness vis-(cid:133)-vis imports of ready-made
articles.

(360) An examination of several cost calculations con-
cerning different ready-made articles submitted by
different interest parties shows that the ratio of the
cost of the finished fabric in the sale price varies
between 15 % and 45 %, being around 35 % on
average. Even in the case of no absorption of any
cost, prices would not be likely to increase over
2 % on average.

(361) Some parties have also claimed that the imposition
of an anti-dumping duty on imports of unbleached
fabrics will neatively affect makers-up, especially
those in the household textile sector, since this
sector is a heavy user of the product concerned for
the making-up of articles such as bedding and
furnishing fabrics and suffers from competition
from imports from low-cost third countries.

(362)

In this respect it is worth mentioning that one of
the main household textile products — bed linen,
estimated to represent
the
making-up using the product concerned — is
currently subject to anti-dumping measures and,
therefore, the competitive impact of imports from
other third countries is relatively limited.

around 30 % of

the
is therefore provisionally concluded that
It
imposition of an anti-dumping duty will not sig-
nificantly
situation of
makers-up.

economic

impact

the

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(d) Consumers

of

anti-dumping measures

(363) The product under consideration is an intermediate
product, that is not commonly sold at retail level.
In particular, unbleached cotton is a raw material
that undergoes a number of transformations before
it is sold to the consumer. In order to assess the
impact
the
consumer, it is appropriate to examine the effects
of such measures on economic operators further up
in the commercial chain. As shown above,
the
negative impact of measures on finishers and
makers-up would not be significant. In particular,
the price increase of the made-up product to the
consumer
is not expected to exceed the price
increase for makers-up which was estimated to
amount
the
made-up goods.

to about 2 % of

the total cost of

on

7. Conclusions on Community interest

(364)

In order to appreciate all the interests at stake, as
provided for in Article 21 of the Basic Regulation,
the Commission examined all the arguments and
questions raised by all
interested parties in the
course of the investigation.

The analysis has concentrated on the possible costs
and benefits for the main sectors concerned by the
proceeding: the Community producers, that is the
weavers and the upstream industry, on the one
hand, and the downstream industry, in particular
the finishers, on the other hand.

(365) Community weavers appear

to be viable and
competitive, highly capital intensive, a substantial
source of employment (even more so if considered
together with the employment of
the spinning
sector that is directly linked to it). The sector is
very exposed to international competition from
low-cost countries; the average profitability is weak,
even negative, putting at risk its survival
in the
absence of anti-dumping measures. If the industry
disappears, it will have a negative impact not only
on spinners but also on the cotton industry as a
whole, including the downstream sector for which
it constitutes a stable and convenient source of
supply.

of quotas and limited capacities available in the
third countries.

(368) The examination of the effects that the provisional
measures had on Community weavers, just as the
effect observed on the Community downstream
industry, reflect a short term adaptation to market
conditions. Community weavers have benefited
from provisional measures and it appears that they
have not increased their prices to the full extent of
the anti-dumping duties imposed. It is possible that
over the longer term, the imposition of measures
would produce greater benefits for the Community
industry (increase in capacity, decrease of averge
costs, increase of profit).

in costs

the example of

the chain. Prices of

As regards finishers,
the period
when provisional measures were in place showed
the
the alleged impossibility to transfer
that
increase
further downstream
to the
industry did not materialise, and that the increase
in the cost of the raw material was shared by the
different steps of
the un-
bleached fabrics from the countries concerned and
from third countries did not increase to reflect fully
the average anti-dumping duty
the amount of
the provisional
imposed (15 %). However,
measures had been confirmed definitively,
is
likely that certain negative effects on Community
finishers could have been accentuated (increase in
the export prices of the countries concerned and
perhaps even a certain increase in the prices from
third countries).

it

if

(369) Community spinners are highly dependent on
Community weavers. Therefore, any benefit to the
Community weavers will positively affect Com-
munity spinners.

(370) Concerning makers-up,

the effect of any anti-
dumping measure on them is diluted by their
distance to the product concerned and the high
value added in the making-up.

(371)

the

abovementioned factors,

In view of
the
Commission has provisionally concluded that no
compelling reasons have been found against the
in the
imposition of
present proceeding.

anti-dumping measures

(366) As regards Community finishers, the Commission
found that, globally, employment in the sector is of
a comparable importance to that of
the Com-
munity weaving industry.

(372)

(367) The sector is less exposed to imports from low-cost
countries; by virtue of its comparative advantages
such as design, quality, and adaptability to fashion
its profitability is in general higher, since the
commercial risks involved are also higher.

As regards the alleged risk of loss of market share
due to the shift in imports to finished fabrics, it
was found to be minimal, in view of the existence

H. PROVISIONAL DUTY

In view of the provisional conclusion reached with
regard to dumping,
injury, causation and Com-
munity interest, provisional measures should be
adopted in order to prevent further injury being
caused to the Community industry by the dumped
imports
from the People’s Republic of China,
Egypt, India, Indonesia, Pakistan and Turkey.

(373) Given the wide variety of constructions from the
is considered appro-
the anti-dumping measure takes the

six countries concerned,
priate that
form of an ad valorem anti-dumping duty.

it

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9. 4. 98

(374)

(375)

In establishing the level of the provisional duty,
account has been taken of the dumping margins
found and of the amount of the duty necessary to
eliminate the injury sustained by the Community
industry. Since the injury consists mainly of price
and market share suppression, and in lack of pro-
fitability, the removal of injury would require that
the Community producers be put in a position to
increase prices to profitable levels, without
re-
ducing the sales volumes. In order to achieve this,
the prices of the imports from the six countries
concerned should be increased accordingly.

In order to establish the level of the duty adequate
it is first
to remove injury caused by dumping,
necessary to consider
reasonable minimum
a
pre-tax profit required by the Community produ-
cers in order to remain competitive. It has been
found that a profit margin of 8 % could be
regarded as representing an appropriate minimum
which the Community industry could reasonably
be expected to make in the absence of injurious
dumping, taking into account its need to make
long-term investments.

(376) For the calculation of the injury threshold, that is
the weighted average profit
price underselling,
shortfall of
the sampled Community producers
during the period of investigation together with the
minimum pre-tax profit mentioned above was
added to the Community producers sales price
found. The weighted average injury margin found
was then expressed as a percentage of the free-at-
Community-frontier price CIF level.

(377) Where the margins of dumping found in respect of
a particular exporting producer were below the
corresponding increases in export prices necessary
to remove the injury, as calculated above, the provi-
sional duties imposed should be limited to the
dumping margin established.

(378) The anti-dumping duty proposed for companies
which cooperated but were not included in the
sample is equivalent
to the average dumping
margin for the sample, weighted on the basis of
export
for
Turkey where the duty was based on the injury
threshold, and except for Indonesia where the duty
was based on the complaint.

to the Community, except

turnover

(379) The

duty

anti-dumping

for non-cooperating
is based on the highest dumping
companies
margin calculated for a sampled company, except
in the case of Turkey, where in view of the low
level of cooperation,
representative
the exporter with the highest
dumped type of
dumping margin was used.

the highest

I. FINAL PROVISIONS

(380)

In accordance with Article 47(2) of the additional
Protocol to the EC-Turkey Association Agreement,

the Commission made an application to the
EC-Turkey Association Council on 11 July 1997
because
against
an anti-dumping proceeding
Turkish exporters had been initiated. Since no
decision has been taken by the Association Council
within the three-month period from the making of
this application, the Commission is now applying
provisional anti-dumping measures on imports of
the product concerned originating in Turkey,
in
accordance with the above-mentioned provision
and Article 7 of the Basic Regulation.

(381)

In the interest of sound administration, periods
should be fixed in which the parties concerned
may make their views known in writing and
request a hearing. Furthermore, it should be stated
that all findings made for the purpose of this Regu-
lation are provisional and may have to be recon-
the purpose of any definitive duty
sidered for
which the Commission may propose,

HAS ADOPTED THIS REGULATION:

Article 1

codes

5208 11 90 90,

A provisional anti-dumping duty is hereby imposed
1.
on imports of unbleached cotton fabrics, falling within ex
CN codes 5208 11 90 to 5208 19 and 5209 11 to 5209 19
5208 12 11 90,
(TARIC
5208 12 15 90,
5208 12 19 90,
5208 12 13 90,
5208 12 95 90,
5208 12 93 90,
5208 12 91 90,
5208 12 99 90,
5208 19 00 90,
5208 13 00 90,
5209 11 00 90, 5209 12 00 90, 5209 19 00 90) and origina-
ting in the People’s Republic of China, India, Indonesia,
Pakistan, Egypt and Turkey.

2.
The rate of the provisional anti-dumping duty appli-
cable to the CIF net, free-at-Community-frontier price,
before duty, shall be as follows, for products originating
in:

Country

Rate of
duty

Taric
additional
code

The People’s Republic of China

15,7 %

Egypt

India

20,6 %

8900

16,9 %

8900

Indonesia

31,7 %

8900

Pakistan

Turkey

32,5 %

8900

14,3 %

8900

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3. Notwithstanding
exporters listed in Annex I, shall be subject
following rates of anti-dumping duty:

paragraph

the

2,

producers/
to the

Country

Egypt

India

Rate of
duty

Taric
additional
code

20,6 %

8908

13,2 %

8909

Indonesia

13,5 %

8910

Country: Pakistan

Rate of
duty

Taric
additional
code

Diamond Fabrics Ltd

15,6 %

8923

Nishat Mills Ltd

32,5 %

8928

Kohinoor Raiwind Mills Ltd

11,7 %

8925

Kohinoor Weaving Mills Ltd

11,7 %

8926

Pakistan

Turkey

19,2 %

8911

Country: Turkey

Rate of
duty

Taric
additional
code

10 %

8912

Teksmobili

0 %

8103

4. Notwithstanding paragraph 2, the companies listed
below shall be subject
to the following rates of anti-
dumping duty:

Birlik Mensucat

9,7 %

8104

Tureks

10,4 %

8105

Country: India

Rate of
duty

Taric
additional
code

Unless otherwise specified, the provisions in force

5.
concerning customs duties shall apply.

Century Textiles & Industries
Limited

15 %

8913

Coats Viyella India Limited

10 %

8914

Vardhman Spinning & General
Mills Limited

4,9 %

8915

Mafatlal Group (Mafatlal
Indus-
tries Limited and Mafatlal Fine
Manufacturing
&
Spinning
Company Ltd)

5,9 %

8916

Country: Indonesia

Rate of
duty

Taric
additional
code

Group Argo Pantes
(PT Argo
Pantes and PT Daya Manunggal)

31,7 %

8919

Apac Inti Corpora

19 %

8918

Eratex Djaja

29,7 %

8922

The release for free circulation in the Community of
6.
the product referred to in paragraph 1 shall be subject to
the provision of a security, equivalent to the amount of
the provisional duty.

Article 2

1.
Products classified under the CN codes mentioned
in Article 1(1) and woven on looms operated exclusively
by hand or foot are exempted from the duty imposed in
Article 1 (TARIC codes 5208 11 90 10, 5208 12 11 10,
5208 12 19 10,
5208 12 15 10,
5208 12 13 10,
5208 12 95 10,
5208 12 93 10,
5208 12 91 10,
5208 19 00 10,
5208 13 00 10,
5208 12 99 10,
5209 11 00 10, 5209 12 00 10, 5209 19 00 10).

2.
The exemptions referred to in paragraph 1 shall be
granted only to products accompanied on their release for
free circulation in the Community by either:

(a) a certificate from the competent authorities of the
to the model

country of origin which conforms
attached as Annex II; or

(b) a certificate issued pursuant to Article 3 of Council

Regulation (EC) No 3030/93 (1).

3.
Certificates issued pursuant to paragraph 2(a) shall
only be valid if the countries of origin have informed the
Commission of the names and addresses of the govern-

(1) OJ L 275, 8. 11. 1993, p. 1.

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mental authorities situated in their territory which are
empowered to issue these certificates, together with speci-
mens of stamps used by those authorities and the names
and addresses of the relevant governmental authorities
responsible for the control of the certificates. The stamps
shall be valid as from the date of receipt of the specimens
by the Commission.

4.
Certificates issued pursuant to paragraph 2 shall only
be valid if presented with options (a) and (c) in box 11
deleted and if they certify that the products concerned
fulfil the description in option (b).

The

implementing

appropriate provisions

the
5.
Community Customs Code, and notably the provisions
concerning
cooperation contained in
Articles 93, 93a and 94 of Commission Regulation (EEC)
No 2454/93 (1), as amended in particular by Regulation
(EC) No 12/97 (2), shall apply mutatis mutandis.

administrative

Article 3

Pursuant to Article 20(1) of Regulation (EC) No 384/96,
the parties concerned may make their views known in
writing and apply to be heard by the Commission within
15 days of the date of entry into force of the present
Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96,
the parties concerned may comment on the application of
the present Regulation within one month of the date of
its entry into force.

Article 4

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

This Regulation shall apply for a period of six months.

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

Done at Brussels, 7 April 1998.

For the Commission

Leon BRITTAN

Vice-President

(1) OJ L 253, 11. 10. 1993, p. 1.
(2) OJ L 9, 13. 1. 1997, p. 1.

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ANNEX I

LIST OF COOPERATING COMPANIES

The People’s Republic of China

All exporters

Egypt

All exporters

Indonesia

— PT Sandratex,
— Group Batik Keris (PT Batik Keris, PT Danliris, PT Catur

Jantra),

— Group GKBI
Primatexco),

(Gabungan Koperasi Batik Indonesia, PT

— PT Bina Nusantara Prima,
— PT Batam Textile,
— PT Maha Mujur Textile,
— PT Five Star,
— PT Bintang Agung.

Pakistan

— Abdur rahman corporation,
— Abdyul rehman cor. kyc,
— Acme Mills Karachi,
— Ajaz Enterprise, Karachi,
— Al Rehmat traders,
— Al-Karam, Karachi,
— Ali ind Ltd,
— Arshad cor. kyc, Faisalabad,
— Arzoo international,
— Arzoo textile mills,
— Baak ind.,
— Bahrara fabrics fsd,
— Be be jan pakistan, Faisalabad,
— Bismillah tex.,
— Chawala enterprises,
— Chenab fabrics & pro,
— Cotton arts Ltd,
— Decent industries,
— Decent textiles, Faisalabad,
— Dowood textiles Ltd,
— Ehsan Fabrics Ltd, Lahore,
— Elahi enterprises Limited, Lahore,
— Elahi Spinning & weaving mills, Lahore,
— Em jay exports Ltd,
— En em industries Ltd,
— Fazal abdullah export,
— Five star textile ind.,
— Gohar enterprises,
— Gohar international,
— Gulistan Weaving Mills Ltd,
— Gulsham weaving mills Ltd, Lahore,
— ICC textiles Limited, Lahore,

— Ihsan yousaf textiles,
— Imran textile,
— Ishaq textile mills, Faisalabad,
— JK brothers Ltd,
— JK Exports, Faisalabad,
— JK Sons Ltd, Faisalabad,
— JMS trading co kyc,
— Kohinoor calico mill kyc,
— Kohinoor Fabrics Limited,
— Latif hansel kyc,
— Mahboob amin,
— Mahmood textile mills Limited, Multan,
— Majeeda textile Ltd,
— Master textile mills Limited, Lahore,
— Megatex Limited,
— Mian Textile, Lahore,
— MK sons Ltd,
— Mohammad Farooq Textile Mills Ltd, Karachi,
— MSC Textiles, Faisalabad,
— Mughanum Ltd,
— Mutual trading corporation, Karachi,
— Mutual trading group,
— Nakshbandi industries Limited, Karachi,
— Nash garments, Karachi,
— Nash textiles, Karachi,
— Naveed Agencies, Karachi,
— Naveed tex; ind,
— Nishitex enterprises,
— Paradise textile,
— Parsons Limited Industries Ltd,
— Prime Weaving Factory, Karachi,
— Qayyum rashid textiles,
— Regency textiles Ltd, Lahore,
— Roomi enterprise Limited, Karachi,
— Saba textiles Limited, Karachi,
— Samin textiles Limited, Lahore,
— Samira Fabrics, Karachi,
— Saquib fabrics,
— Saya weaving mills Ltd, Karachi,
— Sayeeda syndicates kyc,
— Service fabrics Limited,
— Shahzad siddique Faisalabad,
— Shams textile cor.,
— Shams textile mills Ltd, Karachi,
— Sharif tex. ind,
— Sna tex.,
— Suraj Cotton Mills Ltd, Lahore,
— Syncotex agencies kyc,
— Taha Garments Limited, Karachi,
— Tanveer weavings Ltd, Lahore,
— Tariq enterprises,
— Tex-arts,

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— Texto print mills (pvt),
— The Crescent textile mills Ltd, Faisalabad,
— Tradex,
— Worldover enterprises Ltd, Karachi,
— Xebec tex,
— ZA international,
— Zahidjee brothers,
— Zahidjee fabrics,
— Zam Zam weaving & proc.

Turkey

— Isko Tekstil Sanayi ve Ticaret A S,
— GAP — G(cid:129)neydogu Tekstil Sanayi ve Ticaret A S,
— Kipas — Kahramanmaras Iplik Pamuk Ticaret ve Sanayi A S,
— Tac Sanayive,
— Isko.

India

— A S Marimuthu, Rajapalayam,
— Anglo French Textiles, Pondicherry,
— Anudeep Enterprises Pvt. Ltd, Mumbai,
— Art Leather Limited, Mumbai,
— Arumuga Textile Exporters, Chatrapatti,
— Arun Textiles, Rajapalayam,
— Aryan Finefab Ltd M/S, Mumbai,
— Atlas Export Enterprises, Karur,
— Auroville Exports Trust M/S, Auroville,
— Ayyappan Textiles Limited, Madurai,
— B K S Mills, Coimbatore,
— B N Sardar & Sons, Calcutta,
— Bharat Vijay Mills, Kalol,
— Bhiwani Denim & Apparels Limited M/S, Haryana,
— Blue Bull Textiles, Tirupur,
— Bojaraj Textile Mills Ltd, Madurai,
— Bonanza Overseas Pvt. Ltd,
— Chhaganlal Kasturchand & Co. Ltd, Mumbai,
— Chiranjilal Choudhary & Sons, Delhi,
— Classic Connections, Bombay,
— CLC Corporation, Delhi,
— D V Textiles M/S, Mumbai,
— Dhanalaksmi Weaving Works, Cannanore,
— Durga Textiles, Tirupur,
— Emperor Trading Company, Tirupur,
— Emti Exports Ltd, Mumbai,
— Esskay International M/S, Bombay,
— Forbes Gokak Ltd, Mumbai,
— GR Mani Textiles, Chatrapatti,
— GD JD Exports, Chennai,
— Ginni International Ltd, New Delhi,
— Gokul Fabrics, Madras,
— Govindji Trikamdas & Co. M/S, Mumbai,
— Govindji Trikamdas Exports Ltd, Mumbai,
— Group Ashima Texcellence

(Ashima Fabrics, Ashima

Denims, Ashima Syntex Limited), Ahmedabad,

— Guru Nanak Exports, Gurgaon,
— IA Intercontinental, Madras,
— Ideal Expo Fabrics Limited, Salem,
— Inter Globe Services, Mumbai,
— JCT Limited, Mumbai,
— Jindal (India), Ahmedabad,

— Jindal Worldwide Ltd, Ambawadi,
— Jyoti Overseas Limited, Indori,
— Kanakalakshmi Mills (P) Ltd, Coimbatore,
— Kanoria Chemicals & Industries Limited, Ahmedabad,
— Keshavlal Talakchand M/S, Bombay,
— Kitex Exports Limited, Cochin,
— Lakshmi Apparels and Wovens Limited, Coimbatore,
— Lotus Mills M/S, Tirupur,
— Loyal Textile Mills Limited, Tamil Nadu,
— M S Mathivanan M/S, Komarapalayam,
— M U A Arumugaperumal & Sons, Chatrapatti,
— Mahavashtra state textile corporation Ltd, Mumbai,
— Morarjee Goculdas Spg. & Wvg. Co. Ltd, Bombay,
— N W Exports Limited, Mumbai,
— Naatchiar Textile Exporters, Chatrapatti,
— Nahar Fabrics Limited, Ludhiana,
— National Textile Corporation Limited, New Delhi,
— Navnitlal & Co., Mumbai,
— Niyati Overseas, Coimbatore,
— Nowrosjee Wadia & Sons Ltd, Mumbai,
— P A P Exports, Karur,
— Pankaj Trading Co. M/S, Bombay,
— Parag Trading Corporation, Mumbai,
— Pasupati Fabrics Limited, New Delhi,
— Patodia Syntex Ltd, Bombay,
— Piramal Sons Ltd, Mumbai,
— Piramal Spg. & Wvg. Mills Limited, Mumbai,
— Pothys Cotton Products Pvt. Ltd, Srivilliputtur,
— Pradeep Investments Pvt. Ltd, Mumbai,
— Prakash Cotton Mills Ltd, Mumbai,
— Prathishta Weaving & Knitting Company

Limited,

Coimbatore,

— Preemier Textile, Tirupur,
— Preeti Impex, Salem,
— Premier Enterprises, Chatrapatti,
— Premier Mills Limited, Coimbatore,
— Premier Textile Exporters M/S, Chatrapatti,
— Pushpsons Industries Ltd, New Delhi,
— Ram Textiles M/s, Karur,
— Rama Qualitex Limited, Bangalore,
— Rite Exports, New Delhi,
— S D Enterprises, Mumbai,
— Sabare International, Karur,
— Sajjan Textiles Mills Limited M/S, Mumbai,
— Sajjan Udyog Export Limited M/S, Mumbai,
— Sambandam Exports, Tirupur,
— Sap Chemical Industries Pvt. Ltd, Mumbai,
— Sathya Textiles, Tirupur,
— Senthill textiles, Tirupur,
— Shanker Kapda Niryat Pvt. Ltd, Baroda,
— Shanudeep Private Limited, Mumbai,
— Sheth Exports M/S, Bombay,
— Sheth Investments & Trading Co. Ltd M/S, Bombay,
— Shri Vishnu Fabrics, Tamil Nadu,
— Sigma Exports, Mumbai,
— Sitalakshmi Mills Limited, Madurai,
— Sivakkumar Mills, Palladam,
— Sivam Fabrics, Tirupur,

9. 4. 98

‹

EN

‹

Official Journal of the European Communities

L 111/61

— Sky International, Tirupur,
— SMT Exports, Tirupur,
— Sohanlal Balkrishna Export M/S, Bombay,
— Sree Rangsan Textiles, Komarapalayam,
— Sri Balaji Fabric, Tirupur,
— Sri Dhavamani Textiles, Erode,
— Sri Rajasekar Textiles, Chatrapatti,
— Sri Rani Lakshmi Gng. Spg. & Wvg. Mills Ltd, Madurai,
— Sri Saravanaa Exports Company, Rajapalayam,
— Sri Sarita Synthetics Ltd, Hyderabad,
— Sri Vasavi Impex (P) Ltd, Hyderabad,
— Srinavasa Textiles, Chatrapatti,
— Standard Industries Limited, Mumbai,
— Sudha Mills M/S, Mumbai,
— Sun Enterprises M/S, Mumbai,
— Supreme Bandages, Chatrapatti,
— Suresh & Company, Bombay,
— Suruthi Fabricss, Madurai,
— Surya Cotton Fabrics, Tirupur,

— Tamarai Mills Ltd, Coimbatore,
— The Arvind Mills Limited, Ahmedabad,
— The Bombay Dyeing & Mfg. Co. Ltd, Mumbai,
— The Hindoostan Spg. & Wvg. Mills Ltd, Mumbai,
— The Lakshmi Mills Company Limited, Coimbatore,
— The Ruby Mills Ltd, Mumbai,
— The Western India Cottons Ltd, Pappinisseri,
— Trend Setters, Mumbai,
— Trident Textile Mills Ltd, Chennai,
— V & K Associates, Bombay,
— Vadivel Sizing & Weaving Mills Pvt. Ltd, Tirupur,
— Varadhalakshmi Mills Limited, Madurai,
— Velraj Exporters Private Ltd, Coimbatore,
— Vijayeswari Textiles Limited, Coimbatore,
— Vrindavan Overseas, Hathras,
— VTC Industries Limited, Mumbai,
— Wisdom Fabrics, Palladam,
— World-Tex Limited, Noida,
— Yarn Syndicat Limited, Calcutta.

        
ANEXO II — BILAG II — ANHANG II — PAQAQTGLA II — ANNEX II — ANNEXE II — ALLEGATO II — BIJLAGE II —
ANEXO II — LIITE II — BILAGA II

1 Exporter (name, full address, country)

Exportateur (nom, adresse compl(cid:138)te, pays)

ORIGINAL

2 No

3 Consignee (name, full address, country)

Destinataire (nom, adresse compl(cid:138)te, pays)

CERTIFICATE in regard to HANDLOOMS, TEXTILE HANDICRAFTS and
TRADITIONAL TEXTILE PRODUCTS, OF THE COTTAGE INDUSTRY,
issued in conformity with and under the conditions regulating trade in
textile products with the European Community

CERTIFICAT relatif aux TISSUS TISSÉS SUR MÉTIERS À MAIN, aux
PRODUITS TEXTILES FAITS À LA MAIN et aux PRODUITS TEXTILES
RELEVANT DU FOLKLORE TRADITIONNEL, DE FABRICATION ARTI-
SANALE, délivré en conformité avec et sous les conditions régissant
les échanges de produits textiles avec la Communauté européenne

4 Country of origin
Pays d’origine

5 Country of destination
Pays de destination

6 Place and date of shipment — Means of transport

Lieu et date d’embarquement — Moyen de transport

7 Supplementary details

Donn(cid:130)es suppl(cid:130)mentaires

8 Marks and numbers — Number and kind of packages — DESCRIPTION OF GOODS

Marques et num(cid:130)ros — Nombre et nature des colis — D(cid:144)SIGNATION DES MARCHANDISES

9 Quantity
Quantit(cid:130)

10 FOB Value (1)
Valeur fob (1)

11 CERTIFICATION BY THE COMPETENT AUTHORITY — VISA DE L’AUTORIT(cid:144) COMP(cid:144)TENTE

I, the undersigned, certify that the consignment described above includes only the following textile products of the cottage industry of the country shown
in box No 4:
a) fabrics woven on looms operated solely by hand or foot (handlooms) (2)
b) garments or other textile articles obtained manually from the fabrics described under a) and sewn solely by hand without the aid of any machine

(handicrafts) (2)

c) traditional folklore handicraft textile products made by hand, as defined in the list agreed between the European Community and the country shown

in box No 4.

Je soussign(cid:130) certifie que l’envoi d(cid:130)crit ci-dessus contient exclusivement les produits textiles suivants relevant de la fabrication artisanale du pays
figurant dans la case 4:
a) tissus tiss(cid:130)s sur des m(cid:130)tiers actionn(cid:130)s (cid:133) la main ou au pied (handlooms) (2)
b) v(cid:136)tements ou autres articles textiles obtenus manuellement (cid:133) partir de tissus d(cid:130)crits sous a) et cousus uniquement (cid:133) la main sans l’aide d’une

machine (handicrafts) (2)

c) produits textiles relevant du folklore traditionnel fabriqu(cid:130)s (cid:133) la main, comme d(cid:130)finis dans la liste convenue entre la Communaut(cid:130) europ(cid:130)enne et le

pays indiqu(cid:130) dans la case 4.

12 Competent authority (name, full address, country)

Autorit(cid:130) comp(cid:130)tente (nom, adresse compl(cid:138)te, pays)

At — (cid:211) .........................,

on — le.........................

...............................
(Signature)

(Stamp — Cachet)

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