98/349/EC: Commission Decision of 27 May 1998 terminating the anti-dumping proceeding concerning imports of pure silk typewriter ribbon fabrics originating in the People's Republic of China
Date: 1998-05-27
Institutions: European Commission
Subjects: China, anti-dumping legislation, import, natural fibre, office equipment, silk

29. 5. 98

EN

Official Journal of the European Communities

L 155/55

COMMISSION

COMMISSION DECISION

of 27 May 1998

terminating the anti-dumping proceeding concerning imports of pure silk type-
writer ribbon fabrics originating in the People’s Republic of China

(98/349/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

subsequently
imposed by Council Regulation
(EEC) No 3200/90 (5), still at a level of 24,6 %.

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
the European
from countries
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Article 23 thereof,

not members

of

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

After consulting the Advisory Committee,

Whereas:

B. REQUEST FOR REVIEW

(2)

In August 1991, the exporter lodged a request for a
alleging changed
review of
circumstances since the entry into force of the
measures. The main grounds were as follows:

the undertaking,

(a) There was no longer significant Community
production of pure silk typewriter
ribbon
fabrics, since the only Community producer
had switched to producing mixed fabrics of
polyester/silk.

(b) The Community producer had not increased its
selling prices since the entry into force of the
undertaking, and was aiming to secure a
monopoly of the Community market.

A. ANTI-DUMPING MEASURES IN FORCE

(1)

In July 1990, a provisional anti-dumping duty of
24,6 % was imposed on pure silk typewriter ribbon
fabrics originating in the People’s Republic of
China, by Commission Regulation (EEC) No 1937/
90 (4). By the same Regulation, the Commission
accepted a price undertaking from the China
National Silk Import and Export Corporation (cid:190)
Zhejiang Branch (the only known exporter in the
People’s Republic of China, hereinafter referred to
as ‘the exporter'). This exporter was thus exempted
from the definitive anti-dumping duty which was

(3)

(4)

(c) Since the exporter had not exported any pure
silk
the
ribbon
Community since 1989, it could no longer be
causing injury to the Community industry.

typewriter

fabrics

to

The Commission was satisfied that there was suf-
ficient evidence of changed circumstances to justify
the initiation of a review of the measures in force.

C. REVIEW INVESTIGATION

In January 1992,
the Commission published a
notice of initiation (6) of a review of Regulation
(EEC) No 1937/90 accepting an undertaking with
regard to imports of pure silk typewriter ribbon

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ L 209, 2. 8. 1988, p. 1.
(4) OJ L 174, 7. 7. 1990, p. 27.

(5) OJ L 306, 6. 11. 1990, p. 21.
(6) OJ C 12, 18. 1. 1992, p. 5.

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Official Journal of the European Communities

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fabrics originating in the People’s Republic of
China, and of Regulation (EEC) No 3200/90
imposing a definitive anti-dumping duty on the
above imports, and reopened the investigation in
accordance with Article 14 of Regulation (EEC) No
2423/88.

The Commission officially advised the Community
producer, the exporter and importers known to be
concerned, as well as the representatives of the
exporting country. All parties directly concerned
were given the opportunity to make their views
known in writing and to request a hearing within
the time-limit set in the Notice of initiation.

(7)

(8)

(5)

The following interested parties all completed the
Commission’s questionnaire and made their views
known in writing:

(a) Complainant: International Association of users
of Yarn of man-made Fabrics and of Natural
Silk (Aiuffass), on behalf of the sole Community
producer.

(b) Community producer: Spinnh(cid:129)tte GmbH Co.
KG, Celle, Germany, hereinafter referred to as
‘Spinnh(cid:129)tte' or ‘Community producer'.

(c) Unrelated importer: Delacamp GmbH & Co.

KG, Hamburg, Germany.

(d) Exporter in the People’s Republic of China:
and Export

China National
Silk Import
Corporation, Zhejiang Branch.

Verification visits were carried out at the premises
of the Community producer and the importer.

The Community producer
requested and were granted hearings.

and the

exporter

The investigation of dumping covered the period
from 1 January 1991 to 31 December 1991 (herein-
after referred to as ‘the investigation period'). Ori-
ginally, the examination of injury had covered the
period from 1989 up to the end of the investigation
period.

(6)

In October 1993,
in view of the length of the
investigation and the different arguments put
forward by the parties about the changed situation
on the market for the product concerned, it was
thought appropriate to update the data up to and
including 1993.

Spinnh(cid:129)tte did not provide some essential informa-
tion, such as a breakdown of sales and audit/
management
the granting of
various extensions of the deadline.

reports, despite

the initial measures would normally have
As
expired on 6 November 1995, a Notice (1) was
published in accordance with Article 15(4) of Regu-
lation (EEC) No 2423/88, indicating that the anti-
dumping measures would remain in force beyond
the end of
the five-year period, pending the
outcome of the review.

D. PRODUCT CONCERNED/LIKE PRODUCT

Description of the product concerned

The product concerned is the same as in the ori-
ginal investigation, namely plain woven silk fabric
made out of raw silk of a weight of 40 g/m2 or
more, but not excededing 50 g/m2. This product
(hereinafter referred to as ‘silk typewriter ribbon
fabrics') is used by the office supplies industry, and
for the further manufacture of typewriter ribbon
spools.

Spinnh(cid:129)tte requested that the definition of the like
product be widened so as to extend the weight
range of 40 to 50 grams per m2 (g/m2) to a weight
between 30 g/m2 and 70 g/m2. It was further
proposed to extend the product definition to
include a mixed silk/polyester product produced by
Spinnh(cid:129)tte, which had been introduced on the
market after the initiation of the original invest-
igation.

In respect of the request for an extension of the
definition of the product concerned, the following
should be noted:

First, no evidence has been submitted suggesting
that an extension of the weight criteria is justified.
The fact that the Community industry has know-
ledge of offers or transactions marginally outside
the relevant weight range only demonstrates the
existence of a market for different products, and
does not in itself justify extending the scope of
measures to these; in any event, Spinnh(cid:129)tte did not
produce any evidence of unfarily traded imports
resulting from such offers.

Secondly, although the mxied product in question
is said to be interchangeable and to compete
ribbon fabrics
directly with the silk typewriter
concerned in this proceeding, it has to be noted
that the basic physical characteristics of both prod-
ucts differ significantly. In any event, as will be
shown in Parts E and F, the conclusion reached
with respect
injury
would not have been different had the mixed
product been considered part of
the product
concerned in this investigation, given the decline
typewriter
in demand in the Community for
ribbon fabrics in general.

to injury and recurrence of

(1) OJ C 291, 4. 11. 1995, p. 20.

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L 155/57

E. INJURY

4. Profitability

As there is only one producer in the Community,
data is given in indexed form for reasons of confi-
dentiality.

1. Community

production,

consumption,

capacity utilization and employment

(12) On the basis of the information available, and in
the light of the fact that sales prices fell by less
than volumes, together with a lowering of the price
of raw silk, the Community producer has appar-
ently been able, by the end of the period, to restore
a satisfactory level of profitability on a per-unit
level and to obtain a reasonable return on capital.
On an indexed basis, with 1988/89 as 100, profit-
ability had reached 112 in 1992/93.

(9)

Over the period from 1989/90 to 1992/93, Spinn-
h(cid:129)tte’s total production of typewriter ribbon fabrics,
namly silk typewriter ribbon fabrics and mxied
silk/polyester
fell by
more than 60 %. As regards the ‘like product', the
fall
this period was much
in production over
higher, at around 85 %.

ribbon fabrics,

typewriter

In this context, it has to be noted that Spinnh(cid:129)tte
in 1989 introduced a new typewriter ribbon fabric
manufactured from a mixture of silk and polyester.
In 1989, Spinnh(cid:129)tte hoped that this patented new
product would come to represent 50 % of
its
production, thus gradually replacing the pure silk
version, which is now of minor importance, given a
severe fall in demand.

As to consumption, as there have been no imports
of the product concerned and as there is only one
supplier on the Community market, sales made by
Spinnh(cid:129)tte represent total Community consump-
tion of the like product.

In 1989, according to Spinnh(cid:129)tte, 30 % of
its
weaving mill capacity was engaged in the produc-
is es-
tion of silk typewriter ribbons fabrics. It
timated that only 10 % of capacity was used for the
like product by the end of the period examined.

5. Conclusion on injury

(13) While the investigation has

shown that

in terms of decreases

the
Community industry has experienced substantial
in
economic difficulties
production, sales and prices, it is clear that these
developments are, in the absence of imports, due
solely to reduced demand, arising from the general
diversification away from the use of cloth type-
writer ribbon to plastic ribbon and from typewriters
to word-processors. In the face of such a basic shift,
Spinnh(cid:129)tte could do little, except restructure its
range of production (see below).

F. RECURRENCE OF INJURIOUS DUMPING

(14)

The absence of exports following the imposition of
anti-dumping measures is not in itself a sufficient
reason for their removal. It has to be examined
whether removing the measures would lead to a
foreseeable and imminent
injury
from the People’s
caused by dumped imports
Republic of China.

recurrence of

Over the period, total employment appeared to be
stable at about 35 people.

1. Recurrence of dumping

2. Imports of the product concerned

(10) According to the undertaking reports made by the
Chinese producer, as confirmed by the relevant
Eurostat figures, there have been no imports of the
product concerned since 1989.

3. Spinnh(cid:129)tte’s

sales

of

the

product

concerned on the Community market

(11)

Spinnh(cid:129)tte’s sales volumes, in m2, of silk typewriter
ribbon fabrics on the Community market declined
between 1 January 1989 and 30 June 1993 by
72 %, while prices fell by 66 % over the same
period.

(15)

The Commission recalls that in this particular case,
normal value had to be constructed on the basis of
cost of production plus a reasonable profit calcu-
lated by reference to those incurred and realised by
the Community producer.

In this respect, the investigation has shown that
there has been a sharp decline in normal value as
compared to the original investigation. The infor-
mation available, and Spinnh(cid:129)tte’s submission of 5
December 1995, show that the price of raw silk, the
major cost element for the product concerned, has
declined by 50 % since 1989/90, and that there
have been favourable developments in manufac-
turing and other costs since that time. In addition,
there are now increased opportunities for obtaining
raw silk on the world market;
the Community
is no longer dependent on Chinese
producer
the provisional
raw silk. Moreover,
supplies of
application of
between the
the Agreement
Community and China, which was the subject

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29. 5. 98

should
of Council Decision 95/155/EEC (1),
prevent
situations whereby finished goods are
exported at prices of about, or below, the price of
the raw silk content.

A combination of these factors leads the Commis-
sion to the view that the decline of constructed
normal value would tend to remove, or at least
greatly reduce, the margin of dumping, although, as
discussed below, it is not at all clear that, given the
fall in demand, exports would resume if the present
measures were to expire. Moreover,
the sole
Chinese producer capable of offering silk type-
writer ribbon fabrics produces more than 35 other
products
ribbon
in addition to silk typewriter
fabric, and is not, therefore, likely to be interested
in the product concerned which has been subject
to sharply decreasing demand.

Further, according to information submitted by the
Chinese producer, its total output is destined for
the Chinese market, and any increased production
is unlikely;
to supply the Community market
changing looms would not be profitable, given the
better returns available from other silk products in
the face of declining demand for the product
concerned.

(16)

The Community producer recognized that there
was no evidence on Chinese imports of the product
concerned between November 1989 and 1 October
1995 (cid:190) that is, since before the imposition of the
anti-dumping measure in 1990 (cid:190) although, it was
maintained that the measures were being circum-
vented in various ways, for example by tranship-
ment via third countries with misdeclaration of
origin, misdescription of product, and manipula-
tion of the weight limits covered by the definition
of the product concerned.

Further, it was alleged that there were indications
that the Chinese exporter was still interested in the
Community market.

First, offers had apparently been made by another
Chinese exporter
for sales on the Community
market of silk typewriter ribbon fabrics of Chinese
origin. In addition, the reportedly poor financial
results of the Chinese silk industry suggested that a
recurrence of injurious dumping was likely if meas-
ures were to expire. Reference was also made to
several other offers and transactions, at prices below
the normal value of the Chinese product, entering
the Community market via Switzerland.

Secondly, the Community producer contested the
view that
the sole Chinese
producer of the like product was destined solely for
the Chinese market, since it claimed to have

the total output of

(1) OJ L 104, 6. 5. 1995, p. 2.

evidence that sales of the Chinese product were
being made in the United States of America. In
addition, overcapacity in the Chinese silk industry
and the recent bilateral EC-China agreement,
which did not cover the product concerned, were
put forward as reasons why exports of silk type-
writer fabrics would be of interest to the Chinese
producer. Resumption of such exports would cause
a recurrence of
injurious dumping, and anti-
dumping measures are the only means of protec-
tion against this. Finally, the request for a review
proceeding made by the Chinese in August 1991,
and the adjustment of the price undertaking in
February 1994 at
the Chinese
exporter, were adduced as evidence of continuing
interest in the Community market.

the request of

(17)

The Commission examined these contentions, but
cannot accept them.

As to circumvention, no evidence was produced to
corroborate the allegations. In particular, as to the
imports transited through Switzerland, it was estab-
lished that these did not concern typewriter ribbon
fabrics, since they did not conform to the necessary
length requirements of 220 yards per roll, as is
recognized by the Community producer.

As to the offers made by another Chinese exporter,
it was found that these were not relevant; indeed,
according to the complaint itself, the exporting
company in question is not authorized to handle
exports of the product concerned.

With respect to possible sales on the US market
and the potential effects of overcapacity in the
Chinese silk industry, the Commission recalls that
its information indicates that the total output of the
sole producer in China is intended for domestic
sales. Notwithstanding these conflicting indications
on export sales to third-country markets, however,
the Commission maintains
the view expressed
above, namely that any increase in Chinese produc-
tion of
to the
Community, where the market has been in sharp
decline, is unlikely, given the advanced stage of the
product’s
switching
life-cycle and the cost of
production to the product concerned, when better
returns are available on other silk products. Further,
given its product mix, the Chinese producer would
not seem to be dependent on the production and
sale of typewriter ribbon fabrics.

the like product

for export

As to the Chinese request for a review and the
adaptation of the price undertaking, these, in isola-
tion, cannot be evidence of a threat of a recurrence
of injury, particularly in the absence of imports
into the Community since 1989 (cid:190) that is to say,
before the introduction of measures.

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2. Recurrence of injury

G. CONCLUSION

(18)

(19)

It was claimed by the Community producer that
anti-dumping measures were still necessary to
prevent a recurrence of injury while the company,
which is small, was completing an ongoing restruc-
turing. Although production was being diversified
away from silk typewriter ribbon fabrics, the trans-
formation was said to be as yet incomplete, and the
production of the like product remained essential
for Spinnh(cid:129)tte’s survival.

In this context, it should first be noted that the
purpose of any anti-dumping measure is not to
facilitate the Community industry’s restructuring
process, but to eliminate the trade-distorting effects
of
injurious dumping and thus to enable the
Community industry to compete on equal terms
with the dumped imports.

Further, it should be recalled that no imports have
taken place since November 1989, and therefore
that no injury could have been caused to the
Community industry by dumped imports of the
product concerned since then.

Since the Community producer and the Chinese
producer are the only two producers of silk type-
writer ribbon fabrics in the world, the Community
producer has been enjoying a monopoly position
within the Community since 1989.

It is clear, therefore, that a recommencement of
imports would, by increasing competition on the
market, affect the position of Spinnh(cid:129)tte. However,
as outlined above, it is unlikely that exports of the
product concerned at dumped prices would re-start
if the measures were repealed.

(20)

Finally, as it believes that injurious dumping is
likely to re-occur if the existing measures lapse, the
Community producer requested that Regulation
(EEC) No 3200/90 imposing a definitive duty be
maintained, but that the measures be immediately
suspended pursuant to Article 14(4) of Regulation
(EC) No 384/96.

The Commission cannot agree to this request. As
they were intended to address entirely different
situations,
the provisions of
Article 14(4) of Regulation (EC) No 384/96 is inap-
propriate in the circumstances of this proceeding.

the application of

(21)

(22)

(23)

In view of the above, the Commission concludes
that there is no evidence pointing to a current risk
that the removal of anti-dumping measures would
lead to a foreseeable and imminent recurrence of
injury due to dumped imports from China. Indeed,
it seems likely that the Community industry will
continue
from
Chinese imports, but from the substitute products
and the growth in the demand for word processors
and personal computers, which will
inevitably
continued to reduce sales of conventional type-
writers using textile ribbons.

to experience difficulties, not

in the light,

in
It is considered, therefore, that,
particular, of the decline in demand for the product
concerned, the apparent restoration of profitability,
and the fact that a recurrence of injurious dumping
is unlikely, the measures in force should be allowed
to expire.

The Commission informed interested parties,
including the Community industry, of its conclu-
sions. After being informed by the Commission of
the above facts and conclusions, representatives of
the Community industry made further representa-
tions, both in writing and orally, concerning the
impact of the Chinese imports in question on the
Community industry. However, no information or
argument was provided which could, on exam-
ination, reverse the above conclusions.

(24) Member States did not raise any objections to the

termination of the proceeding,

HAS DECIDED AS FOLLOWS:

Sole Article

The anti-dumping proceeding concerning imports of
pure silk typewriter ribbon fabrics falling within CN
codes ex 5007 10 00, ex 5007 20 11, ex 5007 20 19 and ex
5007 20 21 originating in the People’s Republic of China
is hereby terminated.

Done at Brussels, 27 May 1998.

For the Commission

Leon BRITTAN

Vice-President