Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of synthetic fibre ropes originating in India and collecting definitively the provisional duty imposed
Date: 1998-05-29
Institutions: European Commission
Subjects: India, anti-dumping duty, import (EU), man-made fibre, textile fibre

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.05.1998 
COM(1998) 343  final 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing a definitive anti-dumping duty on imports of synthetic fibre ropes 

originating in India and collecting definitively the provisional duty imposed 

(presented by the Commission) 

H» 

EXPLANATORY  MEMORANDUM 

1.  On  8 January  1998, the  Commission  imposed  provisional  anti-dumping  duties  of 

53.0% and 82.0% on imports of synthetic fibre ropes originating in India. 

2.  The  Commission  subsequently  continued  to  seek  all  the  information  it  deemed 

necessary for its definitive  findings. The main conclusions are stated below. 

3.  Modifications  of the dumping  margins were made, where  necessary,  in respect  of 

additional information  supplied by the co-operating exporter concerned. 

4.  As  regards  injury  and  causation,  the  main  conclusions  were  that,  between  1993 
and  the  period  from  1  July  1996  to  31  May  1997,  the  Community  industry 
suffered  a  significant  downwards  pressure  on  sales  prices  and  an  important 
reduction  in profits,  in addition to a loss in market  share. This situation  coincided 
with a significant  increase in the volume and market  share of synthetic fibre  ropes 
originating in India, at prices which were found  to be the lowest on the market and 
which undercut the prices of the Community  industry. 

5.  The  estimation  of  the  total  volume  of  the  dumped  imports  into  the  Community 
was slightly revised further  to information  submitted  by the co-operating  exporter. 
However,  this  revision  did  not  modify  the  conclusions  of  the  Commission  as 
regards injury  and causation. 

6.  As  regards  Community  interest,  it  was  concluded  that  there  were  no  compelling 

reasons not to impose definitive  measures. 

7.  Given  that  the  injury  elimination  levels  determined  are  lower  than  the  dumping 
margins  found,  the  definitive  duties  should  be  based  on  these  lower  levels,  in 
accordance  with  Article  9(4)  of  Council  Regulation  (EC)  No  384/96.  On  this 
basis,  it  is  proposed  to  impose  definitive  anti-dumping  duties  on  imports  of 
synthetic fibre ropes originating in India at the following  levels : 

- Garware Wall ropes Ltd: 

53.0% 

- Other manufacturers: 

82.0% 

8.  A  majority  of  Member  States  in the  Anti-dumping  Advisory  Committee  were  in 

favour  of the imposition of definitive  measures. 

A 

COUNCIL REGULATION (EC) No 

of 

imposing a definitive  anti-dumping duty on imports of synthetic fibre ropes 

originating in India and collecting definitively  the provisional duty imposed 

THE COUNCIL OF THE EUROPEAN UNION 

Having regard to the Treaty establishing the European  Community 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on 

protection  against  dumped  imports  from  countries  not  members  of  the  European 

Community  1, and in particular Article 9(4) thereof, 

Having  regard  to the  proposal  submitted  by the  Commission  after  consulting  the 

Advisory Committee, 

Whereas: 

s 

lOJ  L 56, 6.3.1996, p. 1. Regulation as amended by Regulation  (EC) No 2331/96 (OJ L 317, 
6.12.1996, p. 1) 

A^ 

A. PROVISIONAL  MEASURES 

(1) By  Commission  Regulation  (EC)  No  18/98^,  (hereinafter  referred  to  as  'the 

provisional  duty  Regulation'),  provisional  anti-dumping  duties  were  imposed 

on  imports  of  synthetic  fibre  ropes falling  within  CN codes  5607 49  11,  5607 

49  19, 5607 50  11 and 5607 50 19 originating in India. 

B. SUBSEQUENT  PROCEDURE 

(2)  Following  the imposition  of the provisional  anti-dumping  measures, a  number 

of interested parties submitted comments in writing. 

(3) The  only  co-operating  Indian  exporter,  Garware-Wall  Ropes  Ltd,  requested 

and was granted a hearing. 

(4) The  Commission  continued  to  seek  and  verify  all  information  deemed 

necessary for the definitive  findings. 

(5) Parties  were  informed  of the essential  facts  and  considerations  on the  basis  of 

which it was intended to recommend the imposition  of definitive  anti-dumping 

duties  and  the  definitive  collection  of  amounts  secured  by  way  of  provisional 

duty.  They  were  also  granted  a  period  within  which  to  make  representations 

subsequent to this disclosure. 

(6) The  oral  and  written  comments  submitted  by  the  interested  parties  were 

considered  and, where deemed appropriate, taken into account in the  definitive 

findings. 

2OJ  L4,  08.01.1998, p. 28. 

C. GROUNDS FOR THE INITIATION OF THE  PROCEEDING 

(7) The co-operating Indian exporter reiterated his objections to the opening of the 

proceeding. 

However,  this  issue  was  already  covered  in  recital  1 of  the  provisional  duty 

Regulation. In this respect, it should be noted that the submission made by the 

Indian  exporter  concerned  did  not  contain  any  evidence  or  argument  which 

would  invalidate  the  conclusions  stated  in  recital  I  of  the  provisional  duty 

Regulation. 

D. PRODUCT CONCERNED AND LIKE PRODUCT 

(8) In  the  absence  of  any  new  information,  the  provisional  findings,  as  stated  in 

recitals 7 to 9 of the provisional duty Regulation, are hereby  confirmed. 

E. DUMPING 

1. Normal value 

(9)  The co-operating exporting producer claimed and demonstrated  that the cost 

of  production  used  in order to  examine  whether  or not  domestic  sales  were 

made in the ordinary course of trade contained  trade discounts accounted  for 

as  selling  expenses,  while  the  domestic  sales  prices  used  for  this  purpose 

were  net  of  these  discounts.  The  Commission  accepted  this  claim  and, 

accordingly,  amended  both  the  constructed  normal  value  and  that  based  on 

domestic prices. 

(10)  The  other  findings  made  in  recitals  10  to  12  of  the  provisional  duty 

Regulation  concerning  the  determination  of  normal  value  are  hereby 

confirmed. 

2. Export price 

(11)  In the  absence  of  any  new  information,  the  findings  set  out  in recital  13 of 

the provisional duty Regulation are hereby  confirmed. 

3.  Comparison 

(12)  The  co-operating  exporting  producer  claimed  that  the  method  used  by  the 

Commission  to  grant  adjustments  for  duty  drawback  did  not  reflect  the 

amount of import duties paid for the product concerned  sold on the  domestic 

market.  It  argued  that  the  Commission  should  not  have  allocated  the  duty 

drawback  adjustment  on  the  basis  of  domestic  turnover  of  the  product 

concerned  but  on  the  basis  of  the  quantity  sold  domestically.  After  further 

examination,  this  claim  was  accepted  and  the  calculations  were  modified 

accordingly. 

(13)  The  co-operating  company  reiterated  its  claim  for  adjustments  for  the 

domestic market  infrastructure  and for  differences  in physical  characteristics 

of  the  exported  and  the  domestically  sold  ^products.  However,  as  the 

company  did  not  supply  any  new  supporting  evidence, the positions  set  out 

in recital  15 of the provisional duty Regulation are hereby  confirmed. 

(14)  As  far  as  credit  costs  are  concerned,  the  co-operating  company,  which  had 

already  been  granted  adjustments  for  credit  costs  directly  linked  to  the 

domestic  sales at the provisional  stage, claimed  that the  Commission  should 

have  granted  an  additional  adjustment  taking  into  account  the  difference  in 

interest  rates for  financing  domestic and export  working  capital.  This  claim 

had  to  be  rejected  since  the  company  was  not  in  a  position  to  quantify 

correctly  these  differences  nor  to  show  how  they  could  have  affected  price 

comparability.  In  this  context,  it  should  be  noted  that  a  difference  in  costs 

incurred  for  export  sales  and  domestic  sales  does  not  in  itself  justify  an 

adjustment  under  Article  2(10)(k)  of  Regulation 

(EC)  No  384/96, 

(hereinafter  referred  to as the 'Basic Regulation'). 

4. Dumping margin 

(15)  In the  absence  of  any  new arguments  concerning  the  methodology  used  for 

the calculation of the dumping margin, the methodology  described  in recitals 

16 and  17 of  the  provisional  duty  Regulation  is  hereby  confirmed.  On  this 

basis, the dumping margins are as follows: 

-  In view of the  changes  in the calculations  mentioned  above, the  definitive 

dumping  margin  calculated  for  the  co-operating  exporting  producer, 

expressed  as  a percentage  of the  CIF price  at Community  frontier,  is  87.5 

%. 

- The definitive  dumping  margin  established  for  Indian  exporting  producers 

other  than  those  co-operating  in  this  investigation,  expressed  as  a 

percentage of the CIF price at Community frontier,  is 243.0 %. 

F. COMMUNITY  INDUSTRY 

(16)  In the absence of any new information,  the provisional findings, as stated  in 

recital  18 of the provisional duty Regulation, are hereby  confirmed. 

G. INJURY 

1. Sampling 

(17)  The  co-operating  Indian  exporter  contested  the  selection  of  Community 

producers  made by the  Commission  for  the purposes  of the  investigation  of 

injury  on  the  grounds  that  it  was  different  from  the  sample  used  in  the 

previous  proceeding  concerning  imports  of  synthetic  fibre  ropes  originating 

in  India,  which  was  terminated  without  the  adoption  of  measures.  This 

exporter  claimed  that  failure  to  use  the  same  sample  of  Community 

producers would result in a biased analysis, since the Commission would  not 

be  able  to  assess  the  degree  of  any  injury  suffered  by  the  Community 

industry  in  the  present  proceeding,  as  compared  with  that  in  the  previous 

case. 

(18)  Furthermore,  the  Indian  exporter  argued  that  four  of  the  companies  in  the 

sample had been inadequately selected for the examination of injury  and that, 

if  those  companies  were  consequently  excluded,  the  remaining  Community 

producers  in  the  sample  would  not  be  representative  of  the  Community 

industry  any  longer.  The  Indian  exporter  alleged  that  the  activities  of  one 

company  had  been  severely  disrupted  by  a  fire  which  had  destroyed  its 

production  facilities  and that any  injury  suffered  by  this company  would  be 

due  to  this  event.  It  was  further  claimed  that  a  second  company  had  not 

provided  complete  information  on  sales  transactions.  Finally,  the  Indian 

exporter  claimed 

that  two  of  the  companies 

in  the  sample  mainly 

manufactured  high performance  leisure ropes, which could not be considered 

to compete with the products sold by the Indian exporters  in the  Community, 

i.e. simple, commodity type ropes, at the lower end of the market. 

(19)  The  selection  of  the  sample  of  Community  producers  in  the  present 

investigation  was  based  on  levels  of  production  and  sales  and  geographical 

location, i.e. the same methodology  as in the previous proceeding, which  has 

not  been  disputed.  It  should  be  noted,  in  this  context,  that  some  of  the 

companies  selected  in  the  previous  proceeding  no  longer  produced  the 

product concerned  at the time of the initiation of the present proceeding.  The 

companies  in the sample accounted  for 47% of production  and 44% of  sales 

on  the  Community  market  of  the  product  concerned  by  the  Community 

industry  during  the  investigation  period.  Moreover,  the  sample  included 

large as well as small companies and producers from  several Member  States. 

These companies  are therefore  representative  of the  Community  industry,  in 

the meaning of  Article  17 of the Basic Regulation. 

(20)  With regard to the allegations made in relation to certain companies  included 

in  the  sample,  it  was  found  that  one  company  had  indeed  suffered  a  fire. 

However,  the  production  facilities  of  this  company  had  not  been  damaged 

and  any  effects  from  the  fire  on  the  financial  performance  of  the  company 

could  be  identified  in  its accounts  and  were  duly  excluded  for  the  purposes 

of  the  injury  findings.  Concerning  the  second  company  referred  to  by  the 

exporter  and  the  allegation  that  it  had  provided  insufficient  information,  il 

should  be noted that this company provided  all information  requested  during 

the investigation.  Finally, as to the allegation  concerning  the two  companies 

producing  high  performance  leisure  ropes,  it  is  noted  that  these  ropes  fall 

within the definition  of the product concerned by this proceeding.  Moreover, 

it was found  that these two companies had significant  production of  standard 

ropes directly comparable to those sold by the Indian exporter. 

Therefore,  it  is  considered  that  the  inclusion  of  the  above-mentioned 

Community producers in the sample is fully  justified. 

2. Community  consumption 

(21)  In  determining  total  apparent  consumption  on  the  Community  market,  the 

total  sales  of  the  Community  producers  were  added  to  the  imports  into  the 

Community. 

(22)  As explained  in more detail  in recital 23, the volume of imports was, for  the 

purposes  of  the  definitive  findings,  determined  on  the  basis  of  Eurostat 

figures.  This  resulted  in  a  change  in  consumption  figures  for  the  period 

considered  (i.e. the  period  between  1993 and  31  May  1997).  On  this  basis, 

Community  consumption  increased  from  21.820 tons in  1993 to 26.325  tons 

in  1995 and remained relatively  stable thereafter,  reaching 26.773 tons in the 

investigation  period,  which  represents  an  overall  increase  of  23% over  the 

period considered. 

3. Volume and market share of the dumped imports 

(23)  The  volume  of  the  imports  originating  in  India  was  determined,  at  the 

provisional  stage,  on  the  basis  of  information  on  export  sales  to  the 

Community  supplied  by  the  co-operating  Indian  exporter  as  verified  by  the 

Commission. 

Subsequent  to  the  imposition  of  provisional  measures,  the  co-operating 

Indian  exporter  contested  this determination.  It was  claimed  that  part  of  the 

sales  for  export  to  the  Community  were  not  released  for  free  circulation  in 

the  Community,  but  were  put  in  bonded  warehouses  on  the  Community 

territory  partly  for  subsequent  export  sales  to  seagoing  ships,  without 

clearing  customs.  Consequently,  it  was  requested  that  Eurostat  statistics, 

rather than the sales volume reported by this company to the Commission, be 

used to determine the volume and market shares of the Indian imports. 

(24)  The  Commission  examined  this  issue. It  should  be  noted  that  the  quantities 

reported  by  the co-operating  Indian  exporter  concerned  as  being  sold  in  the 

Community,  exceeded  the  import  quantities  reported  by  Eurostat, 

in 

particular  in  1996  and  during  the  investigation  period.  While  at  the 

provisional  stage  no  importer  co-operated  in  the  investigation  and  the 

Commission  based  its  conclusions  on  the  information  submitted  by  the 

Indian  exporter,  following  the  imposition  of  provisional  measures  a  number 

of  importers  made  information  available  to  the  Commission  which  showed 

that, during  the investigation  period  some quantities  purchased  from  the  co 

operating  Indian exporter had, indeed, not been released  into free  circulation 

on the Community market. 

In  these  circumstances,  Eurostat  appears  to  be  a  more  reliable  source  of 

information  for determining  the volume of the Indian  imports for the  period 

examined  than  the  export  quantities  reported  by  the  co-operating  Indian 

exporter. However, it was also found  that, in the investigation period, part of 

the  volumes  stored  in  bonded  warehouses  on  the-Community  territory  had 

not  yet  been  resold  and  that these  volumes could potentially  be released  for 

free circulation in the Community at very low prices. 

In  any  event,  it  should  be  noted  that  both  Eurostat  figures  and  the  sales 

volume  reported  by  the  co-operating  Indian  exporter  indicate  the  same 

increasing  trend  in volume and  market  share for  the Indian  imports over  the 

period considered. Overall, the revised volume of dumped  imports  increased 

by  107% between  1993 and the  investigation  period  (from  440 tons in  1993 

to  1089  tons  in  1995  and  then  a  decrease  to  911  tons  in  the  investigation 

period). The market share of these imports rose from 2% in  1993 to  4.1%  in 

1995, then decreased  to 3.4% in the investigation  period.  It should  be noted 

that  this  relative  decrease  after  1995  coincided  with  the  previous  anti-

dumping proceeding concerning this product. 

4. Prices of the dumped  imports 

(25)  The following  comments were submitted with regard to the determination  of 

price undercutting. 

(26)  The  co-operating  Indian  exporter  claimed  that  the  determination  of  price 

undercutting  should  not  have been  made  on the basis  of the detailed  export 

sales  listing provided  by this exporter  to the Commission  since a  significant 

part  of  these  export  sales  had  not  been  released  for  free  circulation  in  the 

Community.  The  exporter  claimed  that  the  average  Eurostat  prices  should 

have  been  used  instead.  This  claim  also  applied  to  the  determination  of  the 

injury  margin, which was based  on the  same export  prices  as those  used  for 

the undercutting  assessment. 

However,  according  to the  information  available  (Eurostat),  around  70% of 

the  total  volume  of  sales  made  by  the  Indian  exporter  to  the  Community 

during  the  investigation  period  were  released  for  free  circulation  in  the 

Community.  The  prices  of  these  export  sales,  which  were  verified  by  the 

Commission,  were  therefore,  considered  to  be  representative  of  the  actual 

prices  of  the  imports  concerned  in  the  Community.  Furthermore,  no 

differences  in  export  prices  between  individual  transactions,  whether  or  not 

destined  for free  circulation, could be determined. 

In  addition,  given  the  existence  of  various  types  of  ropes  falling  within  the 

definition  of the product  concerned,  average  Eurostat  prices  would  not  have 

permitted  a  proper  comparison  of  prices  as  they  would  have  consisted  of 

average values for greatly varying types of ropes. 

Therefore, the claim was not considered to be justified. 

It  was  further  argued  that,  in  any  event,  the  export  sales  transactions 

concerning  large polypropylene  mooring ropes, should  be excluded  from  the 

undercutting and injury  elimination level assessments, as these types of ropes 

were  only  sold  to  seagoing  ships  and  therefore  were  never  released  for  free 

circulation in the Community. 

However, it was found  that, in the investigation period, a significant  volume 

of  these  types  of  ropes  exported  from  India  to  the  Community  had 

subsequently been released for free  circulation in the Community.  Moreover, 

no  sufficient  information  was  submitted  to  the  Commission  to  identify, 

among  the  total  export  transactions  concerning  these  types  of  ropes,  those 

which resulted  in ropes being subsequently  released  in the Community.  This 

argument could therefore  not be taken into account. 

10 

(27)  The  co-operating  Indian  exporter  also  claimed  that  the  method  used  by  ihe 

Commission  to  differentiate  between  the  various  types  of  synthetic  fibre 

ropes  sold  on  the  Community  market,  for  the  purposes  of  determining 

undercutting  and  the  injury  margin,  did  not  take  full  account  of  the 

differences  between high value and lower value commodity products. 

In  this  respect,  it  is  noted  that  the  method  used  enabled  a  distinction  to  be 

made  between  the  ropes  on  the  basis  of  the  type  of  raw  material  used,  the 

number of strands, the diameter  of the rope and the construction  (braided  or 

twisted). These were found  to be the main identifiable  and objective  criteria 

on the basis  of  which the prices  of the product  concerned  were  determined, 

both  by  the  sampled  Community  producers  and  by  the  Indian  exporter 

concerned. 

Therefore,  the  approach  used  at  the  provisional  stage  in  order  to  determine 

price undercutting was also used for definitive findings. 

(28)  On  this  basis,  as  already  indicated  in  recital  24  of  the  provisional  duty 

Regulation,  it  was  found  that,  during  the  investigation  period,  price 

undercutting  margins,  expressed  as  a  percentage  of  the  Community 

industry's  average  selling  prices  of  comparable  product  types, ranged  from 

0% to 38%, with an overall weighted average of 16%. 

5. Situation of the Community  industry 

(29)  The  co-operating  Indian  exporter  submitted  that  the  decline  in  employment 

observed  during  the  period  considered  could  not  be  an  indicator  of  injury 

because  it  was  compensated  for  by  an  improvement  in  productivity.  It  was 

also  argued  that,  according  to  the  Commission's  findings  in  the  previous 

proceeding  concerning  imports  of  synthetic fibre ropes originating  in  India, 

any  decrease  in  employment  up  to  1995  was  due  to  factors  other  than  the 

dumped Indian imports. 

11 

It  should  be  remembered  that,  in  accordance  with  Article  3(5)  of  the  Basic 

Regulation, no single injury  factor  can necessarily  give decisive guidance on 

the  impact  of  the  dumped  imports  on  the  situation  of  the  Community 

industry. 

In  this  respect,  it  is  not  contested  that  in  the  early  nineties  the  decline  in 

employment  may have been due to  factors  other than dumped  imports, such 

as  the  restructuring  of  the  industry.  However,  it  should  also  be  noted  that 

after  a slight  increase in  1996, employment  levels were again on the  decline 

in the investigation period. Moreover, in spite of the increase in productivity 

over  the  period  considered,  the  Community  industry  suffered  a  significant 

loss  in market  share at a time when  Community  consumption  had  increased 

by  23%.  Furthermore,  the  Community 

industry  showed  a  significant 

deterioration  in  its  financial  results  from  1995  onwards,  resulting  in  a 

weighted  average  loss  of-7.1%  of net  sales  in the  investigation  period,  and 

suffered  significant  price  pressure  from  the  Indian  imports  throughout  the 

period  considered,  with  price  undercutting  of  up  to  38%  during  the 

investigation period. 

6. Conclusion on injury 

(30)  In  the  absence  of  any  other  arguments  concerning  the  situation  of  the 

Community  industry  and  in  the  light  of  the  above,  the  conclusion  that  the 

Community  industry  has  suffered  material  injury  within  the  meaning  of 

Article  3(1)  of  the  Basic  Regulation,  as  stated  in  recitals  25  to  35  of  the 

provisional duty Regulation, is hereby  confirmed. 

12 

H. CAUSATION OF INJURY 

1. Effects  of the dumped imports 

(31)  The co-operating  Indian exporter argued that any material  injury  suffered  by 

the  Community  industry  could  not  be  attributable  to  imports  originating  in 

India. The following  arguments were put  forward: 

(32)  The  overall  loss  of market  share  suffered  by the  Community  producers  was 

not  due  to  the  imports  originating  in  India,  but  resulted  from  a  shift  by 

Community  producers  towards  the  production  of  specialised  ropes,  with  a 

higher added value, destined primarily for export markets. It was argued that, 

in  this  way,  these  producers  created  a  vacuum  in  the  supply  of  commodity 

ropes  on  the  Community  market  which  was  filled,  inter  alia,  by  the  Indian 

imports.  In  addition,  it  was  stated  that,  in  any  event,  the  Community 

producers  lacked  the  necessary  production  capacity  to  meet  the  growing 

demand of the Community  market. 

In this respect  it should  be noted that, although the Community  industry  was 

found  to be developing production  of ropes at the upper end of the market in 

terms  of  added  value  and  specialisation,  the  bulk  of  the  production  of  the 

Community  industry  at the end  of the  investigation  period  still  consisted  of 

commodity type ropes. 

Moreover,  the  Commission  examined  the  evolution  of  the  exports  of  the 

sampled  Community producers over the period considered. It was found  that 

this  volume  remained  stable  between  1993  and  the  investigation  period,  at 

around  1.900  tons,  representing  some  15%  of  the  total  production  of  the 

sampled companies. 

As  regards  the  production  capacity  of  the  whole  Community  industry,  it 

exceeded  total  Community  consumption  throughout  the  period  considered 

(during  the  investigation  period,  total  consumption  was  26.700  tons,  while 

total capacity was 36.000 tons). 

13 

The  Community  industry's  loss  of  market  share  could  not,  therefore,  be 

attributed  to  an  increase  in  export  sales,  an  insufficient  offer  of  commodity 

type ropes nor to insufficient  production capacity. 

(33)  Concerning the decrease in profitability  suffered  by the Community  industry 

between  1995 and the  investigation  period,  the co-operating  Indian  exporter 

argued  that  the  decrease  in  raw  material  prices  between  1995  and  the 

investigation  period  should  have  resulted  in  increased  profitability  for  the 

Community  producers  during  this  period.  They  therefore  claimed  that  any 

decline  in  profitability  in  this  period  was  due  to  increased  overheads,  in 

particular  depreciation  charges  and  interest  expenses,  as  a  result  of  the 

important investments made by the Community  industry. In any event, it was 

argued  that the drop  in profitability  could  not  be due  to  the  Indian  imports, 

which declined between  1995 and the investigation  period. 

It  was  found  that  between  1995  and  the  investigation  period,  the  average 

prices  of  raw  materials  declined  by  approximately  11%.  Considering  that 

raw materials account for approximately  50% of the total costs of production 

of  the  product  concerned,  this  decrease  in  raw  material  costs  enabled  the 

Community  producers  to reduce their  costs of production  by  5%.  However, 

over the  same period, the average  sales prices  of the Community  producers, 

under  strong  downward  pressure  from  the  prices  of  the  Indian  imports, 

declined by 16%. 

Furthermore,  as  regards  the  impact  of  the  investments  made  by  the 

Community  industry  on profitability,  it was found  that these had  a marginal 

impact  on the  Community  producers'  costs  of  production  during  the  period 

considered,  mainly  because  any  costs  related  with  these  new  investments 

were compensated  for by gains in productivity and by an overall reduction in 

other general and administrative expenses. 

Finally,  it  should  be  noted  that,  despite  the  small  decline  of  the  imports 

originating  in India between  1995 and the investigation  period, these  imports 

increased  overall  by  107% during  the  period  considered.  Moreover,  it  was 

14 

found  that  the  prices  of  these  imports  undercut  the  Community  producers' 

prices  significantly  throughout  the  whole  period  considered,  including  the 

period  from  1995  onwards,  thus  exerting  downward  pressure  on  the  sales 

prices  of  the  Community  producers,  which  declined  dramatically,  between 

1995 and the investigation period, by  16%. 

The  decline  in  profitability  experienced  by  the  Community  producers 

between  1995 and the  investigation  period  was therefore  clearly  linked  to  a 

major  reduction  in sales prices over that  period,  which  in turn  occurred  at a 

time  of  significant  price  undercutting  by  the  Indian  imports  in  this 

commodity product market. 

(34)  The co-operating  Indian exporter also argued that the Community  producers 

suffered  an inherent  competitive  disadvantage, because they  purchased  their 

raw  materials  at  significantly  higher  prices  than  the  Indian  exporters. 

However,  it  should  be  noted  that,  if  the  Indian  importers  had  not  sold  the 

product concerned at dumped prices, they would not have undercut the prices 

of  the  Community  industry.  The  argument  is therefore  not  relevant.  In  any 

event,  it  was  found  that  the  purchase  prices  of  the  co-operating  Indian 

exporter's  raw  materials  were  approximately  14%  lower  than  those  of  the 

Community  industry. Since raw materials account for  50% of the full  cost of 

production,  this  difference  could  only  explain,  at  best,  a difference  in  sales 

prices  of  up  to  7%,  which  is  largely  below  the  level  by  which  the  Indian 

imports  undercut  the  Community  producers'  prices,  i.e.  up  to  38%, with  a 

weighted average undercutting of 16%. 

(35)  Finally, it was argued that, compared  with the negative finding on  causation 

made in the previous proceeding  concerning  imports of synthetic fibre ropes 

originating  in  India,  there  were  no  changed  circumstances  to  explain  a 

different  finding  in  the  present  proceeding  on  the  causal  link  between 

dumping and  injury. 

It should  be recalled that, in the previous proceeding, dumping  by the  Indian 

exporters  and  injury  to the Community  industry  were  established.  However, 

15 

the  information  available  at  the  time  did  not  permit  the  determination  of  a 

clear  causal  link  between the dumped  imports and the  injury  suffered  by  the 

Community  industry. 

In  the  present  case,  in  accordance  with  the  consistent  practice  of  the 

Community  Institutions, the  injury  examination  covered  a period  of  time  of 

nearly  5 years,  from  1993 to  May  1997.  It  should  be  noted  that  this  period 

partly coincided with the period examined in the previous proceeding. 

However,  compared  with the  previous  proceeding,  the present  investigation 

has examined the impact of the imports over a longer period of time after  the 

Indian  imports  appeared  in  significant  volume.  Indeed,  the  previous  and 

present  investigation  periods  ended  respectively  in  March  1996 and  in  May 

1997  and  the  increase  in  the  imports  concerned  was  particularly  apparent 

after  1994.  Moreover,  reliable 

information  on 

the  development  of 

profitability  of  the  Community  industry  for  the  whole  period  considered, 

which was lacking in the previous case, was received in the present case. 

Contrary  to  the  previous  investigation,  it  has  therefore  been  possible  to 

establish a causal link between the imports concerned  and the material  injury 

suffered  by the Community  industry. 

2. Effects  of other factors 

(a) Imports from other third countries 

(36)  The  co-operating  Indian  exporter  argued  that  imports  from  countries  other 

than India were the cause of any material  injury  suffered  by the  Community 

industry. It was claimed, in particular, that the prices of imports of  synthetic 

fibre ropes  originating  in Poland,  the  Czech  Republic,  Slovenia  and  Tunisia 

had  undercut  the  prices  of  the  Community  producers  throughout  the  period 

considered.  Moreover,  the  Indian  exporter  claimed  that  the  prices  of  these 

imports were lower than the Indian prices for the types which represented  the 

majority  of  the  total  imports  of  synthetic  fibre  ropes  originating  in  India  to 

16 

the  Community,  i.e.  polyethylene  and  polypropylene  ropes  and 

that, 

therefore,  any  price  pressure  suffered  by  the  Community  industry  was 

largely attributable to these imports and not to the Indian imports. 

The  Commission  analysed  the  evolution  of the  imports  of  polyethylene  and 

polypropylene ropes originating in Poland, the Czech Republic, Slovenia and 

Tunisia,  as  compared  to  Indian  imports  of  the  same  types  of  ropes.  This 

analysis  showed  that  the  average  prices  of  the  imports  originating  in 

Slovenia  and  Tunisia  were  at  approximately  the  same  level  of  the  Indian 

export  prices  throughout  the  whole  period  considered.  Moreover,  it  was 

found  that  the  imports  originating  in  Slovenia  and  Tunisia,  although 

increasing  in  the  period  considered,  accounted  for  only  0.8%  and  1.3% 

respectively  of  total  Community  consumption  in  the  investigation  period. 

Any  impact  of these  imports  should  therefore  be  considered  less  significant 

as compared  to the impact of Indian imports. As regards Poland, the average 

prices  of  the  imports  originating  in  Poland  were  found,  at  times,  to  be 

slightly  lower  than  the  Indian  import  prices.  However,  the  overall  market 

share  held  by  these  imports  decreased  from  2.6%  in  1993  to  2%  in  the 

investigation  period.  As regards  the  Czech  Republic,  the  market  share  held 

by the imports originating  in this country went from  0.8% in  1993 to 2% in 

the  investigation  period.  However,  it  was  only  in  1993  that  the  prices  of 

these  imports  were  found  to  be  significantly  lower  than  the  prices  of  the 

imports  originating  in  India.  During  the  investigation  period,  the  imports 

originating  in  the  Czech  Republic  entered  the  Community  market  at 

approximately the same prices as the Indian imports. 

Finally,  it  should  be  noted  that,  the  comparison  between  the  prices  of  the 

Indian imports and the prices of imports originating  in Poland and the  Czech 

Republic for all types of synthetic fibre ropes falling  within the definition  of 

the  product  concerned,  i.e.  not  only  polyethylene  and  polypropylene  ropes, 

indicated  that  the  Indian  import  prices  were  the  lowest  on  the  Community 

market  for the whole period  considered, except  for  1993. This comparison  is 

17 

all  the  more  representative,  since  it  concerns  the  whole  product  concerned 

definition. 

Therefore,  the  findings  and  conclusions  on  the  effect  of  imports  from 

countries  other  than  India  on  the  injurious  situation  of  the  Community 

industry, as stated in recital 41 of the provisional duty Regulation, are hereby 

confirmed. 

3. Conclusion on causation 

(37)  In  the  light  of  the  above,  although  it  cannot  be  excluded  that  some  of  the 

imports  originating  in  countries  other  than  India  may  have  had  a  negative 

impact on the situation of the Community  industry, this impact was not such 

as  to  break  the  causal  link  between  the  injury  suffered  by  the  Community 

industry  and  the  dumped  imports  originating  in  India.  Therefore  and  in  the 

absence of any new information,  the conclusion that the imports of  synthetic 

fibre  ropes  originating  in  India,  taken  in  isolation,  have  caused  material 

injury  to  the  Community  industry,  as  stated  in  recitals  36  to  43  of  the 

provisional duty Regulation, is hereby  confirmed. 

(38)  This conclusion  is drawn  in particular  given the  loss  in market  share  of  the 

Community  industry,  combined  with  a  deterioration  in  profitability,  which 

coincided with an increase in the volume and market share of Indian imports, 

at prices which constantly undercut those of the Community  industry. 

18 

I. COMMUNITY  INTEREST 

(39)  It  was  claimed  that  the  conclusion  on  the  Community  interest  in  the 

provisional  duty  Regulation  was  not  supported  by  factual  evidence.  In 

particular,  it  was  argued  that  the  Commission  had  not  sought  sufficient 

information  on the  impact  of  measures  on the  users,  in  order  to  support  its 

conclusions concerning the Community  interest. 

It should  be noted  that the Commission  contacted  all known  associations  of 

users,  in  particular  shipping  and  fishing  vessel  associations  and  all  known 

distributors of the product concerned in the Community, as well as all known 

significant  upstream  industries.  Only  limited  and  general  replies  were 

received.  Moreover,  no  additional  substantiated  comments  were  submitted 

from the above-mentioned parties after the adoption of provisional measures. 

(40)  In the absence  of any new information,  the findings set out  in recitals  44 to 

52  of  the  provisional  duty  Regulation  concerning  Community  interest,  are ^ 

hereby  confirmed. 

J. DEFINITIVE DUTY 

1. Injury elimination level 

(41)  The  co-operating  Indian  exporter  argued  that  their  export  prices  had  to  be 

adjusted  for  the purposes  of the injury  elimination  level  assessment,  to  take 

account  of the  difference  in raw material  prices  between  the Indian  and  the 

Community producers. 

However, as stated in recital 53 of the provisional duty Regulation, the  injury 

elimination  level  was  determined  on the  basis  of  the  costs  of  production  of 

the  Community 

industry  plus  a  reasonable  amount  of  profit.  Any 

19 

considerations  of  differences  in  costs of production  between  the  Indian  and 

Community producers are therefore  irrelevant in this respect. 

(42)  Therefore,  the  method  used  by  the  Commission  to  establish  the  injury 

elimination level, as stated in recital 53 of the provisional duty Regulation, is 

hereby  confirmed. 

On  this  basis,  the  injury  margin  was  found  to  be  53%  of  the  weighted 

average,  net,  free-at-Community  frontier  price,  before  duty.  For  companies 

which did not co-operate in the investigation, the injury  margin was 82%, as 

stated in recital 55 of the provisional duty Regulation. 

Since  the  amount  of  duty  adequate  to  remove  the  injury  sustained  by  the 

Community  industry  is  lower  than  the  dumping  margins  found,  the  anti 

dumping  duty  to  be  imposed  should  be  based  on  the  former,  in  accordance 

with Article 9(4) of the Basic Regulation. 

2. Type of definitive anti-dumping duty 

(43)  An  ad  valorem  duty  appears  to  be  the  most  appropriate  measure  given  the 

high number of types of ropes involved. 

K. COLLECTION OF THE PROVISIONAL  DUTY 

(44)  Considering  the conclusions  on  dumping  and  injury  definitively  established 

and that the rate of definitive  duty  is equal to that provisionally  determined, 

the amounts  secured  by way  of the provisional  anti-dumping  duty should  be 

definitively  collected, 

20 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. A definitive  anti-dumping duty is hereby imposed on imports of synthetic fibre 

ropes falling within CN codes 5607 49  11, 5607 49  19, 5607 50  11 and 5607 50 19 

originating in India. 

2.  The rate of duty  applicable to the net, free-at-Community  frontier price  before 

duty shall be as follows: 

Products manufactured by: 

- Garware Wall ropes Ltd: 

53.0% (additional Taric code 8755) 

- Other manufacturers: 

82.0% (additional Taric code 8900) 

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

shall apply. 

Article 2 

The  amount  secured  by  way  of  provisional  anti-dumping  duty  pursuant  to 

Regulation  (EC)  No  18/98  shall  be  definitively  collected  at  the  duty  rate 

definitively  imposed. 

21 

Article 3 

This Regulation  shall  enter into  force  on the day following  its publication  in the 

Official  Journal of the European Communities 

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

Member States. 

Done at Brussels, 

For the Council 

The President 

22 

ISSN 0254-1475 

COM(98) 343 final 

DOCUMENTS 

EN 

02  11  10 

Catalogue number  : CB-CO-98-351-EN-C 

ISBN 92-78-36817-2 

Office for Official  Publications of the European Communities 

L-2985 Luxembourg 

J3